Impact of Effective Problem Solving on Business Performance

Instructor: Artem Cheprasov

Artem has a doctor of veterinary medicine degree.

This lesson goes over a step by step approach that businesses can use to solve their problems and the impact this may have on business performance over the long term.

Solving a Problem

Did you ever have a weak subject in school? Maybe you weren't particularly good at math. It's likely that if you wanted to solve this problem (being bad at math) you took several steps that, in the end, helped improve your performance in math class.

The same kind of idea goes for business problems and effectively solving them in a way that will maximize long-term performance. This lesson will go over the steps a business can take to solve problems and how this may impact the company over the long run as a result.

Effective Problem Solving Steps 1-2

Every business is going to have its fair share of problems, including some that come out of left field. And while most businesses share fundamental problems, there are always going to be aspects to a problem that are unique to each business. That's why each problem should be approached in a methodical fashion.

Let's take a look at the steps by which problems can be solved and how this may impact long-term business performance and goals.

The very first step of solving a business problem is to identify the problem. For instance, if sales are falling, then what is the problem? Is it poor staff training? Is it competition? By determining the correct problem from the start, you'll save the company a lot of time and money in the long run (not to mention headaches). If you pursue the wrong problem, you'll have to start over and pour in more resources to figure out what the actual problem is.

After you've determined the actual problem, you need to delineate the problem. It's not enough to just identify it. If sales are falling and you've figured out the problem is a poorly trained sales team, then you have to clearly define and describe what aspects of the sales team must be improved. Are they poorly equipped? Are they bad at closing sales? Are they bad communicators? By effectively delineating the problem, you'll not only help laser-focus on the necessary resources to fix it, but you'll create an effective solution, such as a better sales team, for the long-run.

Effective Problem Solving Steps 3-5

After you've identified and delineated the problem you must think of alternative solutions. In our example, what are we to do with this poor sales team? Do you just fire everyone? That's one solution. Do you incentivize them with rewards to try and get them to perform better? That's another potential solution. Or, perhaps, you can have someone come in to train them.

By carefully coming up with as many alternative solutions as possible, you can help yourself pick and choose the best path to follow for the long term. It may be easy to just fire everyone, but then you have to start from scratch and you may end up hiring as poor a sales team as the one before. Over the long run, this can delay sales revenues.

It may be better for the long-run to train the team you already have. By training them, you're also investing in their career and this may breed loyalty within the workforce over the long-run as well. That sense of loyalty, in turn, may improve business performance over time since employees will be motivated to work harder.

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