what does problem solving mean in business terms

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Why Problem-Solving Skills Are Essential for Leaders in Any Industry

• 17 Jan 2023

Any organization offering a product or service is in the business of solving problems.

Whether providing medical care to address health issues or quick convenience to those hungry for dinner, a business’s purpose is to satisfy customer needs .

In addition to solving customers’ problems, you’ll undoubtedly encounter challenges within your organization as it evolves to meet customer needs. You’re likely to experience growing pains in the form of missed targets, unattained goals, and team disagreements.

Yet, the ubiquity of problems doesn’t have to be discouraging; with the right frameworks and tools, you can build the skills to solve consumers' and your organization’s most challenging issues.

Here’s a primer on problem-solving in business, why it’s important, the skills you need, and how to build them.

Access your free e-book today.

What Is Problem-Solving in Business?

Problem-solving is the process of systematically removing barriers that prevent you or others from reaching goals.

Your business removes obstacles in customers’ lives through its products or services, just as you can remove obstacles that keep your team from achieving business goals.

Design Thinking

Design thinking , as described by Harvard Business School Dean Srikant Datar in the online course Design Thinking and Innovation , is a human-centered , solutions-based approach to problem-solving and innovation. Originally created for product design, design thinking’s use case has evolved . It’s now used to solve internal business problems, too.

The design thinking process has four stages :

• Clarify: Clarify a problem through research and feedback from those impacted.
• Ideate: Armed with new insights, generate as many solutions as possible.
• Develop: Combine and cull your ideas into a short list of viable, feasible, and desirable options before building prototypes (if making physical products) and creating a plan of action (if solving an intangible problem).
• Implement: Execute the strongest idea, ensuring clear communication with all stakeholders about its potential value and deliberate reasoning.

Using this framework, you can generate innovative ideas that wouldn’t have surfaced otherwise.

Creative Problem-Solving

Another, less structured approach to challenges is creative problem-solving , which employs a series of exercises to explore open-ended solutions and develop new perspectives. This is especially useful when a problem’s root cause has yet to be defined.

You can use creative problem-solving tools in design thinking’s “ideate” stage, which include:

• Brainstorming: Instruct everyone to develop as many ideas as possible in an allotted time frame without passing judgment.
• Divergent thinking exercises: Rather than arriving at the same conclusion (convergent thinking), instruct everyone to come up with a unique idea for a given prompt (divergent thinking). This type of exercise helps avoid the tendency to agree with others’ ideas without considering alternatives.
• Alternate worlds: Ask your team to consider how various personas would manage the problem. For instance, how would a pilot approach it? What about a young child? What about a seasoned engineer?

It can be tempting to fall back on how problems have been solved before, especially if they worked well. However, if you’re striving for innovation, relying on existing systems can stunt your company’s growth.

Related: How to Be a More Creative Problem-Solver at Work: 8 Tips

Why Is Problem-Solving Important for Leaders?

While obstacles’ specifics vary between industries, strong problem-solving skills are crucial for leaders in any field.

Whether building a new product or dealing with internal issues, you’re bound to come up against challenges. Having frameworks and tools at your disposal when they arise can turn issues into opportunities.

As a leader, it’s rarely your responsibility to solve a problem single-handedly, so it’s crucial to know how to empower employees to work together to find the best solution.

Your job is to guide them through each step of the framework and set the parameters and prompts within which they can be creative. Then, you can develop a list of ideas together, test the best ones, and implement the chosen solution.

Related: 5 Design Thinking Skills for Business Professionals

4 Problem-Solving Skills All Leaders Need

1. problem framing.

One key skill for any leader is framing problems in a way that makes sense for their organization. Problem framing is defined in Design Thinking and Innovation as determining the scope, context, and perspective of the problem you’re trying to solve.

“Before you begin to generate solutions for your problem, you must always think hard about how you’re going to frame that problem,” Datar says in the course.

For instance, imagine you work for a company that sells children’s sneakers, and sales have plummeted. When framing the problem, consider:

• What is the children’s sneaker market like right now?
• Should we improve the quality of our sneakers?
• Should we assess all children’s footwear?
• Is this a marketing issue for children’s sneakers specifically?
• Is this a bigger issue that impacts how we should market or produce all footwear?

While there’s no one right way to frame a problem, how you do can impact the solutions you generate. It’s imperative to accurately frame problems to align with organizational priorities and ensure your team generates useful ideas for your firm.

