problem solving skills for entrepreneurs

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The importance of entrepreneurial skills

12 essential entrepreneurial skills

More entrepreneurial hard skills to brush up on

How to improve your entrepreneurial skills, lead a successful business (and life).

Successful entrepreneurs are often jacks of all trades — and never experts at none. 

Running your own business means you have to pull from a deep toolbox of hard and soft skills to push your business off the ground and keep it growing. But because entrepreneurs are constantly on call and keep never-ending to-do lists, it can be difficult to prioritize learning the entrepreneurship skills that will help you and your business stay healthy. 

Whether you’re getting ready to transform your side hustle into a new business or want to audit your current skill set to improve your ability to lead , working on your transferable skills is a great way to bolster a growth mindset . And though you can’t master everything, building well-rounded know-how will empower you and your teams to support the business. 

As an entrepreneur , your responsibilities may feel never-ending and all-encompassing. After all, turning your dreams into a successful business doesn’t happen overnight — and once your business begins to gain traction, the work required to keep the lights on never ceases.

Business leaders with an entrepreneurial spirit must accept this challenge and continuously make calculated and informed decisions to keep their business plans moving forward.

It’s up to you to identify opportunities, make smart decisions , and chart the course when challenges arise. And as your startup grows, you must learn to effectively allocate your resources and create value propositions for your employees and clients. 

But don’t worry — this hard work pays off. According to the U.S. Business Administration Office of Advocacy, small businesses employ 46.4% of private sector U.S. employees , meaning business owners stimulate local economies and create important lifelines for local communities. Here are a few other ways your entrepreneurial skills leave a positive impact:

• Entrepreneurs can drive social change and create products and services that improve lives
• Disruptive innovation stimulates economic growth and opens new markets for other entrepreneurs
• Great entrepreneurs grow together with their employees, providing valuable personal and professional development opportunities
• Working on your skills builds adaptability and dynamism , allowing you to work efficiently alone and as part of a team
• Building your entrepreneurial ability helps you set realistic goals and hit objectives, which can fill you with purpose and boost your satisfaction with life

While you don’t have to excel at everything, developing a breadth of know-how helps you delegate tasks realistically and empathize with your employees

12 essential entrepreneurial skills 

Getting a business off the ground and moving is no small task. In a world of ever-changing market trends and economic challenges, you have to think on your feet without losing sight of your company mission . Be ing able to switch from one competency to another is crucial to maintaining a solid business foundation. 

The following skills aren’t exclusive to entrepreneurs — they’re indispensable to any industry and job role. If you’re getting ready to make the transition to entrepreneurship, you may be surprised by how many transferable skills you already have under your belt.

Of course, others may need a little cultivation or refining. But fine-tuning them will ensure you’re qualified to roll with the punches and keep your business moving forward. 

Here are 12 key skills every entrepreneur should strive for:

Budgeting: All business ideas are limited by budgets. Successful entrepreneurship requires a firm grip on your business’s financial reality, which means learning to manage budgets , analyze financial data, and understand cash flow patterns. 

This knowled ge is invaluable to your business’ security, as it facilitates sound decision-making and allows you to build realistic action plans for investments, expansions, and cuts.

Problem-solving : Entrepreneurship has no finish line, no matter the industry. Your business journey will be chock-full of new challenges and obstacles requiring problem-solving and critical-thinking skills . Strategic thinking is what allows you to step back from today’s problems and see the bigger picture, aligning short-term goals with long-term objectives . 

Communication skills: Business owners are the voice of their companies. Whether you’r e emailing a client , delivering an elevator pitch to a potential investor , or delegating tasks on Slack, practicing adaptability in tone and delivery is essential to effective communication , no matter the scenario. 

Time management: With so many responsibilities and decisions to make each day, you might feel like several tasks are competing for your time and attention. Learning to manage your time and leave r oom for flexibility provides you with the necessary structure to move through your day without wasted resources or missed deadlines. 

Creative thinking: The business landscape i s ever-changing, and adaptability is essential to staying competitive. An entrepreneurial mindset means inserting creative thinking into every aspect of your business strategy, from differentiating your products from the competition to creating incentives that retain the best talent . 

Practice keeping an open mind by challenging traditional ideas, embracing new perspectives, and encouraging experimentation. It’ll keep your teams inspired and your business forward-thinking. 

Leadership skills: As the head of the company, your team looks to you to set the tone. Whether you demonstrate a strong work ethic or cut corners, your behavior tells your employees what is and isn’t acceptable behavior.

Leadership is a 24/7 responsibility, but fostering a positive and productive work environment will pay off in strong collaboration and continuous improvement from your teams. 

Management skills: While you may be tempted to juggle a dozen roles, you (and your mental health ) can’t do it all. When small-scale day-to-day tasks constantly occupy your time, b ecoming a future-minded leader is difficult.

As your business grows, building structures that allow your employees to thrive and take on more responsibilities is vital. That way, you can delegate to your growing team and dedicate more time to overseeing long-term planning.

Decision-making: As the head of the business, your days are fraught with important decisions. Successful entrepreneurs mix analytical thinking and intuition, as they may face situations with limited information or uncertain results. Learning to weigh pros and cons, consider risks, and surround yourself with diverse perspectives empowers you to navigate complexities confidently. 

Networking: Hard work is just one part of the equation to keep your business healthy. The relationships you cultivate are the other. After all, your familiarity with industry peers, potential partners, and clients keeps your business on people’s minds.

Regular networking helps you gain insights into your target market, stay up-to-date on emerging trends, and open doors to new opportunities.

Collaboration: You depend on your teams to keep business moving forward, so you need to arm yourself with tools to give them support and guidance. Demonstrating gratitude , open-mindedness, and reliability are interpersonal skills that build the trust that keeps your workforce productive. 

Active listening:  Team members want to feel heard a nd respected. After all, we all dedicate a lot of time and energy to our jobs. Workers who feel understood are more productive , so aim to practice emotional intelligence and value your team’s work-life balance . You’ll see hap pier and more effective teams. 

Public speaking: Management is the face of the company. Throughout your career, you’ll have plenty of opportunities to speak in front of a crowd. Whether delivering a TED Talk or l eading a team meeting, you can motivate and inspire people to rally around your vision. 

Hard skills are explicit knowledge that helps you perform specific tasks. Most people learn technical skills through formal education and refine them through supplemental training and on-the-job experiences. 

Here are 15 of the most important skills that’ll come in handy while building your business: 

• Social media 
• Accounting and bookkeeping
• Inbox management
• Basic financial knowledge
• Sales and negotiation
• Digital marketing
• Market research and analysis
• Project management
• Customer service and management
• Data analysis
• Legal and regulatory compliance
• Supply chain management
• Basic computer skills
• Presentation development

Entrepreneurship is a commitment that requires continuous learning and skill refinement. When you’re ready, choose from the entrepreneurship examples above and get to work on your skills. 

Here are a few tips to help you constantly improve your ability to lead a business: 

Take online courses: There’s a class for every aspect of business management. Quick courses in social media advertising, financial forecasting, and supply chain optimization can help you develop your skill set. 

Even if you don’t directly oversee a specific task, developing a working knowledge can improve your collaboration with other departments and your ability to make informed decisions with your team.

• Seek out mentors: You’re not alone in the business world. Plenty of entrepreneurs have already navigated decisions that are brand new to you. Mentors can provide you with a sense of connection and bolster your confidence. Tapping into an experienced professional network can give you the clarity to help you move forward, no matter your business situation. 
• Create a practice plan: You don’t have to learn everything at once. Identify the most pertinent skills to your success, and create a plan to refine them. This could mean being more conscientious of writing clear communications, regularly showing gratitude, or attending a seminar every month. Regardless of your goals, practice and consistency make perfect. 
• Join a local business organization: Running a business is difficult, but having the support of colleagues navigating similar professional spheres can help you maintain your sense of purpose. Local business associations are also great places to network, stay up-to-date on trends, and find new opportunities. 
• Work with a coach: Entrepreneurs provide constant guidance to their teams, and they benefit from the same support. Coaches are incredible allies to entrepreneurs, and they can assist you in setting clear goals and staying on track to reach your wellness and professional objectives. 

If you have the characteristics of an entrepreneur , you already possess valuable soft skills, including passion, drive, and self-confidence. Now it’s time to level up your entrepreneurial skills and equip yourself with the tools to transform your dreams into reality.

Practicing time management, learning to lead a team, and developing know-how about various business management topics can all help push your business forward. And as your company grows and earns successes, so will you.

Elizabeth Perry, ACC

Elizabeth Perry is a Coach Community Manager at BetterUp. She uses strategic engagement strategies to cultivate a learning community across a global network of Coaches through in-person and virtual experiences, technology-enabled platforms, and strategic coaching industry partnerships. With over 3 years of coaching experience and a certification in transformative leadership and life coaching from Sofia University, Elizabeth leverages transpersonal psychology expertise to help coaches and clients gain awareness of their behavioral and thought patterns, discover their purpose and passions, and elevate their potential. She is a lifelong student of psychology, personal growth, and human potential as well as an ICF-certified ACC transpersonal life and leadership Coach.

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6.1 Problem Solving to Find Entrepreneurial Solutions

Portions of the material in this section are based on original work by Geoffrey Graybeal and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.

Learning Objectives

By the end of this section, you will be able to:

• Define problem solving in the context of entrepreneurship
• Describe and compare the adaptive model and the innovative model of problem solving
• Identify the skills entrepreneurs need for effective problem solving
• Identify types of problem solvers

As you’ve learned, entrepreneurs often visualize an opportunity gap, a gap between what exists and what could exist, as Hirabayashi and Lidey did with Shine. Entrepreneurial problem solving is the process of using innovation and creative solutions to close that gap by resolving societal, business, or technological problems. Sometimes, personal problems can lead to entrepreneurial opportunities if validated in the market. The entrepreneur visualizes the prospect of filling the gap with an innovative solution that might entail the revision of a product or the creation of an entirely new product. In any case, the entrepreneur approaches the problem-solving process in various ways. This chapter is more about problem solving as it pertains to the entrepreneur’s thought process and approach rather than on problem solving in the sense of opportunity recognition and filling those gaps with new products.

For example, as we read in Identifying Entrepreneurial Opportunity , Sara Blakely (as shown in Figure 6.2 ) saw a need for body contouring and smoothing undergarments one day in the late 1990s when she was getting dressed for a party and couldn’t find what she needed to give her a silhouette she’d be pleased with in a pair of slacks. She saw a problem: a market need. But her problem-solving efforts are what drove her to turn her solution (Spanx undergarments) into a viable product. Those efforts came from her self-admitted can-do attitude: “It’s really important to be resourceful and scrappy—a glass half-full mindset.” 1 Her efforts at creating a new undergarment met resistance with hosiery executives, most of whom were male and out of touch with their female consumers. The hosiery owner who decided to help Blakely initially passed on the idea until running it by his daughters and realizing she was on to something. That something became Spanx , and today, Blakely is a successful entrepreneur. 2

Before getting into the heart of this chapter, we need to make a distinction: Decision making is different from problem solving . A decision is needed to continue or smooth a process affecting the operation of a firm. It can be intuitive or might require research and a long period of consideration. Problem solving , however, is more direct. It entails the solution of some problem where a gap exists between a current state and a desired state. Entrepreneurs are problem solvers who offer solutions using creativity or innovative ventures that exploit opportunities. This chapter focuses on different approaches to problem solving and need recognition that help potential entrepreneurs come up with ideas and refine those ideas.

Two Problem Solving Models: Adaptive and Innovative

There are two prominent established problem-solving models: adaptive and innovative . A renowned British psychologist, Michael Kirton , developed the Kirton Adaption-Innovation (KAI) Inventory to measure an individual’s style of problem solving. 3 Problem-solving preferences are dependent on the personality characteristics of originality, conformity, and efficiency, according to Kirton. The KAI inventory identifies an individual’s problem-solving approach by measuring agreement with statements that align with characteristics, such as the ability to produce many novel ideas, to follow rules and get along in groups, and to systematically orient daily behavior. The results categorize an individual as an innovator or an adaptor. Innovators are highly original, do not like to conform, and value efficiency less than adaptors.

The first and more conservative approach an entrepreneur may use to solve problems is the adaptive model. The adaptive model seeks solutions for problems in ways that are tested and known to be effective. An adaptive model accepts the problem definition and is concerned with resolving problems rather than finding them. This approach seeks greater efficiency while aiming at continuity and stability. The second and more creative approach is the innovative model of entrepreneurial problem solving, which uses techniques that are unknown to the market and that bring advantage to an organization. An innovative problem-solving style challenges the problem definition, discovers problems and avenues for their solutions, and questions existing assumptions—in a nutshell, it does things differently. It uses outside-the-box thinking and searches for novel solutions. Novelty is a shared trait of creative entrepreneurship, and it’s why entrepreneurs gravitate toward this method of problem solving. According to Dr. Shaun M. Powell , a senior lecturer at the University of Wollongong, Australia: “Creative entrepreneurs are notable for a distinctive management style that is based on intuition, informality and rapid decision making, whereas the more conventional thinking styles are not in accord with the unique attributes of creative entrepreneurs.” 4 This way of problem solving doesn’t alter an existing product. It is the creation of something entirely new.

For example, healthcare facilities have long been known as a source of methicillin-resistant Staphylococcus aureus (MRSA), a deadly infection that can have long-term effects on patients. Vital Vio , led by Colleen Costello , has developed white light technology that effectively disinfects healthcare facilities by targeting a molecule specific to bacteria. The light, safe to humans, can burn constantly to kill regenerative bacteria. An adaptive problem-solving model would seek to minimize harm of MRSA within a hospital—to respond to it—whereas the Vital Vio is an entirely new technique that seeks to eliminate it. Adaptive solutions to MRSA include established processes and protocols for prevention, such as having doctors, nurses, and other healthcare providers clean their hands with soap and water, or an alcohol-based hand rub before and after patient care, testing patients to see if they have MRSA on their skin, cleaning hospital rooms and medical equipment, and washing and drying clothes and bed linens in the warmest recommended temperatures. 5

Link to Learning

Visit Inc. Magazine for support and advice for up-and-coming startups to learn more. Examples of how “Dorm Room” entrepreneurs spot and pursue opportunities are shared along with tips and advice for making your startup a success.

Problem-Solving Skills

While identifying problems is a necessary part of the origin of the entrepreneurial process, managing problems is an entirely different aspect once a venture is off the ground and running. An entrepreneur does not have the luxury of avoiding problems and is often responsible for all problem solving in a startup or other form of business. There are certain skills that entrepreneurs possess that make them particularly good problem solvers. Let’s examine each skill (shown in Figure 6.3 ) .

Critical Thinking

Critical thinking is the complex analysis of a problem or issue with the goal of solving the problem or making a decision. The entrepreneur analyzes and peels away the layers of a problem to find the core of an issue facing a business. The entrepreneur focuses on the heart of the problem and responds reasonably and openly to suggestions for solving it. Critical thinking is not only important for developing entrepreneurial ideas: it is a sought-after asset in education and employment. Entrepreneur Rebecca Kantar dropped out of Harvard in 2015 to found the tech startup Imbellus , which aims to replace standardized college admissions tests like the SAT with interactive scenarios that test critical-thinking skills. Many standardized tests may include multiple choice questions asking for the answer to a straightforward knowledge question or math problem. Kantar seeks to create tests that are more concerned with the analytic ability and reasoning that goes into the process of solving the problem. Imbellus says it aims to test “how people think,” not just what they know. The platform, which has not yet launched, will use simulations for its user assessments. 6

Read more about problem solving and EnterpriseWorks/Vita’s story at Harvard Business Review .

