Decision Making

Analyzing the Problem

Problem solving skills are an important resource in a small business toolkit. The best entrepreneurs are masters at problem solving, maybe because they know how to properly analyze problems before they make decisions.

A business owner without problem solving skills is like a carpenter without a hammer.

In the world of business, new problems are thrown at you everyday, sometimes at a blistering pace. While some problems are relatively insignificant, others have major consequences and require immediate action. Unfortunately, many business owners simply aren't equipped with the skills they need to make the right decisions when it really matters.

A lack of business problem solving skills usually isn't due to a shortage of intelligence or even business know-how. More often than not, it can be attributed to an inability to adequately analyze problems before taking action. When time is of the essence, entrepreneurs have a tendency to act before they have really considered the parameters of the situation. So for business owners, the first step in improving problem solving skills is learning how to analyze the problems they face on a daily basis.

Here are some of the questions you'll need to ask yourself before you commit to a course of action:

What's the problem? Problems can involve lots of different things: People, situations, goals, hurdles, etc. But most problems don't involve all of those things at once. Before you do anything else, take a moment to clarify the actual nature of the problem.
Is it one problem or multiple problems? Really challenging problems may consist of multiple problems. Since solving multiple problems simultaneously isn't realistic, carefully deconstruct the problem and resolve each issue one by one.
How big is the problem? Urgency tends to magnify the scope of problems. Take a step back and determine the scope of the problem. Maybe it's limited to a single business unit and maybe it affects the entire company. Either way, you need to know what you're dealing with before you spring into action.
Whose problem is it? Skilled problem solvers are adept at determining responsibility for the problems that come across their desk. For example, if a vendor incurred unexpected costs shipping supplies to your location, that's a problem - but contractually, it may not be your problem.
How have others solved similar problems? Don't reinvent wheels! There's a good chance that you're not the only person who has ever had to deal with the problem you're facing. Do some research and base your decisions on proven resolution strategies.
What needs to be done to resolve the problem? Ultimately, you'll need to decide exactly what needs to be done to solve the problem, how long it will take, and who will do it. But by the time you reach this stage of the process, you can be confident that you thoroughly understand the problem and its implications for your company.