People who are good at solving problems for other people make great entrepreneurs. That's what a business gets paid to do.
The challenge is not the same as inventing a new technology, or finding things that make you feel good, and assuming that everyone will want one. In business, the ability to solve problems is called "street smarts," and it's more valuable than "book smarts."
In my role as a new business advisor, I sometimes see people who are very intelligent and well-educated, but not adept at problem solving.
Yet I'm convinced that this trait can be learned by discipline and practice. If you want to improve your strength in this area, or need to coach your team along these lines, I recommend the following steps:
1. Approach every problem as a positive business opportunity
At worst, it's a learning opportunity for you and your team, which can lead to providing a better customer solution or experience.
At best, you may find a new revenue stream providing a product or service that eliminates a painful problem for both you and your customers. Look first for positives.
2. Step back and collect the facts, without emotion
Entrepreneurs are often too passionate and impatient. It's not effective to attack a problem you don't understand, and jump to conclusions in the heat of a crisis.
All too often, a small problem will become a big one if you let emotion get the best of you. In all cases, get clarity and plan your attack.
3. Enlist help and advice from the right people
When you have a problem to solve, it's not smart to just grab the least-busy person on your team for help. These individuals may not have the skills or mindset you need, and can delay the solution or instigate a bigger problem.
Problems are best solved by open-minded team members who know the ropes.
4. Identify all potential sources of the problem
It's easy to jump to conclusions. For example, what looks like a sales revenue problem may actually be a new competitor offering, a marketing decline, or a lag in receivables.
Attacking the wrong source only delays the solution, antagonizes people, and increases costs. Check all the angles.
5. Perform a root cause analysis
Problems don't get solved by treating the symptoms. The best approach to get to the root of a problem is to iteratively question the source of each symptom until all answers point to the same source.
By eliminating that source, you won't waste time fixing symptoms or chasing the same problem with different symptoms.
6. Identify and prioritize alternative solutions
There are always multiple ways to fix a problem, so don't jump too quickly on the first alternative that surfaces. Identify several, then prioritize based on cost, time, and risk.
In business, an acceptable solution, done quickly, is usually superior to the perfect solution that will take more time and money.
7. Select a solution, and initiate immediate action
Some people find it hard to make a decision, even when all the necessary information in on the table. Don't let costs escalate, or customers escape for lack of action.
An important step is to communicate the problem and solution to all constituents, along with your action plan. Initiate action.
8. Clearly assign solution implementation and follow-up
The best entrepreneurs drive responsibility down to the relevant person, rather than trying to orchestrate all activities and tracking personally.
Assignments should be documented and communicated, rather than assumed. Don't allow confusion or multiple people to be set as responsible.
9. Establish metrics to assure solution and prevent recurrence
Problems have the positive impact of suggesting that something needs to be measured. Define the required metrics, including a check for side effects and follow-on problems.
Often, the removal of one constraint in a system leads to other problems further down in the process.
If you are not a great problem solver yourself, it pays to surround yourself with people who are. You can learn from these people, and rely on them to keep your business running smoothly.
Look for problem solving examples in the resumes of every new team member, and ask some hard questions in your interviews. The best of the best will highlight their street smarts as well as their book smarts.
You and your business need both to win.