Defining a Problem Statement

What is a Problem Statement and how do I define one?

In Digital Transformation and Change Management some situations are complex and there are many ways that an issue, challenge or change can be approached.

Defining a problem statement at the outset will help you internally align on the challenge to address, regardless of whether you are addressing this internally, or asking for solutions from prospective consultancies.

By providing a clear and concise explanation of the problem, it also helps stakeholders understand what needs to be fixed, improved, or changed.

A problem statement is not:

·        A proposal to define the problem

·        A leading bias towards an expected solution, approach or strategy

·        The entire history of what has led up to the challenge

·        Different views on what could be changed

A problem statement is:

·        A clear and concise description of the issue to be addressed

·        An identification of the problem’s current state

·        An identification of the problem’s desired future state

·        The gap between the current state and the desired goal

Crafting a clear problem statement ensures that all stakeholders are aligned on the issue making it easier to develop future effective solutions.

What situations lend well to using a problem statement?

It’s most useful for projects where you need a form of process improvement. Here are a few scenarios.

·        The start of a research project

·        Projects leading to improving customer or stakeholder experiences

·        Outlining a project where previous attempts are failing or have failed

·        A project that involves several different internal or external teams

·        Clearing defining customer or stakeholder issues that a product or service can solve

Problem statement formats

There are a few different formats, and academia takes a slightly different view than business, but we’re focussing on business here.

Whilst different resources may point you to three, five, seven headings, here is what we have always found most useful in practice.

1 Description of the Problem:

Outline the issue that the business is facing. This part of the statement is crucial because it lays the groundwork for the short document. It should be specific, addressing a particular problem rather than a general area of concern.

 Questions that can help you describe the problem are:

·        What specific issue are we encountering?

·        When and where does this problem occur?

·        What are the symptoms of the problem?

·        How does this problem manifest in day-to-day operations?

2 Impact of the Problem:

Details how the problem affects the business, including potential or actual impacts on operations, financial performance, customer satisfaction, reputation and competitive position. Highlighting the impact underlines the importance of addressing the issue.

 Questions that can help you define the impact of the problem are:

·        How is this problem affecting our overall business performance?

·        What are the immediate and long-term consequences of this problem?

·        Can we quantify the impact (in terms of cost, time, customer satisfaction, etc.)?

·        What could happen if we don't address this problem?

3 Who does the Problem Affects?

This specifies the customers, and stakeholders impacted by the problem. This could include employees, customers, investors, or other groups. Understanding who is affected helps in tailoring the solution to meet their needs.

 Questions that can help you define who the problem affects are:

·        Who is directly impacted by this problem? (e.g., specific teams, departments, customers

·        How are they affected by this problem?

·        Are there any external stakeholders (e.g., partners, suppliers) affected?

·        What feedback have we received from those affected?

4 Scope of the Problem:

The scope defines the boundaries of the problem, including what’s included and excluded from consideration. This helps focus efforts on a manageable segment of the larger issue.

Questions that can help you define the scope of the problem are:

·        What is the extent of the problem?

·        Are there specific areas of the business more affected than others?

·        What are the boundaries of the problem?

·        What is not considered part of the problem?

·        How has the problem evolved over time?

 5 Benefits of Solving the Problem:

This part articulates the advantages or improvements expected from solving the problem. It helps in justifying the resources and effort required to address the issue.

 Questions that can help you articulate the benefits of solving the problem are:

·        What are the expected outcomes of addressing this problem?

·        How will solving this problem improve our operations/business?

·        What are the potential gains in efficiency, cost savings, or revenue?

·        How will solving this problem improve satisfaction for those affected?

6 Constraints and Requirements:

Define if there are there any limitations or specific conditions that must be considered in solving the problem. These might include budgetary constraints, time limitations, or technological requirements.

 Questions that can help you define constraints and requirements are:

·        What limitations do we face in solving this problem (budget, time, resources)?

·        Are there any legal or regulatory considerations?

·        What are the must-haves and nice-to-haves in the solution?

·        Do we have any technological constraints or requirements?

Asking these questions can help dive deep into the problem, ensuring a comprehensive understanding and ultimately facilitating the development of a well-informed, effective solution.

You may not need to ask all of these questions, but we have always found this a helpful practical framework for defining the problem statement. Remember, do keep it concise and good luck with your projects.