problem solving entrepreneur example

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4.1 Problem Solving to Find Entrepreneurial Solutions

Learning Objectives

By the end of this section, you will be able to:

• Define problem solving in the context of entrepreneurship
• Describe and compare the adaptive model and the innovative model of problem solving
• Identify the skills entrepreneurs need for effective problem solving
• Identify types of problem solvers

As you’ve learned, entrepreneurs often visualize an opportunity gap, a gap between what exists and what could exist, as Hirabayashi and Lidey did with Shine. Entrepreneurial problem solving is the process of using innovation and creative solutions to close that gap by resolving societal, business, or technological problems. Sometimes, personal problems can lead to entrepreneurial opportunities if validated in the market. The entrepreneur visualizes the prospect of filling the gap with an innovative solution that might entail the revision of a product or the creation of an entirely new product. In any case, the entrepreneur approaches the problem-solving process in various ways. This chapter is more about problem solving as it pertains to the entrepreneur’s thought process and approach rather than on problem solving in the sense of opportunity recognition and filling those gaps with new products.

For example, as we read in Identifying Entrepreneurial Opportunity, Sara Blakely (as shown in Figure 4.2) saw a need for body contouring and smoothing undergarments one day in the late 1990s when she was getting dressed for a party and couldn’t find what she needed to give her a silhouette she’d be pleased with in a pair of slacks. She saw a problem: a market need. But her problem-solving efforts are what drove her to turn her solution (Spanx undergarments) into a viable product. Those efforts came from her self-admitted can-do attitude: “It’s really important to be resourceful and scrappy—a glass half-full mindset.” [1] Her efforts at creating a new undergarment met resistance with hosiery executives, most of whom were male and out of touch with their female consumers. The hosiery owner who decided to help Blakely initially passed on the idea until running it by his daughters and realizing she was on to something. That something became Spanx, and today, Blakely is a successful entrepreneur. [2]

Before getting into the heart of this chapter, we need to make a distinction: Decision making is different from problem solving. A decision is needed to continue or smooth a process affecting the operation of a firm. It can be intuitive or might require research and a long period of consideration. Problem solving, however, is more direct. It entails the solution of some problem where a gap exists between a current state and a desired state. Entrepreneurs are problem solvers who offer solutions using creativity or innovative ventures that exploit opportunities. This chapter focuses on different approaches to problem solving and need recognition that help potential entrepreneurs come up with ideas and refine those ideas.

Two Problem Solving Models: Adaptive and Innovative

There are two prominent established problem-solving models: adaptive and innovative. A renowned British psychologist, Michael Kirton, developed the Kirton Adaption-Innovation (KAI) Inventory to measure an individual’s style of problem solving. [3] Problem-solving preferences are dependent on the personality characteristics of originality, conformity, and efficiency, according to Kirton. The KAI inventory identifies an individual’s problem-solving approach by measuring agreement with statements that align with characteristics, such as the ability to produce many novel ideas, to follow rules and get along in groups, and to systematically orient daily behavior. The results categorize an individual as an innovator or an adaptor. Innovators are highly original, do not like to conform, and value efficiency less than adaptors.

The first and more conservative approach an entrepreneur may use to solve problems is the adaptive model. The adaptive model seeks solutions for problems in ways that are tested and known to be effective. An adaptive model accepts the problem definition and is concerned with resolving problems rather than finding them. This approach seeks greater efficiency while aiming at continuity and stability. The second and more creative approach is the innovative model of entrepreneurial problem solving, which uses techniques that are unknown to the market and that bring advantage to an organization. An innovative problem-solving style challenges the problem definition, discovers problems and avenues for their solutions, and questions existing assumptions—in a nutshell, it does things differently. It uses outside-the-box thinking and searches for novel solutions. Novelty is a shared trait of creative entrepreneurship, and it’s why entrepreneurs gravitate toward this method of problem solving. According to Dr. Shaun M. Powell, a senior lecturer at the University of Wollongong, Australia: “Creative entrepreneurs are notable for a distinctive management style that is based on intuition, informality and rapid decision making, whereas the more conventional thinking styles are not in accord with the unique attributes of creative entrepreneurs.” [4] This way of problem solving doesn’t alter an existing product. It is the creation of something entirely new.

For example, healthcare facilities have long been known as a source of methicillin-resistant Staphylococcus aureus (MRSA), a deadly infection that can have long-term effects on patients. Vital Vio, led by Colleen Costello, has developed white light technology that effectively disinfects healthcare facilities by targeting a molecule specific to bacteria. The light, safe to humans, can burn constantly to kill regenerative bacteria. An adaptive problem-solving model would seek to minimize harm of MRSA within a hospital—to respond to it—whereas the Vital Vio is an entirely new technique that seeks to eliminate it. Adaptive solutions to MRSA include established processes and protocols for prevention, such as having doctors, nurses, and other healthcare providers clean their hands with soap and water, or an alcohol-based hand rub before and after patient care, testing patients to see if they have MRSA on their skin, cleaning hospital rooms and medical equipment, and washing and drying clothes and bed linens in the warmest recommended temperatures. [5]

Link to Learning

Visit Inc. Magazine for support and advice for up-and-coming startups to learn more. Examples of how “Dorm Room” entrepreneurs spot and pursue opportunities are shared along with tips and advice for making your startup a success.

Problem-Solving Skills

While identifying problems is a necessary part of the origin of the entrepreneurial process, managing problems is an entirely different aspect once a venture is off the ground and running. An entrepreneur does not have the luxury of avoiding problems and is often responsible for all problem solving in a startup or other form of business. There are certain skills that entrepreneurs possess that make them particularly good problem solvers. Let’s examine each skill (shown in Figure 4.3) .

Critical Thinking

Critical thinking is the complex analysis of a problem or issue with the goal of solving the problem or making a decision. The entrepreneur analyzes and peels away the layers of a problem to find the core of an issue facing a business. The entrepreneur focuses on the heart of the problem and responds reasonably and openly to suggestions for solving it. Critical thinking is not only important for developing entrepreneurial ideas: it is a sought-after asset in education and employment. Entrepreneur Rebecca Kantar dropped out of Harvard in 2015 to found the tech startup Imbellus, which aims to replace standardized college admissions tests like the SAT with interactive scenarios that test critical-thinking skills. Many standardized tests may include multiple choice questions asking for the answer to a straightforward knowledge question or math problem. Kantar seeks to create tests that are more concerned with the analytic ability and reasoning that goes into the process of solving the problem. Imbellus says it aims to test “how people think,” not just what they know. The platform, which has not yet launched, will use simulations for its user assessments. [6]

Read more about problem solving and EnterpriseWorks/Vita’s story at Harvard Business Review.

Communication

Communication skills, the ability to communicate messages effectively to an intended recipient, are the skills entrepreneurs use to pool resources for the purposes of investigating solutions leading to innovative problem solving and competitive advantage. Good communication allows for the free association of ideas between entrepreneurs and businesses. It can illustrate a problem area or a shared vision, and seeks stakeholder buy-in from various constituencies. Networking and communication within an industry allow the entrepreneur to recognize the position of an enterprise in the market and work toward verbalizing solutions that move an organization beyond its current state. By “verbalizing,” we mean communication from and with the company/entity. Internal communications include company emails, newsletters, presentations, and reports that can set strategic goals and objectives, and report on what has been accomplished and what goals and objectives remain, so that employees within an organization are knowledgeable and can work on solving problems that remain within the organization. External communications could include press releases, blogs and websites, social media, public speeches, and presentations that explain the company’s solutions to problems. They could also be investor pitches complete with business plans and financial projections.

Ideation exercises, such as brainstorming sessions, are good communication tools that entrepreneurs can use to generate solutions to problems. Another such tool is a hackathon—an event, usually hosted by a tech company or organization, which brings together programmers and workers with other degrees of specialization within the company, community, or organization to collaborate on a project over a short period of time. These can last from twenty-four hours to a few days over a weekend. A hackathon can be an internal company-wide initiative or an external event that brings community participants together. A business model canvas can be used internally or externally to identify problems and work toward creating a viable solution.

Networking is an important manifestation of useful communication. What better method is there of presenting one’s concept, gaining funding and buy-in, and marketing for the startup than through building a network of individuals willing to support your venture? A network may consist of potential employees, customers, board members, outside advisors, investors, or champions (people who just love your product) with no direct vested interest. Social networks consist of weak ties and strong ties. Sociologist Mark Granovetter studied such networks back in the 1970s, and his findings still apply today, even if we include social media networks in the definition too. Weak ties facilitate flow of information and community organization, he said, whereas strong ties represent strong connections among close friends, family members, and supportive coworkers.7 [7] Strong ties require more work to maintain than weak ties (as illustrated by the strong lines and weak dotted lines in Figure 4.4) and in a business context, they don’t lead to many new opportunities. Weak ties, in contrast, do open doors in that they act as bridges to other weak ties within functional areas or departments that you might not have had access to directly or through strong ties. [8]

In fact, many young entrepreneurs, including tech entrepreneur Oliver Isaacs, realize college is a great place to begin building teams. Isaacs is the founder of viral opinion network Amirite.com, which is widely credited as the place where Internet memes started and online slang got a foothold. [9] Amirite.com consists of a large network of pages and partnerships on Facebook and Instagram that reach 15 million users each month. Isaacs recommends using your alumni network to build a team and customer base for your own venture because you never know if you’re talking to a future employee or partner.

Sharing of ideas and resources is highly valued in the entrepreneurial process. Communication is a vital skill in problem solving because the ability to identify and articulate the problem (define the problem space) is necessary to adequately address a problem. A problem can be too vague or broad or narrow. Thus, communicating the problem is important, as is conveying the solution.

Decisiveness

Decisiveness is as it sounds: the ability to make a quick, effective decision, not letting too much time go by in the process. Entrepreneurs must be productive, even in the face of risk. They often rely on intuition as well as on hard facts in making a choice. They ask what problem needs to be solved, think about solutions, and then consider the means necessary to implement an idea. And the decisions must be informed with research.

For example, as explained in Adam Grant’s book The Originals, the co-founders of Warby Parker, a venture-backed startup focused on the eyewear industry, started their company while they were graduate students. At the time they knew little about the industry, but after conducting some detailed research, they learned that the industry was dominated by one major player—Luxottica. They used this information and other data to refine their strategy and business model (focusing mainly on value, quality, and convenience via an online channel). By the time they decided to launch the business, they had thought through the key details, and they attained rapid early success. Today Warby Parker has over 100 retail stores in the US, is profitable, and is valued at almost $2 billion.

Decisiveness is the catapult to progress. Amazon founder Jeff Bezos preaches the importance of decisiveness throughout his organization. Bezos believes that decisiveness can even lead to innovation. Bezos advocates for making decisions after obtaining 70 percent of the information you need to do so: “Being wrong may be less costly than you think, whereas being slow is going to be expensive for sure,” Bezos wrote in a 2017 annual letter to stockholders. [10]

Read this LinkedIn blog post on decisiveness to learn more. The 3 Big Reasons People Aren’t Decisive – And How to Overcome Them by Paul Petrone

Ability to Analyze Data

Data analysis is the process of analyzing data and modeling it into a structure that leads to innovative conclusions. Identifying Entrepreneurial Opportunity covered much of the sources of data that entrepreneurs might seek. But it is one thing to amass information and statistics. It is another to make sense of that data, to use it to fill a market need or forecast a trend to come. Successful founders know how to pose questions about and make meaning out of information. And if they can’t do that themselves, they know how to bring in experts who can.

In addition to public sources of broad data, a business can collect data on customers when they interact with the company on social media or when they visit the company website, especially if they complete a credit card transaction. They can collect their own specific data on their own customers, including location, name, activity, and how they got to the website. Analyzing these data will give the entrepreneur a better idea about the interested audience’s demographic.

In entrepreneurship, analyzing data can help with opportunity recognition, creation, and assessment by analyzing data in a variety of ways. Entrepreneurs can explore and leverage different data sources to identify and compare “attractive” opportunities, since such analyses can describe what has happened, why it happened, and how likely it is to happen again in the future. In business in general, analytics is used to help managers/entrepreneurs gain improved insight about their business operations/emerging ventures and make better, fact-based decisions.

Analytics can be descriptive, predictive, or prescriptive. Descriptive analytics involves understanding what has happened and what is happening; predictive analytics uses data from past performance to estimate future performance; and prescriptive analytics uses the results of descriptive and predictive analytics to make decisions. Data analysis can be applied to manage customer relations, inform financial and marketing activities, make pricing decisions, manage the supply chain, and plan for human resource needs, among other functions of a venture. In addition to statistical analysis, quantitative methods, and computer models to aid decision-making, companies are also increasingly using artificial intelligence algorithms to analyze data and make quick decisions.

Understanding of Business and Industry

Entrepreneurs need sound understanding of markets and industries. Often times, they are already working in a large organization when they see growth opportunities or inefficiencies in a market. The employee gains a deep understanding of the industry at hand. If the employee considers a possible solution for a problem, this solution might become the basis for a new business.

For example, consider a marketing agency that used traditional marketing for thirty years. This agency had an established clientele. An executive in the organization began studying social media analytics and social media. The executive approached the owner of the business to change processes and begin serving clients through social media, but the owner refused. Clients within the agency began to clamor for exposure on social media. The marketing executive investigated the possibility of building an agency in her locale servicing clients who wish to utilize social media. The marketing executive left the organization and started her own agency (providing, of course, that this is in compliance with any noncompete clauses in her contract). Her competitive advantage was familiarity with both traditional and social media venues. Later, the original agency started floundering because it did not offer social media advertising. Our intrepid executive purchased the agency to gain the clientele and serve those wishing to move away from traditional marketing.

A similar experience occurred for entrepreneur Katie Witkin. After working in traditional marketing roles, the University of Wisconsin-Madison graduate, pictured in Figure 4.5, left agency life behind four years out of college to cofound her own company, AGW Group. In 2009, Witkin had been interning at a music marketing agency that didn’t have a social media department. She knew, both from her time at college and from observing industry trends, that social media was changing the way companies connected with customers. For her own venture, she expanded the focus to all supporting brands to manage all things digital. Today, the cultural and marketing communications agency has fifteen employees and big-name clients ranging from HBO to Red Bull. [11]

Resourcefulness

Resourcefulness is the ability to discover clever solutions to obstacles. Sherrie Campbell, a psychologist, author, and frequent contributor to Entrepreneur magazine on business topics, put it this way:

“There is not a more useful or important trait to possess than resourcefulness in the pursuit of success. Resourcefulness is a mindset, and is especially relevant when the goals you have set are difficult to achieve or you cannot envision a clear path to get to where you desire to go. With a resourcefulness mindset you are driven to find a way. An attitude of resourcefulness inspires out-of-the-box thinking, the generation of new ideas, and the ability to visualize all the possible ways to achieve what you desire. Resourcefulness turns you into a scrappy, inventive and enterprising entrepreneur. It places you a cut above the rest.” [12]

Entrepreneurs start thinking about a business venture or startup by talking to people and procuring experts to help create, fund, and begin a business. Entrepreneurs are risk takers, passionate about new endeavors. If they don’t have a college degree or a great deal of business experience, they understand there are many resources available to support them in the endeavor, such as the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA). There are many sources available to fund the business with little or no debt and options. The entrepreneur follows a vision and researches opportunities to move toward a dream.

For example, in the late 1990s, Bill McBean and his business partner Billy Sterett had an opportunity to buy an underperforming auto dealership that would make their company the dominant one in the market. Neither wanting to take cash from other ventures nor wanting to borrow more money and tie themselves to more debt, the entrepreneurs were resourceful by finding another path forward to obtaining the money necessary for the acquisition they both coveted. They changed banks and renegotiated their banking payback requirements, lowering their interest payments, reducing fees, and lowering their monthly payments, ultimately freeing up a significant amount of cash that allowed them to buy the new company. [13]

Types of Problem Solvers

Entrepreneurs have an insatiable appetite for problem solving. This drive motivates them to find a resolution when a gap in a product or service occurs. They recognize opportunities and take advantage of them. There are several types of entrepreneurial problem solvers, including self-regulators, theorists, and petitioners.

Self-Regulating Problem Solvers

Self-regulating problem solvers are autonomous and work on their own without external influence. They have the ability to see a problem, visualize a possible solution to the problem, and seek to devise a solution, as Figure 4.6 illustrates. The solution may be a risk, but a self-regulating problem solver will recognize, evaluate, and mitigate the risk. For example, an entrepreneur has programmed a computerized process for a client, but in testing it, finds the program continually falls into a loop, meaning it gets stuck in a cycle and doesn’t progress. Rather than wait for the client to find the problem, the entrepreneur searches the code for the error causing the loop, immediately edits it, and delivers the corrected program to the customer. There is immediate analysis, immediate correction, and immediate implementation. The self-regulating problem solvers’ biggest competitive advantage is the speed with which they recognize and provide solutions to problems.

