Problem-solving to grow your business

All expansion stage software companies, and frankly all business in general, encounter problems as they grow.  All business growth strategies encounter impediments. All teams make mistakes, all people make mistakes, economies tank, and so on.

One big difference between companies that quickly get to the next stage of development and those that get stuck is the way in which these problems / impediments / mistakes are handled by senior management teams and companies as a whole.

In encouraging Agile development methods adoption in the companies in our venture capital portfolio, one of the most important things we push for is the adoption of the retrospective and the surfacing and removal of impediments.

At the end of the day, as long as teams are reflecting on their days, weeks, sprints, months, and quarters, and are aggressively looking for and identifying impediments to doing better, and eliminating those impediments, chances are the teams will get better over time and will successfully navigate adverse changes.

Once the basic rhythm is in place, the next stage is to become very good at identifying the root cause of various impediments and really removing them, rather than identifying problems at a more superficial and obvious level and working to remove the problem without actually succeeding.

A company really starts to accelerate when these practices become part of the culture across all function areas.

This requires discipline, skills, and experience. Luckily, lots of people have written about this.

Ray Dalio, Founder and CEO of Bridgewater Associates, a $74 billion hedge fund calls it “getting at the truth”, and refers to a basic process that has served him well in which diagnosing the root cause of a problem is distinct from identifying the problem and solving the problem (see his manifesto here, lots of great stuff for managers of any business).

There’s asking the “5 Whys”, described here, and Toyota’s A3 sheet, here.

And much much more. It doesn’t matter which approach is used or what it’s called as long as a team is identifying problems, diagnosting the root cause, and removing it.