In today’s business world, where everything is continuously changing at a fast pace, the ability to arrive at solutions to new problems is in demand. It is a multistage process for businesses to come up with the right solutions for their problems. This post goes through the nine-stage process model for creative problem-solving. The process gives a guide for businesses to follow, from defining the problems to evaluating solutions. It is designed to assist organizations in understanding their issues in-depth as well as come up with the best possible solutions. Nike is given as an example to illustrate the points made in this post.
Table of Contents
- Constantly Analyzing the Environment to Find Potential Problems for Creative Problem-Solving
- Objective Finding – Define the Problem Area
- Fact-Finding – Gather Information for creative Problem-Solving
- Problem Finding – Define the Problem Correctly
- Specifying Assumptions
- Finding Ideas and Generating Solutions
- Solution Finding – Evaluate and Choose Between Possible Solutions
- Acceptance Finding – Implement Chosen Ideas Correctly for Creative Problem-Solving
- Controlling Post-Implementation
Constantly Analyzing the Environment to Find Potential Problems for Creative Problem-Solving
The first step in the nine-stage process for creative problem-solving is to scan the environment to look for any possible issues. One of the popular tools that businesses can use to analyze the external environment is PESTEL analysis. This framework examines six vital environmental factors to understand how they interact with a business. The first factor is politics. The PESTEL looks at how specific regulations, laws, or taxes can affect the daily operations of a company or an industry. For instance, in May 2020, the European Commission opened an investigation to find out whether Apple had violated the European Antitrust law. Although Apple is an American firm, its operations in Europe are under the control of the governments over there. Apple could have avoided this situation if it had analyzed the political factors in Europe more thoroughly.
The second factor is economics. This factor includes all macroeconomic indicators, such as interest rates, inflation rates, employment rates, etc., that can have an impact on the revenues and expenses of a business. For instance, when interest rates increase, it is more expensive for companies to borrow money from banks. Thus, their costs are higher. Because these macroeconomic indicators can change daily, constant analysis of them can help firms prepare for any potential changes in the environment.
The third factor is related to society and culture. Anything that ranges from population growth to racial distribution can have a great impact on businesses in general. For instance, increasing rates of obesity forces companies in the food industry to come up with more healthy products. The fourth factor in the PESTEL model is technology. Nowadays, a lot of companies are investing heavily in research and development (R&D) activities. These R&D activities can lead to significant and disruptive technological changes. If a business can get a hand on new technology that improves its operations before its competitors can, the company can gain a big competitive advantage and market share in its industry.
The fifth factor is environmental. Nowadays, the public has paid more attention to climate change and greenhouse gas. Consumers no longer want to buy products from companies whose operations harm the environment. Instead, they want to be associated with firms that not only focus on making profits but also on protecting the environment. This trend makes companies invest more funds and resources in corporate social responsibility. The final factor in the PESTEL model is legal, which includes employment law, consumer law, copyright law, etc. Similar to the political element, the legal factor can influence the way companies operate, their costs, and how consumers react to their products.
Besides, organizations can use SWOT analysis when analyzing the environment for creative problem-solving. This analysis model can help firms understand the internal facts, including their strengths (what have they been doing well) and weaknesses (what are their limits), and the external factors, including opportunities and threats. Companies can identify possible objectives by looking at the combinations of the four elements in the SWOT analysis model.
In Nike’s case, the company’s strength is producing shoes and sneakers. Nike sees a new opportunity in the cross-training sneaker market. Thus, it has invested in a plan to develop and manufacture new cross-training sneakers. Nike’s weakness is that it does not have direct control over the materials to produce cross-training sneakers. Hence, it cannot control the costs, and ultimately, its product price. This limit has led to Nike’s biggest threat in this situation. The danger is that Nike is dependent on a single supplier.
Objective Finding – Define the Problem Area
In this step of the nine-stage process, companies should implement a plan to identify their problems before going forward with any innovations or creative problem-solving. It is because many firms developed new products and projects without rigorously scrutinize their issues. As a result, those firms often ended up finding out that their projects or innovation programs were not aligned with their problems and that they deliver wrong outcomes that could not be implemented.