Communication

Communication skills , the ability to communicate messages effectively to an intended recipient, are the skills entrepreneurs use to pool resources for the purposes of investigating solutions leading to innovative problem solving and competitive advantage. Good communication allows for the free association of ideas between entrepreneurs and businesses. It can illustrate a problem area or a shared vision, and seeks stakeholder buy-in from various constituencies. Networking and communication within an industry allow the entrepreneur to recognize the position of an enterprise in the market and work toward verbalizing solutions that move an organization beyond its current state. By “verbalizing,” we mean communication from and with the company/entity. Internal communications include company emails, newsletters, presentations, and reports that can set strategic goals and objectives, and report on what has been accomplished and what goals and objectives remain, so that employees within an organization are knowledgeable and can work on solving problems that remain within the organization. External communications could include press releases, blogs and websites, social media, public speeches, and presentations that explain the company’s solutions to problems. They could also be investor pitches complete with business plans and financial projections.

Ideation exercises, such as brainstorming sessions (discussed in Creativity, Innovation, and Invention , are good communication tools that entrepreneurs can use to generate solutions to problems. Another such tool is a hackathon —an event, usually hosted by a tech company or organization, which brings together programmers and workers with other degrees of specialization within the company, community, or organization to collaborate on a project over a short period of time. These can last from twenty-four hours to a few days over a weekend. A hackathon can be an internal company-wide initiative or an external event that brings community participants together. A business model canvas , which is covered in Business Model and Plan and other activities outlined in other chapters can be used internally or externally to identify problems and work toward creating a viable solution.

Networking is an important manifestation of useful communication. What better method is there of presenting one’s concept, gaining funding and buy-in, and marketing for the startup than through building a network of individuals willing to support your venture? A network may consist of potential employees, customers, board members, outside advisors, investors, or champions (people who just love your product) with no direct vested interest. Social networks consist of weak ties and strong ties. Sociologist Mark Granovetter studied such networks back in the 1970s, and his findings still apply today, even if we include social media networks in the definition too. Weak ties facilitate flow of information and community organization, he said, whereas strong ties represent strong connections among close friends, family members, and supportive coworkers. 7 Strong ties require more work to maintain than weak ties (as illustrated by the strong lines and weak dotted lines in Figure 6.4 ) and in a business context, they don’t lead to many new opportunities. Weak ties, in contrast, do open doors in that they act as bridges to other weak ties within functional areas or departments that you might not have had access to directly or through strong ties. 8

In fact, many young entrepreneurs, including tech entrepreneur Oliver Isaacs , realize college is a great place to begin building teams. Isaacs is the founder of viral opinion network Amirite.com , which is widely credited as the place where Internet memes started and online slang got a foothold. 9 Amirite.com consists of a large network of pages and partnerships on Facebook and Instagram that reach 15 million users each month. Isaacs recommends using your alumni network to build a team and customer base for your own venture because you never know if you’re talking to a future employee or partner.

Sharing of ideas and resources is highly valued in the entrepreneurial process. Communication is a vital skill in problem solving because the ability to identify and articulate the problem (define the problem space) is necessary to adequately address a problem. A problem can be too vague or broad or narrow. Thus, communicating the problem is important, as is conveying the solution.

Decisiveness

Decisiveness is as it sounds: the ability to make a quick, effective decision, not letting too much time go by in the process. Entrepreneurs must be productive, even in the face of risk. They often rely on intuition as well as on hard facts in making a choice. They ask what problem needs to be solved, think about solutions, and then consider the means necessary to implement an idea. And the decisions must be informed with research.

For example, as explained in Adam Grant’s book The Originals , the co-founders of Warby Parker, a venture-backed startup focused on the eyewear industry, started their company while they were graduate students. At the time they knew little about the industry, but after conducting some detailed research, they learned that the industry was dominated by one major player—Luxottica. They used this information and other data to refine their strategy and business model (focusing mainly on value, quality, and convenience via an online channel). By the time they decided to launch the business, they had thought through the key details, and they attained rapid early success. Today Warby Parker has over 100 retail stores in the US, is profitable, and is valued at almost $2 billion.

Decisiveness is the catapult to progress. Amazon founder Jeff Bezos preaches the importance of decisiveness throughout his organization. Bezos believes that decisiveness can even lead to innovation. Bezos advocates for making decisions after obtaining 70 percent of the information you need to do so: “Being wrong may be less costly than you think, whereas being slow is going to be expensive for sure,” Bezos wrote in a 2017 annual letter to stockholders. 10

Read this LinkedIn blog post on decisiveness to learn more.

Ability to Analyze Data

Data analysis is the process of analyzing data and modeling it into a structure that leads to innovative conclusions. Identifying Entrepreneurial Opportunity covered much of the sources of data that entrepreneurs might seek. But it is one thing to amass information and statistics. It is another to make sense of that data, to use it to fill a market need or forecast a trend to come. Successful founders know how to pose questions about and make meaning out of information. And if they can’t do that themselves, they know how to bring in experts who can.

In addition to public sources of broad data, a business can collect data on customers when they interact with the company on social media or when they visit the company website, especially if they complete a credit card transaction. They can collect their own specific data on their own customers, including location, name, activity, and how they got to the website. Analyzing these data will give the entrepreneur a better idea about the interested audience’s demographic.

In entrepreneurship, analyzing data can help with opportunity recognition, creation, and assessment by analyzing data in a variety of ways. Entrepreneurs can explore and leverage different data sources to identify and compare “attractive” opportunities, since such analyses can describe what has happened, why it happened, and how likely it is to happen again in the future. In business in general, analytics is used to help managers/entrepreneurs gain improved insight about their business operations/emerging ventures and make better, fact-based decisions.

Analytics can be descriptive, predictive, or prescriptive. Descriptive analytics involves understanding what has happened and what is happening; predictive analytics uses data from past performance to estimate future performance; and prescriptive analytics uses the results of descriptive and predictive analytics to make decisions. Data analysis can be applied to manage customer relations, inform financial and marketing activities, make pricing decisions, manage the supply chain, and plan for human resource needs, among other functions of a venture. In addition to statistical analysis, quantitative methods, and computer models to aid decision-making, companies are also increasingly using artificial intelligence algorithms to analyze data and make quick decisions.

Understanding of Business and Industry

Entrepreneurs need sound understanding of markets and industries. Often times, they are already working in a large organization when they see growth opportunities or inefficiencies in a market. The employee gains a deep understanding of the industry at hand. If the employee considers a possible solution for a problem, this solution might become the basis for a new business.

For example, consider a marketing agency that used traditional marketing for thirty years. This agency had an established clientele. An executive in the organization began studying social media analytics and social media. The executive approached the owner of the business to change processes and begin serving clients through social media, but the owner refused. Clients within the agency began to clamor for exposure on social media. The marketing executive investigated the possibility of building an agency in her locale servicing clients who wish to utilize social media. The marketing executive left the organization and started her own agency (providing, of course, that this is in compliance with any noncompete clauses in her contract). Her competitive advantage was familiarity with both traditional and social media venues. Later, the original agency started floundering because it did not offer social media advertising. Our intrepid executive purchased the agency to gain the clientele and serve those wishing to move away from traditional marketing.

A similar experience occurred for entrepreneur Katie Witkin . After working in traditional marketing roles, the University of Wisconsin-Madison graduate, pictured in Figure 6.5 , left agency life behind four years out of college to cofound her own company, AGW Group . In 2009, Witkin had been interning at a music marketing agency that didn’t have a social media department. She knew, both from her time at college and from observing industry trends, that social media was changing the way companies connected with customers. For her own venture, she expanded the focus to all supporting brands to manage all things digital. Today, the cultural and marketing communications agency has fifteen employees and big-name clients ranging from HBO to Red Bull. 11

Resourcefulness

Resourcefulness is the ability to discover clever solutions to obstacles. Sherrie Campbell , a psychologist, author, and frequent contributor to Entrepreneur magazine on business topics, put it this way:

“There is not a more useful or important trait to possess than resourcefulness in the pursuit of success. Resourcefulness is a mindset, and is especially relevant when the goals you have set are difficult to achieve or you cannot envision a clear path to get to where you desire to go. With a resourcefulness mindset you are driven to find a way. An attitude of resourcefulness inspires out-of-the-box thinking, the generation of new ideas, and the ability to visualize all the possible ways to achieve what you desire. Resourcefulness turns you into a scrappy, inventive and enterprising entrepreneur. It places you a cut above the rest.” 12

Entrepreneurs start thinking about a business venture or startup by talking to people and procuring experts to help create, fund, and begin a business. Entrepreneurs are risk takers, passionate about new endeavors. If they don’t have a college degree or a great deal of business experience, they understand there are many resources available to support them in the endeavor, such as the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA) . There are many sources available to fund the business with little or no debt and options, as you will see in the chapter on Entrepreneurial Finance and Accounting . The entrepreneur follows a vision and researches opportunities to move toward a dream.

For example, in the late 1990s, Bill McBean and his business partner Billy Sterett had an opportunity to buy an underperforming auto dealership that would make their company the dominant one in the market. Neither wanting to take cash from other ventures nor wanting to borrow more money and tie themselves to more debt, the entrepreneurs were resourceful by finding another path forward to obtaining the money necessary for the acquisition they both coveted. They changed banks and renegotiated their banking payback requirements, lowering their interest payments, reducing fees, and lowering their monthly payments, ultimately freeing up a significant amount of cash that allowed them to buy the new company. 13

Types of Problem Solvers

Entrepreneurs have an insatiable appetite for problem solving. This drive motivates them to find a resolution when a gap in a product or service occurs. They recognize opportunities and take advantage of them. There are several types of entrepreneurial problem solvers, including self-regulators, theorists, and petitioners.

Self-Regulating Problem Solvers

Self-regulating problem solvers are autonomous and work on their own without external influence. They have the ability to see a problem, visualize a possible solution to the problem, and seek to devise a solution, as Figure 6.6 illustrates. The solution may be a risk, but a self-regulating problem solver will recognize, evaluate, and mitigate the risk. For example, an entrepreneur has programmed a computerized process for a client, but in testing it, finds the program continually falls into a loop, meaning it gets stuck in a cycle and doesn’t progress. Rather than wait for the client to find the problem, the entrepreneur searches the code for the error causing the loop, immediately edits it, and delivers the corrected program to the customer. There is immediate analysis, immediate correction, and immediate implementation. The self-regulating problem solvers’ biggest competitive advantage is the speed with which they recognize and provide solutions to problems.

Theorist Problem Solvers

Theorist problem solvers see a problem and begin to consider a path toward solving the problem using a theory. Theorist problem solvers are process oriented and systematic. While managers may start with a problem and focus on an outcome with little consideration of a means to an end, entrepreneurs may see a problem and begin to build a path with what is known, a theory, toward an outcome. That is, the entrepreneur proceeds through the steps to solve the problem and then builds on the successes, rejects the failures, and works toward the outcome by experimenting and building on known results. At this point, the problem solver may not know the outcome, but a solution will arise as experiments toward a solution occur. Figure 6.7 shows this process.

For example, if we consider Marie Curie as an entrepreneur, Curie worked toward the isolation of an element. As different approaches to isolating the element failed, Curie recorded the failures and attempted other possible solutions. Curie’s failed theories eventually revealed the outcome for the isolation of radium. Like Curie, theorists use considered analysis, considered corrective action, and a considered implementation process. When time is of the essence, entrepreneurs should understand continual experimentation slows the problem-solving process.

Petitioner Problem Solvers

Petitioner problem solvers ( Figure 6.8 ) see a problem and ask others for solution ideas. This entrepreneur likes to consult a person who has “been there and done that.” The petitioner might also prefer to solve the problem in a team environment. Petitioning the entrepreneurial team for input ensures that the entrepreneur is on a consensus-driven path. This type of problem solving takes the longest to complete because the entrepreneur must engage in a democratic process that allows all members on the team to have input. The process involves exploration of alternatives for the ultimate solution. In organizational decision-making, for example, comprehensiveness is a measure of the extent a firm attempts to be inclusive or exhaustive in its decision-making. Comprehensiveness can be gauged by the number of scheduled meetings, the process by which information is sought, the process by which input is obtained from external sources, the number of employees involved, the use of specialized consultants and the functional expertise of the people involved, the years of historical data review, and the assignment of primary responsibility, among other factors. Comprehensive decision-making would be an example of a petitioner problem-solving style, as it seeks input from a vast number of team members.

A charette —a meeting to resolve conflicts and identify solutions—is another example that employs a petitioner problem-solving approach. Often times, a developer of a new project might hold a community charette to aid in the design of a project, hoping to gain approval from elected officials. In the building example, this could consist of the developer and his team of architects, project designers, and people with expertise in the project working alongside community members, business executives, elected officials, or representatives like staff members or citizen-appointed boards like a planning board. Such an activity is representative of a petitioner problem-solving approach, as opposed to a developer representative designing the project with no input from anyone else.

In summary, there is no right or wrong style of problem solving; each problem solver must rely on the instincts that best drive innovation. Further, they must remember that not all problem-solving methods work in every situation. They must be willing to adapt their own preference to the situation to maximize efficiency and ensure they find an effective solution. Attempting to force a problem-solving style may prevent an organization from finding the best solution. While general entrepreneurial problem-solving skills such as critical thinking, decisiveness, communication, and the ability to analyze data will likely be used on a regular basis in your life and entrepreneurial journey, other problem-solving skills and the approach you take will depend on the problem as it arises.

There are a number of resources online that can help analyze your problem-solving abilities. Mindtools.com is one such resource. These are useful to learn your general problem-solving tendencies before being called upon to apply them in a real-world setting. One of the problem-solving techniques available from mindtools.com offers that problems can be addressed from six different perspectives. Called CATWOE , the approach is an acronym for Customers, Actors (people within the organization), Transformative, Worldwide, Owner, and Environment (organizational).

Learn more about the CATWOE technique for problem solving.

