business problem solving course

• Courses for Individuals

Understanding and Solving Complex Business Problems

Management and Leadership

Certificate Credits

- Operations

- Systems Thinking

• Participants

Course Highlights

• Discover MIT's unique, powerful, and integrative System Dynamics approach to assess problems that will not go away
• Experience the Beer Game, which simulates the supply chain of the beer industry
• Learn a new way of thinking about and resolving complex, persistent problems that emerge from change
• Earn a certificate of course completion from the MIT Sloan School of Management

Why attend Understanding and Solving Complex Business Problems?

Systems thinking was designed to improve people's ability to manage organizations comprehensively in a volatile global environment. It offers managers a framework for understanding complex situations and the dynamics those situations produce. Systems thinking is a response to the rapid changes in technology, population, and economic activity that are transforming the world, and as a way to deal with the ever-increasing complexity of today's business.

Senior managers can use systems thinking to design policies that lead their organizations to high performance. The program is intended to give participants the tools and confidence to manage organizations with full understanding and solid strategy.

Course experience

This complex problem-solving course introduces participants to MIT's unique, powerful, and integrative System Dynamics approach to assess problems that will not go away and to produce the results they want. Through exercises and simulation models, participants experience the long-term side effects and impacts of decisions and understand the ways in which performance is tied to structures and policies.

Sample Schedule—Subject to Change

This program is designed for executives with decision-making responsibility who are looking for fresh ideas to resolve organizational problems.

Past participants have included

• VPs and EVPs
• Corporate planners and strategists
• Senior Project Managers
• Product Development Managers

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This program is designed to empower you to analyze complex problems in any area by using powerful yet very simple tools which are also very easy to use in real world, I enjoyed it a lot.

—Jia X.

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What mit’s beer game teaches about panic hoarding, mit’s ‘beer game’ shows humans are weakest link in supply chains, the beer game, john sterman on system dynamics, how the ‘beer game’ helps retailers solve toilet paper crisis, course offerings.

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Design Thinking and Innovation

Key concepts, who will benefit, aspiring or current innovation managers, entrepreneurs, product managers, developers, and marketers.

What You Earn

Certificate of Completion

Boost your resume with a Certificate of Completion from HBS Online

Earn by: completing this course

Certificate of Specialization

Prove your mastery of entrepreneurship and innovation

Earn by: completing any three courses within this subject area to earn a Certificate of Specialization

Content Week - Clarify: Empathy and Understanding

• An Introduction to Innovation
• Clarify Through Observation
• Insights and Problem Framing
• The Right Enviroment for Creativity

Featured Exercises

Project week – clarify.

• Project Instructions

Content Week - Ideate, Part 1: Tools for Generating Ideas

• Establishing Focus with Design Principles
• The Ideation Process: Getting Started with SIT
• More SIT Tools for Ideation
• Open-Ended Approaches to Generating Ideas
• Review of Project Work

Content Week - Ideate, Part 2: User Values and Behaviors

• Design Heuristics for Generating and Refining Ideas
• Designing for Behavior Change

Project Week - Ideate

Content Week - Develop: An Experimentation Mindset

• Idea Selection and Evaluation
• Defining and Refining Your Prototype Plan
• Prototyping: From Exploration to Validation
• Leading Concept Development

Content Week - Implement: Communication and Structure

• Overcoming Developer and User Bias
• Strategies for Communicating Value
• Managing an Innovation Culture

So You Want to Be an Entrepreneur: How to Get Started

Our difference, about the professor.

Srikant Datar Design Thinking and Innovation

Dates & eligibility.

No current course offerings for this selection.

All applicants must be at least 18 years of age, proficient in English, and committed to learning and engaging with fellow participants throughout the course.

Learn about bringing this course to your organization .

Learner Stories

Design Thinking and Innovation FAQs

Could you tell me a little more about the ai course assistant chat bot.

