On June 29, Dr. Len Bertain joined Simplilearn to present a webinar on the art of problem solving for business operations. Len Bertain, Ph.D., is the CEO of Consortium of Problem Solvers. He and his organization have solved problems for over 200 CEOs, focusing on solutions with a 100 to 1 ROI. These solutions have generated over $1 Billion in first-year profits for his clients. Len is the co-author of "5/67 Problem Solving: How to Solve Wicked Problems... Correctly" and has written many other books on the subject.
His webinar addressed career tips for digital transformation, why businesses need a problem-solving strategy, why it's crucial to solve problems before applying digital transformation to them, and how business strategy and business processes interact. View the replay here.
The Five Pillars of Problem Solving
Moving forward, in this career tips for digital transformation, let us discuss what are the 5 pillars of problem-solving.
In this career tips for digital transformation webinar wrap-up article, let us focus on the five pillars of problem solving.
Len's mantra in his practice is to respect ideas, empower workers at his clients, and get success in that way. The fundamental nature of business problems is that they involve the mix of three types of operational functions:
- Value-added: these functions create the value for which the business receives revenues
- Essential support: these functions do not create value directly but are necessary to enable the value-added functions
- Waste: these functions neither create value nor support value creation; they only expend the business's resources
Figure 1. The Three Types of Business Functions
Here is why a business needs a problem-solving strategy. A business strategy is made of the value propositions of the company. The strategy needs to be checked continually to ensure the value propositions are compatible with current conditions (customer needs, competition, technology, etc.). Problems are issues affecting the delivery of one or more of the business's value propositions. An effective problem-solving strategy provides the CEO with a way to know where the weaknesses of the business strategy are and a guide to making mid-course corrections. It also ensures that problems and solutions are defined properly and thoroughly before the business starts applying technology like robotic process automation or digital transformation (both of which may be essential parts of some solutions).
The Five Pillars of Problem Solving are:
- No Blame
- 5/67 Solutions
- An Empowered Team
- The Six-Step Process
- High ROI
This “No Blame” problem-solving pillar is one of the important factors for career tips for digital Transformation. The biggest obstacle to solving problems is seeking who to blame for a problem instead of focusing on what caused the problem and how to fix it. A culture of blame causes people to hide problems rather than identify them and present them for solutions.
Closely tied to this idea is the need to accept change without reprisal. However essential and beneficial the change, changing an existing business process will disrupt the routines of some people. If people view that disruption as a loss of power, prestige, or control, they will undermine the change and cause it to fail.
One of Len's favorite sayings is a quotation from "East of Eden," the novel by John Steinbeck:
"This I believe: that the free, exploring mind of the individual human is the most valuable thing in the world. And this I would fight for: the freedom of the mind to take any direction it wishes, undirected… And this I must fight against: any idea, religion, or government [Len adds, or corporation] which limits or destroys the individual. This is what I am and what I am about."
Next, let us understand the concept of 5/67 solutions in this career tips for digital transformation article.
Most people are familiar with the Pareto Principle: 80 percent of the results come from 20 percent of the causes. This rule of thumb describes diminishing returns: each added increment of effort will yield a smaller impact than the one before. It's a valuable way to focus on the early and easy wins in any process of transformation.
Len points out that the statistics also support a 5/67 formulation of the Pareto Principle: the first five percent of effort, if applied correctly, will yield two-thirds of the available improvement. This way of looking at solutions focuses problem solving on the issues with the quickest payback.
Related to 5/67 solutions is the 120/20 Rule of Profits. This rule says that when you rank your productive resources in quintiles, the first 20 percent produces 120 percent of your profits, the next 20 percent yields 50 percent of profits, the third quintile produces 5 percent, the fourth quintile actually costs you 20 percent of your profits, and the fifth quintile destroys a whopping 55 percent of profits. Whether you look at salespeople, products, customers, or any other aspect of your value proposition delivery, if you could eliminate the worst 40 percent, your overall profits would rise by 75 percent. Structurally, it may be impossible to remove just the worst parts, but this rule can help you look for where the worst parts are and take corrective action.
Moving forward, let us discuss the concepts of nature or work and problems in this career tips for digital transformation article.
Figure 2. The 120/20 Rule of Profits
The Nature of Work and Problems
In Len's view, work is just a process of continually solving problems. There are lots of problems in your daily work directive: for example, a client doesn't get a package, or there is a bug in your software. If the problem falls only in your work directive and you can solve it, you solve it.
If the problem is too difficult for you to solve on your own, you form a team.
That is true of all problems within or without your work directive. All problems are not only people problems but they can be solved by people individually or in groups. The ability to solve them requires that the people be empowered to solve them.
Len classifies problems into three types:
- Stupid: If a problem has an obvious solution, just solve it.
- Difficult: If a problem doesn't have an obvious solution that one person can create, form a team that includes people inside and outside the work directive that has the problem.
- Wicked: If a difficult problem also affects the control, prestige, or jobs of people, form a team and ensure you have a sponsor in the organization who can back up the required solution.
Len offers the reminder of Occam's Razor: usually, the simplest solution is the best. But Len also gives two warnings: first, most companies don't have a problem-solving strategy: they just hope that problems will somehow go away – but they won't. Second, today's solution will create tomorrow's problem, so you can't solve a problem and assume you're done with it. For both of these reasons, you need a problem-solving strategy that continually reviews your business strategy and solves problems as they arise.
Moving forward, let us discuss the process & strategy concepts of this career tips for digital transformation article.
Process and Strategy
High ROI problem solving can operate in two directions. It can align the business strategy with a business process. Len gave an example of a small business that remanufactures starters and alternators for automobiles. The initial problem Len helped them solve was the business process of optimized manufacturing time, using the Kanban discipline of the Toyota Production System. Once the process was organized into just-in-time parts bins, the business owner realized he could apply the method to classic and antique car parts, which he could sell to car restorers and collectors. With the new part inventory control system (process), he could offer same-day delivery to customers willing to pay premium prices (strategy).
High ROI problem solving can also align a business process to the business strategy. For this example, Len described a biotechnology company that produces and sells DNA snippets called oligos. The business strategy called for packaging custom sets of oligos on test sample plates for customers. In the problem-solving phase, an internal team came up with a robotic process to do the packaging, thus allowing the company to produce this premium product at a reasonable cost.
Len's recommendation is for businesses to take three steps to build a problem-solving strategy:
- Because work is primarily solving problems, first, hire people good at solving problems.
- Second, hire people to get things done (to implement the solutions and carry out value-added and essential support functions).
- Third, be sure to include remote workers and gig workers in the strategy and tap them for problem-solving teams. This category of workers comprises a growing segment of the workforce, and it's vital to make them a part of your problem-solving strategy.
That was all about career tips for digital transformation articles.
Simplilearn offers programs and courses that give insight into solving business problems to reduce waste and create effective solutions (including digital transformation). Our Post Graduate Program in Lean Six Sigma, in partnership with UMass Amherst, focuses on the tools businesses use to root out waste and improve process quality. Our Post Graduate Program in Digital Transformation, in partnership with Purdue University, empowers learners to lead digital business process transformation. Either one will help you in your pursuit of an effective problem-solving strategy.
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