Peter Drucker’s Five Step Problem Solving Process


Peter Drucker was one of the greatest business minds in our culture. One of the many techniques I’ve used is his five step problem solving formula. It’s as simple as it is sublime. It’s below with my commentary.

Whenever you have a key problem in your business, take a minute, pull up a blank document, and analyze the problem using the following five steps.

Step One: Realize that this problem will repeat over and over again until you come up with a rule or principle that you will forever follow. Even if the problem doesn’t repeat, the negative effects of the problem likely will. This mindset does two things. First, it helps battle procrastination. If the pain lasts “forever” you’ll be more likely to deal with it sooner. Second, it forces you to think long-term rather than staying in firefighting mode. Solving a problem should be a real solution, not a band-aid.

Step Two: Establish the definition of the specifications to which the solution must satisfy. Often, leaping to a solution to a pressing problem simply creates new problems. The goverment is a great example of this. You need to make sure your solution doesn’t negatively affect anything else, and fits within your overall business structure and goals.

Step Three: Determine what will completely and fully satisfy the specification before worrying about the compromises, adaptations, or concessions that need to be made for the solution to be manifest in real life. Again, this simply forces your thinking in the right direction. Once you come up with a real solution from steps two and three, then you can tweak the things needed to be done “on the edges” to make it work.

Step Four: Make a list of actions to carry out the solution. This is time management 101. Make a to-do list and sort it by sequence and priority, as I’ve discussed on this blog many times before.

Step Five: Monitor the feedback which tests the validity and effectiveness of the solution against the actual course of events. See what happens. Measure. Ensure the solution actually A) fixes the problem, B) doesn’t screw anything else up, and C) is cost effective enough to continue in perpetuity. If not, go back and course correct if needed.

I’ve used this formula many times in my own businesses and it’s always worked for me. It will work for you too.

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