You can think of the beta version of the Design Thinking and Innovation AI Course Assistant chat bot in two ways: like a virtual Teaching Assistant who can help you consolidate and confirm your understanding of course concepts, and as a virtual Learner Success Assistant who can help you stay on track with completing the coursework in a timely fashion. When you are finding a particular concept difficult to master, or would like additional examples of a theory, try asking the bot your question in the same way you would phrase it to a human TA. If you have a question pertaining to where or how to submit certain assignments, or one relating to deadlines or time estimates, you can also express those in a similar fashion. Please note that no preexisting familiarity or experience with generative AI is necessary or assumed to use the bot and, while we encourage you to engage with the bot and share your candid feedback on your experience, a lack of engagement with the bot will not adversely impact your eligibility for a certificate of completion.

What are the learning requirements in order to successfully complete the course, and how are grades assigned?

Participants in Design Thinking and Innovation are eligible for a Certificate of Completion from Harvard Business School Online.

Participants are expected to fully complete all coursework in a thoughtful and timely manner. This will mean meeting each week’s course module deadlines and fully answering questions posed therein. This helps ensure participants proceed through the course at a similar pace and can take full advantage of social learning opportunities. In addition to module and assignment completion, we expect you to offer feedback on others’ reflections and contribute to conversations on the platform. Participants who fail to complete the course requirements will not receive a certificate and will not be eligible to retake the course.

More detailed information on course requirements will be communicated at the start of the course. No grades are assigned for Design Thinking and Innovation. Participants will either be evaluated as complete or not complete.

What materials will I have access to after completing Design Thinking and Innovation?

You will have access to the materials in every prior module as you progress through the program. Access to course materials and the course platform ends 60 days after the final deadline in the program.

At the end of each course module, you will be able to download a PDF summary highlighting key concepts used throughout the course. At the end of the program, you will receive a PDF compilation of all of the module summary documents. We hope the module summary documents will serve as a helpful resource after you finish the course.

How should I list my certificate on my resume?

Once you've earned your Certificate of Completion, list it on your resume along with the date of completion:

Harvard Business School Online Certificate in Design Thinking and Innovation [Cohort Start Month and Year]

List your certificate on your LinkedIn profile under "Education" with the language from the Credential Verification page:

School: Harvard Business School Online Dates Attended: [The year you participated in the program] Degree: Other; Certificate in Design Thinking and Innovation Field of Study: Leave blank Grade: "Complete" Activities and Societies: Leave blank

Description: Design Thinking and Innovation is a 7-week, 40-hour online certificate program from Harvard Business School. Design Thinking and Innovation will teach you how to leverage fundamental design thinking principles and innovative problem-solving tools to address business challenges and build products, strategies, teams, and environments for optimal use and performance.

The program was developed by leading Harvard Business School faculty and is delivered in an active learning environment based on the HBS signature case-based learning model.

What is the project?

Beginning in Module 2 of Design Thinking and Innovation, you will apply the tools you learn in the course to an innovation problem that is important or interesting to you, or you can use a provided scenario. In subsequent modules, you will use your earlier responses to build on your innovation project and make each phase of design thinking relevant to your own work.

Do I need to collaborate with others to complete the project?

No, each individual submits their own work in Design Thinking and Innovation, and all project work can be submitted without sharing it with others in the course. You are encouraged to share with others and ask for feedback, but collaboration isn’t necessary to advance through the course.

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The Right Way to Solve Complex Business Problems

Corey Phelps, a strategy professor at McGill University, says great problem solvers are hard to find. Even seasoned professionals at the highest levels of organizations regularly...

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Corey Phelps, a strategy professor at McGill University, says great problem solvers are hard to find. Even seasoned professionals at the highest levels of organizations regularly fail to identify the real problem and instead jump to exploring solutions. Phelps identifies the common traps and outlines a research-proven method to solve problems effectively. He’s the coauthor of the book, Cracked it! How to solve big problems and sell solutions like top strategy consultants.