• 1 Helen Lock. “‘I Put My Butt on the Line’: How Spanx Took Over the World.” The Guardian. July 11, 2016. https://www.theguardian.com/small-business-network/2016/jul/11/put-butt-on-the-line-how-spanx-world
• 2 Gary Keller. “Business Success Series, Part 1: Sara Blakely-Spanx.” The One Thing. n.d. https://www.the1thing.com/blog/the-one-thing/business-success-series-part-1-sara-blakely-spanx/
• 3 “Characteristics of Adaptors and Innovators.” Kirton KAI Inventory Tool . n.d. http://pubs.acs.org/subscribe/archive/ci/31/i11/html/11hipple_box3.ci.html
• 4 Shaun Powell. “The Management and Consumption of Organisational Creativity.” Journal of Consumer Marketing 25, no. 3 (2008): 158–166.
• 5 N.C Healthcare-Associated Infections Prevention Program. Healthcare-Associated Infections in North Carolina: 2014 Annual Report, Healthcare Consumer Version. April 2015. https://epi.dph.ncdhhs.gov/cd/hai/figures/hai_apr2015_consumers_annual.pdf
• 6 Romesh Ratnesar. “What If Instead of Taking the SAT You Got to Play a Video Game?” Bloomberg BusinessWeek. March 19, 2019. https://www.bloomberg.com/news/features/2019-03-19/a-harvard-dropout-s-plan-to-fix-college-admissions-with-video-games
• 7 Mark Granovetter. “The Strength of Weak Ties.” American Journal of Sociology 5 (1973): 1360–1380.
• 8 Jacob Morgan. “Why Every Employee Should Be Building Weak Ties at Work.” Forbes. March 11, 2014. https://www.forbes.com/sites/jacobmorgan/2014/03/11/every-employee-weak-ties-work/#277851063168
• 9 John White. “Top UK Influencer Oliver Isaacs Reveals What It Takes to Go Viral.” Inc . August 6, 2017. https://www.inc.com/john-white/top-uk-influencer-oliver-isaacs-reveals-what-it-ta.html
• 10 Erik Larson. “How Jeff Bezos Uses Faster Better Decisions to Keep Amazon Innovating.” Forbes . September 24, 2018. https://www.forbes.com/sites/eriklarson/2018/09/24/how-jeff-bezos-uses-faster-better-decisions-to-keep-amazon-innovating/#492c351b7a65
• 11 Stephanie Schomer. “How Getting Laid Off Empowered This Entrepreneur to Start Her Own Award-Winning Marketing Agency.” Entrepreneur. January 15, 2019. https://www.entrepreneur.com/article/326212
• 12 Sherrie Campbell. “6 Characteristics of Resourceful People That Bring Them Success.” Entrepreneur. March 10, 2016. https://www.entrepreneur.com/article/272171
• 13 “Resourcefulness Is More Important Than Resources.” The Ecommerce Mindset: How Successful Store Owners Think. n.d. https://www.oberlo.com/ebooks/mindset/resourceful-entrepreneur

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Why Problem-Solving Skills Are Essential for Leaders in Any Industry

• 17 Jan 2023

Any organization offering a product or service is in the business of solving problems.

Whether providing medical care to address health issues or quick convenience to those hungry for dinner, a business’s purpose is to satisfy customer needs .

In addition to solving customers’ problems, you’ll undoubtedly encounter challenges within your organization as it evolves to meet customer needs. You’re likely to experience growing pains in the form of missed targets, unattained goals, and team disagreements.

Yet, the ubiquity of problems doesn’t have to be discouraging; with the right frameworks and tools, you can build the skills to solve consumers' and your organization’s most challenging issues.

Here’s a primer on problem-solving in business, why it’s important, the skills you need, and how to build them.

Access your free e-book today.

What Is Problem-Solving in Business?

Problem-solving is the process of systematically removing barriers that prevent you or others from reaching goals.

Your business removes obstacles in customers’ lives through its products or services, just as you can remove obstacles that keep your team from achieving business goals.

Design Thinking

Design thinking , as described by Harvard Business School Dean Srikant Datar in the online course Design Thinking and Innovation , is a human-centered , solutions-based approach to problem-solving and innovation. Originally created for product design, design thinking’s use case has evolved . It’s now used to solve internal business problems, too.

The design thinking process has four stages :

• Clarify: Clarify a problem through research and feedback from those impacted.
• Ideate: Armed with new insights, generate as many solutions as possible.
• Develop: Combine and cull your ideas into a short list of viable, feasible, and desirable options before building prototypes (if making physical products) and creating a plan of action (if solving an intangible problem).
• Implement: Execute the strongest idea, ensuring clear communication with all stakeholders about its potential value and deliberate reasoning.

Using this framework, you can generate innovative ideas that wouldn’t have surfaced otherwise.

Creative Problem-Solving

Another, less structured approach to challenges is creative problem-solving , which employs a series of exercises to explore open-ended solutions and develop new perspectives. This is especially useful when a problem’s root cause has yet to be defined.

You can use creative problem-solving tools in design thinking’s “ideate” stage, which include:

• Brainstorming: Instruct everyone to develop as many ideas as possible in an allotted time frame without passing judgment.
• Divergent thinking exercises: Rather than arriving at the same conclusion (convergent thinking), instruct everyone to come up with a unique idea for a given prompt (divergent thinking). This type of exercise helps avoid the tendency to agree with others’ ideas without considering alternatives.
• Alternate worlds: Ask your team to consider how various personas would manage the problem. For instance, how would a pilot approach it? What about a young child? What about a seasoned engineer?

It can be tempting to fall back on how problems have been solved before, especially if they worked well. However, if you’re striving for innovation, relying on existing systems can stunt your company’s growth.

Related: How to Be a More Creative Problem-Solver at Work: 8 Tips

Why Is Problem-Solving Important for Leaders?

While obstacles’ specifics vary between industries, strong problem-solving skills are crucial for leaders in any field.

Whether building a new product or dealing with internal issues, you’re bound to come up against challenges. Having frameworks and tools at your disposal when they arise can turn issues into opportunities.

As a leader, it’s rarely your responsibility to solve a problem single-handedly, so it’s crucial to know how to empower employees to work together to find the best solution.

Your job is to guide them through each step of the framework and set the parameters and prompts within which they can be creative. Then, you can develop a list of ideas together, test the best ones, and implement the chosen solution.

Related: 5 Design Thinking Skills for Business Professionals

4 Problem-Solving Skills All Leaders Need

1. problem framing.

One key skill for any leader is framing problems in a way that makes sense for their organization. Problem framing is defined in Design Thinking and Innovation as determining the scope, context, and perspective of the problem you’re trying to solve.

“Before you begin to generate solutions for your problem, you must always think hard about how you’re going to frame that problem,” Datar says in the course.

For instance, imagine you work for a company that sells children’s sneakers, and sales have plummeted. When framing the problem, consider:

• What is the children’s sneaker market like right now?
• Should we improve the quality of our sneakers?
• Should we assess all children’s footwear?
• Is this a marketing issue for children’s sneakers specifically?
• Is this a bigger issue that impacts how we should market or produce all footwear?

While there’s no one right way to frame a problem, how you do can impact the solutions you generate. It’s imperative to accurately frame problems to align with organizational priorities and ensure your team generates useful ideas for your firm.

To solve a problem, you need to empathize with those impacted by it. Empathy is the ability to understand others’ emotions and experiences. While many believe empathy is a fixed trait, it’s a skill you can strengthen through practice.

When confronted with a problem, consider whom it impacts. Returning to the children’s sneaker example, think of who’s affected:

• Your organization’s employees, because sales are down
• The customers who typically buy your sneakers
• The children who typically wear your sneakers

Empathy is required to get to the problem’s root and consider each group’s perspective. Assuming someone’s perspective often isn’t accurate, so the best way to get that information is by collecting user feedback.

For instance, if you asked customers who typically buy your children’s sneakers why they’ve stopped, they could say, “A new brand of children’s sneakers came onto the market that have soles with more traction. I want my child to be as safe as possible, so I bought those instead.”

When someone shares their feelings and experiences, you have an opportunity to empathize with them. This can yield solutions to their problem that directly address its root and shows you care. In this case, you may design a new line of children’s sneakers with extremely grippy soles for added safety, knowing that’s what your customers care most about.

Related: 3 Effective Methods for Assessing Customer Needs

3. Breaking Cognitive Fixedness

Cognitive fixedness is a state of mind in which you examine situations through the lens of past experiences. This locks you into one mindset rather than allowing you to consider alternative possibilities.

For instance, your cognitive fixedness may make you think rubber is the only material for sneaker treads. What else could you use? Is there a grippier alternative you haven’t considered?

Problem-solving is all about overcoming cognitive fixedness. You not only need to foster this skill in yourself but among your team.

4. Creating a Psychologically Safe Environment

As a leader, it’s your job to create an environment conducive to problem-solving. In a psychologically safe environment, all team members feel comfortable bringing ideas to the table, which are likely influenced by their personal opinions and experiences.

If employees are penalized for “bad” ideas or chastised for questioning long-held procedures and systems, innovation has no place to take root.

By employing the design thinking framework and creative problem-solving exercises, you can foster a setting in which your team feels comfortable sharing ideas and new, innovative solutions can grow.

How to Build Problem-Solving Skills

The most obvious answer to how to build your problem-solving skills is perhaps the most intimidating: You must practice.

Again and again, you’ll encounter challenges, use creative problem-solving tools and design thinking frameworks, and assess results to learn what to do differently next time.

While most of your practice will occur within your organization, you can learn in a lower-stakes setting by taking an online course, such as Design Thinking and Innovation . Datar guides you through each tool and framework, presenting real-world business examples to help you envision how you would approach the same types of problems in your organization.

Are you interested in uncovering innovative solutions for your organization’s business problems? Explore Design Thinking and Innovation —one of our online entrepreneurship and innovation courses —to learn how to leverage proven frameworks and tools to solve challenges. Not sure which course is right for you? Download our free flowchart .

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Identifying Problems Worth Solving: A Guide for Entrepreneurs

• October 9, 2023

In the world of entrepreneurship, success often hinges on the ability to identify and solve the right problems worth solving. However, tackling an issue without fully understanding its worth can lead to wasted time and resources. This blog post will guide you through the process of determining which problems are worth solving and how to address them effectively, ensuring a greater likelihood of success in your entrepreneurial journey of building better software or SaaS solutions.

Key Takeaways

• Identify and reframe problems worth solving through research, observation, customer conversations and collaborative problem-solving techniques.
• Evaluate market demand to ensure successful solutions by leveraging technology and resources.
• Build trust with customers by providing consistent problem-solving strategies that create value.

Understanding the Essence of a Problem Worth Solving

As an entrepreneur, it’s vital to focus on problems that meet certain criteria, such as establishing an emotional connection with customers, demonstrating market potential, and being realistically solvable. A profound understanding of these aspects can help you create solutions that address the genuine problems your target customers face, ultimately leading to a more successful and impactful business.

Determining if a problem is worth solving involves considering diverse approaches and perspectives, analyzing potential impacts, and understanding the reasons the market has failed to address the problem. This process, known as idea extraction, involves interviewing individuals in a market about the difficulties they face to identify a problem they are willing to pay to have solved, thus improving the customer’s circumstances.

Emotional Connection

Emotionally connecting to a problem involves understanding and empathizing with the feelings and experiences associated with the issue. By recognizing the emotional motivations behind customer issues, more effective solutions can be developed, resulting in greater customer value. For instance, Slack identified the need for a sense of community, meaning, and shared purpose in workplace communication and developed a tool that encourages inclusive communication and discussion around common objectives.

Forming an emotional bond with the problem can spark motivation and ignite creative solutions. This approach ensures that entrepreneurs not only address the superficial aspects of a problem but also tackle its underlying emotional drivers, leading to a more profound and lasting impact on customers.

Pro Tip: People primarily take action for emotional reasons NOT logical ones. Logic prevails in the end, but emotional reactions are the primary driver for action. As such, it’s important that you know what emotional drivers are motivating users and customers to take action.

Market Potential

Assessing the market size and its potential to expand becomes important when determining if a problem requires a solution. One way to gauge market potential is by examining the amount of money customers are currently spending to address the issue. This helps us better understand important context around how motivated customers are to solve the problem and the impact that it’s causing to their business operations.

Focus your research in these areas:

• Thoroughly research their target market
• Identify gaps in the existing solutions offered by competitors
• Ensure that their proposed solution addresses a genuine customer need
• Ensure that their proposed solution has the potential to capture a significant market share.

Solvability

A problem worth solving must be feasible to resolve, have an emotional connection, and demonstrate commercial viability. Solvability comprises a critical component of this equation. I followed this exact strategy to bring my B2B SaaS product Podcast Show Notes to market. This software leverages AI to automate the creation of show notes for podcast episodes using AI. Before building this product, I validated it as both a problem worth solving and a commercially viable solution by selling it and developing an MVP before investing more significantly and building out the entire application.

Breaking down complex issues into individual elements by drilling down to root causes can render them more accessible and solvable. By considering the feasibility of a solution and the resources needed to implement it, entrepreneurs can ensure that their efforts are directed towards problems that can be realistically solved and have a meaningful impact on customers’ circumstances. This approach allows problem solvers to focus on the big idea that can truly make a difference.

Research and Observation: Key Steps in Identifying Problems Worth Solving

Uncovering potential problems worth solving requires a combination of research and observation, which can be achieved through customer conversations, industry analysis, and competitor study. The most promising approach to identify a customer’s problem worth solving is to engage in dialogue with a particular group of customers at the outset of the innovation process, allowing you to better understand their problems and challenges.

Thorough research and observation can help software and SaaS entrepreneurs confirm the existence and importance of a problem, directing their efforts towards resolving significant issues that can impact their target market positively.

Customer Conversations

Engaging with customers is vital for understanding their challenges and verifying insights with further research. While there is no definitive answer to how many customer interviews are needed to identify a deep problem with a sizable market, beginning with three to five customers and modifying questions every new set of three to five customer interviews is the ideal approach.

However, it’s crucial to be aware of a challenge in uncovering issues through customer conversations: individuals don’t always reflect problems and challenges of the same severity. This means customer A may report a problem with a minor impact as a BIG problem, but customer B may report a problem with a big impact as a small problem. As such, it’s critically important to develop a systematic approach to being able to compare problems and impact in a relatively consistent manner across a set of interviews.

Industry Analysis

Scrutinizing industry trends and advancements aids in identifying potential problems and opportunities. For example, the European Union’s implementation of the General Data Protection Regulation (GDPR) created a reason for businesses to need new software and SaaS solutions. By analyzing:

• Customer needs
• Market size
• The competitive landscape
• Technological advancements

Entrepreneurs can uncover potential problems worth solving and opportunities for growth by leveraging various strategies such as:

• Customer surveys
• Focus groups
• Market research

Each of these strategies has respective pros and cons when helping you identify problems worth solving. A balanced approach is recommended to ensure you capture adequate context in the problem space.

Note: Be aware of a problem related to running focus groups I call ‘group think’. This is where you don’t get adequate representation from the group and the ‘loudest voice’ seems to carry because everyone doesn’t feel comfortable expressing their feelings in a group setting. This is where one on one conversations shine.

Competitor Study

Studying competitor offerings is vital to identify problems that warrant resolution, enabling entrepreneurs to understand the current market solutions and their potential limitations. By examining competitors, entrepreneurs can recognize areas where they can offer a superior or more innovative solution to meet customer demands and resolve pain points, ultimately ensuring that their solution has a competitive edge.

Competitor study not only helps in identifying potential problems worth solving, but also assists entrepreneurs in understanding the market conditions, customer inclinations, and potential barriers to entry for given markets, which are essential components in determining the practicality and success of a business.

Pro Tip: There’s always competition. Even if it isn’t the same format as what you plan to build. If you want to build a software solution then you may be competing against another product or a service. Either way, that’s your competition. Study it because you stand to learn a whole lot from that investment.

