The Three Types of Business Problems

The Three Types of Business Problems

There are three types of problems, understanding them matters.

Problems are only problems until they are paired with solutions
~Someone Super Smart

It’s a good thought, and quotes like this will no doubt get you likes on Facebook.

Let’s try it out.

Take 8 seconds and seriously think about a problem you are facing. Now, say out loud “If I had a solution my problem would be gone!”.

Is your problem gone?

If your answer is yes, you should scroll all the way down and click unsubscribe - it's going to get boring.

But, if you are kinda slow and stupid like me, needing more than platitudes to progress, keep reading. This is how I break down problems into pieces which will aid in actually solving them.

Besides the three types of problems, there is an important cycle to always remember:

1. You cannot control outcomes.

2. You cannot control other people.

3. When it’s your turn to make a decision, you HAVE to make a decision. Get it wrong if you must, but make a decision.

(We will talk more about this cycle later)

The three types of problems:

  • Lack of resources
    • You don’t have the tools, knowledge, or experience to make the correct choice.

  • Lack of picture
    • You do have the tools, knowledge, and experience, but you don’t know how to use them.

  • Lack of accountability
    • You have the resources and know how to use them, but you are choosing not to anyway.

1) Lack of Resources

Being proficient at solving these problems, AND knowing what to do when you get it wrong, affects the other two.

Step #1 - Label Your Position:

When you face a problem you are not sure how to solve, ask yourself this question:

Question: Do I know what talent, tools, or software is needed to solve this problem?

If you can’t answer yes, you are lacking resources. GOOD.

(Bookmark Jocko Willink’s video – GOOD)

The only thing worse than not having the right resources to make a decision is thinking you do when you definitely don’t.

So put a label on it.

Here’s the thing.. there is a pretty good chance you will get it wrong.

You are going to miss an important step.

You are going to make a bad guess or a bad estimate.

What happens after you make a bad decision (and find out you are wrong) is the important part.

Being wrong is part of expanding; how you handle being wrong will determine whether you continue to expand or let your business (and dreams) die.

Some applicable stuff.. then onto the Takeaway:

When I started my second company, I knew selling our products online (e-commerce) was the best way to give my branch of the company the greatest chance at winning.

We needed to reach more people and most people are on the internet - easy choice.

But breaking into online sales is a steady series of MASSIVE hurdles.

The first hurdle was choosing the platform on which to build our store.

There are dozens… all with unique features and benefits.

But I had no way of knowing what features would be needed.

I had never run an e-commerce store before.

So here is a problem. It’s my problem to solve and my decision to make, but I have no idea how to solve it or which platform to use.

How am I supposed to choose?

Getting it wrong could cost thousands of dollars and equivalent man hours - of which I had little to spare.

Well, I did what everyone else does. I learned what I could about each platform for as long as I could until a decision needed to be made. And I made it.

I picked the platform and we got to work adding products and marketing the crap out of it.

My small team and I spent hundreds of hours building this website - endless hours.

And guess what… it SUCKED.

  • SEO sucked.
  • Navigation sucked.
  • Product pages sucked.
  • Store management sucked.
  • And it was butt ugly

But it wasn't all bad, it got us customers and it got us sales.

Best of all, our ugly little website put our products in the hands of people who loved them and it solved their problems. People we never could have reached otherwise.

We found out quickly, the platform I chose could not do everything we needed. And that’s OK.

What I also learned, by choosing the wrong platform, were the exact things I needed to better choose in the future. These were all things I would not have known until I faced a problem I did not know how to solve and had to make a decision anyway.

Now I had tools, knowledge, and experience – all things I did not have before making the wrong choice.

The Takeaway:

This is honestly the easy part. But you need to actually do it..

Next time you are faced with a problem you don’t have the resources to properly solve (and you get it wrong), take out a piece of paper, and write it down.

Write down three to five reasons highlighting why the choice you made was the wrong one.

Write. it. Down.

Acknowledge it.

Move onto the next one.

No beating yourself up. No bout of shame.

If you can get this right, you will accomplish more than you can imagine.

2) Lack of Picture

Story time first – then application:

For six years building our e-commerce branch, we had a consistent, recurring problem.

Here is what our trail of understanding looked like:

First, we didn’t know it was a problem.

Next, we recognized it was a problem, and ignored it.

Third, we somewhat understood the problem but didn’t know how to fix it.

Eventually, at year SIX, we finally got serious about solving it and could not figure out how that was going to be possible.

The problem? We were losing money on freight costs.

Remember our first ugly, awful, no good rotten platform and website we chose?

That website could not handle the complexity of our shipping needs.

Nor could the second platform.

Nor the third..

By the time we built and rebuilt our store 3 different times, managing thousands of products from dozens of warehouses, we were so vested in our new platform that a switch was not going to be viable for the purpose of solving one problem.

But it didn’t matter; at the time, we had bigger issues to deal with and we were profitable.

