Sprint #1: How To Identify and Define a Business Problem

Kicking off with hatch Sprint #1, Identifying the Problem (see the full agenda here), we’re bringing you some top tips from TBE Club. Rushing headlong into a product idea may feel great at first, but step back to define your problem to see your idea really start to resonate with a wider audience.

I’ve found the solution…..but what was the problem to solve? How many times have you found yourself in this position? The first step in problem solving is often the one most overlooked; identifying and defining the problem itself. Whether it’s running out of coffee filters or your profits decreasing by 15%, problems will occur in every oracle of your business, and having a solid response structure will enable more effective solutions!

How many times have you and your team faced a roadblock or obstacle? I’d say hourly. 

Let’s take the most important problem listed above; the lack of coffee filters on a Monday morning! Now from the outside, that looks like an easy fix; send Kevin over the road to grab some more from the local shop. Problem solved right? Wrong. Running out of coffee filters wasn’t the problem – what Kevin solved was a symptom of the actual problem, that the repeat order of coffee filters was cancelled and the office no longer receives the monthly delivery.

As this example illustrates, solving a symptom will find you going round in circles wondering why the problem seems to keep occurring; you haven’t identified or defined the root cause. 

Defining the Problem 1: Case of the missing coffee Filters 

Whilst many ways to define a problem, one particularly effective activity is using logic maps. Logic maps include breaking down a problem into smaller problems in a way that would logically make sense, and then blow these into larger proportion to identify key contributors to the problem.

In the case of the missing coffee filter, the root cause, whilst initially out of sight, was fairly easy to come to. A simple logic map below shows how the initial ‘problem’ can be broken down and defined and a solution can be found. 

Defining the Problem 2: Decreasing profits    

Lets take a slightly more complex issue; your initially thriving startup has found its profits taking a dive in recent months. Finding the root cause of this problem will require digging a lot deeper into your organisation, and a more complex logic map to be used.

Whilst your company could be broken down into many aspects, you’ve taken a glance at the data and believe the loss of profits have something to do with one of your product range. Your product range contains 3 individual items, with the decrease in profits coming from any number of things. The logic map below shows how you can break the problem down into it’s smaller parts. 

From this, you’ve identified that product A’s revenue isn’t as high as it was. Taking each stem of the logic map, you discover the price of your main component part from your current supplier has increased massively.

From here, you can see clearer solutions by asking questions of the defined problem like:

• Are there any cheaper suppliers?

• Do I need to increase my product price to absorb the increase in costs?

• Should I adjust my product spec to use cheaper components?

The solution

So you’ve identified and defined the problem, but the solution is often just as complex to create. Consider the below when crafting your plan of attack;

• Consider the repercussions of your proposed solutions 

  • Will changing your supplier effect a deeper relationship you’ve built?

  • What will an increase in price do to your loyal customer base?

  • Do you have the budget, timeline and expertise to adjust your product spec?

• Evaluate prior efforts

  • Have you had similar problems before?

  • Who was involved in solving them?

  • What efforts did you put forward and how successful were they?

• Take a new view

  • The view from the CEO vs the front line will bring up different solutions