Collaborative Problem-Solving Techniques

Entrepreneurs can encourage innovative problem-solving by employing collaborative techniques, including brainstorming sessions, design thinking, and stakeholder mapping. These approaches encourage creativity, cooperation, and reiteration, ultimately leading to innovation projects that are tailored to the needs and desires of the users.

By engaging with a diverse group of stakeholders, entrepreneurs can gain valuable insights and perspectives, helping them to identify, validate, and address problems in a more comprehensive and effective manner.

Brainstorming Sessions

Inviting various stakeholders to participate in brainstorming sessions can create a broad assortment of ideas and perspectives, ultimately leading to improved solutions. Brainstorming sessions can be conducted in-person or using online platforms to facilitate wider participation, and they can involve both individual and group brainstorming to prevent groupthink and encourage faster innovation in a psychologically safe setting.

Through brainstorming sessions, entrepreneurs can:

• Evaluate all aspects of an issue
• Encourage creative thinking
• Provide further pathways to success
• Ensure that the focus remains on the broader perspective and the problems to be solved, rather than jumping to solutions prematurely.

Design Thinking

Design thinking is a systematic and human-centric approach to problem-solving that can greatly assist entrepreneurs in recognizing issues worth addressing. The design thinking process consists of five steps:

• Empathize: Comprehend the needs and perspectives of the target users or customers.
• Define: Clearly define the problem or challenge that needs to be addressed.
• Ideate: Generate a wide range of possible solutions or ideas.
• Prototype: Create a physical or digital representation of the solution.
• Test: Gather feedback and evaluate the effectiveness of the solution.

By following these steps, entrepreneurs can uncover issues and develop innovative solutions.

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The advantages of design thinking include:

• Promoting creativity
• Cooperation and collaboration
• Iteration and continuous improvement
• Tailoring solutions to user requirements
• Minimizing risk
• Increasing the likelihood of success

Stakeholder Mapping

Stakeholder mapping is an essential component of the problem-solving process, as it assists entrepreneurs in comprehending the people, groups, and organizations that can influence or be influenced by their project or business. By mapping out stakeholders, entrepreneurs can ascertain their requirements, expectations, and issues, which are essential in understanding the problems that are worth solving.

In order to prioritize stakeholders and ensure that their perspectives and interests are taken into account when identifying and addressing problems, entrepreneurs can engage in the following activities:

• Customer conversations
• Competitor analysis
• Brainstorming sessions
• Design thinking
• Stakeholder mapping

Reframing and Validating Identified Problems

After identifying a problem, it becomes important to reconsider its framing and confirm its significance. Reframing a problem facilitates the consideration of it from varied perspectives and ultimately leads to improved solutions. For instance, my Podcast Show Notes tool can help podcast production agencies with more than just producing great show notes in less time and budget. My software helps them scale their agencies so it goes way beyond solving each of those problems.

Validation is another crucial step in the decision making process. By challenging assumptions, evaluating market demand, and conducting product discovery, entrepreneurs can refine and validate identified problems, ensuring that their efforts are directed towards addressing pressing issues with the potential to make a real difference in their target market.

Challenging Assumptions

It’s important to identify and question risky assumptions to prevent the development of bad software. Challenging the status quo, considering unconventional approaches, and visualizing alternative solutions can help entrepreneurs challenge assumptions and discover real problems, examine novel perspectives, and devise inventive solutions to address the underlying issues.

Disregarding assumptions could result in the production of an inappropriate product or solution, expending time and resources ineffectively, and neglecting potential opportunities. By actively challenging assumptions, entrepreneurs can ensure that their efforts are focused on addressing genuine customer needs, ultimately leading to more successful and impactful solutions.

Evaluating Market Demand

Measuring potential demand for a solution is critical to guarantee it meets a legitimate target customer need.

Entrepreneurs should consider factors such as:

• The size of the target market
• The number of potential customers
• The customer’s willingness to pay

These factors are important in order to properly evaluate market demand.

Product Discovery

Product discovery involves a series of activities, such as user testing, customer interviews, and feedback collection, in order to gain insights into the needs and pain points of the target users. This process enables entrepreneurs to validate the existence and significance of a problem and prioritize and concentrate on resolving issues that have a true effect on their target market, augmenting the possibilities of creating a successful and valuable product.

For instance, in the case of Podcast Show Notes, user feedback led to modifications in the initial version of the solution, such as:

• Creating multiple title options for a podcast
• Turning episodes into social posts and marketing emails
• Creating new tiers for power users of the software
• Enabling multi-language support to broaden the target market

This example demonstrates the importance of product discovery in refining and validating identified problems to ensure the development of successful solutions, ultimately leading to a problem solved for those facing the issue.

Turning Identified Problems into Successful Solutions

After identifying, reframing, and validating a problem, the subsequent step is to convert it into a viable solution. To achieve this, entrepreneurs should focus on creating a roadmap, leveraging technology and resources, and building trust and value.

By developing a clear plan, utilizing available technology, and delivering value to customers from day one, entrepreneurs can ensure that their efforts are directed towards addressing the right problems and achieving the desired outcome, ultimately leading to a more successful and impactful business.

Creating a Roadmap

Crafting a detailed plan that outlines the steps to address the identified problem and achieve the intended outcomes is key to transforming identified problems into successful solutions. A roadmap helps to set objectives, collect inputs, and prioritize the problems that need to be solved, ensuring that the emphasis remains on the broader perspective and the predicaments to solve, instead of immediately jumping to solutions.

Formulating a plan of action, constructing a timeline, and establishing goals and objectives are essential components of a successful roadmap. By creating a roadmap, entrepreneurs can effectively communicate their strategic plan and coordinate resources proficiently, resulting in a greater chance of success in resolving the identified problems.

Leveraging Technology and Resources

Leveraging technology and resources plays a crucial role in boosting efficiency and productivity. Entrepreneurs have access to a plethora of online tools, software, databases, and other resources that can aid in identifying and resolving issues.

By employing technology and resources to create prototypes, evaluate solutions, and refine solutions, entrepreneurs can ensure that their efforts are directed towards addressing the right problems in the most efficient and effective manner possible. Moreover, entrepreneurs can assess their success when utilizing technology and resources by monitoring metrics such as cost savings, time savings, and customer satisfaction.

Building Trust and Value

Delivering value to customers from the outset and progressively building trust through consistent problem-solving and customer-centric strategies is vital for sustained success. Entrepreneurs may deliver value to customers from the outset by comprehending their requirements, furnishing solutions that fulfill those requirements, and delivering an excellent customer experience.

By attentively listening to customer feedback, promptly responding to customer inquiries, and providing solutions that adequately meet customer needs, entrepreneurs can establish trust through consistent problem-solving and customer-centric approaches.

Ultimately, cultivating trust and value contributes to fulfilling customer requirements, developing a competitive advantage, stimulating innovation, and producing business opportunities that can improve a customer’s circumstances.

Identifying and addressing problems worth solving is a critical aspect of successful innovation in the software space. By understanding the essence of a problem worth solving, conducting research and observation, employing collaborative problem-solving techniques, reframing and validating identified problems, and turning them into successful solutions, entrepreneurs can ensure that their efforts are directed towards the right problems and ultimately achieve success in their endeavors. By focusing on delivering value to customers and fostering trust, entrepreneurs can create lasting impact and build prosperous businesses that address genuine customer needs. If you could use help with strategy related to uncovering problems worth solving, schedule a free product strategy session with me so I can learn more about how to help.

Frequently Asked Questions

What are some problems that need to be solved.

The world faces numerous pressing issues, such as climate change, wars and military conflicts, water contamination, human rights violations, global health issues, poverty, and children’s lack of access to healthcare, education, safety, and food. Each of these need to be addressed urgently and ideally with innovative solutions.

What makes a problem worth solving?

A problem is worth solving if it has a significant negative impact on the customer’s circumstances and a better solution can provide meaningful benefits compared to existing solutions, whether for many customers or a smaller niche group.

How do I find a problem worth solving?

To find a problem worth solving, interview customers to gain insight into their pain points and day-to-day activities. Ask them questions about how often they experience the problem and how they’re trying to solve it. Then, use further customer and market research to validate your assumptions. Finally, capture early demand when you have 70% confidence in the solution.

What does it mean to identify a problem?

Problem Identification is the process of clearly identifying the root cause of a problem and developing a detailed problem statement that includes the impact. It requires analyzing the context, background, and symptoms of the issue to form a hypothesis about what is causing or maintaining the conditions around the problem. This process involves gathering data, conducting interviews, and analyzing the data to identify the root cause of the problem. Once the root cause is identified, a problem statement can be developed that outlines the scope of the problem.

What are the criteria for a problem worth solving?

For a problem to be worth solving, it must be relevant to the target customer, have potential for commercial success and be realistically solvable.

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7 Critical Thinking Skills Needed for Entrepreneurship

Entrepreneurship is exciting, isn’t it? As an entrepreneur, you can start with nothing and go as far as your skills will take you. Entrepreneurship requires several different types of skills . You need to be resilient, hardworking, and motivated. You also need to have some critical thinking skills too.

Critical thinking is a cognitive process that involves evaluating information, identifying assumptions, analyzing arguments, and drawing logical conclusions. They are the thinking skills that allow entrepreneurs to drive their businesses forward. 

There are many types of critical thinking skills. And, different skills are required for different professions. But which critical thinking skills are the most important for entrepreneurship? In this article, we’ll look at some of the most important ones that entrepreneurs should focus on.

Problem-Solving

Richard Branson, the founder of Virgin Group, once said, “To launch a business means successfully solving problems.” I couldn’t agree more. Most of entrepreneurship is solving problems, including your problems, the business’s problems, and the problems of your customers.

Having problem-solving skills allows you to identify, analyze, and overcome a variety of challenges that arise.

Problem-solving skills can also help entrepreneurs identify market gaps and innovate. By applying this creative thinking skill, they can uncover unmet customer needs and develop solutions that give them a competitive edge.

To problem-solve effectively, follow these steps:

• Identify the problem: Clearly define the problem you’re facing. 
• Analyze the problem: Gather information, data, or insights. Determine the severity of the problem and who is affected by it.
• Generate possible solutions: Brainstorm multiple potential solutions to the problem without immediately judging their feasibility.
• Evaluate and select the best solution: Assess the pros and cons of each and pick the most suitable solution.
• Develop an action plan: Define the objectives, resources, and timelines required for successful execution.
• Implement the solution: Execute the action plan.
• Evaluate the outcome: Assess your plan’s effectiveness and try again if needed.

Learning how to problem-solve the right way can take time, but it is worth it. Once you have this skill, running a business becomes easier.

Analytical Thinking

Entrepreneurs must possess strong analytical skills to make data-driven decisions that can drive their businesses forward. Analytical thinking involves examining information and breaking it down into its constituent parts to understand the underlying structure or relationships.

To enhance analytical thinking, entrepreneurs can begin by gathering relevant data and information from various sources. This may include market research, customer feedback, or industry trends.

 Identifying patterns, trends, and relationships within the data helps entrepreneurs make informed decisions about their business strategies. Entrepreneurs should also utilize appropriate tools and methods to analyze the information, such as spreadsheets or data visualization software. Drawing logical conclusions based on the analysis will help entrepreneurs make well-informed decisions for their businesses.

Creative Thinking

All types of entrepreneurship often involve developing new ideas. These ideas are used to create new and better products and services. Whether you have a mobile car wash business or an AI startup, all entrepreneurs need to apply creativity to their businesses.

Learning to use your creative thinking skills starts with having an open mind and a curious attitude. Regularly brainstorm new ideas and challenge existing assumptions. By doing this, you will begin to find innovative solutions.

As an entrepreneur, work towards improving your ability to be creative. Start thinking about the problems you’re facing and look at them from a different perspective. Also, ask others to take a look at your problems. Get their opinions and decide if they make sense for your issues. Begin to find other ways to do what you’ve been doing. All of this will help build your creativity muscles and contribute to your business innovation.

Deductive Reasoning Skills

This is an often overlooked skill needed to run a successful business effectively. Deductive reasoning is a logical process in which a conclusion is drawn based on a set of premises that are assumed to be true. You may also have heard it called “top-down” reasoning. This skill comes in handy when there isn’t enough verifiable data available to make crucial decisions.

In the face of limited information, entrepreneurs can use logical reasoning to make educated assumptions about market trends, customer preferences, and competitive landscapes. This enables them to proactively anticipate changes and adapt their business strategies accordingly, thereby staying ahead of the competition and ensuring the continued success of their enterprises.

For example, a customer tells you they are unhappy with the response time for customer service. So, if you shorten response time, you will have happier customers. In this example, you are assuming something that is not immediately verifiable. However, you’re doing it based on what you already know to be true – in this case, your customer is unhappy with response times.

Deductive reasoning can be practiced throughout your business. There are also times when inductive reasoning should be used. However, for the uncertainty of entrepreneurship, this skill will come in handy very often.

Decision Making Skills

An unavoidable critical thinking skill needed to succeed as an entrepreneur is the ability to make decisions. If you are an indecisive person, you may struggle as an entrepreneur. This is because a significant part of entrepreneurship is decision-making. Here are just a few examples of some important decisions all entrepreneurs will make:

• What product you’ll offer.
• Which marketing strategy to follow.
• Who should join your team?
• How much to price your products.
• How to allocate resources.

And these are just some of the major ones. Entrepreneurship also involves making micro-decisions throughout the day. That is one reason why entrepreneurs are at risk of experiencing decision fatigue .

To improve decision-making skills, entrepreneurs should be clear on their goals. This first step will help many of the decisions make themselves. Then, gather relevant information and weigh the pros and cons of each option. Doing this helps you make more informed decisions. From there, consider the possible short-term and long-term consequences of each decision. Also, think about how those decisions will impact yourself, employees, customers, and investors.

Being decisive and taking responsibility for your decisions is an essential part of becoming a better decision-maker . Understand and recognize that not all decisions will be perfect. And some will just be downright bad decisions . But by learning from your experiences, you can continually refine your decision-making skills and improve your business over time.

The Adaptability Skill Set

The skill of adaptability means being able to adjust and evolve when things around you are changing. If the marketing strategy you used for years is no longer working because there is more competition, you need to learn to adapt to the situation. This skill is becoming even more important as AI technology is changing the landscape of business as well as other areas.

To develop this skill, entrepreneurs can start by embracing change. Look at the things around you that are changing as an opportunity for growth and improvement. Try not to resist new developments or fear the unknown. Instead, view change as a chance to refine your strategies and explore new possibilities.

Also, be willing to pivot or change direction when needed. Entrepreneurs who want to be adaptable should recognize when a particular strategy or product is not working anymore and be open to exploring alternative approaches. Learn from setbacks and use them as a chance for growth and improvement.

Communication

A critical thinking skill for entrepreneurs that cannot be understated is the ability to communicate well. Nearly 70% of people sa y they’ve personally wasted time as a result of communication issues in their business. Some entrepreneurs believe that this skill is only important for leaders of teams. However, solopreneurs also need great communication skills.

As an entrepreneur, you need to communicate with your customers, partners, and employees.

 Being able to effectively communicate enables entrepreneurs to build strong relationships with clients, customers, partners, and team members. It also allows them to articulate their ideas, visions, and objectives clearly, ensuring that everyone involved in the business is on the same page. This can only be done when you’re able to communicate well.