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Welcome to the IdeaCast from Harvard Business Review. I’m Curt Nickisch.

Problem-solving is in demand. It’s considered the top skill for success at management consulting firms. And it’s increasingly desired for everyone, not just new MBA’s.

A report from the World Economic Forum predicts that more than one-third of all jobs across all industries will require complex problem-solving as one of their core skills by 2020.

The problem is, we’re often really bad at problem-solving. Our guest today says even the most educated and experienced of senior leaders go about it the wrong way.

COREY PHELPS: I think this is one of the misnomers about problem-solving. There’s this belief that because we do it so frequently – and especially for senior leaders, they have a lot of experience, they solve problems for a living – and as such we would expect them to be quite good at it. And I think what we find is that they’re not. They don’t solve problems well because they fall prey to basically the foibles of being a human being – they fall prey to the cognitive biases and the pitfalls of problem-solving.

CURT NICKISCH: That’s Corey Phelps. He says fixing these foibles is possible and almost straightforward. You can improve your problem-solving skills by following a disciplined method.

Corey Phelps is a strategy professor at McGill University. He’s also the co-author of the book “Cracked It: How to Solve Big Problems and Sell Solutions like Top Strategy C onsultants.” Corey thanks for coming on the show.

COREY PHELPS: Thank you for the opportunity to talk.

CURT NICKISCH: Another probably many, many biases that prevent people from solving big problems well.

COREY PHELPS: Absolutely.

CURT NICKISCH: What are some of the most common, or your favorite stumbling blocks?

COREY PHELPS: Well, one of my favorites is essentially the problem of jumping to solutions or the challenge of jumping to solutions.

CURT NICKISCH: Oh, come on Corey. That’s so much fun.

COREY PHELPS: It is, and it’s very much a result of how our brains have evolved to process information, but it’s my favorite because we all do it. And especially I would say it happens in organizations because in organizations when you layer on these time pressures and you layer on these concerns about efficiency and productivity, it creates enormous, I would say incentive to say “I don’t have time to carefully define and analyze the problem. I got to get a solution. I got to implement it as quick as possible.” And the fundamental bias I think is, is illustrated beautifully by Danny Kahneman in his book “Thinking, Fast and Slow,” is that our minds are essentially hardwired to think fast.

We are able to pay attention to a tiny little bit of information. We can then weave a very coherent story that makes sense to us. And then we can use that story to jump very quickly to a solution that we just know will work. And if we just were able to move from that approach of what Kahneman and cognitive psychologists called “System 1 thinking” to “System 2 thinking” – that is to slow down, be more deliberative, be more structured – we would be able to better understand the problem that we’re trying to solve and be more effective and exhaustive with the tools that we want to use to understand the problem before we actually go into solution-generation mode.

CURT NICKISCH: Complex problems demand different areas of expertise and often as individuals we’re coming to those problems with one of them. And I wonder if that’s often the problem of problem-solving, which is that a manager is approaching it from their own expertise and because of that, they see the problem through a certain way. Is that one of the cognitive biases that stop people from being effective problem solvers?

COREY PHELPS: Yeah. That’s often referred to as the expertise trap. It basically colors and influences what we pay attention to with respect to a particular problem. And it limits us with respect to the tools that we can bring to bear to solve that problem. In the world of psychology, there’s famous psychologist, Abraham Maslow, who is famous for the hierarchy of needs. He’s also famous for something that was a also known as MaSlow’s axiom, Maslow’s law. It’s also called the law of the instrument, and to paraphrase Maslow, he basically said, “Look, I suppose if the only tool that you have in your toolkit is a hammer, everything looks like a nail.”

His point is that if you’re, for example, a finance expert and your toolkit is the toolkit of let’s say, discounted cash flow analysis for valuation, then you’re going to see problems through that very narrow lens. Now, one of the ways out of this, I think to your point is collaboration becomes fundamentally important. And collaboration starts with the recognition that I don’t have all of the tools, all of the knowledge in me to effectively solve this. So I need to recruit people that can actually help me.