To solve a problem, you need to empathize with those impacted by it. Empathy is the ability to understand others’ emotions and experiences. While many believe empathy is a fixed trait, it’s a skill you can strengthen through practice.

When confronted with a problem, consider whom it impacts. Returning to the children’s sneaker example, think of who’s affected:

• Your organization’s employees, because sales are down
• The customers who typically buy your sneakers
• The children who typically wear your sneakers

Empathy is required to get to the problem’s root and consider each group’s perspective. Assuming someone’s perspective often isn’t accurate, so the best way to get that information is by collecting user feedback.

For instance, if you asked customers who typically buy your children’s sneakers why they’ve stopped, they could say, “A new brand of children’s sneakers came onto the market that have soles with more traction. I want my child to be as safe as possible, so I bought those instead.”

When someone shares their feelings and experiences, you have an opportunity to empathize with them. This can yield solutions to their problem that directly address its root and shows you care. In this case, you may design a new line of children’s sneakers with extremely grippy soles for added safety, knowing that’s what your customers care most about.

Related: 3 Effective Methods for Assessing Customer Needs

3. Breaking Cognitive Fixedness

Cognitive fixedness is a state of mind in which you examine situations through the lens of past experiences. This locks you into one mindset rather than allowing you to consider alternative possibilities.

For instance, your cognitive fixedness may make you think rubber is the only material for sneaker treads. What else could you use? Is there a grippier alternative you haven’t considered?

Problem-solving is all about overcoming cognitive fixedness. You not only need to foster this skill in yourself but among your team.

4. Creating a Psychologically Safe Environment

As a leader, it’s your job to create an environment conducive to problem-solving. In a psychologically safe environment, all team members feel comfortable bringing ideas to the table, which are likely influenced by their personal opinions and experiences.

If employees are penalized for “bad” ideas or chastised for questioning long-held procedures and systems, innovation has no place to take root.

By employing the design thinking framework and creative problem-solving exercises, you can foster a setting in which your team feels comfortable sharing ideas and new, innovative solutions can grow.

How to Build Problem-Solving Skills

The most obvious answer to how to build your problem-solving skills is perhaps the most intimidating: You must practice.

Again and again, you’ll encounter challenges, use creative problem-solving tools and design thinking frameworks, and assess results to learn what to do differently next time.

While most of your practice will occur within your organization, you can learn in a lower-stakes setting by taking an online course, such as Design Thinking and Innovation . Datar guides you through each tool and framework, presenting real-world business examples to help you envision how you would approach the same types of problems in your organization.

Are you interested in uncovering innovative solutions for your organization’s business problems? Explore Design Thinking and Innovation —one of our online entrepreneurship and innovation courses —to learn how to leverage proven frameworks and tools to solve challenges. Not sure which course is right for you? Download our free flowchart .

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What is Problem Solving? (Steps, Techniques, Examples)

By Status.net Editorial Team on May 7, 2023 — 4 minutes to read

What Is Problem Solving?

Definition and importance.

Problem solving is the process of finding solutions to obstacles or challenges you encounter in your life or work. It is a skill that allows you to tackle complex situations, adapt to changes, and overcome difficulties with ease.

Problem-Solving Steps

The problem-solving process typically includes the following steps:

• Identify the issue : Recognize the problem that needs to be solved.
• Analyze the situation : Examine the issue in depth, gather all relevant information, and consider any limitations or constraints that may be present.
• Generate potential solutions : Brainstorm a list of possible solutions to the issue, without immediately judging or evaluating them.
• Evaluate options : Weigh the pros and cons of each potential solution, considering factors such as feasibility, effectiveness, and potential risks.
• Select the best solution : Choose the option that best addresses the problem and aligns with your objectives.
• Implement the solution : Put the selected solution into action and monitor the results to ensure it resolves the issue.
• Review and learn : Reflect on the problem-solving process, identify any improvements or adjustments that can be made, and apply these learnings to future situations.