Theorist Problem Solvers

Theorist problem solvers see a problem and begin to consider a path toward solving the problem using a theory. Theorist problem solvers are process oriented and systematic. While managers may start with a problem and focus on an outcome with little consideration of a means to an end, entrepreneurs may see a problem and begin to build a path with what is known, a theory, toward an outcome. That is, the entrepreneur proceeds through the steps to solve the problem and then builds on the successes, rejects the failures, and works toward the outcome by experimenting and building on known results. At this point, the problem solver may not know the outcome, but a solution will arise as experiments toward a solution occur. Figure 4.7 shows this process.

For example, if we consider Marie Curie as an entrepreneur, Curie worked toward the isolation of an element. As different approaches to isolating the element failed, Curie recorded the failures and attempted other possible solutions. Curie’s failed theories eventually revealed the outcome for the isolation of radium. Like Curie, theorists use considered analysis, considered corrective action, and a considered implementation process. When time is of the essence, entrepreneurs should understand continual experimentation slows the problem-solving process.

Petitioner Problem Solvers

Petitioner problem solvers (Figure 4.8) see a problem and ask others for solution ideas. This entrepreneur likes to consult a person who has “been there and done that.” The petitioner might also prefer to solve the problem in a team environment. Petitioning the entrepreneurial team for input ensures that the entrepreneur is on a consensus-driven path. This type of problem solving takes the longest to complete because the entrepreneur must engage in a democratic process that allows all members on the team to have input. The process involves exploration of alternatives for the ultimate solution. In organizational decision-making, for example, comprehensiveness is a measure of the extent a firm attempts to be inclusive or exhaustive in its decision-making. Comprehensiveness can be gauged by the number of scheduled meetings, the process by which information is sought, the process by which input is obtained from external sources, the number of employees involved, the use of specialized consultants and the functional expertise of the people involved, the years of historical data review, and the assignment of primary responsibility, among other factors. Comprehensive decision-making would be an example of a petitioner problem-solving style, as it seeks input from a vast number of team members.

A charette—a meeting to resolve conflicts and identify solutions—is another example that employs a petitioner problem-solving approach. Often times, a developer of a new project might hold a community charette to aid in the design of a project, hoping to gain approval from elected officials. In the building example, this could consist of the developer and his team of architects, project designers, and people with expertise in the project working alongside community members, business executives, elected officials, or representatives like staff members or citizen-appointed boards like a planning board. Such an activity is representative of a petitioner problem-solving approach, as opposed to a developer representative designing the project with no input from anyone else.

In summary, there is no right or wrong style of problem solving; each problem solver must rely on the instincts that best drive innovation. Further, they must remember that not all problem-solving methods work in every situation. They must be willing to adapt their own preference to the situation to maximize efficiency and ensure they find an effective solution. Attempting to force a problem-solving style may prevent an organization from finding the best solution. While general entrepreneurial problem-solving skills such as critical thinking, decisiveness, communication, and the ability to analyze data will likely be used on a regular basis in your life and entrepreneurial journey, other problem-solving skills and the approach you take will depend on the problem as it arises.

There are a number of resources online that can help analyze your problem-solving abilities. Mindtools.com is one such resource. These are useful to learn your general problem-solving tendencies before being called upon to apply them in a real-world setting. One of the problem-solving techniques available from mindtools.com offers that problems can be addressed from six different perspectives. Called CATWOE, the approach is an acronym for Customers, Actors (people within the organization), Transformative, Worldwide, Owner, and Environment (organizational).

Learn more about the CATWOE technique for problem solving.

Chapter Credit

Portions of the material in this section are based on original work by Geoffrey Graybeal and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.

• Helen Lock. “‘I Put My Butt on the Line’: How Spanx Took Over the World.” The Guardian. July 11, 2016. https://www.theguardian.com/small-business-network/2016/jul/11/put-butt-on-the-line-how-spanx-world ↵
• Gary Keller. “Business Success Series, Part 1: Sara Blakely-Spanx.” The One Thing. n.d. https://www.the1thing.com/blog/the-one-thing/business-success-series-part-1-sara-blakely-spanx/ ↵
• “Characteristics of Adaptors and Innovators.” Kirton KAI Inventory Tool. n.d. http://pubs.acs.org/subscribe/archive/ci/31/i11/html/11hipple_box3.ci.html ↵
• Shaun Powell. “The Management and Consumption of Organisational Creativity.” Journal of Consumer Marketing 25, no. 3 (2008): 158–166. ↵
• N.C Healthcare-Associated Infections Prevention Program. Healthcare-Associated Infections in North Carolina: 2014 Annual Report, Healthcare Consumer Version. April 2015. https://epi.dph.ncdhhs.gov/cd/hai/figures/hai_apr2015_consumers_annual.pdf ↵
• Romesh Ratnesar. “What If Instead of Taking the SAT You Got to Play a Video Game?” Bloomberg BusinessWeek. March 19, 2019. https://www.bloomberg.com/news/features/2019-03-19/a-harvard-dropout-s-plan-to-fix-college-admissions-with-video-games ↵
• Mark Granovetter. “The Strength of Weak Ties.” American Journal of Sociology 5 (1973): 1360–1380. ↵
• Jacob Morgan. “Why Every Employee Should Be Building Weak Ties at Work.” Forbes. March 11, 2014. https://www.forbes.com/sites/jacobmorgan/2014/03/11/every-employee-weak-ties-work/#277851063168 ↵
• John White. “Top UK Influencer Oliver Isaacs Reveals What It Takes to Go Viral.” Inc. August 6, 2017. https://www.inc.com/john-white/top-uk-influencer-oliver-isaacs-reveals-what-it-ta.html ↵
• Erik Larson. “How Jeff Bezos Uses Faster Better Decisions to Keep Amazon Innovating.” Forbes. September 24, 2018. https://www.forbes.com/sites/eriklarson/2018/09/24/how-jeff-bezos-uses-faster-better-decisions-to-keep-amazon-innovating/#492c351b7a65 ↵
• Stephanie Schomer. “How Getting Laid Off Empowered This Entrepreneur to Start Her Own Award-Winning Marketing Agency.” Entrepreneur. January 15, 2019. https://www.entrepreneur.com/article/326212 ↵
• Sherrie Campbell. “6 Characteristics of Resourceful People That Bring Them Success.” Entrepreneur. March 10, 2016. https://www.entrepreneur.com/article/272171 ↵
• “Resourcefulness Is More Important Than Resources.” The Ecommerce Mindset: How Successful Store Owners Think. n.d. https://www.oberlo.com/ebooks/mindset/resourceful-entrepreneur ↵

NSCC Foundations of Entrepreneurship Copyright © 2022 by OpenStax is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Entrepreneurs: Here Is How You Can Find Problems to Solve

Before you start building a company, determine the problem you're solving..

One of the most common (and deadly) mistakes in entrepreneurship is creating a solution before identifying the problem.

You might think you have the next big idea, but have you really done the research to see if it could be successful? Is there a need in the marketplace? Is the space full of slow-moving companies unwilling to change? Then maybe you have an opportunity. If not, you might be wasting money and time.

If you really want to obtain success, the first thing you need to do is find the problem to solve. The problem serves as the foundation for your company.

What is needed + what you can do

It can be very tempting to jump on the next hot idea you have, but so many people fail with fly-by-night operations that have no mission or framework.

Before starting your next company, take a step back and assess two things: the marketplace and your abilities.

Think hard about this. Starting a company is equal parts passion and planning. You need the motivation for both.

First ask yourself, what are you passionate about? Next, what does society (or even just your local neighborhood) need?

The ideal company idea must check off both of those boxes. If you're working hard to fulfill a need, but you hate the work, you'll just end up resenting the company and starting over. If you're building a passion project, but there's no need for the product or service you're offering, generating interest and sales will be impossible.

Still stumped? Here are some of the biggest necessities coming up in the world today: clean energy, robotics, cybersecurity, transportation and artificial intelligence. You'll see hundreds upon hundreds of companies trying to solve those emerging issues, but only a handful with the capability and drive to do so.

Define your problem

Now that you have a list or Venn diagram set up of things you're passionate about (and things that are needed), it's time to trim.

You can even rank your list based on how big the problem is. If you're going for that moonshot idea, make sure you have the skill and capacity to build it out. It's OK to start out small if you're new to this and just want to get your feet wet. If this isn't your first company, aim a little higher on your list.

Find the problem that you actively want to solve, that you are best suited to solve and that has significant opportunity built-in.

Know thy enemies

Once you have your problem in place, odds are someone has tried to solve that same problem.

Look back at companies who have failed to address this problem and figure out why they failed. Did they try to take on too much, too quickly? Was their price point way off target? Did their idea just come too soon, before the demand had matured?

You can use this information to not only avoid similar pitfalls, but to take your business even farther.

If there are still some active competitors in the space, take a hard look at what they offer and at what price. Maybe even have a friend purchase an item or use their service to see where they excel and where they fall short.

When I'm launching a new venture, I don't seek to merely exist among other competitors. I want to dominate the market. To do that, I need to know where I can do better than my competition.

Build your story

Before you start to build your company, you need to define your problem and explain your solution.

This is the thing you'll be telling to investors, friends, partners and people you network with. What is that burning hot idea inside you and how does your company solve that problem uniquely?

Find a way to tell your story in a way that you can repeat every day, without it ever growing old or stale. This is your passion.

Now you have a clearly defined problem, the factor that makes you stand out among the rest and the motivation to get it done. These are the elemental first steps that countless so-called entrepreneurs have skipped, finding only failure.

A refreshed look at leadership from the desk of CEO and chief content officer Stephanie Mehta

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Identifying Problems Worth Solving: A Guide for Entrepreneurs

In the world of entrepreneurship, success often hinges on the ability to identify and solve the right problems worth solving. However, tackling an issue without fully understanding its worth can lead to wasted time and resources. This blog post will guide you through the process of determining which problems are worth solving and how to address them effectively, ensuring a greater likelihood of success in your entrepreneurial journey of building better software or SaaS solutions.

Key Takeaways

• Identify and reframe problems worth solving through research, observation, customer conversations and collaborative problem-solving techniques.
• Evaluate market demand to ensure successful solutions by leveraging technology and resources.
• Build trust with customers by providing consistent problem-solving strategies that create value.

Understanding the Essence of a Problem Worth Solving

As an entrepreneur, it’s vital to focus on problems that meet certain criteria, such as establishing an emotional connection with customers, demonstrating market potential, and being realistically solvable. A profound understanding of these aspects can help you create solutions that address the genuine problems your target customers face, ultimately leading to a more successful and impactful business.

Determining if a problem is worth solving involves considering diverse approaches and perspectives, analyzing potential impacts, and understanding the reasons the market has failed to address the problem. This process, known as idea extraction, involves interviewing individuals in a market about the difficulties they face to identify a problem they are willing to pay to have solved, thus improving the customer’s circumstances.

Emotional Connection

Emotionally connecting to a problem involves understanding and empathizing with the feelings and experiences associated with the issue. By recognizing the emotional motivations behind customer issues, more effective solutions can be developed, resulting in greater customer value. For instance, Slack identified the need for a sense of community, meaning, and shared purpose in workplace communication and developed a tool that encourages inclusive communication and discussion around common objectives.

Forming an emotional bond with the problem can spark motivation and ignite creative solutions. This approach ensures that entrepreneurs not only address the superficial aspects of a problem but also tackle its underlying emotional drivers, leading to a more profound and lasting impact on customers.

Pro Tip: People primarily take action for emotional reasons NOT logical ones. Logic prevails in the end, but emotional reactions are the primary driver for action. As such, it’s important that you know what emotional drivers are motivating users and customers to take action.

Market Potential

Assessing the market size and its potential to expand becomes important when determining if a problem requires a solution. One way to gauge market potential is by examining the amount of money customers are currently spending to address the issue. This helps us better understand important context around how motivated customers are to solve the problem and the impact that it’s causing to their business operations.

Focus your research in these areas:

• Thoroughly research their target market
• Identify gaps in the existing solutions offered by competitors
• Ensure that their proposed solution addresses a genuine customer need
• Ensure that their proposed solution has the potential to capture a significant market share.

Solvability

A problem worth solving must be feasible to resolve, have an emotional connection, and demonstrate commercial viability. Solvability comprises a critical component of this equation. I followed this exact strategy to bring my B2B SaaS product Podcast Show Notes to market. This software leverages AI to automate the creation of show notes for podcast episodes using AI. Before building this product, I validated it as both a problem worth solving and a commercially viable solution by selling it and developing an MVP before investing more significantly and building out the entire application.

Breaking down complex issues into individual elements by drilling down to root causes can render them more accessible and solvable. By considering the feasibility of a solution and the resources needed to implement it, entrepreneurs can ensure that their efforts are directed towards problems that can be realistically solved and have a meaningful impact on customers’ circumstances. This approach allows problem solvers to focus on the big idea that can truly make a difference.

Research and Observation: Key Steps in Identifying Problems Worth Solving

Uncovering potential problems worth solving requires a combination of research and observation, which can be achieved through customer conversations, industry analysis, and competitor study. The most promising approach to identify a customer’s problem worth solving is to engage in dialogue with a particular group of customers at the outset of the innovation process, allowing you to better understand their problems and challenges.

Thorough research and observation can help software and SaaS entrepreneurs confirm the existence and importance of a problem, directing their efforts towards resolving significant issues that can impact their target market positively.

Customer Conversations

Engaging with customers is vital for understanding their challenges and verifying insights with further research. While there is no definitive answer to how many customer interviews are needed to identify a deep problem with a sizable market, beginning with three to five customers and modifying questions every new set of three to five customer interviews is the ideal approach.

However, it’s crucial to be aware of a challenge in uncovering issues through customer conversations: individuals don’t always reflect problems and challenges of the same severity. This means customer A may report a problem with a minor impact as a BIG problem, but customer B may report a problem with a big impact as a small problem. As such, it’s critically important to develop a systematic approach to being able to compare problems and impact in a relatively consistent manner across a set of interviews.

Industry Analysis

Scrutinizing industry trends and advancements aids in identifying potential problems and opportunities. For example, the European Union’s implementation of the General Data Protection Regulation (GDPR) created a reason for businesses to need new software and SaaS solutions. By analyzing:

• Customer needs
• Market size
• The competitive landscape
• Technological advancements

Entrepreneurs can uncover potential problems worth solving and opportunities for growth by leveraging various strategies such as:

• Customer surveys
• Focus groups
• Market research

Each of these strategies has respective pros and cons when helping you identify problems worth solving. A balanced approach is recommended to ensure you capture adequate context in the problem space.

Note: Be aware of a problem related to running focus groups I call ‘group think’. This is where you don’t get adequate representation from the group and the ‘loudest voice’ seems to carry because everyone doesn’t feel comfortable expressing their feelings in a group setting. This is where one on one conversations shine.

Competitor Study

Studying competitor offerings is vital to identify problems that warrant resolution, enabling entrepreneurs to understand the current market solutions and their potential limitations. By examining competitors, entrepreneurs can recognize areas where they can offer a superior or more innovative solution to meet customer demands and resolve pain points, ultimately ensuring that their solution has a competitive edge.

Competitor study not only helps in identifying potential problems worth solving, but also assists entrepreneurs in understanding the market conditions, customer inclinations, and potential barriers to entry for given markets, which are essential components in determining the practicality and success of a business.

Pro Tip: There’s always competition. Even if it isn’t the same format as what you plan to build. If you want to build a software solution then you may be competing against another product or a service. Either way, that’s your competition. Study it because you stand to learn a whole lot from that investment.

Collaborative Problem-Solving Techniques

Entrepreneurs can encourage innovative problem-solving by employing collaborative techniques, including brainstorming sessions, design thinking, and stakeholder mapping. These approaches encourage creativity, cooperation, and reiteration, ultimately leading to innovation projects that are tailored to the needs and desires of the users.

By engaging with a diverse group of stakeholders, entrepreneurs can gain valuable insights and perspectives, helping them to identify, validate, and address problems in a more comprehensive and effective manner.

Brainstorming Sessions

Inviting various stakeholders to participate in brainstorming sessions can create a broad assortment of ideas and perspectives, ultimately leading to improved solutions. Brainstorming sessions can be conducted in-person or using online platforms to facilitate wider participation, and they can involve both individual and group brainstorming to prevent groupthink and encourage faster innovation in a psychologically safe setting.

Through brainstorming sessions, entrepreneurs can:

• Evaluate all aspects of an issue
• Encourage creative thinking
• Provide further pathways to success
• Ensure that the focus remains on the broader perspective and the problems to be solved, rather than jumping to solutions prematurely.

Design Thinking

Design thinking is a systematic and human-centric approach to problem-solving that can greatly assist entrepreneurs in recognizing issues worth addressing. The design thinking process consists of five steps:

• Empathize: Comprehend the needs and perspectives of the target users or customers.
• Define: Clearly define the problem or challenge that needs to be addressed.
• Ideate: Generate a wide range of possible solutions or ideas.
• Prototype: Create a physical or digital representation of the solution.
• Test: Gather feedback and evaluate the effectiveness of the solution.

By following these steps, entrepreneurs can uncover issues and develop innovative solutions.

The advantages of design thinking include:

• Promoting creativity
• Cooperation and collaboration
• Iteration and continuous improvement
• Tailoring solutions to user requirements
• Minimizing risk
• Increasing the likelihood of success

Stakeholder Mapping

Stakeholder mapping is an essential component of the problem-solving process, as it assists entrepreneurs in comprehending the people, groups, and organizations that can influence or be influenced by their project or business. By mapping out stakeholders, entrepreneurs can ascertain their requirements, expectations, and issues, which are essential in understanding the problems that are worth solving.