CURT NICKISCH: That’s really interesting. I wonder how much the fact that you have solved a problem before it makes you have a bias for that same solution for future problems?

COREY PHELPS: Yeah, that’s a great question. What you’re alluding to is analogical reasoning, and we know that human beings, one of the things that allows us to operate in novel settings is that we can draw on our past experience. And we do so when it comes to problem solving, often times without being conscious or mentally aware of it. We reach into our memory and we ask ourselves a very simple question: “Have I seen a problem like this before?”

And if it looks familiar to me, the tendency then is to say, “Okay, well what worked in solving that problem that I faced before?” And then to say, “Well, if it worked in that setting, then it should work in this setting.” So that’s reasoning by analogy.

Reasoning by analogy has a great upside. It allows human beings to not become overwhelmed by the tremendous novelty that they face in their daily lives. The downside is that if we don’t truly understand it at sort of a deep level, whether or not the two problems are similar or different, then we can make what cognitive psychologists called surface-level analogies.

And we can then say, “Oh, this looks a lot like the problem I faced before, that solution that worked there is going to easily work here.” And we try that solution and it fails and it fails largely because if we dug a little bit deeper, the two problems actually aren’t much alike at all in terms of their underlying causes.

CURT NICKISCH: The starkest example of this, I think, in your book is Ron Johnson who left Apple to become CEO of JC Penney. Can you talk about that a little bit and what that episode for the company says about this?

COREY PHELPS: So yes, its – Ron Johnson had been hired away from Target in the United States to, by Steve Jobs to help create Apple stores. Apple stores are as many people know the most successful physical retailer on the planet measured by, for example, sales per square foot or per square meter. He’s got the golden touch. He’s created this tremendously successful retail format for Apple.

So the day that it was announced that Ron Johnson was going to step into the CEO role at JC Penney, the stock price of JC Penney went up by almost 18 percent. So clearly he was viewed as the savior. Johnson moves very, very quickly. Within a few months, he announces that he has a strategic plan and it basically comes in three parts.

Part number one is he’s going to eliminate discount pricing. JC Penney had been a very aggressive sales promoter. The second piece of it is he’s going to completely change how they organize merchandise. It’s no longer going to be organized by function – so menswear, housewares, those sorts of things. It’s going to be organized by boutique, so there’s going to be a Levi’s boutique, a Martha Stewart Boutique, a Joe Fresh Boutique and so on.

And it would drop the JC P enney name, they would call it JCP. And he rolls this out over the course of about 12 months across the entire chain of over 1100 stores. What this tells us, he’s so confident in his solution, his strategic transformation, that he doesn’t think it’s worth it to test this out on one or two pilot stores.

CURT NICKISCH: Yeah, he was quoted as saying: “At Apple, we didn’t test anything.”

COREY PHELPS: We didn’t test. Yes. What worked at Apple, he assumed would work at JC Penney. And the critical thing that I think he missed is that JC Penney customers are very different from Apple store customers. In fact, JC Penney customers love the discount. They love the thrill of hunting for a deal.

CURT NICKISCH: Which seems so fundamental to business, right? Understanding your customer. It’s just kind of shocking, I guess, to hear the story.

COREY PHELPS: It is shocking and especially when you consider that Ron Johnson had spent his entire career in retail, so this is someone that had faced, had seen, problems in retailers for decades – for over three decades by the time that he got to JC Penney. So you would expect someone with that degree of experience in that industry wouldn’t make that leap of, well, what worked at Apple stores is going to work at JC Penney stores, but in fact that’s exactly what happened.

CURT NICKISCH: In your book, you essentially suggest four steps that you recommend people use. Tell us about the four steps then.

COREY PHELPS: So in the book we describe what we call the “Four S method,” so four stages, each of which starts with the letter “s”. So the first stage is “state the problem.” Stating the problem is fundamentally about defining what the problem is that you are attempting to solve.

