Are you only fixing the problem or turning them into assets?

While solving a problem, you need to decide to what extent you want to solve the problem. Here you have 3 levels to choose from:

Level 1 - Fix-it:

Many problems are addressed in this way, where you simply "fix" the existing problem as early as possible. This approach towards problem-solving is especially prevalent where - time and not improvement, is of the essence. The organisation can simply not afford the cost of the problem to exists and needs to revert to pre-existing state on priority. For known problems, the shortest route is to implement a known solution. Even for new and unique problems, fixing it and stopping the loss is a priority.

Examples for such an approach towards problem-solving would be an oil-spill or a data breach or a system outage. In all these examples time is of the essence, and the first thing that needs to be done is to stop more damage from happening and reverting to the previous state.

The moot point here is that at this level the momentum of problem-solving is towards reverting to the previous state.

Here, Urgency To Solve > Need to improve

Level 2 - Turn Problem into opportunities:

At this level of problem-solving, a more deliberate and concerted effort is made to fundamentally improve the product or business process in consideration. In this approach, the momentum of problem-solving is towards improving in a manner that makes the organisation more competitive than before. Giving it a distinct advantage in making its offering - faster, better and/or cheaper.

Structured problem-solving methodologies like Lean Six Sigma are used to thoroughly understand the factors causing the problem and then solving it reliably. The result is a considerable uptick in performance when compared to the earlier state of the process or product. Many of level 1 problems that show re-occurrence or are very severe are good candidates for this level of problem-solving.

Examples for such an approach would be improving the system to 99.99% or reducing the cost of your goods by 15%, etc. You will observe that these examples are primarily aimed at the improvement over the prior state by some factor "x". This factor of improvement is dependent on several internal factors and context.

Here, Need to improve > Urgency to Solve

Level 3 - Turning Problems into Assets:

When a problem is solved at a level that the solution becomes industry best, that’s when a problem has been changed into an asset. This is a level where your organisation has disrupted the way the process was handled earlier and is now way better than it’s nearest competitor.

Problem-solving at this level would almost always mean new simpler processes, new paradigm and new convenience. The result is that the organisation gets a significant advantage in this space and the benefits are reflected in its P&L.

At this level, the organisation is not solving the problem, rather it is questioning the existence of the problem itself and innovating to find a completely new and simpler way of either preventing or solving the problem.

To convert problems into assets, innovation is the fuel.

Supported by an organizational culture that is willing to make big investments in finding new path-breaking solutions knowing fully well that the majority of these investments may not turn into assets.

Not all opportunities can be converted into assets. Identifying the correct ones is key for the organisation. Consistent pursuit of excellence is needed to solve the problem exceedingly well. These organisations spend a lot of time and resources in analysing, researching, synergising and testing. A good way to spot these problems is to scan the industry and see the common problems that are faced by all or look at cross-industry innovations.

An example, from financial sector, is the use of mobile wallets. Where B2C and C2C transactions are paid directly from one mobile wallet to another. This has not only drastically changed the way people pay, but has made the entire payment process simpler, more accessible and seamless. Such solutions, that fundamentally change user interactions or business processing create new markets and expand the industry at large. Another example would be of AWS, Amazon’s Cloud Service business. Amazon’s internal IT processes were refined to a point where Amazon decided to scale up AWS and offer it as a separate business for providing scalable and best in-class cloud solutions.

Here being best in class > Need to improve

To conclude, problems can be either fixed or used as an opportunity to improve and in some cases used as a vehicle to change the industry. A good evaluation of the problem and assessment of the industry are helpful in assessing the trajectory a problem takes, and thereby decide the level at which it should be addressed.

Photos: Unsplash – Drew Graham & Alec Favale