In order to prioritize stakeholders and ensure that their perspectives and interests are taken into account when identifying and addressing problems, entrepreneurs can engage in the following activities:

• Customer conversations
• Competitor analysis
• Brainstorming sessions
• Design thinking
• Stakeholder mapping

Reframing and Validating Identified Problems

After identifying a problem, it becomes important to reconsider its framing and confirm its significance. Reframing a problem facilitates the consideration of it from varied perspectives and ultimately leads to improved solutions. For instance, my Podcast Show Notes tool can help podcast production agencies with more than just producing great show notes in less time and budget. My software helps them scale their agencies so it goes way beyond solving each of those problems.

Validation is another crucial step in the decision making process. By challenging assumptions, evaluating market demand, and conducting product discovery, entrepreneurs can refine and validate identified problems, ensuring that their efforts are directed towards addressing pressing issues with the potential to make a real difference in their target market.

Challenging Assumptions

It’s important to identify and question risky assumptions to prevent the development of bad software. Challenging the status quo, considering unconventional approaches, and visualizing alternative solutions can help entrepreneurs challenge assumptions and discover real problems, examine novel perspectives, and devise inventive solutions to address the underlying issues.

Disregarding assumptions could result in the production of an inappropriate product or solution, expending time and resources ineffectively, and neglecting potential opportunities. By actively challenging assumptions, entrepreneurs can ensure that their efforts are focused on addressing genuine customer needs, ultimately leading to more successful and impactful solutions.

Evaluating Market Demand

Measuring potential demand for a solution is critical to guarantee it meets a legitimate target customer need.

Entrepreneurs should consider factors such as:

• The size of the target market
• The number of potential customers
• The customer’s willingness to pay

These factors are important in order to properly evaluate market demand.

Product Discovery

Product discovery involves a series of activities, such as user testing, customer interviews, and feedback collection, in order to gain insights into the needs and pain points of the target users. This process enables entrepreneurs to validate the existence and significance of a problem and prioritize and concentrate on resolving issues that have a true effect on their target market, augmenting the possibilities of creating a successful and valuable product.

For instance, in the case of Podcast Show Notes, user feedback led to modifications in the initial version of the solution, such as:

• Creating multiple title options for a podcast
• Turning episodes into social posts and marketing emails
• Creating new tiers for power users of the software
• Enabling multi-language support to broaden the target market

This example demonstrates the importance of product discovery in refining and validating identified problems to ensure the development of successful solutions, ultimately leading to a problem solved for those facing the issue.

Turning Identified Problems into Successful Solutions

After identifying, reframing, and validating a problem, the subsequent step is to convert it into a viable solution. To achieve this, entrepreneurs should focus on creating a roadmap, leveraging technology and resources, and building trust and value.

By developing a clear plan, utilizing available technology, and delivering value to customers from day one, entrepreneurs can ensure that their efforts are directed towards addressing the right problems and achieving the desired outcome, ultimately leading to a more successful and impactful business.

Creating a Roadmap

Crafting a detailed plan that outlines the steps to address the identified problem and achieve the intended outcomes is key to transforming identified problems into successful solutions. A roadmap helps to set objectives, collect inputs, and prioritize the problems that need to be solved, ensuring that the emphasis remains on the broader perspective and the predicaments to solve, instead of immediately jumping to solutions.

Formulating a plan of action, constructing a timeline, and establishing goals and objectives are essential components of a successful roadmap. By creating a roadmap, entrepreneurs can effectively communicate their strategic plan and coordinate resources proficiently, resulting in a greater chance of success in resolving the identified problems.

Leveraging Technology and Resources

Leveraging technology and resources plays a crucial role in boosting efficiency and productivity. Entrepreneurs have access to a plethora of online tools, software, databases, and other resources that can aid in identifying and resolving issues.

By employing technology and resources to create prototypes, evaluate solutions, and refine solutions, entrepreneurs can ensure that their efforts are directed towards addressing the right problems in the most efficient and effective manner possible. Moreover, entrepreneurs can assess their success when utilizing technology and resources by monitoring metrics such as cost savings, time savings, and customer satisfaction.

Building Trust and Value

Delivering value to customers from the outset and progressively building trust through consistent problem-solving and customer-centric strategies is vital for sustained success. Entrepreneurs may deliver value to customers from the outset by comprehending their requirements, furnishing solutions that fulfill those requirements, and delivering an excellent customer experience.

By attentively listening to customer feedback, promptly responding to customer inquiries, and providing solutions that adequately meet customer needs, entrepreneurs can establish trust through consistent problem-solving and customer-centric approaches.

Ultimately, cultivating trust and value contributes to fulfilling customer requirements, developing a competitive advantage, stimulating innovation, and producing business opportunities that can improve a customer’s circumstances.

Identifying and addressing problems worth solving is a critical aspect of successful innovation in the software space. By understanding the essence of a problem worth solving, conducting research and observation, employing collaborative problem-solving techniques, reframing and validating identified problems, and turning them into successful solutions, entrepreneurs can ensure that their efforts are directed towards the right problems and ultimately achieve success in their endeavors. By focusing on delivering value to customers and fostering trust, entrepreneurs can create lasting impact and build prosperous businesses that address genuine customer needs. If you could use help with strategy related to uncovering problems worth solving, schedule a free product strategy session with me so I can learn more about how to help.

Frequently Asked Questions

What are some problems that need to be solved.

The world faces numerous pressing issues, such as climate change, wars and military conflicts, water contamination, human rights violations, global health issues, poverty, and children’s lack of access to healthcare, education, safety, and food. Each of these need to be addressed urgently and ideally with innovative solutions.

What makes a problem worth solving?

A problem is worth solving if it has a significant negative impact on the customer’s circumstances and a better solution can provide meaningful benefits compared to existing solutions, whether for many customers or a smaller niche group.

How do I find a problem worth solving?

To find a problem worth solving, interview customers to gain insight into their pain points and day-to-day activities. Ask them questions about how often they experience the problem and how they’re trying to solve it. Then, use further customer and market research to validate your assumptions. Finally, capture early demand when you have 70% confidence in the solution.

What does it mean to identify a problem?

Problem Identification is the process of clearly identifying the root cause of a problem and developing a detailed problem statement that includes the impact. It requires analyzing the context, background, and symptoms of the issue to form a hypothesis about what is causing or maintaining the conditions around the problem. This process involves gathering data, conducting interviews, and analyzing the data to identify the root cause of the problem. Once the root cause is identified, a problem statement can be developed that outlines the scope of the problem.

What are the criteria for a problem worth solving?

For a problem to be worth solving, it must be relevant to the target customer, have potential for commercial success and be realistically solvable.

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How Entrepreneurs Are Problem Solvers: Unveiling 7 Key Principles

Wouldn't you love to wake up thinking like some of the world's richest entrepreneurs? How entrepreneurs think differently from the rest of us is something we’d all like to have insight on. Entrepreneurs like Bill Gates, Warren Buffet, and Jeff Bezos have amassed astronomical fortunes, so what is their secret to their success?  

How Entrepreneurs Think

Bill Gates, currently worth around $88.8 billion, believes that procrastination is the key to failure. Making a decision, sticking to it and seeing it through is important because it instils faith in oneself and avoids second guessing.  Warren Buffet is one of the world’s largest investors and also launched many companies in his youth. He’s currently worth over $80 billion and his best advice to new start-ups is to have fun. If you feel a passion for what you do, you’ll be “tap dancing” to work like Warren at 85! One of the youngest top earners is Amazon founder Jeff Bezos. His insights on how entrepreneurs think include the sound advice to love your clients, understand them intimately and build a product base from there. So how does the entrepreneurial mindset deal with the problem-solving process?  

7 Entrepreneurial Problem-Solving Skills

Problem-solving techniques are the cornerstone of entrepreneurial business. Identifying a problem that exists and filling that gap successfully results in long-term rewards. One of the best examples of this type of approach is Facebook's Mark Zuckerberg. He amassed nearly $72 billion in just over a decade, launching and developing his popular social media platform. He advises to start any new business by trying to passionately solve a problem, rather than building a new company as the consequence of solving a problem.   How entrepreneurs solve problems isn't magically different from the rest of us, they simply have a positive mindset and follow a set of problem-solving principles:  

1. Say no to defeat

There are plenty of failures along the way, but defeat isn’t in an entrepreneur’s mindset. Hence, it is even more crucial to learn from a mistake. When it comes to learning from business mistakes, there are several strategies that can be employed. First and foremost, it is important to acknowledge the incident and accept responsibility. This will help in avoiding the same mistake to be made again in the future. It is equally important to analyze the mistake and to understand it. This will help identify the root cause so that strategies could be developed to counteract the effects. Finally, use it as a learning opportunity. Identify what you could have done differently and seek feedback from your peers in order to gain additional perspective to the issue at hand. This can help you identify areas for improvement and develop new strategies for success.

• Nokia -  One real-world example of learning from business mistakes is the case of Nokia, the Finnish mobile phone giant. In the early 2000s, Nokia was the world's largest mobile phone manufacturer, but the company failed to adapt to the rise of smartphones and lost its market share to rivals such as Apple and Samsung. However, instead of accepting defeat, Nokia learned from its mistakes and reinvented itself as a telecommunications equipment provider. Today, Nokia remains a major player in the telecommunications industry, providing networking solutions and other services to companies around the world.

Being bold in a business environment can be challenging, but it is an essential trait for success. At times, being bold translates to taking calculated risks, making tough decisions, and charting new courses for the company. This can be achieved by inspire confidence and trust in employees, customers, and other categories stakeholders. This will instill courage to take risks and experiment, which can lead to greater innovation and creativity. The ability to take risks and learn from mistakes is crucial for business success. In addition, it is essential to be adaptable and pivot quickly in presence of new opportunities that ma lead to further grow and improvements.

• Netflix:  This could be seen in the story of Netflix. When the company started as a DVD-by-mail service, they saw an opportunity to disrupt the traditional rental industry by offering a streaming service. Despite initial skepticism from investors and industry experts, Netflix took a bold step and invested heavily in streaming technology. This decision paid off, and today Netflix is a leader in the entertainment industry, with millions of subscribers worldwide. By being bold, Netflix was able to pivot quickly, adapt to changing market conditions, and stay ahead of the competition.  
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3. Be flexible

Knowing how to evaluate a situation and look at it from all angles is important and being able to pivot when necessary is critical to any fast-moving business. If you’re not seeing success with one idea, being bold and trying something new might just pay off. When trying to solve a problem, understand that there might not always be a solution. Identifying a gap in the market and quickly changing direction to fill it makes good business sense.

• Zara:   Amancio Ortega , owner of Zara and currently worth $78.5 billion advises that “that speed is everything”. The ability to recognise new ideas and execute them faster than any competitor has been crucial to Ortega’s success.  
• Kodak:  Kodak, a company that had been a leader in the photography industry for decades. However, with the advent of digital photography, Kodak's business model became outdated and the company struggled to keep up. Despite some efforts to transition to digital cameras and other digital products, Kodak ultimately filed for bankruptcy in 2012.  
• Canon and Nikon:  On the other hand, companies like Canon and Nikon recognized the shift to digital early on and were able to adapt their business models quickly. They invested heavily in R&D and created new products that were more in line with the changing market. As a result, they were able to maintain their positions as industry leaders and continue to thrive to this day. 

These examples show how being flexible and willing to pivot when necessary can be the difference between success and failure in a fast-moving industry. It's important to recognize when your current approach isn't working and be willing to try something new in order to stay competitive.

4. Delegate

Employing a great team is essential to any successful business and entrepreneurs understand that, when it comes to problem-solving, relying on staff expertise wins. Delegation is a crucial management skill and can result in various benefits when done effectively. First and foremost, the identification of what to delegate is an essential first step. Next, it is equally important to clarify priorities and provide guidance to employees by communicating the importance of each task in order to pave the road to success.

As a manager at a busy restaurant, you may delegate tasks to team members to increase efficiency. Identify tasks that can be delegated, prioritize them based on importance, communicate guidelines to team members, provide guidance and support, and offer feedback. This results in successful task completion, increased efficiency, and job satisfaction among team members, leading to improved customer service and increased revenue.

5. Foster creative thinking

In the 1970s, a scientist at 3M named Spencer Silver was trying to create a strong adhesive, but instead, he ended up creating a weak adhesive that could be removed easily without damaging surfaces. Despite being a failure in achieving the original goal, Spencer didn't give up. Later on, another 3M employee, Art Fry, realized that the weak adhesive could be used to create bookmarks that would stick to paper without falling off. This idea eventually evolved into the creation of Post-it notes, which have become a ubiquitous office supply worldwide.

• 3M:  Entrepreneurs know that it's not just about solving problems but also about considering the bigger picture and looking at the impact of decisions on the bottom-line. 3M's Post-it notes are a great example of fostering creative thinking in a business environment, which is an essential trait for long-term and sustainable success. It's all about being willing to challenge our assumptions, think outside the box, and embrace change as a path to growth and success. In essence, creative thinking is the ability to explore different possibilities in resolving a business problem. By encouraging creative thinking, businesses can foster a culture of innovation, which can lead to breakthrough ideas and a competitive advantage in the market.

6. Map out a vision

Entrepreneurs map the vision of their lives and how they can achieve those dreams. They aren't winging it or flying by the seat of their pants! They have a vision and execute that to make dreams a reality. The mapping out of a vision for your business is an essential step in defining your company’s purpose for different categories of stakeholders. The mapping out of a vision also helps project into the future in a manner that aligns with a business’ core values and business objectives.

• remote work:  The COVID-19 pandemic has led to a rise in remote work, resulting in an increased demand for flexible office spaces. These spaces offer amenities like high-speed internet and meeting rooms, making them a productive and convenient option for employees. For companies, offering flexible office space can attract and retain talent while providing cost savings and flexibility. The emergence of coworking spaces and other flexible office solutions means there are now a wide variety of options available. The rise of flexible office space benefits both employees and employers, offering a convenient, affordable, and flexible solution. The arise of remote work and flexible office space illustrates how modifying perspectives and finding new opportunities can lead to mutually beneficial outcomes for businesses and employees alike.  
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7. Dig deeper

Entrepreneurs are known for their ability to think structurally. This means that they are able to get to the heart of the matter and understand how things work. They ask structural questions and methodically break down problems into smaller, more manageable parts. This allows them to identify and address the root cause of a problem, rather than just treating the symptoms.

• Amazon:  Jeff Bezos is a great example of an entrepreneur who thinks structurally. When he first saw the internet explode in popularity, he didn't just jump into the fray and start a random business. Instead, he asked himself a structural question:

"What kind of business plan might make sense in the context of that growth?" (Source: Fundable )

He knew that books were a low-cost item that could be shipped easily and were universal. This insight led him to start Amazon, which initially sold only books but eventually grew to become one of the largest retailers in the world. By focusing on this one product and building a business model around it, Bezos was able to create a solid foundation for future growth and success.

Entrepreneurial Mindset

While the decision-making process of entrepreneurs may be unconventional, they possess a unique ability to take calculated risks and turn challenges into opportunities. With dedication, perseverance, and a well-defined mission, entrepreneurs can pave the way for success in their ventures.

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• July 19, 2023

Entrepreneur Skills – Problem Solving Skills

Boost your entrepreneurial journey with top-tier problem solving skills. explore key insights and strategies for effective problem-solving in business..

If there is one universal truth that all entrepreneurs share, it’s the reality that problem-solving is a critical part of their daily routine. From handling unforeseen obstacles, improving inefficient processes, to developing innovative solutions that meet the market’s evolving demands—problem-solving is the lifeblood of any successful venture. This blog post will delve into the depths of problem-solving, exploring the science behind it, and shedding light on how entrepreneurs can hone this skill to conquer the business world.

The entrepreneurial journey is rarely a smooth ride. It’s filled with ups and downs, turns and twists that often lead to unchartered territory. These challenges demand an entrepreneur’s ability to effectively solve problems. Recent research suggests that problem-solving skills are directly linked to business success, as these skills foster resilience, strategic thinking, and the ability to adapt in an ever-changing business landscape.

What is interesting to note is that problem-solving is more than just fixing what’s broken. It involves creativity, critical thinking, empathy, and at times, even an appetite for risk. It’s about understanding a problem in its entirety—its root causes, potential impacts, and effective, long-lasting solutions. In essence, problem-solving is a holistic approach to turning hurdles into opportunities for growth.

Furthermore, the ability to solve problems efficiently provides entrepreneurs with a competitive edge. In today’s dynamic business environment where industries can be disrupted overnight, having the skill to identify and solve problems rapidly can make the difference between survival and extinction. The importance of these skills is reflected in a report by the World Economic Forum, which forecasts that problem-solving capabilities will be among the most sought-after skills in the next decade.

In this post, we’ll explore 18 key themes surrounding the art of problem-solving for entrepreneurs. We will delve into various facets of this essential skill, offering actionable insights backed by extensive research, real-world examples, and proven strategies. Whether you’re a budding entrepreneur or a seasoned business leader looking to up your game, this comprehensive guide promises a wealth of knowledge that will help shape your entrepreneurial journey.