CURT NICKISCH: And you probably would say don’t hurry over that first step or the other three are going to be kind of pointless.

COREY PHELPS: Yeah, that’s exactly the point of of laying out the four s’s. There’s a tremendous amount of desire even amongst senior executives to want to get in and fix the problem. In other words, what’s the trouble? What are the symptoms? What would define success? What are the constraints that we would be operating under? Who owns the problem? And then who are the key stakeholders?

Oftentimes that step is skipped over and we go right into, “I’ve got a hypothesis about what I think the solution is and I’m so obsessed with getting this thing fixed quickly, I’m not going to bother to analyze it particularly well or test the validity of my assumptions. I’m going to go right into implementation mode.”

The second step, what we call “structure the problem” is once you have defined the problem, you need to then start to identify what are the potential causes of that problem. So there are different tools that we talked about in the book that you can structure a problem for analysis. Once you’ve structured the problem for analysis and you’ve conducted the analysis that helps you identify what are the underlying causes that are contributing to it, which will then inform the third stage which is generating solutions for the problem and then testing and evaluating those solutions.

CURT NICKISCH: Is the danger that that third step – generating solutions – is the step that people spend the most time on or have the most fun with?

COREY PHELPS: Yeah. The danger is, is that what that’s naturally what people gravitate towards. So we want to skip over the first two, state and structure.

CURT NICKISCH: As soon as you said it, I was like, “let’s talk about that more.”

COREY PHELPS: Yeah. And we want to jump right into solutioning because people love to talk about their ideas that are going to fix the problem. And that’s actually a useful way to frame a discussion about solutions – we could, or we might do this – because it opens up possibilities for experimentation.

And the problem is that when we often talk about what we could do, we have very little understanding of what the problem is that we’re trying to solve and what are the underlying causes of that problem. Because as you said, solution generation is fun. Look, the classic example is brainstorming. Let’s get a bunch of people in a room and let’s talk about the ideas on how to fix this thing. And again, be deliberate, be disciplined. Do those first stages, the first two stages – state and structure – before you get into the solution generation phase.

CURT NICKISCH: Yeah. The other thing that often happens there is just the lack of awareness of just the cost of the different solutions – how much time, or what they would actually take to do.

COREY PHELPS: Yeah, and again, I’ll go back to that example I used of brainstorming where it’s fun to get a group of people together and talk about our ideas and how to fix the problem. There’s a couple challenges of that. One is what often happens when we do that is we tend to censor the solutions that we come up with. In other words, we ask ourselves, “if I say this idea, people are gonna, think I’m crazy, or people going to say: that’s stupid, that’ll never work, we can’t do that in our organization. It’s going to be too expensive, it’s going to take too much time. We don’t have the resources to do it.”

So brainstorming downside is we we self-sensor, so that’s where you need to have deep insight into your organization in terms of A. what’s going to be feasible, B. what’s going to be desirable on the part of the people that actually have the problem, who you’re trying to solve the problem for and C. from a business standpoint, is it going to be financially attractive for us?

So applying again a set of disciplined criteria that help you choose amongst those ideas for potential solutions. Then the last stage of the process which is selling – because it’s rare in any organization that someone or the group of people that come up with the solution actually have the power and the resources to implement it, so that means they’re going to have to persuade other people to buy into it and want to help.

CURT NICKISCH: Design thinking is another really different method essentially for solving problems or coming up with solutions that just aren’t arrived at through usual problem-solving or usual decision-making processes. I’m just wondering how design thinking comes to play when you’re also outlining these, you know, disciplined methods for stating and solving problems.

