Feel like you’re always putting out fires, but never actually making much progress toward solving your biggest challenges?
Let’s explore how to quickly analyze and reframe problems so you can overcome them more easily.
[Full Transcript]
Feel like you’re always putting out fires, but never actually making much progress toward solving your biggest challenges?
Let’s explore how to quickly analyze and reframe problems so you can overcome them more easily.
Defining Effective Problem Solving
Successful people don’t just embrace problems—they constantly seek out better problems to solve. The bigger the problem, the bigger the reward for solving it.
Problem solving and entrepreneurship go hand in hand. If there were no problems that needed solving, then there would be no need for your business. And in order to succeed as an entrepreneur, you need to be able to solve:
- External problems (your customers’ problems) with your products and services.
- Internal problems (sales problems, marketing problems, staffing problems).
Solving these types of external and internal problems is how you create value as an entrepreneur.
Why Problem Solving Skills Are Critical For Entrepreneurs
Problems Help You Focus on What Matters Most
By identifying the obstacles that stand between you and your vision, you’re able to focus your attention on the actions that will have the greatest impact on your success.
These problems then become the catalyst to unlocking your inherent strengths and creativity, inspiring you to focus your talents in order to contribute the most value possible. Without these types of obstacles, your business would be just a repeating cycle of meaningless busywork.
Problem Solving is Your Competitive Advantage
Most businesses sell similar products and services, with similar features, and at similar price points. You’re probably not trying to invent the next iPhone or Google (which of course would both require extraordinary problem solving skills themselves). More than likely, you sell something like consulting, graphic design, software development, or some kind of professional service in an established industry.
You and your direct competitors all face similar obstacles—marketing problems, sales problems, product development problems, employee morale problems. But this seemingly overwhelming list of challenges actually holds your greatest opportunity to rise above the competition. By becoming a better problem solver, you’re able to move through these challenges in innovative ways that differentiate your business and create greater value for customers.
While everyone else is stuck in reaction mode putting out fires, you’ll be:
- Focusing on the few key bottlenecks that stand in the way of your most important goals.
- Taking the time to truly understand the causes of these challenges.
- Devising efficient solutions that completely transform the nature of your business.
What’s Blocking Us From Becoming Better Problem Solvers
Focusing on the Wrong Problems
The streetlight effect is a type of observational bias that occurs when you only search for something where it is easiest to look. Here’s a well-known story that demonstrates this bias:
A police officer sees a drunk man searching for something under a streetlight. The drunk man tells the officer that he lost his keys, and they both look under the streetlight together. After a few minutes the officer asks the man if he’s sure he lost them under the streetlight. The drunk replies, “no, I lost them in the park.” The officer asks why he’s searching here and not in the park. The drunk replies, “this is where the light is.”
While this story is a bit corny, it makes an important point—by limiting your focus on solutions that are easiest to find, you may also be focusing on problems that don’t actually matter all that much.
Consider a marketing example like boosting the response to an underperforming ad. The easy problem to solve is rewriting the headline. The harder problems to solve include the possible disconnect between your product’s value prop and the needs of your target market, or even targeting the wrong market or customer type altogether.
By focusing exclusively on easy problems, you ignore deeper, more complex, and more challenging core causes. It’s like constantly battling the smoke without putting out the fire.
Assumptions and Habitual Responses
When the pressure is on, it’s natural to want to come up with a solution as quickly as possible.
The downside to going with the first solution that pops into your head is that you end up relying on conditioned habits rather than critical thinking. By definition, the solutions we already know of are based on problems we’ve already solved. When we draw from the same narrow set of answers from our experience, we tend to approach problems as if they’re essentially all the same. We use shortcuts to quickly label problems into groups of patterns, and then apply the quickest default solution that we can think of.
For example, imagine you’re having difficulty keeping good long-term customers. You keep churning through new business, your marketing costs are through the roof, and your average customer lifetime value keeps dropping.
Rather than taking time to explore the problem more deeply, you get stuck in reaction mode. Your brain scans for patterns that relate to “customer churn,” and you quickly lock on to what seems like the most obvious solution: lower your price.
“Pricing is the cause of our customer churn” is just an assumption. Will lowering your prices solve the problem and help you retain customers? Who knows.
But by rushing to a conclusion and latching on to the first solution you could think of, you’ve created a blind spot that keeps you from seeing other potential causes and solutions.
And even if lowering prices decreases customer churn, it’s just one of many potential solutions, and may end up creating many more problems than it actually solves.
Lowering prices might increase retention, but it also might:
- Decrease cash flow.
- Force you to cut costs.
- Position you as low cost rather than high quality.
- Attract price shoppers (who may drop you anyway when they find an even lower price elsewhere).
- Lock you into a competitive race to the bottom.
What if you had taken the time to explore the problem more deeply. By asking lost customers to share their reasons for leaving, you may have discovered that many of them felt a bit neglected. Perhaps all of your attention was being spent on attracting new business, and established customers were being put on auto-pilot.
Their reason for leaving may have been related to price—after all, if the level of ongoing service is mediocre, they may as well save a buck. But the real problem was that they simply didn’t feel valued.
With your understanding of “long-term customers don’t feel valued” as the true cause of customer churn, you now have alternative solutions that are far better than dropping your price. The problem gets reframed from being “customers don’t want to pay full price” to “how do we make every customer feel valued over the long term?”
With this new insight, you can quickly start experimenting with simple, low-cost ways to strengthen your long-term customer relationships. And while these activities will surely take up some of your time and effort, the potential costs will be nothing compared to dropping your price.
How to Turn Things Around
Turning your business vision into a reality requires moving from reactive mode to a more strategic problem solving mindset. We’ll dive into more details about solving complex problems in future posts. But for now, you can quickly supercharge your problem solving skills simply by identifying and prioritizing the right challenges.
According to the theory of constraints, every system has a set of potential bottlenecks. Imagine your business is like a factory, with a production line moving from Point 1 (the raw materials) to Point 10 (the finished product).
At each point along the way, there’s a machine designed to do one specific job. If the machine at Point 3 breaks or slows down, it will reduce the productivity of every machine after it in the production line. It won’t matter how well-tuned those other machines are. The production line will only move as fast as its slowest component—in this case the bottleneck at Point 3.
Fixing that bottleneck should be your highest priority. Bringing that single machine up to 100% productivity will have the greatest impact on the performance of the entire production line.
How does this apply to your business? Think about your marketing and selling process. At Point 1 in that “production line” are your potential prospects and customers. At Point 10 are the closed sales of your product or service.
You could have the most beautiful and well-designed website in the world. But that won’t matter much if you can’t drive any traffic to it. That’s your bottleneck. Until you fix that step in the process, anything you do to improve your website (and everything after that step in your marketing and sales process) will be wasted effort.
Once you start looking at your business from this perspective, you might see that there are a lot of things you’ve been spending your time and energy on that just don’t make that much of a difference. You can then start focusing higher up in the process, and fix the bottlenecks that are slowing down the entire system.
In the next post, we’re going to move on to the topic of expanding your influence. We’ll explore ways to clearly communicate your ideas so that you can move others to take action.
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