Using "First Principles Thinking" to Solve Complex Problems

“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” – Albert Einstein

Think you know the best way to move your company forward? Think again. Or rather, think first with “first principles thinking” to solve your business’s most complex problems, bring innovative solutions to the table, and walk away with a better decision than you would have before.

First principles thinking is an incredibly helpful model for Chiefs of Staff and Executive Assistants to use when a new project or opportunity lands in their inbox, either for themselves or for their Executive. The first principles thinking framework can help everyone get clarity on the issue at hand, while also providing the best options for moving forward. Organizing problems and finding creative solutions is what Force Multipliers do.

What is First Principles Thinking?

First principles thinking is a thinking model best used to challenge assumptions, understand the real issue, and decide what solution to implement. First principles thinking is made up of three components:

1. Identify current assumptions
2. When a new or reoccurring problem is presented, list out all the current assumptions you have about that issue.
3. Breakdown the problem into it’s various components and fundamental principles
4. This is where powerful questions come into play. What is true about the problem? What isn’t? How did this problem come about? What components (cost, people, resources, systems, etc.) make up the problem? Is there an underlying issue here that if solved, would make the current issue irrelevant? What are our current beliefs about this challenge? How are those not true?
5. Between steps 1 and 2, it’s a good time to bring in other key stakeholders to ask questions, bring a different perspective and make sure nothing has been missed. Force Multipliers can provide context and frame the discussion around the core issue and main objective and then open the floor to additional questions and insights.
6. Create new solutions
7. After you have named the problem, identified current assumptions, broken the problem down into it’s key parts, challenged their validity through powerful questions and?critical thinking , you’re poised to develop new and innovate solutions that you haven’t tried yet.

Let’s use first principles thinking on these common issues in business:

Assumption #1: “The labor market is tight and I’m not going to be able to hire the talent I need.”

Break down the problem:?Is the labor market tight in our market/industry? (Market) How many positions do we need to hire for today (8) and in the next 6 months (4 more), the next 12 months (6 more)? Have we clearly defined the roles and the impact they will bring to the organization? (Yes) What is the current unemployment rate in our market and industry? (4.8% which makes it an employee market) Are we willing to hire remote employees? (Yes) Will we invest in a recruiting or search firm? (Not at the moment, but in 30 days if we’re not seeing results, we will revisit that option.) Do we need to revisit our compensation plan to be more competitive in the current market? (Yes, we are working with HR to collect data and revise starting salaries.) What other benefits can we add? (employer-paid Short Term Disability, Long Term Disability, and a 401k match) How do we make our company more attractive to candidates? (We could launch a social media campaign to highlight current employees and what it means to work here) Why do people want to work at our company? (We will gather employee stories – but culture and growth opportunity are our two focuses) Can we use current employees to help refer other talent to us? (Possibly, we would need to create a referral program of some sort) What are we spending on hiring right now? (Per employee – $4,000) If we increase our hiring budget, what other expenses can we reduce? (We could cut our events budget, and increase our hiring budget to $4,500 per employee).

Create new solutions:?We are going to reduce our events budget and allocate those funds towards a larger hiring budget, which will include more marketing and sharing of our stories about our company and our team. In addition, we will be adding more benefits and revising starting salaries to become more competitive in our market and industry, as well as opening up our hiring pool to remote employees for 50% of our positions.

Assumption #2: “My Executive is not willing to make the tough decisions we need to move the company forward.”

Break down the problem:?Has she made tough decisions in the past? (Yes, during her first two years at the company and at her previous companies.) Is this a new behavior? (Yes, over the past 6 months specifically.) Can you identify a pattern of when she has made these types of decisions in the past or the types of decisions she won’t pull the trigger on? (Our company is growing quickly and we need stronger leadership in many departments, and I believe it’s time to part ways with some team members) In what way is the company stagnant? (We could grow much faster and more strategically if we top-graded.) Is that true for all areas of the business? (No, there are 3 core business divisions, the ones that she hired for and initial grew.) Are there other stakeholders who are feeling the same way? (Yes, other senior leaders have brought this to my attention.) Has someone brought this up to her before? (Not really.) What was her response? (It hasn’t been directly addressed, though I believe she is aware some people are not happy with current divisional leaders.) What qualifies as a tough decision? (Firing or laying off employees, downsizing, drastic change in systems/operations – anything that directly affects the day-to-day work, working environment, or livelihood of our team that could have negative consequences.) Does she have enough information to make these tough decisions? (No, I think that is part of the reason for the hesitation to make this particular decision and a few others.)

Create new solutions:?First, I need to have a?fierce conversation ?with my CEO and let her know what I am hearing and seeing. I will also bring the following to the meeting: our 2022 business plan, P&L, current profit margins, as well as a forecast for profit if we continue with the current staff vs. if we invested in new talent with more experience, current job descriptions for said leaders, proposed job descriptions and compensation plans for new hires, and an analysis of the gap between our current staff and what we need in the new roles based on our growing business. I will recommend that we begin looking for new talent while having job reviews with the current team members – perhaps they will be able to upskill or move to a different position in the company. I will also bring some additional resource ideas (like HR consultant or an Executive Coach) to help her prepare for these difficult conversations.

As you can see, first principles thinking helps you think outside the box, particularly when you’re close to the issue, have tried to solve it in the past and failed, or are getting various opinions from multiple parties, based on anecdotes and not facts. The ability to create new solutions from lingering or reoccurring problems is liberating!

We have to move fast – that is the nature of business in today’s world. However, slowing down from time to time to use first principles thinking could save you time, energy, and money in the long run. And, you never know, you may just develop a game-changing strategy or solution that takes your career, company, or industry to a whole other level.

Is there a common problem in your life that needs first principles thinking to help you find a new solution?