COREY PHELPS: For us it’s about choosing the right approach. You know what the potential causes of a problem are. You just don’t know which ones are operating in the particular problem you’re trying to solve. And what that means is that you’ve got a theory – and this is largely the world of strategy consultants – strategy consultants have theories. They have, if you hear them speak, deep understanding of different types of organizational problems, and what they bring is an analytic tool kit that says, “first we’re going to identify all the possible problems, all the possible causes I should say, of this problem. We’re going to figure out which ones are operating and we’re going to use that to come up with a solution.” Then you’ve got problems that you have no idea what the causes are. You’re in a world of unknown unknowns or unk-unks as the operations management people call them.

CURT NICKISCH: That’s terrible.

COREY PHELPS: In other words, you don’t have a theory. So the question is, how do you begin? Well, this is where design thinking can be quite valuable. Design thinking says: first off, let’s find out who are the human beings, the people that are actually experiencing this problem, and let’s go out and let’s talk to them. Let’s observe them. Let’s immerse ourselves in their experience and let’s start to develop an understanding of the causes of the problem from their perspective.

So rather than go into it and say, “I have a theory,” let’s go the design thinking route and let’s actually based upon interactions with users or customers, let’s actually develop a theory. And then we’ll use our new understanding or new insight into the causes of the problem to move into the solution generation phase.

CURT NICKISCH: Problem-solving – we know that that’s something that employers look for when they’re recruiting people. It is one of those phrases that, you know, I’m sure somebody out there has, has the title at a company Chief Problem Solver instead of CEO, right? So, it’s almost one of those phrases that so over used it can lose its meaning.

And if you are being hired or you’re trying to make a case for being on a team that’s tackling a problem, how do you make a compelling case that you are a good problem solver? How can you actually show it?

COREY PHELPS: It’s a great question and then I have two answers to this question. So one is, look at the end of the day, the proof is in the pudding. In other words, can you point to successful solutions that you’ve come up with – solutions that have actually been effective in solving a problem? So that’s one.

The second thing is can you actually articulate how you approach problem-solving? In other words, do you follow a method or are you reinventing the wheel every time you solve a problem? Is it an ad hoc approach? And I think this issue really comes to a head when it comes to the world of strategy consulting firms when they recruit. For example, Mckinsey, you’ve got the Mckinsey problem-solving test, which is again, a test that’s actually trying to elicit the extent to which people are good applicants are good at solving problems

And then you’ve got the case interview. And in the case interview, what they’re looking at is do you have a mastery over certain tools. But what they’re really looking at is, are you actually following a logical process to solve this problem? Because again, what they’re interested in is finding- to your point – people that are going to be good at solving complex organizational problems. So they’re trying to get some evidence that they can demonstrate that they’re good at it and some evidence that they follow a deliberate process.

CURT NICKISCH: So even if you’re not interviewing at a consulting firm, that’s a good approach, to show your thinking, show your process, show the questions you ask?

COREY PHELPS: Yeah, and to your point earlier, at least if we look at what recruiters of MBA students are saying these days, they’re saying, for example, according to the FT’s recent survey, they’re saying that we want people with really good problem solving skills, and by the same token, we find that that’s a skill that’s difficult for us to recruit for. And that reinforces our interest in this area because the fundamental idea for the book is to give people a method. We’re trying to equip not just MBA students but everybody that’s going to face complex problems with a toolkit to solve them better.

CURT NICKISCH: Corey, this has been really great. Thank you.

COREY PHELPS: Thanks for the opportunity. I appreciate it.

CURT NICKISCH: That’s Corey Phelps. He teaches strategy at McGill University, and he co-wrote the book “Cracked It: How to Solve Big Problems and Sell Solutions Like Top Strategy Consultants.”

This episode was produced by Mary Dooe. We got technical help from Rob Eckhardt. Adam Buchholz is our audio product manager.

Thanks for listening to the HBR IdeaCast. I’m Curt Nickisch.

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Design Thinking and Innovation

Design Thinking and Innovation from Harvard Business School (HBS) Online will teach you how to leverage fundamental design thinking principles and innovative problem-solving tools to address business challenges.

Associated Schools

Harvard Business School

What you'll learn.