Key Insights on Problem Solving

1. Understanding the Problem:

The foundation of any problem-solving process is a deep understanding of the problem. This requires you to go beyond the superficial symptoms and uncover the root causes. Often, problems are complex and multi-faceted, making them challenging to understand fully. Techniques such as the “5 Whys” or Cause and Effect Diagrams can be beneficial in digging deeper and identifying the true source of the problem.

2. Identifying Opportunities:

Problems often come masked as opportunities. Entrepreneurs who have mastered the art of problem-solving can flip the script and turn a challenge into an avenue for innovation or business growth. It’s all about perspective. Look at problems as questions that need answers and obstacles as potential paths towards new business opportunities.

3. Creativity:

Problem-solving and creativity go hand in hand. Sometimes, traditional solutions may not be adequate or effective, necessitating a creative approach. Techniques such as brainstorming, mind mapping, or lateral thinking can inspire unconventional solutions that break the mold and deliver results.

4. Analytical Thinking:

Analytical thinking plays a crucial role in problem-solving. It allows entrepreneurs to examine a problem objectively, breaking it down into smaller, manageable parts. This approach is essential when dealing with complex issues, as it helps to simplify them, making the solution-finding process more efficient.

5. Decision Making:

Making decisions is an integral part of solving problems. Entrepreneurs often have to make quick decisions under pressure. Having a systematic decision-making process helps increase the likelihood of choosing the most effective solution.

6. Resourcefulness:

Entrepreneurs often operate with limited resources, making resourcefulness a valuable skill. It’s about making the most out of what’s available and finding clever ways to overcome limitations. The ability to be resourceful not only aids in problem-solving but also sparks innovation.

7. Flexibility:

The business landscape is continually changing. As such, a solution that worked yesterday may not be applicable today. Flexibility allows entrepreneurs to adapt their approach to problem-solving, accounting for changes in circumstances, market conditions, or technology.

8. Risk Analysis:

Risk is inherent in every business decision. Entrepreneurs who are skilled at risk analysis can anticipate potential problems and mitigate them before they become significant issues. It’s about striking a balance between risk and reward, ensuring that the solutions implemented do not endanger the business.

9. Collaboration:

Problem-solving is not a solo endeavor. Collaboration enables entrepreneurs to leverage diverse perspectives and skills, fostering creative and effective solutions. Building a culture of collaboration in a team also promotes ownership and morale, enhancing the problem-solving process.

10. Communication:

Effective communication is pivotal to successful problem-solving. Clear and concise communication ensures that everyone involved understands the problem and their role in solving it. It also prevents misunderstandings that could derail the solution implementation process.

11. Embracing Failure:

Embracing failure is a crucial part of problem-solving. Mistakes and failures offer valuable lessons that can provide insights into more effective solutions. The ability to learn from failure fosters resilience and encourages a growth mindset, essential for entrepreneurial success.

12. Continuous Learning:

The more knowledge an entrepreneur has, the better equipped they are to solve problems. Cultivating a culture of continuous learning promotes curiosity and openness to new ideas, enriching the problem-solving process.

13. Customer-Centricity:

Problem-solving should always be customer-centric. Understanding your customer’s needs and concerns can guide your problem-solving efforts, ensuring that the solutions you implement enhance customer value and satisfaction.

14. Emotional Intelligence:

Emotional intelligence aids in problem-solving by promoting empathy and understanding. It allows entrepreneurs to consider the emotional and human aspects of a problem, leading to more comprehensive and effective solutions.

15. Time Management:

Efficient problem-solving requires effective time management. Knowing how to prioritize problems based on their urgency and impact can streamline the problem-solving process and ensure that critical issues are addressed promptly.

16. Strategic Thinking:

Strategic thinking involves looking at problems from a broader perspective. It allows entrepreneurs to consider the long-term implications of their solutions, ensuring that they align with their business goals and vision.

17. Technology Literacy:

In today’s digital age, technology literacy is crucial for problem-solving. Whether it’s leveraging data analytics for informed decision-making or utilizing digital tools to enhance collaboration, technology plays a significant role in modern problem-solving.

18. Self-Motivation:

Last but not least, self-motivation is essential. Problem-solving can be challenging and draining. The ability to stay motivated and maintain a positive attitude can make the process more manageable and productive, driving entrepreneurial success.

Problem-solving is a critical entrepreneurial skill that serves as the backbone of any successful venture. The ability to accurately identify and creatively overcome challenges is a testament to an entrepreneur’s resilience and adaptability. In this rapidly evolving business environment, a problem-solving mindset empowers entrepreneurs to navigate through uncertainty, fostering innovation and growth.

This comprehensive guide has provided an in-depth look at 18 crucial themes surrounding problem-solving for entrepreneurs. By understanding and implementing these insights, entrepreneurs can enhance their problem-solving skills, contributing to their personal growth and their business’s success.

Ultimately, the true value of problem-solving lies in its capacity to transform obstacles into opportunities. It’s not just about ‘fixing’ what’s broken, but about continuously evolving, adapting, and driving forward in the face of adversity. In the world of entrepreneurship, problems are merely stepping stones on the path to success.

So, embrace the challenges that come your way, arm yourself with these problem-solving strategies, and continue on your entrepreneurial journey. Remember, every problem you solve takes you one step closer to your ultimate business goal.

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The 12 best entrepreneurial skills

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The importance of entrepreneurial skills

12 essential entrepreneurial skills

More entrepreneurial hard skills to brush up on

How to improve your entrepreneurial skills, lead a successful business (and life).

Successful entrepreneurs are often jacks of all trades — and never experts at none. 

Running your own business means you have to pull from a deep toolbox of hard and soft skills to push your business off the ground and keep it growing. But because entrepreneurs are constantly on call and keep never-ending to-do lists, it can be difficult to prioritize learning the entrepreneurship skills that will help you and your business stay healthy. 

Whether you’re getting ready to transform your side hustle into a new business or want to audit your current skill set to improve your ability to lead , working on your transferable skills is a great way to bolster a growth mindset . And though you can’t master everything, building well-rounded know-how will empower you and your teams to support the business. 

As an entrepreneur , your responsibilities may feel never-ending and all-encompassing. After all, turning your dreams into a successful business doesn’t happen overnight — and once your business begins to gain traction, the work required to keep the lights on never ceases.

Business leaders with an entrepreneurial spirit must accept this challenge and continuously make calculated and informed decisions to keep their business plans moving forward.

It’s up to you to identify opportunities, make smart decisions , and chart the course when challenges arise. And as your startup grows, you must learn to effectively allocate your resources and create value propositions for your employees and clients. 

But don’t worry — this hard work pays off. According to the U.S. Business Administration Office of Advocacy, small businesses employ 46.4% of private sector U.S. employees , meaning business owners stimulate local economies and create important lifelines for local communities. Here are a few other ways your entrepreneurial skills leave a positive impact:

• Entrepreneurs can drive social change and create products and services that improve lives
• Disruptive innovation stimulates economic growth and opens new markets for other entrepreneurs
• Great entrepreneurs grow together with their employees, providing valuable personal and professional development opportunities
• Working on your skills builds adaptability and dynamism , allowing you to work efficiently alone and as part of a team
• Building your entrepreneurial ability helps you set realistic goals and hit objectives, which can fill you with purpose and boost your satisfaction with life

While you don’t have to excel at everything, developing a breadth of know-how helps you delegate tasks realistically and empathize with your employees

12 essential entrepreneurial skills 

Getting a business off the ground and moving is no small task. In a world of ever-changing market trends and economic challenges, you have to think on your feet without losing sight of your company mission . Be ing able to switch from one competency to another is crucial to maintaining a solid business foundation. 

The following skills aren’t exclusive to entrepreneurs — they’re indispensable to any industry and job role. If you’re getting ready to make the transition to entrepreneurship, you may be surprised by how many transferable skills you already have under your belt.

Of course, others may need a little cultivation or refining. But fine-tuning them will ensure you’re qualified to roll with the punches and keep your business moving forward. 

Here are 12 key skills every entrepreneur should strive for:

Budgeting: All business ideas are limited by budgets. Successful entrepreneurship requires a firm grip on your business’s financial reality, which means learning to manage budgets , analyze financial data, and understand cash flow patterns. 

This knowled ge is invaluable to your business’ security, as it facilitates sound decision-making and allows you to build realistic action plans for investments, expansions, and cuts.

Problem-solving : Entrepreneurship has no finish line, no matter the industry. Your business journey will be chock-full of new challenges and obstacles requiring problem-solving and critical-thinking skills . Strategic thinking is what allows you to step back from today’s problems and see the bigger picture, aligning short-term goals with long-term objectives . 

Communication skills: Business owners are the voice of their companies. Whether you’r e emailing a client , delivering an elevator pitch to a potential investor , or delegating tasks on Slack, practicing adaptability in tone and delivery is essential to effective communication , no matter the scenario. 

Time management: With so many responsibilities and decisions to make each day, you might feel like several tasks are competing for your time and attention. Learning to manage your time and leave r oom for flexibility provides you with the necessary structure to move through your day without wasted resources or missed deadlines. 

Creative thinking: The business landscape i s ever-changing, and adaptability is essential to staying competitive. An entrepreneurial mindset means inserting creative thinking into every aspect of your business strategy, from differentiating your products from the competition to creating incentives that retain the best talent . 

Practice keeping an open mind by challenging traditional ideas, embracing new perspectives, and encouraging experimentation. It’ll keep your teams inspired and your business forward-thinking. 

Leadership skills: As the head of the company, your team looks to you to set the tone. Whether you demonstrate a strong work ethic or cut corners, your behavior tells your employees what is and isn’t acceptable behavior.

Leadership is a 24/7 responsibility, but fostering a positive and productive work environment will pay off in strong collaboration and continuous improvement from your teams. 

Management skills: While you may be tempted to juggle a dozen roles, you (and your mental health ) can’t do it all. When small-scale day-to-day tasks constantly occupy your time, b ecoming a future-minded leader is difficult.

As your business grows, building structures that allow your employees to thrive and take on more responsibilities is vital. That way, you can delegate to your growing team and dedicate more time to overseeing long-term planning.

Decision-making: As the head of the business, your days are fraught with important decisions. Successful entrepreneurs mix analytical thinking and intuition, as they may face situations with limited information or uncertain results. Learning to weigh pros and cons, consider risks, and surround yourself with diverse perspectives empowers you to navigate complexities confidently. 

Networking: Hard work is just one part of the equation to keep your business healthy. The relationships you cultivate are the other. After all, your familiarity with industry peers, potential partners, and clients keeps your business on people’s minds.

Regular networking helps you gain insights into your target market, stay up-to-date on emerging trends, and open doors to new opportunities.

Collaboration: You depend on your teams to keep business moving forward, so you need to arm yourself with tools to give them support and guidance. Demonstrating gratitude , open-mindedness, and reliability are interpersonal skills that build the trust that keeps your workforce productive. 

Active listening:  Team members want to feel heard a nd respected. After all, we all dedicate a lot of time and energy to our jobs. Workers who feel understood are more productive , so aim to practice emotional intelligence and value your team’s work-life balance . You’ll see hap pier and more effective teams. 

Public speaking: Management is the face of the company. Throughout your career, you’ll have plenty of opportunities to speak in front of a crowd. Whether delivering a TED Talk or l eading a team meeting, you can motivate and inspire people to rally around your vision. 

Hard skills are explicit knowledge that helps you perform specific tasks. Most people learn technical skills through formal education and refine them through supplemental training and on-the-job experiences. 

Here are 15 of the most important skills that’ll come in handy while building your business: 

• Social media 
• Accounting and bookkeeping
• Inbox management
• Basic financial knowledge
• Sales and negotiation
• Digital marketing
• Market research and analysis
• Project management
• Customer service and management
• Data analysis
• Legal and regulatory compliance
• Supply chain management
• Basic computer skills
• Presentation development

Entrepreneurship is a commitment that requires continuous learning and skill refinement. When you’re ready, choose from the entrepreneurship examples above and get to work on your skills. 

Here are a few tips to help you constantly improve your ability to lead a business: 

Take online courses: There’s a class for every aspect of business management. Quick courses in social media advertising, financial forecasting, and supply chain optimization can help you develop your skill set. 

Even if you don’t directly oversee a specific task, developing a working knowledge can improve your collaboration with other departments and your ability to make informed decisions with your team.

• Seek out mentors: You’re not alone in the business world. Plenty of entrepreneurs have already navigated decisions that are brand new to you. Mentors can provide you with a sense of connection and bolster your confidence. Tapping into an experienced professional network can give you the clarity to help you move forward, no matter your business situation. 
• Create a practice plan: You don’t have to learn everything at once. Identify the most pertinent skills to your success, and create a plan to refine them. This could mean being more conscientious of writing clear communications, regularly showing gratitude, or attending a seminar every month. Regardless of your goals, practice and consistency make perfect. 
• Join a local business organization: Running a business is difficult, but having the support of colleagues navigating similar professional spheres can help you maintain your sense of purpose. Local business associations are also great places to network, stay up-to-date on trends, and find new opportunities. 
• Work with a coach: Entrepreneurs provide constant guidance to their teams, and they benefit from the same support. Coaches are incredible allies to entrepreneurs, and they can assist you in setting clear goals and staying on track to reach your wellness and professional objectives. 

If you have the characteristics of an entrepreneur , you already possess valuable soft skills, including passion, drive, and self-confidence. Now it’s time to level up your entrepreneurial skills and equip yourself with the tools to transform your dreams into reality.

Practicing time management, learning to lead a team, and developing know-how about various business management topics can all help push your business forward. And as your company grows and earns successes, so will you.

Understand Yourself Better:

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Elizabeth Perry, ACC

Elizabeth Perry is a Coach Community Manager at BetterUp. She uses strategic engagement strategies to cultivate a learning community across a global network of Coaches through in-person and virtual experiences, technology-enabled platforms, and strategic coaching industry partnerships. With over 3 years of coaching experience and a certification in transformative leadership and life coaching from Sofia University, Elizabeth leverages transpersonal psychology expertise to help coaches and clients gain awareness of their behavioral and thought patterns, discover their purpose and passions, and elevate their potential. She is a lifelong student of psychology, personal growth, and human potential as well as an ICF-certified ACC transpersonal life and leadership Coach.

10 essential business skills that make an impact on your career

What business acumen is and 9 ways to develop it, the 12 best business podcasts and why to tune in, 9 of the best jobs with a business degree, 10 characteristics for becoming a successful entrepreneur, how tacit knowledge drives innovation and team outcomes, the unspoken language of business casual clothing, create smart kpis to strategically grow your business, business coaching: maximizing your company’s potential, boss versus leader: develop the skills to bring out the best of both, cultivate the top 10 office skills to improve your resume, do you have an entrepreneurial spirit 10 characteristics to lean into, entrepreneurial mindset: what is it & how to think like an entrepreneur, what is an entrepreneur understanding the different types and examples of entrepreneurship, want to find your inner entrepreneur 13 tips to get started, stay connected with betterup, get our newsletter, event invites, plus product insights and research..

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More From Forbes

Five ways to overcome common entrepreneurial challenges.

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As founder of a community full of inspiring entrepreneurs, I’ve been fortunate to see companies grow from early stage startups to full-fledged businesses year after year. Although each of us achieves different goals throughout our unique journeys, there’s one thing we all have in common. We’re entrepreneurs, and we’ve tackled the challenges that come along with it.

Here are a few ways to overcome entrepreneurial challenges I’ve experienced and learned from along the way.

1. Understand Your Personal Habits

One of the earliest challenges to overcome is you. Learn to be self-aware and understand your personal habits. For example, if you’re someone who isn’t receptive to new ideas or open to listening, this will cause issues for your business, internally and with partners. You’ll need to step outside yourself to take a good look at your flaws. Growing a business requires being adaptive, which means being open to criticism and its different forms; everything will not always be sugar-coated.

2. Let Go Of Excessive Control

Your big ideas won’t stop once your business is off the ground. Not every idea you have will work, and even though you push hard for an initiative to come through doesn’t mean it’s right. You’ll need to learn to allow processes to play out without excessive involvement. With a great team and valued partners by your side, some projects might unfold even better than you had hoped, even if it’s not at your desired pace. Your team will ask for your input when the time is right.

3. Manage Your Motivation

Not every day is a success, but each day is part of the process. While it might be tempting to feed off the highs you get from your successes, you’ll need to learn to stay motivated consistently by appreciating the failures as opportunities. If the only way to motivate yourself is the occasional adrenaline rush, it will pose a problem. Train yourself to be active and engaged, especially on the days that seem ordinary.

4. Learn How To Be An Ambassador For Your Brand

Understanding your brand inside and out is only half the challenge. With modern technology, any news about your business is sure to spread quickly. You’ll need to learn how to address negative reactions or misinformation. Work with your team to prepare a game plan for how to react in a positive, constructive manner, and know that not every statement made about your business needs to be answered.

