17.3 Team Problem-solving

No matter who you are or where you live, problems are an inevitable part of life. This is true for groups as much as for individuals. Some work teams are formed specifically to solve problems. Other teams encounter problems for a wide variety of reasons. A problem might be that some workers are putting in more effort than others, yet achieving poorer results or a team may be formed to increase sales or minimize burnout.  Whatever the problem, having the resources of a group can be an advantage as different people can contribute different ideas for how to reach a satisfactory solution.

Once a group encounters a problem, questions that come up range from “Where do we start?” to “How do we solve it?” While there are many approaches to a problem, the American educational philosopher John Dewey’s reflective thinking sequence has stood the test of time. This seven-step process (Adler, 1996) produces positive results and serves as a handy organizational structure. If you are a  member of a group that needs to solve a problem and don’t know where to start, consider these seven simple steps in a format adapted from Scott McLean (2005):

1. Define the problem
2. Analyze the problem
3. Establish criteria for a successful resolution to the problem
4. Consider possible solutions
5. Decide on a solution or a select combination of solutions
6. Implement the solution(s)
7. Follow up on the solution(s)

Define the Problem

If you don’t know what the problem is, how do you know you can solve it? Defining the problem allows the group to set boundaries of what the problem is and what it isn’t, as well as to begin formalizing a description of the scope, size, or extent of the challenge the group will address. A problem that is too broadly defined can overwhelm the group and make getting started even more challenging. If the problem is too narrowly defined, however, important considerations that, if addressed, might help successfully resolve the problem will fall outside of the scope, guaranteeing failure.

Let’s say there’s a web-based company called Fan Favourites that needs to increase its customer base and ultimately sales. The manager assembles key players into a problem-solving group that starts by formulating a working definition of the problem. If it’s “Sales are off, our numbers are down, and we need more customers,” it would be too broad to map out a feasible roadmap to resolution. A more precise definition such as the following, however, would provide more specific direction:

Sales have been slipping incrementally for six of the past nine months and are significantly lower than a seasonally adjusted comparison to last year. Overall, this loss represents a 4.5 percent reduction in sales from the same time last year. However, when we break it down by product category, sales of our non-edible products have seen a modest but steady increase, while sales of edibles account for the drop-off and we need to halt the decline.

With hard facts and figures, as well as a breakdown that pinpoints specific strengths and weaknesses, the team can begin providing a more thorough analysis that would itself suggest solutions.

Analyze the Problem

Now the group analyzes the problem by figuring out its root causes so that the solution can address those rather than mere effects. Why do non-edible products continue selling well? What is it about the edibles that is turning customers off? The problem is complex and requires more than one area of expertise, so let’s meet our problem solvers at Fan Favourites.

Kevin is responsible for customer resource management. He is involved with the customer from the point of initial contact through purchase and delivery. Most of the interface is automated in the form of an online shopping-cart model, where photographs and product descriptions are accompanied by “Add to Cart” buttons. He is available during normal business hours for live chat and voice chat if needed, and customers are invited to request additional information. Most Fan Favourites customers don’t access this service, but Kevin is nonetheless quite busy handling returns and complaints. Because he believes that superior service retains customers while attracting new ones, he is always interested in better ways to serve the customer. Looking at edibles and non-edibles, he’ll study the cycle of customer service and see if there are any common points—from the main webpage, through the catalog, to the checkout process, and on to returns where customers abandon the sale. He has existing customer feedback loops with end-of-sale surveys, but most customers decline to take the survey and there is currently no incentive to participate.

Mariah is responsible for products and purchasing. She wants to offer the best products at the lowest price and to offer new, unusual, rare, or exotic products. She regularly adds these products to the Fan Favourites catalogue and culls underperformers. Right now she has the data on every product and its sales history, but representing that history is a challenge. She analyzes current sales data and produces a report that specifically identifies how each product—edible and non-edible—has and is performing. She wants to highlight “winners” and “losers” but also recognizes that today’s “losers” may be the hit of tomorrow. It’s hard to predict constantly changing tastes and preferences, but that’s part of her job. It’s both an art and a science. She must have an eye for what will catch on tomorrow while continuing to provide what is hot today.

Suri is responsible for data management at Fan Favourites. She gathers, analyzes, and presents information gathered from the supply chain, sales, and marketing. She works with vendors to ensure product availability, makes sales predictions based on sales history, and assesses marketing campaign effectiveness. The problem-solving group members already have certain information on hand: they know that customer retention is one contributing factor. Attracting new customers is a constant goal, but they are aware of the well-known principle that it takes more effort to attract new customers than to keep existing ones. It’s therefore important to ensure quality customer service for existing customers and encourage them to refer friends. The group needs to determine how to promote this favourable customer behaviour.

Another contributing factor seems to be that customers often abandon the shopping cart before completing a purchase, especially when purchasing edibles. The group members need to learn more about why this is happening.

Establish Criteria

Establishing the criteria for a solution is the next step. At this point, information is coming in from diverse perspectives, and each group member has contributed information from their perspective, even though they may overlap at certain points.

Kevin: Customers who complete the post-sale survey indicate that they want to know (1) what is the estimated time of delivery, (2) why a specific item was not in stock and when it will be available, and (3) why their order sometimes arrives incomplete with some items back-ordered but with no notification at the point of sale. He knows that a very small percentage of customers complete the post-sale survey and the results are far from scientific. He also notes that it appears the interface is not capable of cross-checking inventory to provide immediate information concerning back orders, so the customer “Adds to Cart” only to learn several days later that it was not in stock. This is worse for edible products because people tend to order them for special occasions like birthdays and anniversaries. We don’t really know this for sure, however, due to the low post-sale survey participation.

