Be a better problem-solver

Let’s imagine you have a problem on your hands – a fairly complex business issue, that may have an impact on your, or your company’s, future. It might be a question of how to improve profitability, increase sales, or raise operational efficiency. You have speculated about how to find the best options to solve the issue, weighed the alternatives, discussed the situation with your colleagues and stakeholders – and ended up going back to the drawing board once again.

A very effective way of avoiding the uncertainties and delays that so often frustrate decision-making is to employ the KPMG Global Strategy Group’s 5-step Problem Solving Approach (PSA), which is often used together with our ‘9 Levers of Value’ strategy framework.

Step 1: Identify the challenges

In order to identify the challenges, you first need to be sure you have set up the right questions to be answered. In an optimal setting, these ‘exam questions’ need to be clearly articulated and closely connected to your organization’s strategy, and they need to have measurable outcomes.
A sample ‘exam question’: What set of actions could my company implement over the next 2 years to increase the operating margin from 3% to 7%?

Step 2: Deconstruct the problem

Break down the problem by using an issue tree, for example, to identify the most critical parts. This creates an opportunity for your stakeholders to engage in setting up the problem to be solved, and will help you to focus on the key aspects, without neglecting the small but significant details.

Step 3: Define the approach

This is where you will start to construct solutions to the problem by using an issue tree or other similar depiction. You need to create possible solutions, based on hypotheses of the most important issues to be solved. All hypotheses must answer the ‘exam question’ and follow the other guidelines that have been set by the organization.

Step 4: Refine the options

You then need to analyze and test these hypotheses or potential problem solutions, and, sooner or later, this will lead to a realization either that some approaches are feasible, or that new ones need to be created and tested. A simple tree or table will help you to organize and visualize this phase.
Considering the impacts of the different options is also a key element of this step, as many options will still be available for you to follow. As in the previous steps, engage colleagues and stakeholders in your analysis and findings. The concrete deliverable here should be a long list of feasible options, together with impact assessments and selection criteria.

Step 5: Finalize the options

In this step, you will make the necessary decisions in order to really start solving your problem by implementing the selected options. Before this, you may still need 1) to assess the intended and unintended consequences, and 2) to consider the practical aspects of implementing the planned solutions.

This structured approach will ensure that you find better answers more quickly, while preventing you from adopting solutions too early in the problem solving process. Last, but not least, remember that good visualization and storytelling will always increase understanding and buy-in for the implementation phase.