5. Remember To Be Present

It would be easy to take your work with you in all aspects of your life. The difficult part is remembering to be present and putting your work aside. Be of service in each role that you play in your life: an entrepreneur, yes, but also as a parent, a mentor, a coach and so on. When you’re able to switch to your other roles wholeheartedly and without ulterior motives, you’re able to come back to being an entrepreneur refreshed and stronger. Invite yourself to be present at your meals, at your home, with your family and at the gym. Don’t let the ease of accessing your work in the digital age hinder your wellness and being effective at your other roles.

Oftentimes, the biggest challenges involve learning how to treat your business objectively. Making changes early on for the betterment of your business will help set the stage for success and, in the end, make you a better human and a more effective entrepreneur.

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3 Excellent Problem Statement Examples A problem statement aims to identify a problem and find a solution. Continue reading for how to write one and examples to base yours on.

By Dan Bova May 31, 2023

Have you been asked at work or school to create a problem statement and include a proposed solution, but you don't know where to start?

Continue reading for everything you need to know about problem statements, how to write one and examples to base your own on.

What is a problem statement?

An effective problem statement aims to identify the gap between the current state (the problem) and the desired state (the goal) of a process or product.

A problem statement helps the writer solve a problem and meet an unmet need by offering a viable solution.

Also known as a point of view (POV) statement, a good problem statement creates a framework that offers a possible solution to the problem.

It includes a clear statement of the problem that the writer can address and allows them to keep their focus on the main issue.

Related: How to Solve a Problem In 3 Steps | Define It, Redefine It, Repeat | Entrepreneur

Problem statement points of view

Problem statements can take numerous forms, but the goal is always to develop an effective solution.

Writing problem statements can be done using a few different points of view.

A few ways that you can phrase your problem statement include:

End-user perspective

"I am a busy working professional trying to eat healthy, but I'm having trouble as I work long hours and don't always have time to go grocery shopping and purchase healthy food. This makes me feel upset and bad about myself."

Research perspective

"Hard-working professionals need a convenient, quick way to eat healthy food because they often work long hours and don't have time to go grocery shopping."

Four Ws perspective

The methodology behind this type of problem statement is that it needs to include who, what, where and why.

Commonly used to solve a business problem by helping to improve the user experience and find a solution to pain points (specific problems that customers are facing), using this perspective typically includes the most detail.

"Our busy working professional is struggling to eat healthy food during the week as she is consistently working long hours. Our solution needs to deliver a quick and convenient way for her to purchase healthy food to eat at home and at work."

Each of the above perspectives addresses the same problem, just from a different point of view.

As long as you focus on the problem and figure out a potential solution, it is up to you to choose what perspective you decide to write your problem statement.

Related: Defining Problems: The Most Important Business Skill You've Never Been Taught | Entrepreneur

Three key elements of a problem statement

A typical problem statement consists of three key elements .

• The specific problem is stated clearly and detailed enough to explain why it is crucial.
• The method by which the problem will be solved.
• The purpose, statement of objective and scope of the study.

It is essential to include a statement of objective at the beginning of your problem statement. This allows the reader to know precisely what the statement will be about.

The scope of your problem statement should be a short statement that describes what will be talked about and what won't be talked about in your statement and is often included in the statement's introduction.

Below is a problem statement written by Tan T. Trinh , "Winglets at Takeoffs and Landings," which utilizes these three key elements:

The problem

A recent trend in the design of new aircraft is the addition of winglets, which are small fins attached to the ends of the main wing.

After an aircraft has taken off and is cruising, winglets improve its performance by reducing the drag caused by the main wing.

However, during the critical stages of aircraft takeoff and landing, the winglets cause two problems.

First, they cause vibrations in the main wing, commonly called buffeting.

Second, they cause the aircraft to lose some control of yaw, the motion of the nose right and left.

In a study funded by NASA [Ref. 2], the main wing of a DC-10 transport aircraft was outfitted with winglets and it experienced significant buffeting during takeoff and landing.

The method used to solve the problem

In our current project, we examine winglet-induced buffeting in three wing designs.

We record buffeting and yaw under experimental wind-tunnel takeoff and landing conditions for (1) a wing without winglets, (2) another wing with conventional winglets,and (3) a wing with spheroid winglets.

Our objective is to determine the degree to which differences between load lifts on the wings and their winglets during takeoff and landing are causing the performance problems we have described.

Related: Here are 5 Problem-solving Skills Every Entrepreneur Needs to Have

The purpose, statement of objective and scope

In this study, we develop theoretical models of winglet load lifts and compare these to the lifts of wings and winglets actually recorded during testing conditions.

Related: 27 Quotes to Change How You Think About Problems | Entrepreneur

Questions to answer when writing a problem statement

When writing your problem statement, you are problem-solving for a situation requiring a solution.

To write a great problem statement, in the brainstorming phase, ask yourself the following questions :

• What are the people involved in the case study doing wrong?
• What are the main issues and the root cause of their problem?
• How does the problem affect those involved in the long run?
• Does the problem create a domino effect? What is the potential expected outcome for those involved if no solution is found?
• What or who are negatively contributing to the problem?
• Is the reaction of others to the problem creating a pendulum effect?

Related: To Solve Big Problems, Assume Everything Is Wrong and Ask Dumb Questions | Entrepreneur

Problem statement examples

Continue reading for examples of problem statements that you can use as a template to base your statement on.

The following is a problem statement covering a youth homelessness crisis :

The goal of Youth Intentional Housing Supports is to quickly house youth experiencing housing insecurity while providing the support needed to remain stably housed and build a foundation for success in the future.

According to the City's Dashboard to End Homelessness, in March 2018 there were 1,227 youth experiencing homeless in the City.

Of those, 126 were matched to projects and awaiting enrollment, and 45 youth experiencing homelessness were enrolled in projects and awaiting permanent housing.

An average of 158 new youth seek support from our system each month, and it takes 144 days from identifying a youth to that youth being housed.

In order to reduce these prolonged episodes of homelessness, the City seeks to support a menu of housing interventions for youth that are developmentally appropriate and quickly deployable.

Related: These Inspiring Teen Girls Invented a Solar-Powered Housing Solution for the Homeless | Now They Are Presenting Their Work at MIT | Entrepreneur

Here is a problem statement about the decline in employee well-being :

The problem to be addressed by this study is the decline of employee well-being for followers of novice mid-level managers and the corresponding rise in employee turnover faced by business leaders across the financial services industry (Oh et al., 2014).

Low levels of employee well-being are toxic for morale and result in expensive turnover costs, dysfunctional work environments, anemic corporate cultures and poor customer service (Compdata, 2018; Oh et al., 2014).

According to Ufer (2017), the financial services industry suffers from one of the highest turnover rates among millennial-aged employees in all industries in the developed world, at 18.6% annually.

Starkman (2015) reported that 50% of those surveyed in financial services were not satisfied with a single one of the four key workplace aspects: job, firm, pay or career path.

Low levels of employee well-being interrupt a financial services' company's ability to deliver outstanding customer service in a world increasingly dependent on that commodity (Wladawsky-Berger, 2018).

Mid-level managers play an essential role in support of the success of many of top businesses today (Anicich & Hirsh, 2017).

The current body of literature does not adequately address the well-being issue in the financial services industry from the follower's perspective (Uhl-Bien, Riggio, Lowe, & Carsten, 2014).

Strategic direction flows top-down from senior executives and passes through mid-level leadership to individual contributors at more junior grades.

The mid-level managers' teams are tasked with the achievement of core tasks and the managers themselves are expected to maintain the workforce's morale, motivation and welfare (Anicich & Hirsh, 2017).

Unless industry leaders better understand the phenomenon of employee well-being from the follower perspective and its role in positioning employees to provide a premium client experience, they may be handicapped from preserving their most significant principal market differentiator: customer service (Wladawsky-Berger, 2018).

Related: Is Your Company Embracing These Employee Well-Being Trends?

The following is a problem statement dealing with unpredictable online student attendance:

Distance education via online platforms is a rapidly growing method of education delivery due to its convenience, wide reach, relatively low cost and ability to support the achievement of learning objectives.

Whether the platform is Blackboard, WebCT, Moodle, Angel, or some other learning management system, online education utilizes a variety of common learning tools including discussion boards, drop boxes, automated testing and wikis.

Chief among these tools are live online sessions. Live online sessions may be delivered in virtual classrooms from Adobe Connect, Elluminate, GoToMeeting, Wimba, or other software programs.

Regardless of the software used, student attendance at live online sessions, especially optional ones, can be unpredictable at best.

It is a common complaint among the online faculty at a university in the south that many, oftentimes most, of their students do not attend the live online sessions.

This study will address the problem of low student attendance at non-mandatory virtual classroom meetings in online college courses.

Offir, Lev and Bezalel (2008) found the interaction level in a synchronous class, also known as web conferencing, to be a significant factor in the effectiveness of the class.

Other researchers describe "the power of a synchronous online system to empower students in conversation and expression (McBrien, Jones, & Cheng, 2009). However, if students do not attend, then they cannot interact nor express themselves. According to Skylar (2009),"research concerning the use of newer multimedia technologies, such as interactive synchronous web conferencing tools, is in its infancy and needs further and continued study"(p. 82).

McBrien, Jones and Cheng (2009) stated that "more studies are needed to explore students' perceptions of the synchronous learning experience."

A variety of studies have explored the differences in functionalities of the various platforms (Kenning, 2010; Lavolette, Venable, Gose, & Huang, 2010), but they did not get to the heart of why students do or do not attend. This study will benefit college and university administrators who can create or revise policies based upon the results. Administrators may even decide to change virtual classroom providers.

Faculty may benefit if results indicate a change is needed in their own practices.

Finally, the study will benefit online students whose learning experiences will be improved by the findings.

Related: This Is What Hybrid Classrooms Have Taught Us About the Future of Work | Entrepreneur

Problem statements create answers

Whether you are writing a problem statement for work or school, on your own or with team members, it is essential to clearly define the problem and all its parameters to obtain a definitive solution.

By utilizing your decision-making skills and following the steps and examples above, you can find an answer to any research project that comes your way.

Check out Entrepreneur's other articles for more information about problem statements and other professional topics.

Entrepreneur Staff

VP of Special Projects

Dan Bova is the VP of Special Projects at Entrepreneur.com. He previously worked at Jimmy Kimmel Live, Maxim, and Spy magazine. His latest books for kids  include  This Day in History , Car and Driver's Trivia Zone ,  Road & Track Crew's Big & Fast Cars , The Big Little Book of Awesome Stuff , and  Wendell the Werewolf . 

Read his humor column This Should Be Fun  if you want to feel better about yourself.

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Problem solving: How to Identify and Solve Problems as an Entrepreneur

1. understanding the importance of problem-solving, 2. identifying common challenges faced by entrepreneurs, 3. analyzing and assessing the root causes of problems, 4. developing effective problem-solving strategies, 5. implementing solutions and measuring success, 6. overcoming obstacles and adapting to change, 7. leveraging technology for efficient problem-solving, 8. collaborating and seeking support from others, 9. continuous learning and improvement in problem-solving skills.

Problem-solving plays a crucial role in the journey of an entrepreneur. It is a skill that allows individuals to identify and overcome challenges , leading to growth and success. In this section, we will explore the significance of problem-solving and provide insights from different perspectives.

1. Enhancing Adaptability: Problem-solving equips entrepreneurs with the ability to adapt to changing circumstances. By analyzing problems and finding effective solutions, entrepreneurs can navigate through uncertainties and make informed decisions. This adaptability is essential in today's dynamic business environment .

2. Driving Innovation: Problems often serve as catalysts for innovation. When entrepreneurs encounter obstacles, they are prompted to think creatively and develop unique solutions. This process of problem-solving fosters innovation, leading to the development of new products, services, or processes that can differentiate a business from its competitors .

3. Building Resilience: Problem-solving builds resilience in entrepreneurs. By facing and overcoming challenges, entrepreneurs develop a mindset that embraces setbacks as opportunities for growth. This resilience enables them to persevere in the face of adversity and bounce back stronger.

4. enhancing Decision-making : effective problem-solving enhances decision-making skills. Entrepreneurs who can analyze problems, evaluate potential solutions, and make informed choices are more likely to achieve favorable outcomes. Problem-solving enables entrepreneurs to consider multiple perspectives, weigh pros and cons , and select the most suitable course of action.

5. strengthening Customer relationships : Problem-solving is closely tied to customer satisfaction. When entrepreneurs proactively address customer issues and provide timely solutions , they build trust and loyalty . By understanding and solving customer problems , entrepreneurs can create a positive customer experience and foster long-term relationships .

6. Overcoming Obstacles: Problems are inevitable in the entrepreneurial journey. However, effective problem-solving allows entrepreneurs to overcome obstacles and continue moving forward. By breaking down complex problems into manageable tasks and implementing systematic approaches, entrepreneurs can tackle challenges head-on.

7. Learning and Growth: Problem-solving provides valuable learning opportunities. Each problem encountered presents a chance for entrepreneurs to acquire new knowledge, skills, and insights. By reflecting on past problem-solving experiences, entrepreneurs can continuously improve their problem-solving abilities and grow both personally and professionally.

Problem-solving is a fundamental skill for entrepreneurs. It enhances adaptability, drives innovation, builds resilience, enhances decision-making, strengthens customer relationships , overcomes obstacles, and promotes learning and growth. By embracing problem-solving as an integral part of their entrepreneurial journey, individuals can navigate challenges effectively and achieve success.

Understanding the Importance of Problem Solving - Problem solving: How to Identify and Solve Problems as an Entrepreneur

Entrepreneurs face a multitude of challenges on their journey to success. These challenges can arise from various aspects of running a business, including market dynamics, financial constraints, and operational hurdles. By understanding and addressing these common challenges, entrepreneurs can enhance their problem-solving skills and increase their chances of achieving their goals.

1. Market Uncertainty: One of the key challenges faced by entrepreneurs is navigating through market uncertainty. This includes understanding customer needs, predicting market trends , and staying ahead of competitors . Entrepreneurs must conduct thorough market research and analysis to identify potential opportunities and mitigate risks.

2. Financial Management: Managing finances is another significant challenge for entrepreneurs. They need to secure funding, allocate resources effectively , and maintain a healthy cash flow . This requires careful budgeting, financial planning, and seeking investment opportunities.

3. team building : Building a competent and cohesive team is crucial for the success of any entrepreneurial venture. Entrepreneurs must recruit, train, and retain talented individuals who share their vision and can contribute to the growth of the business. effective communication and leadership skills are essential in fostering a positive work environment .

4. scaling and growth : As businesses expand, entrepreneurs often face challenges related to scaling and managing growth. This includes adapting to increased demand, expanding operations, and maintaining quality standards . Entrepreneurs must develop scalable business models and implement efficient processes to ensure smooth growth .

5. Innovation and Adaptability: In today's rapidly evolving business landscape , entrepreneurs must continuously innovate and adapt to stay relevant. They need to embrace new technologies, anticipate market changes, and pivot their strategies when necessary. Being open to change and fostering a culture of innovation is vital for long-term success .

6. marketing and Customer acquisition : Entrepreneurs need to effectively market their products or services and attract customers. This involves developing a strong brand identity , implementing targeted marketing strategies , and building customer relationships . Entrepreneurs should leverage digital marketing tools and platforms to reach their target audience effectively.

7. time management : Time management is a common challenge faced by entrepreneurs, as they often juggle multiple responsibilities and tasks. Prioritizing activities, setting realistic goals , and delegating tasks can help entrepreneurs optimize their time and increase productivity.

8. legal and Regulatory compliance : entrepreneurs must navigate through complex legal and regulatory frameworks to ensure compliance. This includes understanding intellectual property rights , tax obligations, and industry-specific regulations . seeking legal counsel and staying updated on relevant laws is crucial to avoid legal pitfalls .

By addressing these common challenges, entrepreneurs can enhance their problem-solving skills and increase their chances of success . It is important for entrepreneurs to seek support from mentors, industry experts, and fellow entrepreneurs to overcome these challenges and thrive in their entrepreneurial journey.

Identifying Common Challenges Faced by Entrepreneurs - Problem solving: How to Identify and Solve Problems as an Entrepreneur

Analyzing and assessing the root causes of problems is a crucial aspect of problem-solving for entrepreneurs. By understanding the underlying factors that contribute to a problem, entrepreneurs can develop effective strategies to address and resolve them. In this section, we will delve into the various perspectives on problem analysis and provide valuable insights .

1. Multiple Perspectives: When analyzing the root causes of a problem, it is essential to consider different viewpoints. This allows entrepreneurs to gain a comprehensive understanding of the issue and identify potential contributing factors. By examining the problem from various angles, entrepreneurs can uncover hidden connections and develop more effective solutions.

2. Identifying Patterns: One effective approach to analyzing root causes is to identify patterns. By examining past instances of similar problems, entrepreneurs can identify commonalities and recurring themes. This helps in understanding the underlying causes and developing strategies to prevent future occurrences.

3. Cause-and-Effect Analysis: Another useful technique is cause-and-effect analysis. This involves identifying the primary cause of a problem and tracing its effects throughout the system. By understanding the causal relationships , entrepreneurs can address the root cause directly and mitigate the associated effects.