Defining the Problem

To start tackling a problem, first, identify and understand it. Analyzing the issue thoroughly helps to clarify its scope and nature. Ask questions to gather information and consider the problem from various angles. Some strategies to define the problem include:

• Brainstorming with others
• Asking the 5 Ws and 1 H (Who, What, When, Where, Why, and How)
• Analyzing cause and effect
• Creating a problem statement

Generating Solutions

Once the problem is clearly understood, brainstorm possible solutions. Think creatively and keep an open mind, as well as considering lessons from past experiences. Consider:

• Creating a list of potential ideas to solve the problem
• Grouping and categorizing similar solutions
• Prioritizing potential solutions based on feasibility, cost, and resources required
• Involving others to share diverse opinions and inputs

Evaluating and Selecting Solutions

Evaluate each potential solution, weighing its pros and cons. To facilitate decision-making, use techniques such as:

• SWOT analysis (Strengths, Weaknesses, Opportunities, Threats)
• Decision-making matrices
• Pros and cons lists
• Risk assessments

After evaluating, choose the most suitable solution based on effectiveness, cost, and time constraints.

Implementing and Monitoring the Solution

Implement the chosen solution and monitor its progress. Key actions include:

• Communicating the solution to relevant parties
• Setting timelines and milestones
• Assigning tasks and responsibilities
• Monitoring the solution and making adjustments as necessary
• Evaluating the effectiveness of the solution after implementation

Utilize feedback from stakeholders and consider potential improvements.

Problem-Solving Techniques

During each step, you may find it helpful to utilize various problem-solving techniques, such as:

• Brainstorming : A free-flowing, open-minded session where ideas are generated and listed without judgment, to encourage creativity and innovative thinking.
• Root cause analysis : A method that explores the underlying causes of a problem to find the most effective solution rather than addressing superficial symptoms.
• SWOT analysis : A tool used to evaluate the strengths, weaknesses, opportunities, and threats related to a problem or decision, providing a comprehensive view of the situation.
• Mind mapping : A visual technique that uses diagrams to organize and connect ideas, helping to identify patterns, relationships, and possible solutions.

Brainstorming

When facing a problem, start by conducting a brainstorming session. Gather your team and encourage an open discussion where everyone contributes ideas, no matter how outlandish they may seem. This helps you:

• Generate a diverse range of solutions
• Encourage all team members to participate

When brainstorming:

• Reserve judgment until the session is over
• Encourage wild ideas
• Combine and improve upon ideas

Root Cause Analysis

For effective problem-solving, identifying the root cause of the issue at hand is crucial. Try these methods:

• 5 Whys : Ask “why” five times to get to the underlying cause.
• Fishbone Diagram : Create a diagram representing the problem and break it down into categories of potential causes.
• Pareto Analysis : Determine the few most significant causes underlying the majority of problems.

SWOT Analysis

SWOT analysis helps you examine the Strengths, Weaknesses, Opportunities, and Threats related to your problem. To perform a SWOT analysis:

• List your problem’s strengths, such as relevant resources or strong partnerships.
• Identify its weaknesses, such as knowledge gaps or limited resources.
• Explore opportunities, like trends or new technologies, that could help solve the problem.
• Recognize potential threats, like competition or regulatory barriers.

SWOT analysis aids in understanding the internal and external factors affecting the problem, which can help guide your solution.

Mind Mapping

A mind map is a visual representation of your problem and potential solutions. It enables you to organize information in a structured and intuitive manner. To create a mind map:

• Write the problem in the center of a blank page.
• Draw branches from the central problem to related sub-problems or contributing factors.
• Add more branches to represent potential solutions or further ideas.

Mind mapping allows you to visually see connections between ideas and promotes creativity in problem-solving.

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What is problem solving and why is it important?

By Wayne Stottler, Kepner-Tregoe

• Problem Solving & Decision Making Over time, developing and refining problem solving skills provides the ability to solve increasingly complex problems Learn More

For over 60 years, Kepner-Tregoe has been helping companies across industries and geographies to develop and mature their problem-solving skills through our industry-leading approach to training and the implementation of best-practice processes. Considering that problem solving is a part of almost every person’s daily life (both at home and in the workplace), it is surprising how often we are asked to explain what problem solving is and why it is important.

Problem solving is at the core of human evolution. It is the methods we use to understand what is happening in our environment, identify things we want to change and then figure out the things that need to be done to create the desired outcome. Problem solving is the source of all new inventions, social and cultural evolution, and the basis for market based economies. It is the basis for continuous improvement, communication and learning.

If this problem-solving thing is so important to daily life, what is it?

