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How to Solve Problems Permanently

We all have them.  Those nagging business problems.  They are part of business life.  You can’t escape them, and no matter how many problems you solve, there always seems to be a new one you couldn’t have dreamed up in your wildest imagination.

But are you really solving your problems?  Or are you just fire fighting?  The problem with putting out small fires all the time is that they have a bad habit of re-occurring.  The result is that problems accumulate and multiply.  Then before you know it, the house is burning down.

Sometimes there is a tendency to solve the current problem without really solving the cause of the problem.  We all do it.  We solve the crisis of the moment.  Then we’re on to the next thing.  Is this bad?  Well yes and no.  Clearly there are not enough hours in the day to stop and solve all the problems in the business by going through a long problems solving exercise.  As much as you might like to solve all the problems, the fact is…it’s just not practical.

So the first point is balance.  You cannot solve all the problems at once.  In fact, you can only solve them one at a time.  You need to make them line up.

But I never have time…

The 10% rule

By definition everyone is always busy, there is never enough time.  This is true for employees and it is certainly true for owners and managers.

But if you are going to solve problems you have to start somewhere.

I took over a business a few years ago that was purchased out of bankruptcy.  The business was losing $100,000 per month with no end in sight!  Talk about being in firefighting mode.  And to top it off many of the key staff were working 50-60 hours a week.  Obviously not a good situation.  How can you implement change when your core staff is already working overtime?  They didn’t even want to think about going to a meeting to do problem solving.  And hiring additional people was out of the question.

I knew that if we didn’t get out of our cycle, the business would fail.  I got everybody into a meeting and explained our dilemma.  Then I asked everyone to commit to 4 hours per week, or 10% of our time, to work on solving problems and to work on longer-term strategies.  I asked them to do this for one month, and at the end of the month we would evaluate how we were doing and whether they wanted to continue committing 4 hours per week to longer-term problem solving.  In order to be effective I asked them to do this 4 hours of work in no more than 2 blocks of 2 hours and it had to be done “off hours” when the phone was not ringing.  They could schedule the time as they saw fit.  They agreed.

We all set aside 4 hours per week, or 10% of our time, to working on problems and issues…

Set Stretch Targets

At our first meeting, I set a target to “double the business with no additional overhead staff”.  We sent the sales managers went off to figure out how to do double the business, while the rest of us starting discussing operational issues.

The very first comment from one of the engineers was “How are we going to handle twice the business if we are already working overtime?!!”

“Well I guess you can’t do things the way you have been doing them.” I responded.

“But if we are working 50+ hours a week now and we double the business, we will be working 100 hours per week.”  But I look at this another way…jobs that took 16 hours to do in engineering would have to be done in about 4-5 hours.

Impossible?

Well there are some interesting dynamics to problem solving.  If you ask someone to improve things by 10% you will get a faster way of doing things the same way.  But if you ask them to do it in half or one-quarter the time, they have to rethink the entire process.  The old ways will simply not work anymore.

By the way, the person who voiced this comment ended up doing his “16 hours of work” in 2-3 hours, and the sales managers figured out how to double the business.

But it wasn’t done overnight…

Rome wasn’t built in a day.

One day a number of years ago I was driving into Boston.  Lost again in the maze of changing routes and construction caused by the “Big Dig”.  Drivers had been complaining for years about the mess, until one day there was a huge billboard that was erected:

“Rome wasn’t built in a day…if it was, we would have hired their contractor”.

Of course we want to solve all the problems, and we want to solve them all today.  But the truth is, it takes time and staying power.  You need a plan, then you need to chew away at it, one bite at a time, and you need to keep chewing.

If you are not prepared to stick with it, then there is no point in starting.  You will only add to your frustration level.

Get a Plan

You need to have a plan or strategy to deal with your problems and issues.  The more problems and more the serious the issues, the more you need to plan an attack.  I have developed a 7-point plan to deal with problems and issues of all sorts and sizes.

  1. Make problems line up
  2. Pick one to solve, and only one
  3. Find the underlying causes
  4. Set targets
  5. Think outside the box
  6. Execute
  7. Check the progress

#1 – Make problems line up

Psychologists have determined that the human minds works much more effectively when you get everything on a list.  The more you have going on, the harder it is to remember what you are supposed to be doing and before you know it, you get lost in the day to day clutter of activities.  Sure lots of these activities are important or even critical, but the longer-range pressing issues do not get addressed.

I recommend getting an “Issues List” together.  Get all your issues large and small on this list, however do not get your daily activities or “to-do” list mixed up with these items.  “Phone John Smith tomorrow about warranty problem” does NOT go on the issues list.

Now if you have identified warranty problems as a serious issue that you need to deal with, then by all means put “warranty problems” on the Issues List.

Issue

 

Impact

Person

Date Started

Date Completed

Warranty problems

Low

Self

Cash flow problems

High

Self

Returns procedure

Low

Joe

Mar 21

Þ Action Item:  Make an issue list.

#2 – Pick one problem to solve, and only one

People simply cannot focus on everything at once.  You have to pick what you consider your most pressing problem and start to work it.  You can have multiple problems solutions underway, however one person can only have one problem at a time.  If you assign multiple problems to most people they spend a lot of time jumping from issue to issue and become very ineffective.

Prioritize the issues list.  Note the items that will take a long time to solve and the items that can be done quickly.  You need a balance in your attack, a balance of long term items and short terms items.  Also note the items that are critical to solve.  And which ones will have the biggest impact on the business financially.

This is also true for your own problem solving.

Now other simpler problems may be identified and solved in one easy step, but the issues we are talking about are the more difficult ones.

Þ Action Item:  Decide on one key problem to solve.

