Think about powerful CEOs like Elon Musk, Jeff Bezos, and Steve Jobs. What do they all have in common?
They create mental shortcuts for repetitive problems to find and solve the root cause quickly.
Jobs famously had a three-step approach to solving problems: zooming out, zooming in, and finally walking away from the situation to create distance before deciding on a solution.
Musk has a different approach, which he borrowed from Aristotle. He starts by identifying a problem and then lists obvious solutions before creating a final solution based on desire.
No matter the approach, the secret to advanced problem-solving is learning a technique that suits your leadership style.
This guide will explain the intricacies involved in advanced problem-solving and how to accelerate the process so you can create mental shortcuts of your own.
Three years ago, the Predictive Index interviewed 156 CEOs, presidents, and business leaders to find out what pressing issues they usually faced.
Their answers were clear. Finding the right people, building better processes and aligning their team with the company's strategy were at the top of the list.
Despite all of the CEOs' problems, they could be overcome with the right strategy. Using practical techniques (usually referred to as heuristics) can help leaders quickly solve problems. These techniques might not be optimal but the differences aren't significant compared to other methods and can save leaders a ton of time.
There are seven main heuristic techniques leaders can use to answer questions. And while each has issues and limitations, applying the appropriate strategy depending on the problem can yield positive results.
The seven techniques are:
Let's take a closer look at each one. ⬇️
What is BEP?
Break-Even Point (BEP) is used to determine the revenue needed to cover the total cost or when a product/service will start to turn a profit. Once the inflection point has been reached, profit becomes higher than cost.
When should BEP be used?
BEPs can assess business models and understand a company's financial performance.
Risks with using BEPs
BEPs are useful if costs are fixed. Companies with fluctuating product or service prices, or where costs change rapidly, may be better off using another model.
What is S-Curve?
The S-Curve is a graph that plots the evolution of any unit or quantity against time.
When should S-Curve be used?
This problem-solving method can predict an organization's adoption of startup products or growth.
Risks with using S-Curves
Although many companies and products have used the S-Curve to predict growth accurately, it's essential to understand that not all projects or products will follow this model.
What is Occam's Razor?
Occam's Razor is a problem-solving technique that states the simplest solution to a problem should always be used.
When should Occam's Razor be used?
Leaders should choose the solution with the fewest assumptions and least complex path when presented with competing options to solve a problem.
Risks with using Occam's Razor
Occam's Razor is most effective during the early stages of a problem (or company) when leaders are crunched for time when deciding on next steps.
What is Expected Value?
Expected Value (EV) is a predicted value for a specific variable. This problem-solving method is usually used to calculate possible outcomes depending on their likelihood.
When should Expected Value be used?
Leaders should use EV to quantify and incorporate risk into their decision-making processes to estimate future outcomes more accurately.
Risks with using EV
Probability changes over time, so leaders should revisit their EV predictions if technology, processes, or market conditions change.
What is the 80/20 rule?
The 80/20 rule (Pareto Principle) states many outcomes—roughly 80%—account for just 20% of the effort.
When should the 80/20 rule be used?
The Pareto Principle is ideal for leaders on a short timeframe who need a quick and approximated answer to an outcome or question.
Risks with using the 80/20 rule
The principle is directional, so leaders should only use it as a guide and not rely on it for accurate answers.
What is the Rule of 72?
Rule of 72 estimates the doubling period for any variable by dividing 72 by the annual growth rate of that variable. If an investment of $100 grows at 7.2% yearly, it would ultimately reach $200 in a decade (72 divided/7.2% according to the rule).
When should you use the Rule of 72?
This rule is handy to estimate returns and calculate rough compounding rates quickly.
Risks with using Rule of 72
If growth varies over time, the Rule of 72 can't accurately calculate returns that are either too conservative or too progressive.
What is Marginal Analysis?
Marginal Analysis takes additional benefits of an activity and contrasts them based on additional costs and time.
When should you use Marginal Analysis?
This method can estimate costs of manufacturing additional products. Businesses can use these calculations to decide whether they can produce more while staying profitable.
Before picking a problem-solving technique, go back to basics and find the question you're trying to answer.
We can use three different techniques to make sure we're asking the right questions. ⬇️
The three questions technique asks three questions to narrow down a scenario and arrive at a reasonable answer.
The technique places a constraint by asking a maximum of three questions and forces leaders to ask only the most pertinent questions to arrive at an answer quickly.
Hospitals use a similar technique in A&E departments to determine how much of a risk patients are. If a patient enters the emergency room with chest pains, a doctor may ask three questions to help conclude how much danger they are in:
Using these three questions, the patient can be placed into a high-risk or low-risk category.
Named after its creator Professor Kaoru Ishikawa, this strategy is rooted in cause and effect analysis.
The strategy uses a diagram to highlight potential root causes of a specific event to help leaders visualize each stage of the problem and find a solution. For example, if a company has a manufacturing defect, the root cause could be many factors including raw materials, measurement methods, environment, machines or people.
Once all the potential factors are placed into the diagram, a leader can start eliminating them one-by-one until they find the root cause of the manufacturing defect.
The technique is aptly named "five whys"—where "why" is asked to each corresponding question to find the root problem.
Consider this: a company has started to lose revenue. By asking "why", we can find out what happened.
The first line explores the company's possibility of losing revenue through existing customers—and it's happening across all product lines.
Why would this happen?
By asking "why", the company discovers a fatal customer support issue inside its phone service team. The good news is, with better training, the company can improve its phone customer service and start to win back revenue.
In 1989, a group of researchers from Wharton, Cornell and the University of Colorado wanted to determine how effective prospective hindsight is.
Otherwise known as a pre-mortem, prospective hindsight imagines an event that has already happened and draws conclusions to learn from it. The researchers discovered pre-mortems were incredibly effective and increased their ability to correctly identify reasons for future outcomes by 30%.
The lesson is simple: If you are open to predicting future mistakes, you can learn lessons and even avoid them.
Research psychologist Gary Klein used this same thinking when developing his PreMortem Risk Assessment Method in 2007. Using this strategy, leaders imagine that a project (still in its early stages) has failed and then consider why it failed.
The pre-mortem usually has four steps:
Conduct a pre-mortem to help look ahead at a project's challenges and create a plan to fix any vulnerabilities.
A 10x problem solver is someone who can manage the job of 10 people—and they're worth their weight in gold.
WhatsApp discovered this when Facebook acquired the company in early 2014. Although WhatsApp only had 32 employees at the time, Facebook was willing to pay an eye-watering $16 billion for the company. That's roughly $500 million for every engineer WhatsApp had on its payroll.
WhatsApp investors noted there was one engineer to every 14 million users, and the company processed 50 billion messages a day across seven platforms. The company's engineers were so effective at creating a product its customers loved that it didn't employ a single employee in PR or marketing.
WhatsApp engineers are the definition of 10x employees. They are so talented and precise that they can single-handedly match the efficiency of 10 engineers and create extraordinary value for the company.
The same can be said for employees who can solve problems quickly. These employees enable companies to grow and differentiate themselves from the competition.
Here are four traits every 10x problem solver has:
No matter how complex, every problem can be solved with the right process and patience.
There are many ways you can approach a problem. Use the different techniques we discussed, or hire brilliant problem-solvers and gain insight from their knowledge to help you see a problem from all angles.
The most crucial part of any problem-solving process is choosing a repeatable technique. Once you've found a reliable way to solve problems quickly, you'll save time and be able to reach your goals faster.