Problem-solving is the process of observing what is going on in your environment; identifying things that could be changed or improved; diagnosing why the current state is the way it is and the factors and forces that influence it; developing approaches and alternatives to influence change; making decisions about which alternative to select; taking action to implement the changes; and observing impact of those actions in the environment.

Each step in the problem-solving process employs skills and methods that contribute to the overall effectiveness of influencing change and determine the level of problem complexity that can be addressed. Humans learn how to solve simple problems from a very early age (learning to eat, make coordinated movements and communicate) – and as a person goes through life, problem-solving skills are refined, matured and become more sophisticated (enabling them to solve more difficult problems).

Problem-solving is important both to individuals and organizations because it enables us to exert control over our environment.

Fixing things that are broken

Some things wear out and break over time, others are flawed from day one. Personal and business environments are full of things, activities, interactions and processes that are broken or not operating in the way they are desired to work. Problem-solving gives us a mechanism for identifying these things, figuring out why they are broken and determining a course of action to fix them.

Addressing risk

Humans have learned to identify trends and developed an awareness of cause-and-effect relationships in their environment. These skills not only enable us to fix things when they break but also anticipate what may happen in the future (based on past experience and current events). Problem-solving can be applied to anticipated future events and used to enable action in the present to influence the likelihood of the event occurring and/or alter the impact if the event does occur.

Improving performance

Individuals and organizations do not exist in isolation in the environment. There is a complex and ever-changing web of relationships that exist and as a result, the actions of one person will often have either a direct impact on others or an indirect impact by changing the environment dynamics. These interdependencies enable humans to work together to solve more complex problems but they also create a force that requires everyone to continuously improve performance to adapt to improvements by others. Problem-solving helps us understand relationships and implement the changes and improvements needed to compete and survive in a continually changing environment.

Seizing opportunity

Problem solving isn’t just about responding to (and fixing) the environment that exists today. It is also about innovating, creating new things and changing the environment to be more desirable. Problem-solving enables us to identify and exploit opportunities in the environment and exert (some level of) control over the future.

Problem solving skills and the problem-solving process are a critical part of daily life both as individuals and organizations. Developing and refining these skills through training, practice and learning can provide the ability to solve problems more effectively and over time address problems with a greater degree of complexity and difficulty. View KT’s Problem Solving workshop known to be the gold standard for over 60 years.

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What is problem-solving? And why is it important in the workplace?

September 28, 2023 by MindManager Blog

If there’s one thing you can count on as a business professional, it’s that you’ll never run short of new problems to solve. Thankfully, whether it includes handling difficult or unexpected situations in the workplace, or resolving complex organizational challenges, we all have the capacity to develop our business problem-solving skills.

The best way to get better at tackling problems productively is to start at the beginning. After all, the better you understand what problem-solving is – and the significant role it plays in every organization – the easier you’ll find it to improve on problem-solving skills in the workplace.

Let’s dive in!

What is problem-solving?

Problem-solving refers to the act of find solutions to difficult or complex issues.

A good problem-solving definition might be finding solutions to difficult or complex issues . In practice, however, solving problems in the workplace is a little more immersive than that.

In the workplace, problem-solving includes a variety of tools, resources, and techniques to:

• Identify what’s not working.
• Figure out why it’s broken.
• Determine the best course of action to fix it.

Whether you know them as obstacles, glitches, or setbacks, problems are a part of our everyday lives. The good news is that our brains excel at reasoning out intricate scenarios and making calculations in situations we’ve never experienced before. That means every one of us is hard-wired to be an adept problem-solver.

The trick is to learn how to take that innate ability and apply it in a deliberate and practiced way.

However, one thing is certain: successfully resolving business and workplace issues is essential.

Not only does effective problem-solving create value that encourages growth, it goes hand-in-hand with impactful decision making.

What are the benefits of problem-solving in business?

Practically speaking, problem-solving provides a golden opportunity to improve your processes, products, and systems – especially when you work through those challenges with others.

Learning to face difficulties calmly, and deal with them intentionally, can also:

• Ramp up your confidence.
• Increase your resilience.
• Help you develop valuable critical thinking skills.

Applying problem-solving skills in the face of an obstacle that seems insurmountable trains you to shift your perspective and look at potential hurdles in a different way.

It also gets you used to examining multiple options for dealing with a problem, which can help you feel more confident in the direction you take.

Solving problems as a team

Business problem solving as a team offers an even wider range of benefits since active collaboration tends to make good things happen at both the individual and group level.