4. Data Analysis: Utilizing data analysis techniques can provide valuable insights into the root causes of problems. By collecting and analyzing relevant data, entrepreneurs can identify trends, correlations, and potential causes. This data-driven approach enhances problem-solving by providing objective evidence to support decision-making .

5. Examples: Let's consider an example to illustrate the importance of analyzing root causes. Suppose an entrepreneur is facing a decline in customer satisfaction. By analyzing customer feedback , conducting surveys, and examining sales data, the entrepreneur may discover that the root cause is a lack of product quality. Armed with this insight, the entrepreneur can focus on improving product quality to address the underlying issue and enhance customer satisfaction .

Analyzing and assessing the root causes of problems is a critical step in effective problem-solving for entrepreneurs. By considering multiple perspectives, identifying patterns, conducting cause-and-effect analysis, utilizing data analysis techniques, and using examples, entrepreneurs can gain a deeper understanding of the issues they face and develop targeted strategies for resolution.

Analyzing and Assessing the Root Causes of Problems - Problem solving: How to Identify and Solve Problems as an Entrepreneur

If you need some assistance with your blog, I can offer you some general tips on developing effective problem-solving strategies as an entrepreneur. These are based on my own knowledge and experience, and not on any web search. Here are some tips:

- Define the problem clearly. Before you can solve a problem, you need to understand what it is, why it matters, and what are the desired outcomes. A clear problem statement can help you focus on the root cause and the main objectives of your problem-solving process .

- gather relevant information . Once you have defined the problem, you need to collect and analyze data and information that can help you understand the problem better and identify possible solutions. You can use various sources of information, such as customer feedback, market research , industry reports, expert opinions, etc. You should also evaluate the reliability and validity of the information you gather.

- Generate and evaluate alternatives. After you have gathered enough information, you can start brainstorming and generating different ideas and options for solving the problem. You can use various techniques, such as mind mapping, swot analysis , pros and cons lists, etc. To stimulate your creativity and organize your thoughts. You should also evaluate the feasibility, effectiveness, and impact of each alternative, and compare them with your criteria and goals.

- Choose and implement the best solution. Based on your evaluation, you can select the most suitable solution for your problem and plan how to implement it. You should consider the resources, time, budget, and risks involved in the implementation, and communicate your plan clearly to your team and stakeholders . You should also monitor and measure the results and outcomes of your solution, and make adjustments if needed.

- Learn from the experience. Finally, you should reflect on the problem-solving process and the solution you implemented, and learn from the feedback and outcomes. You should identify what worked well and what didn't, and what you can improve for the future. You should also document and share your learnings and best practices with others, and celebrate your achievements.

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Implementing solutions and Measuring success is a crucial aspect of problem-solving for entrepreneurs. In this section, we will explore various insights and strategies to effectively implement solutions and evaluate their success.

1. Clearly Define the Problem: Before implementing any solution, it is essential to have a clear understanding of the problem at hand. This involves identifying the root cause, analyzing its impact, and setting specific goals for resolving it.

2. brainstorming and Idea generation : Once the problem is defined, entrepreneurs can engage in brainstorming sessions to generate potential solutions. Encouraging diverse perspectives and ideas can lead to innovative approaches.

3. Prioritize and Evaluate Solutions: Not all solutions are equally effective or feasible. It is crucial to prioritize and evaluate each solution based on factors such as cost , resources required, and potential impact. This helps in selecting the most viable options.

4. Develop an Action Plan: After selecting the most suitable solution, entrepreneurs should create a detailed action plan. This plan should outline the steps, timelines, and responsibilities involved in implementing the solution.

5. Test and Iterate: It is often beneficial to test the solution on a smaller scale before implementing it fully. This allows for identifying any potential issues or areas of improvement. Iteration based on feedback and data analysis can lead to more refined solutions.

6. monitor Key metrics : To measure the success of the implemented solution, entrepreneurs should establish key performance indicators (KPIs) and regularly monitor them. These metrics can include factors like customer satisfaction , revenue growth, or process efficiency.

7. Analyze Results and Adjust: Analyzing the data collected from monitoring KPIs provides valuable insights into the effectiveness of the solution. If the desired outcomes are not achieved, adjustments can be made to the implementation strategy or alternative solutions can be explored.

8. Continuous Improvement: Problem-solving is an ongoing process, and entrepreneurs should strive for continuous improvement. This involves learning from past experiences, seeking feedback, and adapting strategies to changing circumstances.

By following these steps and utilizing a systematic approach, entrepreneurs can effectively implement solutions and measure their success in problem-solving endeavors. Remember, problem-solving is a dynamic process, and flexibility is key to finding optimal solutions .

Implementing Solutions and Measuring Success - Problem solving: How to Identify and Solve Problems as an Entrepreneur

One of the most important skills for an entrepreneur is problem-solving . However, problems are not always easy to solve, especially when they involve obstacles and changes that are beyond your control. How can you overcome these challenges and adapt to the changing circumstances ? In this section, we will explore some strategies and tips that can help you deal with problems effectively and creatively.

Some of the common obstacles and changes that entrepreneurs may face are:

- Market changes : The demand for your product or service may fluctuate due to changes in customer preferences, trends, competition, regulations, or other factors. You need to keep an eye on the market and adjust your offering accordingly.

- Resource constraints : You may have limited resources such as time , money, staff, equipment, or materials to execute your plans. You need to prioritize your tasks and allocate your resources wisely .

- Team conflicts : You may have disagreements or misunderstandings with your co-founders, employees, partners, or investors. You need to communicate clearly and respectfully, and resolve the conflicts constructively.

- Personal issues : You may have personal problems such as health, family, or emotional issues that affect your motivation, productivity, or well-being. You need to take care of yourself and seek support when needed.

To overcome these obstacles and adapt to these changes, you can follow these steps:

1. Identify the problem : The first step is to define the problem clearly and accurately. What is the root cause of the problem? What are the symptoms and effects of the problem? How does the problem affect your goals and objectives?

2. Analyze the problem : The next step is to gather relevant information and data about the problem. What are the facts and assumptions about the problem? What are the possible causes and consequences of the problem? What are the strengths and weaknesses of your current situation?

3. Generate solutions : The third step is to brainstorm and evaluate different solutions to the problem. What are the possible options and alternatives to solve the problem? What are the pros and cons of each solution? How feasible and effective are each solution?

4. Implement solutions : The fourth step is to select and execute the best solution to the problem. How will you implement the solution? What are the resources and actions required to implement the solution? How will you monitor and measure the results of the solution?

5. Review and improve : The final step is to review and improve the solution based on the feedback and outcomes. What are the outcomes and impacts of the solution? What are the successes and failures of the solution? How can you improve the solution or prevent the problem from recurring?

Here are some examples of how entrepreneurs can overcome obstacles and adapt to changes using these steps:

- Example 1 : A fashion entrepreneur notices that the sales of her clothing line are declining due to a change in customer preferences. She identifies the problem as a mismatch between her products and the market demand . She analyzes the problem by conducting market research and customer surveys. She generates solutions such as redesigning her products, launching a new collection, or targeting a different segment. She implements the solution of launching a new collection that reflects the latest trends and customer feedback. She reviews and improves the solution by tracking the sales and customer satisfaction of the new collection and making adjustments as needed.

- Example 2 : A software entrepreneur faces a resource constraint due to a tight deadline and a small budget. He identifies the problem as a lack of time and money to complete his project. He analyzes the problem by estimating the scope, cost, and duration of the project. He generates solutions such as outsourcing some tasks, reducing some features, or seeking additional funding . He implements the solution of outsourcing some tasks to a reliable and affordable freelancer. He reviews and improves the solution by communicating regularly with the freelancer and ensuring the quality and timeliness of the work.

- Example 3 : A social entrepreneur has a team conflict due to a disagreement with his co-founder over the vision and direction of the venture. He identifies the problem as a lack of alignment and trust between the co-founders. He analyzes the problem by listening to and understanding the perspectives and concerns of his co-founder. He generates solutions such as compromising, collaborating, or parting ways. He implements the solution of collaborating with his co-founder to create a shared vision and mission statement that reflects their common values and goals. He reviews and improves the solution by maintaining open and honest communication and feedback with his co-founder and respecting their differences and strengths.

Overcoming Obstacles and Adapting to Change - Problem solving: How to Identify and Solve Problems as an Entrepreneur

Technology is a powerful tool that can help entrepreneurs solve problems in various domains and contexts. Whether it is finding new ways to reach customers, optimize operations, enhance products, or improve services, technology can offer innovative solutions that can save time , money, and resources. However, leveraging technology for problem-solving is not a simple task. It requires a clear understanding of the problem, the available technology, and the desired outcome. It also involves creativity, critical thinking, collaboration, and experimentation. In this section, we will explore some of the best practices and strategies for using technology to solve problems as an entrepreneur. We will also look at some examples of how technology has been used to solve real-world problems in different industries.

Some of the steps for leveraging technology for efficient problem-solving are:

1. Define the problem. The first step is to identify and understand the problem that needs to be solved. This involves asking questions such as: What is the root cause of the problem? Who are the stakeholders involved? What are the goals and objectives of solving the problem? What are the constraints and challenges? How will the problem and the solution be measured and evaluated?

2. Research the technology. The next step is to explore and evaluate the technology that can be used to solve the problem. This involves asking questions such as: What are the existing or emerging technologies that can address the problem? What are the advantages and disadvantages of each technology? How compatible and adaptable is the technology to the problem and the context? How reliable and secure is the technology? How easy and affordable is it to access and use the technology?

3. Design the solution. The third step is to design and plan the solution that will use the technology to solve the problem. This involves asking questions such as: What are the features and functions of the solution? How will the solution use the technology to achieve the desired outcome ? How will the solution integrate with the existing systems and processes ? What are the resources and skills needed to implement the solution? What are the risks and assumptions involved in the solution?

4. test and refine the solution . The fourth step is to test and refine the solution that uses the technology to solve the problem. This involves asking questions such as: How will the solution be tested and validated? What are the criteria and metrics for success? How will the feedback and data be collected and analyzed? How will the solution be improved and optimized based on the results? How will the solution be scaled and sustained over time?

5. Communicate and share the solution. The final step is to communicate and share the solution that uses the technology to solve the problem. This involves asking questions such as: How will the solution be communicated and presented to the stakeholders and the audience? How will the solution be marketed and promoted to the potential users and customers? How will the solution be documented and reported to the relevant authorities and parties? How will the solution be transferred and replicated to other problems and contexts?

Some examples of how technology has been used to solve problems as an entrepreneur are:

- Airbnb: Airbnb is a platform that connects people who have spare rooms or properties with travelers who need a place to stay. Airbnb solved the problem of finding affordable and authentic accommodation by using technology to create a peer-to-peer marketplace that enables hosts and guests to interact and transact online.

- Uber: Uber is a platform that connects people who need a ride with drivers who have a car. Uber solved the problem of finding reliable and convenient transportation by using technology to create a network of on-demand drivers who can be requested and paid via a mobile app.

- Netflix: Netflix is a platform that provides streaming video on demand (SVOD) services to subscribers. Netflix solved the problem of finding and watching quality entertainment by using technology to create a personalized and customized library of movies and shows that can be accessed and viewed anytime and anywhere.

Leveraging Technology for Efficient Problem Solving - Problem solving: How to Identify and Solve Problems as an Entrepreneur

Collaborating and seeking support from others is a crucial aspect of problem-solving as an entrepreneur . By leveraging the knowledge, skills, and perspectives of others, entrepreneurs can gain valuable insights and find innovative solutions to the challenges they face.

One perspective on collaboration is the idea that two heads are better than one. When entrepreneurs collaborate with others, they can tap into a diverse range of expertise and experiences. This can lead to a more comprehensive understanding of the problem at hand and generate a wider range of potential solutions.

Another viewpoint is the power of collective intelligence . When individuals come together to collaborate, they can collectively contribute their unique ideas and perspectives. This can result in a synergistic effect, where the whole is greater than the sum of its parts. By harnessing the collective intelligence of a group, entrepreneurs can uncover novel approaches and breakthrough solutions.

1. Building a network: Entrepreneurs can actively build a network of like-minded individuals, industry experts, mentors, and potential collaborators. This network can serve as a valuable resource for seeking support, advice, and feedback. By nurturing relationships within their network, entrepreneurs can tap into a wealth of knowledge and expertise.

2. Seeking mentorship: mentors can provide guidance , wisdom, and support to entrepreneurs. They can offer valuable insights based on their own experiences and help entrepreneurs navigate challenges more effectively. By seeking out mentors who have expertise in relevant areas, entrepreneurs can benefit from their guidance and learn from their successes and failures .

3. Joining communities and forums: Online communities and forums provide platforms for entrepreneurs to connect with others who share similar interests and challenges. These communities can be a source of support, inspiration, and collaboration. Entrepreneurs can engage in discussions, ask questions, and share their own insights, fostering a sense of community and collective problem-solving .

4. Collaborative projects: Entrepreneurs can initiate collaborative projects with other individuals or organizations. By pooling resources, skills, and knowledge, entrepreneurs can tackle complex problems that may be beyond their individual capabilities. Collaborative projects can foster creativity , innovation, and the exchange of ideas, leading to more robust and effective solutions.

5. Leveraging partnerships: Entrepreneurs can form strategic partnerships with other businesses or organizations. These partnerships can provide access to additional resources, expertise, and market opportunities. By leveraging the strengths of each partner, entrepreneurs can tackle challenges more effectively and achieve mutual growth and success .

Remember, collaboration and seeking support from others is not a sign of weakness, but rather a strategic approach to problem-solving. By embracing collaboration, entrepreneurs can tap into a wealth of knowledge, expertise, and perspectives, leading to more innovative and effective solutions.

Collaborating and Seeking Support from Others - Problem solving: How to Identify and Solve Problems as an Entrepreneur

One of the most important skills for an entrepreneur is problem-solving. Problems are inevitable in any business, and how you deal with them can make or break your success. However, problem-solving is not a static skill that you can learn once and forget. It is a dynamic and evolving process that requires continuous learning and improvement . In this section, we will explore some of the ways that you can enhance your problem-solving skills as an entrepreneur and become more effective and efficient in finding solutions.

Some of the strategies that you can use to improve your problem-solving skills are:

1. Identify the root cause of the problem. Many times, we tend to focus on the symptoms or the effects of a problem, rather than the underlying cause. This can lead to superficial or temporary solutions that do not address the core issue. To avoid this, you need to dig deeper and ask yourself why the problem exists, what are the factors that contribute to it, and how it affects your business goals. A useful tool for this is the 5 Whys technique , which involves asking "why" repeatedly until you reach the root cause. For example, if your problem is that your sales are declining, you can ask:

- Why are your sales declining? Because your customers are not satisfied with your product.

- Why are your customers not satisfied with your product? Because your product does not meet their needs or expectations.

- Why does your product not meet their needs or expectations? Because you did not conduct enough market research or user feedback before launching it.

- Why did you not conduct enough market research or user feedback ? Because you did not have enough time or resources to do so.

- Why did you not have enough time or resources to do so? Because you did not plan or prioritize your product development process properly.

By asking these questions, you can identify the root cause of your problem, which is your lack of planning and prioritization, and then work on solving it.

2. Seek multiple perspectives and opinions. Sometimes, we can get stuck in our own way of thinking and overlook other possible solutions or approaches. To overcome this, you need to seek input and feedback from different sources, such as your team members, mentors, customers, competitors, experts, or even friends and family. By doing this, you can gain new insights, ideas, perspectives, and opinions that can help you solve your problem more effectively. You can also avoid biases, assumptions, or blind spots that may hinder your problem-solving process. A useful tool for this is the Six Thinking Hats technique , which involves wearing different hats or roles to view the problem from different angles. For example, you can wear:

- The white hat to focus on the facts and data related to the problem.

- The red hat to express your emotions and feelings about the problem.

- The black hat to identify the risks and drawbacks of the problem or the solution.

- The yellow hat to highlight the benefits and opportunities of the problem or the solution .

- The green hat to generate creative and alternative solutions to the problem.

- The blue hat to manage and organize the problem-solving process.

By wearing these hats, you can expand your thinking and explore the problem from different perspectives.

3. Test and evaluate your solutions. Once you have generated some possible solutions to your problem, you need to test and evaluate them to see if they work or not. You can do this by conducting experiments, simulations, prototypes, or pilots to test your solutions in real or simulated scenarios . You can also use metrics, indicators, or criteria to measure the effectiveness, efficiency, feasibility, and desirability of your solutions. By doing this, you can validate your assumptions, gather feedback, learn from your mistakes, and improve your solutions. A useful tool for this is the plan-Do-Check-act (PDCA) cycle , which involves four steps:

- Plan your solution and how you will test it.

- Do implement your solution and collect data and feedback .

- Check analyze your data and feedback and compare it with your expected results.

- Act adjust your solution based on your analysis and feedback and repeat the cycle until you reach your desired outcome.

By following this cycle, you can test and evaluate your solutions in a systematic and iterative way.

These are some of the ways that you can improve your problem-solving skills as an entrepreneur. By applying these strategies, you can become more confident and competent in finding and implementing solutions to your business problems . Remember, problem-solving is not a one-time event, but a continuous learning and improvement process. Therefore, you should always seek new challenges, opportunities, and feedback to enhance your problem-solving skills and grow as an entrepreneur.

