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Why Problem-Solving Skills Are Essential for Leaders in Any Industry

• 17 Jan 2023

Any organization offering a product or service is in the business of solving problems.

Whether providing medical care to address health issues or quick convenience to those hungry for dinner, a business’s purpose is to satisfy customer needs .

In addition to solving customers’ problems, you’ll undoubtedly encounter challenges within your organization as it evolves to meet customer needs. You’re likely to experience growing pains in the form of missed targets, unattained goals, and team disagreements.

Yet, the ubiquity of problems doesn’t have to be discouraging; with the right frameworks and tools, you can build the skills to solve consumers' and your organization’s most challenging issues.

Here’s a primer on problem-solving in business, why it’s important, the skills you need, and how to build them.

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What Is Problem-Solving in Business?

Problem-solving is the process of systematically removing barriers that prevent you or others from reaching goals.

Your business removes obstacles in customers’ lives through its products or services, just as you can remove obstacles that keep your team from achieving business goals.

Design Thinking

Design thinking , as described by Harvard Business School Dean Srikant Datar in the online course Design Thinking and Innovation , is a human-centered , solutions-based approach to problem-solving and innovation. Originally created for product design, design thinking’s use case has evolved . It’s now used to solve internal business problems, too.

The design thinking process has four stages :

• Clarify: Clarify a problem through research and feedback from those impacted.
• Ideate: Armed with new insights, generate as many solutions as possible.
• Develop: Combine and cull your ideas into a short list of viable, feasible, and desirable options before building prototypes (if making physical products) and creating a plan of action (if solving an intangible problem).
• Implement: Execute the strongest idea, ensuring clear communication with all stakeholders about its potential value and deliberate reasoning.

Using this framework, you can generate innovative ideas that wouldn’t have surfaced otherwise.

Creative Problem-Solving

Another, less structured approach to challenges is creative problem-solving , which employs a series of exercises to explore open-ended solutions and develop new perspectives. This is especially useful when a problem’s root cause has yet to be defined.

You can use creative problem-solving tools in design thinking’s “ideate” stage, which include:

• Brainstorming: Instruct everyone to develop as many ideas as possible in an allotted time frame without passing judgment.
• Divergent thinking exercises: Rather than arriving at the same conclusion (convergent thinking), instruct everyone to come up with a unique idea for a given prompt (divergent thinking). This type of exercise helps avoid the tendency to agree with others’ ideas without considering alternatives.
• Alternate worlds: Ask your team to consider how various personas would manage the problem. For instance, how would a pilot approach it? What about a young child? What about a seasoned engineer?

It can be tempting to fall back on how problems have been solved before, especially if they worked well. However, if you’re striving for innovation, relying on existing systems can stunt your company’s growth.

Related: How to Be a More Creative Problem-Solver at Work: 8 Tips

Why Is Problem-Solving Important for Leaders?

While obstacles’ specifics vary between industries, strong problem-solving skills are crucial for leaders in any field.

Whether building a new product or dealing with internal issues, you’re bound to come up against challenges. Having frameworks and tools at your disposal when they arise can turn issues into opportunities.

As a leader, it’s rarely your responsibility to solve a problem single-handedly, so it’s crucial to know how to empower employees to work together to find the best solution.

Your job is to guide them through each step of the framework and set the parameters and prompts within which they can be creative. Then, you can develop a list of ideas together, test the best ones, and implement the chosen solution.

Related: 5 Design Thinking Skills for Business Professionals

4 Problem-Solving Skills All Leaders Need

1. problem framing.

One key skill for any leader is framing problems in a way that makes sense for their organization. Problem framing is defined in Design Thinking and Innovation as determining the scope, context, and perspective of the problem you’re trying to solve.

“Before you begin to generate solutions for your problem, you must always think hard about how you’re going to frame that problem,” Datar says in the course.

For instance, imagine you work for a company that sells children’s sneakers, and sales have plummeted. When framing the problem, consider:

• What is the children’s sneaker market like right now?
• Should we improve the quality of our sneakers?
• Should we assess all children’s footwear?
• Is this a marketing issue for children’s sneakers specifically?
• Is this a bigger issue that impacts how we should market or produce all footwear?

