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Why Problem-Solving Skills Are Essential for Leaders in Any Industry

• 17 Jan 2023

Any organization offering a product or service is in the business of solving problems.

Whether providing medical care to address health issues or quick convenience to those hungry for dinner, a business’s purpose is to satisfy customer needs .

In addition to solving customers’ problems, you’ll undoubtedly encounter challenges within your organization as it evolves to meet customer needs. You’re likely to experience growing pains in the form of missed targets, unattained goals, and team disagreements.

Yet, the ubiquity of problems doesn’t have to be discouraging; with the right frameworks and tools, you can build the skills to solve consumers' and your organization’s most challenging issues.

Here’s a primer on problem-solving in business, why it’s important, the skills you need, and how to build them.

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What Is Problem-Solving in Business?

Problem-solving is the process of systematically removing barriers that prevent you or others from reaching goals.

Your business removes obstacles in customers’ lives through its products or services, just as you can remove obstacles that keep your team from achieving business goals.

Design Thinking

Design thinking , as described by Harvard Business School Dean Srikant Datar in the online course Design Thinking and Innovation , is a human-centered , solutions-based approach to problem-solving and innovation. Originally created for product design, design thinking’s use case has evolved . It’s now used to solve internal business problems, too.

The design thinking process has four stages :

• Clarify: Clarify a problem through research and feedback from those impacted.
• Ideate: Armed with new insights, generate as many solutions as possible.
• Develop: Combine and cull your ideas into a short list of viable, feasible, and desirable options before building prototypes (if making physical products) and creating a plan of action (if solving an intangible problem).
• Implement: Execute the strongest idea, ensuring clear communication with all stakeholders about its potential value and deliberate reasoning.

Using this framework, you can generate innovative ideas that wouldn’t have surfaced otherwise.

Creative Problem-Solving

Another, less structured approach to challenges is creative problem-solving , which employs a series of exercises to explore open-ended solutions and develop new perspectives. This is especially useful when a problem’s root cause has yet to be defined.

You can use creative problem-solving tools in design thinking’s “ideate” stage, which include:

• Brainstorming: Instruct everyone to develop as many ideas as possible in an allotted time frame without passing judgment.
• Divergent thinking exercises: Rather than arriving at the same conclusion (convergent thinking), instruct everyone to come up with a unique idea for a given prompt (divergent thinking). This type of exercise helps avoid the tendency to agree with others’ ideas without considering alternatives.
• Alternate worlds: Ask your team to consider how various personas would manage the problem. For instance, how would a pilot approach it? What about a young child? What about a seasoned engineer?

It can be tempting to fall back on how problems have been solved before, especially if they worked well. However, if you’re striving for innovation, relying on existing systems can stunt your company’s growth.

Related: How to Be a More Creative Problem-Solver at Work: 8 Tips

Why Is Problem-Solving Important for Leaders?

While obstacles’ specifics vary between industries, strong problem-solving skills are crucial for leaders in any field.

Whether building a new product or dealing with internal issues, you’re bound to come up against challenges. Having frameworks and tools at your disposal when they arise can turn issues into opportunities.

As a leader, it’s rarely your responsibility to solve a problem single-handedly, so it’s crucial to know how to empower employees to work together to find the best solution.

Your job is to guide them through each step of the framework and set the parameters and prompts within which they can be creative. Then, you can develop a list of ideas together, test the best ones, and implement the chosen solution.

Related: 5 Design Thinking Skills for Business Professionals

4 Problem-Solving Skills All Leaders Need

1. problem framing.

One key skill for any leader is framing problems in a way that makes sense for their organization. Problem framing is defined in Design Thinking and Innovation as determining the scope, context, and perspective of the problem you’re trying to solve.

“Before you begin to generate solutions for your problem, you must always think hard about how you’re going to frame that problem,” Datar says in the course.

For instance, imagine you work for a company that sells children’s sneakers, and sales have plummeted. When framing the problem, consider:

• What is the children’s sneaker market like right now?
• Should we improve the quality of our sneakers?
• Should we assess all children’s footwear?
• Is this a marketing issue for children’s sneakers specifically?
• Is this a bigger issue that impacts how we should market or produce all footwear?

While there’s no one right way to frame a problem, how you do can impact the solutions you generate. It’s imperative to accurately frame problems to align with organizational priorities and ensure your team generates useful ideas for your firm.

To solve a problem, you need to empathize with those impacted by it. Empathy is the ability to understand others’ emotions and experiences. While many believe empathy is a fixed trait, it’s a skill you can strengthen through practice.

When confronted with a problem, consider whom it impacts. Returning to the children’s sneaker example, think of who’s affected:

• Your organization’s employees, because sales are down
• The customers who typically buy your sneakers
• The children who typically wear your sneakers

Empathy is required to get to the problem’s root and consider each group’s perspective. Assuming someone’s perspective often isn’t accurate, so the best way to get that information is by collecting user feedback.

For instance, if you asked customers who typically buy your children’s sneakers why they’ve stopped, they could say, “A new brand of children’s sneakers came onto the market that have soles with more traction. I want my child to be as safe as possible, so I bought those instead.”

When someone shares their feelings and experiences, you have an opportunity to empathize with them. This can yield solutions to their problem that directly address its root and shows you care. In this case, you may design a new line of children’s sneakers with extremely grippy soles for added safety, knowing that’s what your customers care most about.

Related: 3 Effective Methods for Assessing Customer Needs

3. Breaking Cognitive Fixedness

Cognitive fixedness is a state of mind in which you examine situations through the lens of past experiences. This locks you into one mindset rather than allowing you to consider alternative possibilities.

For instance, your cognitive fixedness may make you think rubber is the only material for sneaker treads. What else could you use? Is there a grippier alternative you haven’t considered?

Problem-solving is all about overcoming cognitive fixedness. You not only need to foster this skill in yourself but among your team.

4. Creating a Psychologically Safe Environment

As a leader, it’s your job to create an environment conducive to problem-solving. In a psychologically safe environment, all team members feel comfortable bringing ideas to the table, which are likely influenced by their personal opinions and experiences.

If employees are penalized for “bad” ideas or chastised for questioning long-held procedures and systems, innovation has no place to take root.

By employing the design thinking framework and creative problem-solving exercises, you can foster a setting in which your team feels comfortable sharing ideas and new, innovative solutions can grow.

How to Build Problem-Solving Skills

The most obvious answer to how to build your problem-solving skills is perhaps the most intimidating: You must practice.

Again and again, you’ll encounter challenges, use creative problem-solving tools and design thinking frameworks, and assess results to learn what to do differently next time.

While most of your practice will occur within your organization, you can learn in a lower-stakes setting by taking an online course, such as Design Thinking and Innovation . Datar guides you through each tool and framework, presenting real-world business examples to help you envision how you would approach the same types of problems in your organization.

Are you interested in uncovering innovative solutions for your organization’s business problems? Explore Design Thinking and Innovation —one of our online entrepreneurship and innovation courses —to learn how to leverage proven frameworks and tools to solve challenges. Not sure which course is right for you? Download our free flowchart .

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What is problem-solving? And why is it important in the workplace?

September 28, 2023 by MindManager Blog

If there’s one thing you can count on as a business professional, it’s that you’ll never run short of new problems to solve. Thankfully, whether it includes handling difficult or unexpected situations in the workplace, or resolving complex organizational challenges, we all have the capacity to develop our business problem-solving skills.

The best way to get better at tackling problems productively is to start at the beginning. After all, the better you understand what problem-solving is – and the significant role it plays in every organization – the easier you’ll find it to improve on problem-solving skills in the workplace.

Let’s dive in!

What is problem-solving?

Problem-solving refers to the act of find solutions to difficult or complex issues.

A good problem-solving definition might be finding solutions to difficult or complex issues . In practice, however, solving problems in the workplace is a little more immersive than that.

In the workplace, problem-solving includes a variety of tools, resources, and techniques to:

• Identify what’s not working.
• Figure out why it’s broken.
• Determine the best course of action to fix it.

Whether you know them as obstacles, glitches, or setbacks, problems are a part of our everyday lives. The good news is that our brains excel at reasoning out intricate scenarios and making calculations in situations we’ve never experienced before. That means every one of us is hard-wired to be an adept problem-solver.

The trick is to learn how to take that innate ability and apply it in a deliberate and practiced way.

However, one thing is certain: successfully resolving business and workplace issues is essential.

Not only does effective problem-solving create value that encourages growth, it goes hand-in-hand with impactful decision making.

What are the benefits of problem-solving in business?

Practically speaking, problem-solving provides a golden opportunity to improve your processes, products, and systems – especially when you work through those challenges with others.

Learning to face difficulties calmly, and deal with them intentionally, can also:

• Ramp up your confidence.
• Increase your resilience.
• Help you develop valuable critical thinking skills.

Applying problem-solving skills in the face of an obstacle that seems insurmountable trains you to shift your perspective and look at potential hurdles in a different way.

It also gets you used to examining multiple options for dealing with a problem, which can help you feel more confident in the direction you take.

Solving problems as a team

Business problem solving as a team offers an even wider range of benefits since active collaboration tends to make good things happen at both the individual and group level.

For example:

• Team-based problem-solving is akin to having a built-in sounding board when you explore new approaches and ideas.
• As each team member’s critical thinking skills evolve, they bring fresh insights to the collective problem-solving process, bearing out the old adage that many heads are better than one.
• Solving problems as a team also reduces the feeling of personal risk and exposure that’s common when one person is tasked with solving a puzzle. When that same problem is shared, the sense of risk gets dispersed, and individual team members are less likely to feel singled out.

Not only is there less chance of arriving at an unreasonable or biased solution when you problem-solve as a group, team members assigned to carry that solution out will feel more invested in its success.

Examples of problem solving skills in the workplace

Improving on your problem-solving skills helps you make the most of your brain’s natural capacity to analyze and reason things out.

There are dozens of problem-solving skills that play out in the average workplace – all of which can contribute to your ability to correct oversights, resolve conflict , and work around unexpected obstructions.

Here are a few common examples of problem-solving skills in the workplace, and tips on how to improve them.

1. Data gathering

Figuring out the cause of a problem hinges on collecting relevant data. Consulting efficiently with colleagues, conducting online research, and brainstorming with your team are all valuable data gathering skills.

2. Active listening

As opposed to listening in a purely supportive or empathetic way, active listening involves concentrating fully on what the other person is saying so you can understand the content, respond accordingly, and remember what was said later.

3. Troubleshooting

The ability to analyze and troubleshoot a situation with the help of any data and human input you’ve gathered is essential for drilling down into the core of a problem, and scrutinizing potential solutions.

4. Brainstorming

Brainstorming has become synonymous with creative thinking, innovative idea generation, and problem-solving. The more productive your brainstorming sessions, the more likely you and your group are to put together a list of quality, workable solutions.

It’s interesting to note that effective decision making is both a contributor to, and a by-product of, effective problem-solving.

For example, honing your analytical abilities and other problem-solving skills will inevitably help you make better decisions. The more efficient your decision-making process becomes, meanwhile, the better you’ll get at uncovering and acting on the most promising solution to any dilemma.

A simple problem-solving scenario

It’s clear that we can all benefit from getting more comfortable with problem-solving in the workplace.

Examples of situations where your problem-solving skills will come in handy aren’t difficult to find, and might include:

• Fixing a technical issue for your customer.
• Improving your student’s test performance.
• Reducing the theft of your in-store merchandise.
• Bumping up your marketing reach.

But, here’s the interesting thing. While it’s evident in each of these situations that there’s a problem to be solved, the exact nature of that problem isn’t so obvious.

In the student’s case, for example, you’d need additional input to help you figure out why they’re performing poorly. Only then would you be able to take steps to find the best-fit solution and achieve the desired learning outcome.

Here’s a simple scenario to help demonstrate that idea:

Bringing new customers onboard in a timely manner is an important part of your client relations strategy. Since hiring Alex a few weeks ago, however, your onboarding process has been taking longer than it should and team members are beginning to complain.

While you can see that the problem in this scenario is the fact that your team isn’t meeting their client onboarding goals, the key is to get clear on exactly what’s causing the hold-up.

You could jump to the conclusion that Alex has time management issues and that it’s time to start looking for a replacement. But, since one of the most common mistakes in business problem-solving is attempting to seize on a solution right away, that might cause you to waste time and resources on a remedy that ultimately proves unnecessary, or that doesn’t provide a viable fix.

Instead, it’s time to put your problem-solving skills to work.

Using data gathering and troubleshooting to pinpoint and clarify the bottleneck in your onboarding process – and active listening to interpret the situation from Alex’s perspective – you soon determine that the real cause of the problem is not what you thought.

In truth, an administrative oversight during the hiring process (yet another problem to be solved!) left Alex unaware of, and without access to, the business process map that’s so vital to efficiently onboarding new customers. Once you provide the necessary resources, it doesn’t take Alex long to get up to speed – and your client onboarding process to revert back to the well-oiled machine that it was.

Even with a team of eager problem-solvers by your side, the truth is that it’s often necessary to have the right problem-solving tools in place to achieve your desired results. That’s where versatile mind mapping software can help.

Not only does MindManager® provide a visual framework that fully supports the problem-solving process, it improves comprehension, inspires more creative solutions, and boosts your ability to make the best possible decisions.

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Six problem-solving mindsets for very uncertain times

Great problem solvers are made, not born. That’s what we’ve found after decades of problem solving with leaders across business, nonprofit, and policy sectors. These leaders learn to adopt a particularly open and curious mindset, and adhere to a systematic process for cracking even the most inscrutable problems. They’re terrific problem solvers under any conditions. And when conditions of uncertainty are at their peak, they’re at their brilliant best.

Six mutually reinforcing approaches underly their success: (1) being ever-curious about every element of a problem; (2) being imperfectionists , with a high tolerance for ambiguity; (3) having a “dragonfly eye” view of the world, to see through multiple lenses; (4) pursuing occurrent behavior and experimenting relentlessly; (5) tapping into the collective intelligence , acknowledging that the smartest people are not in the room; and (6) practicing “show and tell” because storytelling begets action (exhibit).

Here’s how they do it.

1. Be ever-curious

As any parent knows, four-year-olds are unceasing askers. Think of the never-ending “whys” that make little children so delightful—and relentless. For the very young, everything is new and wildly uncertain. But they’re on a mission of discovery, and they’re determined to figure things out. And they’re good at it! That high-energy inquisitiveness is why we have high shelves and childproof bottles.

When you face radical uncertainty, remember your four-year-old or channel the four-year-old within you. Relentlessly ask, “Why is this so?” Unfortunately, somewhere between preschool and the boardroom, we tend to stop asking. Our brains make sense of massive numbers of data points by imposing patterns that have worked for us and other humans in the past. That’s why a simple technique, worth employing at the beginning of problem solving, is simply to pause and ask why conditions or assumptions are so until you arrive at the root of the problem. 1 This approach was originally developed by Sakichi Toyoda, the founder of Toyota.