Then, in year five, something changed.

We lost the ability to sell our most popular (and highest margin) products.

Simultaneously, we were losing margin on most of our other products.

AND we were trying to move into new markets - all in the same year.

That is when we realized how important it was to capture accurate shipping costs. Because now... now we are losing money.

So here is a problem. It's my problem to lead my team in solving. I understand the problem, my team and I had documented the complexity of our problem.

So we did what anyone would do, we searched for the solution:

  • We checked our current store platform – It did not handle the complexity..
  • We checked with SAAS partners - they would cost us more than we could capture..
  • We looked at building our own software in-house – we could not build it fast enough to make a difference.

(I promise – I’m getting to the point, just hang in there)

Then, one day in an executive meeting with my partner (who had little to do with our e-commerce branch), I laid out the problem, all of its complexities, and the myriad of solutions we already tested against our problem.

He listened to my frustration, thought for a second and then asked:

“Why can’t you just estimate total shipping by month or by quarter, divide that by the number of products shipped, and charge whatever that number is?”

I was irritated.

He clearly didn't understand the complexity of our situation, so I argued all the reasons why his ”solution“ would not work.

This went on for about a minute.. until I realized his question was valid.

Why can’t we do what he suggested?

We don’t have to calculate perfectly (for every product, from every warehouse, to every destination) or know at the time an order is placed, from which warehouse the product(s) is coming.

We can look at data we already have, using tools we already know, to create a simple rule and fix the problem.

And we did.

Within 2 days we were beta testing the new system; it was fully implemented within a week.

Let’s go back to the type of problem, “Lack of Picture”.

Why did my partner - who knew nothing about the problem - come up with a good solution that an entire team (who did understand) was unable to solve?

The answer is simple - he was far enough away to see the whole picture.

Often in business, there will be problems that require you as a leader to zoom in a bit so you can understand the particular issue.

This is a necessary and great thing for leaders to do.

It’s just like when you take a family photo and you zoom in to see individual faces with more clarity.

But in business (just like in pictures) if you zoom in too far, all you see are individual colors of individual pixels.

No matter how far or fast you pan around the image (or the problems), you will never be able to make out the whole picture until you zoom out again.

The Takeaway:

  • When a problem seems too complex to solve, with the tools and knowledge you have, there is a good chance you are too close
  • Peers are integral to leadership. You need people in your life who are parallel to you and have a bias for your success.

3) Lack of Accountability

I was recently listening to a podcast where Jordan Petersen said: (something like)

"The two big categories people fear most are painful death and public humiliation. And the only thing scarier would be to undergo a painful death in a very humiliating way."

When I thought about how I would write this segment on the three types of business problems, I decided on pointing out what's lacking. Because it leaves an opportunity for a clear picture of what needs to be changed (or gained) in order to improve yourself and become better at problem solving.

Acknowledging when you're clueless about solving a problem is a tough pill to swallow.

Even more challenging when you should know what to do, but the solution eludes you.

The most daunting of all is the humiliation that stems from knowing you're wrong, understanding how to correct it, yet persisting in the wrong path – the third and most complex type.

Drawing inspiration from Paul's words in the book of Romans – "For I do not do the good I want to do, but the evil I do not want to do—this I keep on doing" – although spoken in the context of sin, the same principle resonates in the realm of business.

The values that make you conscious of sin against God align with those that illuminate business sins. Willfully acting against your better judgment brands you as a fraud against your potential.

In the initial stages of my business, I was relentlessly immersed in my work, burning the candle at both ends. Early mornings and late nights were dedicated to the business. But, as stabilized, complacency crept in.

Just a few years in, we were up sizing our shop (for a second time) and the new shop didn’t have office space for our online support team. No problem here.. I have a guest house deemed “The Cabin” that I turned into an office for my team to use.

  • It kept me close to home.
  • I could spend less time driving.
  • I could walk over and pop in for lunch – awesome.

However, the combination of convenience and “success” birthed apathy.

Late nights and equally late mornings became routine. I was showing up later to work, missing meetings, and had a blatant disregard for the different time zones our customers and vendors operated in.

I was fully aware that this wasn't acceptable. The trust of my team was eroding, and my ability to support our work during crucial moments was compromised.

Around the same time, I had hired a business coach. Someone who could understand what entrepreneurship was like and had the ability to look into my life, ask questions and be honest with me no matter how it felt.

His primary role was important but simple – to hold me accountable to my values and potential.

The Takeaway:

  • You have to want accountability
    • If you don’t want to change, no one is going to make you. You have to want it.
  • They have to tell you the truth.
    • Accountability thrives on truth. Uncomfortable as it may be, the foundation must be built on a commitment to honesty.
  • Respectful Authority:
    • The person should not be a peer. They have to be someone ahead or above you, that you respect enough to care what they have to say.

Photo by Brett Jordan on Unsplash