While there’s no one right way to frame a problem, how you do can impact the solutions you generate. It’s imperative to accurately frame problems to align with organizational priorities and ensure your team generates useful ideas for your firm.

To solve a problem, you need to empathize with those impacted by it. Empathy is the ability to understand others’ emotions and experiences. While many believe empathy is a fixed trait, it’s a skill you can strengthen through practice.

When confronted with a problem, consider whom it impacts. Returning to the children’s sneaker example, think of who’s affected:

• Your organization’s employees, because sales are down
• The customers who typically buy your sneakers
• The children who typically wear your sneakers

Empathy is required to get to the problem’s root and consider each group’s perspective. Assuming someone’s perspective often isn’t accurate, so the best way to get that information is by collecting user feedback.

For instance, if you asked customers who typically buy your children’s sneakers why they’ve stopped, they could say, “A new brand of children’s sneakers came onto the market that have soles with more traction. I want my child to be as safe as possible, so I bought those instead.”

When someone shares their feelings and experiences, you have an opportunity to empathize with them. This can yield solutions to their problem that directly address its root and shows you care. In this case, you may design a new line of children’s sneakers with extremely grippy soles for added safety, knowing that’s what your customers care most about.

Related: 3 Effective Methods for Assessing Customer Needs

3. Breaking Cognitive Fixedness

Cognitive fixedness is a state of mind in which you examine situations through the lens of past experiences. This locks you into one mindset rather than allowing you to consider alternative possibilities.

For instance, your cognitive fixedness may make you think rubber is the only material for sneaker treads. What else could you use? Is there a grippier alternative you haven’t considered?

Problem-solving is all about overcoming cognitive fixedness. You not only need to foster this skill in yourself but among your team.

4. Creating a Psychologically Safe Environment

As a leader, it’s your job to create an environment conducive to problem-solving. In a psychologically safe environment, all team members feel comfortable bringing ideas to the table, which are likely influenced by their personal opinions and experiences.

If employees are penalized for “bad” ideas or chastised for questioning long-held procedures and systems, innovation has no place to take root.

By employing the design thinking framework and creative problem-solving exercises, you can foster a setting in which your team feels comfortable sharing ideas and new, innovative solutions can grow.

How to Build Problem-Solving Skills

The most obvious answer to how to build your problem-solving skills is perhaps the most intimidating: You must practice.

Again and again, you’ll encounter challenges, use creative problem-solving tools and design thinking frameworks, and assess results to learn what to do differently next time.

While most of your practice will occur within your organization, you can learn in a lower-stakes setting by taking an online course, such as Design Thinking and Innovation . Datar guides you through each tool and framework, presenting real-world business examples to help you envision how you would approach the same types of problems in your organization.

Are you interested in uncovering innovative solutions for your organization’s business problems? Explore Design Thinking and Innovation —one of our online entrepreneurship and innovation courses —to learn how to leverage proven frameworks and tools to solve challenges. Not sure which course is right for you? Download our free flowchart .

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• Getting to the root of the issue:  First, Sarah starts by looking at the numbers for the past few months. She identifies the products for which sales are falling. She then attempts to correlate it with the seasonal nature of consumption or if there is any other cause hiding behind the numbers. 
• Identifying the sources of the problem:  In the next step, Sarah attempts to understand why sales are falling. Is it the entry of a new competitor in the next neighborhood, or have consumption preferences changed over time? She asks some of her present and past customers for feedback to get more ideas. 
• Putting facts on the table:  Next up, Sarah talks to her sales team to understand their issues. They could be lacking training or facing heavy workloads, impacting their productivity. Together, they come up with a few ideas to improve sales. 
• Selection and application:  Finally, Sarah and her team pick up a few ideas to work on after analyzing their costs and benefits. They ensure adequate resources, and Sarah provides support by guiding them wherever needed during the planning and execution stage. 
• Identifying the root cause of the problem.
• Brainstorming possible solutions.
• Evaluating those solutions to select the best one.
• Implementing it.