Natural human biases in decision making, including confirmation, availability, and anchoring biases, often cause us to shut down the range of solutions too early. 2 Daniel Kahneman, Thinking, Fast and Slow , New York, NY: Farrar, Straus and Giroux, 2011. Better—and more creative—solutions come from being curious about the broader range of potential answers.

One simple suggestion from author and economist Caroline Webb to generate more curiosity in team problem solving is to put a question mark behind your initial hypotheses or first-cut answers. This small artifice is surprisingly powerful: it tends to encourage multiple solution paths and puts the focus, correctly, on assembling evidence. We also like thesis/antithesis, or red team/blue team, sessions, in which you divide a group into opposing teams that argue against the early answers—typically, more traditional conclusions that are more likely to come from a conventional pattern. Why is this solution better? Why not that one? We’ve found that better results come from embracing uncertainty. Curiosity is the engine of creativity.

We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians.

2. Tolerate ambiguity—and stay humble!

When we think of problem solvers, many of us tend to picture a poised and brilliant engineer. We may imagine a mastermind who knows what she’s doing and approaches a problem with purpose. The reality, though, is that most good problem solving has a lot of trial and error; it’s more like the apparent randomness of rugby than the precision of linear programming. We form hypotheses, porpoise into the data, and then surface and refine (or throw out) our initial guess at the answer. This above all requires an embrace of imperfection and a tolerance for ambiguity—and a gambler’s sense of probabilities.

The real world is highly uncertain. Reality unfolds as the complex product of stochastic events and human reactions. The impact of COVID-19 is but one example: we address the health and economic effects of the disease, and their complex interactions, with almost no prior knowledge. We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians. Guesses based on gut instinct can be wildly wrong. That’s why one of the keys to operating in uncertain environments is epistemic humility, which Erik Angner defines as “the realization that our knowledge is always provisional and incomplete—and that it might require revision in light of new evidence.” 3 Erik Angner, “Epistemic humility—knowing your limits in a pandemic,” Behavioral Scientist , April 13, 2020, behavioralscientist.org.

Recent research shows that we are better at solving problems when we think in terms of odds rather than certainties. 4 Annie Duke, Thinking in Terms of Bets: Making Smarter Decisions When You Don’t Have All the Facts , New York, NY: Portfolio/Penguin, 2018. For example, when the Australian research body Commonwealth Scientific and Industrial Research Organisation (CSIRO), which owned a core patent on the wireless internet protocol, sought royalties from major companies, it was initially rebuffed. The CSIRO bet that it could go to court to protect its intellectual property because it estimated that it needed only 10 percent odds of success for this to be a good wager, given the legal costs and likely payoff. It improved its odds by picking the weakest of the IP violators and selecting a legal jurisdiction that favored plaintiffs. This probabilistic thinking paid off and eventually led to settlements to CSIRO exceeding $500 million. 5 CSIRO briefing to US Government, December 5, 2006. A tolerance for ambiguity and a willingness to play the odds helped the organization feel its way to a good solution path.

To embrace imperfectionism with epistemic humility, start by challenging solutions that imply certainty. You can do that in the nicest way by asking questions such as “What would we have to believe for this to be true?” This brings to the surface implicit assumptions about probabilities and makes it easier to assess alternatives. When uncertainty is high, see if you can make small moves or acquire information at a reasonable cost to edge out into a solution set. Perfect knowledge is in short supply, particularly for complex business and societal problems. Embracing imperfection can lead to more effective problem solving. It’s practically a must in situations of high uncertainty, such as the beginning of a problem-solving process or during an emergency.

Good problem solving typically involves designing experiments to reduce key uncertainties. Each move provides additional information and builds capabilities.

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3. take a dragonfly-eye view.

Dragonfly-eye perception is common to great problem solvers. Dragonflies have large, compound eyes, with thousands of lenses and photoreceptors sensitive to different wavelengths of light. Although we don’t know exactly how their insect brains process all this visual information, by analogy they see multiple perspectives not available to humans. The idea of a dragonfly eye taking in 360 degrees of perception 6 Philip Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction , New York, NY: Crown, 2015. is an attribute of “superforecasters”—people, often without domain expertise, who are the best at forecasting events.

Think of this as widening the aperture on a problem or viewing it through multiple lenses. The object is to see beyond the familiar tropes into which our pattern-recognizing brains want to assemble perceptions. By widening the aperture, we can identify threats or opportunities beyond the periphery of vision.

Consider the outbreak of HIV in India in the early 1990s—a major public-health threat. Ashok Alexander, director of the Bill & Melinda Gates Foundation’s India Aids Initiative, provided a brilliant example of not just vision but also dragonfly vision. Facing a complex social map with a rapidly increasing infection rate, he widened the problem’s definition, from a traditional epidemiological HIV transmission model at known “hot spots,” to one in which sex workers facing violence were made the centerpiece.

This approach led to the “Avahan solution,” which addressed a broader set of leverage points by including the sociocultural context of sex work. The solution was rolled out to more than 600 communities and eventually credited with preventing 600,000 infections. The narrow medical perspective was sensible and expected, but it didn’t tap into the related issue of violence against sex workers, which yielded a richer solution set. Often, a secret unlocks itself only when one looks at a problem from multiple perspectives, including some that initially seem orthogonal.

The secret to developing a dragonfly-eye view is to “anchor outside” rather than inside when faced with problems of uncertainty and opportunity. Take the broader ecosystem as a starting point. That will encourage you to talk with customers, suppliers, or, better yet, players in a different but related industry or space. Going through the customer journey with design-thinking in mind is another powerful way to get a 360-degree view of a problem. But take note: when decision makers face highly constrained time frames or resources, they may have to narrow the aperture and deliver a tight, conventional answer.

Want better strategies? Become a bulletproof problem solver

4. pursue occurrent behavior.

Occurrent behavior is what actually happens in a time and place, not what was potential or predicted behavior. Complex problems don’t give up their secrets easily. But that shouldn’t deter problem solvers from exploring whether evidence on the facets of a solution can be observed, or running experiments to test hypotheses. You can think of this approach as creating data rather than just looking for what has been collected already. It’s critical for new market entry—or new market creation. It also comes in handy should you find that crunching old data is leading to stale solutions.

Most of the problem-solving teams we are involved with have twin dilemmas of uncertainty and complexity, at times combined as truly “wicked problems.” 7 A term coined in a now famous 1973 article: Horst W. J. Rittel and Melvin Webber, “Dilemmas in a general theory of planning,” Policy Sciences , 1973, Number 4, pp. 155–69. For companies ambitious to win in the great unknown in an emerging segment—such as electric cars or autonomous vehicles, where the market isn’t fully established—good problem solving typically involves designing experiments to reduce key uncertainties, not just relying on existing data. Each move (such as buying IP or acquiring a component supplier) and each experiment (including on-road closed tests) not only provides additional information to make decisions but also builds capabilities and assets that support further steps. Over time, their experiments, including alliances and acquisitions, come to resemble staircases that lead to either the goal or to abandonment of the goal. Problem-solving organizations can “bootstrap” themselves into highly uncertain new spaces, building information, foundational assets, and confidence as they take steps forward.

Risk-embracing problem solvers find a solution path by constantly experimenting. Statisticians use the abbreviation EVPI—the expected value of perfect information—to show the value of gaining additional information that typically comes from samples and experiments, such as responses to price changes in particular markets. A/B testing is a powerful tool for experimenting with prices, promotions, and other features and is particularly useful for digital marketplaces and consumer goods. Online marketplaces make A/B testing easy. Yet most conventional markets also offer opportunities to mimic the market’s segmentation and use it to test different approaches.

The mindset required to be a restless experimenter is consistent with the notion in start-ups of “failing fast.” It means that you get product and customer affirmation or rejection quickly through beta tests and trial offerings. Don’t take a lack of external data as an impediment—it may actually be a gift, since purchasable data is almost always from a conventional way of meeting needs, and is available to your competitors too. Your own experiments allow you to generate your own data; this gives you insights that others don’t have. If it is difficult (or unethical) to experiment, look for the “natural experiments” provided by different policies in similar locations. An example would be to compare outcomes in twin cities, such as Minneapolis–St. Paul.

It’s a mistake to think that your team has the smartest people in the room. They aren’t there. They’re invariably somewhere else. Nor do they need to be there if you can access their intelligence via other means.

5. Tap into collective intelligence and the wisdom of the crowd

Chris Bradley, a coauthor of Strategy Beyond the Hockey Stick , 8 Chris Bradley, Marin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds , Hoboken, NJ: Wiley, 2018. observed that “it’s a mistake to think that on your team you have the smartest people in the room. They aren’t there. They’re invariably somewhere else.” 9 For more from Chris Bradley, in a conversation with Rob McLean, see “ Want better strategies? Become a bulletproof problem solver ,” August 2019. Nor do they need to be there if you can access their intelligence via other means. In an ever-changing world where conditions can evolve unpredictably, crowdsourcing invites the smartest people in the world to work with you. For example, in seeking a machine-learning algorithm to identify fish catch species and quantities on fishing boats, the Nature Conservancy (TNC) turned to Kaggle and offered a $150,000 prize for the best algorithm. This offer attracted 2,293 teams from all over the world. TNC now uses the winning algorithm to identify fish types and sizes caught on fishing boats in Asia to protect endangered Pacific tuna and other species.

Crowdsourced problem solving is familiar in another guise: benchmarking. When Sir Rod Carnegie was CEO of Conzinc Riotinto Australia (CRA), he was concerned about the costs of unscheduled downtime with heavy trucks, particularly those requiring tire changes. He asked his management team who was best in the world at changing tires; their answer was Formula One, the auto racing competition. A team traveled to the United Kingdom to learn best practice for tire changes in racetrack pits and then implemented what it learned thousands of miles away, in the Pilbara region of Western Australia. The smartest team for this problem wasn’t in the mining industry at all.

Of course, while crowdsourcing can be useful when conventional thinking yields solutions that are too expensive or incomplete for the challenge at hand, it has its limitations. Good crowdsourcing takes time to set up, can be expensive, and may signal to your competitors what you are up to. Beware of hidden costs, such as inadvertently divulging information and having to sieve through huge volumes of irrelevant, inferior suggestions to find the rare gem of a solution.

Accept that it’s OK to draw on diverse experiences and expertise other than your own. Start with brainstorming sessions that engage people from outside your team. Try broader crowdsourcing competitions to generate ideas. Or bring in deep-learning talent to see what insights exist in your data that conventional approaches haven’t brought to light. The broader the circles of information you access, the more likely it is that your solutions will be novel and creative.

Rookie problem solvers show you their analytic process and math to convince you they are clever. Seasoned problem solvers show you differently.

6. Show and tell to drive action

We started our list of mindsets with a reference to children, and we return to children now, with “show and tell.” As you no doubt remember—back when you were more curious!—show and tell is an elementary-school activity. It’s not usually associated with problem solving, but it probably piqued your interest. In fact, this approach is critical to problem solving. Show and tell is how you connect your audience with the problem and then use combinations of logic and persuasion to get action.

The show-and-tell mindset aims to bring decision makers into a problem-solving domain you have created. A team from the Nature Conservancy, for instance, was presenting a proposal asking a philanthropic foundation to support the restoration of oyster reefs. Before the presentation, the team brought 17 plastic buckets of water into the boardroom and placed them around the perimeter. When the foundation’s staff members entered the room, they immediately wanted to know what the buckets were for. The team explained that oyster-reef restoration massively improves water quality because each oyster filters 17 buckets of water per day. Fish stocks improve, and oysters can also be harvested to help make the economics work. The decision makers were brought into the problem-solving domain through show and tell. They approved the funding requested and loved the physical dimension of the problem they were part of solving.

Rookie problem solvers show you their analytic process and mathematics to convince you that they are clever. That’s sometimes called APK, the anxious parade of knowledge. But seasoned problem solvers show you differently. The most elegant problem solving is that which makes the solution obvious. The late economist Herb Simon put it this way: “Solving a problem simply means representing it so as to make the solution transparent.” 10 Herbert Simon, The Sciences of the Artificial , Cambridge, MA: MIT Press, 1969.

To get better at show and tell, start by being clear about the action that should flow from your problem solving and findings: the governing idea for change. Then find a way to present your logic visually so that the path to answers can be debated and embraced. Present the argument emotionally as well as logically, and show why the preferred action offers an attractive balance between risks and rewards. But don’t stop there. Spell out the risks of inaction, which often have a higher cost than imperfect actions have.

The mindsets of great problem solvers are just as important as the methods they employ. A mindset that encourages curiosity, embraces imperfection, rewards a dragonfly-eye view of the problem, creates new data from experiments and collective intelligence, and drives action through compelling show-and-tell storytelling creates radical new possibilities under high levels of unpredictability. Of course, these approaches can be helpful in a broad range of circumstances, but in times of massive uncertainty, they are essential.

Charles Conn is an alumnus of McKinsey’s Sydney office and is a board member of Patagonia and former CEO of the Rhodes Trust. Robert McLean is an alumnus of the Sydney office and is the advisory-board chair of the Nature Conservancy Australia. They are the authors of Bulletproof Problem Solving: The One Skill That Changes Everything (Wiley, 2018).

This article was edited by David Schwartz, an executive editor in the Tel Aviv office.

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What Is Problem Solving?

Find a solution to any problem you face.

By the Mind Tools Content Team

We all spend a lot of our time solving problems, both at work and in our personal lives.

Some problems are small, and we can quickly sort them out ourselves. But others are complex challenges that take collaboration, creativity, and a considerable amount of effort to solve.

At work, the types of problems we face depend largely on the organizations we're in and the jobs we do. A manager in a cleaning company, for example, might spend their day untangling staffing issues, resolving client complaints, and sorting out problems with equipment and supplies. An aircraft designer, on the other hand, might be grappling with a problem about aerodynamics, or trying to work out why a new safety feature isn't working. Meanwhile, a politician might be exploring solutions to racial injustice or climate change.

But whatever issues we face, there are some common ways to tackle them effectively. And we can all boost our confidence and ability to succeed by building a strong set of problem-solving skills.

Mind Tools offers a large collection of resources to help you do just that!

How Well Do You Solve Problems?

Start by taking an honest look at your existing skills. What's your current approach to solving problems, and how well is it working? Our quiz, How Good Is Your Problem Solving? lets you analyze your abilities, and signposts ways to address any areas of weakness.