For example:

• Team-based problem-solving is akin to having a built-in sounding board when you explore new approaches and ideas.
• As each team member’s critical thinking skills evolve, they bring fresh insights to the collective problem-solving process, bearing out the old adage that many heads are better than one.
• Solving problems as a team also reduces the feeling of personal risk and exposure that’s common when one person is tasked with solving a puzzle. When that same problem is shared, the sense of risk gets dispersed, and individual team members are less likely to feel singled out.

Not only is there less chance of arriving at an unreasonable or biased solution when you problem-solve as a group, team members assigned to carry that solution out will feel more invested in its success.

Examples of problem solving skills in the workplace

Improving on your problem-solving skills helps you make the most of your brain’s natural capacity to analyze and reason things out.

There are dozens of problem-solving skills that play out in the average workplace – all of which can contribute to your ability to correct oversights, resolve conflict , and work around unexpected obstructions.

Here are a few common examples of problem-solving skills in the workplace, and tips on how to improve them.

1. Data gathering

Figuring out the cause of a problem hinges on collecting relevant data. Consulting efficiently with colleagues, conducting online research, and brainstorming with your team are all valuable data gathering skills.

2. Active listening

As opposed to listening in a purely supportive or empathetic way, active listening involves concentrating fully on what the other person is saying so you can understand the content, respond accordingly, and remember what was said later.

3. Troubleshooting

The ability to analyze and troubleshoot a situation with the help of any data and human input you’ve gathered is essential for drilling down into the core of a problem, and scrutinizing potential solutions.

4. Brainstorming

Brainstorming has become synonymous with creative thinking, innovative idea generation, and problem-solving. The more productive your brainstorming sessions, the more likely you and your group are to put together a list of quality, workable solutions.

It’s interesting to note that effective decision making is both a contributor to, and a by-product of, effective problem-solving.

For example, honing your analytical abilities and other problem-solving skills will inevitably help you make better decisions. The more efficient your decision-making process becomes, meanwhile, the better you’ll get at uncovering and acting on the most promising solution to any dilemma.

A simple problem-solving scenario

It’s clear that we can all benefit from getting more comfortable with problem-solving in the workplace.

Examples of situations where your problem-solving skills will come in handy aren’t difficult to find, and might include:

• Fixing a technical issue for your customer.
• Improving your student’s test performance.
• Reducing the theft of your in-store merchandise.
• Bumping up your marketing reach.

But, here’s the interesting thing. While it’s evident in each of these situations that there’s a problem to be solved, the exact nature of that problem isn’t so obvious.

In the student’s case, for example, you’d need additional input to help you figure out why they’re performing poorly. Only then would you be able to take steps to find the best-fit solution and achieve the desired learning outcome.

Here’s a simple scenario to help demonstrate that idea:

Bringing new customers onboard in a timely manner is an important part of your client relations strategy. Since hiring Alex a few weeks ago, however, your onboarding process has been taking longer than it should and team members are beginning to complain.

While you can see that the problem in this scenario is the fact that your team isn’t meeting their client onboarding goals, the key is to get clear on exactly what’s causing the hold-up.

You could jump to the conclusion that Alex has time management issues and that it’s time to start looking for a replacement. But, since one of the most common mistakes in business problem-solving is attempting to seize on a solution right away, that might cause you to waste time and resources on a remedy that ultimately proves unnecessary, or that doesn’t provide a viable fix.

Instead, it’s time to put your problem-solving skills to work.

Using data gathering and troubleshooting to pinpoint and clarify the bottleneck in your onboarding process – and active listening to interpret the situation from Alex’s perspective – you soon determine that the real cause of the problem is not what you thought.

In truth, an administrative oversight during the hiring process (yet another problem to be solved!) left Alex unaware of, and without access to, the business process map that’s so vital to efficiently onboarding new customers. Once you provide the necessary resources, it doesn’t take Alex long to get up to speed – and your client onboarding process to revert back to the well-oiled machine that it was.

Even with a team of eager problem-solvers by your side, the truth is that it’s often necessary to have the right problem-solving tools in place to achieve your desired results. That’s where versatile mind mapping software can help.

Not only does MindManager® provide a visual framework that fully supports the problem-solving process, it improves comprehension, inspires more creative solutions, and boosts your ability to make the best possible decisions.

Ready to take the next step?