• Analytical thinking:   Analytical thinking skills refer to a leader’s abilities that help them analyze, study, and understand complex problems. It allows them to dive deeper into the issues impacting their teams and ensures that they can identify the causes accurately. 
• Critical Thinking:  Critical thinking skills ensure leaders can think beyond the obvious. They enable leaders to question assumptions, break free from biases, and analyze situations and facts for accuracy. 
• Creativity:  Problems are often not solved straightaway. Leaders need to think out of the box and traverse unconventional routes. Creativity lies at the center of this idea of thinking outside the box and creating pathways where none are apparent. 
• Decision-making:  Cool, you have three ways to go. But where to head? That’s where decision-making comes into play – fine-tuning analysis and making the choices after weighing the pros and cons well. 
• Effective Communication:  Last but not at the end lies effective communication that brings together multiple stakeholders to solve a problem. It is an essential skill to collaborate with all the parties in any issue. Leaders need communication skills to share their ideas and gain support for them.

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Problem Solving Ability

Definition: anticipating, analyzing, diagnosing, and resolving problems..

Leaders with an aptitude for problem-solving have the ability to analyze, diagnose and deal with problems effectively. Whether the problem is linear and “tame,” or nonlinear and “wicked,” adept problem solvers have a natural propensity to discover and help lead others to solutions. The leaders of tomorrow must learn to be collaborative problem-solving facilitators, instead of solitary master problem-solvers. Problem-solving ability is a multi-faceted competency that uses other skills discussed throughout the Leaders Are Clear Thinkers section, including conceptual thinking, planning and organization, and creativity. In this section you’ll discover resources and activities to sharpen your problem-solving skills.

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Problem solving: a critical leadership skill.

Home » Blog » Business » Problem Solving: A Critical Leadership Skill

Today’s leadership responsibilities and roles aren’t limited to delegating and management. Instead, when it comes to effective leadership, problem solving is not only an important skill, but a crucial role for leaders to take on.

Faced with more complex challenges in business and the world at large, many leaders are embracing what some traditionalists may call anti-leadership. Instead of focusing primarily on managing their people, many leaders are fixing their attention on the problems at hand, and unintentionally leading people excited about the solutions they are striving for. Founder of the MIT Leadership Center Deborah Ancona and Executive Director Hal Gregersen have labeled this problem-led leadership , and are reporting an increase in this distinctive style.

Even on a smaller scale, problem solving is a critical component for leaders who must strive to eliminate barriers and challenges that can otherwise hinder their people’s or their business’ progress. In a Harvard Business Review study about the skills that influence a leader’s success, problem solving ranked third out of 16.

As a leader, you need to approach problem solving as an opportunity, with a broad perspective and a calm demeanor. And, you’ll want to arm yourself with a few critical approaches to hone your problem-solving skills.

How to Develop Problem Solving Skills

Identify and define the problem.

Implementing a solution too early may not fully address the problem. Instead, invest time in understanding and defining the scope and nature of the problem to generate several good solutions before taking action. Don’t confuse a generic label of the problem (for example, the sales forecast is wrong) with the real definition of the problem. To truly define the problem, you would need to indicate something like: I know our department anticipated twice the revenue shown in the forecast here, and only three salespeople are represented from a staff of 10. Then, you also need to identify when and what the resolution needs to be: In one week, I need the correct forecast available for a board meeting.

Analyze the Problem

You will also want to assess the degree to which the problem has affected the overall business. In the example above, perhaps the sales forecast report has impacted other departments in the company as well. Look for overall patterns and ask questions about who, what, when, where, why and how to understand the scale of the impact. The objective is to find the root cause to allow you to implement a permanent resolution instead of a temporary fix.

Data offers a fact-based perspective on a problem and can help you define the issue. Learn what types of data are available for you and how to interpret the datasets. And, be sure to translate your findings in clear and meaningful ways for stakeholders who can support resolutions.

Communicate

You will need to cultivate good communication skills, to allow you to clearly and effectively relay the problem to key stakeholders. Then, you’ll also need to inspire the people who are supporting the solution to remain connected to the task until it is resolved.  

