Define business problems before implementing solutions

I have been working with the owner of a very successful service company. It had been in business a long time, but was having problems with the head of the HR department submitting late reports and missing deadlines. Additionally, the firm wasn’t receiving all of the HR training the laws require.

The owner valued this employee and did not want her to leave, so he decided to hire someone to help. He assumed it was a workload issue and figured getting her some help would be the answer.

When the owner asked me what I thought about the situation, I told him that he was trying to fix a problem he had not yet identified. Instead of just throwing another worker into the mix, he needed to determine the root cause of the HR manager’s poor performance. I recommended he hire a consultant to do an in-depth analysis.

During the analysis they discovered that the HR manager had another job and she was using some of this company’s time to work on her other responsibilities. Because of this, her work at this company had deteriorated. Now that they knew what the real situation was, they were able to address the problem without having to hire another worker.

In another case, an entrepreneur was having a revenue problem — or so he thought. His sales had been on a continual decline and his cash flow was becoming critical.

The entrepreneur had decided that advertising was the solution and was about to spend a bunch of money — which was very limited — on a new advertising campaign when one of his employees suggested that the bookkeeper might be stealing. After an in-depth investigation, they discovered that the bookkeeper had, in fact, stolen more than $300,000 over the last three years.

Business owners and managers often assume they know how to solve every problem simply because they have had many years of experience. However, experience often leads to decisions that worked in the past, and past decisions are not always applicable in the current environment.

To avoid mistakes like these entrepreneurs were about to make, it is important that you do not rush to judgment. Instead, ask yourself the following questions to help define the real problem:

• Are you sure that you have identified the appropriate problem?

• What makes you sure that you have defined the problem correctly?

• Is this a symptom of the problem or the root cause?

• Is there more than one problem to be solved in this situation?

• Are there other people who can verify that you have defined the problem correctly?

Now go out and make sure you have identified your business problem correctly before implementing any solutions.

You can do this!

Jerry Osteryoung is a consultant to businesses - he has directly assisted over 3,000 firms. He is the Jim Moran Professor of Entrepreneurship (Emeritus) and Professor of Finance (Emeritus) at Florida State University. He was the founding Executive Director of The Jim Moran Institute and served in that position from 1995 through 2008. His newest book co-authored with Tim O'Brien, "If You Have Employees, You Really Need This Book," is an Amazon.com bestseller. He can be reached by e-mail at jerry.osteryoung@gmail.com.

Tags: Florida Small Business