MindManager helps boost collaboration and productivity among remote and hybrid teams to achieve better results, faster.

Why choose MindManager?

MindManager® helps individuals, teams, and enterprises bring greater clarity and structure to plans, projects, and processes. It provides visual productivity tools and mind mapping software to help take you and your organization to where you want to be.

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10-Step Problem Solving Process for Business Owners and Entrepreneurs

13 min. read

Updated September 25, 2024

When you start a small business or launch a startup, the one thing you can count on is the unexpected. No matter how thoroughly you plan, forecast, and test—problems are bound to arise. 

This is why, a key skill you must develop as an entrepreneur, is business problem solving.

What is problem solving?

Problem solving in business relates to establishing processes that mitigate or remove obstacles preventing you from reaching strategic goals. 

These are typically complex issues that create a gap between actual results and your desired outcome. They may be present in a single team, operational process, or throughout your organization, typically without an immediate or obvious solution. 

To find effective solutions, you need to establish consistent problem solving methods that help you: 

• • Explore solutions
• • Prioritize execution
• • Measure success

This should be similar to how you review business performance during a monthly plan review . 

You work through the same documentation, look for gaps, dig deeper to identify the root cause of the problem, and hash out options. 

Without this process, you can’t expect to solve problems efficiently or effectively. 

Why problem solving is important for your business

While some would say problem-solving comes naturally, it’s actually a skill you can grow and refine over time. 

The best business leaders didn’t just find a magic solution to solve their problems, they built processes and leveraged tools to find success. And you can do the same.

I’ll take you through the process, step-by-step, so you can confidently tackle any type of problem. 

1. Define the problem

When a problem arises, it’s all too easy to jump into finding a solution. 

While taking action is admirable, if you don’t correctly identify the source of the problem, you may not solve it. You just treat the symptoms, get short-term relief, and the likely possibility of the issue resurfacing.

For instance, if you realize that your sales from new customers are dropping, your first inclination might be to rush into upping your marketing spend to increase exposure. 

But what if decreasing sales are just a symptom of the real problem ?

You want to be sure you’re not missing the forest for the trees. 

So, whenever you have a large issue, take the time to look at it from multiple angles. While not exhaustive, here are a few places to start with:

Competition 

• • Is a competitor’s promotion or pricing affecting your sales?
• • Are there new entrants in your market ?
• • How are they marketing their product or business?

Business model 

• • Is your business model sustainable?
• • Is it realistic for how fast you want to grow?
• • Should you explore different pricing or cost strategies?

Market factors

• • Are world events, social trends, or your nation’s economy impacting customer spending?
• • Are there supply chain changes impacting your expenses or distribution processes?
• • Are there any issues affecting your team?
• • Do they have the tools and resources they need to succeed?

Goal alignment 

• • Is everyone on your team working toward the same goal ?
• • Have you communicated short-term and long-term business goals clearly and often?

Back to our example: By looking at every facet of your business, you may discover you’re already spending more on advertising than your competitors. Instead, a communication gap within your team is leading to the mishandling of new customers and therefore lost sales. 

If you jumped into fixing your brand exposure with more ads, you would have been dumping more money into an area you’re already winning. Potentially leading to greater losses as more and more new customers are dropped due to poor internal communication.

This is why it’s so vital that you explore your blind spots and track the problem to its source.

2. Conduct a SWOT analysis

All good businesses solve some sort of problem for customers. 

What if your particular business problem is an opportunity? What if it’s a strength if considered from a different angle? 

You’ll want to conduct a SWOT analysis to determine if that is the case. 

SWOT is a great tool to use whenever you’re looking at investing resources to solve a problem. It can help you avoid implementing a solution where the chances of success are low due to your current internal or external positioning.

You may even want to use this analysis when defining your problem—as it immediately frames problems and solutions through the lens of specific strengths and weaknesses of your business. Then use any opportunities or threats you identify to kickstart a solution.

If you’re not a fan of using SWOT as a problem-solving technique, there are plenty of other alternative frameworks to use. All that matters is that it helps you further identify the problem and what potential solutions may require.

3. Identify multiple solutions with design thinking

The worst thing you can do is limit your solutions. If you do, you may miss out on solutions that lead to better, cheaper, or faster results.

That’s why you may want to use the design thinking approach . It’s often used by organizations looking to solve big, community-based problems and emphasizes rapid iteration by opening up the floor to any and all ideas. 