Break cognitive fixedness and approach problems with a new mindset that integrates creative problem-solving and management

Develop an innovation toolkit, and determine when to apply design thinking frameworks, tools, and exercises to your own strategic initiatives

Practice empathy and apply human-centered design through techniques such as ideation, prototyping, user journey mapping, and analyzing mental models

Assess group dynamics and maximize your team’s potential for developing and iterating prototypes and managing the implementation of new designs

Understand how leaders can create the optimal environment and team dynamics to guide innovation and collaboration

Put design thinking into action by collaborating with peers from a wide range of professional experiences and backgrounds

Course description

Design Thinking and Innovation, through Harvard Business School (HBS) Online, equips current and aspiring innovation managers with the design thinking principles and innovative problem-solving tools to solve business challenges and guide their organization’s strategy. The course features five weeks of course content and two weeks of cohort project work, enabling the opportunity to put learning into practice. Leaders interviewed include Moderna CEO Stéphane Bancel, Royal Philips CEO Frans van Houten, and T-Mobile CEO Mike Sievert, among others. Participants will walk away with an innovation toolkit of frameworks and exercises for identifying business opportunities and generating possible solutions for their organization’s initiatives.

Instructors

Srikant Datar

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Understanding and Solving Complex Business Problems

Description.

Start Date(s)

Dec 12 2024, Jun 06 2024, Oct 03 2024

Time Commitment

Non-Degree Credit

2.0 EEUs (Executive Education Units)

Certificate

Executive Certificate in Management and Leadership

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10 Step Process for Effective Business Problem Solving

Posted august 3, 2021 by harriet genever.

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 as an entrepreneur, you need to know how to solve business problems effectively.

What is problem solving in business?

Problem solving in business relates to establishing processes that mitigate or remove obstacles currently 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 entire organization, typically without an immediate or obvious solution. 

To approach problem solving successfully, you need to establish consistent processes that help you evaluate, explore solutions, prioritize execution, and measure success. In many ways, it should be similar to how you review business performance through a monthly plan review . You work through the same documentation, look for gaps, dig deeper to identify the root cause, and hash out options. Without this process, you simply cannot 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. Problem solving skills will help you and your team tackle critical issues and conflicts as they arise. It starts from the top. You as the business owner or CEO needing to display the type of level-headed problem solving that you expect to see from your employees.

Doing so will help you and your staff quickly deal with issues, establish and refine a problem solving process, turn challenges into opportunities, and generally keep a level head. Now, 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.

By following this 10-step process, you can develop your problem-solving skills and approach any issue that arises with confidence. 

1. Define the problem

When a problem arises, it can be very easy to jump right into creating a solution. However, if you don’t thoroughly examine what led to the problem in the first place, you may create a strategy that doesn’t actually solve it. You may just be treating the symptoms.

For instance, if you realize that your sales from new customers are dropping, your first inclination might be to rush into putting together a marketing plan to increase exposure. But what if decreasing sales are just a symptom of the real problem? 

When you define the problem, you want to be sure you’re not missing the forest for the trees. If you have a large issue on your hands, you’ll want to look at it from several different angles:

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

How are world events and the nation’s economy affecting your customers and your sales?

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 your short-term and long-term business goals clearly and often?

There are a lot of ways to approach the issue when you’re facing a serious business problem. The key is to make sure you’re getting a full snapshot of what’s going on so you don’t waste money and resources on band-aid solutions. 

Going back to our example, by looking at every facet of your business, you may discover that you’re spending more on advertising than your competitors already. And instead, there’s a communication gap within your team that’s leading to the mishandling of new customers and therefore lost sales. 

If you jumped into fixing the exposure of your brand, 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 actually an opportunity, or even a strength if considered from a different angle? This is when you’d want to conduct a SWOT analysis to determine if that is in fact the case.