To avoid this mistake, companies can carry out two necessary steps. First, they should build up the demand for a solution. In other words, problems should be expressed in simple terms so that everybody can understand the scale of the issues and establish a solution for the problems. Two questions should be asked in this first step. What is the fundamental demand for businesses? And what results do they want the solutions to deliver? For the second step, the purpose is to understand why it is crucial to solving the problems. Here, companies can do a cost and benefit analysis. They should identify all costs and benefits associated with potential solutions. If the benefits of solving the problems outweigh the costs, the organizations should move on with addressing the issues.
Fact-Finding – Gather Information for creative Problem-Solving
In this stage, companies can rewrite the problems in the following format that consists of questions on how, what, when, and why. From this format, firms can gather facts to answer the questions. It makes sure that no relevant information is omitted. In Nike’s problem, what happens is the supplier has decided to increase its price. It occurs when Nike has been ready to produce new cross-training sneakers. The cause is that the cost of the material that the supplier use has increased. As to how the problem can happen, it is due to the uniqueness of the supplier.
Problem Finding – Define the Problem Correctly
This stage relies on the previous step, which is fact-finding. This stage encourages businesses to look at their problems from different perspectives for creative problem-solving. For Nike, its initial problem identification is its dependence on a single supplier. Nike can try to figure out various aspects of this stage. The new perspective can be that Nike did not negotiate well with its supplier before signing a contract. Another point is that Nike chooses inappropriate materials for its new sneaker product. If this perspective is selected, the solution can be looking for new materials that are equivalent in quality but has lower costs.
This stage is directly related to the problem-finding stage. Finding out new assumptions can help companies come up with new perspectives for their issues. For Nike, new premises can be that costs can be reduced in other parts of the manufacturing process. If this assumption is in place, Nike can move forward with its plan despite the supplier’s price increase.
Finding Ideas and Generating Solutions
After the problems and all the perspectives are defined, Nike can move on to generate solutions for its problems. If the problem is Nike’s reliance on one supplier, the answer is to diversify its supply chain by looking for new materials that other suppliers can provide. If the problem is Nike’s negotiation with the supplier, the company can go back to the supplier to negotiate and sign a new contract that benefits both sides. Another solution is that Nike can try to reduce its costs by evaluating its manufacturing process to identify which parts of the process can be made redundant. Finally, the problem can be bad timing. If this is the case, Nike can postpone its plan to a better time when the marital price goes down and remains stable.
Solution Finding – Evaluate and Choose Between Possible Solutions
In this stage, it is essential to assess the costs and benefits of each solution. The solution that can bring the most benefits with minimum costs should be chosen. In all solutions defined in the prior stage, going back to the supplier and renegotiating the contract term is the most feasible. For example, Nike can ask its supplier to keep the price unchanged in exchange for high purchased quantity or signing new contracts with the supplier for other projects. Another reasonable solution is that Nike can postpone its production until a better time. However, delaying production may cost Nike a lot more than the increase in supplier price.
Acceptance Finding – Implement Chosen Ideas Correctly for Creative Problem-Solving
In this stage, companies should come up with different obstacles that may prevent them from implementing the solution and how to overcome those obstacles for creative problem-solving. One of the barriers to the answer given in the prior stage is that the supplier does not want to negotiate new terms. If this is the case, Nike should come up with ways to persuade the supplier to go back to the negotiating table.
In this stage, companies can define what control system they should implement to control the results of their solutions. Furthermore, an evaluation system should be identified to evaluate the success of the solutions as well as come up with new plans when the answers do not deliver the desired outcome.
To sum up, after analyzing all facts, the problem with Nike is that it relies only on one supplier. Consequently, when the supplier increases the price of raw materials, Nike encounters a difficult situation. However, based on the nine-stage model for creative problem-solving, the problem can be looked at from different angles. One of them is that Nike has negotiated a lousy term that allows its supplier to increase the price at its discretion. If this is the case, Nike should turn back to the supplier to negotiate a new contract term. The solutions should be based on how Nike looks at its problem and how it performs the analysis of costs and benefits.