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    Writing a good problem statement #21 OE Newsletter

    The unimpeachable problem statement points directly to the art of concise communication.

    The path to operational excellence depends on the organization’s capacity to mobilize and enable teams, manage transformation projects, and learn through experimentation. It sounds simple, doesn’t it? But anyone that has walked this path can tell you that it is fraught with problems which must be solved in order for progress to be made and sustained.

    Therefore, we believe the development of a problem-solving capability among your team-members is a must. And, the art of solving problems begins with the ability to write a good problem statement, which from experience we can tell you sounds much easier than it is. Why is writing a good problem statement such a big concern? Because the problem statement will guide your actions as you work to find a solution.

    Consider this…before you can adopt A3 thinking, you must be able to write a good problem statement.

    So, what is a good problem statement?

    It is a clear and concise description of an issue that establishes context and the importance of needing attention and resolution. Problem statements have three parts: a compelling opening, context, and resolution.

    You can get started writing a problem statement by considering the 5 W’s— Who, What, Where, When, and Why.

    Part One: A compelling opening

    A problem statement begins with rendering the ideal situation specific to the identified issue (revealed in Part Two).

    The Duluc Insurance Company, to ensure its future growth, targets to be recognized publicly and by the financial community, by year-end 2019, as the cost/performance leader and preferred provider of personal insurance in the Northeast United States (CT, MA, NH, ME) as measured by 20172018 industry standards.

    The statement must be concrete, of consequence, clear, and current.

    Part Two: Context

    The opening statement must connect with Part Two. The connection takes place via language that ties Part One and Part Two together presenting the context of the current situation.

    Part Two must use complete sentences and clearly state why something is an issue. It’s here in Part Two we must quantify the situation usually in terms of time, money, quantity, or percent, while presenting a degree of historical data and future projections.

    However, in the past 12 months, from February 2016 – February 2017, Duluc has lost five key resources jeopardizing our overall effectiveness and earning potential. This loss has resulted in escalating customer complaints due to poor customer service (+20% last week alone) and threatens Duluc’s capability to meet our projected 25% increase in 2017 new customer revenue, putting our 2019 cost/performance targets at risk.

    Use caution here to avoid being too general or too granular. Overly general information about problems serves no one, as this fails to corral the issue into a single, focused target for resolution. When the problem is stated too broadly, stakeholders may have differing opinions as to what the issue is, which works against collaboration. Be lucid and concise.

    Part 3: Offer a solution

    The proposed solution, often called the “target effect”, requires a definitive resolution value and date of completion. Here too use caution in prescribing a detailed solution. There’ll be plenty of time for that later.

    The solution, like Part Two—Context, must use complete sentences and clearly state what should be done about the problem. Here too, you must quantify the solution in terms of time, money, quantity, or percentage. Use terms like improve, reduce, increase, achieve.

    By developing and positioning an effective resource retention, redundancy, and pay-for-performance program we can replace our five key resources and once again provide quality customer service thus improving customer confidence. With a budget of $25,000, using industry networking opportunities and resource recruiting channels, we must immediately identify, hire and train three resources within 30 days from today’s date and identify, hire and train an additional two resources in the subsequent 30 days. Additionally, we will research and position a pay-for-performance program best suited to the Duluc culture by the end of 2017. These measures, once in place, will enable Duluc to reduce our current turnover rate and subsequently achieve our 2017 growth targets, and help to ensure achievement of our 2019 cost/ performance goals.

    While an equilibrium of hard and soft data give a problem its features, solutions must, in a sense, be stricter. First and foremost, the best way to prevent a project from going over budget, or over time, is to establish a deadline.

    Second, targeting determined dollar values or percent improvements forces teams to measure and grade their proposed solution and problem-solving process. Success is iterative, rarely will project teams uncover the perfect solution on the first attempt. However, a target unreached is not a failure. A proposed solution may achieve the desired result, it just needs a little more time.


    Creating a sound problem statement embodies many of the core principles underpinning continuous improvement and lean implementation. Those who have worked with the A3 process know that problem statements are fundamental to making good decisions, experimentation, and getting to root cause.

    • Identify the ideal state
    • Put the current situation in context
    • Offer a solution

    The best problem statements hone problem-solving by conditioning teams to develop target-oriented improvement perspectives.

    Remember that telling a good story aids in making problem statements valuable. Open yourself to discovery. Position yourself to discover the full extent of a problem and pledge to go wherever the search for a solution takes you. Don’t be afraid of what you don’t know. Instead, embrace it and let experimenting guide your resolution. If you hit a road block, reconvene, reassess, redirect and go wherever that new path takes you.

    Ask The Consultants

    Q. How do we better understand customer need?

    A. Understanding customer need is one of the elements of your business model which focuses on the approach to gaining a deep, meaningful understanding of what customers’ value. How your business determines this today is an important element in discovering the future state answer to your question.

    Making the assumption (and it’s a big one) that your current model is no longer serving you well or well enough, we’d suggest that it’s time to design and implement a future state business model that is based on:

    1. a solid understanding of customer utility*
    2. knowledge of what constitutes actual order qualifiers and order winners
    3. getting into the mind of your customer
    4. identifying the problems they have that they can’t even articulate.

    Additionally, the future state business model must have the end-to-end customer experience in scope: Purchase, Delivery, Use, Maintenance, Disposal, etc.

    * We have to be able to explain our value propositions utility value in terms of (like): productivity, safety, simplicity, convenience, environmental friendliness, lowest lifecycle cost, etc., etc.

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