Identifying problems and opportunities

There are many ways to identify current problems and opportunities. Start by listening to suggestions, being alert to what is happening in the organisation, and being willing to change. It is often a vague idea that starts a project rolling. Sources of ideas include:

• Operational management – what issues and problems are arising? What do we do well we should do more of?
• Performance metrics – what are the areas of underperformance, what are the trends? (Trends are always more informative than single pieces of data.)
• Interviews – managers, staff, customers, focus groups, etc. What ideas and concerns do they have?
• Observation – keeping eyes and ears open around the organisation. What are staff, customers and suppliers talking about? Do these conversations contain any good ideas?
• Technology – what new technology is available, and how can we take advantage of it?
• Market research – what is happening in the market and in competing organisations?
• Reviews using techniques such as brainstorming or other idea-generation approaches.
• Suggestion boxes and taking advantage of staff insights.

Organisations should be aware of future problems and opportunities, and managers must regularly ask themselves:

• What changes are taking place in the environment of this organisation?
• What risks is the organisation exposed to? How are risks evolving?
• What are the areas the organisation’s performance is most sensitive to (both positive and negative)?
• What technology trends can be identified – do they pose any threat or opportunity?
• What are competitors doing – does this pose any threat or opportunity?
• What are suppliers doing – does this pose any threat or opportunity?
• How are customer needs evolving – does this pose any threat or opportunity?
• How are staff needs and interests evolving – does this pose any threat or opportunity?
• Are you listening to ideas from your staff?
• Are there any other stakeholders whose interests, needs or desires are changing?

Understanding the impact of a problem

Understanding the impact of problems will help in prioritising which problems are resolved and in developing project business cases.

1. How does the problem manifest itself:
   • Who or what is affected by the problem?
   • When or in what conditions are they affected? Is it the whole time, or only at certain times or in certain conditions? If the problem is intermittent, try to identify when it occurs.
   • In what way are they affected by the problem?
2. How can the problem manifestations be measured or, if quantification is not possible, described?
3. Is there a baseline for this measure when the problem is not occurring or before it started? What is the incremental change brought about by the problem?
4. Are you sure which problem is causing what impacts – or are the symptoms a manifestation of the interaction of multiple problems? If so, do you understand the relationship between problems?
5. Are there any workarounds or fixes which enable people to overcome this problem? Can you just accept the problem and use the fixes? If not, why not?
6. What is the potential benefit of resolving the problem?

Root cause analysis

Root cause analysis identifies the originating cause of problems. Problems have many symptoms and it is the symptoms that often become the focus of management attention. Organisations waste huge resources treating the symptoms. It is always more effective to resolve the root cause.

There are several approaches to root cause analysis, including Ishikawa or fishbone diagrams, 5 whys and fault tree analysis. Irrespective of technique used, the basic steps are:

1. Define the problem – root cause analysis works from a clear, succinct definition of the problem that needs to be resolved. It cannot be applied to poorly defined problems.
2. Gather data and evidence – what evidence and metrics exist to show the problem? What information exists on this problem?
3. Identify issues that contribute to the problem – analyse the problem and think through the possible related issues that may have contributed. For each issue ask what happened, and when, how and why it happened.
4. Find root causes:
   • Structure the issues into a chain of events – linking causes to effects. Start with the ‘final’ effects.
   • Identify the causes of each effect by determining why it occurred. Don’t confuse effects for causes. This is a common mistake. A cause may link to multiple effects.
   • If the cause has its own identifiable cause, you have not reached the root cause.
   • When you cannot sensibly answer why the event occurred you have reached the root cause.
   • If you find you cannot continue because of a lack of information – return to Step 3.
5. Check the logic in your chain of events:
   • Ensure nothing is missed out.
   • Eliminate all ideas from the analysis that are not root causes.
   • If you used assumptions ensure that this is understood as you could be wrong. Try to verify all assumptions.
6. Resolve the root cause of the problem:
   • As you implement your resolution, measure and monitor the problem symptoms (effects) to ensure they disappear.
   • If they do not, the wrong root cause has been identified and further work is required – return to Step 2.

Generating opportunities and solutions

The checklists on pages 37–40 will help you to understand the problems you have. Problems are overcome by solutions. Fortunately, life is not just about solving problems – there are also opportunities for improvement. This checklist is written from the viewpoint of a solution to a known problem, but it will also work in identifying new opportunities.

1. Make sure there is a clear understanding of what is wanted. Don’t jump too soon to a solution. You are answering a question like ‘I want to overcome problem X’, not something of the form ‘I want to do Y’. For example, ‘I want to transport a 250kg box from London to Edinburgh’, not ‘I want to hire a Ford Transit van’.
2. Document the problem succinctly and unambiguously. If you can’t express it in a sentence or two, you won’t be able to focus people on working out a solution to it.
3. Challenge yourself and your team, and if appropriate your customers and suppliers, with regard to this problem:
   • What do your competitors do?
   • Who really understands this issue?
   • Are there other organisations who you can talk to, to discuss ideas?
   • What books, journals, websites, blogs are available on this topic? Who is reading them?
   • Are there specialists or consultants who can advise you?
   • Are there other areas we can gain inspiration from?
   • What is an off-the-wall suggestion?
4. Create an atmosphere in which innovation and creativity thrive. Build expertise, motivation and excitement for creativity, and creative thinking skills. Do not set too tight constraints or limits. Identify and challenge inherent assumptions.
5. Go beyond the obvious. If every idea is obvious, try harder! Recognise and be open to unusual opportunities. The most successful businesses do something different.
6. Set aside time for thinking as an individual or group. Make use of sessions with an expert facilitator, use brainstorming or visioning techniques. Consider investing in a creativity or innovation approach.
7. Define the characteristics of a good solution, but try not to include too many constraints that limit your thinking.
8. For every solution generated, do a comparison to the original problem definition. If you implement this solution, will you really overcome the problem?

