The Briefcase #59: Are You Solving the Wrong Problem?

Accountants solve problems all day long. It’s pretty much all you do. Cashflow is always tight, costs are always rising, and customers are always paying late. It’s a constant stream of ugly things raising their ugly heads.

What’s frustrating, though, is that the first problem you notice isn’t necessarily the one you need to solve.

A falling profit margin might look like a pricing problem, but turn out to be a sales problem. An increase in customer complaints might look like a customer service problem, but actually it’s caused by two experienced employees called Alf and Dave leaving. And sometimes the issue everybody is discussing isn’t particularly important at all, it’s just some senior manager’s insane bugbear, and maybe we just need Alf and Dave back, pronto.

This is where accountants have a particularly useful role to play. You have access to data, you know how to interrogate it and, increasingly, you’re using it to help the wider organisation make better decisions. You’re an analytical machine, spewing out solutions at a rate of knots.

So, before we start solving anything, perhaps we should work out what the problem actually is.

🔊 Cutting through the noise

The squeaky wheel gets the grease, and some wheels positively screech. If an important customer is raising the stakes with the sales team, or if there’s an unexpected price hike on a key component, everyone can quite quickly start going bananas.

Maybe a manager comes into the meeting sweating buckets, but the issue freaking his nut out might be diverting attention from the longstanding one that’s been costing the organisation £200,000 a year.

Accountants can help by quantifying the impact. How many customers are affected? How much money are we losing? How long has it been happening? What happens if we do absolutely nothing? What happens if I do absolutely nothing, for maybe two weeks?

Sometimes, the answer will confirm everyone’s worst fears, but it also might be a lesson in just chilling out and having a good time instead.

📝 The problem statement

Suppose customer complaints have suddenly increased. The temptation is to jump immediately to solutions – hire more customer service staff, introduce new software, retrain everybody, or hold the most productive meeting you’ve ever had in the world.

But “customers are complaining” isn’t really a useful definition of the problem. What are they complaining about? Which customers? When did the complaints start? What changed around that time? What are the consequences if nothing is done?

A useful way of approaching this is to summarise the issue in one sentence, work out why it matters, investigate its nature and then write a short problem statement. You might discover that complaints are mainly about poor communication, began shortly after Alf and Dave left, and could lead to customers not renewing their contracts. Alf and Dave were such class acts. Maybe we could get them back?

Anyway, if you figure that out, you have something considerably more useful than “customers aren’t happy”. And, importantly, a problem statement shouldn’t contain the solution. If you define the problem as “we need to employ two new customer service staff”, you’ve already decided what the answer is before you’ve properly investigated the question, and besides, we just need Alf and Dave back anyway.

❓ Keep asking why

As you might’ve noticed, defining the problem is most of solving it. One wonderfully simple technique is the five whys, originally developed as part of Toyota’s approach to problem solving. It’s about getting to that root cause.

The concept is exactly as sophisticated as its name suggests – ask why something happened, then ask why again, and do that five times. It’s essentially the investigative technique employed by every four-year-old who starts by asking why they can’t have crisps for dinner and somehow ends up demanding an explanation of what happened in the first few seconds after the Big Bang.

Imagine margins have fallen. Why? Because a greater proportion of sales came from lower-margin products. Why? Because customers bought a different mix of products than expected. Why? You don’t need to keep going until you get to string theory, but you’ve got to push on it for a while.

For accountants, this is where access to the numbers becomes particularly useful. The data can tell you whether your explanation is right, or whether you’re still fooling around with symptoms.

🚨 Don’t do the Ds

We tend to react to issues in one of three ways. We dismiss: “it was only one customer complaining.” We downplay: “this always happens at this time of year.” Or we distort: “the payroll system made a mistake, so I’m going to do knife tricks for the rest of the day.”

None of these is especially helpful – even if you do get really good at knife tricks, the correlation between that and the payroll system is shaky at best. Instead, try to put the problem into perspective. Who does it affect? How badly? Has it happened once or every Tuesday since 2019? And, perhaps most importantly, what happens if you don’t solve it?

Because not every problem deserves solving. If fixing something costs £100,000, takes six months and causes enormous disruption to eliminate an inconvenience worth £600 a year, you’d honestly be better off learning some cool knife tricks. You could send some videos to Alf and Dave, too, with the message “here’s what you’re missing out on 💅”

💡 Getting creative

Accountants already have a useful analytical toolkit for the last piece of the puzzle – the solution. You can interrogate data, test scenarios, build models, and all the really exciting stuff that gets to the bottom of it all.

But a good solution requires a little human ingenuity, too. That means being curious, asking “what if?”, talking to people with different perspectives, and entertaining ideas that initially sound ridiculous, like “what if we replaced Alf and Dave with other people”.

Brainstorming can help here, provided everybody is allowed to contribute without their ideas being immediately torn apart. This may require some adjustment – accountants are usually rewarded for picking a nit and ruining a day. Problem-solving occasionally requires delaying that pleasure for ten minutes.

And creativity doesn’t mean abandoning the numbers. The two approaches work best together. All the dullards you work with might’ve brainstormed an idea to give customers face-to-face training because they’re struggling with new accounting software. Fine. Now let’s analyse it. How many customers need help? How much staff time would training require? How does that cost compare with the time currently spent chasing customers for missing information? Now you’re the captain, and it feels sweet.

🎯 Imperfect but practical

Here’s another uncomfortable fact about problems, in case you wanted another – sometimes, there isn’t a correct answer. Instead, you will probably have several possible solutions, each with different costs, benefits, risks and drawbacks.

You can test them. Does the solution actually address the root cause? Could it create another problem elsewhere? Will it damage customer service? Does it introduce unacceptable risk? Is it practical? What would Alf and Dave think of it? What are they up to now? Are they having fun without me?

This is where “don’t let perfect be the enemy of good” becomes useful. If you’ve found a practical solution that addresses the real problem without creating three exciting new ones, you may have to go with that, even if it doesn’t quite scratch that itch you have. In fact, after a complicated investigation, the eventual solution can sometimes be embarrassingly simple.

🧠 Final thoughts

Accountants have always been problem-solvers. So, it’s basically fine that you’re being asked to solve more and more problems – it’s your wheelhouse anyway.

AI might have started handling your routine processes, identifying anomalies, and crunching your data, but the more valuable skill is finding the causes of issues, and helping the organisation decide what to do next.

So, the next time somebody announces, “we have a margin problem”, resist the urge to immediately build a twelve-tab spreadsheet, and instead make sure you actually have a margin problem. Maybe the solution will surprise you.