Thinking

Better problem-solving

Are you happy with how well and quickly you’re solving the biggest problems in your firm?

In the agency world, we’re usually spread thin and moving fast. Lists get longer and staying across everything is hard. We can lose even more ground when we put a lot of effort into something without success.

If solving a problem matters and there isn’t a straightforward, easy fix, slow down to think things through. Your future self will thank you. (Ask me how I know!)

On the surface, solving problems is simple enough:

  1. Expose reality
  2. Act on it
  3. Repeat

But like building a car, creating a vehicle to solve a problem in your firm usually takes many parts working well together. The ignition needs a starter, the starter a battery, and the battery an alternator.

If you’re not getting results (or want to increase the odds you do), return to first principles to find any missing links.

  1. Problem – Understand what’s wrong and why it matters
  2. Metrics – Know how to measure the problem
  3. Aim – Define what success is
  4. Drivers – Diagnose contributors and causes
  5. Levers – Find sources of leverage
  6. Priorities – Choose levers considering impact and effort
  7. Action – Deploy the right people and resources

Let’s apply this to an example:

  1. Problem – Delivery/services profit margin has declined 20% YoY
  2. Metrics – Delivery margin and also utilization, % billable, EHR, CPH
  3. Aim – Increase delivery margin 20%
  4. Drivers – Measurement reveals the following:
    1. Decrease in client hours
    2. Only a minor decrease in capacity
    3. Increase in cost per hour
    4. Decrease in % billable
    5. Only a minor increase in effective hourly rate
  5. Levers – Segmenting and analysis reveal:
    1. Clients with more opportunities to add value and increase hours
    2. Staff that are persistently underutilized
    3. Clients being over-served and under-billed
    4. Clients overdue for rate increases
    5. One team with a pattern of client demands for invoice credits
  6. Priorities – Weighing impact and effort, our analysis shows the most leverage will come from:
    1. Rate increases for select clients (above average hours, below average rates)
    2. Account review and strategy for select clients (more opportunities)
    3. Ending engagements with select staff whose skills and interests no longer align with our client portfolio
  7. Action – Each of these priorities is assigned a single accountable owner with the time, capabilities, and empowerment to succeed

The whole problem-solving effort is at risk if any of these pieces are missing at the start. And as you take action, revisit first principles periodically to close any gaps that develop.

To fix our problem-solving itself, we slow down and:

  1. Expose reality
  2. Act on it
  3. Repeat

Application: Think of a problem you don’t have traction solving or one you’re about to start solving. Set aside a few minutes to work through first principles and find any gaps; then make space to close them.