Problem solving is an essential skill for the strategy consultant. Without good problem solving skills, it is impossible to perform well as a consultant. Six steps make up the problem solving process: **Defining, Identifying, Understanding, Generating Solutions, Analyzing, Choosing.**

**Define the Problem** – Before solving a problem, it is important to define the problem. In defining the problem, there are a few different tools to help you do this:

*Five Whys Analysis* is useful for getting to the core of a problem. Ask the question “why” until you get to the root cause of a problem. For example, if a product were not selling, you would ask “why” until you get to the core reason the product does not sell.

*Cause and Effect Analysis* involves drawing a diagram that looks very much like a fishbone. This lets you see at a glance what the involved causes to a problem are.

*Drill Down* breaks down complex problems into their component parts. You write the problem down. Then, you will write the next level of detailed factors contributing to the problem. For each point, you will repeat the process until you reach an understanding of all factors contributing to the problem.

**Identify **what qualifies as success in solving the problem – After you have defined the problem and narrowed it down to its root cause, you must determine what “solving the problem” means. The tool used for identifying success is *Critical Success Factors (CSF) *analysis. Critical success factors are the essential activity areas that must occur in order for a component of a project to be successful.

To determine your *Critical Success Factors*, you must first state your mission and your goal concerning solving the problem. Once complete, this will determine the CSFs through asking, “What is essential to achieve this goal?” After coming up with a list of answers, narrow it down to those elements critical to the solution of the problem. Before you can take these on, you will need first to identify metrics for each CSF and then communicate them to all team members.

Form an **understanding** of the problem’s environment – Understanding the problem’s environment is crucial for understanding how the problem arose and how to solve the problem. While this process is sometimes intuitive for small problems, for larger problems, you may need a variety of tools including:

*SWOT Analysis* – SWOT Analysis (literally Strengths, Weaknesses, Opportunities, Threats) is a simple yet powerful tool that will help you to focus on the situation. By listing each of the items in these four categories for your problem, you can focus on strengths and seize opportunities while minimizing weaknesses and steering clear of threats.

*Porter’s Five Forces* – This is an analysis performed to determine where the power in a situation lies. The five forces analyzed are supplier power, customer power, threat of substitution, ease of new entry and competitive rivalry.

*PEST Analysis* – PEST Analysis (Political, Economic, Sociocultural, and Technical) will determine the background against which the problem has occurred.

*Value Chain Analysis* – Value chain analyses determines where value lies in solving your problem. To do this analysis, first you will work to identify any activities undertaken to complete a project. Then, you will analyze each activity to determine what value it adds for your customer. Finally, you will determine whether changes should be made and plan to act upon these changes.

*Flow Charts* – By constructing a flow chart for a problematic process, you can identify the part in the process that causes the problem.

*Swim Lane Diagrams* – Swim Lane Diagrams allow you to map any interactions in processes – and find where the problem is being cause in terms of interchanges between departments and teams.

**Generate a list of solutions** – Once you have defined the problem, understood the critical factors for success to the problem, and determined environmental factors contributing to the genesis of the problem, you can generate alternative solutions. *Brainstorming* is a popular tool that focuses on throwing ideas onto the table without judging them. Closely related to this is *Reverse Brainstorming.* This focuses upon how to cause the problem rather than how to solve the problem; the idea being that if you can cause the problem, you can then figure out from there how to solve the problem.

**Analyze **risks involved, assumptions that have been hidden, and any unforeseen impacts of each potential solution – This is a vital part of problem solving; sometimes solving one problem creates another. Before acting on any of your potential solutions, test the ideas to determine what hides behind. Tools helpful for this step in the problem solving process include:

*Risk Analysis* – A good risk analysis will follow the formula, risk = the probability of an event occurring multiplied by the cost of that event. Identify the different potential risks for your proposed solution then estimate the costs. Finally, you will need to determine how these risks will be managed and formulate a plan.

*Failure Mode and Effects Analysis (FMEA)* – Performing an FMEA analysis involves identifying the different ways your solution may fail to fix the problem.

*Ladder of Influence* – The ladder of influence helps you to check assumptions and ensure that any proposed solution is based on logic and sound data.

*Impact Analysis* – An impact analysis looks at possible consequences arising from a solution and it ensures that the change made will be positive. It helps consultants to spot unintended consequences before they occur.

**Choose the best solution** – After all the analysis, brainstorming, and breaking things down, it is time to choose the best solution. Before you can make the decision, there are three different tools that can help you to make the right decision for the customer:

*Cash Flow Forecasting* – What is the expected financial impact from the proposed solution?

Cost/Benefit Analysis – What are the costs and benefits of each proposed solution? Which one will be most worth the time and money involved?

*Decision Tree Analysis* – This is a structure for laying out the different proposed solutions and investigating possible outcomes. It will help you effectively analyze the different risks and rewards associated with each of the options available.

Once you have chosen the best solution, draft a plan for putting it into effect, act on the plan, and carefully monitor progress towards the solution of the problem.