28 Feb Problem Solving for Business
Imagine this scenario:
The CEO gathers marketing, sales and fulfilment into the boardroom and makes a strongly worded statement: “We NEED more sales.”
The CEO has interpreted the data the accountant and finance manager have presented. Everyone in the room is uncomfortable and shuffling in their seats. The first reaction is to work out who is at fault. This meeting is already heading down a track that isn’t solving anything.
Problem solving in business actually comes down to asking the right questions more often than it comes down to knowing the right answer (and definitely more often than deciding who is at fault).
If I was to hand everyone a post-it note and say, “write down what you think the CEO’s problem is”, I guarantee you a different picture would take shape. Each department would have a different opinion on what the problem is.
Businesses are often quick to say we need more sales. But do you? Really?
Are ALL of your existing customers happy? Why make new sales if you can’t keep your existing customers happy? Isn’t that like putting buckets of water into the bath when you haven’t even got the plug in?
Could it be that you are selling your service too cheap? Would increasing your prices make a difference?
Could it be that your fulfilment is inefficient?
Do you need to lower your overheads or increase your profit margin?
Do you need more consistent revenue? Do you need to change the nature of your contracts?
Would selling more of one particular product line make the business more profitable?
Do you need to remove some products or services from your offering to reduce operational costs and improve efficiencies?
What is the CEO actually saying when she says “We NEED to make more sales”? She could be saying the business is low on cashflow… or that the business isn’t moving enough product (and it is taking up space in the warehouse) or that the sales forecast is dire. These could all be true – but they mean very different things when it comes to solving the businesses problem.
Here are eight-steps for an effective problem-solving process:
- Identify the issues
- Understand everyone’s interests
- List the possible solutions (options)
- Ask more questions
- Evaluate the options
- Select an option (or options)
- Document the agreement(s)
- Agree on contingencies, monitoring, and evaluation
Knowing how to make more sales might not be the right answer here. Knowing what questions to ask and understanding the drivers behind that statement might lead the business in a very different (and more profitable) direction…
It might also be the right answer and the sales people just need to get busy, but at least you’ll know for sure.