WHY IT IS NEEDED
As a Startup founder it is not enough that you know the rules and behaviors required in a particular business model, know how to conduct negotiations or marketing studies and perfectly manage your time, you also have to know how to plan, identify and solve problems, make the right decisions and make sure they are carried out. After becoming familiar with the rules of decision making and problem solving you will analyze several variations of these processes to see how you can best use them to execute your plan and achieve perfection.
Solving problems and making decisions are one key skills of each startup founder in the constantly changing business environment! Solving problems will require you as a startup founder to make various decisions and be prepared for the fact that it will be a complex and demanding process of access to diverse knowledge.
In your startup, in all probability, you will be accompanied by the process of decision making every day. Make sure that this is an intended rather than random choice – don’t leave your problems to be solved just by a chance.
1. Identify the problem and gather the information
The ability to precisely define the nature of a problem is a key issue in effective decision making. All problems, regardless whether they concern a situation connected with your startup or not, are explorative – which means that startup founders or leaders do not always identify the right cause of the problem or develop the best plan. Additionally, the tendency of startup founders to make mistakes increases along with the rising levels of stress. Receiving false information can lead to incorrect identification of a problem and mistaken conclusions regarding its causes. In consequence, if you are not able to find the truth regarding the source of the problem you may develop an unsuitable plan for solving it.
Identifying problems in your business will enable you to answer the following questions:
- Which events could have contributed to the appearance of the problem?
- What was the character of those events (internal, external)?
- Who does the existing problem concern (directly, indirectly)?
- What are the relations between problems and other areas?
- Is there appropriate information which will help solve the problem?
- What factors can exacerbate the problem?
- What limits or reduces the problem?
Always try to identify real problems, not their consequences (i.e., a company could say, that low sales is their main problem, but that is not true – the problem lies somewhere else and causes low sales; the problem might be related to weak marketing efforts, poor quality of the product, market competition, and etc.). Consider all possibilities for your problem occurrence. Learn to find only precise information which will lead you to the real causes of the problem. To make sure that the information is correct question its validity. In other words, you must gain precise information, use your best judgment and formulate assumptions regarding the cause of the problem. Then you must consider the courses of action which are most likely to help you be successful. Although You, as a startup founder, can utilize the correct process of problem solution incorrect identification of a problem may result in a wrong decision. It is a mistake to think that the use of the right formula or the correct set of steps will lead you to the source of the problem and its successful resolution. Your values, character, knowledge and way of thinking all have a direct and significant impact on problems which you consider to be important. At this stage you also have to gather all information which concerns or can impact the situation (the identified problem) available from internal (reports, financial documents, etc.) as well as external sources (market and marketing analyses, trend analysis).
2. Use heuristic tools to identify the roots causes of the problem
Once you have identified the main problem, it is a good idea to apply heuristic procedures enabling the identification of problem causes and providing inspiring ideas for problem solving. You might want to consider using at least one of those methods:
- creating mind maps;
- 5xWHY method;
- 5W+H method.
This is a method of expanding the field of the analyzed problem solving options in which the process of creating suggestions is consciously separated from their assessment. During brainstorming group members come up with as many possibilities as they can but those ideas are not assessed at this time. This gives the participants the feeling of freedom to think up unconventional, sometimes strange, solutions. However, it may happen that even a completely unrealistic idea may inspire valuable suggestions. There is no single path to developing solutions and sometimes it is worth it to use this method of free associations. If you decide to try a brainstorming session, be sure to follow the main rules.
- You must know what you want; have a clear vision of your goals, the problem must be defined.
- Select the team: the group can be neither too big nor too small, it is best to have 6-12 people. It is wise to invite one or more people not directly connected to the problem. Often these outsiders can look at the problem in an unconventional way, from a different perspective than the “old hands”.
- Make sure the atmosphere is informal. It is best to choose a place different from your normal, routine meetings.
- It is good to choose a session leader-moderator who will make sure that the discussion deals with pre-established goals-subjects and that everyone can freely express themselves. This person will ask questions, write down ideas and ensure that the rules are observed.
