Lesson 3, Topic 1
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The Problem Definition Process

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Problem-solving in business is defined as implementing processes that reduce or remove obstacles.

In order to solve problems with potential products or services, you need first to understand and clearly define what the minimum viable problem is. We want to solve a full problem, not half of one, as a result, we need to get really clear exactly what problem we are actually trying to solve.

finding the problem
The Problem

The clearer our problem is, the easier it will be to design and produce a solution, work out who we can sell it to, what their needs are and how we can actually sell it to them, what price we charge and how we get it in front of them.

A problem that is sustainable, one we will be willing to dedicate ourselves our time and our resources to will be one that we are passionate about, a problem that frustrates us enough that we feel the need to solve it.

Albert Einstein said. “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it,”

Without really working hard at clarifying the problem,  most businesses miss opportunities, waste resources, and end up pursuing innovation initiatives that aren’t aligned with the right outcomes. A clear problem you’re looking to solve for your business, or it’s products and services sets the direction the business will go in, without it, it’s very easy to get lost.


design thinking
defining the problem

How many times have you seen a project go down one path only to realise in hindsight that it should have gone down another?

Many businesses are built, products/services are designed and often, they fail to be set up and the owner realises the product or service solution doesn’t quite meet the customer’s needs. Why? Most often because the central problem relating to the customer’s needs weren’t clearly articulated. The problem must meet the needs of the customer.

When starting a business, you see the first (big picture problem) in business, through the metaphor of a tree. A tree starts with a seed (the idea) it sprouts with one clearly defined problem (the trunk) as the business grows, the trunk strengthens and becomes the foundation for the business.

The trunk becomes the solution to the big picture problem (what Simon Sinek calls ‘the why’ behind the business, the reason driving the business existence).

As the tree continues to grow, it sprouts and strengthens branches (sub-problems and their solutions – the products and services that solve smaller related problems identified by the business.

As you grow and strengthen your business, the tree becomes what the world sees, your business in the eyes of your customers, the products and services you sell, and how you sell them. The trunk strengthens itself and anchors itself into the ground. The roots of the trunk become internal business operations and these are strengthened by your building out strong business policies, procedures and ways of doing things that all support you in solving the business problem.

As with anything a process can help facilitate your thinking and direct you to source solutions.

In order to help you really clarify and define your business or product or service problem, we’d like to share with you a problem defining a process.


problem triangle

Adapted from Dwayne Spradlin the leader of InnoCentive, an innovation marketplace that uses problem-solving as the fundamental step for all product, service and business creation.

The process includes three steps:


  1. Establish the need for a solution to the problem
  2. Justify the need for the solution to the problem
  3. Contextualise the need for the solution to the problem!

There are many businesses who come up with amazing innovations and products or services, but then fail to execute them in the market (they aren’t backed by the relevant people; investors, businesses, customers) this often results in businesses not defining the problem enough or working entirely on the wrong problem. To ensure you are refining your problem this model relies on you asking the right questions to ensure you end up working with the right problem!

Establish the need for a solution

The first step is to work out what the problem is in the simplest of languages. This might take you a bit of brain-dumping before you can really refine it.Remembering language is what defines everything in life. Coming up with a basic problem statement is the way to facilitate this.

Questions can help you work out what the basic need is.

  1. What is the basic need to solve the problem?
  2. What is the desired outcome?
  3. Who will benefit from a solution being developed/provided?


For example: in a business example we will build out throughout this topic, we have identified the basic problem to be:

Nature is what grounds us, keeps us connected to simplicities in life and the basic rules of life, there are a lot of people who are out of touch with nature, who live in apartments, small buildings and don’t get the opportunity to be in nature.

There are lots of products we have in our homes that facilitate us to disconnect from nature rather than connect with it. I.e. tv’s and devices, couches

There are a lot of pots for plants indoors but often they are cheap looking, unnatural, and uninspiring. – they all look similar and don’t uplift or inspire inside spaces.

These examples identified a tendency to want to move to solutions i.e. We could sell inspiring pots, but we don’t want to be focused on solutions just yet. We really want to work on the problem before shifting our minds to a solution. What we have identified here, however, would justify the need for a solution, in the third step. As a result, we moved this idea there.

Justify the need to solve the problem

If the business isn’t established and you’re using this process to facilitate you establishing what the business is, it comes back to asking yourself is this:

  • Something I am passionate about (aligns with values and beliefs)?
  • Something I can work on that I am good at (or could become good easily)? 
  • Something I would love to work on?
  • Is it something my world needs?

