A 7-step structured problem-solving process to deal with your business challenges
Problem-solving is a daily task in any business. But what do you do when major problems keep recurring over and over? If it feels as if you’re constantly putting out fires in your company, it may be because you’re not solving the underlying causes of key issues in a structured way.
“Many companies spend a lot of energy on firefighting without ever addressing the root causes of issues,” says Anish Ambujakshan, a Senior Business Advisor with BDC Advisory Services who specializes in operational efficiency. “The result is a lot of wasted time, resources and effort as the same problems keep coming back and getting worse.”
He likens problem-solving to weeding your garden. “If you just remove the surface, the problem will come back. You need to pull out the root.”
Ambujakshan advises businesses to follow a seven-step structured problem-solving process to fix challenges once and for all.
It’s important to clearly define the problem and the associated factors contributing to that problem.
Anish Ambujakshan
Senior Business Advisor, BDC Advisory Services
1. Identify the problem
The first step is to identify critical problems in your business. Examples could be:
- declining customer satisfaction
- high employee turnover
- a drop in profitability or sales
- instances of the “8 wastes,” such as inefficient operations or activity, idle employees or machines, or misused resources
Most entrepreneurs aren’t aware of the full extent of waste and other challenges in their company. To identify them, Ambujakshan recommends doing a physical walk-through of your plant or office, known as a Gemba walk. (This is the first of the three steps of implementing lean thinking in a business.)
2. Describe the situation
Next, describe the problem in detail. For example, it’s not enough to say your company’s problem is that customers are unhappy. A better description would be that customers aren’t happy with lead times and that client satisfaction has dropped 30% from last year.
“It’s important to clearly define the problem and the associated factors contributing to that problem. On the other hand, defining the problem shouldn’t be complicated. This step, though not to be missed, is just to make sure you are solving the right problem,” Ambujakshan says.
The six questions below could help you to describe your operational problems.
6 questions to help describe your operational problems
- Does the problem happen constantly or only occasionally?
- When did the problem occur?
- Where did the problem occur?
- What are the processes, products or parts in question?
- What changed recently? Are there new participants?
- Who is concerned or needs to be informed?
For more complex problems or those involving several departments, you may need to do process mapping. This is a way to visualize workflow from start to finish and helps you understand which processes or areas of the business are most responsible for a problem.
For example, if your customers aren’t happy due to longer lead times, you need to better understand which area of operations is causing the delay. A process mapping exercise can show your workflow involving your different areas—for example, design, handling raw materials, fabrication, assembly, painting, finishing and shipping. With mapping, you may find out that painting contributes the most to lead time. This means the painting area is where you can prioritize efforts on a solution.
“Complex problems need broader evaluations. In such cases, mapping not only helps in visualization of your processes, but also helps you identify problem sources across your operational areas and the most impactful solutions,” Ambujakshan says.
3. Take temporary countermeasures
You may need to take quick action to temporarily resolve problems until you’re able to implement a more complete solution. For example, an unhappy customer could be offered a credit or discount while the reasons for the problem are addressed.
4. Find the root cause
It’s essential to find the underlying cause of problems in order to develop the right solutions. A simple problem can be tackled with the “five whys” approach—asking “why” at least five times to trace the problem back to its source.
For example, if protective strips are coming off a machine, the five whys process could look like this.
Five whys approach example: protective strips are coming off a machine
More complex problems or those involving several departments can be analyzed with an Ishikawa diagram, named after its creator, Kaoru Ishikawa, a Japanese quality-control guru. Also sometimes known as a fishbone diagram, the tool is a way to visualize and analyze a problem’s potential causes in various functions of a business.
What is root cause analysis?
Root cause analysis is a structured way to identify underlying reasons for a business issue. It’s a key tool of operational efficiency and lean thinking. The idea is to go beyond symptoms or superficial causes of a problem to discover the core reason it occurs.
The five whys approach and fishbone (Ishikawa) diagrams are two common root cause analysis methods.
5. Propose solutions
When the root causes of the problem are understood, involve your team in brainstorming about solutions. Be sure to consider how the solutions will affect all areas of the business. You can use Pareto analysis to focus on the causes that have the greatest impact on your business.
An action plan creates more ownership and responsibility within your team.
6. Establish and implement an action plan
With your team, develop an action plan to implement the solutions. The plan should detail specific initiatives, who is responsible for carrying out them out and a timeline. It should also include key performance indicators to gauge the impact on the business.
“The effectiveness of your solutions depends on how well you manage them with your employees. That’s why creating and proactively managing an action plan is important. An action plan creates more ownership and responsibility within your team,” Ambujakshan says.
In the example above where painting contributed to long lead times, root cause analysis may reveal that the bottleneck at the painting stage is due to long drying time of the paint. The solution could be to speed up the paint drying process. Action plan items could include steps to speed up the drying time (e.g. buying a more powerful drying fan) and measuring the drying time as a baseline to improve.
7. Check results
It’s important to follow up with your team to make sure action items have been accomplished and monitor improvements to gauge impacts on your business. Also be ready to adjust your action plan if needed and evaluate any gaps between anticipated and actual results.
If lead time goes down and clients get your product earlier, that could solve your customer satisfaction problem. If not, you may need to review the process to look for other root causes or solutions.
“Success is determined by your clients,” Ambujakshan says. “Your customers can accelerate your operational efficiency journey.”