- Participants should sit next to one another in a circle. No one should occupy a “privileged” position.
- The rules must be clearly explained especially the rule which forbids criticizing others. It may be worthwhile to state that it does not matter who comes up with the idea and that it is the shared goal which is the most important.
- It is a good idea to write down all ideas on large boards which can be seen by everyone. This can be done by the moderator or a person designated to this role.
- Without excessive criticism choose the most promising ideas. This initiates the phase of logical, sequential analysis of solutions.
- Participants expand, define more precisely and critically assess selected ideas.
- At this moment it becomes clear whether the brainstorming session produced an idea which presents a possibility for solving the problem. If it did the group continues working on the solution to the problem – brainstorming did its job. If not:
- You can repeat the session or look for solutions using other methods.
This method consists of writing down all ideas and associations provoked by the initial problem – main subject. This subject is written down in the center of the page and from that moment on we allow ourselves to be carried away by our thoughts. We write down all subsequent ideas around our subject – if they are related we connect them to each other using lines and if not we create new branches. After some time the map becomes quite extensive and complicated. After we exhaust our invention we can analyze the resulting picture. Any new relations can be connected using additional lines. It is highly probable that the map:
- will contain many more elements than a list of ideas which we would have created using the traditional method of thinking – some we would have forgotten and others would not have come up at all;
- will show unexpected connections between ideas; these relations will provoke inclusion of additional elements;
- will allow us to see a clear picture of the entire problem which would not have been possible using sequential thinking.
An example of Mind-Mapping. Source
The 5xWHY method
The 5xWHY method is a mechanism for discovery of problem causes. It is a rule which is used to determine the root of the problem. This method was developed by Sakichi Toyoda.
Asking “Why?” several times allows reaching the source of the disturbances, thoroughly assess their causes and focus on their effective correction. Through asking “Why?” the problem becomes more readily understood and the basic cause of its occurrence becomes easier to identify and eliminate. The 5xWHY analysis allows us to answer the questions:
- why did the problem occur?
- why didn’t we notice it?
- how to solve it?
A simple example:
Question 1: Why did the employee fall down?
Answer: The floor was wet.
Question 2: Why was the floor wet?
Answer: Because of a leaking valve.
Question 3: Why did the valve leak?
Answer: Because the gasket was worn.
Question 4: Why was the gasket worn?
Answer: Because it has not been serviced for 3 years.
Question 5: Why hasn’t it been serviced for 3 years?
Answer: Because the preventive maintenance plan does not cover valve maintenance.
The cause of the problem, therefore, is the fact that: the preventive maintenance plan does not cover valve maintenance! The 5xWHY method is simple, easy to apply and can be used by every organization or company.
The 5W+H method
The 5W+H method is a way of solving problems by focusing our thinking on people, things, places, times, manners and causes. Correct defining of problems brings us closer to developing effective solutions. It is worthwhile to ask a number of questions regarding the problematic situation or phenomenon which needs to be improved. Our perception of the reality that surrounds us as well as its understanding can be improved through the posing of 6 questions: who, what, how, where, when and why, with the first letters making up the method’s name – 5W+H. This is the first step in every project activity. Being aware of all 6 aspects forces us to take care of them all and not just a random portion of them. That is the difference between this method and the trivial assertion that these questions are obvious. Additionally the method requires that the answers be written down which completely changes the way the world is experienced – systematically instead of accidentally. Use mind mapping to achieve this. It will allow you to see the relations between those aspects. The 5W+H can also be combined with brainstorming.
- Who? – consider who is having the problem and who needs to solve it. What are the resources and needs of all people involved in these activities?
- What? – describe the expected effect or solution. Will the solution fulfill the needs of the people to whom it has been dedicated?
- Where? – determine the place in which the solution will be developed or one where it should work. Will this place, location require specific actions?
- When? – what is the time frame within which the aim must be achieved. Are there any specific conditions or limitations resulting from the time in which the solutions must be developed or implemented?
- Why? – what benefits will come from the solution of a given problem. Identify the reasons for achieving the goal and the benefits from its achievement.