But communication is not just speaking; it is also listening. As mentioned before, you need to ask others for their opinions as part of the decision-making process. Being able to actively listen to their thoughts is important. Also, you need to be able to ask good questions in order to fully understand situations and problems. When you’re a good communicator , you can accomplish this.

Although critical thinking skills are not the only skills needed to be an entrepreneur , they are among the most important. Take time to develop these skills while growing your business. As you do, they will become easier to practice over time.

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Ralph is the Managing Editor at StartUp Mindset. The StartUp Mindset team consists of dedicated individuals and is designed to help new, seasoned, and aspiring entrepreneurs succeed.

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4.1 Problem Solving to Find Entrepreneurial Solutions

Learning Objectives

By the end of this section, you will be able to:

• Define problem solving in the context of entrepreneurship
• Describe and compare the adaptive model and the innovative model of problem solving
• Identify the skills entrepreneurs need for effective problem solving
• Identify types of problem solvers

As you’ve learned, entrepreneurs often visualize an opportunity gap, a gap between what exists and what could exist, as Hirabayashi and Lidey did with Shine. Entrepreneurial problem solving is the process of using innovation and creative solutions to close that gap by resolving societal, business, or technological problems. Sometimes, personal problems can lead to entrepreneurial opportunities if validated in the market. The entrepreneur visualizes the prospect of filling the gap with an innovative solution that might entail the revision of a product or the creation of an entirely new product. In any case, the entrepreneur approaches the problem-solving process in various ways. This chapter is more about problem solving as it pertains to the entrepreneur’s thought process and approach rather than on problem solving in the sense of opportunity recognition and filling those gaps with new products.

For example, as we read in Identifying Entrepreneurial Opportunity, Sara Blakely (as shown in Figure 4.2) saw a need for body contouring and smoothing undergarments one day in the late 1990s when she was getting dressed for a party and couldn’t find what she needed to give her a silhouette she’d be pleased with in a pair of slacks. She saw a problem: a market need. But her problem-solving efforts are what drove her to turn her solution (Spanx undergarments) into a viable product. Those efforts came from her self-admitted can-do attitude: “It’s really important to be resourceful and scrappy—a glass half-full mindset.” [1] Her efforts at creating a new undergarment met resistance with hosiery executives, most of whom were male and out of touch with their female consumers. The hosiery owner who decided to help Blakely initially passed on the idea until running it by his daughters and realizing she was on to something. That something became Spanx, and today, Blakely is a successful entrepreneur. [2]

Before getting into the heart of this chapter, we need to make a distinction: Decision making is different from problem solving. A decision is needed to continue or smooth a process affecting the operation of a firm. It can be intuitive or might require research and a long period of consideration. Problem solving, however, is more direct. It entails the solution of some problem where a gap exists between a current state and a desired state. Entrepreneurs are problem solvers who offer solutions using creativity or innovative ventures that exploit opportunities. This chapter focuses on different approaches to problem solving and need recognition that help potential entrepreneurs come up with ideas and refine those ideas.

Two Problem Solving Models: Adaptive and Innovative

There are two prominent established problem-solving models: adaptive and innovative. A renowned British psychologist, Michael Kirton, developed the Kirton Adaption-Innovation (KAI) Inventory to measure an individual’s style of problem solving. [3] Problem-solving preferences are dependent on the personality characteristics of originality, conformity, and efficiency, according to Kirton. The KAI inventory identifies an individual’s problem-solving approach by measuring agreement with statements that align with characteristics, such as the ability to produce many novel ideas, to follow rules and get along in groups, and to systematically orient daily behavior. The results categorize an individual as an innovator or an adaptor. Innovators are highly original, do not like to conform, and value efficiency less than adaptors.

The first and more conservative approach an entrepreneur may use to solve problems is the adaptive model. The adaptive model seeks solutions for problems in ways that are tested and known to be effective. An adaptive model accepts the problem definition and is concerned with resolving problems rather than finding them. This approach seeks greater efficiency while aiming at continuity and stability. The second and more creative approach is the innovative model of entrepreneurial problem solving, which uses techniques that are unknown to the market and that bring advantage to an organization. An innovative problem-solving style challenges the problem definition, discovers problems and avenues for their solutions, and questions existing assumptions—in a nutshell, it does things differently. It uses outside-the-box thinking and searches for novel solutions. Novelty is a shared trait of creative entrepreneurship, and it’s why entrepreneurs gravitate toward this method of problem solving. According to Dr. Shaun M. Powell, a senior lecturer at the University of Wollongong, Australia: “Creative entrepreneurs are notable for a distinctive management style that is based on intuition, informality and rapid decision making, whereas the more conventional thinking styles are not in accord with the unique attributes of creative entrepreneurs.” [4] This way of problem solving doesn’t alter an existing product. It is the creation of something entirely new.

For example, healthcare facilities have long been known as a source of methicillin-resistant Staphylococcus aureus (MRSA), a deadly infection that can have long-term effects on patients. Vital Vio, led by Colleen Costello, has developed white light technology that effectively disinfects healthcare facilities by targeting a molecule specific to bacteria. The light, safe to humans, can burn constantly to kill regenerative bacteria. An adaptive problem-solving model would seek to minimize harm of MRSA within a hospital—to respond to it—whereas the Vital Vio is an entirely new technique that seeks to eliminate it. Adaptive solutions to MRSA include established processes and protocols for prevention, such as having doctors, nurses, and other healthcare providers clean their hands with soap and water, or an alcohol-based hand rub before and after patient care, testing patients to see if they have MRSA on their skin, cleaning hospital rooms and medical equipment, and washing and drying clothes and bed linens in the warmest recommended temperatures. [5]

Link to Learning

Visit Inc. Magazine for support and advice for up-and-coming startups to learn more. Examples of how “Dorm Room” entrepreneurs spot and pursue opportunities are shared along with tips and advice for making your startup a success.

Problem-Solving Skills

While identifying problems is a necessary part of the origin of the entrepreneurial process, managing problems is an entirely different aspect once a venture is off the ground and running. An entrepreneur does not have the luxury of avoiding problems and is often responsible for all problem solving in a startup or other form of business. There are certain skills that entrepreneurs possess that make them particularly good problem solvers. Let’s examine each skill (shown in Figure 4.3) .

Critical Thinking

Critical thinking is the complex analysis of a problem or issue with the goal of solving the problem or making a decision. The entrepreneur analyzes and peels away the layers of a problem to find the core of an issue facing a business. The entrepreneur focuses on the heart of the problem and responds reasonably and openly to suggestions for solving it. Critical thinking is not only important for developing entrepreneurial ideas: it is a sought-after asset in education and employment. Entrepreneur Rebecca Kantar dropped out of Harvard in 2015 to found the tech startup Imbellus, which aims to replace standardized college admissions tests like the SAT with interactive scenarios that test critical-thinking skills. Many standardized tests may include multiple choice questions asking for the answer to a straightforward knowledge question or math problem. Kantar seeks to create tests that are more concerned with the analytic ability and reasoning that goes into the process of solving the problem. Imbellus says it aims to test “how people think,” not just what they know. The platform, which has not yet launched, will use simulations for its user assessments. [6]

Read more about problem solving and EnterpriseWorks/Vita’s story at Harvard Business Review.

Communication

Communication skills, the ability to communicate messages effectively to an intended recipient, are the skills entrepreneurs use to pool resources for the purposes of investigating solutions leading to innovative problem solving and competitive advantage. Good communication allows for the free association of ideas between entrepreneurs and businesses. It can illustrate a problem area or a shared vision, and seeks stakeholder buy-in from various constituencies. Networking and communication within an industry allow the entrepreneur to recognize the position of an enterprise in the market and work toward verbalizing solutions that move an organization beyond its current state. By “verbalizing,” we mean communication from and with the company/entity. Internal communications include company emails, newsletters, presentations, and reports that can set strategic goals and objectives, and report on what has been accomplished and what goals and objectives remain, so that employees within an organization are knowledgeable and can work on solving problems that remain within the organization. External communications could include press releases, blogs and websites, social media, public speeches, and presentations that explain the company’s solutions to problems. They could also be investor pitches complete with business plans and financial projections.

Ideation exercises, such as brainstorming sessions, are good communication tools that entrepreneurs can use to generate solutions to problems. Another such tool is a hackathon—an event, usually hosted by a tech company or organization, which brings together programmers and workers with other degrees of specialization within the company, community, or organization to collaborate on a project over a short period of time. These can last from twenty-four hours to a few days over a weekend. A hackathon can be an internal company-wide initiative or an external event that brings community participants together. A business model canvas can be used internally or externally to identify problems and work toward creating a viable solution.

Networking is an important manifestation of useful communication. What better method is there of presenting one’s concept, gaining funding and buy-in, and marketing for the startup than through building a network of individuals willing to support your venture? A network may consist of potential employees, customers, board members, outside advisors, investors, or champions (people who just love your product) with no direct vested interest. Social networks consist of weak ties and strong ties. Sociologist Mark Granovetter studied such networks back in the 1970s, and his findings still apply today, even if we include social media networks in the definition too. Weak ties facilitate flow of information and community organization, he said, whereas strong ties represent strong connections among close friends, family members, and supportive coworkers.7 [7] Strong ties require more work to maintain than weak ties (as illustrated by the strong lines and weak dotted lines in Figure 4.4) and in a business context, they don’t lead to many new opportunities. Weak ties, in contrast, do open doors in that they act as bridges to other weak ties within functional areas or departments that you might not have had access to directly or through strong ties. [8]

In fact, many young entrepreneurs, including tech entrepreneur Oliver Isaacs, realize college is a great place to begin building teams. Isaacs is the founder of viral opinion network Amirite.com, which is widely credited as the place where Internet memes started and online slang got a foothold. [9] Amirite.com consists of a large network of pages and partnerships on Facebook and Instagram that reach 15 million users each month. Isaacs recommends using your alumni network to build a team and customer base for your own venture because you never know if you’re talking to a future employee or partner.

Sharing of ideas and resources is highly valued in the entrepreneurial process. Communication is a vital skill in problem solving because the ability to identify and articulate the problem (define the problem space) is necessary to adequately address a problem. A problem can be too vague or broad or narrow. Thus, communicating the problem is important, as is conveying the solution.

Decisiveness

Decisiveness is as it sounds: the ability to make a quick, effective decision, not letting too much time go by in the process. Entrepreneurs must be productive, even in the face of risk. They often rely on intuition as well as on hard facts in making a choice. They ask what problem needs to be solved, think about solutions, and then consider the means necessary to implement an idea. And the decisions must be informed with research.

For example, as explained in Adam Grant’s book The Originals, the co-founders of Warby Parker, a venture-backed startup focused on the eyewear industry, started their company while they were graduate students. At the time they knew little about the industry, but after conducting some detailed research, they learned that the industry was dominated by one major player—Luxottica. They used this information and other data to refine their strategy and business model (focusing mainly on value, quality, and convenience via an online channel). By the time they decided to launch the business, they had thought through the key details, and they attained rapid early success. Today Warby Parker has over 100 retail stores in the US, is profitable, and is valued at almost $2 billion.

Decisiveness is the catapult to progress. Amazon founder Jeff Bezos preaches the importance of decisiveness throughout his organization. Bezos believes that decisiveness can even lead to innovation. Bezos advocates for making decisions after obtaining 70 percent of the information you need to do so: “Being wrong may be less costly than you think, whereas being slow is going to be expensive for sure,” Bezos wrote in a 2017 annual letter to stockholders. [10]

Read this LinkedIn blog post on decisiveness to learn more. The 3 Big Reasons People Aren’t Decisive – And How to Overcome Them by Paul Petrone

Ability to Analyze Data

Data analysis is the process of analyzing data and modeling it into a structure that leads to innovative conclusions. Identifying Entrepreneurial Opportunity covered much of the sources of data that entrepreneurs might seek. But it is one thing to amass information and statistics. It is another to make sense of that data, to use it to fill a market need or forecast a trend to come. Successful founders know how to pose questions about and make meaning out of information. And if they can’t do that themselves, they know how to bring in experts who can.

In addition to public sources of broad data, a business can collect data on customers when they interact with the company on social media or when they visit the company website, especially if they complete a credit card transaction. They can collect their own specific data on their own customers, including location, name, activity, and how they got to the website. Analyzing these data will give the entrepreneur a better idea about the interested audience’s demographic.

In entrepreneurship, analyzing data can help with opportunity recognition, creation, and assessment by analyzing data in a variety of ways. Entrepreneurs can explore and leverage different data sources to identify and compare “attractive” opportunities, since such analyses can describe what has happened, why it happened, and how likely it is to happen again in the future. In business in general, analytics is used to help managers/entrepreneurs gain improved insight about their business operations/emerging ventures and make better, fact-based decisions.

Analytics can be descriptive, predictive, or prescriptive. Descriptive analytics involves understanding what has happened and what is happening; predictive analytics uses data from past performance to estimate future performance; and prescriptive analytics uses the results of descriptive and predictive analytics to make decisions. Data analysis can be applied to manage customer relations, inform financial and marketing activities, make pricing decisions, manage the supply chain, and plan for human resource needs, among other functions of a venture. In addition to statistical analysis, quantitative methods, and computer models to aid decision-making, companies are also increasingly using artificial intelligence algorithms to analyze data and make quick decisions.

Understanding of Business and Industry

Entrepreneurs need sound understanding of markets and industries. Often times, they are already working in a large organization when they see growth opportunities or inefficiencies in a market. The employee gains a deep understanding of the industry at hand. If the employee considers a possible solution for a problem, this solution might become the basis for a new business.

For example, consider a marketing agency that used traditional marketing for thirty years. This agency had an established clientele. An executive in the organization began studying social media analytics and social media. The executive approached the owner of the business to change processes and begin serving clients through social media, but the owner refused. Clients within the agency began to clamor for exposure on social media. The marketing executive investigated the possibility of building an agency in her locale servicing clients who wish to utilize social media. The marketing executive left the organization and started her own agency (providing, of course, that this is in compliance with any noncompete clauses in her contract). Her competitive advantage was familiarity with both traditional and social media venues. Later, the original agency started floundering because it did not offer social media advertising. Our intrepid executive purchased the agency to gain the clientele and serve those wishing to move away from traditional marketing.