Define Every Problem

The first step in solving a problem is understanding what that problem actually is. You need to be sure that you're dealing with the real problem – not its symptoms. For example, if performance in your department is substandard, you might think that the problem lies with the individuals submitting work. However, if you look a bit deeper, the real issue might be a general lack of training, or an unreasonable workload across the team.

Tools like 5 Whys , Appreciation and Root Cause Analysis get you asking the right questions, and help you to work through the layers of a problem to uncover what's really going on.

However, defining a problem doesn't mean deciding how to solve it straightaway. It's important to look at the issue from a variety of perspectives. If you commit yourself too early, you can end up with a short-sighted solution. The CATWOE checklist provides a powerful reminder to look at many elements that may contribute to the problem, keeping you open to a variety of possible solutions.

Understanding Complexity

As you define your problem, you'll often discover just how complicated it is. There are likely several interrelated issues involved. That's why it's important to have ways to visualize, simplify and make sense of this tangled mess!

Affinity Diagrams are great for organizing many different pieces of information into common themes, and for understanding the relationships between them.

Another popular tool is the Cause-and-Effect Diagram . To generate viable solutions, you need a solid understanding of what's causing the problem.

When your problem occurs within a business process, creating a Flow Chart , Swim Lane Diagram or a Systems Diagram will help you to see how various activities and inputs fit together. This may well highlight a missing element or bottleneck that's causing your problem.

Quite often, what seems to be a single problem turns out to be a whole series of problems. The Drill Down technique prompts you to split your problem into smaller, more manageable parts.

General Problem-Solving Tools

When you understand the problem in front of you, you’re ready to start solving it. With your definition to guide you, you can generate several possible solutions, choose the best one, then put it into action. That's the four-step approach at the heart of good problem solving.

There are various problem-solving styles to use. For example:

• Constructive Controversy is a way of widening perspectives and energizing discussions.
• Inductive Reasoning makes the most of people’s experiences and know-how, and can speed up solution finding.
• Means-End Analysis can bring extra clarity to your thinking, and kick-start the process of implementing solutions.

Specific Problem-Solving Systems

Some particularly complicated or important problems call for a more comprehensive process. Again, Mind Tools has a range of approaches to try, including:

• Simplex , which involves an eight-stage process: problem finding, fact finding, defining the problem, idea finding, selecting and evaluating, planning, selling the idea, and acting. These steps build upon the basic, four-step process described above, and they create a cycle of problem finding and solving that will continually improve your organization.
• Appreciative Inquiry , which is a uniquely positive way of solving problems by examining what's working well in the areas surrounding them.
• Soft Systems Methodology , which takes you through four stages to uncover more details about what's creating your problem, and then define actions that will improve the situation.

Further Problem-Solving Strategies

Good problem solving requires a number of other skills – all of which are covered by Mind Tools.

For example, we have a large section of resources to improve your Creativity , so that you come up with a range of possible solutions.

By strengthening your Decision Making , you'll be better at evaluating the options, selecting the best ones, then choosing how to implement them.

And our Project Management collection has valuable advice for strengthening the whole problem-solving process. The resources there will help you to make effective changes – and then keep them working long term.

Problems are an inescapable part of life, both in and out of work. So we can all benefit from having strong problem-solving skills.

It's important to understand your current approach to problem solving, and to know where and how to improve.

Define every problem you encounter – and understand its complexity, rather than trying to solve it too soon.

There's a range of general problem-solving approaches, helping you to generate possible answers, choose the best ones, and then implement your solution.

Some complicated or serious problems require more specific problem-solving systems, especially when they relate to business processes.

By boosting your creativity, decision-making and project-management skills, you’ll become even better at solving all the problems you face.

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What Is Problem Solving in Business?

Problem-solving in business is defined as implementing processes that reduce or remove obstacles that are preventing you or others from accomplishing operational and strategic business goals.

In business, a problem is a situation that creates a gap between the desired and actual outcomes. In addition, a true problem typically does not have an immediately obvious resolution.

Business problem-solving works best when it is approached through a consistent system in which individuals:

• Identify and define the problem
• Prioritize the problem based on size, potential impact, and urgency
• Complete a root-cause analysis
• Develop a variety of possible solutions
• Evaluate possible solutions and decide which is most effective
• Plan and implement the solution

Why Is Problem-Solving Important in Business?

Understanding the importance of problem-solving skills in the workplace will help you develop as a leader. Problem-solving skills will help you resolve critical issues and conflicts that you come across. Problem-solving is a valued skill in the workplace because it allows you to:

• Apply a standard problem-solving system to all challenges
• Find the root causes of problems
• Quickly deal with short-term business interruptions
• Form plans to deal with long-term problems and improve the organization
• See challenges as opportunities
• Keep your cool during challenges

How Do You Solve Business Problems Effectively?

There are many different problem-solving strategies, but most can be broken into general steps. Here is a six-step method for business problem solving:

1) Identify the Details of the Problem: Gather enough information to accurately define the problem. This can include data on procedures being used, employee actions, relevant workplace rules, and so on. Write down the specific outcome that is needed, but don’t assume what the solution should be.

• Use the Five Whys: When assessing a problem, a common strategy is to ask “why” five times. First, ask why the problem occurred. Then, take the answer and ask “why” again, and so on. The intention is to help you get down to the root cause of the problem so you can directly target that core issue with your solution.

2) Creatively Brainstorm Solutions:   State every solution you can think of. Write them down. Seek input from those who possess in-depth knowledge of or experience with the problem you’re trying to solve. These insights will provide you with valuable perspectives you can transform into tangible and impactful solutions.

3) Evaluate Solutions and Make a Decision:   Assess the feasibility of each solution. Is the deadline realistic? Are there readily available resources you can leverage to successfully implement the solution? What is the return on investment of each solution? If necessary, come up with alternative solutions or adjust the initial ones you brainstormed in step 2.

4) Make a Decision: Finally, make a firm decision on one solution. This final solution should clearly address the root cause of the problem.

• Perform a SWOT Analysis: You can use a SWOT analysis to help you decide on the best solution. A SWOT analysis involves identifying the strengths, weaknesses, opportunities, and threats linked to a specific decision. With this framework, your team can assess a decision from various angles, thereby gaining a holistic view of it.

5) Take Action:   Write up a detailed plan. This involves developing a comprehensive roadmap that outlines the steps required to implement your solution. The steps should specify milestones, deadlines, roles, and how to obtain the necessary approvals. To ensure accountability, your entire team should have access to this action plan. Each team member should be able to track and share their progress with the group.

6) Gather and Share Feedback: Problem-solving is not a “set it and forget it” process. It’s a dynamic journey that necessitates ongoing attention, deliberation, and refinement to achieve optimal results. Thus, periodic feedback is critical in validating whether the chosen solution creates the desired impact. It allows key stakeholders to check in and make any necessary changes.

What Are Problem-Solving Skills?

Problem-solving skills are specific procedures that can be used to complete one or more of the six general steps of problem-solving (discussed above). Here are five important examples:

Using Emotional Intelligence: You’ll solve problems more calmly when you learn to recognize your own emotional patterns and to empathize with and guide the emotions of others. Avoid knee-jerk responses and making assumptions.

Researching Problems: An effective solution requires an accurate description of the problem. Define simple problems using quick research methods such as asking, “What? Where? When? and How much?.” Difficult problems require more in-depth research, such as data exploration, surveys, and interviews.

Creative Brainstorming: When brainstorming with a group, encourage idea creation by listening attentively to everyone, and recognizing everyone’s unique contributions.

Logical Reasoning: Develop standard logical steps for analyzing possible solutions to problems. Study and apply ideas about logical fallacies, deductive reasoning, and other areas of analytical thought.

Decisiveness: Use an agreed-upon system for choosing a solution, which can include assigning pros and cons to solutions, identifying mandatory results, getting feedback about solutions, choosing the decision-maker(s), and finishing or repeating the process.

How Can You Improve Your Problem-Solving Skills?

Learning how to solve business problems takes time and effort. Though some people appear to have been born with superior problem-solving skills, great problem-solvers usually have taken the time to refine their abilities. You can develop high-level skills for solving problems too, through the following methods:

Ask and Listen: Don’t expect to solve every problem alone. Ask for advice, and listen to it carefully.

Practice Curiosity: Any time you’re involved in solving a problem, practice researching and defining the problem just a little longer than you would naturally.

Break Down Problems: Whenever possible, break large problems into their smallest units. Then, search for solutions to one unit at a time.

Don’t Label Yourself Negatively: Don’t allow a problem to mean something negative about you personally. Separate yourself from it. Look at it objectively and be part of the solution.

Enhance Your Problem-Solving Skills with CMOE

Problem-solving skills in business are not developed overnight. Developing then takes ongoing practice and the right guidance to get right. We encourage you to leverage CMOE’s Problem-Solving and Decision Making in the Workplace workshop to further develop your skills. We’ll help you identify new ways to solve problems methodically so you can create greater impact.

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10 Step Process for Effective Business Problem Solving

Posted august 3, 2021 by harriet genever.

When you start a small business or launch a startup, the one thing you can count on is the unexpected. No matter how thoroughly you plan, forecast , and test, problems are bound to arise. This is why as an entrepreneur, you need to know how to solve business problems effectively.

What is problem solving in business?

Problem solving in business relates to establishing processes that mitigate or remove obstacles currently preventing you from reaching strategic goals . These are typically complex issues that create a gap between actual results and your desired outcome. They may be present in a single team, operational process, or throughout your entire organization, typically without an immediate or obvious solution. 

To approach problem solving successfully, you need to establish consistent processes that help you evaluate, explore solutions, prioritize execution, and measure success. In many ways, it should be similar to how you review business performance through a monthly plan review . You work through the same documentation, look for gaps, dig deeper to identify the root cause, and hash out options. Without this process, you simply cannot expect to solve problems efficiently or effectively. 

Why problem solving is important for your business

While some would say problem-solving comes naturally, it’s actually a skill you can grow and refine over time. Problem solving skills will help you and your team tackle critical issues and conflicts as they arise. It starts from the top. You as the business owner or CEO needing to display the type of level-headed problem solving that you expect to see from your employees.

Doing so will help you and your staff quickly deal with issues, establish and refine a problem solving process, turn challenges into opportunities, and generally keep a level head. Now, the best business leaders didn’t just find a magic solution to solve their problems, they built processes and leveraged tools to find success. And you can do the same.

By following this 10-step process, you can develop your problem-solving skills and approach any issue that arises with confidence. 

1. Define the problem

When a problem arises, it can be very easy to jump right into creating a solution. However, if you don’t thoroughly examine what led to the problem in the first place, you may create a strategy that doesn’t actually solve it. You may just be treating the symptoms.

For instance, if you realize that your sales from new customers are dropping, your first inclination might be to rush into putting together a marketing plan to increase exposure. But what if decreasing sales are just a symptom of the real problem? 

When you define the problem, you want to be sure you’re not missing the forest for the trees. If you have a large issue on your hands, you’ll want to look at it from several different angles:

Competition 

Is a competitor’s promotion or pricing affecting your sales? Are there new entrants in your market? How are they marketing their product or business?

Business model 

Is your business model sustainable? Is it realistic for how fast you want to grow? Should you explore different pricing or cost strategies?

Market factors

How are world events and the nation’s economy affecting your customers and your sales?

Are there any issues affecting your team? Do they have the tools and resources they need to succeed? 

Goal alignment 

Is everyone on your team working toward the same goal ? Have you communicated your short-term and long-term business goals clearly and often?

There are a lot of ways to approach the issue when you’re facing a serious business problem. The key is to make sure you’re getting a full snapshot of what’s going on so you don’t waste money and resources on band-aid solutions. 

Going back to our example, by looking at every facet of your business, you may discover that you’re spending more on advertising than your competitors already. And instead, there’s a communication gap within your team that’s leading to the mishandling of new customers and therefore lost sales. 

If you jumped into fixing the exposure of your brand, you would have been dumping more money into an area you’re already winning. Potentially leading to greater losses as more and more new customers are dropped due to poor internal communication.

This is why it’s so vital that you explore your blind spots and track the problem to its source.

2. Conduct a SWOT analysis

All good businesses solve some sort of problem for customers. What if your particular business problem is actually an opportunity, or even a strength if considered from a different angle? This is when you’d want to conduct a SWOT analysis to determine if that is in fact the case.

SWOT is a great tool for strategic planning and bringing multiple viewpoints to the table when you’re looking at investing resources to solve a problem. This may even be incorporated in your attempts to identify the source of your problem, as it can quickly outline specific strengths and weaknesses of your business. And then by identifying any potential opportunities or threats, you can utilize your findings to kickstart a solution. 

3. Identify multiple solutions with design thinking

As you approach solving your problem, you may want to consider using the design thinking approach . It’s often used by organizations looking to solve big, community-based problems. One of its strengths is that it requires involving a wide range of people in the problem-solving process. Which leads to multiple perspectives and solutions arising.

This approach—applying your company’s skills and expertise to a problem in the market—is the basis for design thinking.

It’s not about finding the most complex problems to solve, but about finding common needs within the organization and in the real world and coming up with solutions that fit those needs. When you’re solving business problems, this applies in the sense that you’re looking for solutions that address underlying issues—you’re looking at the big picture.

4. Conduct market research and customer outreach

Market research and customer outreach aren’t the sorts of things small business owners and startups can do once and then cross off the list. When you’re facing a roadblock, think back to the last time you did some solid market research or took a deep dive into understanding the competitive landscape .

Market research and the insights you get from customer outreach aren’t a silver bullet. Many companies struggle with what they should do with conflicting data points. But it’s worth struggling through and gathering information that can help you better understand your target market . Plus, your customers can be one of the best sources of criticism. It’s actually a gift if you can avoid taking the negatives personally .

The worst thing you can do when you’re facing challenges is isolating yourself from your customers and ignore your competition. So survey your customers. Put together a competitive matrix . 

5. Seek input from your team and your mentors

Don’t do your SWOT analysis or design thinking work by yourself. The freedom to express concerns, opinions, and ideas will allow people in an organization to speak up. Their feedback is going to help you move faster and more efficiently. If you have a team in place, bring them into the discussion. You hired them to be experts in their area; use their expertise to navigate and dig deeper into underlying causes of problems and potential solutions.

If you’re running your business solo, at least bring in a trusted mentor. SCORE offers a free business mentorship program if you don’t already have one. It can also be helpful to connect with a strategic business advisor , especially if business financials aren’t your strongest suit.

Quoting Stephen Covey, who said that “strength lies in differences, not in similarities,” speaking to the importance of diversity when it comes to problem-solving in business. The more diverse a team is , the more often innovative solutions to the problems faced by the organization appear.

In fact, it has been found that groups that show greater diversity were better at solving problems than groups made up specifically of highly skilled problem solvers. So whoever you bring in to help you problem-solve, resist the urge to surround yourself with people who already agree with you about everything.

