Group Problem Solving

The problem-solving process involves thoughts, discussions, actions, and decisions, from the initial consideration of a problematic situation to the achievement of the goal. The problems that groups face are varied, but some common issues include budgeting funds, raising funds, planning events, addressing customer or citizen complaints, creating or adapting products or services to fit needs, supporting members, and raising awareness about issues or causes. While there are many ways to approach a problem, John Dewey’s reflective thinking sequence, an American educational philosopher, has stood the test of time. This seven-step process (Adler, 1996) has yielded positive results and serves as a proper organizational structure. If you are a member of a group that needs to solve a problem and don’t know where to start, consider the seven simple steps illustrated in Figure 38.1 below:

Define the Problem

If you don’t know what the problem is, how do you know you can solve it? Defining the problem allows the group to establish boundaries for what the problem is and what it is not, and to begin formalizing a description or definition of the scope, size, or extent of the challenge the group will address. A problem that is too broadly defined can overwhelm the group. Important information will be missed or overlooked if the problem is defined too narrowly. In the following example, a web-based company called Favourites needs to increase its customer base and sales. A problem-solving group has been formed, and they start by formulating a working definition of the problem.

Example problems:

Too broad: “Sales are off, our numbers are down, and we need more customers.”

More precisely: “Sales have been slipping incrementally for six of the past nine months and are significantly lower than a seasonally adjusted comparison to last year. This represents a 4.5 percent decrease in sales compared to the same period last year. However, when we break it down by product category, sales of our nonedible products have seen a modest but steady increase, while sales of edibles account for the drop-off, and we need to halt the decline.”

Analyze the Problem

The problem-solving group, consisting of Kevin, Mariah, and Suri, analyzes the problem and begins to gather information to gain a deeper understanding. The problem is complex and requires expertise in multiple areas. Why do non-edible products continue selling well? What is it about the edibles that are turning customers off?

Kevin is responsible for managing customer resources. He is involved with the customer from initial contact through purchase and delivery. Most of the interface is automated as an online “basket model,” where photographs and product descriptions are accompanied by “buy it” buttons. He is available for live and voice chats during regular business hours if needed, and customers are invited to request additional information. Most Favourites customers do not access this service, but Kevin is kept busy as he handles returns and complaints. Because Kevin believes that superior service retains customers while attracting new ones, he is always interested in finding better ways to serve them. Looking at both edibles and non-edibles, he will study the customer service cycle and identify any common points—from the main webpage through the catalog, to the purchase process, and to returns, where customers often abandon the sale. He has existing customer feedback loops, including end-of-sale surveys; however, most customers decline to participate in the study, and there is currently no incentive for them to do so.

Mariah is responsible for products and purchasing. She aims to offer the best products at the lowest prices, as well as new, unusual, rare, or exotic ones. She regularly adds new products to the Favourites catalog and culls underperformers. Currently, she has data on every product and its sales history, but it presents a challenge to represent it effectively. She will analyze current sales data and produce a report that explicitly identifies how each product—both edible and nonedible—performs. She wants to highlight “winners” and “losers,” but also recognizes that today’s “losers” may be the hit of tomorrow. Predicting constantly changing tastes and preferences is hard, but that is part of her job. It’s not all science, and it’s not all art. She has to have an eye for what will catch on tomorrow while continuing to provide information on what is hot today.

Suri is responsible for data management at Favourites. She gathers, analyzes, and presents information from the supply chain, sales, and marketing. She also works with vendors to ensure products are available when needed, makes sales predictions based on past sales history, and assesses the effectiveness of marketing campaigns.

The problem-solving group members already have certain information on hand. They recognize that customer retention is a key factor in contributing to their success. Attracting new customers is a constant goal, but they realize that it takes more effort than retaining existing ones. Thus, it is vital to ensure a quality customer service experience for existing customers and encourage them to refer friends. The group needs to determine how to promote this favorable customer behavior. Another contributing factor is that customers often abandon the shopping cart before completing a purchase, especially when purchasing edibles. The group members need to learn more about why this is happening.

Establish Criteria

Establishing the criteria for a solution is the next step. At this point, information is coming in from diverse perspectives, and each group member has contributed information from their perspective, even though there may be several points of overlap.

Kevin: Customers who complete the postsale survey indicate that they want to know (1) what is the estimated time of delivery, (2) why a specific item was not in stock and when it will be available, and (3) why their order sometimes arrives with less than a complete order, with some items back-ordered, without prior notification.

He notes that a tiny percentage of customers complete the postsale survey, and the results are far from scientific. He also notes that it appears the interface cannot cross-check inventory to provide immediate information regarding backorders. Hence, the customer “buys it” only to learn several days later that it is not in stock. This seems especially problematic for edible products, as people often order them for special occasions, such as birthdays and anniversaries. However, we don’t know this for sure because of the low participation rate in the post-sale survey.