Exploring ideas

Solutions or opportunities need to be detailed to be taken forward. A one-line definition is not enough to achieve an outcome. The level of detail required depends on the situation. For a small task there needs to be enough detail for the work to be performed. For a complex situation or project, there needs to be sufficient detail for a project to be scoped, sized and prioritised. For a project you need to have sufficient detail to answer the question: Is this an idea we want to pursue?

1. Start with a clear and, if possible, unambiguous definition of the idea:
   • Clarify ambiguities that can be clarified.
   • Provide sufficient detail for everyone to understand what the idea is.
   • If the idea breaks into logical components, describe these – but don’t force its decomposition if it is not natural or the decomposition constrains thinking.
2. Balance realism (this idea has to work) with an open mind (it may be improvable). Avoid expanding the scope by adding too many bells and whistles, but do explore the potential of ideas. Remember the idea will be implemented at some stage.
3. Try to improve on the idea:
   • What assumptions are related to this idea?
   • Are they realistic and reasonable?
   • Do any assumptions constrain the idea – can conditions be made in which the assumptions are false?
   • What combinations or reductions in scope can be made?
   • Can you combine good bits from other ideas to improve this idea?
   • Can you subtract or remove parts to make it more attractive or practical?
   • Are there any aspects of the idea you can magnify or reduce to improve it?
   • Can you rearrange the idea in any way to make it better?
   • Can you substitute parts of the idea with other ideas or existing solutions?
   • What other modifications or adaptations can you make to the idea?
4. Keep asking why and therefore what and how. Expand and detail the idea.

Choosing between solutions

You cannot implement everything. You have to whittle down lots of ideas to a set of concepts that you have the resources to implement.

1. Be clear about the problem the solutions are designed to resolve. Only select those solutions that really will solve the problem you have.
2. Evaluate and eliminate the no-hopers. Don’t be too hasty in rejecting unusual ideas, but there will be some ideas that are impractical.
3. Identify criteria to choose the best solution. The criteria should be easy to apply and use. Don’t just use financial criteria, as this will miss out many valuable concepts. A selection of possible criteria are:
   • Strategic fit – is it consistent with our organisation’s strategy?
   • Motivation and interest – is it something we want to do?
   • Fit with requirements – will it achieve what it needs to achieve?
   • Cost – both cost to achieve and cost to maintain once implemented.
   • Ease of application – how simple or straightforward will this be to do?
   • Level of risk – what is the likelihood of success? What uncertainties are there?
   • Disruption to business of solution – will implementing this solution be easy and risk-free, or will it disrupt the business?
   • Capability to deliver – technical competencies, business competencies.
   • Financial (NPV (net present value), IRR (internal rate of return), payback period).
   • Value to customers – will our customers appreciate this solution?
4. Determine the relative weighting of each criterion.
5. Collect necessary information to make decisions, for example:
   • What is the strategy?
   • What requirements does this solution have to fulfil?
   • For NPV calculations – what is an appropriate discount rate?
6. Apply criteria – the criteria do not have to be applied in depth, but simply to show which ideas are better. Often a simple scale such as high–medium–low is sufficient. At this stage it is not the absolute value that matters, but only the relative value compared to the other ideas.
7. Validate – can you check your assessment with someone else?
8. Check if any ideas can be adapted or re-scoped (scoping is described on page 70) to give a different value.
9. Choose the best idea(s).

Converting ideas into actions

Ideas only become valuable when they are converted into actions that can be implemented in reality. Actions have to be defined (what), someone has to be named to do them (who), there has to be a way to do each action (how), and a time frame for completion should be set (when).

1. Ensure the idea is understood in sufficient detail to progress (or return to page 45).
2. Minimise divergence. Divergence is valued when creating solutions – now make it converge and try to focus the idea into a limited area. Limit the scope – remove bells and whistles. What are the core elements of the idea you have to implement to achieve your goals?
3. For every aspect of the idea, ask how it will be done and who will do it.
4. If the idea is too big to answer how and who, break it down into smaller activities. Continue to do this until you can answer what, how and who for each activity.
5. Check across all the activities, and:
   • Make sure there are no gaps – all necessary parts are done and together they will achieve the idea.
   • Make sure there are no overlaps – each activity is done only once.
   • Clarify who is responsible overall for making the idea happen.
6. For each action, set a time by which it should be completed.
7. Start work and monitor progress. Amend what, how, who and when depending on the result of each activity.