#3 – Find Underlying Causes

In order to solve the problem permanently you MUST find the underlying causes.  Sometimes they will be simple silly issues, other times they will be difficult to understand and even more difficult to come up with a solution and implement it.

To find the underlying causes you MUST “Drill deep”.  Let’s go back to the example on cash flow problems and do some analysis.  To be effective you need to do this analysis on paper.

As I mentioned, you need to follow the problems to the root causes.  As you see in the example below, there are 3 possible reasons we have identified for our cash flow problems, low sales, high costs and poor margins.  You will notice that in this case we have decided that “high costs” is a major contributor to the problem.  You can see in the next line we have taken this item and expanded it further.  You want to do this following the chain of possible causes as far down as you can.  Explore everything that has a material effect on the problem.  Leave the low impact items for another time.

   

Impact

Low ——————– High

Problem Possible Cause

1

2

3

4

5

Cash flow problem Low sales

High costs

Poor margins

X

X

X

High costs High assembly costs

High material costs

X

X

High assembly costs High labor rates

Poor productivity

X

X

Poor productivity People wasting time

Poor designs

Poor fab shop accuracy

Parts not ready at job start

X

X

X

X

As you can see, in the above example we drilled 4 levels deep into the problem.  You keep drilling down until you find the root causes.  The more complex the problem, the more chains you have to follow and the more time it will take.

But this is the best time you can spend.  Clearly understanding the root causes will allow for a permanent fix that is much more likely to stay in place and not come back to haunt you again.

Þ Action Item:  Define the underlying issues for your problem.

#4 – Set Targets

You can only set targets once you completely understand the problem.  Targets need to be set at the lowest level in the “Underlying Causes” matrix shown previously.   Make sure that the targets you set are meaningful and will move the business forward.

It is also best to set targets that can be monitored or measured easily.  For instance, in the example above, if the fabrication department accuracy needs to be within 0.001” for certain parts or certain operations, then specify them so they are easily checked and measured.

As mentioned previously, when it is appropriate you need to set “stretch targets” so people need to rethink the process entirely.

Þ Action Item:  Set your own stretch target.

#5 – Think Outside The Box

After you set your targets, it is time to consider the various alternatives that may be available to solve the problem. However, it is important at this stage that you do not jump at the first available solution. You want to consider a number of alternatives. When you list the alternative solutions you will also want to note the cost, time and effort involved. Make sure your people don’t come up with a complex $1,000 solution to a simple $0.10 problem.

Sometimes listing the alternative solutions can be quite challenging. It is at this point in the process you want to ensure that people are thinking creatively. Remember, Rome wasn’t built in a day, so it may take some time to develop all the possible alternatives. Set deadlines by all means, but leave time for the people to think about and digest the problem and possible solutions.

#6 – Execute

The next step in the problem-solving process is the execution phase. In this phase you want to take the solution that you decided on in the previous step and implement it in such a way that you have a permanently solved problem. In other words, we want to avoid the “Boomerang effect”, where the problem reappears sometime in the future.

The best way to avoid the boomerang effect is to make sure that the fundamental process has been altered. This may mean that you need to update drawings, write new manufacturing procedures, update shop forms or order entry forms, etc. Attention to this kind of detail will have a huge impact on your ability to execute the solution permanently.

Depending on the complexity of the implementation there may also be an element of training that is required for the personnel.

The other key to a good implementation is to make sure that the people involved in the process to be altered are included in the problem solution stage. If you have support from all levels of the organization, the chances of a good implementation are much improved. People resist change, however it is well known that if they are included in the problem-solving step they are much more inclined to accept the change.

#7 – Check Progress

Most problem solving requires the implementation of some change to the people or the processes, and with all change, there is a chance that the people will resort to the old methods or systems. Therefore it is imperative that some kind of measurement or feedback is imbedded with the change. You need a way of monitoring that the changes still in place, and you need the people to understand that this change is important to you.

You need to consider the measurement or feedback system carefully. Do you need a permanent measurement or a temporary measurement just until you or certain that the solution has been permanently implemented?

Problems are Opportunities in Disguise

Problems can be an interesting way to energize your people.  Many times when I sit in on the meetings were the people are discussing the various reasons why something is impossible to solve, somebody will say something that will trigger a thought with someone else and all of a sudden, instead of “impossible” they accept the problem as a “challenge”.  They become energized and the creativity starts to flow.  It is always fun to watch people solve problems they thought were “impossible”.  The look on their faces is priceless.

Find the high leverage points and challenge the people to solve them.  And don’t let them off the hook.  Encourage them and support them.  Set a ridiculous objective and achieve it!

Conclusion

Stay focused and make progress every day on something that moves you forward on a sustainable path.  Do these changes come easy?  Of course not.  If it were easy, you would have done it already.  However, once your plan gains some momentum you will be amazed at the results.

A Word About Using This Report

In order to get value from this report you will need to do the action items and implement the strategies in your business environment, and sometimes this can be challenging.  You will need to be persistent and diligent in your follow-up.  You won’t get any positive results unless you take action on the information and strategies outlined!

About the Author

Mr. Ray Smalley is a veteran CEO who works with owners and managers who are frustrated with their business performance.

He has led the management team for companies that include manufacturing, technology, service and construction, from $3 to $50 million in sales.  In each case, he achieved outstanding increases in sales and profits in very mature or declining markets, including turnaround situations.  He is able to provide leadership for all levels of the organization and effectively manage change.

Mr. Smalley graduated with the top award in his engineering class and graduated from Honeywell’s internal Executive Management Program presented by Harvard Business School.

(c) 2013 Ray Smalley, VenPlan Inc.  All rights reserved.

The contents of this paper are copyrighted and, as such, may be used for personal use only.  Duplication and/or commercial use of this material is expressly prohibited without written permission of the author.

 

 

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