6. Apply lean planning for nimble execution

So you do your SWOT analysis and your design thinking exercise. You come up with a set of strong, data-driven ideas. But implementing them requires you to adjust your budget, or your strategic plan, or even your understanding of your target market.

Are you willing to change course? Can you quickly make adjustments? Well in order to grow, you can’t be afraid to be nimble . 

By adopting the lean business planning method —the process of revising your business strategy regularly—you’ll be able to shift your strategies more fluidly. You don’t want to change course every week, and you don’t want to fall victim to shiny object thinking. But you can strike a balance that allows you to reduce your business’s risk while keeping your team heading in the right direction.

Along the way, you’ll make strategic decisions that don’t pan out the way you hoped. The best thing you can do is test your ideas and iterate often so you’re not wasting money and resources on things that don’t work. That’s Lean Planning .

7. Model different financial scenarios

When you’re trying to solve a serious business problem, one of the best things you can do is build a few different financial forecasts so you can model different scenarios. You might find that the idea that seemed the strongest will take longer than you thought to reverse a negative financial trend. At the very least you’ll have better insight into the financial impact of moving in a different direction.

The real benefit here is looking at different tactical approaches to the same problem. Maybe instead of increasing sales right now, you’re better off in the long run if you adopt a strategy to reduce churn and retain your best customers. You won’t know unless you model a few different scenarios. You can do this by using spreadsheets, and a tool like LivePlan can make it easier and quicker.

8. Watch your cash flow

While you’re working to solve a challenging business problem, pay particular attention to your cash flow and your cash flow forecast . Understanding when your company is at risk of running out of cash in the bank can help you be proactive. It’s a lot easier to get a line of credit while your financials still look good and healthy, than when you’re one pay period away from ruin.

If you’re dealing with a serious issue, it’s easy to start to get tunnel vision. You’ll benefit from maintaining a little breathing room for your business as you figure out what to do next.

9. Use a decision-making framework

Once you’ve gathered all the information you need, generated a number of ideas, and done some financial modeling, you might still feel uncertain. It’s natural—you’re not a fortune-teller. You’re trying to make the best decision you can with the information you have.

This article offers a really useful approach to making decisions. It starts with putting your options into a matrix like this one:

Use this sort of framework to put everything you’ve learned out on the table. If you’re working with a bigger team, this sort of exercise can also bring the rest of your team to the table so they feel some ownership over the outcome.

10. Identify key metrics to track

How will you know your problem is solved? And not just the symptom—how will you know when you’ve addressed the underlying issues? Before you dive into enacting the solution, make sure you know what success looks like.

Decide on a few key performance indicators . Take a baseline measurement, and set a goal and a timeframe. You’re essentially translating your solution into a plan, complete with milestones and goals. Without these, you’ve simply made a blind decision with no way to track success. You need those goals and milestones to make your plan real .

Problem solving skills to improve

As you and your team work through this process, it’s worth keeping in mind specific problem solving skills you should continue to develop. Bolstering your ability, as well as your team, to solve problems effectively will only make this process more useful and efficient. Here are a few key skills to work on.

Emotional intelligence

It can be very easy to make quick, emotional responses in a time of crisis or when discussing something you’re passionate about. To avoid making assumptions and letting your emotions get the best of you, you need to focus on empathizing with others. This involves understanding your own emotional state, reactions and listening carefully to the responses of your team. The more you’re able to listen carefully, the better you’ll be at asking for and taking advice that actually leads to effective problem solving.

Jumping right into a solution can immediately kill the possibility of solving your problem. Just like when you start a business , you need to do the research into what the problem you’re solving actually is. Luckily, you can embed research into your problem solving by holding active reviews of financial performance and team processes. Simply asking “What? Where? When? How?” can lead to more in-depth explorations of potential issues.

The best thing you can do to grow your research abilities is to encourage and practice curiosity. Look at every problem as an opportunity. Something that may be trouble now, but is worth exploring and finding the right solution. You’ll pick up best practices, useful tools and fine-tune your own research process the more you’re willing to explore.

Brainstorming

Creatively brainstorming with your team is somewhat of an art form. There needs to be a willingness to throw everything at the wall and act as if nothing is a bad idea at the start. This style of collaboration encourages participation without fear of rejection. It also helps outline potential solutions outside of your current scope, that you can refine and turn into realistic action.

Work on breaking down problems and try to give everyone in the room a voice. The more input you allow, the greater potential you have for finding the best solution.

Decisiveness

One thing that can drag out acting upon a potential solution, is being indecisive. If you aren’t willing to state when the final cutoff for deliberation is, you simply won’t take steps quickly enough. This is when having a process for problem solving comes in handy, as it purposefully outlines when you should start taking action.

Work on choosing decision-makers, identify necessary results and be prepared to analyze and adjust if necessary. You don’t have to get it right every time, but taking action at the right time, even if it fails, is almost more vital than never taking a step.  

Stemming off failure, you need to learn to be resilient. Again, no one gets it perfect every single time. There are so many factors in play to consider and sometimes even the most well-thought-out solution doesn’t stick. Instead of being down on yourself or your team, look to separate yourself from the problem and continue to think of it as a puzzle worth solving. Every failure is a learning opportunity and it only helps you further refine and eliminate issues in your strategy.

Problem solving is a process

The key to effective problem-solving in business is the ability to adapt. You can waste a lot of resources on staying the wrong course for too long. So make a plan to reduce your risk now. Think about what you’d do if you were faced with a problem large enough to sink your business. Be as proactive as you can.

Editor’s note: This article was originally published in 2016. It was updated in 2021.

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Harriet Genever

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Effective Problem-Solving Techniques in Business

January 20, 2023

Purdue Online

Problem solving is an increasingly important soft skill for those in business. The Future of Jobs Survey by the World Economic Forum drives this point home. According to this report, complex problem solving is identified as one of the top 15 skills that will be sought by employers in 2025, along with other soft skills such as analytical thinking, creativity and leadership.

Dr. Amy David , clinical associate professor of management for supply chain and operations management, spoke about business problem-solving methods and how the Purdue University Online MBA program prepares students to be business decision-makers.

Why Are Problem-Solving Skills Essential in Leadership Roles?

Every business will face challenges at some point. Those that are successful will have people in place who can identify and solve problems before the damage is done.

“The business world is constantly changing, and companies need to be able to adapt well in order to produce good results and meet the needs of their customers,” David says. “They also need to keep in mind the triple bottom line of ‘people, profit and planet.’ And these priorities are constantly evolving.”

To that end, David says people in management or leadership need to be able to handle new situations, something that may be outside the scope of their everyday work.

“The name of the game these days is change—and the speed of change—and that means solving new problems on a daily basis,” she says.

The pace of information and technology has also empowered the customer in a new way that provides challenges—or opportunities—for businesses to respond.

“Our customers have a lot more information and a lot more power,” she says. “If you think about somebody having an unhappy experience and tweeting about it, that’s very different from maybe 15 years ago. Back then, if you had a bad experience with a product, you might grumble about it to one or two people.”

David says that this reality changes how quickly organizations need to react and respond to their customers. And taking prompt and decisive action requires solid problem-solving skills.

What Are Some of the Most Effective Problem-Solving Methods?

David says there are a few things to consider when encountering a challenge in business.

“When faced with a problem, are we talking about something that is broad and affects a lot of people? Or is it something that affects a select few? Depending on the issue and situation, you’ll need to use different types of problem-solving strategies,” she says.

Using Techniques

There are a number of techniques that businesses use to problem solve. These can include:

• Five Whys : This approach is helpful when the problem at hand is clear but the underlying causes are less so. By asking “Why?” five times, the final answer should get at the potential root of the problem and perhaps yield a solution.
• Gap Analysis : Companies use gap analyses to compare current performance with expected or desired performance, which will help a company determine how to use its resources differently or adjust expectations.
• Gemba Walk : The name, which is derived from a Japanese word meaning “the real place,” refers to a commonly used technique that allows managers to see what works (and what doesn’t) from the ground up. This is an opportunity for managers to focus on the fundamental elements of the process, identify where the value stream is and determine areas that could use improvement.
• Porter’s Five Forces : Developed by Harvard Business School professor Michael E. Porter, applying the Five Forces is a way for companies to identify competitors for their business or services, and determine how the organization can adjust to stay ahead of the game.
• Six Thinking Hats : In his book of the same name, Dr. Edward de Bono details this method that encourages parallel thinking and attempting to solve a problem by trying on different “thinking hats.” Each color hat signifies a different approach that can be utilized in the problem-solving process, ranging from logic to feelings to creativity and beyond. This method allows organizations to view problems from different angles and perspectives.
• SWOT Analysis : This common strategic planning and management tool helps businesses identify strengths, weaknesses, opportunities and threats (SWOT).

“We have a lot of these different tools,” David says. “Which one to use when is going to be dependent on the problem itself, the level of the stakeholders, the number of different stakeholder groups and so on.”

Each of the techniques outlined above uses the same core steps of problem solving:

• Identify and define the problem
• Consider possible solutions
• Evaluate options
• Choose the best solution
• Implement the solution
• Evaluate the outcome

Data drives a lot of daily decisions in business and beyond. Analytics have also been deployed to problem solve.

“We have specific classes around storytelling with data and how you convince your audience to understand what the data is,” David says. “Your audience has to trust the data, and only then can you use it for real decision-making.”

Data can be a powerful tool for identifying larger trends and making informed decisions when it’s clearly understood and communicated. It’s also vital for performance monitoring and optimization.

How Is Problem Solving Prioritized in Purdue’s Online MBA?

The courses in the Purdue Online MBA program teach problem-solving methods to students, keeping them up to date with the latest techniques and allowing them to apply their knowledge to business-related scenarios.

“I can give you a model or a tool, but most of the time, a real-world situation is going to be a lot messier and more valuable than what we’ve seen in a textbook,” David says. “Asking students to take what they know and apply it to a case where there’s not one single correct answer is a big part of the learning experience.”

Make Your Own Decision to Further Your Career

An online MBA from Purdue University can help advance your career by teaching you problem-solving skills, decision-making strategies and more. Reach out today to learn more about earning an online MBA with Purdue University .

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More From Forbes

How to identify and solve problems in your business.

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James Webster, Executive Chairman, ROK Financial .

Whether mild or severe, problems occur in businesses all the time. From declining sales to product quality issues to employee challenges, every business faces a unique set of obstacles.

It’s important to take a look at your business and identify the potential problems that could be hurting the bottom line.

How Effective Problem Solving Can Boost Your Business

This is always the most obvious benefit. By optimizing your business process, you’ll be able to offer more quality and quantity in every area, resulting in more goods, services and overall value for your customers.

Competitive Advantage

Effective problem solving can quickly become a competitive edge. Particularly when you improve your products and services based on your market space. Having the ability to quickly determine what may need fixing in your business (or even issues you’re experiencing in your industry) can give your business competitive advantage in the market.

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Say, for instance, you and your competitors purchase supplies from the same distributor, but there have been delays in your orders. Finding other distributors that have shorter production cycles would allow you to sell your goods and services faster than your competitors.

Customer Satisfaction

Addressing customer issues directly is essential to the satisfaction of your patrons allowing you to foster customer loyalty. These positive relationships are needed for long-term growth.

How To Identify Problems To Solve In Your Business

Gather data and information.

You should be collecting relevant data for every aspect of your business cycle. Everything from business performance and customer feedback to financial reports and market trends. In fact, each separate department should have its own KPIs, which are core metrics that reflect performance.

It’s also important to solicit feedback—both positive and negative—from your customers. Doing so gives you a direct pulse on your business. It’s not only important to ask for feedback, it’s even more important to respond to it. Make sure you are commenting back on your customer reviews on review websites, trying to reach out to clients to rectify any issues and thanking them for leaving their feedback.

Analyze Patterns And Trends

Examine your collected data for patterns and recurring themes. Identifying common issues helps pinpoint problem areas that require attention.

Conduct A SWOT Analysis

Perform a SWOT (strengths, weaknesses, opportunities, threats) analysis to learn more about your internal and external factors. Depending on the complexity of your business, you may consider performing multiple SWOT analyses for each of your departments.

We construct a SWOT analysis on a yearly basis during our executive retreats. This allows the leadership team to come together and truly look at the business as a whole to identify areas of needed focus and highlight areas of success. This exercise usually sparks additional ideas from the team, and we’re able to come up with new initiatives for the upcoming year.

Use The ‘Five Whys’ Method

One of our favorite techniques here at ROK is the simple yet effective “Five Whys” method. It involves gathering a team and repeatedly asking “why” (typically five times) to uncover the root cause of a problem.

We love this method because it’s simple. Making your problem solving too complex can make it difficult to gather input from your staff or patrons.

Next Steps Once You’ve Identified Your Problems

Determine where you want your business to go.

Having a clear vision of the best possible business cycle for your company is always the first step in problem solving. This lets you make the best decisions for long-term and short-term growth based on what’s happening in the present.

Prioritize And Plan

Not all problems are created equal. In fact, some issues aren’t worth being solved at all.

That’s where your instincts need to jump in. It’s important to prepare your list of tasks you need to accomplish and prioritize them in order of importance.

Once your task list is set in place, you can begin planning how you will execute the list. One thing every successful leader does is delegate. This may be hard to do at first, but you’ll never get up that mountain alone. Delegating some of your tasks can help you cross items off your list and allow you to focus on big-picture ideas.

Empower Your Team To Solve Problems

Similarly, put a team in place that can assist with decision making. Setting your team up for success and giving them power to make decisions on the fly, or long term, can help solve problems quickly in your business. To solve problems efficiently, you’ll need to let go of the reins a bit.

Prepare To Pivot, If Needed

Being agile in business is the key to success. Things will be thrown your way you did not prepare for or oftentimes didn’t anticipate encountering. It’s important that you and your team are able to pivot and change with the times.

For example, when Covid hit, many businesses failed because they were unable to adapt to the new normal. Did your brick-and-mortar business turn digital overnight, or were you unable to make the necessary changes to provide your goods and services to your clients? Having the ability to make changes when necessary allows your business to adapt quickly to ever-changing environments.

Measure Your Progress

All the data and metrics in the world mean nothing if you don’t use them. It’s imperative that you are constantly looking at your progress and that data. Something my team and I have done at our weekly meetings is to do a quick check-in on our KPIs. This is done regularly to ensure we’re meeting our targets and to quickly identify areas that may need to be improved throughout the sales cycle instead at the end of the month or quarter.

Looking at your numbers regularly gives you a true pulse on your business, and allows you to make better educated decisions. Do you need to increase leads or sales? Are you seeing customers fall off at a certain point? These are questions that can be answered quickly if you are constantly looking at your metrics.