A similar experience occurred for entrepreneur Katie Witkin. After working in traditional marketing roles, the University of Wisconsin-Madison graduate, pictured in Figure 4.5, left agency life behind four years out of college to cofound her own company, AGW Group. In 2009, Witkin had been interning at a music marketing agency that didn’t have a social media department. She knew, both from her time at college and from observing industry trends, that social media was changing the way companies connected with customers. For her own venture, she expanded the focus to all supporting brands to manage all things digital. Today, the cultural and marketing communications agency has fifteen employees and big-name clients ranging from HBO to Red Bull. [11]

Resourcefulness

Resourcefulness is the ability to discover clever solutions to obstacles. Sherrie Campbell, a psychologist, author, and frequent contributor to Entrepreneur magazine on business topics, put it this way:

“There is not a more useful or important trait to possess than resourcefulness in the pursuit of success. Resourcefulness is a mindset, and is especially relevant when the goals you have set are difficult to achieve or you cannot envision a clear path to get to where you desire to go. With a resourcefulness mindset you are driven to find a way. An attitude of resourcefulness inspires out-of-the-box thinking, the generation of new ideas, and the ability to visualize all the possible ways to achieve what you desire. Resourcefulness turns you into a scrappy, inventive and enterprising entrepreneur. It places you a cut above the rest.” [12]

Entrepreneurs start thinking about a business venture or startup by talking to people and procuring experts to help create, fund, and begin a business. Entrepreneurs are risk takers, passionate about new endeavors. If they don’t have a college degree or a great deal of business experience, they understand there are many resources available to support them in the endeavor, such as the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA). There are many sources available to fund the business with little or no debt and options. The entrepreneur follows a vision and researches opportunities to move toward a dream.

For example, in the late 1990s, Bill McBean and his business partner Billy Sterett had an opportunity to buy an underperforming auto dealership that would make their company the dominant one in the market. Neither wanting to take cash from other ventures nor wanting to borrow more money and tie themselves to more debt, the entrepreneurs were resourceful by finding another path forward to obtaining the money necessary for the acquisition they both coveted. They changed banks and renegotiated their banking payback requirements, lowering their interest payments, reducing fees, and lowering their monthly payments, ultimately freeing up a significant amount of cash that allowed them to buy the new company. [13]

Types of Problem Solvers

Entrepreneurs have an insatiable appetite for problem solving. This drive motivates them to find a resolution when a gap in a product or service occurs. They recognize opportunities and take advantage of them. There are several types of entrepreneurial problem solvers, including self-regulators, theorists, and petitioners.

Self-Regulating Problem Solvers

Self-regulating problem solvers are autonomous and work on their own without external influence. They have the ability to see a problem, visualize a possible solution to the problem, and seek to devise a solution, as Figure 4.6 illustrates. The solution may be a risk, but a self-regulating problem solver will recognize, evaluate, and mitigate the risk. For example, an entrepreneur has programmed a computerized process for a client, but in testing it, finds the program continually falls into a loop, meaning it gets stuck in a cycle and doesn’t progress. Rather than wait for the client to find the problem, the entrepreneur searches the code for the error causing the loop, immediately edits it, and delivers the corrected program to the customer. There is immediate analysis, immediate correction, and immediate implementation. The self-regulating problem solvers’ biggest competitive advantage is the speed with which they recognize and provide solutions to problems.

Theorist Problem Solvers

Theorist problem solvers see a problem and begin to consider a path toward solving the problem using a theory. Theorist problem solvers are process oriented and systematic. While managers may start with a problem and focus on an outcome with little consideration of a means to an end, entrepreneurs may see a problem and begin to build a path with what is known, a theory, toward an outcome. That is, the entrepreneur proceeds through the steps to solve the problem and then builds on the successes, rejects the failures, and works toward the outcome by experimenting and building on known results. At this point, the problem solver may not know the outcome, but a solution will arise as experiments toward a solution occur. Figure 4.7 shows this process.

For example, if we consider Marie Curie as an entrepreneur, Curie worked toward the isolation of an element. As different approaches to isolating the element failed, Curie recorded the failures and attempted other possible solutions. Curie’s failed theories eventually revealed the outcome for the isolation of radium. Like Curie, theorists use considered analysis, considered corrective action, and a considered implementation process. When time is of the essence, entrepreneurs should understand continual experimentation slows the problem-solving process.

Petitioner Problem Solvers

Petitioner problem solvers (Figure 4.8) see a problem and ask others for solution ideas. This entrepreneur likes to consult a person who has “been there and done that.” The petitioner might also prefer to solve the problem in a team environment. Petitioning the entrepreneurial team for input ensures that the entrepreneur is on a consensus-driven path. This type of problem solving takes the longest to complete because the entrepreneur must engage in a democratic process that allows all members on the team to have input. The process involves exploration of alternatives for the ultimate solution. In organizational decision-making, for example, comprehensiveness is a measure of the extent a firm attempts to be inclusive or exhaustive in its decision-making. Comprehensiveness can be gauged by the number of scheduled meetings, the process by which information is sought, the process by which input is obtained from external sources, the number of employees involved, the use of specialized consultants and the functional expertise of the people involved, the years of historical data review, and the assignment of primary responsibility, among other factors. Comprehensive decision-making would be an example of a petitioner problem-solving style, as it seeks input from a vast number of team members.

A charette—a meeting to resolve conflicts and identify solutions—is another example that employs a petitioner problem-solving approach. Often times, a developer of a new project might hold a community charette to aid in the design of a project, hoping to gain approval from elected officials. In the building example, this could consist of the developer and his team of architects, project designers, and people with expertise in the project working alongside community members, business executives, elected officials, or representatives like staff members or citizen-appointed boards like a planning board. Such an activity is representative of a petitioner problem-solving approach, as opposed to a developer representative designing the project with no input from anyone else.

In summary, there is no right or wrong style of problem solving; each problem solver must rely on the instincts that best drive innovation. Further, they must remember that not all problem-solving methods work in every situation. They must be willing to adapt their own preference to the situation to maximize efficiency and ensure they find an effective solution. Attempting to force a problem-solving style may prevent an organization from finding the best solution. While general entrepreneurial problem-solving skills such as critical thinking, decisiveness, communication, and the ability to analyze data will likely be used on a regular basis in your life and entrepreneurial journey, other problem-solving skills and the approach you take will depend on the problem as it arises.

There are a number of resources online that can help analyze your problem-solving abilities. Mindtools.com is one such resource. These are useful to learn your general problem-solving tendencies before being called upon to apply them in a real-world setting. One of the problem-solving techniques available from mindtools.com offers that problems can be addressed from six different perspectives. Called CATWOE, the approach is an acronym for Customers, Actors (people within the organization), Transformative, Worldwide, Owner, and Environment (organizational).

Learn more about the CATWOE technique for problem solving.

Chapter Credit

Portions of the material in this section are based on original work by Geoffrey Graybeal and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.

• Helen Lock. “‘I Put My Butt on the Line’: How Spanx Took Over the World.” The Guardian. July 11, 2016. https://www.theguardian.com/small-business-network/2016/jul/11/put-butt-on-the-line-how-spanx-world ↵
• Gary Keller. “Business Success Series, Part 1: Sara Blakely-Spanx.” The One Thing. n.d. https://www.the1thing.com/blog/the-one-thing/business-success-series-part-1-sara-blakely-spanx/ ↵
• “Characteristics of Adaptors and Innovators.” Kirton KAI Inventory Tool. n.d. http://pubs.acs.org/subscribe/archive/ci/31/i11/html/11hipple_box3.ci.html ↵
• Shaun Powell. “The Management and Consumption of Organisational Creativity.” Journal of Consumer Marketing 25, no. 3 (2008): 158–166. ↵
• N.C Healthcare-Associated Infections Prevention Program. Healthcare-Associated Infections in North Carolina: 2014 Annual Report, Healthcare Consumer Version. April 2015. https://epi.dph.ncdhhs.gov/cd/hai/figures/hai_apr2015_consumers_annual.pdf ↵
• Romesh Ratnesar. “What If Instead of Taking the SAT You Got to Play a Video Game?” Bloomberg BusinessWeek. March 19, 2019. https://www.bloomberg.com/news/features/2019-03-19/a-harvard-dropout-s-plan-to-fix-college-admissions-with-video-games ↵
• Mark Granovetter. “The Strength of Weak Ties.” American Journal of Sociology 5 (1973): 1360–1380. ↵
• Jacob Morgan. “Why Every Employee Should Be Building Weak Ties at Work.” Forbes. March 11, 2014. https://www.forbes.com/sites/jacobmorgan/2014/03/11/every-employee-weak-ties-work/#277851063168 ↵
• John White. “Top UK Influencer Oliver Isaacs Reveals What It Takes to Go Viral.” Inc. August 6, 2017. https://www.inc.com/john-white/top-uk-influencer-oliver-isaacs-reveals-what-it-ta.html ↵
• Erik Larson. “How Jeff Bezos Uses Faster Better Decisions to Keep Amazon Innovating.” Forbes. September 24, 2018. https://www.forbes.com/sites/eriklarson/2018/09/24/how-jeff-bezos-uses-faster-better-decisions-to-keep-amazon-innovating/#492c351b7a65 ↵
• Stephanie Schomer. “How Getting Laid Off Empowered This Entrepreneur to Start Her Own Award-Winning Marketing Agency.” Entrepreneur. January 15, 2019. https://www.entrepreneur.com/article/326212 ↵
• Sherrie Campbell. “6 Characteristics of Resourceful People That Bring Them Success.” Entrepreneur. March 10, 2016. https://www.entrepreneur.com/article/272171 ↵
• “Resourcefulness Is More Important Than Resources.” The Ecommerce Mindset: How Successful Store Owners Think. n.d. https://www.oberlo.com/ebooks/mindset/resourceful-entrepreneur ↵

Real world problem solving: An entrepreneurial perspective Copyright © 2022 by OpenStax is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.

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Problem-solving Skills for Entrepreneurs

Everyone, even entrepreneurs, needs to tackle problems; the trick is to do it proactively before they happen. The more you anticipate problems in advance and make plans for how you'll solve them when they do come up, the more you will be able to sleep well at night. 

Even the best strategies face unexpected problems. Once you determine the top five problems your company faces each month, you can take steps to address them proactively. As entrepreneur:

• Identify the most common issues that your company faces daily. What are the biggest headaches?
• Make a list of problems your team needs to address.
• Evaluate your current resources and capabilities. How can you allocate time and money to solve these problems? What options do you have to run new tests?
• Think ahead to the next six months. Will some of the same issues still be around? How will you address them? Where will your company need more resources or practice?
• Make a plan that addresses these issues as soon as possible, ideally during the next 30 days.
• Assign a point person to monitor progress and act if they are not resolved.
• Return to the problems on your list. Make revisions as necessary and resubmit them.

What matters in an entrepreneur's problem-solving skills?

Good entrepreneurs plan to take their businesses to the next level. They are goal-oriented individuals who can identify the factors that need to be solved and then create a proper plan to act. There are specific skills that enable one to put together a successful business plan efficiently. The entrepreneur needs to focus on the problem at hand and tackle it before the problem gets worse.

Think Critically

Critical thinking helps you understand what you are up against, which will help you formulate a more meaningful strategy to get through the problem. Successful entrepreneurs develop a habit of solving these problems systematically, rather than waiting for circumstances to place them in front of you before you act. 

Ability to Make Decisions

The ability to make good decisions quickly is must for every successful entrepreneur. Entrepreneurs are constantly bombarded with problems and determining the best course of action can be difficult. 

Take Initiatives

Without the ability to take charge, without the drive to put yourself in situations that can provide growth for your project and career, you will never be able to achieve success. A proactive mindset means they will look at their business' strengths and weaknesses to improve. 

Do you feel like you are struggling with putting "strategy" and "business growth concepts" in place that make a difference? Doing it all is overwhelming! Let’s have a honest discussion about your business and see if the Power of 10 can help you. Click  “HERE”  to have a great conversation with our team today.

Written By The Strategic Advisor Board - Chris O'Byrne C. 2017-2021 Strategic Advisor Board / M&C All Rights Reserved www.strategicadvisorboard.com / [email protected]

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• July 19, 2023

Entrepreneur Skills – Problem Solving Skills

Boost your entrepreneurial journey with top-tier problem solving skills. explore key insights and strategies for effective problem-solving in business..

If there is one universal truth that all entrepreneurs share, it’s the reality that problem-solving is a critical part of their daily routine. From handling unforeseen obstacles, improving inefficient processes, to developing innovative solutions that meet the market’s evolving demands—problem-solving is the lifeblood of any successful venture. This blog post will delve into the depths of problem-solving, exploring the science behind it, and shedding light on how entrepreneurs can hone this skill to conquer the business world.

The entrepreneurial journey is rarely a smooth ride. It’s filled with ups and downs, turns and twists that often lead to unchartered territory. These challenges demand an entrepreneur’s ability to effectively solve problems. Recent research suggests that problem-solving skills are directly linked to business success, as these skills foster resilience, strategic thinking, and the ability to adapt in an ever-changing business landscape.

What is interesting to note is that problem-solving is more than just fixing what’s broken. It involves creativity, critical thinking, empathy, and at times, even an appetite for risk. It’s about understanding a problem in its entirety—its root causes, potential impacts, and effective, long-lasting solutions. In essence, problem-solving is a holistic approach to turning hurdles into opportunities for growth.

Furthermore, the ability to solve problems efficiently provides entrepreneurs with a competitive edge. In today’s dynamic business environment where industries can be disrupted overnight, having the skill to identify and solve problems rapidly can make the difference between survival and extinction. The importance of these skills is reflected in a report by the World Economic Forum, which forecasts that problem-solving capabilities will be among the most sought-after skills in the next decade.

In this post, we’ll explore 18 key themes surrounding the art of problem-solving for entrepreneurs. We will delve into various facets of this essential skill, offering actionable insights backed by extensive research, real-world examples, and proven strategies. Whether you’re a budding entrepreneur or a seasoned business leader looking to up your game, this comprehensive guide promises a wealth of knowledge that will help shape your entrepreneurial journey.

Key Insights on Problem Solving

1. Understanding the Problem:

The foundation of any problem-solving process is a deep understanding of the problem. This requires you to go beyond the superficial symptoms and uncover the root causes. Often, problems are complex and multi-faceted, making them challenging to understand fully. Techniques such as the “5 Whys” or Cause and Effect Diagrams can be beneficial in digging deeper and identifying the true source of the problem.

2. Identifying Opportunities:

Problems often come masked as opportunities. Entrepreneurs who have mastered the art of problem-solving can flip the script and turn a challenge into an avenue for innovation or business growth. It’s all about perspective. Look at problems as questions that need answers and obstacles as potential paths towards new business opportunities.

3. Creativity:

Problem-solving and creativity go hand in hand. Sometimes, traditional solutions may not be adequate or effective, necessitating a creative approach. Techniques such as brainstorming, mind mapping, or lateral thinking can inspire unconventional solutions that break the mold and deliver results.

4. Analytical Thinking:

Analytical thinking plays a crucial role in problem-solving. It allows entrepreneurs to examine a problem objectively, breaking it down into smaller, manageable parts. This approach is essential when dealing with complex issues, as it helps to simplify them, making the solution-finding process more efficient.

5. Decision Making:

Making decisions is an integral part of solving problems. Entrepreneurs often have to make quick decisions under pressure. Having a systematic decision-making process helps increase the likelihood of choosing the most effective solution.

6. Resourcefulness:

Entrepreneurs often operate with limited resources, making resourcefulness a valuable skill. It’s about making the most out of what’s available and finding clever ways to overcome limitations. The ability to be resourceful not only aids in problem-solving but also sparks innovation.

7. Flexibility:

The business landscape is continually changing. As such, a solution that worked yesterday may not be applicable today. Flexibility allows entrepreneurs to adapt their approach to problem-solving, accounting for changes in circumstances, market conditions, or technology.

