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Problem Solving, Creativity, and Innovation

Problem solving is a skill that is required of every per- son in almost every aspect of life. Seldom does an hour go by without an individual’s being faced with the need to solve some kind of problem. The manager’s job, in particular, is inherently a problem-solving job. If there were no problems in organizations, there would be no need for managers. Therefore, it is hard to con- ceive of an incompetent problem solver succeeding as a manager.

ing, most people implement a marginally acceptable or merely satisfactory solution instead of the optimal or ideal solution. In fact, many observers have attributed the extensive failures of Internet and dot-com firms— as well as more established companies—to the aban- donment of correct problem-solving principles by man- agers. Shortcuts in analytical problem solving by managers and entrepreneurs, they argue, have had a major negative effect on company survival (Goll & Rasheed, 1997). Effective problem solving relies on a systematic and logical approach, and it involves at least four steps, which are explained next.

In this chapter, we offer specific guidelines and techniques for improving problem-solving skills. Two kinds of problem solving—analytical and creative—are addressed. Effective managers are able to solve prob- lems both analytically and creatively, even though dif- ferent skills are required for each type of problem. First, we discuss analytical problem solving—the kind that managers use many times each day. Then we turn to creative problem solving, a kind that occurs less fre- quently. Yet this creative problem-solving ability often separates career successes from career failures, heroes from goats, and achievers from derailed executives. It can also produce a dramatic impact on organizational effectiveness. A great deal of research has highlighted the positive relationship between creative problem solving and successful organizations (Sternberg, 1999). This chapter provides guidelines for how you can become a more effective problem solver, both analytical and creative, and concludes with a brief discussion of how managers can foster creative problem solving and innovation among the people with whom they work.


Most people, including managers, don’t particularly like problems. Problems are time-consuming, they cre- ate stress, and they never seem to go away. In fact, most people try to get rid of problems as soon as they can. Their natural tendency is to select the first reason- able solution that comes to mind (Koopman, Broekhuijsen, & Wierdsma, 1998; March, 1994; March & Simon, 1958). Unfortunately, that first solu- tion is often not the best one. In typical problem solv-

Defining the Problem

The most widely accepted model of analytical problem solving is summarized in Table 1. This method is well known and widely utilized in firms, and it lies at the heart of the quality improvement movement. It is widely asserted that to improve quality as individuals and as organizations, an essential step is to learn and apply this analytical method of problem solving (see Ichikawa, 1986; Juran, 1988; Riley, 1998). Many large organizations (e.g., Ford Motor Company, General Electric, Dana) spend millions of dollars to teach their managers this type of problem solving as part of their quality improvement process. Variations on this four- step approach have been implemented in various firms (e.g., Ford uses an eight-step approach), but all the steps are merely derivations of the standard model we discuss here.

The first step is to define a problem. This involves diagnosing a situation so that the focus is on the real problem, not just its symptoms. For example, suppose you must deal with an employee who consistently fails to get work done on time. Slow work might be the problem, or it might be only a symptom of another underlying problem such as bad health, low morale, lack of training, or inadequate rewards. Defining the problem, therefore, requires a wide search for informa- tion. The more information that is acquired, the more likely it is that the problem will be defined accurately. As Charles Kettering put it, “It ain’t the things you don’t know that’ll get you in trouble, but the things you know for sure that ain’t so.”

Following are some attributes of good problem definition:



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