Problem-solving is innate to us and at the core of human evolution.

As human beings, we are striven to understand

our environment, identify the sub-optimal, the challenges and figure out what needs to be done to create the
desirable outcome.

While problem-solving is at the source of all new inventions, our evolution, the revolutions, our industries and the
basis for market-based economies. Problem-solving is also important in our daily lives, be it in your professional life
or your personal. Consider that career switch that you are looking to do. Consider the new task your manager has
assigned you at work. Consider the new competitive threat on the horizon at your company. Why? Perhaps consider
that gadget at home that needs fixing.

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Imagine the situation I was in yesterday when it was raining heavily outside and I had to walk from my home to
office. What would you have done in this situation? You can decide to walk to the office with an umbrella or you
could simply book a cab and reach the office.

Now, after evaluating a few factors, you could decide that booking a cab to reach the office is the most viable and
the most comfortable option. Without even realising that you're actually solving for a problem, you solved one. So,
there you have it. Problems abound right, so are ways to solve them.

My name is Prashanth Balasubramanian and I will be your trainer through this course. In the 10 odd years, I’ve spent
in the industry, I’ve learned the many strategies the masters use and learned the many lessons I have from a host of
business challenges I’ve seen, addressed, and successfully overcome. These draw from the experiences I’ve had at
roughly 40 odd engagements and an equal number of business pitches that I have seen across my times at Bain,
Siemens, and TI.

If there is one thing that I truly believe it is that to every problem out there, there is a solution. One, if you can
carefully and methodically get to. Before we go any further in this discussion, let me give you a brief overview of
what you are going to learn.

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Aside from appreciating the basic theory behind problem-solving, you will:

1. One, understand the overall approach to problem-solving, which you will soon realise is very structured and
quite easy to learn.

2. Two, appreciate common problem-solving methodologies used in business, consulting, and in daily life. I will
orient you to the most frequently used techniques that are called upon almost on 90% plus locations.

3. Three, orient you to the basic consultative problem-solving aids, which are of course more commonly
referred to as frameworks, although I sometimes avoid using that word as it makes it sound very
prescriptive.

4. Four, get an overview of the case interview, an interview type that started as the bread and butter of the
consulting interviews, that is now often being used for strategy and product management roles too.

This course is relevant, therefore, to a variety of audiences. Be it, students, in graduate or postgraduate programs,
be it job applicants to interviews where basic problem solving will be tested, be it young professionals who have a
strong problem-solving aspect to the work they do or be it managers who are looking to fine-tune their skills or
perhaps teach someone else the reins. Irrespective of who you are, you are likely to find something out here that will
be useful for you.

Let me take you through the quick tour of the five modules that we will be covering through this course.

A. First, an introduction to problem-solving. Here, we will define a few specific terms, identifying different
problem and solution context, give you an overview of a few techniques that are commonly used to solve
problems.

B. Second, an approach to problem-solving. Here, you will understand the end-to-end approach that masters
take when it comes to problem-solving.

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 C. Three, the aids to business problem-solving. Here, we will orient you to the most basic aids of frameworks,
as colloquially known, that are used in business strategy or consulting contexts.

D. Four, an introduction to case studies. Here we will look at how case studies are now employed within an
interview and a few practical pointers to help you sail through them.

E. Finally, taking stock and what's next. Here, you will briefly look at all that you have learned and then get a
sense of what you need to do so you can keep going through this journey of learning that you've now
embarked upon.

Before we dive deeper into the different approaches and techniques that you can use to solve problems, let us first
understand what the terms problem and solution mean.

The word problem comes from the Greek word proballein. Pro here means before and ballein here means to throw.
In that context, proballein refers to the idea of something being thrown before you in the form of a question or a
tricky situation or a challenge. Therefore, a problem basically means a situation, which prevents something from
being achieved.

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On the other hand, solution comes from the Latin word solvere; that is to loosen and unfasten. You can perhaps
imagine untying a knot. And similarly, a solution is nothing but a means of solving a problem. I am quite sure you
already see value in problem-solving.

Here are a few specific advantages or benefits of great problem solving:

● The most basic benefit of problem-solving is that it helps you fix things that are broken. Having a good
problem-solving approach can help you in identifying problems and patterns and then determining an
effective course of action to fix them.