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What is problem solving and why is it important

By Wayne Stottler , Kepner-Tregoe

• Problem Solving & Decision Making Over time, developing and refining problem solving skills provides the ability to solve increasingly complex problems Learn More

For over 60 years, Kepner-Tregoe has been helping companies across industries and geographies to develop and mature their problem-solving capabilities through KT’s industry leading approach to training and the implementation of best practice processes. Considering that problem solving is a part of almost every person’s daily life (both at home and in the workplace), it is surprising how often we are asked to explain what problem solving is and why it is important.

Problem solving is at the core of human evolution. It is the methods we use to understand what is happening in our environment, identify things we want to change and then figure out the things that need to be done to create the desired outcome. Problem solving is the source of all new inventions, social and cultural evolution, and the basis for market based economies. It is the basis for continuous improvement, communication and learning.

If this problem-solving thing is so important to daily life, what is it?

Problem-solving is the process of observing what is going on in your environment; identifying things that could be changed or improved; diagnosing why the current state is the way it is and the factors and forces that influence it; developing approaches and alternatives to influence change; making decisions about which alternative to select; taking action to implement the changes; and observing impact of those actions in the environment.

Each step in the problem-solving process employs skills and methods that contribute to the overall effectiveness of influencing change and determine the level of problem complexity that can be addressed. Humans learn how to solve simple problems from a very early age (learning to eat, make coordinated movements and communicate) – and as a person goes through life problem-solving skills are refined, matured and become more sophisticated (enabling them to solve more difficult problems).

Problem-solving is important both to individuals and organizations because it enables us to exert control over our environment.

Fixing things that are broken

Some things wear out and break over time, others are flawed from day-1. Personal and business environments are full of things, activities, interactions and processes that are broken or not operating in the way they are desired to work. Problem-solving gives us a mechanism for identifying these things, figuring out why they are broken and determining a course of action to fix them.

Addressing risk

Humans have learned to identify trends and developed an awareness of cause-and-effect relationships in their environment. These skills not only enable us to fix things when they break but also anticipate what may happen in the future (based on past-experience and current events). Problem-solving can be applied to the anticipated future events and used to enable action in the present to influence the likelihood of the event occurring and/or alter the impact if the event does occur.

Improving performance

Individuals and organizations do not exist in isolation in the environment. There is a complex and ever-changing web of relationships that exist and as a result, the actions of one person will often have either a direct impact on others or an indirect impact by changing the environment dynamics. These interdependencies enable humans to work together to solve more complex problems but they also create a force that requires everyone to continuously improve performance to adapt to improvements by others. Problem-solving helps us understand relationships and implement the changes and improvements needed to compete and survive in a continually changing environment.

Seizing opportunity

Problem solving isn’t just about responding to (and fixing) the environment that exists today. It is also about innovating, creating new things and changing the environment to be more desirable. Problem-solving enables us to identify and exploit opportunities in the environment and exert (some level of) control over the future.

Problem solving skills and the problem-solving process are a critical part of daily life both as individuals and organizations. Developing and refining these skills through training, practice and learning can provide the ability to solve problems more effectively and over time address problems with a greater degree of complexity and difficulty. View KT’s Problem Solving workshop known to be the gold standard for over 60 years.

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Why problem-solving Is Important in Business

Problem-solving is a critical skill in business.

It involves the ability to identify and solve problems efficiently and effectively to move a company forward.

Whether it’s resolving a technical issue, finding a new solution to an age-old problem, or simply making a difficult decision, strong problem-solving skills are essential for the success of any business.

In this blog post, we’ll explore why problem-solving is so important in the business world and how it can help organizations thrive.

The Importance of Problem-Solving in Business

As mentioned in the introduction, problem-solving is a crucial skill in the business world. It allows organizations to identify and address challenges in a timely and effective manner, which is essential for driving progress and growth.

Without strong problem-solving abilities, businesses may struggle to adapt to change and overcome obstacles, ultimately hindering their success.

But the importance of problem-solving goes beyond just overcoming challenges.

It can also help businesses to identify and seize new opportunities, allowing them to stay ahead of the competition and remain innovative.

Whether it’s finding a new market to tap into or developing a more efficient production process, problem-solving skills are key to driving innovation and staying ahead of the curve.

In short, strong problem-solving skills are essential for businesses of all sizes and industries.

They help organizations to overcome challenges, stay adaptable, and identify and seize new opportunities.

In the following sections, we’ll delve deeper into the various ways that problem-solving can benefit businesses and the different techniques and strategies that can be used to tackle problems effectively.

Developing Problem-Solving Skills

Developing strong problem-solving skills is essential for the success of any business, and there are several ways that organizations can help their employees to hone these skills. Some strategies for developing problem-solving skills include:

Providing training and development opportunities

Many organizations offer training programs or workshops specifically designed to help employees develop problem-solving skills. These programs may include simulations, case studies, or hands-on exercises that allow employees to practice and apply their skills.

Encouraging a growth mindset

A growth mindset is a belief that abilities can be developed through effort and learning. By fostering a culture of continuous learning and encouraging employees to embrace challenges and failures as opportunities to grow and improve, businesses can help to develop problem-solving skills.

Encouraging collaboration and open communication

Collaboration and open communication can be key to solving problems effectively. By creating an environment where employees feel comfortable sharing ideas and seeking help, businesses can foster a culture of problem-solving and continuous improvement.

Providing resources and support

Organizations can also support the development of problem-solving skills by providing employees with the resources and support they need to tackle problems. This may include access to data and analytics tools, training materials, or guidance from experienced colleagues.

By implementing these strategies and providing opportunities for employees to practice and develop their problem-solving skills, businesses can build a strong problem-solving culture and equip their teams with the skills they need to drive success.

The Role of Leadership in Problem-Solving

Effective leadership is crucial for driving problem-solving within an organization. Leaders play a key role in setting the tone and culture of a business, and by fostering a culture of problem-solving and continuous improvement, they can help to develop strong problem-solving skills throughout the organization.

Some specific ways that leaders can support problem-solving within their organization include:

Modeling good problem-solving behavior

Leaders can set a good example by demonstrating strong problem-solving skills themselves. This can include taking a proactive approach to identifying and addressing challenges, seeking out new opportunities, and continuously learning and improving.

Encouraging a culture of continuous improvement

Leaders can create an environment that supports problem-solving by encouraging employees to embrace challenges, think creatively, and seek out new opportunities for improvement.

Leaders can also support problem-solving by providing employees with the resources and support they need to tackle problems effectively. This may include access to data and analytics tools, training materials, or guidance from experienced colleagues.

Recognizing and rewarding problem-solving efforts

By recognizing and rewarding employees who demonstrate strong problem-solving skills, leaders can encourage a culture of problem-solving and continuous improvement within the organization.

By taking an active role in fostering a problem-solving culture and providing the resources and support needed to tackle challenges, leaders can help their organizations to thrive and succeed.

The Benefits of Problem-Solving in Business

In addition to helping businesses to overcome challenges and seize opportunities, strong problem-solving skills can bring a range of other benefits to an organization. Some of the key advantages of problem-solving in business include:

Improved decision-making

Problem-solving skills help organizations to make informed and effective decisions. By using structured approaches and analyzing data, businesses can develop a clear understanding of the issues they face and identify the best course of action.

Enhanced adaptability

Problem-solving skills help businesses to stay adaptable and responsive to change. By being able to identify and address challenges quickly and effectively, organizations can better navigate the constantly-evolving business landscape.

Increased productivity

By resolving issues and identifying efficiencies, problem-solving can help businesses to increase productivity and reduce waste. This can lead to cost savings and improved profitability.

Improved customer satisfaction

Strong problem-solving skills can also help businesses to better serve their customers. By being able to identify and address issues promptly and effectively, organizations can improve customer satisfaction and build stronger relationships with their clients.

Enhanced innovation

Problem-solving skills can also drive innovation within an organization. By encouraging employees to think creatively and critically , businesses can identify and seize new opportunities, leading to new products, services, or processes that set them apart from the competition.

Problem-solving is a critical skill in business, with the potential to drive progress, increase productivity, improve customer satisfaction, and drive innovation. By developing strong problem-solving skills and fostering a culture of continuous improvement, organizations can set themselves up for success.

Conclusion: The Vital Role of Problem-Solving in Business

Problem-solving is a vital skill in the business world. It allows organizations to identify and address challenges efficiently and effectively, helping them to overcome obstacles and seize new opportunities.

Strong problem-solving skills also drive innovation and improve decision-making, leading to increased productivity and customer satisfaction.

Developing and fostering a culture of problem-solving is essential for the success of any business.

By providing training and development opportunities, encouraging a growth mindset, and recognizing and rewarding problem-solving efforts, organizations can help their employees to hone their skills and drive progress.

Effective leadership also plays a key role in fostering a culture of problem-solving, providing the resources and support needed to tackle challenges and seize opportunities.

In short, problem-solving is a critical skill for businesses of all sizes and industries. By developing and fostering strong problem-solving abilities, organizations can set themselves up for success and thrive in today’s fast-paced business environment.

Are you good at problem-solving? Find out with our self-assessment!

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Problem-Solving in Business: PROBLEM-SOLVING DEFINED AND WHY IT IS IMPORTANT

• ABOUT THIS LIBGUIDE
• PROBLEM-SOLVING DEFINED AND WHY IT IS IMPORTANT
• SKILLS AND QUALIFICATIONS NEEDED IN PROBLEM-SOLVING
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Why are problem solving skills in the workplace so important? Subskills, benefits, scenarios

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The importance of problem-solving skills in the workplace can’t be overstated. Every business and job role has its problems. From entry-level hires to senior staffers, every one of your employees will face challenges that don’t can’t be answered by doing a quick Google search – or asking ChatGPT to come up with solutions.

That’s why employers must hire people with excellent problem-solving skills, especially for roles that require dealing with complex business challenges, tight deadlines, and changing variables – for example, when recruiting leaders .

But what are problem-solving skills? What role do they play in the workplace? 

And, most importantly, how can you evaluate candidates’ skills before you hire them?

Table of contents

What are problem solving skills, the benefits of problem solving skills: why are problem solving skills important , examples of problems at the workplace – and how problem solving skills can help, how to assess problem solving skills, evaluate problem solving skills and hire candidates who can think for themselves.

To fully understand the importance of problem-solving skills in the workplace, it’s important first to understand the broad skill set that we commonly refer to as “problem solving skills”. 

Generally, problem-solving refers to a person’s ability to successfully manage and find solutions for complex and unexpected situations. 

Candidates with great problem-solving skills have a combination of analytical and creative thinking. They’re comfortable with making decisions and confident enough to rise to challenges in the workplace.

These candidates possess a combination of analytical, creative, and critical-thinking skills – and a high level of attention to detail . As a result, they will quickly identify problems when they arise and identify the most effective solutions. 

They’ll also identify the factors and forces that might have caused the problem and instigate changes to mitigate future challenges.

There are six key problem-solving skills that you should look for when assessing job candidates: 

1. Listening skills

Active listeners are generally great problem solvers. 

They can listen to those around them to gather the information needed to solve the problem at hand. They also recognize the importance of valuing others’ opinions and experiences to help understand why the problem occurred and define the best course of action to remedy it. 

2. Analytical thinking skills 

Analytical thinkers can identify the logical reasons why a problem occurred, what the long-term effects of the issue could be, and identify how effective different solutions might be to select the most practical one. 

That’s why it’s essential to assess analytical thinking skills during recruitment.

3. Creative thinking skills

Creative thinkers can balance their analytical skills with creative approaches to challenges. Creative thinking skills enable individuals to uncover innovative and progressive solutions to problems. 

In this way, they’re able to provide new perspectives and provide imaginative and experimental solutions to all kinds of problems. 

4. Communication skills 

Problem solvers should also possess great communication skills . The ability to effectively relay complex information thoroughly yet succinctly is a huge benefit for employers working in fast-paced environments. 

5. Decision-making skills 

Those with problem-solving skills will also possess the ability to make decisions and be confident in them. This is important, because most problem-solving involves making firm decisions to reach a successful outcome. 

6. Teamwork

Although problem-solvers need to be independent thinkers, it’s also vital for them to work well as part of a team . 

Determining the best solution often requires collaboration, so it’s important that candidates can demonstrate how they can motivate others to come up with the best solutions and work with them to help develop and implement solutions. 

Problem-solving skills enable you to find candidates who are cognitively equipped to handle anything their jobs throw at them.

Problem solvers can observe, judge, and act quickly when difficulties arise when they inevitably do. Moreover, they are not afraid of the unknown, which is invaluable to employers who rely on their employees to identify and solve problems. 

There are several important benefits of problem-solving skills in the workplace. Below, we’ll go through five of the most significant ones that all problem solvers can bring to their roles and workplaces: 

1. Ability to organize their time intelligently 

Time management skills can often be underlooked as one of the benefits of problem-solving skills in the workplace. 

However, those with problem-solving abilities also typically possess stellar time-management skills. The ability to manage their time wisely and laser-focus on what’s important to the business will lead to better decision-making and business impact. 

2. Ability to prioritize, plan, and execute strategies

Problem solvers have no issue with carefully assessing customer and business needs and deciding how to prioritize, plan, and execute strategies to meet them. They can manage all moving parts and strategize to meet multiple unique demands.

3. Ability to think outside the box

Problem solvers can often identify hidden opportunities in problems. Thinking outside of the box is an important problem-solving skill in the workplace, because it can often lead to better outcomes than the originally expected ones. 

4. Ability to work under pressure

This is often one of the most important benefits of problem-solving skills in the workplace. Problem solvers often work well under pressure, for example when dealing with short deadlines and changing project requirements.

Depending on your workplace culture, you might prefer someone who can deliver quick solutions or someone who takes their time to identify the next steps. Both are valid and important problem solving qualities. 

5. Ability to address risk

Planning is an important problem-solving skill. Problem solvers are not just equipped to deal with the problem at hand but are also able to anticipate problems that will arise in the future based on trends, patterns, experience, and current events.

Let’s now look at some specific examples of problems that could arise at the workplace – at any workplace, really – and how employees’ problem solving skills can help address each issue. 

Below, you’ll find five typical scenarios where problem solving skills are essential.

Conflict between team members

Poor team dynamics or lack of a collaborative spirit might result in frequent workplace conflicts – especially within larger teams.

For example, members of cross-functional teams might disagree on the way they should address a particular issue or even on the priority they should give to it. 

How problem solving skills can help: 

Teamwork is essential when solving conflict – and a cornerstone of effective cross-functional team leadership .

For this, coworkers need to share a common understanding of the team’s goals and also be willing to work towards achieving them, even when they disagree on the specific approaches to each goal.  The ability to understand others’ perspectives, analyze information critically, and come up with a few different solutions is key to finding a common ground and making progress on the team’s objectives.

