7 Steps to Classical Problem Solving

To be successful in solving any problem a classical seven step approach is required. Those seven steps are defined below:

#1 Define the problem. What is it that needs 'fixing'. Many times this is unclear and needs to be pinpointed.

#2 Disaggregate the problem. Take the problem apart and attack it in pieces. In business you have the profit tree. Revenue = Price + Quantity. Cost = Cost X Quantity. Both need to be broken down and studied.

#3 Prioritize. How important is each component in the disaggregate process and do I have the power to change it. What do I analyze?

#4 Breakdown what has been prioritized. Define a work plan to accomplish tasks and define and fix biases.  Develop a work plan that reflects the level of precision required, the time frame you have, and the stakeholders you need to bring into the process.

Problem solving is not a linear process, it is iterative. Most problems can be solved in a day or even a few hours. If you see a 50 page work plan that goes out six months you know it's wrong! It will be outmoded very quickly by the learning process of the seven steps. This is why diversity in the problem solving team is so important.

#5 The work plan is done. Now you've got to do the analysis. Look at statistics before analyzing and understand the scope and shape of the problem before applying complex analytical approaches and models. Test-and-learn is the methodology to be used.

#6 & 7  Once analyzed the decision maker needs to have the question, "What should I do?" Answered. This is where the people tasked with implementing the problem's solution get motivated to action; otherwise, you haven't solved anything. The bias must be to action or you will end up where you started.

The seven step process allows for biases to be avoided. I am talking about cognitive biases not personal ones, like gender, race, etc. I am talking about biases we carry with us, such as overoptimism, anchoring, and availability (you think you have seen this problem before and therefore have the answer to it). Also the sunflower bias - bias based upon hierarchy.

Jim Lavorato, Principal
Fund House Ventures & 4M Performance