Throughout my years as a corporate executive, I’ve seen every kind of organization: the good, the bad, and the ugly. I’ve witnessed firsthand the havoc wreaked by disorganized decision-making processes, but also the benefits produced by effective problem solvers. I’ve seen leaders who can’t identify problems and are unsure of their own objectives, leaders who are in denial about their problems, and leaders who think everything will be okay if they just “wait and see.” My goal in this book is to show you how to correctly identify problems; how to come to terms with them; how to arrive at the right decisions for dealing with them; how to devise a plan for implementing those decisions; and how to make sure the problems don’t recur.
This should all be standard business procedure, but it’s not. More often than not, I have found that decision-making and problem-solving procedures are based on knee-jerk, mishmash, and gut-instinct approaches. These lead to recurring problems, wasted resources, and declining corporate profitability. To take just one statistic, the average life expectancy of a Fortune 500 company in 1955 was around seventy-five years; today, it’s fifteen and dropping. Paul B. Carroll and Chunka Mui’s book Billion Dollar Lessons concludes that the cause of most business failures in corporations with over 500 million in assets was poor strategic decision making. Since 1983, there have been over 420 such failures. Furthermore, according to Paul Nutt, a business professor at Ohio State University, over half of all business decisions end in failure.
There are a few common reasons for these failures. Most decision makers I’ve worked with are just not clear on what the real problem is and kind of outcome they want. I once asked a CEO how he planned to accomplish his newly formed strategic decision, and he replied, “If you can’t figure that out for yourself, I’m not going to tell you.” Translation: “I don’t have the foggiest idea.” Decision making is a balancing act between knowing what kind of problem you are facing, what kind of decision you must make, and what kind of approach you should use.
Other times, leaders recognize the problem but just don’t want to face up to it. Throughout my career, I have found that denial is a major enemy of effective decision making and problem solving, capable of destroying many a company and career. I knew a leader who buried his head in the sand and implemented one bad decision after another in the blind hope that the situation would resolve itself. It never did, of course, and the company is no more.
You can’t make a successful decision if you don’t understand the problem confronting you. Determining if a problem is internal or external and how it affects your organization is a step in the right direction. With this information you can begin the winnowing process and eventually pinpoint the exact type of problem that must be solved. The three types of problem are strategic, organizational, and operational:
1. Strategic problems include: profits, market share, and growth.
2. Organizational problems include: employees, teams, and the culture, mission, and vision of the organization.
3. Operational problems include: deliveries, quality, manufacturing, and waste issues.
These different types of problems require different decision-making activities, skills, and styles. Some problems can be solved without much outside help, while others are more complex and require a specialized set of skills, tools, and techniques. It is up to each decision maker (or group of decision makers) to decide what is needed to solve the problem. Knowing how to craft the correct approach and what activities to engage in is a learnt skill.
Complicating this picture are still other factors that must be considered when deciding how to solve a problem. For example, you must take into account the structure of your organization, its flow of information, and whether employees are encouraged or even permitted to make decisions on their own or in teams. Three further elements that need to be taken into consideration are the impact of the decision, how involved and far-reaching the problem is, and what data is needed. Good decision makers and problem solvers take the time to evaluate how the decision will affect their people, the organization, and the customer.
Experience has taught me that a well-thought-out process will greatly increase the odds of identifying a problem correctly and making the right decisions. As Albert Einstein said, “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.” Having checks and balances in place to challenge conventional thinking and spur creativity will increase the odds of producing the right solution. However, you do not want to let this process become overly mechanistic; using any process in a cookie-cutter manner will be counterproductive, because most complex decisions are unique and must be approached as such.
By the end of this book, you will know what tools and techniques are required to identify and accept problems, arrive at and implement decisions, and make sure the problems you solve don’t return. Organizations that can find, accept, and solve their problems before their competition will create a competitive advantage that will be hard to duplicate.
My goal in writing this book is to increase the readers ability to answer the following questions with razor-sharp precision:
1. How do you know if you are solving the right problem?
2. How do you know if the problem really needs to be solved?
3. How do you know if you have the right solution?
4. How do you know when a problem is solved?
5. How will you know when the problem reoccurs?
I found that decision making is one messy and tricky propositions with no guarantees of success. By asking and answering these questions it will be less so.
Throughout my career, I have found that denial is a major enemy of effective problem solving. The fact is that problem denial has destroyed many a company and career. I worked for one CEO who lied to the board of directors, was found guilty of wrongdoing, had to resign, and still felt he had done nothing wrong. Denial can play tricks on your thinking and perception of reality.
My extensive research and work experience relating to problem solving and decision making have led me to several conclusions. First, effectively and consistently solving problems and making good decisions is much easier said than done. Second, using a well-thought-out (yet flexible) process will greatly increase the odds of solving the right problems and making correct decisions. Third, no process can prevent bad decisions all by itself; however, having a system of checks and balances in place to challenge solutions and decisions throughout the process will increase the odds of producing a successful outcome. Fourth, using any process in a cookie-cutter manner will be counterproductive, because most complex decisions are unique and must be approached as such. Fifth, none of these steps will be effective if the true problem is not correctly identified.
To become an expert at decision making and problem solving, you will need to make an honest self-assessment of your strengths, weaknesses, mindset, and emotional intelligence. To do this, keep a decision-making and problem-solving diary that includes what worked, what did not, what you could have done differently, and what areas need improvement. In your diary include what tools, techniques, and skills you used.
This book reflects my personal observations, research, and conclusions on how to make spot-on decisions that will help solve the true problems you are confronted with. It is written for professionals in business, associations, chambers of commerce, and non-profits. Throughout the book, “decision making” and “problem solving” are used interchangeably.