Problem Solving

Problem solving is the most important part of management. Don't leave it to trial and error.

The distribution of problems, as ranked by cost, follows the familiar Pareto distribution. What may not be so well known is the fact that with a pareto distribution the top few problems really dominate your costs. For the vast majority of items in the pareto, the difference from one to the next will be a small increment. But as you approach the top few items in the pareto you will see this increment grow rapidly. So the difference between your number one problem and your number two problem will be 50% to 100% or more. This is a repeatable pattern that shows up in almost all pareto charts. It's a feature of the distribution of costs, sales, earnings and many other result areas.

So the first task in the management of problems is to quantify all your quality problems. This need not be an accounting exercise with accurate figures. The goal is to prioritise problems. This has to be measured in dollars because not everyone communicates in DPPMs and Cpk values. When you have all this information tallied, you'll know your top problems and you will even be surprised by some of those in the top ten. Quality problems are consuming most of your profits.

Tackling these problems requires skills that need to be learned. Some problems will be easy to solve but they won't be the problems that were able to grow and grow and make your top ten list. Easy problems would have been resolved long before they came to the attention of management. The problems on your top ten list will be complex and elusive and as you try to solve them, they'll fight back. Your top problems became your top problems because you and your peers and your predecessors were not able to figure them out. You need to develop some specific skills for problem solving or take a Six Sigma Black Belt course and become an expert at problem solving. Whichever route you take,when you succeed in problem solving, you make a huge contribution to improving your organization.