Mariah: Four edible products frequently sell out. So far, we haven’t been able to boost the appeal of other edibles, so people would order them as a second choice when these sales leaders aren’t available. We also have several rare and exotic products that are slow sellers. They have potential but are currently underperformers.

Suri: We know from a postal code analysis that most of our customers are from a few specific geographic areas associated with above-average incomes. Few credit cards are declined, and the average sale is over $100. Shipping costs represent, on average, 8 percent of the total sales cost. We do not have sufficient information to produce a customer profile. There is no specific point in the purchase process where basket abandonment tends to happen; it happens uniformly at all steps.

Consider Possible Solutions to the Problem

After listening to each other, the group begins brainstorming ways to address the identified challenges, focusing resources on solutions that are more likely to produce results.

Kevin: Can our programmers create a cross-index feature that links the desired product with a report of how many are in stock? I want the customer to know immediately whether the item is in stock and how long they may have to wait. As another idea, is it possible to add incentives to the purchase cycle that won’t negatively impact our overall profit? I’m thinking of offering a small volume discount on multiple items, or perhaps free shipping above a specific dollar amount.

Mariah: I recommend we hold a focus group where customers can sample our edible products and tell us what they like best and why. When the best-sellers are sold out, could we offer a discount on related products to provide an instant alternative? We might also cull the underperforming products with a liquidation sale to generate interest.

Suri: To gain a deeper understanding of our customers, we must incentivize them to complete the post-sales survey. How about a 5% off coupon code for the next purchase to encourage them to return and help us better identify our customer base? We may also want to establish a customer referral rewards program, but achieving results requires more accurate data. We should also explore the supply side of the business by securing a more reliable supply of our leading products and negotiating more advantageous discounts from our suppliers, especially in the edible category.

Decide on a Solution

Kevin, Mariah, and Suri may want to implement all the solution strategies, but they lack the resources. They’ll complete a cost-benefit analysis, which ranks each solution according to its probable impact.

Implement the Solution

Kevin is faced with designing the computer interface without incurring unacceptable costs. He firmly believes that the interface will pay for itself within the first year—or, more bluntly, that Favourites’ declining sales will worsen if the website does not have this feature soon. He requests a meeting with top management to obtain budget approval and secure their agreement on one condition: he must negotiate a compensation schedule with the information technology consultants that includes delayed compensation in the form of bonuses after the feature has been successfully operational for six months.

Mariah knows that searching for alternative products is a never-ending process, but it takes time, and the company needs results. She decides to evaluate products that competing companies offer, especially in the edible category, on the theory that customers who find their desired items sold out on the Favourites website may have been buying alternative products elsewhere instead of choosing an alternative from Favourites’ product lines.

Suri approaches the vendors of the four frequently sold-out products and asks, “What would it take to get you to produce these items more reliably in greater quantities?” By opening a communication channel with these vendors, she can motivate them to make modifications to improve reliability and quantity. She also approaches the vendors of the less popular products with a request for better discounts in return for their cooperation in developing and test-marketing new products.

Follow Up on the Solution

Kevin: After several beta tests, the cross-index feature was implemented and has been in place for thirty days. Now customers see either “in stock” or “available [mo/da/yr]” in the shopping basket. As expected, Kevin notes a decrease in the number of chat and phone inquiries, such as “Will this item arrive before my wife’s birthday?” However, he notes an increase in inquiries asking, “Why isn’t this item in stock?” It is difficult to tell whether customer satisfaction is higher overall.

Mariah: By exploring the merchandise of competing merchants, she gained several ideas for modifying Favourites’ product line to offer more flavors and other variations of popular edibles. Working with vendors, she found that these modifications cost very little. Sales are up within the first thirty days of adding these items to the product line. Mariah believes these additions also enhance the Favourites brand identity, but she has no data to back this up.

Suri: So far, the vendors supplying the four top-selling edibles have fulfilled their promise of increasing quantity and reliability. However, three of the four items have sold out, raising the question of whether Favourites needs to bring in one or more additional vendors to produce these items. Of the vendors with which Favourites asked to negotiate better discounts, some refused, and two of these were “stolen” by a competing merchant so that they no longer sell to Favourites. In addition, one of the vendors that had agreed to offer a better discount was unexpectedly forced to cease operations for several weeks due to a fire.

This scenario enables us to recognize that the problem may have multiple dimensions and solutions, that resources can be limited, and that not every solution is successful. Even though the problem is not immediately resolved, the group problem-solving pattern and communication among the group members serve as a helpful guide through the problem-solving process.