● Not just that, a good problem solver addresses risks proactively. Problem-solving skills not only helps you in
fixing things when they break, but they also enable you to foresee what may happen in the future based on
your previous experiences.

● The third advantage is that timely problem solving helps you to seize opportunities. Problem-solving is not
just about solving the problems that come your way or pre-empting them. It is also about creating
opportunities when no one else saw one.

● Good problem solving can help you improve your personal as well as your professional performance. It can
help you effectively address the problems that you face in your day-to-day life as well as equip you well to
deal with adverse business challenges that you are likely to come across.

● Another advantage of having good problem-solving skills is that it can help you advance in your career. These
skills are important in every career at every level. Quite often, employers attach a lot of importance on
problem-solving skills. And by problem-solving skills what they mean is an employee's ability to handle
difficult situations and spot opportunities to improve in the workplace.

Most employers prefer hiring candidates who possess a more structured problem-solving approach, thereby making
it a must-have skill for every individual. So, the importance of processing good problem-solving skills is quite evident.
So, working on upskilling them should be a no-brainer.

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Now there are several different ways in which one could classify problems and there are different theories that
abound on this topic. One textbook on theoretical problem solving that I am particularly fond of is Problem-Solving,
The Owner's Manual by Pierce Howard. If I happen to pique your interest in problem-solving through this module
and you get a chance to read the book, do read it, it is worth the time.

Anyway here's what the book says about the most common types of problems. Now there are four types that you
are most likely to encounter. The first type are problems with unknown causes. For example, when scientists and
researchers for the first time ever encountered a disease, they have no clue what the cause of this disease is. In
these kinds of problems, you need to find out the cause, as researchers generally manage to do when they isolate
the new form of bacteria or virus causing the disease.

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The second type are problems with known, but irrelevant causes. Here we need to start with generating ideas or
solutions. For example, imagine while playing football, you fell and fractured your shin. You know the cost of the
problem. An opponent was going to score the winning goal and so you had to make that tackle to help your team
remain in the game. But is the cause of this problem relevant? No, what matters is how to stop the pain and get your
leg plastered.

The third type are problems where solutions are known, however, outcomes are uncertain. Here we need to identify
which solution has the highest payoff or benefit. Consider the case of a company that realizes that its domestic
market is unattractive. Now, it has options to expand, to say the Middle East or to Southeast Asia. But there is no
way, of course, for the firm to be sure of what an eventual success will look like with either option. In this case, one
could do an assessment of the probability of succeeding and the impact, therefore, to the company's bottom lines
for each of these alternatives. You then multiply the probability of success and the associated payoff, and that is
your probability-weighted payoff. The higher this is the more attractive that option is the.

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The fourth type are problems with solutions and options are known. With certain outcomes each, you need to
basically weigh the pros and the cons and then take a decision.

For example, imagine your car broke down when you were leaving from Chennai to Bangalore. You could A hire an
outstation rental or B take a train. Each of these has specific pros and specific cons in terms of cost and speed of
travel and comfort. You could weigh each of these and take a call.

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That said, if you are looking to become a business leader, these problems that we have listed out here are most
certainly problems you are likely to come across.

1. The first set of problems are everything that should concern the top executives. The most burning questions
that are likely to keep the CEO awake at night. How do I grow my business profitably, how do I sell more, but
reduce my cost, and where should I now invest my resources?

2. The second set of problems are those that concern growth. We will, of course, look at the growth challenge
in onward sections in greater detail, but let me illustrate these, however, with an example. Say you are
Flipkart. You could be asking yourself having already established yourself as a leader in India, which new
countries can I enter. That is, which new geographies.

You must be also asking yourself whether you should make a stronger push into various new categories or
businesses, for example, online pharmacies. You may also be asking yourself whether you should be
supplying new products, for example, varieties of, say, groceries and so on.

3. The third set of problems are those that concern the entire value chain. We will revisit this in our value chain
framework later, but think of this as the chain of activities a business needs to perform in order to serve
their customers.

How do I, for instance, better source or buy the raw materials I need? How do I manufacture better? How do
I then market and sell these better? And, finally, how do I supply them better into the market, that is get
them to my customers better? There are a few other common problems aside from this.

