As a business leader you come across situations on a daily basis that derail your plans and take you away from the to do list. How many times have you seen a reoccurrence of a situation and wondered ‘why is this happening again, I thought we solved this?!’
Critical analysis of a situation, and the selection of an appropriate course of action is at the heart of successful business, and is a key component of effective business leadership.
Often, due to the relentless treadmill of SME business life, situations are misinterpreted and course of action rushed, resulting in negative consequence and repeated frustration.
Improving outcomes
Next time you come across a situation ask yourself ‘Is there a problem that needs to be identified and explored before making a decision?
Ask:
Why has this situation arisen?
Have I been asked this before?
Is this truly a decision to make or a problem to explore?
Can the action we take here create opportunity?
Consistently asking and answering these vital questions can mean success or failure within business. Unresolved problems can leave your business in a vulnerable situation with decreasing levels of performance, dissatisfied customers and frustrated employees.
Critical thinking
Both problem solving and decision-making skills are essential for leaders and employees. The two work in conjunction with one another in many scenarios, but it is important to acknowledge that problem-solving and decision-making are not the same. In order to deploy the correct analytical approach in a given situation we must make a clear distinction between the two:
Definitions – Oxford dictionary
Problem - a matter or situation regarded as unwelcome or harmful and needing to be dealt with and overcome.
Decision - a conclusion or resolution reached after consideration.
The process of problem-solving and decision-making are both analytical and share many similarities, such as:
Seek to define the problem or decision
Gather information and quantify the impact if the problem persists or if a decision is not made
Explore options and assess the impact
Make a decision surrounding course of action
Take action
Review the outcome
As you can see from the above decision-making features as part of both the problem-solving and decision-making processes. The key difference here is that problem solving seeks to identify the WHY and get to the real reason for the problem occurring and a decision being required.
Understanding the WHY enables a business to truly understand the root-cause, rather than treating time and time again the symptoms of the problem. Depending on the complexity and the impact of the problem, it is sometimes beneficial to introduce containment actions to minimise the risk to the business whilst more permanent solutions are explored and decisions made.
How can I understand the WHY?
There are many ways to explore the WHY and the chosen method can depend on a number of factors, such as complexity of the problem, business environment, industry, etc.
Below you will find several methods, along with links to explore in more detail:
5 Whys
Cause and effect analysis
Root Cause analysis
Failure Mode and Effects Analysis
Six Sigma
Explore problem solving methods here
Summary
Problem-solving and decision-making is not just for leadership, and by instilling a culture of effective problem-solving and decision-making within your business you will experience many benefits.
To list a few:
Improved RoI
Increased analytical skills across the workforce
Improved outcomes
More satisfied, equipped and empowered employees
Reduced reliance on leadership and management
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About the author.
Hi, I'm Heather Beckett - the founder of BPO. I have a background in strategy, programme, project and change management and take a hands-on, sleeves rolled up approach. I help small business owners to move away from the day-to-day and create capacity to think, plan and act more strategically.