One of the strengths of design thinking is that it brings a wide range of people into the problem-solving process. Allowing multiple perspectives and solutions to arise.

This approach—applying your company’s skills and expertise to a problem in the market—is the basis for design thinking.

It’s not about finding and solving the most complex problems, but common needs within the organization and in the real world. 

When you’re solving business problems, this applies in the sense that you’re looking for solutions that address underlying issues—you’re looking at the big picture.

4. Conduct market research and customer outreach

Market research and customer interviews aren’t meant to be done once and forgotten about. No, customer feedback should be something that you seek out frequently to ensure you’re meeting customer needs. 

Now, market research and the insights you get from customer outreach aren’t a silver bullet. Many companies struggle with what they should do with conflicting data points. But it’s worth gathering information that can help you better understand your target market. 

Plus, your customers can be one of the best sources of criticism. It’s a gift if you can avoid taking the negatives personally.

The worst thing you can do when facing challenges is to isolate yourself from your customers. 

So, if you haven’t been already, survey your customers. Talk to them. Take their feedback to heart and use it to further define the problem and potential solutions. 

5. Seek input from your team and your mentors

Hopefully, you haven’t waited to involve team members until five steps into solving a problem. If you have, it’s still not too late to reap the benefits of collaborating with others.

Ideally, you bring in different contributors throughout to express concerns, opinions, and ideas . Their feedback is going to help you move faster and more efficiently. 

If you have a team in place, bring them into the discussion. You hired them to be experts in their area; use their expertise to navigate and dig deeper into underlying causes of problems and potential solutions.

Quoting Stephen Covey, “strength lies in differences, not in similarities.” The more diverse a team is, the more often innovative solutions to the problems faced by the organization appear.

It has been found that groups that show greater diversity were better at solving problems than groups made up specifically of highly skilled problem solvers. So whoever you bring in to help you problem-solve, resist the urge to surround yourself with people who already agree with you about everything

If you’re running your business solo, bring in a trusted mentor instead. 

SCORE offers a free business mentorship program if you don’t already have one. It can also be helpful to connect with a business advisor , especially if business financials aren’t your strongest suit.

6. Apply growth planning for nimble execution

So you do your SWOT analysis and your design thinking exercise. You come up with a set of strong, data-driven ideas. However, implementing them requires you to adjust your budget, your strategic plan, or even your understanding of your target market.

Are you willing to change course? Can you quickly make adjustments? Well to grow, you can’t be afraid to be nimble. 

By adopting the growth planning method —plan, project, review, and revise—you can shift your strategies more fluidly. 

You don’t want to change course every week, and you don’t want to fall victim to shiny object thinking. But you can strike a balance to reduce your business’s risk while keeping your team heading in the right direction.

Along the way, you’ll make strategic decisions that don’t pan out how you hoped. The best thing you can do is test your ideas and iterate often to avoid wasting money and resources on things that don’t work. 

That’s growth planning in action.

7. Model different financial scenarios

Now, you have a detailed understanding of your problem and one or two solutions in mind. However, even with all of this planning and analysis, things are bound to change. 

Luckily, you can minimze your risk and plan how you’ll react if things go better or worse than expected, by developing a few different financial forecast scenarios. 

You might find that the idea that seemed the strongest will take longer than you thought to reverse a negative financial trend. Or another requires so much up front investment that it risks draining your cash reserves before any gains are realized.

Even if the answers aren’t as obvious as those examples, at the very least you’ll understand the financial impact of moving in a different direction.

The real benefit here is looking at different tactical approaches to the same problem. Maybe instead of increasing sales right now, you’re better off in the long run if you adopt a strategy to reduce churn and retain your best customers. 

You won’t know unless you model a few different scenarios. You can do this work with a customized spreadsheet or a dedicated forecasting tool like LivePlan.

8. Watch your cash flow

While you’re working to solve a challenging business problem, pay particular attention to your cash flow and your cash flow forecast . 

Understanding when your company is at risk of running out of cash in the bank can help you be proactive. It’s a lot easier to get a line of credit while your financials still look good and healthy, than when you’re one pay period away from ruin.

Remember, it’s easy to get tunnel vision. You’ll benefit from maintaining a little breathing room for your business as you figure out what to do next.

9. Use a decision-making framework

Once you’ve gathered all the information you need, generated a number of ideas, and done some financial modeling, you might still feel uncertain. 