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One question that has come to four with the slew of digital innovation that is happening is how do I improve my
customer experience? Online commerce companies are always asking themselves that question. Look at how
Amazon continues to innovate to make your life as a buyer easier.

Another question that often comes up, how do I do M&A, which are mergers and acquisitions? Now, these are all
complex topics. When done right, for example, they can give you an almost immediate access to markets, revenues,
customers, intellectual property, etc., but they can also be very costly. So, this is indeed a very difficult question.

These aside, there are so many other problems that you will come across at work daily. How do I settle down into a
new line of work? How do I work better with my boss? How do I manage my team so that they are all productive and
all happy; and all of these are great problems. So, let's next look at the various types of ways to actually solve for
these problems.

When it comes to problem-solving, it must already be clear that one important skill to have is critical thinking ability.
Our brain’s function very differently. Amongst one of the greatest pieces of research in the last century is a popular
theory that originated in the work done by Nobel laureate, Roger Sperry.

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This theory classifies the brain's functioning into left and right categories. Basically, the way you think could either be
left-brained or right-brained, which refers to the side of the brain that is dominant in your thinking. People whose
left brain is dominant are said to be analytical and methodical in their thinking approach, while those who are
right-brained tend to have more artistic or creative thinking patterns.

So too, you can have approaches to problem-solving that are left-brained, which are going to be very analytical,
methodical, and logical; and you could have approaches to problem-solving that are going to be right-brained, which
are going to be very creative, divergent, and meant to Ideate.

Our lecture will tend to focus a little more on left-brained approaches given that is indeed the first techniques that
you are most likely to use, and perhaps most commonly in your early days. Once you mature into problem-solving,
you are likely to use more right-brained approaches.

Some people are very likely to think that right-brained approaches to problem-solving tend to be unstructured. It
cannot be farther from the truth actually as you will soon find out when you grow into this topic of problem-solving.

Now, let's look at some techniques of left approaches. Let’s start with the root cause analysis. This approach is
focused on identifying the real underlying cause of a problem, which is often not very easy to see immediately.
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There are several techniques that can be used in surfacing the real underlying cause. We will learn about a couple of
common techniques in this course, namely the five whys and the fishbone analysis. Both can be instrumental in
helping us identify the most effective solutions to implement based on a thorough analysis of the root cause of the
problem.

Let us next look at the precedence chart. This is an approach that outlines the initiatives that one needs to take and
in what order to solve for a problem. This approach is powerful because it will allow you and your project team to
understand all the scheduled activities and the dependencies.

Let us next look at the probabilistic decision analysis. This is a tree-like model that aids decisions by considering
options one could take, possible positive and negative consequences and the probabilities of their occurrences. The
tree allows you to assess the weighted payoff based on which you can take a decision. We will explore this in greater
detail onwards, but a couple of quick callouts.

Be careful about your assessment of positive outcomes. We tend to suffer from a bias where we become overly
optimistic about both the chances and the payoffs of positive outcomes. A lot of us also tend to suffer from another

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bias of risk aversion where we tend to choose options that minimise loss. Getting this method right prevents that
from happening.

Let us next look at the matrix problem-solving approach. Now, we all know that several business challenges require
collaboration of multiple stakeholders. In such a scenario, we need to clearly define how these stakeholders need to
interact. Matrix problem solving is an approach that can effectively address this challenge. Here we have different
approaches like RACI, which many firms follow RACI or R.A.C.I. expands to responsible, accountable, consulted, and
informed.

We also have many other approaches like RAPID from Bain, which is similar and expands to R.A.P.I.D. that is input,
recommend, agree, decide, and perform. As an example, let's say you are looking at designing an ad that needs to be
shown on television. You might have your smart market research intern give you few inputs on what the customers
are looking for. You might then have her manager provide a recommendation on what the ad should emphasise
based on these inputs.

The market research department head might agree with the recommendation. The brand head may then take these
inputs and decide on what the TV ad must finally say. Lastly, the marketing agency that's been hired could help
perform the development of the concept of the ad and place it on TV.

So, these are some of the most commonly used left approaches to problem-solving. You will immediately observe
that all these approaches are in principle, extremely analytical and methodical in nature, and that is how the thinking
patterns of left-brain people are oriented.

