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Tuesday, November 3, 2009

Problem Solving Step-by-Step

At its heart, Holocognics is about planning. The only way to plan effectively is to understand something thoroughly. Below is the Holocognical Problem Solving Technique. This can be applied to any problem, including political decisions. The point of laying this out is so that you don't miss something and are able to come to the best decision.

i.Identify problem.
ii.Is it a problem?
iii.Is it something that can be solved through human effort?
iv.Identify all possible solutions.
v.Will any of those solutions “solve” the problem? Re-ask whether it can be solved through human effort.
vi.Is the solution “better”? What are the costs of the solution? What are the new problems created by implementation of that solution? Do those new problems outweigh the benefit of fixing the original problem?
vii.Pick the best solution.

Step (vi) should be performed for each solution identified in step (iv).

Seems obvious right? But most people skip a step, and that can cause problems. Let's look at this technique in action:

Let's say your business is growing and you have an opportunity to take on a new account. The new account will bring in $100,000 in revenues annually. But, you cannot take on that account without hiring a new employee. Many people will just hire the new employee and take the new account. But, that can cause a lot of problems, as we'll see.

I.identify problem – you need to hire a new employee in order to take on the new account.
II.Is this a problem – depending on your goals for your business, this may not be a problem. Perhaps you are happy with the size of your business now, and don't want the extra account. Perhaps you can grow more slowly without needing to take on the extra employee. It just depends on the situation. Let's assume that you really want the account, and so you need to hire the new employee.
III.Is it something that can be solved through human effort – In this case, we're assuming that by hiring the new employee, you will be able to accommodate the new account. In some cases, that won't be possible.
IV.Identify all possible solutions – can you outsource this work? Can you mechanize the work? You want to identify ALL possible solutions, even those that you will eventually dismiss.
V.Will any of those solutions “solve” the problem – Let's assume that you can't mechanize this particular employee's role. But there's a possibility that outsourcing will work.
VI.Is the solution better – Hiring an employee means paying worker's comp, employment taxes, and managing the employee. This means you will be devoting time and energy to the new employee, especially in the beginning. This time and energy is money spent. Maybe the only employee available that can competently handle this work requires $80,000 annually. So after worker's comp, taxes, etc. you're not actually making a profit on that account. But, maybe the account has potential to double in a few years. The employee's salary won't double in that time. On the other hand, if you outsource, the salary is lower, but you have less control over the quality of work.
VII.Pick the best solution

The most important thing is that you identify ALL possible solutions and thoroughly explore whether they actually benefit you.

In the above example, it is absolutely possible that by taking the $100,000 account, you end up in a worse position than you were in before. There are also problems that may not have a solution that works.

--Aaron

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