Creating a Problem Statement

The first and most important step to improving a business process is defining exactly the problem needing a solution.

A problem statement clarifies the current situation, the problem, its location and how its severity is impacting the financial performance of the organization. The problem statement should not include any speculation as to the cause or possible solutions for the problem. The purpose of the problem statement is providing a concise, precise and specific description of the problem in the business process which needs addressing.

By concise, the problem statement should be long enough to adequately describe the problem but short enough to convey the information in a single paragraph of 3 to 4 sentences. By precise, the description of the problem should have detailed measurements and not use generalizations. Lastly, by specific, the problem statement needs to answer the questions of who, what, when, where and how of the problem.

A well written problem statement helps in focusing attention on the area in the business process to facilitate the generation of ideas for possible solutions. Also, a well written problem statement provides an excellent means of communicating the idea, thus getting buy-in and support from others in the organization.

A well written problem statement should include the following information:

• A brief description of the business problem
• The metrics or measurements used to describe the problem
• The name of the business process and its physical location in question
• The time frame during which the problem is occurring
• Demonstrating the magnitude of the problem by describing its financial performance impact

The following is an illustration of a problem statement re-written;

Problem Statement

Human resources is taking too long to fill personnel requests

Better Problem Statement

The recruiting of entry level sales representatives for the new product sales department in New York City is missing its goal of 20 new hires each month 75% of the time. The monthly average number of new hires is 15 over the past 12 months. This hiring shortfall is adding costs of $50,000 per month in overtime and contractor costs.

As shown, the second problem statement conveys far more information than the first and provides a better first step in exploring solutions to the problem.