4 Classes of Problem-Solving to Grow Value Faster

Executive Summary

One of the greatest levers available to business leaders is problem-solving excellence. However, for the vast majority of businesses, problem-solving is a major weakness. 

In order to grow business value faster,

• organizations must first understand their System constraints relative to their growth goals, and

• organizations must have the knowledge to alleviate their constraints faster, thus increasing the flow of value, and compounding the worth of their businesses at a faster rate.

Presented here is a primary approach to how great companies engage and empower employees, outperform their competition, and deliver outsized returns to their shareholders year after year after year.

Some problems in business are caused by system inadequacies and some problems are created on purpose, such as through strategic plans, which reflect growth gaps. In any case, a problem may be thought of as a gap between current state and desired future state. How adept are your teams in designing and executing initiatives to close your value growth gaps?

Introduction

If you are a business unit leader (CEO, President, General Manager) and wish to grow the worth of your business faster, stop seeking the answer through your function leaders. Instead, look in the mirror.

Any system produces exactly what it is designed to produce. Your business is a value flow system and its worth is the result of its capability to produce value now and in the future. Similar to any system, it produces the value it is designed to produce. You own the responsibility for that design.

Are you running an operating organization or a growth organization? It’s easy to answer. Put another way, are you focused on current results or on nurturing the development of knowledge and transformation within your organization relative to your strategic growth goals? 

Problem Solving

After one business unit leader concentrated on shifting his focus from operating to strategically transforming, he said “I had no idea how woefully deficient my teams are at executing initiatives.” However, he fell short in recognizing that he uniquely owned the problem. The people were delivering value in their current environment but the business was falling short of the desired growth goals.

The means to executing higher value initiatives faster to achieve business value growth is at the heart of problem-solving. Although we expect teams to problem-solve, we don’t offer learning programs, tools, automation, or support to provide a foundational environment that build these capabilities and thus accelerate business value growth.

In fact, contrary to the popular myth, “if you can’t measure it, you can’t manage it,” the most important aspects of business can’t be measured. The reason is because we are coming up with theories or predictions of the future and experimenting our way towards a desired future. This is a primary reason why the current objectives and key results (OKRs) craze is destined for the graveyard of “programs du jour.”

There are fundamentally four classes of problems:

1. Known – Known

2. Known – Unknown

3. Unknown – Known

4. Unknown – Unknown.

These types are depicted in Figure 1, Problem Classes. “To the World” generally means broadly known, and “To the Problem-Solver” means to the team facing the problem. Accelerating business value growth is a team discipline, which is another reason the current application of OKRs is doomed. Let’s examine these problem classes.

Figure 1: Problem Classes