8. Risk Analysis:

Risk is inherent in every business decision. Entrepreneurs who are skilled at risk analysis can anticipate potential problems and mitigate them before they become significant issues. It’s about striking a balance between risk and reward, ensuring that the solutions implemented do not endanger the business.

9. Collaboration:

Problem-solving is not a solo endeavor. Collaboration enables entrepreneurs to leverage diverse perspectives and skills, fostering creative and effective solutions. Building a culture of collaboration in a team also promotes ownership and morale, enhancing the problem-solving process.

10. Communication:

Effective communication is pivotal to successful problem-solving. Clear and concise communication ensures that everyone involved understands the problem and their role in solving it. It also prevents misunderstandings that could derail the solution implementation process.

11. Embracing Failure:

Embracing failure is a crucial part of problem-solving. Mistakes and failures offer valuable lessons that can provide insights into more effective solutions. The ability to learn from failure fosters resilience and encourages a growth mindset, essential for entrepreneurial success.

12. Continuous Learning:

The more knowledge an entrepreneur has, the better equipped they are to solve problems. Cultivating a culture of continuous learning promotes curiosity and openness to new ideas, enriching the problem-solving process.

13. Customer-Centricity:

Problem-solving should always be customer-centric. Understanding your customer’s needs and concerns can guide your problem-solving efforts, ensuring that the solutions you implement enhance customer value and satisfaction.

14. Emotional Intelligence:

Emotional intelligence aids in problem-solving by promoting empathy and understanding. It allows entrepreneurs to consider the emotional and human aspects of a problem, leading to more comprehensive and effective solutions.

15. Time Management:

Efficient problem-solving requires effective time management. Knowing how to prioritize problems based on their urgency and impact can streamline the problem-solving process and ensure that critical issues are addressed promptly.

16. Strategic Thinking:

Strategic thinking involves looking at problems from a broader perspective. It allows entrepreneurs to consider the long-term implications of their solutions, ensuring that they align with their business goals and vision.

17. Technology Literacy:

In today’s digital age, technology literacy is crucial for problem-solving. Whether it’s leveraging data analytics for informed decision-making or utilizing digital tools to enhance collaboration, technology plays a significant role in modern problem-solving.

18. Self-Motivation:

Last but not least, self-motivation is essential. Problem-solving can be challenging and draining. The ability to stay motivated and maintain a positive attitude can make the process more manageable and productive, driving entrepreneurial success.

Problem-solving is a critical entrepreneurial skill that serves as the backbone of any successful venture. The ability to accurately identify and creatively overcome challenges is a testament to an entrepreneur’s resilience and adaptability. In this rapidly evolving business environment, a problem-solving mindset empowers entrepreneurs to navigate through uncertainty, fostering innovation and growth.

This comprehensive guide has provided an in-depth look at 18 crucial themes surrounding problem-solving for entrepreneurs. By understanding and implementing these insights, entrepreneurs can enhance their problem-solving skills, contributing to their personal growth and their business’s success.

Ultimately, the true value of problem-solving lies in its capacity to transform obstacles into opportunities. It’s not just about ‘fixing’ what’s broken, but about continuously evolving, adapting, and driving forward in the face of adversity. In the world of entrepreneurship, problems are merely stepping stones on the path to success.

So, embrace the challenges that come your way, arm yourself with these problem-solving strategies, and continue on your entrepreneurial journey. Remember, every problem you solve takes you one step closer to your ultimate business goal.

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What Smart Entrepreneurs Know About Problem-Solving Going the extra mile solves your problems more efficiently -- and might just make you smarter along the way.

By Dipti Parmar • Jun 4, 2018

Opinions expressed by Entrepreneur contributors are their own.

The most successful businesses solve a problem for the end-user. Lyft gets people from Point A to Point B quickly and cheaply. Amazon brings the world's markets to your doorstep in two days, flat. Netflix means you can cut the cord without worrying about a lonesome Saturday night -- endless entertainment is one click away!

Whether you're developing an innovative product that will take the world by storm or solving a payroll problem that's taking up way too much of your time, your business needs creative problem-solving. Every day. While Archimedes and Newton had world-changing epiphanies that simply dawned on them, the rest of us mere mortals definitely could use some help in this department.

This rings even truer in our rapidly evolving economy. Established business models are stumbling to find their way as slick new formats give the old hands a run for their money. So how do the best in the business rise above and stay ahead, day after day? Here are some insights.

Two heads are better than one.

No doubt you've heard the virtues of teamwork to complete a task or an important project. But thinking? That's something you do by yourself and inside your own head, right? Maybe not.

Research shows that problem-solving in a group or as part of a pair is more effective than flying solo. It may be all very well to come up with ideas by yourself, but truly successful people depend on an intellectual equal to help vet their ideas before any important decisions are made.

In their seminal paper, "Why do humans reason? Arguments for an argumentative theory," French social scientists Dan Sperber and Hugo Mercier posited that thinking and reasoning have an important component that disproportionately improves outcomes. This key component is arguing. It's obviously difficult to uncover unbiased inputs when you argue with yourself. This is where a mental sparring partner comes in. Think of it as adding a yin to your yang so you can arrive at your "eureka!" moment.

Related: The Future of Productivity: Teamwork and Collaboration

Nature backs up this theory of collective problem-solving. A study from the School of Biological Sciences at the University of Sydney revealed that shoals of fish solve problems faster and more accurately than do individual fish: "Shoals containing individuals trained in each of the stages pooled their expertise, allowing more fish to access the food, and to do so more rapidly, compared with other shoal compositions."

Even Warren Buffett relies on the sharp insights of Berkshire Hathaway Vice Chairman Charlie Munger. It's probably a good idea to include a business partner or even a close team into your ideation process and problem-solving model.

Organizational culture impacts problem-solving abilities.

Involving one or more teammates in a problem-solving process may not be enough. A Harvard Business Review article highlighted two important ingredients in a winning problem-solving team . First, you need individuals with minds of their own. These unique points of view allow for a variety of ideas and approaches. Second -- and more important -- each independent thinker needs to feel free to contribute her or his thoughts without fear of ridicule or retribution.

Related: The New Rules of Brainstorming

A cognitively diverse team brings together people with completely different approaches to solving the same problem. You're looking for a range of people: analytical types, creatives and organized discipline-maintainers. Because each offers something distinct, the team comes up with a rich variety of ideas to consider.

The team should have the opportunity to function in a psychologically safe space. Here's how it looks in real life: Members are encouraged to contribute without hesitation, mistakes are looked upon as opportunities to get better, and the team moves faster and is open to experimentation. The result? An environment emerges that's ripe for path-breaking solutions and quicker, more efficient processes.

Related: 7 Ways to Help Your Employees Become Better Problem-Solvers

Global diversity for the win.

What do SpaceX, Uber and Stripe have in common? Aside from being billion-dollar startups, each of these American companies has founders who were born outside the United States. In fact, a National Foundation for American Policy brief pointed out that 51 percent of all billion-dollar startups existing in the U.S. in 2016 were founded or co-founded by immigrants .

Research led by William Maddux, an assistant professor of organizational behavior at INSEAD, offers an explanation for this phenomenon. A series of experiments found that foreign-born participants or those who'd lived abroad for substantial lengths of time successfully solved problems more quickly and more creatively.

The researchers explained that individuals are forced to leverage their creativity and problem-solving skills to adapt to a foreign culture and customs. This constant adjustment and thinking on one's feet make such individuals uniquely well equipped to come up with creative solutions to problems. Undoubtedly, these evolved problem-solving skills contribute to success in business.

Related: Scale Culture Alongside Growth Through Diversity

So what do you do? Move to a different country and start a new business there? Probably not.

You could start by hiring a diverse workforce that includes people across different nationalities. These varied voices and eclectic mindsets have the potential to revamp your problem-solving process and offer a much-needed fresh perspective.

Related: Stuck? 5 Ways Entrepreneurs Can Gain a Fresh Perspective

In times of need, resourceful business owners can find plenty of problem-solving templates. But the beaten path often is the quickest route to failure. Instead, opt for a more original and creative journey. The road may be more winding and cumbersome, but science proves that going the extra mile helps you solve problems more efficiently. Stretching that extra neuron just might make you smarter along the way!

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Understanding Essential Entrepreneurial Skills

• Aspiring entrepreneurs need to master their craft by understanding the skills necessary to be successful.
• Those who wish to be entrepreneurs need 12 essential skills, including time management, a growth mindset, adaptability and more.
• Understanding and perfecting these skills can help prepare entrepreneurs for a successful future.

Table of Contents

What are entrepreneurial skills, 12 skills needed for a budding entrepreneur, 1. finance skills, 2. networking, 3. confidence, 4. clear communication, 5. accepting and acting on feedback, 6. growth mindset, 7. analytical and problem-solving skills, 8. time management, 9. leadership, 10. marketing, 11. adaptability, 12. negotiation, aspire to be someone who inspires.

Learn how to become a better leader from philanthropist Smith.

Follow Robert F. Smith on social media for the latest on his work as a business and philanthropic leader.

©  Robert F. Smith  2023

Across our Communities

Mbe entrepreneurship & supplier diversity.

1. Provide technical expertise: offer subject matter and technical expertise to catalyze and support community initiatives 

E.g., tax/accounting experts to help MBEs file taxes

E.g., business experts to help MBEs better access capital and craft business plans to scale their teams and operations

Access to Capital (CDFI/MDI)

2. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

Systems and technology modernization – $10M-15M: Add/upgrade core banking systems, hardware and productivity tools, train frontline workforce on new systems & technology and hire engineering specialists to support customization and news systems rollout – over 5 years

Talent and workforce – $10M: hire and train additional frontline lending staff and invest in recruiting, training, compensation & benefits and retention to increase in-house expertise and loan capacity – over 5 years

Other capacity-building and outreach – $8M: hire additional staff to increase custom borrower and technical assistance (e.g., credit building, MBE financing options, etc.) and increase community outreach to drive regional awareness and new pipeline projects – over 5 years

Education/HBCU & Workforce Development

3. Offer more paid internships: signup onto InternX and offer 25+ additional paid internships per year to HBCU/Black students 

Digital Access

4. Issue digital access equality bonds: issue equality progress bonds and invest proceeds into SCI’s digital access initiatives

5. Fund HBCU campus-wide internet – up to $50M in donations or in-kind: Partner with the Student Freedom Initiative to deliver campus-wide high-speed internet at ~10 HBCUs across SCI regions

6. Be an advocate for SCI priorities: engage federal and state agencies to drive policy and funding improvements to better support SCI’s near-term priorities

E.g., Engage the Small Business Administration and Minority Business Development Agency to increase technical assistance programs and annual spend to better support Minority Business Enterprises (MBEs) with capital and scaling needs

E.g., Ask the Federal Communications Commission (FCC) to include multi-dwelling unit connectivity in its new broadband connectivity maps and ask the National Telecommunications and Information Administration (NTIA) to allow non-FCC data in state broadband plans to unlock ~$285M in potential government broadband funding for 5 SCI regions

Directly Fund SCI

7. Invest directly into SCI (coming soon): provide funding for SCI to pool and invest in community initiatives that are most well-positioned for funding and can drive direct community impact.

Memphis, Tennessee

Lead community organization: The Collective Blueprint

Our ambition:

Increase the volume and value of Black-owned businesses – through corporate MBE spend and MBE startups & scaling

1. Scale technical assistance – $15M: fund* to expand technical assistance through business coaches and wrap-around services for 500+ MBEs over 5 years to help them scale from <$1M to $5M+ in annual revenue

2. Standup MBE fund – $15M: standup/scale MBE fund* to offer more flexible access to capital arrangements 400-500 MBEs over 5 years

 * Lead organization: The Collective Blueprint ; Contributing local organizations for community strategy include (but not limited to): Community Unlimited , Women’s Business Center South , Epicenter , others

Estimated impact (of all initiatives): 2.3x increase in MBE value & 20K+ new jobs, boosting Black community’s net worth by ~$3B+

Modernize CDFI/MDI systems and tech as well as recruit and upskill talent to increase CDFI/MDI capacity and ability to inject more capital into Black communities

3. Provide loan guarantees – $15M: create a fund* to provide 80% loan guarantees over 5 years to encourage lender participation and inject more capital into the community

4. Conduct advocacy: ask US Treasury & Tennessee State to allow Tennessee CDFIs/MDIs to retain SSBCI capital & offer loan guarantees to boost loan issuance

5. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs** over 5 years modernize their core systems, hire and train staff, expand marketing and standup a SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

* Leading organizations for community strategy include (but not limited to): Community LIFT , Memphis CDFI Network , etc.

* In partnership with National Bankers Association and Appalachian Community Capital ; CDFIs/MDIs being considered include: Community Unlimited, Hope Credit Union, River City Capital, United Housing Inc, etc.

Estimated impact (of all initiatives): ~$330M+ in additional loans per year to support ~30K+ MBEs

Lower financial burden for Black students, increase number of Black college graduates, increase Black workforce and executive representation and their access to high-paying jobs

6. Standup training hub – $30M: fund* the establishment a world-class training hub that offers certificate-granting STEM and innovation programs in advanced manufacturing, health care, etc. to 10K+ youths

7. Fund SFI program – $7M: fund the Student Freedom Initiative’s  Income Contingent Alternative to Parent Plus to support ~15 Black STEM students per year forever at 4 HBCUs**

* Lead organization: The Collective Blueprint ; Contributing local organizations for community strategy include (but not limited to): Greater Memphis Chamber and Workforce Midsouth

** Minority Serving Institutions / HBCUs with STEM programs being considered: Le Moyne-Owen, Baptist Memorial, University of Memphis, Rust College

Estimated impact (of all initiatives): 8K+ additional college graduates and 10K workers with high-paying wages to drive ~$1B+ in economic growth

Increase accessibility, affordability and adoption of high-speed Internet

8. Accelerate digital access initiatives – $75M:  partner with local orgs* to invest in setting up internet connections / installing hotspots, offering laptops and supporting adoption (through government subsidy technical assistance and digital literacy) to connect ~135K homes to high-speed internet in the Memphis region

9. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~135K unconnected households 

 * Lead organization: The Collective Blueprint ; Contributing local organizations for community strategy include (but not limited to): CodeCrew

Estimated impact (of all initiatives): ~135K households connected to high-speed internet to unlock ~$2B+ in economic potential

Houston, Texas

Lead community organization: Greater Houston Partnership

1. Scale team – ~$3M: hire 3-4 FTEs over 5 years for One Houston Together * to help companies increase MBE spend from ~2% to 5-10%+ as well as BIPOC workforce advancement and BIPOC board representation 

2. Increase MBE certification and scale technical assistance – ~$2M: partner with One Houston Together * and the Houston Minority Supplier Development Council (HSMDC) ** to certify additional MBEs, develop Minority Business Finder database tool and provide resources and services to help local MBEs scale and participate in Pathways to Excellence program

3. Commit to increase racial diversity in supply chain and procurement: increase MBE spend in Greater Houston region* to 5-10%+

* One Houston Together serves as lead (please contact if you are interested in funding these initiatives)

** Houston Minority Supplier Development Council (HSMDC) serves as a partner organization (please contact if you are interested in learning more about this initiative)

Estimated impact (of all initiatives): 2.5x increase in MBE value & ~55K new jobs, boosting Black community’s net worth by ~$12B 

4. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

* In partnership with National Bankers Association and Appalachian Community Capital ; CDFIs/MDIs being considered include: Unity National Bank, Unity Bank of Texas, PeopleFund, Houston Business Development Inc, etc.