Inefficient processes

Outdated, inefficient processes can reduce productivity and frustrate employees.

Multi-step approval processes are a typical example of this. Having multiple layers of approval for routine decisions can significantly slow down team progress and lead to missed opportunities.

Analytical thinking skills are key in identifying inefficiencies and building better procedures. Employees or team leads can build flowcharts that speed up decision making without having to ask a supervisor’s permission at every step of the process. 

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Poor communication can lead to misunderstandings and lack of clarity and direction – which, in turn, can be detrimental to team performance. 

For example, if you’re a remote-first company, maintaining clear and effective remote communication can be challenging. 

The over-reliance on emails and messaging apps might make it feel like teams are communicating effectively and are always connected. However, the lack of non-verbal cues and face-to-face interactions might make it more difficult to build rapport and a positive workplace culture .

Listening skills are essential to solving communication issues – and good listeners are often excellent at solving problems by recognizing, understanding, and acknowledging others’ points of view. 

One-on-one meetings enable people to communicate more freely and effectively and solve challenges together, so consider encouraging team members to hop on a call each time they encounter a difficult challenge.

Additionally, you can help employees bond with each other with some remote team building activities to improve team cohesion. Plus, problem solving challenges can be excellent team building exercises.

Technological disruptions 

New technologies often disrupt the usual ways of doing things – and sometimes, this can be disruptive for entire teams’ work. 

For example, generative AI and automation technologies have revolutionized numerous types of work, including data analysis, marketing, customer service, and even content creation.

Creative thinking and cognitive flexibility are among the top 10 most important skills of the future , according to the World Economic Forum. Both are essential for adopting new technologies successfully – and finding ways to make the most out of each new tool to improve productivity. 

Insufficient onboarding resources 

Team members may struggle to do their best work if they haven't received proper training or resources.

For example, start-ups that experience rapid growth might hire a few employees at once – or even entire teams. 

If they fail to allocate sufficient time and resources to onboarding new hires, this might lead to lost productivity, a lacking sense of belonging, or increased turnover. That’s true not only for junior employees but also for newly hired senior leaders , as the Harvard Business Review points out.

Your leadership team’s analytical and decision-making skills are crucial in enabling them to distribute limited resources in a way that would give their teams the best chances of success. 

To build a solid onboarding process , you need leaders who are able to take ownership of it – and who have the right problem-solving skills.

Many organizations use problem-solving interview questions to identify the right candidates for their job openings. However, the most effective way to assess problem-solving skills is with pre-employment skills assessments . 

That’s because skills tests provide an objective way to quantify a candidate’s problem-solving skills in a way that isn’t possible during an interview.

How problem solving skills tests work

Tests like TestGorilla’s problem-solving skills test assist organizations in finding candidates who are able to quickly identify the key elements of the problem and work through the problem at speed without making mistakes. 

By presenting candidates with a wide range of questions related to typical problem-solving scenarios, hiring teams can rank their candidates based on an intensive assessment of each candidate’s skill level.

The test specifically evaluates whether a candidate can perform problem-solving tasks like:

Creating and adjust schedules

Prioritizing items based on a given set of rules

Interpreting data and applying logic to make decisions

Analyzing textual and numerical information to draw conclusions

As you can see, even the best interviewer would have trouble assessing each of these skill areas while still covering all the other questions that they need to ask. 

If you’re convinced of the importance of problem-solving skills in the workplace and want to build a team of employees that can think independently and solve their own problems without constant supervision, assess problem-solving skills during the hiring process. 

Problem-solving skills tests like ours are an excellent way to achieve this – especially if you combine them with other skills tests. Check out our extensive test library for other tests you can use in your talent assessment process to hire the best talent. 

Sign up for our free plan to start building your first assessment – or schedule a demo with one of our experts to see how to evaluate applicants’ problem solving skills quickly, efficiently, and without bias. 

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The Importance of Problem Solving When Building a Business When you run up against an obstacle that seems insurmountable, the best thing to do is shift your perspective and try to look at it another way

By Jude Regev • Apr 30, 2019

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Something many successful entrepreneurs know is that you don't have to have an earth-shattering, game-changing idea to start a business. You just have to identify a problem and find a way to solve it. Sure, the thought of achieving overnight success with a billion-dollar idea is alluring, but the fact is that most of the successful business owners out there got to where they are by simply being good problem solvers along the way.

For anyone seeking a career change or considering starting a business and wondering how to approach it, some of the most important skills to brush up on are going to be your problem-solving skills. Here are some problem-solving approaches that could help aspiring entrepreneurs tackle the challenges that inevitably spring up along their way.

Take the Success Mindset

Approach each problem with a success mindset, which requires a specific set of skills and steps to problem-solving. The success mindset entails seeking out innovative ways to solve a problem by looking beyond what's already established, and never simply accepting that "this is the way it has to be done."

Once you begin to explore problems in this way, revolutionary solutions can appear that can disrupt and change systems for the better.

Change Your Perspective

Sometimes, when you run up against an obstacle that seems insurmountable, the best thing to do is shift your perspective and try to look at it another way. Turning a problem around and examining it from different angles can help you understand new possibilities.

This approach can help you in all kinds of situations, from the personal to the professional.

Keep it Going

Problem-solving is iterative. Trust me, you'll get a lot of practice using your problem-solving skills as you go through the process of building your business. You can have a plan, but issues will always crop up along the way, and you'll need to keep a clear head and app

Problems always emerge in new business models—those who are successful do not stop at their first iteration and are always looking beyond what's currently available in the marketplace of ideas. Sometimes the best way to tackle a problem is to create your own solution.

It may seem like an obvious point, but problem-solving is actually going to become the core of your business building strategy. Problem-solving is literally about creating value. That value will be the solution you offer your clients, as well as the solutions you create for yourself. The more value you create, the more your business will grow.

Founder-CEO, Jointer and Element Zero Network

Jude's talent for developing effective digital ideas and big data solutions have resulted in successfully growing five companies and three successful exits. Jointer.io, powered by artificial intelligence and blockchain technology, is designed to help investors and property owners increase their returns, minimize risks, and improve liquidity in the commercial real estate industry. Element Zero is a not-for-profit organization that has developed a turnkey stablecoin platform that provides the ability for organizations and governments to launch stablecoins benefiting from the Element Zero Network’s stablecoin 2.0 methodology. Element Zero platform’s model is built to make the world a better place for all by protecting against long-term inflation and eliminating the possibility for any volatility.

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Are You Solving the Right Problem?

• Dwayne Spradlin

Most firms aren’t, and that undermines their innovation efforts.

Reprint: R1209F

The rigor with which a problem is defined is the most important factor in finding a good solution. Many organizations, however, are not proficient at articulating their problems and identifying which ones are crucial to their strategies.

They may even be trying to solve the wrong problems—missing opportunities and wasting resources in the process. The key is to ask the right questions.

The author describes a process that his firm, InnoCentive, has used to help clients define and articulate business, technical, social, and policy challenges and then present them to an online community of more than 250,000 solvers. The four-step process consists of asking a series of questions and using the answers to create a problem statement that will elicit novel ideas from an array of experts.

• Establish the need for a solution. What is the basic need? Who will benefit from a solution?
• Justify the need. Why should your organization attempt to solve this problem? Is it aligned with your strategy? If a solution is found, who will implement it?
• Contextualize the problem. What have you and others already tried? Are there internal and external constraints to implementing a solution?
• Write the problem statement. What requirements must a solution meet? What language should you use to describe the problem? How will you evaluate solutions and measure success?

EnterpriseWorks/VITA, a nonprofit organization, used this process to find a low-cost, lightweight, and convenient product that expands access to clean drinking water in the developing world.

“If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it,” Albert Einstein said.

• DS Dwayne Spradlin is the president and CEO of InnoCentive , an online marketplace that connects organizations with freelance problem solvers in a multitude of fields. He is a coauthor, with Alpheus Bingham, of The Open Innovation Marketplace: Creating Value in the Challenge Driven Enterprise (FT Press, 2011).

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16 Types of Customer Needs (and How to Solve for Them)

Published: March 24, 2023

Companies want to stay relevant and innovative and often look at other successful companies, hot industry trends, or new shiny products for inspiration.

However, a vital component to growth is at every business's fingertips — it's customers. Honing in on customer needs can improve the longevity and progress of your business. Happy customers result in higher retention rates, lifetime value, and brand reach as they spread the word in their social circles.

The first step toward creating the types of customer experiences that result in happy customers is by understanding and meeting customer needs.

In this article, you'll learn:

• The Definition of Customer Needs
• The Types of Customer Needs

How to Identify Customer Needs

• What a Customer Needs Analysis Is
• How to Solve for Your Customers' Needs

Types of Customer Service

What are customer needs.

A customer need is a motive that prompts a customer to buy a product or service. Ultimately, the need is the driver of the customer's purchase decision. Companies often look at the customer need as an opportunity to resolve or contribute surplus value back to the original motive.

An example of customer need takes place every day around 12:00 p.m. This is when people begin to experience hunger (need) and decide to purchase lunch. The type of food, the location of the restaurant, and the amount of time the service will take are all factors to how individuals decide to satisfy the need.

Customer-centric companies know that solving for customer needs and exceeding expectations along the way is how to drive healthy business growth and foster good relationships with the people your company serves.

Although customer centricity is not a new concept, the right steps to achieve a customer service focus are still hazy.

Why are customer needs important?

Anticipating customer needs will help you cater to customers before they feel the need to put in a request for a new feature, product, or solution for you. If companies can begin to make changes before their customers' needs aren't fulfilled, this can ultimately lead to growth, innovation, and retention.

Creating a customer-centric company that truly listens to customer needs can be daunting, and there's a steep learning curve if you haven't paid close attention to customers before.

Below are the most common types of customer needs — most of which work in tandem with one another to drive a purchasing decision.

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Fill out the form to better understand your customer needs., 16 most common types of customer needs.

The types of product needs can be split into two categories: product and service.

Product Needs

1. functionality.

Customers need your product or service to function the way they need in order to solve their problem or desire.

Customers have unique budgets with which they can purchase a product or service.

3. Convenience

Your product or service needs to be a convenient solution to the function your customers are trying to meet.

4. Experience

The experience using your product or service needs to be easy — or at least clear — so as not to create more work for your customers.

Along the lines of experience, the product or service needs a slick design to make it relatively easy and intuitive to use.

6. Reliability

The product or service needs to reliably function as advertised every time the customer wants to use it.

7. Performance

The product or service needs to perform correctly so the customer can achieve their goals.

8. Efficiency

The product or service needs to be efficient for the customer by streamlining an otherwise time-consuming process.

9. Compatibility

The product or service needs to be compatible with other products your customer is already using.

Service Needs

10. empathy.

When your customers get in touch with customer service, they want empathy and understanding from the people assisting them.

11. Fairness

From pricing to terms of service to contract length, customers expect fairness from a company.

12. Transparency

Customers expect transparency from a company they're doing business with. Service outages, pricing changes, and things breaking happen, and customers deserve openness from the businesses they give money to.

13. Control

Customers need to feel like they're in control of the business interaction from start to finish and beyond, and customer empowerment shouldn't end with the sale. Make it easy for them to return products, change subscriptions, adjust terms, etc.

14. Options

Customers need options when they're getting ready to make a purchase from a company. Offer a variety of product, subscription, and payment options to provide that freedom of choice.

15. Information

Customers need information, from the moment they start interacting with your brand to days and months after making a purchase. Businesses should invest in educational blog content, instructional knowledge base content, and regular communication so customers have the information they need to successfully use a product or service.

16. Accessibility

Customers need to be able to access your service and support teams. This means providing multiple channels for customer service. We'll talk a little more about these options later.

With so many types of customer needs, how do you understand which ones apply to your customers specifically? Next, we'll dig into how to identify them.

• Use Existing Data
• Solicit Customer Feedback
• Customer Journey Mapping
• Input from Service Team
• Study Competitors
• Social Media Listening
• Keyword Research

"You've got to start with the customer experience and work backwards to the technology," Steve Jobs notably stated . "You cannot start with the technology and try to figure out where you are going to sell it."

Whether you sell technology or some other product or service, the underlying message he's saying here rings true.

This means understanding where they're coming from when they've chosen to make a purchase, what expectations they're bringing to the table, and what bumps they'll encounter along the way.

Identifying Customer Needs

You can gain more knowledge about what your customers want using a few different strategies.

1. Use Existing Data

Most likely you have some customer data already, especially if you’re using a CRM. This is the best place to start your search. Are there pain points or issues you can glean from just looking at this customer data? Are there any patterns you can identify? Taking note of who your current customers are and their past interactions with your brand to get a better idea of where customers are coming from and if you’re meeting their needs.

2. Solicit Customer Feedback

When trying to identify consumer needs, go straight to the source. This can be done using surveys that live on your site, or sent via email. Additionally you could conduct focus groups to gain more in depth insight to customer needs and their overall experience with your product or service.

3. Customer Journey Mapping

To better understand and assist customers, you’ll need to first know what phase of the customer journey they are in and what they’re looking for. This is where customer journey mapping can help, giving a visual representation of how customers interact with your brand. This exercise will help you create a more proactive customer service approach and improve retention.

Featured Resource: Customer Journey Map Templates

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4. Input from Service Team

In addition to getting customer feedback, it’s important to consult those who work with them most — your service team. They’ll often have insights you may not be privy to and can help you anticipate the needs of your customers as well as solve existing issues. They’ll also be able to explain how customers are currently using your product or service and can identify any hiccups in the process.

5. Study Competitors

It’s common to study competitors when conducting market research, but you should also consider them when identifying customer needs. There might be overlap in your target audience, meaning your brand could benefit from reviewing any issues competitors are experiencing and gain insight on how they went about fixing it. You might find that some of their strategies would be worth implementing at your company, or discover gaps in service that your company can fill.

10 Free Competitive Analysis Templates

Track and analyze your competitors with these ten free planning templates.

• SWOT Analysis
• Battle Cards
• Feature Comparison
• Strategic Overview

6. Use Social Media

Chances are, your customers use a variety of social media platforms in their day to day. Take advantage of that by using it as a way to listen in on what customers are saying about your products and your competitors. Are people asking questions under your posts? What sorts of comments are they making? Are they giving praise, asking for assistance, or do they want new features? Using a social media monitoring tool like Hootsuite will help you identify trends, mentions, and hashtags relevant to your brand to better inform your strategy.

7. Keyword Research

People turn to the internet for most things, so Google is an excellent resource for figuring out customer needs. How are customers finding your brand online and what are they typing into the search box to find it? Doing keyword research can give you a broad overview of what your customers need based on search data. Keyword research will also help you optimize your site for search engines by aligning the content of your site with what customers are searching for.

