There is a particular kind of business problem that can be difficult to describe.
Nothing is necessarily broken. Customers are still buying. Employees are still working. Orders are still going out. Revenue may even be growing.
But something doesn't feel right.
Margins may be getting tighter. Decisions take longer. Technology that was supposed to simplify the business has created new complexity. Customers are behaving differently. Growth has become harder. The organization feels busier without necessarily becoming better.
Leadership knows something needs to change.
Where do we start?
Don't Start With the Solution
When a problem becomes visible, there is a natural tendency to move immediately toward a solution.
Sales are slowing, so increase marketing. Margins are declining, so reduce costs. Operations are struggling, so implement new software. A location is underperforming, so change management. E-commerce isn't growing, so redesign the website.
Sometimes those are exactly the right moves. Sometimes they aren't.
The problem is that what a business experiences first is often a symptom, not the underlying issue.
Declining sales might be a marketing problem. But they might also reflect changes in customer behavior, pricing, product assortment, competition, service, inventory availability, or the overall customer experience.
Operational problems might require better technology. Or they may be caused by unnecessary complexity in the processes the technology was designed to support.
Before deciding what to change, it helps to understand why the current situation exists.
Separate the Symptom From the Problem
Imagine a retailer experiencing declining profitability.
The initial conclusion might be straightforward: costs are too high.
That may be true. But look deeper and the picture can become more complicated.
Revenue may have increased while gross margin declined. A growing product assortment may have created inventory that moves too slowly. Promotions may be driving transactions without creating enough profit. New locations may be generating sales while adding disproportionate operating costs. E-commerce may be growing while fulfillment and customer-acquisition costs make those sales less attractive than they appear. Technology expenses may have accumulated across systems that no longer serve a clear purpose.
None of these possibilities automatically means the business made a bad decision. They mean the business has changed.
And when a business changes, the questions leadership needs to ask should change with it.
Look Across the Business
Business problems rarely respect organizational boundaries.
A customer problem can become an operations problem. An inventory problem can become a cash-flow problem. A technology decision can affect labor. A pricing decision can change customer behavior. An expansion decision can expose weaknesses that were manageable at a smaller scale.
That is why examining one department in isolation can sometimes produce an incomplete answer.
- Customers
- Revenue
- Margin
- Operations
- Inventory
- Technology
- People
- Risk
- Cash
- Strategy
The goal isn't to make the problem more complicated. It's to avoid solving the wrong one.
Ask Better Questions
What changed?
Was there a point when performance began moving in a different direction?
What do we know versus what do we assume?
Businesses accumulate assumptions. Some remain true for years. Others quietly stop being true.
Where are we actually making money?
Revenue and profitability are not the same thing. Understanding profitability by product, customer, channel, location, or business unit can change the conversation.
What has become more complicated?
Growth often adds products, systems, processes, vendors, locations, channels, and organizational layers. Complexity has a cost even when it doesn't appear as a single line on the income statement.
What would happen if we did nothing?
Not every problem deserves immediate intervention. Some do. Understanding the cost of inaction can help establish priorities.
What are we not seeing?
This may be the most valuable question of all. Leadership teams naturally become close to their businesses. That familiarity creates valuable knowledge, but it can also make long-standing assumptions harder to see.
Find the Constraint
Businesses can have dozens of opportunities for improvement. That doesn't mean they should pursue all of them.
What is preventing the business from performing better right now?
Maybe the constraint is demand. Maybe it's margin. Maybe it's inventory. Maybe it's operational capacity. Maybe it's technology. Maybe it's management bandwidth. Maybe it's capital.
Or perhaps the business has several individually reasonable initiatives competing for the same people, money, and attention.
Finding the constraint helps create focus. Instead of producing a list of twenty things the business could improve, leadership can identify the few things that matter most.
Don't Confuse Activity With Progress
Once a business recognizes a problem, activity can feel reassuring.
Meetings are scheduled. Projects are created. Software demonstrations begin. Consultants are contacted. New reports are requested. Teams start building plans.
But activity isn't necessarily progress.
- What problem are we actually trying to solve?
- Why do we believe this is the underlying problem?
- What would be different if we solved it?
If those answers aren't clear, more activity may simply create more complexity.
Decide What Matters Now
Some problems need immediate attention. Others matter but can wait.
A useful way to think about priorities is to consider both impact and urgency.
What could materially affect customers, profitability, cash flow, operations, or risk? What becomes significantly harder or more expensive if nothing changes for six months? What could create the greatest improvement if addressed? What is consuming disproportionate leadership attention? And what can realistically be changed?
The objective isn't to create the perfect plan. It's to establish enough clarity to make the next good decision.
When an Outside Perspective Can Help
There are times when the people closest to a business are exactly the people who should solve the problem. There are also times when proximity makes the problem harder to see.
- The organization disagrees about what the real problem is.
- The same issue keeps returning despite repeated attempts to fix it.
- A decision crosses multiple parts of the business.
- Leadership is considering a significant investment or change.
- The business has grown faster than its systems or processes.
- Internal teams don't have enough time to step away from daily operations and examine the issue objectively.
- Leadership simply wants another experienced perspective before making an important decision.
Outside help shouldn't replace management's understanding of the business. It should make that understanding more useful.
A Final Thought
When leadership knows something needs to change, there is often pressure to produce an answer quickly.
But speed doesn't come only from moving faster. Sometimes speed comes from getting clear sooner.
Understand what changed. Separate symptoms from causes. Look across the business. Challenge assumptions. Find the constraint. Decide what matters most. Then act.
Because the first question shouldn't always be: What should we do? Sometimes the better question is: What problem are we really trying to solve?