Estimated impact (of all initiatives): ~$330M in additional loans per year to support ~30K MBEs

5. Fund SFI program – $120M: fund the Student Freedom Initiative’s Income Contingent Alternative to Parent Plus * to support ~1.2K Black STEM students per year forever at 7 HBCUs**

* Student Freedom Initiative serves as lead (main contact if you are interested in learning more and funding this initiative)

** Minority Serving Institutions / HBCUs with STEM programs being considered: Texas Southern University, University of Houston, Prairie View A&M University, Houston Baptist University, University of Houston-Clear Lake, University of Houston-Downtown, University of St Thomas.  

Estimated impact (of all initiatives): 5K+ additional college grads & ~600 workers with senior exec positions / high-paying wages to drive ~$0.2B in economic growth

6. Accelerate SCI’s digital access initiatives – up to $80M in donations or in-kind: invest in setting up internet connections / hotspots, offer laptops/Chromebooks and support adoption (through government subsidy technical assistance and digital literacy) to connect ~145K homes to high-speed internet in the Houston region*

7. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~145K unconnected households 

* Community organization(s) being identified 

Estimated impact (of all initiatives): ~145K households connected to high-speed internet to unlock ~$3B in economic potential

Greater New Orleans, Louisiana

Lead community organization: Urban League of Louisiana

1. Scale Black Business Works Fund – $10M: grow the Urban League of Louisiana’s Black Business Works Fund to support ~3K-4K MBEs over 5 years with emergency working capital needs to support/sustain ~$1B+ in annual revenues

2. Scale technical assistance – $20M: fund the Urban League of Louisiana , New Orleans Business Alliance , Thrive New Orleans and Propellor to scale bookkeeping, B2C payment, marketing support & subsidized rent to scale 200+ MBEs from <$1M to $5M+ in annual revenue

Estimated impact (of all initiatives): 2.5x increase in MBE value & 8K+ new jobs, boosting Black community’s net worth by ~$2B+

3. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT teams to conduct needs diagnostic, implement tech solution & provide technical assistance

* In partnership with National Bankers Association and Appalachian Community Capital ; CDFIs/MDIs being considered include: New Orleans Business Alliance (community convener), Liberty, TruFund, LiftFund, NewCorp, etc.

4. Subsidize internships & apprenticeships – $40M: fund the New Orleans Youth Alliance , YouthForce NOLA and the Urban League of Louisiana to place and help subsidize apprenticeships, internships and other work-based learning experiences for ~20K young adults in high-pay sectors (e.g., energy)

5. Fund SFI program – $12M: fund the Student Freedom Initiative’s Income Contingent Alternative to Parent Plus to support ~120 Black STEM students per year forever at 3 HBCUs*

* Minority Serving Institutions / HBCUs being considered: Dillard University, Southern University – New Orleans and Xavier University of Louisiana

6. Scale career prep – ~$10M: scale the New Orleans Youth Alliance and YouthForce NOLA with 15-20 coaches over 5 years to equip ~20K young adults with skills for high-paying industries, job search & prep and subsidized transportation

Estimated impact (of all initiatives): ~2K additional college graduates and ~20K workers with high-paying wages to drive ~$1B in economic growth

7. Accelerate SCI’s digital access initiatives – up to $35M in donations or in-kind: partner with New Orleans’s Office of Information Technology & Innovation and Education SuperHighway to invest in setting up internet connections / hotspots, offering laptops/Chromebook and supporting adoption (through government subsidy technical assistance and digital literacy) to connect ~55K homes to high-speed internet in Greater New Orleans region

8. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~55K unconnected households

Estimated impact (of all initiatives): 55K households connected to high-speed internet to unlock ~$1B in economic potential

Charlotte, North Carolina

Lead community organization: Charlotte Regional Business Alliance

1. Offer in-kind FTEs: provide 2-5 in-kind FTEs to the Charlotte Regional Business Alliance (CRBA) over 5 years to convene corporate partners, assess their MBE spend, develop pipeline to increase MBE spend to 5-10%+

2. Offer technical assistance expertise: partner with the Charlotte Regional Business Alliance (CRBA) to advise/mentor ~200 MBEs on capital/loan access to help them scale from <$10M to $50M+

3. Commit to supplier diversity: increase MBE spend in Charlotte region to 5-10%+

Estimated impact (of all initiatives): 3x increase in MBE value & ~13K new jobs, boosting Black community’s net worth by ~$2B+

4. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M : help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance; in-kind experts to also help build out the MBE ecosystem through CDFIs/MDIs, market CDFI/MDI offerings and programs and help draft final loan agreements to qualify borrowers between investment fund(s) and CDFIs/MDIs

* CDFIs/MDIs being considered (examples and not exhaustive): Security Federal Bank, Institute / North Carolina Community Development Initiative, Sequoyah Fund Inc, Self-Help Credit Union, BEFCOR, Aspire Community Capital, etc.

* In partnership with National Bankers Association and Appalachian Community Capital ; CDFIs/MDIs being considered include: Security Federal Bank, Institute / North Carolina Community Development Initiative, Sequoyah Fund Inc, etc.

5. Fund SFI program – up to $10M: fund the Student Freedom Initiative’s HELPS program to support ~1.5K+ students per year at HBCUs* with emergency expenses – e.g., unexpected health costs, late rent payments, etc.

* Minority Serving Institutions / HBCUs in Charlotte that are being considered: Johnson C. Smith University, Johnson & Wales University – Charlotte, Charlotte Christian College

6. Provide in-kind staff: offer 2-5 FTEs to the Charlotte Regional Business Alliance (CRBA) over 5 years to track Black-/Brown-executive representation, convene corporate partners to develop executive pipeline and hiring plans and support corporate partners to increase representation from ~10% to 30%+

Estimated impact (of all initiatives): 2.5K+ additional college graduates and 2.5K workers with high-paying wages to drive ~$0.2B in economic growth

7. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~35K unconnected households

Estimated impact (of all initiatives): ~35K households get connected to high-speed internet to unlock ~$700M in economic potential for Charlotte

Birmingham, Alabama

Lead community organization: Prosper Birmingham

1. Fund startups and give access to investor network – $70M: grow the Prosper Health Tech Fund – powered by Gener8tor – and offer venture capital technical assistance to scale 50+ startups from <$1M to $5M+ in annual revenue; near-term priority is to secure $4M in venture investment by end of May 2022

2. Fund technical assistance – $25M: fund Prosper Birmingham , Magic City Match , and Birmingham Business Alliance to establish/expand business advisory programs, renovate and subsidize retail/office space for MBEs and scale coaches & support services (e.g., digital footprint, B2C platforms, accounting & bookkeeping, recruitment, etc.) to help 100+ MBEs scale from <$1M to $5M+ in annual revenue

Estimated impact (of all initiatives): 3x increase in annual MBE revenue & 8K+ new jobs, boosting Black community’s net worth by ~$2B+

3. Fund modernization & capacity-building and provide in-kind subject matter experts – $30M: help 4-5 CDFIs/MDIs* over 5 years modernize their core systems, hire and train staff, expand marketing and standup SWAT team of experts to conduct needs diagnostic, implement tech solution & provide technical assistance

* In partnership with National Bankers Association and Appalachian Community Capital ; CDFIs/MDIs being considered include: First Bancshares, Commonwealth National Bank, TruFund, Sabre Finance, Bronze Valley, etc.

4. Fund scholarships and hire coaches – ~$35M: scale Birmingham Promise fund to financially support 200-250 students per year over 4 years to increase college retention and graduation rates

5. Fund endowment – $2M: support 50 University of Alabama at Birmingham college students per year with housing to reduce their financial burden and increase college retention and graduation rates

Estimated impact (of all initiatives): 6.5K+ additional college graduates & 35K workers with high-paying wages to drive ~$1.2B in economic growth

6. Raise community awareness & adoption of Emergency Broadband Benefit: increase door-to-door and community outreach in low-income neighborhoods to get households onto EBB to help connect ~35K unconnected households

Estimated impact (of all initiatives): 48K households get connected to high-speed internet to unlock ~$700M in economic potential for Jefferson County

The Importance Of Problem Solving Skills For Entrepreneurs

Problem-solving is essential for entrepreneurs who want to succeed in today’s business world. Entrepreneurs face numerous challenges, and identifying and solving problems is crucial to achieving success. For that, it is crucial to have problem solving skills for entrepreneurs.

Typically, problem solving skills help to think critically and creatively to develop effective solutions to improve business performance. They also help entrepreneurs communicate effectively, lead confidently, and identify opportunities to grow their businesses.

In this blog, we will explore the importance of problem solving skills for entrepreneurs and provide practical tips and strategies to help them develop and enhance these skills.

Table of Contents

What Are The Skills Of Problem Solving?

Problem-solving skills are an essential element of successful entrepreneurship. Entrepreneurs must be able to recognize issues, evaluate them for possible remedies, and select the best one.

Creative thinking, critical thinking, and analytical skills are essential for effective problem solving. Communication and people skills are also important, as entrepreneurs need to effectively communicate their ideas and work with others to implement solutions.

Additionally, leadership skills are critical for leading teams and driving business success. The problem-solving process is key for entrepreneurs, who must identify opportunities and develop innovative solutions to drive their businesses forward.

Entrepreneurship is creating, developing, and managing a new business venture. Success requires a unique set of skills, abilities, and approaches. One of the most important skills for entrepreneurs is problem-solving. Below, we will discuss the importance of problem-solving skills for entrepreneurs and how it can impact their businesses.

Critical Thinking and Creative Problem-Solving Skills

One of the most critical elements of problem-solving is critical thinking . Entrepreneurs need to be able to analyze situations, identify problems, and develop potential solutions. This requires them to have strong analytical and creative thinking skills. They need to be able to approach problems from different angles, identify patterns, and think outside the box to find innovative solutions.

Effective Solutions and Business Performance

Effective problem-solving can significantly impact the performance of a business. Entrepreneurs who are skilled at problem-solving can identify and address issues quickly, leading to increased efficiency and productivity. They can also identify opportunities for improvement and develop new and innovative solutions to stay ahead of the competition.

Communication and Leadership Skills

Problem-solving also requires strong communication and leadership skills. Entrepreneurs need to communicate their ideas and solutions effectively to their teams, stakeholders, and customers. They need to motivate and inspire their team to take action and implement the solutions. This requires strong leadership skills, including delegating tasks and responsibilities, building a positive company culture, and leading by example.

Entrepreneurial Mindset and Opportunity Identification

Entrepreneurs with strong problem-solving skills often have an entrepreneurial mindset. They are always looking for new opportunities and ways to improve their businesses. They are unafraid to take risks and try new approaches to solve problems. This mindset is essential for identifying entrepreneurial opportunities and developing new and innovative business models.

How To Develop Problem Solving Skills For Entrepreneurs?

Entrepreneurs encounter numerous challenges while starting and managing their businesses, and the ability to solve problems creatively is an essential element of entrepreneurship. Here, we will explore different approaches entrepreneurs can use to develop their problem-solving skills.

Develop Critical Thinking Skills

Critical thinking is an essential skill for entrepreneurs to solve problems effectively. Entrepreneurs need to analyze a situation critically, identify the root cause of the problem, and evaluate potential solutions. Entrepreneurs can engage in activities such as reading challenging books, debating, and solving puzzles to improve critical thinking skills .

Enhance Creative Thinking Skill

Entrepreneurs should have the ability to think creatively when solving problems. Entrepreneurs can cultivate their creative thinking skills by exploring new experiences, brainstorming ideas, and challenging assumptions. When entrepreneurs use creative thinking, they can develop innovative solutions to complex problems.

Improve Communication and Leadership Skills

Entrepreneurs need to have excellent communication and leadership skills to solve problems effectively. Good communication skills help entrepreneurs communicate their ideas and solutions effectively to others. Similarly, leadership skills help entrepreneurs to motivate and guide their teams toward finding solutions to problem.

Think Outside the Box

Entrepreneurs can develop their problem-solving skills by thinking outside the box. When entrepreneurs use divergent thinking, they can generate many potential solutions to a problem. Entrepreneurs can develop innovative and effective solutions to complex problems by exploring different perspectives and considering unconventional solutions.

Utilize Tools and Resources

Entrepreneurs can also utilize various tools and resources to develop their problem-solving skills. These tools and resources include business books, online courses, mentorship programs, and workshops. Such resources can help entrepreneurs to learn new problem-solving techniques and strategies.

Get to Know:   What Is Self Discipline In Entrepreneurship ?

Steps to Effective Problem-Solving for Entrepreneurs

Effective problem-solving is a crucial element of entrepreneurship. Successful entrepreneurs need to possess strong problem-solving skills to identify and resolve challenges in their businesses. Here are the seven steps to effective problem-solving for entrepreneurs:

Step 1: Identify the Problem

The first step in solving any problem is to identify it. Entrepreneurs should use critical thinking skills to recognize the problem and what caused it. The ability to pinpoint the problem accurately will help in developing an effective solution.

Step 2: Gather Information

Once the problem is identified, the next step is to gather as much information as possible. Entrepreneurs should use their research skills to collect data, analyze trends, and look for insights into the problem. This step provides a better understanding of the issue, which is crucial in problem-solving.

Step 3: Analyze the Problem

After gathering the relevant information, entrepreneurs should analyze the problem to determine the root cause. Analyzing the problem enables entrepreneurs to understand the situation more deeply and identify possible barriers to finding an effective solution.

Step 4: Generate Possible Solutions

The next step is to brainstorm and generate potential solutions to the problem. Entrepreneurs should use their creative thinking skills to develop innovative solutions to address the issue. There may be various approaches to solving the problem, and entrepreneurs should consider them all.

Step 5: Evaluate and Select the Best Solution

Entrepreneurs should evaluate all potential solutions to determine which ones are feasible, effective, and have the highest chances of success. They should consider the potential impact of each solution on the business and choose the best one that aligns with their business goals.

Step 6: Implement the Solution

After selecting the best solution, entrepreneurs should create a plan to implement it effectively. The implementation plan should outline the steps required to implement the solution, including the timelines and resources needed.

Step 7: Monitor and Evaluate the Solution

Once the solution is implemented, entrepreneurs should monitor its progress and evaluate its effectiveness. This step helps identify any issues that may arise during the implementation process and make adjustments as necessary. Continuous monitoring and evaluation are crucial to ensure that the solution is sustainable and effective in the long run.

Wrapping Up

The discussion above has highlighted the importance of problem solving skills for entrepreneurs. Problem-solving skills are essential to identify, analyze, and develop solutions.

Entrepreneurs must also be able to adapt to the ever-changing business landscape and come up with innovative solutions. Problem-solving skills help entrepreneurs make better decisions, improve their productivity and increase their chances of success.

Problem solving skills enable entrepreneurs to anticipate problems and take proactive steps to prevent them. Clearly, problem solving skills play a major role in the success of entrepreneurs and should be developed and practiced regularly.

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