A Simple Formula for Good Strategy: DP + 2(PI) = GS Part 2 – Problem Identification

Developing good strategy doesn’t require a complicated process. There is no denying that developing good strategy is hard work, but, the reality is, the formula is simple: Diverse Perspective + Problem Identification + Problem Investigation = Good Strategy.

The genesis of all good strategy is applying diverse perspective to properly defining and systematically investigating the problem. All three components overlap must be used; using any one or two components will result in incomplete strategy, the wrong strategy or no strategy at all.

This article focuses on the Problem Identification. Click here to see the article on Diverse Perspective and sign up here to get the next article on problem investigation.

Problem Identification

Einstein has been quoted as having said “if I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes." Whether one is developing an organizational strategy, which is often solving a series of problems with the main question being how to get an organization from Point A to Point B, or tackling a specific challenge, you have to invest the time to adequately define and redefine the problem to:

  • Ensure that you are addressing the root (right) problem;
  • Generate information specific to the issue at hand that will be useful in solving the problem and developing strategy; and,
  • Lead to group consensus on what the problem actually is, which is vital to creation of good strategic solutions.

Problem identification requires a blend of critical and analytical thought. Although a problem might be complex, the processes used to solve a problem are not complex. The first step is properly defining the problem and this begins with challenging assumptions and breaking the problem down to ensure you are focused on the root problem.

Root Problem Identification

Determining the root cause of a problem is the first step in problem identification. Often what is first identified is a symptom of the problem, not the root cause. As such, it is important to challenge one’s assumptions and not get “locked” into the first “problem” that is identified.

Depending on the problem that one is defining, one or a few methods might be applied to clarify the problem. There are a number of methodologies that can be used to determine the root cause. I have found two in particular to be useful: Ishikawa Diagram (fishbone analysis) and Toyoda’s 5 Whys methodology.

Ishikawa Diagram

An Ishikawa Diagram looks like a fish skeleton, with the initial problem being the head and possible root cause categories represented by the rib bones, under which root causes are listed. The illustration below uses lack of strategic thinking at the board level as the initial problem, and then identifies possible six root cause categories, which become the rib bones of the diagram. Actual potential root causes are then listed along each rib bone.

5 Step Process

  1. Insert the initial problem statement in the problem statement box.
  2. Brainstorm possible root cause categories.
  3. Brainstorm potential root causes in each category
  4. Analyze the potential root causes to clarify / define the real problem(s).
  5. Develop consensus around the root problem(s)

Ishikawa Diagram

Toyoda’s 5 Why’s

Toyoda’s 5 Whys is a very simple method to identify root causes. It can be used alone or in conjunction with the fishbone technique illustrated above. When a problem arises, ask why and for each response to the question ask why again until the why question has been asked at least five times.

Applying the 5 whys methodology to our problem of having a board that is a non-strategic thinking entity, the questions might look like this:

  1. Q: Why doesn’t the Board think Strategically?

A: Because they are always digging into short-term tactics

  1. Q: Why are they always discussing short-term tactics?

A: Because these issues are perceived to be important by the Board

  1. Q: Why are these issues important to the Board?

A: Because they believe it is the role and responsibility of the Board to discuss and act on these issues

  1. Q: Why does the Board believe this is their role and responsibility?

A: Because they don’t know another way

  1. Q: Why doesn’t the Board know another way?

A: Because we don’t have a governance / Board development program

Using this example, we see the real problem is not that the Board isn’t thinking strategically, it is that we don’t have a formalized training / development program for our Board members. Of course, each group (or reader) will answer these questions differently; the point is to engage in the process to dig deeper into the actual root problem.

Define From Multiple Perspectives

Once a problem appears to be well defined, one can also add an additional layer to the clarification process that seeks to define the problem from multiple perspectives. This task is simplified if optimal diversity is achieved before a think tank is conducted. In an association setting, one could define the problem from the perspective of: members, non-members, staff, suppliers, customers, other stakeholder organizations, membership segments or areas of expertise.

Restate The Problem

Restating the problem is another mechanism to clarify what the problem actually is. The technique is also useful in achieving group consensus around the problem. One approach is to restate the problem statement as a question. For example, “in what ways could we create a Board development program that would improve the strategic capacity of the Board? Or, How could we create a Board development program that would increase the strategic capacity of the Board?

Consensus Development

Ultimately, it is critical that consensus be formed around the final problem statement. Failure to achieve consensus on the problem will impede the development of solution(s) and effective strategy. Fortunately, if you invest enough time on defining the problem consensus around the problem will generally emerge.

Why an Investment in Problem Identification Matters

Spending time to make sure that you have defined the problem correctly is imperative to developing good strategy. On a very basic level, it ensures that you are focusing on the right problem and creates a high level of probability that the right strategy will be developed. On the contrary, analyzing the wrong problem will almost always result in developing the wrong strategy. Further, the identification process builds consensus around the actual (root) problem; failure to achieve consensus impedes solution and good strategy development. Finally, engaging in robust problem identification reveals information and knowledge that will inform the problem analysis phase of strategy development and begins to create a focus on the information that is critical to solving the problem.

The key is to always challenge assumptions.

To read my previous article on Diverse Perspective click here [insert link].

In the meantime, let me know if you have tried these methodologies or if you have used others that have worked better for you.

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