If your business is established, and you are focusing on introducing new products or services, the same questions can be asked but in the context of the business, rather than from your perspective as the business leader; is this something the business is:

  • Passionate about (aligns with business values and beliefs)?
  • Something we would love to work on?
  • Is it something our world needs?

You could also ask, does the need for a solution to this problem align with our Business Why (Business Problem/Solution – Focus)?

In order to answer this clearly, you will need to have clarified or refined this. If you haven’t yet, we suggest you use the ideation loop to do this first and then develop an ideation loop for each product/service or related category.

Example: New business Idea

  • Passionate about (aligns with business values and beliefs)?
    Yes it aligns with my beliefs:
    • Nature should be something experienced daily
    • People need nature in order to feel grounded, connected and less stressed
  • Something we would love to work on?
    • We love natural things and inspiring people to reconnect with nature
  • Is it something our world needs?
    • Yes there is a growing epidemic of people feeling overworked, stressed and disconnected from themselves and everything else.

Contextualise the Problem

Contextualising the need for the problem is best worked through by identifying and analysing the current and past efforts of other businesses.

Perhaps you don’t have to reinvent the wheel. You might find an existing solution that you could work with, or work from to provide an even better solution.

If the problem is industrywide, it’s crucial to understand why the market has failed to address it. This idea here is to see if you can find a solution to the problem that already exists, and take a high-level view of how these solutions meet or don’t meet the needs.


The questions you might ask here are:

  • What options are there currently out there that provide a solution or part of a solution?
  • What approaches have been tried so far to solve the problem?


  • People try to bring natural activities that reconnect them with nature inside i.e. yoga, meditation, plants.
  • There are a lot of pots for plants indoors but often they are cheap looking, unnatural, and uninspiring. – they all look similar and don’t uplift or inspire inside spaces.


Define the problem

Once you’ve done this, the goal is to bring it all together into one problem statement.

Once we’ve worked on the problem we need to refine and clarify it in one, up to a  maximum of two, sentences.

This will then become our compass for the direction we need to take our planning in.

problem triangle 2

A problem is a statement about an area of concern, a condition to be improved upon, a difficulty to be eliminated, or a troubling question that exists in theory or in practice that points to the need for meaningful understanding and deliberate investigation.

The problem statement, which captures all that the business has learned through answering the questions in the previous steps, helps to establish a clear understanding on what a viable solution would be and what resources would be required to achieve it.

  1. The problem: What is the problem plaguing the business?
  2. What it affects: Indicate the entities affected by the problem. (This can be a group of stakeholders, businesses or individuals).
  3. Impact: What is the impact or consequence of the problem?
  4. Solution: Include high-level recommendations for solving the problem.

We extracted this framework from the following article, a great supportive read: https://www.isixsigma.com/new-to-six-sigma/getting-started/how-to-write-an-effective-problem-statement/ – a great read!


Netflix’s problem statement would probably look something like this:

Problem:  “Going to the video store requires fighting traffic, wandering the aisles, and waiting in long lines just to get a single movie.”

Or this: “Going to the video store is a pain. People don’t like travelling back and forth just to rent a movie and they hate paying late fees even more.”

Solution: “Netflix allows anyone to enjoy thousands of titles streamed directly to their home or delivered to their mailbox.”


Our example: 

Problem: “Health problems due to stress caused in our lives are having worrying effects on people’s mental and physical health. For many people, spending time with/in nature helps them to feel less stressed,  more connected, more grounded and can help them to gain clarity. Therefore, people need an easier way to connect with nature even when they are busy, without having to leave their homes.”

Problem statements are a great way to elicit the fundamental reason the business or product or services exist and work as a great tool when you’re trying to pitch what your business is and why it exists.

Finding a problem to solve is a fundamental step in designing a product, service or overall business solution. Ensuring you have worked with the problem enough to define the absolute minimum viable problem is the challenge. It’s too easy to jump straight to solutions, but if you do this, you’re likely to create solutions that don’t fully align with the actual problem and the products or solutions.

Assessable Focus

The action focus for this lesson is to work your business idea to refine your problem as we’ve discussed here and demonstrated in your live lesson.

Once you’ve done this, reflect on the process by completing your journal questions.

assessable focus