Anyone who has tried to retrieve understanding of a problem from another human's brain knows the challenges and confusion involved. Twenty years ago, a hermit named Jerry shared a problem-solving secret that I now offer you through the lens of my experience.
The most useful definition I've ever encountered was Gerald Weinberg and Don Gauss' definition of the term "problem" in their book Are Your Lights On?  "Problem: A difference between things as desired and things as perceived."
By this definition, there can be no problem unless someone has a desire. Who? What is his desire and how do we know that? How would we know if we satisfied the desire? How do we know it is not satisfied now? This gets to the other point, perception.
Perception is a powerful word because it reminds us that things aren't always as they seem. How do we know the current state? What data confirms the current state? Whose perception of the current state are we relying upon?
This definition of "problem" helps quickly focus on gathering useful information about the nature of the issue before solving a problem that is ill defined or doesn't exist. It also highlights options for solutions: change the desire, change the perception, and reduce or eliminate the difference between desire and perception.
This is one of the best tools in my kit, reminding me of richer options when I'm hunting for solutions.
I was asked to help a public sector client with a "problem" of slow payment processing. First step: Identify who had the problem. The person willing to invest in solving the problem was the new head of administration for the department. She said, "Our vendors are complaining because we take too long to pay our bills."
I asked how often complaints were received. She showed me a letter from a vendor detailing the payment history of a specific invoice. She was new to the organization and had received no other vendor complaints.
My inquiry identified one source of her perception. If there were only one complaint, it might have been easy to mistake an incident for a trend. I took a copy of the letter and began my investigation.
When I met the nice people in accounting, they confirmed that prompt payment was a common issue and had been since the department was split a year earlier. When the department split, half of the staff had gone to the new department (my client) and half had remained with the old. Existing records had remained with the former department, making payment processing time consuming because old records weren't readily available. It had taken months of overtime to copy and transfer the files. Payment timeliness had suffered as a consequence.
"How long does it typically take to pay an invoice now?" I asked.
"We don't know."
"Then how do you know that you haven't caught up?"
"Because line managers keep calling with payment inquiries on behalf of grumpy vendors. We have dedicated several staff to doing nothing but respond to these inquiries."
I followed the accounting manager on a tour of her facility. Mail was stacked everywhere. Staff worked frenetically. Phones were ringing. Staff apologized for payment delays.
I watched a worker process a stack of mail. He took an invoice, walked to a nearby filing cabinet, pulled a file, and riffled through the pages. He muttered, replaced the file, returned to his desk, and threw the invoice into the trash.
"What's up with that one?" I asked, surprised.
"Duplicate," he answered. "A third of these are redundant requests for payment. That invoice was approved for payment five weeks ago."
I looked at the postmark on the envelope; it was two weeks old.
The rest of the investigation can be summarized as follows: There were two steps to the payment process--(1) Opening the mail and checking files to confirm the vendor was known to the system and funds had been budgeted; then sending the invoice to be approved by the line manager who had received the product or service, and (2) Processing confirmation from the line manager that the debt was authorized for payment, and paying the bill. Line managers often took thirty to ninety days to respond with approval.
Staffing was inadequate to perform these steps while also processing duplicate invoices and searching the stacks for work in progress to respond to internal inquiries. They had a bathtub problem--more work flowing in than they were able to process and drain out. It was making a mess and causing additional work.
I realized that even if things were processed instantly, payment would require thirty to ninety days because of the delay waiting for line manager approval. I partitioned the problem into three parts: processing time within the accounting department, processing time with the line managers, and the time required to cut checks.
Processing time within the department was constrained by the resources available. To speed that up we needed more people (not an option) or less work. Much of the work was a consequence of things taking so long--duplicate requests and inquiries about work in progress. This was a case where the perception of slow payment led to action (duplicate invoicing and inquiries) that led to even slower payment.
Part of the solution involved changing perception. The CEO sent staff a message explaining that accounting had gotten behind and was working to catch up, and that the time required for line managers to approve invoices for payment was beyond the control of the accounting department. The CEO established a one-week turnaround goal of for line manager approvals.
He pointed out the irony that inquiries about delayed payments were responsible for a significant portion of the workload, thus slowing payments, and asked that for ninety days no payment inquiries be made. The CEO announced that accounting would begin publishing weekly metrics on the number of invoices received and paid, and that interested people could watch these metrics to see improvement in throughput until the crisis was past.
A letter was created for vendors apologizing for delays and suggesting two steps vendors could take to have payments processed promptly: Make sure that future invoices were complete and correct, and don't submit duplicate invoices.
A process was established to log invoices as they were received and respond to the invoicing vendor with a copy of the letter and confirmation that the invoice had been received. This correspondence helped manage vendor perception and dramatically reduce the number of duplicate invoices and inquiries.
An effect of the logging process was to track the number of unique requests received and establish the input flow rate. A corresponding process was created to close out transactions when payments were sent. This provided raw data for the output flow rate and gathered data on total processing time for individual transactions. Transactions sent to the line managers for approval were logged out when sent and logged in when received, capturing metrics for turnaround time and enabling reporting on what contributed to the total duration of each specific invoice. Together, these metrics allowed the organization to monitor and diagnose the flow of work and also provide visibility into the process and its steady improvement over time.
This is a favorite example of perception playing a role in both the problem and the solution. Try this definition of "problem." If it serves you, thank Jerry Weinberg and Don Gauss.
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