Problem Solving for Finance Leaders

Episode #94: As leaders in Finance and Accounting, we are asked to analyze problems constantly. Leaders solve the critical problems of the organization. We don’t let issues grow into bigger problems. The most difficult part of problem solving is to identify what the real problem is, followed by performing the analysis to develop viable options, and then deciding the solution which is best for the organization moving forward. It sounds easy, but it takes leadership to accept that a problem exists and to be able to commit resources to analyze it and correct it.

Episode outline:

1. Developing a problem-solving skill set,
2. Problem solving is a process,
3. Sound problem solving leads to better decision making, and
4. Be a leader in all problem solving and decision making. 

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As leaders in finance and accounting, we are asked to analyze problems constantly. Leaders solve the critical problems of the organization, we don't let issues grow into bigger problems. The most difficult part of problem solving is to identify what the real problem is followed by performing the analysis to develop viable options, and then deciding the solution which is best for the organization moving forward. It sounds easy, but it takes leadership to accept that a problem exists, and to be able to commit resources to analyze it and correct it. Please enjoy the episode. Welcome to the finance leader podcast where leadership is bigger than the numbers. I am your host, Stephen McLean. This is the podcast for developing leaders in finance and accounting. Please consider following me on Twitter, Facebook, Instagram and LinkedIn. My usernames and the links are in this episode's show notes. And also, please join the Facebook group I have for this podcast community. Thank you. This is episode number 94. And I'll be talking about problem solving. And I will highlight the following topics. Number one, developing a problem solving skill set. Number two, problem solving is a process. Number three, sound problem solving leads to better decision making. And four be a leader in all problem solving and decision making. executive coach and author Michael gobe said you can increase your problem solving skills by honing your question asking ability. This week, I will be providing an introduction to problem solving and decision making. I chose this topic on purpose, following what I have discussed over the last few weeks, such as financial planning and analysis and Episode 91, data validation and episode 92. And last week in Episode 93, it was about adopting artificial intelligence. The components of all three of these topics help us address problem solving and decision making. But we don't address problem solving as an essential skill set enough with our teammates or even when we interview potential candidates, we often don't even know that a problem exists or even know how to properly address it. Once we do see it. We think something may be happening. Then we ask an analyst to pull some data, and maybe you find something. But have you used a formal problem solving process. We are definitely problem solvers and finance and accounting. Not all may follow a formal process. But I do believe that we need to train it more and expect our team members to embrace and become problem solvers. We have access to data that may very well get us closer to understanding a problem clear, and also for developing solution. Let's build these skills, it will make a difference especially as you rise in position and responsibility. It will be the problem solvers who get the promotions. We know that senior leaders usually rely on a strategy development or strategic initiatives team to work on future issues or to take on organizational level problems. They are often looking at new markets and new opportunities and solving issues that don't even exist yet. We know they're often using a formal problem solving process. My desire is that teams around the company also adopt a similar process. It may not be as complex, but I believe a similar framework, though on a smaller scale will make a huge positive impact. It takes a leadership emphasis to own a problem. So you identify root causes of that problem, analyze it, and then commit resources to solve it to get to root causes. Ask why a lot, then find the data. Keep asking why a little deeper, until you get to the real cause of the problem. What sequence of events or conditions led to this problem? And are there other problems or smaller issues that surround this problem? Asking why in breaking down conditions around the problem? Help us get to the root cause without the root cause you will never solve the real problem. A more formal process on our finance and accounting teams will help us to organize our thoughts and to present critical facts and assumptions as we develop options to solve the problem. I know our analysts and accountants are trying to solve problems, but maybe trying different methods to get an answer, or maybe only focusing on delivering data. Instead of more thought out and detailed options. Please have an open mind that your organization does have issues to be fixed. We may run to the easy problems first, and then put up a larger or more complex problem later, especially if that problem is a tough or troubling topic. It could be an organizational culture issue, or that a pet project of a senior leader is failing, it could be several different issues. So how do you address such sensitive issues? Well, it requires a tough mindset, fortitude, and great leadership to address it. It requires open mindedness to overcome any bias, and it requires a formal process to analyze it. And then to come to a decision. How does bias affect our problem solving. Let's always avoid confirmation bias. I like all sides and perspectives of an issue to be addressed. So we arrive at a solution that ensures we don't have bias built in. We often feel defensive or feel strongly about an issue, which affects how we view any problem associated with a topic that may belong to us. So we may include bias in any proposed analysis and solutions for it. recognize and avoid all types of bias, be open minded and more self aware, problem solving is a process there's a formal process to solving problems. That includes identifying the problem to gathering facts and assumptions, and then developing criteria and courses of action to finally making a decision and then evaluating that decision if it was the correct decision. When I served in the army, I attended a weeks long course, to learn the Army's problem solving and decision making process. It was amazing to apply formal process to analyzing and correcting an issue in the military, we do wait on more senior leaders to identify and begin the problem solving process. Near the end of my career, I had the privilege of overseeing the contract and funding of the Army's external strategic research organization. They were given complex problems that the army was interested in solving that would need to be addressed in terms of years into the future, particularly by external analysts. The