It’s natural—you’re not a fortune-teller. You’re trying to make the best decision you can with the information you have. This is why it may be helpful to use a simple decision matrix to put everything you’ve learned on the table.

Whatever format you use to make a final decision—just stick with it. Like all the SWOT analysis alternatives, these decision frameworks all do the same thing. 

The important thing is that it makes it easy to bring everything together, review what each solution requires, and quickly move forward.  

10. Identify key metrics to track

How will you know your problem is solved? And not just the symptom—how will you know when you’ve addressed the underlying issues? 

Well, that requires you to define what success looks like. And it doesn’t have to be as complicated or daunting as that may sound.

Just decide on a few key performance indicators . 

Take a baseline measurement, and set a goal and a timeframe. You’re essentially translating your solution into a plan, complete with milestones and goals. Without these, you’ve simply made a blind decision with no way to track success. 

You need those goals and milestones to make your plan real .

Problem solving skills to improve

As you and your team work through this process, there are specific problem solving skills you should continue to develop.

Emotional intelligence

It can be very easy to make quick, emotional responses during a crisis or when discussing something you’re passionate about. 

You need to avoid making assumptions and letting your emotions get the best of you, by focusing on empathizing with others. This involves understanding your own emotional state and reactions—while also listening carefully to your team. 

The better you listen and keep your emotions in check, the better you’ll be at asking for and taking advice that leads to effective problem solving.

Jumping right into a solution can immediately kill the possibility of solving your problem. 

Just like when you start a business , you need to research what the problem you’re solving is. Luckily, you can embed research into your problem solving by holding active reviews of financial performance and team processes.

Simply asking “What? Where? When? How?” can lead to more in-depth explorations of potential issues.

The best thing you can do to grow your research abilities is to encourage and practice curiosity. Look at every problem as an opportunity. Something that may be trouble now, but is worth exploring and finding the right solution. 

You’ll pick up best practices, useful tools and fine-tune your own research process the more you’re willing to explore.

Brainstorming

Creatively brainstorming with your team is somewhat of an art form.

There needs to be a willingness to throw everything at the wall and act as if nothing is a bad idea at the start. This style of collaboration encourages participation without fear of rejection. It also helps outline potential solutions outside of your current scope, that you can refine and turn into realistic action.

Work on breaking down problems and try to give everyone in the room a voice. The more input you allow, the greater potential for finding the best solution.

Decisiveness

One thing that can drag out acting upon a potential solution, is being indecisive.

If you aren’t willing to state when the final cutoff for deliberation is, you won’t take steps quickly enough. This is when having a process for problem solving comes in handy, as it purposefully outlines when you should start taking action.

Work on choosing decision-makers, identify necessary results, and be prepared to analyze and adjust if necessary. You don’t have to get it right every time, but taking action at the right time, even if it fails, is almost more vital than never taking a step.  

Stemming off failure, you need to learn to be resilient. Again, no one gets it perfect every single time.

There are so many factors to consider and sometimes even the most well-thought-out solution doesn’t stick. Instead of being down on yourself or your team, separate yourself from the problem and continue to think of it as a puzzle worth solving. 

Every failure is a learning opportunity that only helps you further refine and eliminate issues in your strategy.

Problem solving is a process

The key to effective problem-solving in business is the ability to adapt. You can waste a lot of resources by staying on the wrong course for too long. 

So make a plan to reduce your risk now. 

Consider what you’ll do when faced with a problem large enough to sink your business. Be as proactive as you can, develop the necessary skills, and test multiple approaches to problem solving (even outside of the process listed here).

Lastly, explore tools that will help you create plans and track your progress. At a minimum, use performance dashboard software to make critical business information readily available. 

This will make it much easier to identify problems, dig into what’s causing them, and immediately measure the impact of your decisions. 

Just remember, a tool cannot replace your ability to problem solve. Focus on adopting a consistent process first—then look for ways to improve it. 

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Harriet Genever

Harriet Genever is a freelance writer and copyeditor, specializing in blog posts, research articles and customer case studies. As the founder of her Australian-based business, Write Beyond, she works with B2B companies and small business, developing compelling content to attract customers and keep them engaged. With a background in Human Resource Management, Harriet enjoys the personal interaction with clients and their customers when working on writing projects. She is also a true believer that the key to success in any business is its people.

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