- Which? – describe the requirements, limitations, difficulties which impact the development or implementation of solutions.
- How? – describe how you intend to reach the solution or goal.
Presented questions do not exhaust issues significant to particular projects. It is possible to develop your own questions which are more adequate to the character of your actions and narrow down the scope of your problems.
3. Develop, analyze and compare courses of actions
After the identification of the problem as well as after having gathered all available information you are ready to develop possible courses of action. At this stage you need to keep your mind open and be ready to anticipate changes. “The ability to anticipate is sixty percent (of effective problem solving); 40 percent is the ability to improvise, to reject generally accepted ideas and… ruling through acting rather than acting according to the rules.” (S.L.A. Marshall). Always remember to consider “what will happen if” and prepare for all possible options – do not let yourself be surprised. The laws of probability are certainly in favor of surprises. Develop a plan of action countering events which could make the realization of your plan difficult. If you are working with a team of coworkers conduct a brainstorming session. It is a good technique to use in the event of difficulties in choosing a course of action. If the situation and time allow plan at least two or three possible ways of reacting. The next step for you is to determine which action will be the best solution to the problem. For that reason for every available method you, as a startup founder, should identify the greatest number of advantages and faults. Next they must objectively and logically analyze the advantages and faults of each method in respect to the advantages and faults of other methods. The method which has the most advantages or the least faults is the one which should be recommended or utilized. Although this is true in most cases it is possible that, when weighing the importance of every advantage and fault, there is a situation where “the best” way of acting has fewer advantages (all critical to the realization of the aim) and one or more faults than a different choice (where most of them are insignificant).
The assessment of solution options and the selection of the best one are conducted after developing a set of solution options. During the assessment of solutions the following options can be considered:
- Viability (with consideration for time, budget, current legal regulations)
- Quality (to what level will a given option permanently solve the problem)
- Acceptance level (of all parties impacted by the decision)
- Cost (in respect to the financial aspect as well as the broader perspective such as the impact on the environment)
4. Make a decision and plan how to implement it
After careful analysis of possible courses of action using all available information you must also consider once more all “for” and “against” of your decision. The decision making process is not a purely objective, mathematical formula. The human mind does not work this way, especially under stress. The human mind is rational and intuitive and, since the decision making process is a mental process, it also is both rational and intuitive. Your intuition flows from your instincts and experience. However, you should never make the mistake of making a decision based solely on emotions or intuition and must continue doing what is “right”. Follow the problem solving process in a manner that is the most rational and objective. Gather information; then develop, analyze and compare ways of possible action. Consider your intuition or feelings, emotions and values. Try to identify “the best” course of action, one that is logical and can be successful but also one which “feels right” in respect to your intuition, values and character. Create a plan which will answer the questions: who will do what, when, where, how and why? Be as precise as possible in the time that you are allowed but do not neglect any important information which could make the realization of your mission impossible. Additionally, make sure that you define the what, when, where, how and why for all coworkers. At the end add a risk analysis to your plan, one which will take care of unexpected events. Just like during the development of possible courses of action be prepared to anticipate changes. The ability to introduce appropriate changes into decisions and plans requires a certain mental flexibility – a key feature in correct problem solving.
Download and use the problem solving canvas to find the solution. This tool enables the search for effective remedies based on verified facts. Using the problem solving canvas the team working on a problem conducts an in-depth analysis of the problem identifying source causes and, on this basis, develops and implements solutions. Canvas is used to solve problems which occur often and take up a lot of time but we believe that they cannot be completely eliminated. These should be problems for which the source cause is not known, such as:
- reoccurring errors in documents from Customers,
- reoccurring late data delivery in the delivery process,
- the need for unending consultations during the realization of a cyclical task,
- process errors.
An example of using a problem solving canvas
The canvas presents a certain complete story which has a beginning, content and an end and its individual elements come together to form other cause and effect relationships. Which elements of this “story” should be developed?
- Title – the name of the problem, subject.
- Description of the situation – establishes the problem within the organizational context and describes its significance.
- What are you writing and why do you want to write it?
- What is the situation’s strategic, operational, historical or organizational context?