If you design your process with these things in mind, you'll be able to uncover consumer needs at any stage of their lifecycle. You can take a deeper dive into their needs by conducting a customer needs analysis.

What is a customer needs analysis?

A customer needs analysis is used in product development and branding to provide an in-depth analysis of the customer to ensure that the product or message offers the benefits, attributes, and features needed to provide the customer with value.

To conduct a customer needs analysis successfully, you need to do the following:

1. Customer Needs Analysis Survey

The customer needs analysis is typically conducted by running surveys that help companies figure out their position in their respective competitive markets and how they stack up in terms of meeting their target customers' needs.

The survey should primarily ask questions about your brand and competitors, as well as customers' product awareness and brand attitudes in general.

Questions can include:

• Questions about positive and negative word associations with your brand
• Questions asking customers to group your brand in with similar and/or competing brands
• Questions comparing and sorting brands according to their preferences for usage

You can learn more about which questions to ask in this survey in our guide and this guide from dummies.

2. Means-End Analysis

Once you've conducted the customer needs analysis survey, you can use the answers to get a fuller picture of the reasons why your customers purchase from you, and what makes your product or service stand apart from your competitors.

A means-end analysis analyzes those answers to determine the primary reasons why a customer would buy your product. Those buyer reasons can be divided into three main groups:

1. Features: A customer buys a product or service because of the features included in the purchase. If the customer were buying a computer, for example, they might buy it because it's smaller and more lightweight than other options.

2. Benefits: A customer buys a product or service because of a benefit, real or perceived, they believe it will offer them. The customer might also buy the computer because it syncs easily with their other devices wirelessly.

3. Values: A customer buys a product or service for unique, individual values, real or perceived, they believe it will help them fulfill. The customer might think the computer will help them to be more creative or artistic and unlock other personal or professional artistic opportunities.

As you might imagine, these reasons for purchasing something can vary from customer to customer, so it's important to conduct these customer surveys, collect the answers, and group them into these three categories. From there, you can identify which of those motivating factors you're solving for, and which you can improve on to make your product or service even more competitive in the market.

3. Customer Feedback

If you want to know what your customers think about the experience of working with your company, ask them. Interviewing your customers and members of your service team can contribute to a customer needs analysis and improvements to your customer lifecycle .

As you gather data from your customer needs analysis, it's important to identify the points of friction that your customers experience and the moments in their journey that provide unexpected delight.

• What can your company change?
• What are the elements that you can build from?
• What parts of the experience needs to be worked on?

Asking these questions can lead you to valuable insights as you work to solve for your customers.

How to Solve for Customer Needs

The first step to solving for your customers is to put yourself in their shoes: If you were the customer when we purchase your goods, use your technology, or sign up for your services, what would prevent you from achieving ultimate value?

Your customer needs analysis is a good starting point for getting in the mind of your customer, especially when it comes to identifying common pain points. From there, you can build a proactive plan to implement your customer-first values throughout the customer lifecycle. Here are some tips for doing so:

1. Offer consistent company-wide messaging.

Too often customers get caught up in the "he said, she said" game of being told a product can do one thing from sales and another from support and product. Ultimately, customers become confused and are left with the perception that the company is disorganized.

Consistent internal communications across all departments is one of the best steps toward a customer-focused mindset. If the entire company understands its goals, values, product, and service capabilities, then the messages will easily translate to meet the customers’ needs.

To get everyone on the same page, organize sales and customer service meetings, send out new product emails, provide robust new employee onboarding, and require quarterly training and seminars or staff-hosted webinars to share important projects.

2. Provide instructions for easy adoption.

Customers purchase a product because they believe it will meet their needs and solve their problem. However, adoption setup stages are not always clear. If best practices aren't specified at the start and they don't see value right away, it's an uphill battle to gain back their trust and undo bad habits.

A well-thought-out post-purchase strategy will enable your products or services to be usable and useful.

One way companies gain their customers' attention is providing in-product and email walkthroughs and instructions as soon as the customer receives a payment confirmation. This limits the confusion, technical questions, and distractions from the immediate post-purchase euphoria.

A customer education guide or knowledge base is essential to deliver proper customer adoption and avoid the ‘floundering effect' when customers are stuck. Other companies provide new customer onboarding services, host live demos and webinars and include events and promotions in their email signatures .

3. Build feedback loops into every stage of the process.

Lean into customer complaints and suggestions, and it will change the way you operate your business. Criticism often has negative connotations. However, if you flip problems to opportunities you can easily improve your business to fit the customer's needs.

Just as you solicited customer feedback in your needs analysis, you can keep a pulse on how your customers feel at scale with customer satisfaction scores , customer surveys , exploration customer interviews, social media polls, or personal customer feedback emails.

If you're able to incorporate this into a repeatable process, you'll never be in the dark about the state of the customer experience in your organization, and you'll be enabled to continue improving it.

Take customer suggestions seriously and act on those recommendations to improve design, product, and system glitches. Most customer support success metrics are paramount to the customer experience and this mentality should trickle down to every aspect of the organization.

4. Nurture customer relationships.

When a customer buys a product or service, they want to use it right away and fulfill their immediate need. Whether they are delighted within the first hour, week, or a month, it's important to constantly think about their future needs.

Proactive relationship-building is essential to prevent customers from losing their post-purchase excitement and ultimately churning. If customers stop hearing from you and you don't hear from them this can be a bad sign that they are about to churn .

Companies solve for customer relationships with a combination of customer service structure and communication strategies. Solve for the long-term customer need and create a customer service team dedicated to check-ins and customer retention , show appreciation with rewards and gifts to loyal customers, host local events, highlight employees that go above and beyond and communicate product updates and new features.

5. Solve for the right customer needs.

Excluding customers from your cohort of business can seem counterintuitive to solve for your customers' needs. However, understanding whose needs you can fulfill and whose you cannot is a major step toward solving the right problems. All customers' needs can't be treated equally and a company must recognize which problems they can solve and ones that aren't aligned with their vision.

To find the right customer priorities, create buyer personas and uncover consumer trends, look at customer's long-term retention patterns, establish a clear company vision, provide premier customer service to valuable customers and communicate with your ideal customer in their preferred social media space to capture questions, comments, and suggestions.

Successful startups, brick-and-mortar shops, and Fortune 500 companies solve and prioritize customer needs to stay ahead and establish industry trends.

6. Provide great customer service.

If a problem arises, your customers want to get it resolved and feel heard in the process. This starts with being able to meet their needs with empathy, but along the way, the process for obtaining support should be easy and on a channel that's convenient for them.

Some customer needs are time-sensitive and require immediate interaction via phone or chat. Others are less critical and can be resolved at a more casual pace. Let's break down the types of customer service and how each optimizes your team's ability to fulfill customer needs.

• Social Media
• Call Back Service
• Customer Self-Service
• Interactive Virtual Assistant
• Integrated Customer Service

Email is one of the most fundamental forms of customer service. It allows customers to fully describe their problems, and it automatically records the conversation into a resourceful thread. Customers only have to explain their issue once, while reps can reference important case details without having to request additional information.

Email is best used with customer needs that don't need to be resolved right away. Customers can ask their question, go back to work, and return to the case once the service rep has found a solution. Unlike phones or chat, they don't have to wait idly while a rep finds them an answer.

One limitation of email is the potential lack of clarity. Some customers have trouble describing their problem, and some service reps struggle to explain solutions. This creates time-consuming roadblocks when the issue is overly complex. To be safe, use email for simple problems that require a brief explanation or solution.

When customers have problems that need to be answered immediately, phones are the best medium to use. Phones connect customers directly to reps and create a human interaction between the customer and the business. Both parties hear each other's tone and can gauge the severity of the situation. This human element is a major factor in creating delightful customer experiences.

Phones come in handy most when there's a frustrated or angry customer. These customers are most likely to churn and require your team to provide a personalized solution. Your team can use soft communication skills to appease the customer and prevent costly escalations. These responses appear more genuine on the phone because reps have less time to formulate an answer.

The most common flaw with phone support is the wait time. Strive for shorter wait times as 33% of customers are frustrated by being waiting on hold. Customers hate being put on hold, and it's a determining factor for customer churn .

Chat is one of the most flexible customer service channels. It can solve a high volume of simple problems or provide detailed support for complex ones. Businesses continue to adopt chat because of its versatility as well as the improvement in efficiency it provides for customer service reps.

When it comes to solving customer needs, chat can be used to solve almost any problem. Simple and common questions can be answered with chatbots that automate the customer service process. For more advanced roadblocks, reps can integrate customer service tools into their chat software to help them diagnose and resolve issues.

The limitations of chat are similar to those of email. However, since the interaction is live, any lack of clarity between the two parties can drastically impact troubleshooting. As a former chat rep, there were plenty of times where I struggled to get on the same page as my customer. Even though we resolved the issue, that miscommunication negatively impacted the customer's experience.

4. Social Media

Social media is a relatively new customer service channel. While it's been around for over a decade, businesses are now beginning to adopt it as a viable service option. That's because social media lets customers immediately report an issue. And since that report is public, customer service teams are more motivated to resolve the customer's problem.

Social media is an excellent channel for mass communication, which is particularly useful during a business crisis. When a crisis occurs, your customers' product and service needs become the primary concern of your organization. Social media is an effective tool for communicating with your customers in bulk. With a social media crisis management plan , your team can continue to fulfill customer needs during critical situations.

Social media is different from other types of customer service because it empowers the customer the most. Customers tend to have more urgent needs and expect instant responses from your accounts. While this type of service presents an enormous opportunity, it also places tremendous pressure on your reps to fulfill customer demand. Be sure your team is equipped with proper social media management tools before you offer routine support.

5. In Person

As the oldest form of customer service, you're probably familiar with working in person with customers. Brands who have brick-and-mortar stores must offer this service for customers living near their locations. This fulfills a convenience need as customers can purchase and return a product without having to ship it back to the company through an online service.

In-person customer service is great for businesses with strong service personnel. Without dedicated employees, your customer service team won't be able to fulfill your customers' product or service needs. Successful teams have reps who are determined to provide above-and-beyond customer service .

5. Call Back Service

Sometimes it's not about how quickly your business can provide a solution, but rather how efficient you can make the service experience. For example, say a customer has a simple question about pricing that should only take a few minutes to answer, but their expected wait time for phone service is over 15 minutes. Rather than making this customer spend more time on hold than actually speaking with a representative, you can offer a call back service where your team reaches out to the customer as soon as the next rep is available.

Another situation where this type of service comes in handy is with text-based mediums like email and live chat. In some cases, these channels aren't ideal for troubleshooting and can lead to friction if the case isn't transferred to another platform. Having a call back service available allows customers to schedule time to speak directly with reps, particularly when they feel like they aren't gaining progress on their case. Instead of having to create a completely new support ticket , call backs seamlessly transition the conversation to a more effective channel.

6. Customer Self-Service

Self-service teaches your customers how to solve problems independently from your support team. Rather than calling or emailing your business whenever they need assistance, customers can navigate to your knowledge base and access resources that help them troubleshoot issues on their own. Not only does this get customers faster solutions, but it also saves them from having to open a ticket with your team. This makes the experience feel much less like a formal support case and more like a quick roadblock that your customers can handle on their own.

Self-service is advantageous for your team's productivity as well. If more customers use your knowledge base, less will call or email your team for help. This will free your reps up more to focus on complex service cases that require a longer time commitment.

7. Interactive Virtual Assistant

Chatbots are no longer novelties that customer service teams use to show off their technological prowess. Now, they're integral pieces of support strategies as they act more like interactive virtual assistants than simple, question-and-answer bots. Today's chatbots are powered by innovative AI technology that interprets customer needs and can walk people through step-by-step solutions.

Image Source

The image above shows a perfect example of how useful today's virtual assistants can be. In this situation, the customer is learning how to use their new car — a product that typically offers a lot of unique features and an extensive operator's manual. To help new users navigate the car's basic features, this brand offers an augmented reality tour hosted by a virtual assistant. The user simply has to scroll their camera over different parts of the car and the chatbot will tell them everything they need to know.

Interactive features like this show that you're investing in more than just product development. You're thinking about how you'll support customers and what services you can adopt that will make their lives easier. Customers pay attention to this type of customer service and it can often be a reason why many will return to your business.

8. Integrated Customer Service

Integrated service can be described as all of the little things your brand does to remove pain points from the customer experience. Some of this is proactive, like sending customers an automated newsletter that informs them about major updates or announcements, and some of it is reactive, like pinging a customer success manager whenever someone submits negative feedback to your team.

Even though these pain points may seem small, they add up over time if left unchecked. The best way to remove most of these points of friction is to adopt automation as you grow your customer base. Automated customer service tools like ticketing systems, help desks, and workflows help your team keep pace with increasing customer demand. This technology lets you maintain that same level of personalized customer service even as more people reach out to your business for support.

There's no "best" type of customer service. Each medium complements the other and optimizes your overall performance when used together. This creates an omni-channel experience for your customers which will keep them coming back for more.

What do customers want from a typical customer service situation?

It’s important to note that customer service is reactive. That said, there are a few things to keep in mind to ensure you’re providing excellent customer service.

• Listen : While it’s normal to want to quickly get customers in and out of your service queue, it’s important to actually listen to what their issue is before giving them a solution. They may have a more nuanced issue that a boilerplate response can’t provide. There’s nothing more frustrating than providing customers with a canned response that doesn’t actually solve their issue. Automation is great, but just ensure that it is helping customers.
• Don’t Make Customers Repeat Information: No one wants to answer or submit the same questions repeatedly . Not only is it inconvenient, it shows the customer that no one is listening or paying attention. If you have a ticketing system, review the customer’s history or profile to get familiar with their situation before responding.
• Be Pleasant: Tone is much harder to convey over written communication and can unintentionally come across as cold. To convey some warmth you could introduce phrases like “I’d be happy to help with that,” or “Hope your day/week is going well.”
• Be Responsive : Not only do customers want their problem solved, but they prefer it’s resolved quickly. If you can’t solve their issue easily when they first contact you, set expectations around when it will be resolved (24hrs, 2 business days?) and keep them in the loop. Don’t ghost them.

What Customers Want

• Simple Solutions
• Personalization
• Transparency
• Accessibility

Each customer has their own unique needs, but there are a few that are universal.

1. Simple Solutions

While your product or service may run using a complex set of algorithms and procedures, customers don’t need to know that. They simply want a solution that resolves their issue with as little fuss as possible. Keep your messaging simple and focus on how your brand will solve the customer’s problem.

2. Personalization

Treat your customers like people and not numbers on a spreadsheet. Zendesk found that 54% of customers expect all experiences to be personalized. Use their name in communications and tailor your messaging to the buyer persona they most closely align with. Adding a personal touch when it comes to marketing lets customers know that their needs are at the forefront of your brand’s mission.

