In this article we will explore what a complex situation is and highlight how to approach the situation.
A situation is said to be complex when it comprises of the following attributes:
- Difficult to define
- Has many uncontrollable causative factors that are dynamic and unpredictable.
- May have more than one right method of approach
- Has multiple interfaces or interacting elements
- Multiple stakeholders or interested parties.
- Risk associated with the situation is unknown.
- The situation is new to the decision maker, that is, no prior experience.
Example of a complex situation could be the dilemma faced by a manager when making decision on either to invest in a new product or not. Most times, the manager has no information on consumer reactions towards the product; Will he incur profits or losses if he invests in the product? Will the product give him a competitive advantage over competitors? How much impact will location and customer demography have on the product? Can he consistently drive down cost of production and cost of sales while maximizing profit? What are the regulatory requirements that he must comply with? Will the monetary policy of the country encourage investing in the new product? What other investment alternatives are available and how do they compare with current investment option? These and many more, are the questions the business executive or decision maker must address before deciding to invest on the new product.
Dealing with a complex situation requires critical thinking and the application of a structured problem-solving process as outlined below:
- Understand the situation/business dynamics: This involves probing the situation by conducting research/ or survey to gain better understanding of the situation. Understand the consequence of the situation and how crucial this consequence is to your business. Being able identify the gap between where you want to be and your current state. Having clear understanding of the situation helps in managing the complexity in a way that can allow for problem analysis and implementation of solutions.
- Define the problem: This involves framing of the problem statement to capture the following elements:
- What: What are the symptoms of the situation that you observe? What are the effects of the situation that need to be stopped?
- Where is the problem happening?
- When is it happening?
- Who is affected? Who is relevant to the problem?
- How are you affected by the problem, by what extent and by what means?
- What is the root cause of the problem that once resolved, eliminates reoccurrence of the problem/situation?
- Identify your objectives: Your objectives, when properly identified, provide guides to the direction and effort needed in analyzing and solving the problem.
- Identify the alternatives: Identify different ways of addressing the situation or providing the desired result. When identifying alternatives, try to keep an open mind, do not be influenced by your biases.
- Develop Criteria on which each of the alternatives will be analyzed: Criteria are like set of requirements that each of the alternatives must meet to be regarded as a possible solution to the situation or problem. Ensuring that all important criteria to the solution are identified is very important in decision making and problem solving as each of alternatives will be analyzed on how well they compare against the criteria or requirement.
- Take a decision: Based on the analysis conducted on the alternatives, the alternative with the most favorable outcome when benchmarked against the criteria becomes the decision.
- Develop action plan: Develop a set of actions with timeline that will be carried out on the selected alternative to achieve the desired result.
Solving complex problems in a collaborative manner, with team members and key stakeholders, helps in achieving better solutions that will be accepted by all parties involved.
References: Analysis of Business Problems lecture notes; Image source-mylearningsolutions.org.