studies were mostly taught driven issues regarding policy, strategy, and future capability. This also opened my eyes to leaders needing to think about the future, and exercising a variety of resources to solve important issues for the organization to be successful in the future. Now let's talk about problem solving. Number one, developing a problem solving skill set. We don't emphasize problem solving skills enough, we are solving problems, but we need to do it better. We need to train and coach how to solve problems, and also look for candidates who already have a track record of problem solving. I want to encourage finance and accounting professionals to continually developed a problem solving skills by adding training to the individual development plan. If you can solve problems, you will find career opportunities. Number two, problem solving is a process, I recommend using a formal problem solving process. To address challenges. In the army we use a standard seven step process to solve problems briefly, here are the steps the first one is to identify the problem. This is where we commit to determining real root causes. Next is that you list out the facts and assumptions, list out any relevant information which will help to highlight key information, especially what we think might be affecting the problem and in how we may solve it. Next is that we develop criteria, what is the criteria to be used to determine the final decision? Then we move on to generating options what are the courses of action you can take to solve this problem? Next, we analyze the options by using the weighted criteria we determined a few steps ago, you can numerate which criteria is more important, then we make a decision. After analyzing the options, you must make a decision. Finally, you analyze the decision. The process does not end after the decision. Continue to check the data to analyze whether the right decision was made. And if a course correction is needed. Identifying the problem is the hardest step because often you don't know you have a problem. You don't know what the real problem is, you go chasing the wrong problem or the wrong cause or start to blame. I know that our more qualified financial analysts and accountants are trying to solve problems, but may not use a formal process, which is why this topic is so important. Number three, sound problem solving leads to better decision making. How you solve problems will determine if you are able to make better decisions, better decisions will lead to better outcomes. Let's develop and build a team of problem solvers who can break down and identify true root causes? Who can look at problems while also addressing any possible bias? Who can derive viable options, which will then lead to a better decision? Number four, be a leader in all problem solving and decision making. Leaders set the pace culture and vision of the organization. Leaders also must have the conscience and fortitude to solve real problems, to focus resources to address issues that require a harder look. And I always desire for a finance and accounting professionals. To be leaders in any problem solving exercise, we need to go beyond the data so that we can provide more detailed options. I like options with data, and also options that use weighted criteria to evaluate. This is especially true if we are evaluating different capital investment projects to take on. If we can only take on one investment in the coming year, then we would need to highlight projected rates of return lifecycle equipment expenses, timelines for execution, along with any other key metrics that can be evaluated to give senior leaders a more formal way to decide on which project to undertake. I know most companies are using a formal process at the top level to make decisions. But our finance and accounting professionals can use the same processes to solve everyday problems within their metric portfolio. It will help to deliver better analysis to the senior leaders we support throughout the company. Now here's the challenge. Let's get creative in our approach to problem solving and be open to finding the relevant facts, assumptions, and other details from maybe unusual sources, which can maybe help us find the root causes to the problems we are trying to solve. You may find information critical from people and data sources that are often overlooked. Identifying the problem is the most difficult step in the process. Now for action today, how are you problem solving in your organization today? Are you using a more formal process and your everyday problem solving? I would believe this to be true at your strategic initiatives team. But what about everybody else? How are they solving problems? Will a formal problem solving process help teams across the company? I believe it can. Don't forget to grab my free guide for you called the leadership growth blueprint for finance and accounting managers. Are you a finance or accounting professional who is also leading people that have questions about how to lead more effectively. I know you are expected to be the technical expert in our field. Learning leadership can set you apart from your peers, which can then lead you to more opportunities. In the free guide I talk about three leadership areas communication, team development, and empowerment. Plus a few recommendations around challenges with the financial systems you are using to complete your work. The link to this free guide is in the post or the bio, you can also go to Finance leader academy.com. To download it. Please use the guide to help you with a few leadership wins today. Thank you. Today I introduced problem solving and I highlighted the following points. Number one developing a problem solving skill set. Number two, problem solving is a process. Number three, sound problem solving leads to better decision making. And four be a leader in all problem solving and decision making. I believe in a formal problem solving process. So you gather your thoughts and relevant information and create the best solution to present to department heads, metric owners and senior leaders. In this episode I gave a brief introduction to problem solving. I can't wait to share more details and future episodes. And I want to encourage all of you to improve your own problem solving skills. It will be the problem solvers, the leaders who will get to promotions and advanced career opportunities. If you can solve organizational problems, you will never lack of a career opportunity. I believe that next week I will be talking about leadership in the budget process. I hope you enjoyed the finance leader podcast I am dedicated to helping you grow your leadership skills to change your mindset and to clarify your goals so you advance your career. You can find this episode wherever you listen to podcasts. If this episode helped you today, please share and leave a quick review so that others may find the podcast. Until next time, you can check out more resources at finance leader academy.com and sign up for my weekly updates so you don't miss an episode of the podcast. And now go lead your team. And I'll see you next time. Thank you