On September 27, at the Embassy of Canada to Japan in Tokyo, Corey Phelps, associate professor of strategy and Desautels Faculty Fellow at the Desautels Faculty of Management, McGill University, delivered a talk based on his new book, Cracked It! How to Solve Big Problems and Sell Solutions Like Top Strategy Consultants.

The event was co-hosted by the Canadian Chamber of Commerce in Japan (CCCJ) and McGill MBA Japan, and provided attendees — CCCJ members, McGill MBA Japan students and alumni and members of the general public — with a chance to learn lessons about problem solving drawn from a variety of examples.

Skill in Demand

As Phelps pointed out, the ability to solve com­plex problems is a skill that is in extremely high demand. He cited four different sources — a survey by the leadership consultancy Zenger Folkman, research by the Economist Intelligence Unit, the World Economic Forum’s The Future of Jobs report, as well as the Financial Times’ MBA recruiter survey — all of which high­lighted the fact that problem solving is a critical skill for managers in any industry.

However, as Phelps explained: “The challenge is that, unlike learning how to walk, complex problem solving doesn’t come naturally. We’re human beings and as human beings we are subject to a tremendous number of biases or pitfalls when it comes to problem solving.”

Cautionary Tale

Phelps’s most illustrative example of these pitfalls was Ron Johnson at J. C. Penney Corporation, Inc. Johnson was responsible for turning Target Corporation into a hip brand during the 1990s, and then oversaw the creation of the wildly successful Apple Stores in the 2000s. Therefore, it would have made sense to assume that Johnson would have been an excellent choice to oversee the resuscitation of the ven­er­able J. C. Penney, which had been facing a period of steadily declining performance.

However, Johnson’s tenure at the company was marked by a number of missteps. Johnson did away with the company’s longstanding dis­count pricing, reorganized the stores’ layouts, changed the name of the brand from J. C. Penney to jcp and took out the cash registers and gave sales staff portable credit card readers à la Apple Stores.

The approach turned out to be a spectacular failure, and ended up alienating the brand’s customers. Johnson, who started as J. C. Penney’s CEO in November 2011, was fired in April 2013 following quarter after quarter of the company’s poor performance.

From this cautionary tale, Phelps identified several problem-solving errors.

• The expertise trap: Johnson had been ex­treme­ly successful at Target and Apple, leading him to think that he could do no wrong. He came up with his strategy in less than three months, without ever shopping at a J. C. Penney store or speaking to a customer.
• Reasoning by (bad) analogy: Johnson incorrectly assumed the approaches that succeeded with Apple and Target customers would succeed with J. C. Penney customers.
• Confirmation bias: When Johnson received pushback from executives after presenting his strategy, he ignored or discredited their opinions — and in some cases, even fired them.
• Deference: Because of Johnson’s successes, he was seen as being able to do no wrong, and people around him were likely to defer to him.

All About Method

So if even successful executives are prone to errors when it comes to problem solving, what are average people meant to do? Phelps outlined TOSCA, a problem-solving checklist, which is explained in greater detail in his book. The method requires asking the following questions:

• What is the Trouble or are the symptoms that make this problem salient at the time it is considered?
• Who is the Owner of the problem — who is the “client” of the problem-solving initiative?
• What does Success mean — what per­for­mance criteria will the problem owner consider to gauge the solution?
• What are the Constraints that limit the problem-solving effort and rule out some potential solutions?
• Who are the Actors?

No strategy is fail-safe, but having a method in place can help us prevent some of our natural human tendencies from getting in the way of successful solutions. And with a growing number of firms placing a premium on problem-solving skills, an approach like TOSCA is a useful addition to any employee’s skill set.