Does your product or service outperform the competition or provide a more cost effective solution for consumers? If so, drive that point home in your messaging. Explain how and why they should choose your product or service over others on the market. How will customers benefit when they choose your brand?

4. Transparency

One of the easiest ways to build trust with consumers is to be transparent. No one wants to feel duped by disingenuous, bait-and-switch advertising. Be honest about your product or service’s capabilities and pricing whenever possible.

5. Accessibility

While it is always encouraged to empower customers to help themselves with features like a knowledge base, getting extra assistance when they need it shouldn’t be difficult. Whether it’s phone, email, or chat support, it’s important to be responsive to consumer needs. At the beginning of this article we identified accessibility as one of the most common types of customer needs. If your team is unresponsive to their needs, customers will trade your brand in for a competitor that fills the gap.

Understanding Customer Needs and Expectations

One of the best things you can do is continue learning based on the types of issues that come up so that you can proactively address consumer needs and continue improving on the experience.

While the process requires quite a bit of legwork, the results will be instrumental in the success of your brand. Once you understand customer needs and expectations, you can work towards delighting them with your product.

Editor's note: This post was originally published in September 2020 and has been updated for comprehensiveness.

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14 Inspirational Examples of Business Ideas That Solve Problems

By Brett Farmiloe

Problems are the spark for innovative solutions. Here we've gathered the accounts of entrepreneurs who transformed challenges into successful business ventures. Read on to learn why these founders believe in the power of starting businesses to solve common problems.

14 businesses that were founded to solve a problem

1. the adu guide.

Startup story: "My journey began when I came across the widespread issue of limited housing options. Recognizing the need for adaptable living spaces, I established a construction company that specializes in accessory dwelling units (ADUs). I understand the importance of addressing common problems with innovative solutions. The ADU Guide not only offers homeowners expert advice from licensed consultants, but also helps to alleviate the housing crisis."

Takeaway: "Starting a business to address common issues not only promotes personal success, but also benefits communities by providing practical and meaningful solutions."

— Eli Cohen , The ADU Guide

2. Runtofly

Startup story: " After finishing my studies a few years back, I decided to reward myself with a trip somewhere. I didn’t know exactly where to go, and I was ready to fly anywhere (well…almost!), only if the price was really good. I was literally ready to depart 'now'! I thought it was exactly the idea of a 'last-minute flight' that many people talk about. But unfortunately (or actually, fortunately!), I found out that most flights departing in the next hours or days were very expensive, even when many seats were still available. I realized that cheap last-minute flights were only a myth and that there was a problem of untapped supply and unaddressed demand.

"Instead of accepting things as they were, I made up my mind to work on this problem and make last-minute flights real. It took a few years of blood, sweat, and tears, but finally, I was able to see my vision come to reality in 2024 when Runtofly.co.uk went live."

Takeaway: "People should always start businesses to solve a problem that others have. And the most successful businesses are the ones where the founder experienced the problem themselves firsthand. Too many entrepreneurs start a company just for the sake of starting a company without starting from a problem. Instead, they end up with a 'solution in search of a problem,' instead of the other way around."

— Federico Grimaccia , Runtofly

3. True Friends Moving Company

Startup story: " My entrepreneurial journey began with a rather simple observation—while living in a close-knit community, I noticed a recurring issue many faced: the lack of professional moving services. Can you imagine the stress of moving without reliable help? The distress calls for movers were on the rise, and although several informal services existed, none could instill the confidence and care one would expect during such a stressful time.

"I started small—just me and one truck. But, as we helped families move homes, our reputation grew. Fast-forward to today, and we're not just a moving company; we've become a trusted partner in new beginnings. Solving a common problem isn't just about spotting it; it's about being passionate about providing a solution that people will trust and remember.

Takeaway: "Why should others start businesses to solve common problems? Here's a compelling reason: genuine market demand. When you alleviate a pain point that many face, you immediately tap into an ecosystem where every satisfied client can become a vocal advocate. Growth rooted in solving real-world problems tends to be organic, sustained, and deeply rewarding.

"In my case, as I performed each move, I refined my service and built relationships that turned customers into effective brand ambassadors. My business grew beyond a single truck through the most powerful marketing tool—word-of-mouth referrals.

"When you solve a common problem, you do more than start a business; you build a community cornerstone that supports and grows with its people. Entrepreneurs should be encouraged to look into their own communities and identify needs because, more often than not, serving your community leads to real impact and sustainable success."

— Chris Knowles , True Friends Moving Company

4. InBound Blogging

Startup story: "Initially, when I started my business, I wanted to provide go-to solutions for people who wanted to monetize their blogs. Many small creators and businesses struggle to build websites that generate an income. Recognizing this gap, I started InBound Blogging to provide tailored solutions and help bloggers make a living from their content. My agency has since grown, has grown, and we've pivoted to offering comprehensive SEO services, specifically for B2B SaaS companies."

Takeaway: "Building a business around the concept of problem-solving works because, essentially, you've already got a target audience. If there is a market need for the solutions you're providing, people will seek you out for your expertise to help them out. What you have to do is create something of value so you can build a successful and sustainable company. It gives you space to carve out a niche of your own, and over time, you can do what I did and branch out and offer services in other areas."

— Nikola Baldikov , InBound Blogging

5. SellCoursesOnline

Startup story: "During my years in the digital marketing agency space, I saw firsthand many business owners struggling with the tech side of things. Sure, there's the internet, but it's also filled with a lot of fluffy advice, contradictory information, and even misinformation. It became apparent to me that navigating the tech side of growing an online business presence isn't an easy and straightforward task for everyone. It's a problem in the market that needed a solution, and so I provided one.

"This is how our agency was born. It is essentially a one-stop resource for entrepreneurs and creators to find the support, technical guidance, and the right tools they need to build their e-learning platforms and online courses."

Takeaway: "Simple and common problems like this often get overlooked, but there are actually big opportunities for observant business people who are smart enough to provide a solution."

— Baidhurya Mani , SellCoursesOnline

6. Pool Care Arizona LLC

Startup story: "My foray into entrepreneurship commenced when I encountered obstacles in locating dependable and effective pool maintenance services for my personal residence. Motivated by the dearth of alternatives that satisfied my criteria, I perceived this as a chance to address a market void and offer superior pool services to individuals encountering comparable predicaments."

Takeaway: "Entrepreneurs can address unfulfilled demands, generate value for customers, and make a positive impact on their communities by establishing companies that resolve prevalent issues. Entrepreneurs can create enterprises that not only prosper but also have a significant social and economic impact by recognizing areas of dissatisfaction and presenting novel remedies. This collective experience highlights the criticality of entrepreneurship as a catalyst for advancement and a solution to societal issues."

— Jacob Mendrin , Pool Care Arizona LLC

7. humble help

Startup story: "Starting a business isn't just about making money—it's about finding solutions to real problems. My journey began during the tough times of 2020 when I saw so many small businesses struggling to survive. That's when Humble Help Studio came to life, with a mission to offer support and relief to these important local players."

Takeaway: "Being an entrepreneur means looking at problems as chances to make something better. I was inspired by the hardships these businesses were going through, and it made me realize how important it is to care deeply about the issues you're trying to solve. The best reason to start a business is wanting to make a difference, especially for problems that affect the people and places you love. This mindset turns obstacles into opportunities for making things better, sparking innovation and having a positive impact.

"Simply put, entrepreneurs have this special ability to fix what's broken, using their ideas, hard work, and passion. This doesn't just lead to successful businesses; it helps build a stronger, kinder community."

— Vick Antonyan , humble help

Startup story: "I started Chadix because I was fed up with how complex and time-consuming most SEO tools were. As an online marketer trying to grow sites for myself and clients, I wasted tons of hours on manual content creation, optimizations, keyword research, etc. The lightbulb moment was realizing these SEO processes could be automated using AI, freeing up my time for strategy and scaling.

"So, I built a company to simplify and optimize SEO—with AI automatically handling content production, insights, optimizations, and more. I didn't have a waitlist of thousands at first. Leveraging my personal brand on Facebook, I created the Chadix Facebook Group to build an audience interested in my idea. Within months, I organically grew the group to 850 members.

"To validate Chadix's potential, I invited engaged group members to become Alpha testers. Nearly 80 people signed up and provided invaluable feedback on the software prototyping and UI. The tiny churn rate showed I struck a nerve by addressing the universal pain points around SEO complexity that most marketers and businesses face."

Takeaway: "I believe solving real problems people encounter is the best way to build an impactful business. If your solution alleviates frustrations, saves money, or saves time for customers, you inherently create tremendous value. Chadix was born out of my personal annoyance with SEO tools—then validated by other marketers feeling the same pain. Addressing universal problems with creative solutions is every entrepreneur's path to success."

— Danny Veiga , Chadix

9. My Millennial Guide

Startup story: "When I graduated from college, I was excited to start my career and life as an independent adult. However, I soon found myself weighed down by over $30,000 in student loan debt. No matter how hard I worked at my finance job, I felt like I was drowning in interest payments and getting nowhere.

"I realized so many other millennials were trapped in this same cycle of debt. I knew there had to be a way to break free. So, I started educating myself on personal finance, cutting unnecessary expenses, developing side hustles, and putting every extra penny toward paying down the principal. Through determination and sacrifice, I managed to be completely debt-free in just one year.

"That experience showed me how empowering it is to solve a critical personal problem through resourcefulness and grit. I started My Millennial Guide to help other young people trapped by debt or financial struggles. By sharing what I learned, I hoped to give them the knowledge and inspiration to take control of their own situation."

Takeaway: "Starting a business to address a common problem you've personally faced allows you to intimately understand customer needs. Your own journey also gives you credibility and passion to persevere. I think if you see an unmet need out there, you have both an opportunity and a responsibility to find a solution. Turn your big idea into tangible help for those still struggling. Allow your purpose-driven business to improve lives while also achieving your dreams."

— Brian Meiggs , My Millennial Guide

10. Perfect Locks

Startup story: "During my childhood in India, I faced a lot of bullying and a lot of pressure from society about hair and beauty norms. This personal experience gave me the idea for Perfect Locks. I'd seen firsthand how these issues can impact people, and I wanted to create a company that provides hair extensions and gives people the tools they need to look and feel their best."

Takeaway: "My business was started out of a passion to solve a common issue, creating solutions that boost self-confidence and empower people to express themselves. Running a business to solve everyday issues is important because it enables entrepreneurs to make a positive difference in the world while meeting a need in the marketplace.

"By recognizing and solving problems that most people face, entrepreneurs can develop innovative solutions that make a difference in people's lives and in the world. In addition, running a business focused on solving common issues can be extremely rewarding both personally and professionally. It allows you to combine enthusiasm with purpose, motivating you to overcome challenges and reach your goals.

"Entrepreneurship allows people to do good, build value, and build a legacy by solving common problems and issues facing society. It’s not just about making money; it’s about making a difference and leaving a better world."

— Priyanka Swamy , Perfect Locks

11. Life Architekture

Startup story: "As a life coach, my journey began when I noticed a common problem: many people feel lost, without direction or clarity about their personal and professional lives. Motivated by a desire to help others find their path, I started my life-coaching business. My goal is to provide guidance, support, and strategies to help my clients uncover their passions and find meaning in their lives."

Takeaway: "I believe that starting a business is more than just filling a market gap; it's about making a real difference in people's lives. For me, the decision to become a life coach was driven by the impact I knew I could make. As entrepreneurs, we have the opportunity to transform personal insights and experiences into solutions that can benefit others. By addressing common challenges, we create positive change and empower people to have the support they need to thrive and succeed."

— Bayu Prihandito , Life Architekture

12. Yarooms

Startup story: "Yarooms got started nearly a dozen years ago when I got so sick of not knowing whether a conference room was open at my corporate programming job and decided to stick a tablet to a wall to let people mark it on a calendar. The need to solve this one annoying problem has allowed me to see other small issues that make working in the office, at home, or in a hybrid setting less efficient and enjoyable, and has led me to understand the small fixes we can do to develop solutions."

Takeaway: "It sounds silly, but if you can't find an available solution to your problem or annoyance, fix it yourself. I guarantee if it bothers you, it bothers many other people too."

— Dragos Badea , Yarooms

13. Davis Business Law

Startup story: "I started Davis Business Law to solve three problems: how law firms treat clients, how attorneys get treated in firms, and how attorneys treat the firm’s staff.

"The two things clients really hate about law firms are getting the 'mushroom treatment,' which is getting fed BS while being kept in the dark, and 'blank check syndrome,' where the client feels like they are handing over a blank check for the firm to choose the amount. We deal with these issues through a disciplined case finance where we let our clients know what work is coming down the pike and have them prepay for it if they want us to proceed. Alternatively, it gives them a chance to talk to their attorney and then decide. It takes a lot of work, but counterintuitively, it has led to a massive increase in client satisfaction.

"Law firms also tend to treat associates very poorly with excessive billing demands. Nine hours per day is not out of the ordinary. This is largely a symptom of bad financial management. We run very efficiently and routinely match the salaries of these firms at our six-hour-per-day expectation. This leads to happy lawyers with work-life balance. The kicker is they turn out better legal work because they are not stressed.

"The staff at a lot of law firms suffer from professional arrogance and disrespect from the lawyers. This is not ubiquitous, but it is common. Our hiring process focuses on weeding out attorneys with these attitudes and reinforcing our culture of respect."

Takeaway: "Dealing head-on with these three problems is the foundation of our rapid growth. There is an old saying, 'If you build a better mousetrap, the world will beat a path to your door.' That is the essence of starting a new business. You find a problem and create a solution. In our line of work, we were lucky enough to have three problems and diligent enough to develop three fixes. Implementing them is our recipe for success."

— Matthew Davis , Davis Business Law

Startup story: "As a consultant in the industrial sector, I often worked with businesses looking to diversify. The trouble was that women, LGBTQ, and BIPOC workers had been marginalized so deeply, they weren't even on the radar of most recruiting firms. It was an obvious gap in the market—I knew qualified but neglected workers were out there; they just needed to connect with the market. So, I launched Bemana, a female-majority recruiting firm specializing in the industrial and equipment sector. It wasn't about politics; it was about seeing a gap in the profession I wanted to rectify."

Takeaway: "The response was more than I expected. Not only did a variety of candidates feel comfortable working with me, but clients also began to think of me as someone progressing the sector. That forward-thinking identity helped me stand out from the crowd."

— Linn Atiyeh , Bemana

About the Author

Post by: Brett Farmiloe

Brett Farmiloe is the founder and CEO of Featured, a platform where business leaders can answer questions related to their expertise and get published in articles featuring their insights.

Company: Featured

Website: www.featured.com

Connect with me on LinkedIn .