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 finding solutions to 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 complex problems.
Here’s a primer on effective problem-solving in business, why it’s important, the skills you need, and how to build them.
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—part of the Credential of Digital Innovation and Strategy program—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 addressing 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.
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 creative solutions.
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.
6 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, as defined in Design Thinking and Innovation, involves 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 in alignment with organizational priorities and ensure your team generates useful ideas for your firm.
2. Empathy
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 the audiences 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 identify the problem’s root and consider each group’s perspective. Assuming someone’s perspective is often inaccurate. The most effective way to obtain 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.
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, cognitive fixedness may lead you to think that rubber is the only material suitable 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 also 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 an environment where your team feels comfortable sharing ideas, allowing new, innovative solutions to emerge.
5. Analysis and Idea Evaluation
It's essential to balance creativity and empathy with strong analysis skills. After framing a problem and understanding different perspectives, you must break the information down and look for patterns. This helps you determine the potential solutions that are worth pursuing and which might be a distraction.
For example, say children's sneaker sales are down. A few possible reasons might emerge: new competitors, changing styles, or durability concerns. By analyzing sales trends, customer feedback, and market research together, you can identify which factors are most influential.
Good analysis isn't just about numbers. It's about understanding the root cause so your team can focus on improving processes that actually make a difference.
6. Effective Communication
Even the best solutions won't work if no one understands them. That's where communication skills come in. Leaders need to clearly articulate the problem, spark curiosity, make a personal connection to illustrate why addressing it matters, and define how the proposed solution will help.
Suppose that data pointed toward the soles as the primary issue with children's sneakers. You'll need to explain to your team why redesigning the soles matters—safety concerns, customer preferences, and potential sales impact. Have them consider their own loved ones and their protection. When your team understands the reasoning, they're more likely to support and champion it.
Strong communication keeps everyone aligned. It turns a solution from a good idea into one your team can realistically and successfully implement.
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 program, such as Design Thinking and Innovation, which is part of the required curriculum for the Credential of Digital Innovation and Strategy. Datar guides you through each tool and framework, presenting real-world business examples to help you envision how you would approach similar 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—or dive into our comprehensive six-month Credential of Digital Innovation and Strategy.
This post was updated on October 2, 2025. It was originally published on January 17, 2023.
