In the past, the only problems controllers faced could be solved with concrete accounting procedures. But now financial managers deal with murkier issues than debits and credits — and a black-and-white mind-set won't do. Here's a systematic approach to help solve problems that don't have simple answers.
Until relatively recently, corporate financial managers could succeed without giving the notion of creativity or creative problem solving a second thought. After all, concrete accounting procedures make it relatively easy to solve financial problems. But as controllers move from the back office to the boardroom, as they become financial analysts instead of mere number crunchers, the need to solve problems creatively has grown exponentially.
Today, it's not just debits and credits that need balancing. Controllers also have to weigh the best approach to solving people issues, they must consider the most efficient way to grow a business, they must consult and advise, and they must collaborate with other professionals who often are not of the same black-and-white mind-set — all of which require some measure of creative problem solving.
But unlike accounting practices, which controllers learn in college, creative problem solving is a skill many financial professionals must learn on their own. Fortunately, it is teachable.
What is creative problem solving? In its simplest form, creative problem solving is a procedure that helps you go from goal to action or problem to resolution. According to Roger L. Firestien, Ph.D., president of Innovation Systems Group in Williamsville, N.Y., and author of "Leading on the Creative Edge," (Pinon Press, 1996), the process is most effective for solving complex problems that don't have simple yes-or-no answers. "The creative problem-solving process is ideal when you have problems that you previously have not been able to solve, and when you have problems that are different from any you have faced before," he explains. "Furthermore, it only works in situations in which you have ownership and influence."
Stanley Marszalek, director of municipal affairs examinations for the New York State Controller's Office based in Albany, has been in the midst of a creative problem-solving endeavor for some time. His department, which conducts audits of cities, counties, towns and districts throughout New York, wants to expand beyond audits and provide financial consulting services to help these jurisdictions become more cost-efficient. (In fact, his efforts to become an internal financial consultant are much like the efforts underway by controllers in the private sector.) But with 225 employees spread across seven regional offices, this change in direction has not been an easy one to pursue. Marszalek's management team didn't know how to start, where to start or even what problems needed to be solved first.
Because the path toward reorganization was so unclear, Marszalek knew he needed a methodology to follow that would help everyone "get on the same page," and learn how to generate ideas and solve problems together. In seeking a solution, he hired Firestien to train his management team in the creative problem-solving process.
From Problem to Solution
The process they learned, which can be used by con-trollers in any industry, either alone or in teams, consists of the following six steps:
- Identify the goal, wish, problem or challenge you want to work on. The first step in the problem-solving process is to spend time defining and understanding your problem. Problem statements can be on a general topic, such as "How can we improve service to the business units?" Or, they can be more specific, such as "How can we reduce cash-flow cycle time from 200 days to 50?"
- Gather data. Once the problem is identified, gather information about it. If you want to improve service to the business units, ask questions about why this is important, who is involved, what solutions have already been tried, what stumbling blocks there are and what improved service will look like.
- Clarify the problem. Once you know more about who and what is involved in solving the problem, you'll want to restate the problem as specifically as you can. For instance, you might ask yourself, "In what ways can we begin to improve service to the business units in the next month without adding staff and without disrupting current operations?"
- Generate ideas. With a well-defined problem in mind, you can begin to generate ideas using techniques such as brainstorming. The goal of this phase is to create as many solutions to the problem as possible. Don't stop at just eight to 10 ideas; force yourself to come up with 30 or 40 more. "We know from research that the most sophisticated ideas usually surface after about 35 ideas have been created," Firestien says. One note of caution during this phase: Be sure to defer judgment. At this stage, the goal is not to evaluate ideas, but to create them.
- Select and strengthen solutions. Once the flip chart, blackboard or notebook is filled with a list of ideas, Firestien suggests using what he calls the "PPC" technique, in which the group lists the "pluses, potentials and concerns" of the most promising ideas. The PPC technique includes the following steps:
- Take an idea and state it in the form of a specific idea phrase, starting with "What I see us doing is ..." For example, "What I see us doing is developing a questionnaire to send to the business units to determine their financial needs."
- List at least three good things about that idea.
- List the potentials, or future gains, that might result if the idea were implemented. For example, "If we distributed a questionnaire, we would have a better idea how to provide service to the business units."
- List the concerns about the idea, stating the concern as a problem statement that can be solved. For example, if you're worried about the cost of producing, distributing and evaluating questionnaires, you might state your concern as, "How can we reduce the costs associated with the questionnaires?"
- Generate a list of ways to overcome your concerns about the idea. For instance, one way you might overcome the cost concern is to distribute the questionnaire online.
- Develop an improved statement of the solution. After you have generated enough ideas to overcome the concern, you'll want to develop an improved solution statement, i.e., "What I now see us doing is developing and distributing an online questionnaire so that business-unit leaders can tell us what kind of financial consulting they need."
Remember, These Are Just Guidelines
Although the creative problem-solving process is presented linearly, Firestien cautions that the steps don't always occur in this fashion. "Sometimes, after you've clarified a problem, you'll know exactly what action steps to take," he says. Other times, all you need to do is select and strengthen your solution. Occasionally, you can even skip the problem-definition stage altogether and start generating ideas immediately.
Additionally, there is no certain amount of time that this process takes. Long-term strategic-planning sessions may require two or three days of intensive problem solving, while other problems require five minutes to conquer. The point is, the creative problem-solving process merely provides guidelines to help you uncover issues that may need to be addressed. Are there any pitfalls in the process? Yes, Firestien says. "One of the mistakes people make is that they make the process too rigid." For instance, people will think they can't come up with ideas when they are generating problem statements. Another problem is that people will jump from the goal to generating ideas without having a well-defined problem. "Clarifying the problem is probably one of the most crucial steps in the process," he stresses.
Marszalek agrees. "One of the things my department realized when going through this process is that we had to take a step back and address the correct problem," he explains. "In our session, we realized that to become internal financial consultants we needed a whole new organizational model; we couldn't revamp the division using the old structure. Before we could change the services we provide, we had to change the way we were organized."
Despite the fact that creative problem solving may uncover more — or different — problems than you originally anticipated, the process does work. For controllers, all it requires is the willingness to admit that maybe, just maybe, creativity is part of the controllership function. "It doesn't matter if you are solving personal or business problems," Marszalek adds. "This process works. I'm very enthusiastic about it."