Problems

Problem (Definition) – a situation that can cause great harm or great benefit to the firm depending on how it is handled; you must consider Risks and Benefits.

Causes

Problems are caused by:

1. Negative elements – something is Wrong & should be Fixed

2. Positive elements –provide Opportunities for Competitive Advantage

3. Neutral elements – a Directive issued that something specific should be done

Problem Structure

As with all business elements, Problems exist within an Environment. The surrounding issues and context within which the problem occurs (and must be solved) is the Problem Environment (or Problem Structure).

Dealing With Problems – Types of People

1. Problem Solvers – address problems as they arise, neither seek out nor avoid problems

2. Problem Avoiders – would rather ignore the problem than deal with it, hope that if they ignore the problem long enough it will go away (“lazy, no-good, worthless....”)

3. Problem Seekers – actively look for problems to solve or something that needs improvement, always looking for new and better ways to do things (“trouble maker!”)

Types of Problems

(Defined by amount of information available and frequency of occurrence)

1. Structured Problems – high information, frequent, Production Line Decisions; the problem and alternatives are well understood, high information is available on the problem and its environment, decisions that are made daily, (“No Brainers”)

2. Semi-Structured Problems – less information than we’d like, less frequent; Managers solve these because of their Experience. The problem and alternatives are NOT well understood, some information is available on the problem and its environment but more is needed, most Business Decisions generally fall into this category. A Decision Support System is a specific type of information system used to help add structure and solve semi-structured (and unstructured) problems

3. Un-Structured Problems – low information, infrequent, Executive decisions, Unusually Consequential (“Make or Break”). The problem and alternatives are NOT AT ALL understood, little or no information is available on the problem and its environment, these decisions are Unusually Consequential (“Make you or Break you” decisions) and have strong ramifications for the organization.

Steps for Solving Problems

Solving Problems is an Eight (8) Step Process:

1. Recognize that a Problem exists

2. Identify the Symptoms

3. Follow the Symptom Chain

4. Identify the Problem

5. Identify Alternatives – possible Solutions to the problem

6. MAKE A DECISION – choose a Solution based on Risks/Benefits of the various Alternatives (can be a personality type, or a result of training)

7. Implement the Solution – put it into effect

8. Monitor and Evaluate the Outcomes of Your Decisions – watch the outcome – did it work the way you wanted it to? If not, go back & re-evaluate the steps above.