- Current conditions – describe what is currently known about a given problem.
- Where are the differences seen?
- What is happening now in comparison to what should be happening or what you want to be happening?
- Which particular conditions show that there is a problem or need?
- Show the facts using visuals such as diagrams, graphs or maps.
- Goals/measures – define the desired situation.
- What exactly are the results that have to be achieved?
- What exactly must be changed to get rid of the differences?
- Use visuals to show how much, until when and to what result.
- Analysis – contains the analysis of the situation as well as the causes of the differences between the current situation and the desired situation.
- What are the causes/sources of the problem?
- For analysis of the problem select the simplest tools (such as the 5xWHY, the Ishikawa diagram or the fault tree analysis), ones that will best show the relations between causes and effects.
- Proposed solutions – describe proposals of actions and activities aimed at solving the problem and achievement of desired results.
- What do you propose to do to achieve the desired goal?
- How will the proposed solutions impact the source cause of the problem and make the current situation more like the desired situation?
- Plan – a precise action plan or what will be done, who will do it and how it will be done to achieve the desired goal.
- What actions must be undertaken?
- Who will be responsible for them and what are the time frames?
- How will the effectiveness of these actions be measured?
- Further action – determine how progress will be monitored and define questions which remain unanswered.
- What problems can be anticipated to occur during implementation and what can be done to prepare for them?
- How and when will you check if the plans are being implemented and whether their results are as expected?
- What process will be used to ensure that the actions are successful at every stage of implementation?
- How will you share your conclusions?
5. Execute the plan and be ready for surprises
After making a decision regarding the plan it is now time for action. In this last step you must put your plan into action and then determine whether the desired results have been achieved. This evaluation stage is often neglected in the decision making process. The key to making that assessment is continued feedback regarding the way your plan is working. Get the opinions of your coworkers, contractors and customers. Implement your plan of action and determine whether its stages are working. If not decide why that is and immediately act to correct it.
The application of those steps of the decision making process described above are not a guarantee of an appropriate level of effectiveness because there are many possibilities for error. The most common mistakes which should be avoided are presented in the table below.
Common errors in the process of making a decision
|1||Defining the problem focusing on only one possible solution|
Concentrating on less important goals
Diagnosing the problem in relation to effects rather than causes
|2||Insufficient amount of reliable information|
|3||Tendency to immediate assessment of options|
|4||Lack of a systematic utilization of information|
Tendency to use trial and error
|5||Implementation of a solution while lacking motivation and resources|
|6||Gaps in the implementation program|
No assessment of effects in relation to the accepted option
|7||Improperly selected assessment measures|
Unclear or imprecise assessment criteria
Maybe because it is easier to implement and justify them young entrepreneurs often seek to make simple decisions. However, you must remain very careful in making your decisions too quickly or simplistically. Since you want to support individual development and/or improve the effectiveness of your startup do not automatically choose the first available method to solve a difficult situation. You must assess every decision in respect to its impact on the realization of a given task and future goals. If necessary include in your decision making process the opinions of professionals, such as consultants or business coaches, whose experience will often aid you in making your decision a wise one.
While developing the decision implementation plan establish responsibility for every area and every task entrusted to your coworkers. Actions which will be initiated to implement the decision must be monitored with consideration to the following issues:
- Compliance – are the activities progressing according to the plan?
- Achievements – are the achieved results in line with the plan?
- Effects – what are the results of your decision in respect to your organization and its surroundings?
Finally, be ready for surprises. Plans do not always come from assumptions. Be detailed and sometimes trust your intuition.
Successful startup founders are energetic. They invest a lot of effort into effective communication, goal determination, problem solving, decision making, planning, realizing those plans as well as into supervising and assessing. These skills are indicative of good leadership. As a startup founder you cannot demand positive results from your subordinates unless you work just as hard at solving problems and making decision.
By adopting problem solving and decision making methods described in this chapter you will be better prepared for all those difficult tasks which you will have to undertake on your path of developing your startup business. Knowing how to deal with various problems will grant you additional self-confidence and respect from your colleagues.