Transparency is a key tenant of communication to ensure all aspects of a problem are understood. This is also critical when proposing solutions, as you need to understand different perspectives and concerns before implementing what you believe to be the right approach. Sometimes, this may entail keeping team members accountable for giving honest feedback, as not everyone feels comfortable sharing, particularly negative or dissenting opinions.

Finally, once you have a plan, you’ll need to communicate unambiguously to implement it.

Be Open-Minded

Problem solving cannot be done well if leaders are change- or risk-averse – or worse, allowing team members to mask inefficiencies. You’ll need to be able to assess a problem outside of immediate, obvious details, and be open to taking risks to find a better, more innovative approach. Problem solving is best conducted when many people can contribute their best ideas and skills, and you’ll need to keep an open mind to hear from top talent and innovate ideas across the organization, and to take on a new perspective.

Develop Solutions

Once the problem has been identified and analyzed and you’ve brainstormed solutions, you’ll want to narrow down a few fully developed solutions. Presenting every idea on the list to stakeholders or clients can hamper decisions. With a narrowed list, you can design a long-term solution or two that consider the time, cost, and technology required to support the solution.  

Learn From Mistakes

Mistakes are a natural part of growth and development, and fostering solid problem-solving skills will likely entail some errors along the way. But mistakes can provide learning opportunities and improve your overall process and approach – as long as you appreciate them as a learning opportunity. Even if you aren’t grappling with an obvious mistake, take time to reflect on the overall process and approach and determine if you would change anything to boost efficiency, creativity, or speed the next time.

Cultivating strong problem-solving skills is critical for leaders at any level and career stage, and starting now ensures as you advance, you’ll be fine-tuning this vital skill instead of trying to play catch up.

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Leaders Can Use These Nine Skills to Become Better Problem-Solvers

We often think of leaders as problem solvers, and this opens the possibility of leaders honing their problem-solving skills through training. But how can we train leaders to solve problems? Specifically, it is something called “case-based knowledge” that allows leaders to solve complex issues. Case-based knowledge refers to the context of the problem and any previous experience with similar issues , like a mental library of information tailored toward a specific problem.

But while case-based knowledge has the potential to  improve performance in leadership roles , it is not necessarily enough by itself. Some leaders may get bogged down in the details of a decision or find it difficult to work on multiple cases at once because their case-based knowledge is stored in insufficient “mental models.” A mental model is a network of information that helps people mentally process and store information efficiently. Mental models directly impact a leader’s behavior and problem-solving ability.

In order to improve leader performance through training, the primary question is: what skills best help leaders use case-based knowledge and mental models to solve complex problems ?  Researchers (Mumford, Todd, Higgs, & McIntosh, 2017) reviewed recent literature to identify nine skills critical to leadership performance:

NINE SKILLS FOR PROBLEM-SOLVING LEADERS

• Gather information to define the problem.
• Think about the origin of the problem and possible solutions to the problem and how they are related.
• Consider any factors that may be constraining solutions.
• Plan the solution and consider ways to prevent harmful outcomes.
• Objectively forecast or predict what outcomes will occur after the plan is implemented.
• Use creativity to develop contingency plans.
• Evaluate ideas and appraise solutions. Which will be most effective?
• Use wisdom to appraise solutions using objective self-reflection, awareness, and sound judgment.
• Craft a vision and communicate, adjust, and articulate plans to followers.

IMPLICATIONS FOR LEADERS

When considering the leader as a problem solver, the above nine critical skills will help improve the use of case-based knowledge in mental models of leaders. This leads to more effective problem-solving. Each skill should be considered more or less important depending on the situation. For example, creativity may be important during unanticipated crises , but forecasting may be more critical for social problems with a myriad of possible outcomes. These cognitive skills are easily developed through training, such as strategy-based instructional interventions or self-reflection exercises. They may also be considered for use in assessing leadership potential. Overall, these skills allow leaders to more effectively navigate case-based knowledge in mental models, resulting in higher-quality solutions .

Mumford, M. D., Todd, E. M., Higgs, C., & McIntosh, T. (2017). Cognitive skills and leadership performance: The nine critical skills.  The Leadership Quarterly, 28 , 24-39.