SWOT is a great tool for strategic planning and bringing multiple viewpoints to the table when you’re looking at investing resources to solve a problem. This may even be incorporated in your attempts to identify the source of your problem, as it can quickly outline specific strengths and weaknesses of your business. And then by identifying any potential opportunities or threats, you can utilize your findings to kickstart a solution. 

3. Identify multiple solutions with design thinking

As you approach solving your problem, you may want to consider using the design thinking approach . It’s often used by organizations looking to solve big, community-based problems. One of its strengths is that it requires involving a wide range of people in the problem-solving process. Which leads to multiple perspectives and solutions arising.

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 the most complex problems to solve, but about finding common needs within the organization and in the real world and coming up with solutions that fit those needs. 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 outreach aren’t the sorts of things small business owners and startups can do once and then cross off the list. When you’re facing a roadblock, think back to the last time you did some solid market research or took a deep dive into understanding the competitive landscape .

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 struggling through and 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 actually a gift if you can avoid taking the negatives personally .

The worst thing you can do when you’re facing challenges is isolating yourself from your customers and ignore your competition. So survey your customers. Put together a competitive matrix . 

5. Seek input from your team and your mentors

Don’t do your SWOT analysis or design thinking work by yourself. The freedom to express concerns, opinions, and ideas will allow people in an organization to speak up. 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.

If you’re running your business solo, at least bring in a trusted mentor. SCORE offers a free business mentorship program if you don’t already have one. It can also be helpful to connect with a strategic business advisor , especially if business financials aren’t your strongest suit.

Quoting Stephen Covey, who said that “strength lies in differences, not in similarities,” speaking to the importance of diversity when it comes to problem-solving in business. The more diverse a team is , the more often innovative solutions to the problems faced by the organization appear.

In fact, 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.

6. Apply lean 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. But implementing them requires you to adjust your budget, or your strategic plan, or even your understanding of your target market.

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

By adopting the lean business planning method —the process of revising your business strategy regularly—you’ll be able to 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 that allows you 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 the way you hoped. The best thing you can do is test your ideas and iterate often so you’re not wasting money and resources on things that don’t work. That’s Lean Planning .

7. Model different financial scenarios

When you’re trying to solve a serious business problem, one of the best things you can do is build a few different financial forecasts so you can model different scenarios. You might find that the idea that seemed the strongest will take longer than you thought to reverse a negative financial trend. At the very least you’ll have better insight into 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 by using spreadsheets, and a tool like LivePlan can make it easier and quicker.

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.

If you’re dealing with a serious issue, it’s easy to start 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 article offers a really useful approach to making decisions. It starts with putting your options into a matrix like this one:

Use this sort of framework to put everything you’ve learned out on the table. If you’re working with a bigger team, this sort of exercise can also bring the rest of your team to the table so they feel some ownership over the outcome.

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? Before you dive into enacting the solution, make sure you know what success looks like.

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, it’s worth keeping in mind specific problem solving skills you should continue to develop. Bolstering your ability, as well as your team, to solve problems effectively will only make this process more useful and efficient. Here are a few key skills to work on.

Emotional intelligence

It can be very easy to make quick, emotional responses in a time of crisis or when discussing something you’re passionate about. To avoid making assumptions and letting your emotions get the best of you, you need to focus on empathizing with others. This involves understanding your own emotional state, reactions and listening carefully to the responses of your team. The more you’re able to listen carefully, the better you’ll be at asking for and taking advice that actually 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 do the research into what the problem you’re solving actually 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 you have 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 simply 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 in play to consider and sometimes even the most well-thought-out solution doesn’t stick. Instead of being down on yourself or your team, look to separate yourself from the problem and continue to think of it as a puzzle worth solving. Every failure is a learning opportunity and it 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 on staying the wrong course for too long. So make a plan to reduce your risk now. Think about what you’d do if you were faced with a problem large enough to sink your business. Be as proactive as you can.

Editor’s note: This article was originally published in 2016. It was updated in 2021.

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Harriet Genever

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