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Let’s now move to the right approaches to problem-solving. One of the most popular approaches here is design
thinking. You must have come across this term a few times, but what does it mean? Design thinking is a staged
non-linear and an iterative process. It is staged because it can be divided into five stages, empathise, define, ideate,
prototype, and test.

The first stage empathise focuses on gaining an empathetic understanding of the problem. Once you have a good
understanding of the problem, the next step or stage is to define the exact problem statement. This is particularly
important as a step.

Now, when you have the exact problem statement, you are ready to ideate. Here, you work on brainstorming and
prioritising the most innovative and impactful solutions to the problem you have to find. The next step involves
prototyping and then you have testing, terms we will revisit later in the course. Suffice to say, when you get to these
stages, you would have figured out in a cost-effective manner the viability of the concept.

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You can see that this process allows you to build creative solutions to problems. We also mentioned the term
non-linear. This is because the process itself is flexible and allows you to move from one stage to another in a very
flexible manner. Sometimes you can even skip steps.

Finally, this is an iterative process. Let’s say at some point, you realise that when you are trying to prototype and you
need to further fine-tune your understanding of the problem, you could always go back to the define and the ideate
stages.

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Another right approach for problem-solving, which is commonly used by product-based companies and in
manufacturing setups is RAPID prototyping. This approach usually involves three main stages.

I. The first stage is where a prototype of a product is developed. A prototype in the simplest terms is a sample
version of the final product.

II. Once the prototype is ready, we need to test the product. Here, customer feedback is taken to determine
whether the product is addressing the problem that it was designed to solve.

III. Finally, based on the feedback received from the customers, the prototype is refined. This is again an
iterative process and this cycle keeps going on until the prototype is exactly what the users want.

The benefit of such a RAPID prototyping effort is that user inputs are incorporated already before it formally hits the
market and you are already generating buy-in and promotership with your users. Beware, however, of
under-prototyping or over-prototyping.

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Under-prototyping is when you don't go back soon enough or often enough to your users. I remember an early
version of a product I directed or build off. This mistake happened and we realised that we were not aligned well
enough with what the customer really wanted.

Similarly, over-prototyping is another issue we commonly see. Here, you do too many cycles of feedback and
cooperation, and this can burn out your developers and can also be a little too disruptive for the customer.

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The next approach is one of the most creative problem-solving approaches that I have seen, the Six Thinking Hats
approach. This is based on the theory that humans tend to classic themselves in their own world view and they tend
not to always appreciate a different viewpoint. Such an attitude tends to make group brainstorms unproductive at
times. Therefore, Edward de Bono came up with this method where you metaphorically wear different hats to get
the group to all think in unison and in cargo.

Imagine if you were all asked to pick an idea and where all of you were asked to talk about the benefits of the
product, and then all of you were asked to talk about the challenges with the same product. This means everyone in
the group is thinking in a direction with limited crosstalk, limited shouting at each other, thereby forcing the process
to be very democratic. More about this onwards in our course.

Another commonly used right approach is crowdsourcing. This harnesses the wisdom of the crowds. Used right, it
can help expedite, and frankly speaking, bring multiple ideas that you never knew existed. Hackathons are a good
example where you can get groups to solve for a problem or come up with innovative solutions.

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Similarly, you could have crowd testing done. Here, you could release an app to a crowd and source very quick
feedback. Just the other day, a very good friend of mine sent along a beta version of his app on a closed circle of
friends and asked us all for feedback. Well, he was leveraging crowd testing to great effect.

So, these are some of the most commonly used right approaches to problem-solving. These approaches are based on
creative and divergent thinking, unlike the left approaches, which are more analytical in nature.

With that, you are through module one, introduction to problem-solving. In this module, you have successfully learnt
what the basic definitions of problem and solution are. You also learnt why problem-solving is important. You learnt
the different archetypes of problems depending on whether the causes, the options, and the outcomes are known.

You also learnt the associated broad approaches you take when you encounter these archetypes of problems. You
also learnt about the commonly used left and right approaches to problem-solving where we understood that left
approaches typically lend well to logical and analytical situations and the right approaches lend very well to creative
problem-solving.

In the next module, you will learn how you can build a more structured process to solving complex problems, see
you there.
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