Solving the right problems - A Key to Sustainable Business Success

Problem-solving is the core activity that drives every organization. Whether it's delivering a product that customers enjoy or offering a service that saves them time or money, businesses exist to address customer needs and create value. This fundamental exchange—solving problems in return for revenue—underpins the entire business world. However, despite their best efforts, many organizations, from ambitious startups to well-established corporations, fail in this essential function. This failure often leads to missed opportunities, wasted resources, and even financial losses.

So, why do so many companies struggle to solve the right problems? Is there a common pitfall that businesses need to be wary of? As someone who has spent years consulting organizations on performance improvement, I’ve observed recurring issues that companies face in problem-solving. These challenges apply across industries and often stem from a misunderstanding of customer priorities and a lack of clarity in defining the value they provide. Here, we’ll explore the main reasons businesses fall short and offer actionable solutions for effective problem-solving.

The Big Why: Understanding the Root Cause of Business Failures

One of the primary reasons businesses fail to deliver expected outcomes is their inability to differentiate between what is truly important to customers and what merely satisfies their immediate needs. Over time, organizations may lose sight of this distinction, confusing transient preferences with core priorities.

1. Differentiating Importance and Satisfaction:

Important Attributes: These are aspects of a product or service that align with the values and priorities customers hold dear. For example, today’s customers may highly value sustainability, wanting products made from eco-friendly materials or services that contribute to environmental conservation.

Satisfying Attributes: These are the features that make a product or service easier or more pleasant to use, like home delivery or simple online payment options. While important, these features alone rarely foster long-term loyalty.

Misunderstanding this distinction leads to misplaced effort, where businesses spend resources on features that may satisfy but fail to resonate with customers’ core values. For example, adding a loyalty program might improve customer satisfaction, but if customers prioritise sustainability, the effort may not yield long-term returns

2. Lack of Clear Value Definition Across Organisational Levels:

When businesses fail to clearly define and communicate value, both strategic goals and day-to-day operations suffer. Often, at the top levels, value statements are kept at an abstract level, while at the ground level, employees struggle to connect these statements to actionable steps.

Consider an e commerce company that promises “on-time delivery at an affordable cost.” While this goal appears straightforward, it can be difficult to execute without more precise definitions. Terms like "on-time" and "affordable" are open to interpretation, leading to misaligned expectations between departments and, ultimately, customers. Making these values more specific, such as “24-hour delivery at $3 per items under 10 kg ,” provides some level of clarity, but organisations still need to address how they will deliver this value reliably under fluctuating financial and operational conditions.

All these factors makes it very difficult to prioritise the right problems to solve so as to create maximum value to the customers at any given time.

The Way Forward : Better Methods for Solving the Right Problems

To effectively navigate the complexities of customer needs and deliver true value, businesses must develop a structured approach to problem-solving. Here, we’ll explore specific methods to ensure that organizations solve the right problems and focus their efforts on generating the maximum possible value.

1. Start Measuring What Matters

A clear understanding of which attributes are important and which are satisfying to customers is essential in defining value. Dan Olsen’s book, The Lean Product Playbook, provides valuable insights on how to measure and prioritize customer needs effectively. By assessing attributes across both importance and satisfaction, companies gain a clearer picture of where to focus improvement efforts.

The highest-scoring attributes on both importance and satisfaction scales represent areas where businesses are already meeting customer expectations effectively and thus require minimal immediate attention. However, attributes with high importance but low satisfaction scores highlight significant opportunities for improvement. For instance, if a service receives a low satisfaction score for “speed” but is highly valued by customers, improving this attribute could lead to enhanced customer loyalty and increased market share.

Actionable Steps:

• Conduct regular customer surveys to evaluate both importance and satisfaction for each feature or service aspect.
• Create a visual map, as shown in The Lean Product Playbook, to monitor which attributes need improvement and which are already successful.
• Prioritize resources toward features that are important but currently less satisfying, as this is where the most impactful changes can occur.

2. Develop Actionable Value Statements

While understanding what’s important and satisfying is crucial, it’s only the first step. Once these attributes are identified, organizations need to turn abstract customer needs into specific problem statements. This process involves taking a broad need, such as “easy payment,” and breaking it down into actionable components.

For example, if an e-commerce company finds that customers highly value “cashless payment” options, the organization must identify the steps necessary to enhance this feature without incurring significant losses. Developing actionable value statements involves considering various aspects:

• Process Standards: Define streamlined processes for each feature or service, from payment collection to customer support.
• Automation Opportunities: Identify areas where automation could reduce costs, improve efficiency, or enhance the customer experience.
• Data Security: Ensure that any solution, especially in payment processing, is aligned with security protocols to protect customer information.

Actionable Steps:

• Create a cross-functional team to break down each customer need into specific actions. For cashless payments, this could involve collaborating with IT, finance, and customer support.
• Set measurable standards, such as response times or transaction limits, to ensure consistency.
• Implement feedback loops to refine these processes based on real-time customer feedback and changing market conditions.

Conclusion:

The ability to solve the right problems is essential to long-term business success. By distinguishing between customer values and immediate satisfactions, businesses can ensure that they are addressing what matters most. Clear communication of value, coupled with a structured approach to measuring and acting on customer feedback, helps align organizational efforts with customer priorities. Moreover, a culture of continuous improvement enables companies to adapt swiftly to changing conditions, staying relevant in a competitive landscape.

For organizations that succeed in these areas, the rewards are significant: deeper customer loyalty, stronger market positioning, and a sustainable competitive advantage. Ultimately, solving the right problems is more than a business function—it’s a fundamental strategy for delivering value, achieving growth, and building a legacy of excellence

That's it for today , Hope you have enjoyed it . Also, please feel free to comment or suggest anything that could be worth discussing or writing in the future, Thank You !