PROBLEM SOLVING

Once you own your own business, you will have to make decisions and solve problems everyday

Many entrepreneurs makes decisions casually or based on intuition (gut feeling)

You can’t base you decisions on faulty assumptions or illogical thinking

Successful entrepreneurs use Problems Solving Techniques

Use a Problem Solving ProcessA formal problem solving model helps

business people solve problems in a logical manner

Follow 6 Steps:1. Define the problem2. Gather information3. Identify Various Solutions4. Evaluate Alternatives and select the

best option5. Take action6. Evaluate Action

Step 1Define the Problem

Before you can solve a problem, you need to diagnose it.

Write down what the problem is and why it is a problem.

Try to quantify it too (mathematically figure out whether it is worth fixing or not), basically, how much is it costing you.

Step 2 Gather Information

Gather the right information that could help you solve it

e.g. Company records, industry data, interview customers, employees, suppliers and other business owners (like next door to you) to see if they have experienced similar problems and they have dealt with them.

Step 3 Identify Various Solutions

Most problems can be solved in various ways.

Identify all possibilities before you choose the one that fits best

Step 4 Evaluate you Alternatives

The decision maker then needs to evaluate all possible alternatives.

Either quantify the alternatives or Rank them in an order from best to worst

Step 5 Take Action

Once you have selected the best solution to the problem, you need to take action to implement it.

Step 6 Evaluate the Action

Even a well thought-out problem solving process may not work

You need to take a close look at whether your choice was a good one and did it make your business better than what it was during the problem?

Evaluating your action puts you in a better position next time when you are faced with a similar problem again.

Let’s Try

You are noticing that your telephone bills are being bombarded with long distance charges that you know are not business related because many of the destinations, you do not do business in. You have even noticed some International calls placed and you are very certain that your employees are probably the ones taking advantage of the phone lines when you are not looking.

Group Problem Solving

As a business owner you will have to make many decisions yourself, however, you may want to include employees.

More brains are better than one brain

Techniques

BrainstormingA creative group problem solving technique

that generates many fresh ideas.Make it informal by gathering around a pot

of coffee and chat about the problem and possible solutions

Encourage everyone to volunteerHave a person write all suggestions down

on a piece of paper

The person who called the meeting is the group moderator

The moderator holds order during the meeting

Makes sure that everyone is heard Makes sure that the group stays on track Ideas are not critiqued Ideas are only shared A list of practical ideas is preparedChoose as a group or the owner of the

business may decide that it is in the company’s best interest for the owner to decide

Consensus – Based

An agreement among a group of people An effective way to bring groups of

employees together to solve a problem It helps resolve conflicts It can bridge communication problems The main goal is to find a solution that

would make all or most people satisfied A process that tries to eliminate anger

and hostility

Consensus

Employees with conflicting opinions can meet in a place or atmosphere that fosters mutual respect