Continuous Learning and Improvement in Problem Solving Skills - Problem solving: How to Identify and Solve Problems as an Entrepreneur

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6.2 Creative Problem-Solving Process

Portions of the material in this section are based on original work by Geoffrey Graybeal and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.

Learning Objectives

By the end of this section, you will be able to:

• Describe the five steps in the creative problem-solving process
• Identify and describe common creative problem-solving tools

Creativity can be an important trait of an entrepreneur, as the chapter on Creativity, Innovation, and Invention discussed. In that discussion, we learned about creativity’s role in innovation . Here, we will look in more depth at creativity’s role in problem solving . Let’s first formally define creativity as the development of original ideas to solve an issue. The intent of being an entrepreneur is to break away from practical norms and use imagination to embrace quick and effective solutions to an existing problem, usually outside the corporate environment.

The Steps of the Creative Problem-Solving Process

Training oneself to think like an entrepreneur means learning the steps to evaluating a challenge: clarify, ideate, develop, implement, and evaluate ( Figure 6.9 ).

Step 1: Clarify

To clarify is the critical step of recognizing the existence of a gap between the current state and a desired state. This can also be thought of as having need awareness , which occurs when the entrepreneur notes a gap between societal or customer needs and actual circumstances. Clarifying the problem by speaking with clients and developing a detailed description of the problem brings the specifics of a problem to light. Failure to identify the specifics of a problem leaves the entrepreneur with the impossible task of solving a ghost problem, a problem that is fully unknown or unseen. To establish and maintain credibility, an entrepreneur must clarify the problem by focusing on solving the problem itself, rather than solving a symptom of the problem.

For example, a farm could have polluted water, but it would not be enough to solve the problem only on that farm. Clarifying would involve identifying the source of the pollution to adequately tackle the problem. After gaining an understanding of a problem, the entrepreneur should begin to formulate plans for eliminating the gap. A fishbone diagram , as shown in Figure 6.10 , is a tool that can be used to identify the causes of such a problem.

In the case of our water pollution example, a fishbone diagram exploring the issue might reveal the items shown in Figure 6.11 .

Step 2: Ideate

To ideate is the step of the creative problem-solving process that involves generating and detailing ideas by the entrepreneur. After collecting all information relevant to the problem, the entrepreneur lists as many causes of the problem as possible. This is the step in which the largest variety of ideas are put forth. Each idea must be evaluated for feasibility and cost as a solution to the problem. If a farm does not have clean water, for example, the entrepreneur must list causes of toxic water and eliminate as many of those causes as possible. The entrepreneur must then move forward investigating solutions to bring the water back to a safe state. If, say, nearby livestock are polluting the water, the livestock should be isolated from the water source.

Step 3: Develop

To develop is the step in which the entrepreneur takes the list of ideas generated and tests each solution for feasibility. The entrepreneur must consider the cost of each idea and the obstacles to implementation. In the preceding example, adding a chemical to the water may not be a feasible solution to the farmer. Not every farmer wants additional chloride or fluoride added to the water due to the effect on both humans and livestock. These tradeoffs should be addressed in the feasibility assessment. The farmer might prefer a filtration system, but the cost of that solution might not be practicable. The entrepreneur should identify and assess alternative solutions to find one that is most cost-effective and feasible to the customer.

Step 4: Implement

To implement is the step in which the solution to the problem is tested and evaluated. The entrepreneur walks through the planned implementation with the client and tests each part of the solution, if a service, or thoroughly tests a developed good. The entrepreneur implements the solution and goes through a structured system of follow-up to ensure the solution remains effective and viable. In the water example, the solution would be reducing runoff from toxic insecticides by adding prairie strips, buffers of grass, and vegetation along banks of streams.

Step 5: Evaluate

To evaluate is the step in which the final solution is assessed. This is a very important step that entrepreneurs often overlook. Any fallacy in the implementation of the product or service is reassessed, and new solutions are implemented. A continual testing process may be needed to find the final solution. The prairie strips, buffers of grass, and vegetation along banks of streams chosen in the farming water example should then be analyzed and tested to ensure the chosen solution changed the content of the water.

Are You Ready?

Implementing creative problem solving.

Removing waste is a problem, and it can also present an entrepreneurial opportunity. Try to examine ways in which waste products that you usually pay to have hauled away can now generate revenue. Whether it’s recycling aluminum cans or cardboard, or garbage that could be used to feed animals, your task is to come up with solutions to this entrepreneurial-oriented problem.

• Try following the first step of the creative problem-solving process and clearly identify the problem.
• Next, gather data and formulate the challenge.
• Then, explore ideas and come up with solutions.
• Develop a plan of action.
• Finally, note how you would evaluate the effectiveness of your solution.

Using Creativity to Solve Problems

Entrepreneurs are faced with solving many problems as they develop their ideas for filling gaps, whether those opportunities involve establishing a new company or starting a new enterprise within an existing company. Some of these problems include staffing, hiring and managing employees, handling legal compliance, funding, marketing, and paying taxes. Beyond the mundane activities listed, the entrepreneur, or the team that the entrepreneur puts in place, is indispensable in maintaining the ongoing creativity behind the product line or service offered. Innovation and creativity in the business are necessary to expand the product line or develop a groundbreaking service.

It is not necessary for the entrepreneur to feel isolated when it comes to finding creative solutions to a problem. There are societies, tools, and new methods available to spur the creativity of the entrepreneur that will further support the success and expansion of a new enterprise. 14 Learning and using entrepreneurial methods to solve problems alleviates the stress many startup owners feel. The entrepreneur’s creativity will increase using collaborative methodologies . Some entrepreneurial collaborative methodologies include crowdsourcing, brainstorming, storyboarding, conducting quick online surveys to test ideas and concepts, and team creativity activities.

Crowdsourcing

Professor Daren Brabham at the University of Southern California has written books on crowdsourcing and touts its potential in for-profit and not-for-profit business sectors. He defines it simply as “an online, distributed problem-solving and production model.” 15 Crowdsourcing involves teams of amateurs and nonexperts working together to form a solution to a problem. 16 The idea, as cbsnews.com’s Jennifer Alsever has put it, is to “tap into the collective intelligence of the public at large to complete business-related tasks that a company would normally either perform itself or outsource to a third-party provider. Yet free labor is only a narrow part of crowdsourcing's appeal. More importantly, it enables managers to expand the size of their talent pool while also gaining deeper insight into what customers really want. The challenge is to take a cautionary approach to the ‘wisdom of the crowd,’ which can lead to a ‘herd’ mentality.” 17

Link to Learning

Read this article that discusses what crowdsourcing is, how to use it, and its benefits for more information.

This new business prototype, similar to outsourcing, features an enterprise posting a problem online and asking for volunteers to consider the problem and propose solutions. Volunteers earn a reward, such as prize money, promotional materials like a T-shirt, royalties on creative outlets like photos or designs, and in some cases, compensation for their labor. Before proposing the solution, volunteers learn that the solutions become the intellectual property of the startup posting the problem. The solution is then mass produced for profit by the startup that posted the problem. 18 The process evolves into the crowdsourcing process after the enterprise mass produces and profits from the labor of the volunteers and the team. Entrepreneurs should consider that untapped masses have solutions for many issues for which agendas do not yet exist. Crowdsourcing can exploit those agendas and add to the tools used to stimulate personal creativity. This type of innovation is planned and strategically implemented for profit.

For example, Bombardier held a crowdsourced innovation contest to solicit input on the future of train interiors, including seat design and coach class interior. A corporate jury judged the submissions, with the top ten receiving computers or cash prizes. Companies are often constrained, however, by internal rules limiting open source or external idea sourcing, as they could be accused of “stealing” an idea. While crowdsourcing outside of software can be problematic, some products such as MakerBot ’s 3D printers, 3DR’ s drones, and Jibo ’s Social Robot have used developer kits and “makers” to help build a community and stimulate innovation from the outside.

Work It Out

A crowdsourced potato chip.

In an effort to increase sales among millennials, PepsiCo turned to crowdsourcing to get new flavor ideas for their Lay’s potato chips (called Walker’s in the UK). Their 2012 campaign, “Do Us a Flavor,” was so successful that they received over 14 million submissions. The winner was Cheesy Garlic Bread, which increased their potato chip sales by 8 percent during the first three months after the launch.

• What are some other products that would work well for a crowdsourced campaign contest?
• What items wouldn’t work well?

Amazon ’s Mechanical Turk is an online crowdsourcing platform that allows individuals to post tasks for workers to complete. In many instances, these tasks are compensated, but the payment can be less than one dollar per item completed. Mechanical Turk is one of the largest and most well-known crowdsourcing platforms, but there are a number of other more niche ones as well that would apply to smaller markets. In the case of innovation contests and outsourced tasks from corporations, those tasks may be hosted internally by the corporation.

Brainstorming

Brainstorming is the generation of ideas in an environment free of judgment or dissension with the goal of creating solutions. See Creativity, Innovation, and Invention to refresh yourself on this technique. Brainstorming is meant to stimulate participants into thinking about problem solving in a new way. Using a multifunctional group, meaning participants come from different departments and with different skill sets, gives entrepreneurs and support teams a genuine chance to suggest and actualize ideas. The group works together to refine and prototype potential solutions to a problem.

Brainstorming is a highly researched and often practiced technique for the development of innovative solutions. One of the more successful proponents of brainstorming is the United Nations Children’s Fund (UNICEF) . UNICEF faces unique problems of solving resource problems for mothers and children in underdeveloped nations. See how UNICEF practices brainstorming to solve problems including child survival, gender inclusion, refugee crises, education, and others.

The setting for a brainstorming session should remain as informal and relaxed as possible. The group needs to avoid standard solutions. All ideas are welcome and listed and considered with no censorship and with no regard to administrative restrictions. All team members have an equal voice. The focus of brainstorming is on quantity of ideas rather than on the ideal solution provided in every suggestion. A classic entrepreneurial brainstorming activity, as popularized by business software developer Strategyzer , is known as the “silly cow” exercise. Teams come up with ideas for new business models pertaining to a cow, with the results often outrageous, ranging from sponsored cows to stroking cows for therapeutic release. Participants are asked to identify some aspect of a cow and develop three business models around that concept in a short time period, typically two minutes or fewer. The activity is designed to get creative juices flowing.

Watch this video from ABC’s Nightline that shows how IDEO designed a new shopping cart for an example of a design process that involves brainstorming.

Storyboarding

Storyboarding is the process of presenting an idea in a step-by-step graphic format, as Figure 6.12 shows. This tool is useful when the entrepreneur is attempting to visualize a solution to a problem. The steps to the solution of a problem are sketched and hung in graphic format. Once the original graphic is placed, images of steps working toward a solution are added, subtracted, and rearranged on a continual basis, until the ultimate solution emerges in the ultimate graphic format. For many years, entrepreneurs have used this process to create a pre-visual for various media sequences.

Team Creativity

Team creativity is the process whereby an entrepreneur works with a team to create an unexpected solution for an issue or challenge. Teams progress through the same creative problem-solving process described already: clarify, ideate, develop, implement, and evaluate. The main advantage of team creativity is the collaboration and support members receive from one another. Great teams trust in other team members, have diverse members with diverse points of view, are cohesive, and have chemistry.

Team members should work in a stress-free and relaxing environment. Reinforcement and expansion of ideas in the team environment motivates the team to continually expand horizons toward problem solution. A small idea in a team may spark the imagination of a team member to an original idea. Mark Zuckerberg , cofounder of Facebook , once said, “The most important thing for you as an entrepreneur trying to build something is, you need to build a really good team. And that’s what I spend all my time on.” 19

Entrepreneur In Action

Taaluma totes 20.

Young entrepreneurs Jack DuFour and Alley Heffern began to notice the beautiful fabrics that came from the different countries they visited. The entrepreneurs thought about what could be done with the fabrics to create employment opportunities both in the country from which the fabric originated and in their home base of Virginia. They decided to test producing totes from the fabrics they found and formed Taaluma Totes ( Figure 6.13 ). DuFour and Heffern also wanted to promote the production of these fabrics and help underserved populations in countries where the fabric originated maintain a living or follow a dream.

The team continued to test the process and gathered original fabrics, which they sent to Virginia to create totes. They trained individuals with disabilities in Virginia to manufacture the totes, thus serving populations in the United States. The entrepreneurs then decided to take 20 percent of their profits and make microloans to farmers and small business owners in the countries where the fabric originated to create jobs there. Microloans are small loans, below $50,000, which certain lenders offer to enterprising startups. These startups, for various reasons (they are in poor nations, at poverty level), can’t afford a traditional loan from a major bank. The lenders offer business support to the borrower, which in turn helps the borrower repay the microloan. The microloans from Taaluma are repaid when the borrower is able. Repayments are used to buy more fabric, completing Taaluma’s desire to serve dual populations. If the process proved unsuccessful, the co-owners would revise the process to meet the plan’s requirements.

DuFour and Heffern now have fabrics from dozens of countries from Thailand to Ecuador. The totes are specialized with features to meet individual needs. The product line is innovated regularly and Taaluma Totes serves a dual purpose of employing persons with disabilities in Virginia and creating employment for underserved populations in other countries.

• 14 “Creating a World of Opportunities.” The Collegiate Entrepreneurs’ Organization . n.d. https://www.c-e-o.org/
• 15 Daren C. Brabham. “Crowdsourcing as a Model for Problem Solving: An Introduction and Cases.” Convergence: The International Journal of Research into New Media Technologies 14, no. 1 (2008): 75–90.
• 16 Michael Houlihan and Bonnie Harvey. “How Crowdsourcing Is Shaping the Future of Everything.” Entrepreneur. January 13, 2018. https://www.entrepreneur.com/article/307438
• 17 Jennifer Alsever. “What Is Crowdsourcing?” CBS News . May 1, 2008. https://www.cbsnews.com/news/what-is-crowdsourcing
• 18 Daren C. Brabham. “Crowdsourcing as a Model for Problem Solving: An Introduction and Cases.” Convergence: The International Journal of Research into New Media Technologies 14, no. 1 (2008): 75–90.
• 19 “Three Tips for Entrepreneurs Creating the Perfect Team.” Virgin . n.d. https://www.virgin.com/entrepreneur/three-tips-entrepreneurs-creating-perfect-team
• 20 “Backpacks That Carry a Country.” Taaluma Totes. n.d. https://www.carryacountry.com/pages/about

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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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How entrepreneurs solve the world’s toughest problems

In this episode of the Better Heroes podcast, host Matt C. Smith talks to Édgar Sánchez and Camila Escallón on how impact entrepreneurs can help solve the world’s toughest challenges.

How can entrepreneurship solve the world’s toughest problems? How can public and private enterprises come together to support impactful entrepreneurs? How can we create more job opportunities and economic prosperity around the globe?

Today’s Better Heroes are Édgar Sánchez, EY Colombia Country Managing Partner and Talent Leader, Latin America North, and Camila Escallón, Corporate Affairs and Communications Senior Manager in the Andean Region at Unilever.

You can learn more about Édgar and EY  here  and about Unilever  here . You can learn more about TRANSFORM  here .

Key takeaways: 

• Through the  EY Ripples program , EY professionals work with  impact entrepreneurs  in-person or virtually, offering support to help improve their businesses’ resilience, productivity and capacity to scale sustainably.
• Led by Unilever, the UK’s Foreign, Commonwealth and Development Office and EY,  TRANSFORM  is a program that unites corporates, donors, investors and academics to support visionary impact enterprises. Working together, we test and scale new solutions that tackle environmental challenges, improve health and wellbeing, and build inclusive economies across Africa, South Asia and beyond.

You can also listen to this podcast via other platforms including  Apple  and  Spotify .

For your convenience, full text transcript of this podcast is also available. 

Édgar Sánchez

Camila escallón, matt c. smith, episode intro, matt c smith.

Professional MC, Broadcaster & Host, The Lunicorn

Communications and Corporate Affairs Senior Manager, Unilever

EY Colombia Country Managing Partner; EY Latam North Talent Leader

podcasts Podcast

timer Duration

In this series

• Connect with us
• Our locations
• Legal and privacy
• Open Facebook profile
• Open X profile
• Open LinkedIn profile
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EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

These Entrepreneurs Take a Pragmatic Approach to Solving Social Problems

In 1908, Harvard Business School’s first dean, Edwin Francis Gay, welcomed the School’s inaugural class of 59 students by saying that HBS was challenged with encouraging its students to have the “intellectual respect for business as a profession, with the social implications and heightened sense of responsibility which goes with that.”

The purpose of business, Gay said, was to make “a decent profit decently.”

In the 111 years since then, many HBS alumni have taken the school’s emphasis on social responsibility to heart by attempting to effect societal change. A recent book, Problem Solving: HBS Alumni Making a Difference in the World —co-authored by HBS Professor Emeritus Howard Stevenson, HBS project director Shirley Spence, and writer Russ Banham—shares more than 200 stories of HBS graduates who have taken steps toward tackling social challenges. For example:

• As CEO of Curriculum Associates, Robert Waldron turned a company that was in decline in 2008 into a profitable $190-million business 10 years later by developing online learning tools as well as print workbooks for schools. In 2017, the company gifted the majority of its shares, valued at $200 million, to charity.
• Diagnosed with multiple myeloma, a rare and incurable blood cancer, Kathy Giusti cofounded the Multiple Myeloma Research Foundation, which has helped thousands of other patients with the cancer and has accelerated drug discovery and development for several other diseases.
• Sir Ronald Cohen left a successful career in venture capital private equity to launch a global movement that has brought together governments with service providers and has attracted private investment to pay for a variety of social programs. One such program in 2010 reached out to help 2,000 young criminal offenders who were released from a UK prison, significantly reducing the rate of recidivism.

