Today’s guest contributor is Bill McBean, author of The Facts of Business Life: What Every Successful Business Owner Knows that You Don’t. Bill spent many of his nearly forty years as a successful business owner in the automobile industry. Since selling his company, Bill has been involved in several new businesses, including McBean Partners, an investment and business mentoring company.

In the late 1980s, when I first read Stephen Covey’s The 7 Habits of Highly Successful People, I learned a number of things that I’ve used throughout my ownership career. (In fact, it’s why I still recommend the book to young business people today!)

One of the most important of these is that when there is a problem in your business, the first thing you have to do is determine exactly what the problem is.

Where you stand

This can be a problem in itself because, depending on your position in the organization, you’re likely to see the problem differently than others do. That is, employees see it from their standpoint, managers or supervisors from theirs, and the owner from his or hers. And since they all see the problem differently, they all have different solutions. To further complicate matters, they could all be correct, at least from their own points of view.

This is why, even when a manager or owner thinks a problem has been fixed, a lot of employees wonder why they haven’t fixed it, or think the fix they’ve applied is stupid.

It’s all about where you’re standing.

To make matters worse, problems often appear to be only what is most obvious. For example, what looks like a problem with employee efficiency may, in fact, be the result of a manager’s inability to exercise the kind of control the owner expects. It could also be due to a lack of cash, an insufficient number of trained workers, or employees in another department not doing what they are supposed to do, as well as any number of other possibilities.

The bottom line is that where problems or issues show up may actually be far removed from where they originate.

Art and science of problem-solving

This is why defining the exact nature of a problem is such an important issue in any business. But doing so is not easy. In fact, it’s both a science and an art. The science lies in doing the research that’s needed in order to get to the root of the problem. Although most problems show up at the customer or employee level, that’s seldom where the real problem lies.

In my experience, the further up you go on your company’s chain of command, the closer you come to the real issue. A great many problems, for example, are actually due to policies and processes being reinterpreted by management as they’re being implemented, which in turn causes confusion about how and when things are supposed to be done.

So if you don’t take the time to investigate the real issue, it’s unlikely you’ll be able to fix whatever is wrong, and the problem will continue to rear its ugly head, usually at the most inopportune time.

The art of problem solving lies in the creativity you have to exercise in defining the problem, as well as in dealing with it in such a way that you not only resolve the immediate issue but use the opportunity to improve your business. Every company has to deal with problems, but the most successful owners are those who understand what their businesses need and make the effort, to “take lemons and make lemonade.”

Making lemonade

In fact, the ability to do this is one of the variables that separates the great owners — that is, the most successful ones — from everyone else. One of the best ways to do this, once you’ve resolved the problem, is to look at your company’s policies and processes again to make sure they are all doing what they were intended to do — help your business become the strongest competitor it can be.

Problems are, of course, just a part of business, and they are a result of any one of several factors.

Sometimes they’re created by changes in the market, sometimes by changes you’ve made in response to the market, and sometimes because you’ve been unwilling to make adjustments in how your business operates. They are invariably, however, fueled by three very combustible elements — employees, competitors, and customers. Whatever their causes, though, they must all be resolved.

And the best way to resolve them is to do the research necessary to determine the real problem, and be creative in addressing them so that you not only solve the problem but also provide your company with an ongoing competitive advantage that will enable you to get to the top — and stay there.