Managers are expected to solve diverse problems as an integral part of their responsibility. The contemporary manager deals with hundreds of phone calls, emails, business writings, interminable meeting discussions, planning, policy development and strategy in the course of his duty. It can be punishing and relentless and sometimes, overwhelming. Except for those who are walking the same path or those who have walked it before, few can comprehend the pressure faced by a manager. In this high-pressure system, it is convenient to tend toward jumping to conclusions, assuming outcomes without due consideration for facts. Good managers aim to assemble great teams to whom they can delegate, they create strong structures and processes to guide them in the midst of their busy schedules. They recognize that good decision-making involves deliberate, rational thinking; a process that is approached systematically. This is the essence of the Analysis of Business Problems course taught in business school.
All business problems can be approached by following a tried and tested framework to arrive at a sound decision. The success and growth of every business directly correlate to the quality of these decisions. Arriving at a sound decision involves following some steps:
- Identification and collection of the relevant information required for analyzing the problem at hand. To do this exhaustively, the questions to answer are: What (is the problem to be solved)? Why (did the problem arise)? When (did the problem happen)? How (did the problem happen)? Where (did the problem happen)? Who (did the problem happen to or affected)?
- Identification of the right problem. It is important to recognize the problem not the symptom of the problem.
- Definition of the goal or objective. The objective must be specific, measurable, achievable, relevant, and time-bound (SMART). This is important so that success can be recognized when achieved. It is also critical, to prevent confusion if there are different possible outcomes or perspectives.
- Generate alternatives or different options. Doing this requires brainstorming and critical reasoning by the group or team to generate different possibilities.
- Setting of criteria or conditions. These conditions must be met or achieved to attain the defined goal or objective. These conditions can vary from financial, ethical, social, economic, or psychological criteria.
- Evaluation of the alternates using the criteria already set. Qualitative and quantitative issues must be considered, including opportunity costs, short-term and long-term outcomes
- Make a choice. The right decision is the one that meets the criteria set the most. It satisfies the objective of the problem analysis and guarantees the most optimal outcome.
These steps can be re-evaluated and adjusted as necessary; the desired outcome is to take a decision that addresses the problem and achieves the set objectives. At the end of the process, an action plan must be developed. During this process, risks and headwinds should be identified and plans should be put in place to mitigate them.
It is very instructive to know that this same process can be applied to all problems, including personal decision-making.