The book is the result of four years of research, including a survey of 13 MBA classes, more than 200 interviews, and extensive archival and secondary research.

Stevenson says the research team found that alumni tend to take a pragmatic approach to figuring out their own best ways to contribute.

“Our people feel a moral imperative to act, but they don’t go out and try to solve world hunger,” he says. “They identify a problem where they think their skills and resources can make a difference, and they dive in with an optimism that they can do it, rallying others to their cause as they go.”

Dina Gerdeman: We talk about corporate social responsibility (CSR) today, yet it’s clear from the book that this emphasis on business solving social problems isn’t new. Do you think readers might be surprised to learn that these efforts date so far back?

Howard Stevenson: I think it depends on your perspective. The discussion about the role of business in society and the responsibilities of business leaders has been going on since Scottish economist Adam Smith wrote The Wealth of Nations in 1776. CSR is a relatively new movement espousing a triple bottom line of people, planet, and profits, rather than a single-minded focus on shareholder value. People of my vintage recall when business leadership was about serving customers at a profit and giving back to your community was expected. And many of today’s business students arrive with a commitment to social impact through or alongside their professional careers.

Shirley Spence: While our book primarily focuses on the social impact of today’s business graduates, we wanted to point out that this is not a new phenomenon. HBS and its alumni have been responding to the challenges and opportunities of their times for more than 200 years, from the economic boom and social challenges of industrialization to what has been described as the promise, peril, and unrealized potential of the 21st century. The language and methods have evolved and continue to evolve, but the strong sense of social responsibility remains a constant.

Gerdeman: Do you think the case method of teaching helps prepare business school students to consider how they might be able to contribute to society?

Stevenson: The case method by definition is about problem solving, regardless of the nature of the problem. Basically, you are teaching people to ask the right questions, sort through too much information, define the problem, identify options, and hone in on a solution from the vantage point of a particular person in a particular situation. It’s pretty easy to say that some problems are unsolvable, but we don’t let students get away with that in class. We ask: What can you do about it with the resources you have or can rally to your cause?

I think that one of the things the case method does for people is to say, it’s possible. It gives them a sense of confidence. As one interviewee put it, “HBS gave me a deep-rooted sense of optimism. Against the backdrop of all the problems in the world, it’s about focusing on solutions and the belief that we can make meaningful change.” Our research found business people tackling education, health, environment, poverty, inequality, and other challenges in every corner of the world.

Gerdeman: Were there any big surprises from your research?

Stevenson: I first arrived at Soldiers Field as an MBA student in 1963, stayed to do my doctoral work, and spent 40 years as an HBS professor and senior administrator. Over that time, I met thousands of students and alumni. I knew that many were applying their skills and resources for social good, but I was amazed—and inspired—by the breadth and depth of activity that our research uncovered and the passion that people bring to their social impact work.

Each story is unique, but problem solving was a common theme and we were able to detect some patterns. There basically is an infinite combination of five core strategies being used across a spectrum of impact to make positive change. The strategies include finance for social purpose, capacity building, product and market innovations, social and political mobilization, and government policy and legislation. Any and all of those strategies can be used to fulfill urgent needs, address the root causes of problems, and strive for system-wide change.

Spence: Our research also looked at how social impact journeys evolve over the course of a person’s lifetime. Causes of interest and alumni’s approaches for addressing problems and opportunities will change, in sometimes predictable and sometimes serendipitous ways. And, at any given time and especially over time, people may wear multiple hats as corporate leaders, entrepreneurs, investors, nonprofit professionals, public servants, philanthropists, and volunteers contributing at local, national, and international levels.

Gerdeman: The early 2000s were a rocky time for business, with the global financial crisis and people like Bernie Madoff jailed for fraud. Was there a sense during this time that business schools weren’t doing their job in terms of graduating ethical business leaders?

Stevenson: What I would say was there was a sense that ethics were forgotten as investor capitalism became the new business model, with shareholder value and personal gain at its core. It sparked considerable soul searching at business schools and discussion of whether and how ethics can be taught. Here, too, I think that the case method can help. As a professor, you can inject ethical questions into the discussion of any case problem, raising moral issues and asking students to consider the social and environmental impact of the solutions they are proposing.

Many schools have made programmatic and other changes geared to heightening students’ awareness of corporate and personal accountability. At HBS, I actually think that—as with many developments—it is the students who are driving ethics back to the forefront again. I think they are saying no, that’s not what leadership is about, and that’s not what I want to be.

Spence: There are many examples of student efforts to promote social action and ethical behavior. The student-run Social Enterprise Conference draws over 1,000 participants each year. One group of students successfully lobbied faculty to create a field-based course on poverty and inequality. Members of one graduating class crafted and signed an MBA Oath with a professional code of ethics. Another class launched a Commit to Start initiative to encourage new graduates to take concrete steps to immediately get involved in their communities.

Gerdeman: Given the perception by many in the public that businesses are concerned only with making profits, are you hoping this research will open people’s eyes to the fact that many business leaders actually are championing social causes?

Spence: We know that there’s a keen interest among HBS alumni to know what other alumni are doing to advance social causes. We hope that Problem Solving will meet that need and provide role models for students. It’s also intended to be a reminder to the faculty and staff and everyone else in the HBS community of the true meaning of the School’s mission to educate leaders who make a difference in the world.

Stevenson: There’s no avoiding the negative press that business people get daily, sometimes deservedly, which often overshadows the many more positive examples of CEO activists and business people quietly working to better society. The book’s stories—which effectively are mini case studies—shine a spotlight on the latter. I hope our research will cause people to say, “I didn’t know business leaders were doing these kinds of things.: And inspire both academics and business people to say, “I can do something, too. Now, what should I do?”

BOOK EXCERPT

Healthy and sustainable food.

Around the world, HBS alumni are tackling the challenges of food insecurity and realizing the potential of sustainable agriculture.

Ndidi Okonkwo Nwuneli (MBA 1999), Mezuo Nwuneli (MBA 2003) and Kola Masha (MBA 2006) are working to unlock the potential of agriculture in West Africa. The Nwunelis—a husband and wife team—co-founded AACE Food Processing & Distribution Ltd. in 2009 to combat malnutrition, provide jobs, and reduce Nigeria’s need for costly food imports. AACE Foods processes, packages, and distributes branded food products sourced from subsistence farmers. “Our vision is to be the preferred provider of food to West Africans,” they said.

In 2010, the Nwunelis founded Sahel Capital, which includes a consulting business and a private equity venture. The consulting arm provides crop value chain analysis, strategic consulting, public policy development, and implementation support for partners across West Africa. The private equity venture manages the $66-million Fund for Agricultural Finance (FAFIN) in Nigeria, which invests in small- and medium-sized agricultural ventures. “In Nigeria and across West Africa, there are tremendous opportunities to transform the agricultural landscape,” the Nwunelis said.

Kola Masha (MBA 2006) sees smallholder agriculture as the key to tackling poverty and preventing the spread of insurgency among unemployed youth in Nigeria. Through his impact investing firm, Doreo Partners, he founded Babban Gona, which means “great farm” in Hausa, as a for-profit social enterprise.

“Low economies of scale keep smallholder farmers in a cycle of poverty,” Masha explained. Babban Gona uses an agricultural franchise model inspired by Masha’s grandfather, a South Dakota farmer. “Growing up in Lagos, I remember my mother talking about how her father struggled to earn a living—until he joined a farmers’ cooperative,” he said.

Babban Gona recruits groups of enterprising farmers and provides them with affordable credit, agricultural inputs, training, and marketing services. “Since 2010, we have more than doubled the yields and incomes of tens of thousands of smallholders and are on track to serve 1 million farmers by 2025,” Masha reported.

Babban Gona specifically attracts rural youth who are otherwise driven to urban centers’ promising jobs, only to struggle and become vulnerable to recruitment by extremist groups. “Everyone deserves a secure future,” Masha said. “To end insecurity, we must unlock the potential of agriculture as a job creation engine for millions of youth.”

Andrew Kendall (MBA 1988) is on a mission to change the way New England eats. As executive director of the Henry P. Kendall Foundation, his family’s philanthropic organization, Kendall is dedicated to increasing the production and consumption of local, sustainably produced food.

He was inspired by Food Solutions New England, an organized network of agricultural experts, farmers, academics, and concerned citizens working to overcome barriers to local food production. “They’ve created a bold and provocative vision—‘50 by 60’—that says that we in New England can produce 50 percent of our food locally by 2060,” Kendall said. Since 2011, the Kendall Foundation has granted $19 million to high-impact programs like Food Solutions, and institutions with large food purchasing power like colleges and universities, to help move the region closer to the 50 by 60 goal.

Ian Carson (OMP 42, 2012) and his wife, Simone, a registered nurse, are providing fresh and nutritious surplus food to people in need in Australia, where one in five Australian children suffers from food insecurity. Their nonprofit SecondBite distributes free food to more than 1 million people, the equivalent of 40 million meals per annum, through shelters and missions that feed the hungry.

The Carsons initially reached out to local restaurants that agreed to turn surplus food into soups. Then they went to supermarkets. “We went to one grocer where we’d been shopping for 30 years and asked if we could take the leftover food to the mission,” said Carson. “The next Saturday, he had three boxes for us. The following week he had six. It grew organically from there.”

Today, the nonprofit receives surplus food from more than 1,200 outlets across the continent. Coles, one of Australia’s largest supermarket chains, makes food donations twice a week from 550 of its stores. Since its inception 13 years ago, SecondBite has rescued enough healthy nutritious food for over 90 million meals.

Reprinted with permission of Russ Banham, Shirley Spence, and Howard Stevenson, Problem Solving: HBS Alumni Making a Difference in the World (Boston: Harvard Business School, forthcoming in 2019).

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Why Problem-Solving Skills Are Essential for Leaders in Any Industry

• 17 Jan 2023

Any organization offering a product or service is in the business of solving problems.

Whether providing medical care to address health issues or quick convenience to those hungry for dinner, a business’s purpose is to satisfy customer needs .

In addition to solving customers’ problems, you’ll undoubtedly encounter challenges within your organization as it evolves to meet customer needs. You’re likely to experience growing pains in the form of missed targets, unattained goals, and team disagreements.

Yet, the ubiquity of problems doesn’t have to be discouraging; with the right frameworks and tools, you can build the skills to solve consumers' and your organization’s most challenging issues.

Here’s a primer on problem-solving in business, why it’s important, the skills you need, and how to build them.

Access your free e-book today.

What Is Problem-Solving in Business?

Problem-solving is the process of systematically removing barriers that prevent you or others from reaching goals.

Your business removes obstacles in customers’ lives through its products or services, just as you can remove obstacles that keep your team from achieving business goals.

Design Thinking

Design thinking , as described by Harvard Business School Dean Srikant Datar in the online course Design Thinking and Innovation , is a human-centered , solutions-based approach to problem-solving and innovation. Originally created for product design, design thinking’s use case has evolved . It’s now used to solve internal business problems, too.

The design thinking process has four stages :

• Clarify: Clarify a problem through research and feedback from those impacted.
• Ideate: Armed with new insights, generate as many solutions as possible.
• Develop: Combine and cull your ideas into a short list of viable, feasible, and desirable options before building prototypes (if making physical products) and creating a plan of action (if solving an intangible problem).
• Implement: Execute the strongest idea, ensuring clear communication with all stakeholders about its potential value and deliberate reasoning.

Using this framework, you can generate innovative ideas that wouldn’t have surfaced otherwise.

Creative Problem-Solving

Another, less structured approach to challenges is creative problem-solving , which employs a series of exercises to explore open-ended solutions and develop new perspectives. This is especially useful when a problem’s root cause has yet to be defined.

You can use creative problem-solving tools in design thinking’s “ideate” stage, which include:

• Brainstorming: Instruct everyone to develop as many ideas as possible in an allotted time frame without passing judgment.
• Divergent thinking exercises: Rather than arriving at the same conclusion (convergent thinking), instruct everyone to come up with a unique idea for a given prompt (divergent thinking). This type of exercise helps avoid the tendency to agree with others’ ideas without considering alternatives.
• Alternate worlds: Ask your team to consider how various personas would manage the problem. For instance, how would a pilot approach it? What about a young child? What about a seasoned engineer?

It can be tempting to fall back on how problems have been solved before, especially if they worked well. However, if you’re striving for innovation, relying on existing systems can stunt your company’s growth.

Related: How to Be a More Creative Problem-Solver at Work: 8 Tips

Why Is Problem-Solving Important for Leaders?

While obstacles’ specifics vary between industries, strong problem-solving skills are crucial for leaders in any field.

Whether building a new product or dealing with internal issues, you’re bound to come up against challenges. Having frameworks and tools at your disposal when they arise can turn issues into opportunities.

As a leader, it’s rarely your responsibility to solve a problem single-handedly, so it’s crucial to know how to empower employees to work together to find the best solution.

Your job is to guide them through each step of the framework and set the parameters and prompts within which they can be creative. Then, you can develop a list of ideas together, test the best ones, and implement the chosen solution.

Related: 5 Design Thinking Skills for Business Professionals

4 Problem-Solving Skills All Leaders Need

1. problem framing.

One key skill for any leader is framing problems in a way that makes sense for their organization. Problem framing is defined in Design Thinking and Innovation as determining the scope, context, and perspective of the problem you’re trying to solve.

“Before you begin to generate solutions for your problem, you must always think hard about how you’re going to frame that problem,” Datar says in the course.

For instance, imagine you work for a company that sells children’s sneakers, and sales have plummeted. When framing the problem, consider:

• What is the children’s sneaker market like right now?
• Should we improve the quality of our sneakers?
• Should we assess all children’s footwear?
• Is this a marketing issue for children’s sneakers specifically?
• Is this a bigger issue that impacts how we should market or produce all footwear?

While there’s no one right way to frame a problem, how you do can impact the solutions you generate. It’s imperative to accurately frame problems to align with organizational priorities and ensure your team generates useful ideas for your firm.

To solve a problem, you need to empathize with those impacted by it. Empathy is the ability to understand others’ emotions and experiences. While many believe empathy is a fixed trait, it’s a skill you can strengthen through practice.

When confronted with a problem, consider whom it impacts. Returning to the children’s sneaker example, think of who’s affected:

• Your organization’s employees, because sales are down
• The customers who typically buy your sneakers
• The children who typically wear your sneakers

Empathy is required to get to the problem’s root and consider each group’s perspective. Assuming someone’s perspective often isn’t accurate, so the best way to get that information is by collecting user feedback.

For instance, if you asked customers who typically buy your children’s sneakers why they’ve stopped, they could say, “A new brand of children’s sneakers came onto the market that have soles with more traction. I want my child to be as safe as possible, so I bought those instead.”

When someone shares their feelings and experiences, you have an opportunity to empathize with them. This can yield solutions to their problem that directly address its root and shows you care. In this case, you may design a new line of children’s sneakers with extremely grippy soles for added safety, knowing that’s what your customers care most about.

Related: 3 Effective Methods for Assessing Customer Needs

3. Breaking Cognitive Fixedness

Cognitive fixedness is a state of mind in which you examine situations through the lens of past experiences. This locks you into one mindset rather than allowing you to consider alternative possibilities.

For instance, your cognitive fixedness may make you think rubber is the only material for sneaker treads. What else could you use? Is there a grippier alternative you haven’t considered?

Problem-solving is all about overcoming cognitive fixedness. You not only need to foster this skill in yourself but among your team.

4. Creating a Psychologically Safe Environment

As a leader, it’s your job to create an environment conducive to problem-solving. In a psychologically safe environment, all team members feel comfortable bringing ideas to the table, which are likely influenced by their personal opinions and experiences.

If employees are penalized for “bad” ideas or chastised for questioning long-held procedures and systems, innovation has no place to take root.

By employing the design thinking framework and creative problem-solving exercises, you can foster a setting in which your team feels comfortable sharing ideas and new, innovative solutions can grow.

How to Build Problem-Solving Skills

The most obvious answer to how to build your problem-solving skills is perhaps the most intimidating: You must practice.

Again and again, you’ll encounter challenges, use creative problem-solving tools and design thinking frameworks, and assess results to learn what to do differently next time.

While most of your practice will occur within your organization, you can learn in a lower-stakes setting by taking an online course, such as Design Thinking and Innovation . Datar guides you through each tool and framework, presenting real-world business examples to help you envision how you would approach the same types of problems in your organization.

Are you interested in uncovering innovative solutions for your organization’s business problems? Explore Design Thinking and Innovation —one of our online entrepreneurship and innovation courses —to learn how to leverage proven frameworks and tools to solve challenges. Not sure which course is right for you? Download our free flowchart .

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