Mariah: Four edible products frequently sell out. So far, we haven’t been able to boost the appeal of other edibles so that people would order them as alternatives when sales leaders are unavailable. We also have several rare, exotic products that are slow movers. They have potential but are currently underperformers.

Suri: We know from a postal code analysis that most customers are from a few specific geographic areas associated with above-average incomes. We have very few credit cards declined, and the average sale is over $100. Shipping costs an average of 8% of the total sales cost. We don’t have sufficient information to produce a customer profile. There’s no specific point in the purchase process where cart abandonment tends to happen; it happens fairly uniformly at all steps.

Consider Possible Solutions to the Problem

The group listens to each other and now brainstorms ways to address the challenges they have analyzed while focusing resources on those solutions that are more likely to produce results.

Kevin: Is it possible for our IT programmers to create a cross-index feature linking the product desired with a report of how many are in stock? I’d like the customer to know right away whether it is in stock or how long they may have to wait. Another idea is to add incentives to the purchase cycle that won’t negatively impact overall profit. I’m thinking a small-volume discount on multiple items, or perhaps free shipping over a specific dollar amount like many online retailers such as Amazon.ca or Well.ca do.

Mariah: I recommend holding a focus group where customers can sample our edible products and tell us what they like best and why. When the best-sellers are sold out, could we offer a discount on related products to provide an instant alternative? We might also cull the underperforming products with a liquidation sale to generate interest.

Suri: If we want to know more about our customers, we need to give them an incentive to complete the post-sale survey. How about a 5%-off coupon code for the next purchase to get them to return and to help us better identify our customer base? We may also want to build in a customer referral rewards program, but it all takes better data in to get results out. We should also explore the supply side of the business by getting a more reliable supply of the leading products and trying to get discounts that are more advantageous from our suppliers, especially in the edible category.

Decide on a Solution

Kevin, Mariah, and Suri may want to implement all the solution strategies, but they do not have the resources to do them all. They’ll complete a cost-benefit analysis, which ranks each solution according to its probable impact, as shown in Table 17.3 below.

^{Table 17.3 | Sample Cost-benefit Analysis}

Now that the options have been presented with their costs and benefits, deciding which courses of action are likely to yield the best outcomes is much easier. The analysis helps the team see beyond the immediate cost of implementing a given solution. For example, Kevin’s suggestion of offering free shipping won’t cost Fan Favourites much money, but it also may not pay off in customer goodwill. Even though Mariah’s suggestion of having a focus group might sound like a good idea, it’ll be expensive and its benefits questionable.

The analysis indicates that Kevin’s best suggestion is to integrate the cross-index feature in the ordering process so that customers can know immediately whether an item is in stock or on back order. Meanwhile, Mariah suggests that searching for alternative products is probably the most likely to benefit Fan Favourites, while Suri’s two supply-side suggestions are likely to result in positive outcomes.

Implement the Solution

Kevin is faced with the challenge of designing the computer interface without incurring unacceptable costs. He strongly believes that the interface will pay for itself within the first year—or, to put it more bluntly, that Fan Favourites’ declining sales will get worse if the website doesn’t have this feature soon. He asks to meet with top management to get budget approval and secures their agreement on one condition: he must negotiate a compensation schedule with the IT consultants that includes delayed compensation in the form of bonuses after the feature has been up and running successfully for six months.

Mariah knows that searching for alternative products is a never-ending process, but it takes time and the company needs results. She decides to invest time evaluating products that competing companies currently offer, especially in the edible category. She theorizes that customers who find their desired items sold out on the Fan Favourites website may have been buying alternative products elsewhere instead of choosing an alternative from Fan Favourites’ product lines.

Suri decides to approach the vendors of the four most frequently sold-out products and ask point-blank, “What would it take to get you to produce these items more reliably in greater quantities?” By opening the channel of communication with these vendors, she motivates them to make modifications that will improve the reliability and quantity. She also approaches the vendors of the less popular products with a request for better discounts in return for their cooperation in developing and test-marketing new products.

Follow Up on the Solution

Kevin: After several beta tests, the cross-index feature was implemented and has been in place for thirty days. Now customers see either “in stock” or “available [mo/da/yr]” in the shopping cart. As expected, Kevin sees a decrease in the number of chat and phone inquiries of the “Will this item arrive before my wife’s birthday?” type. However, he also sees an increase in inquiries asking, “Why isn’t this item in stock?” It is difficult to tell whether customer satisfaction is higher overall.

Mariah: In exploring the merchandise available from competing retailers, she got several ideas for modifying Fan Favourites’ product line to offer more flavours and other variations on popular edibles. Working with vendors, she found that these modifications cost very little. Within the first thirty days of adding these items to the product line, sales are up. Mariah believes these additions also serve to enhance the Fan Favourites brand identity, but she has no data to back this up.

Suri: So far, the vendors supplying the four top-selling edibles have fulfilled their promise of increasing quantity and reliability. Three of the four items have still sold out, however, raising the question of whether Fan Favourites needs to bring in one or more additional vendors to produce these items. Of the vendors Fan Favourites asked to negotiate better discounts, some refused and two were “stolen” by a competing retailer so that they no longer deal with Fan Favourites. In addition, one of the vendors that agreed to give a better discount was unexpectedly forced to cease operations for several weeks because of a fire.

This scenario allows us to see that the problem may have several dimensions as well as solutions, but resources can be limited and not every solution is successful. Even though the problem is not completely resolved immediately, the team made some measurable progress towards their goal. Even learning what doesn’t work gives them valuable information when they return to the drawing board to refine past attempts and hatch all-new solution possibilities. Altogether, the methodical approach serves as a useful guide through the problem-solving process that will eventually lead to success.