Part 3 in a series of the fundamentals of making business decisions. Here, we will examine how to define the objective or target.

1. How to Solve Business Problems, part 3
Armin J Cruz
Master in BusinessAdministration
Six Sigma Master Black Belt

2.  Remember, this too is a process not an event
 The objective, as all items in process
management can be summed up in the
equationY=f(X).Whereas,Y is the desired
outcome, and is nothing more than the
function of the inputs.
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3.  First define what the problem is
 Next, tell me why I care
 Followed by the scope of the issue
 Finally, tell me how I will know if the objective
is reached
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4.  Tell me what the problem is
 Commonly referred to as a “problem statement”
 Should be 2-3 sentences that concisely depicts the
issue. For example, our current reporting strategy
does not account for a regulatory mandate to cure
complaints and escalations within 30 business days
because the cycle time is 45 days. This presents an
operational, legal, compliance, and potentially a
reputational risk if not cured.
▪ In this example we outlined the “What” (risk of non-
performance) and the effect of the issue in 2 sentences. Keep
it high level, details come later.
6/27/15 Armin J Cruz armin.j.cruz@hotmail.com 4

5.  Tell me why I care
 Or describe to me the business case. The start of it
should be the end of the problem statement. In our
example, previously described, it is the issue
surrounding the three risk types.
 Now, follow up and define the consequences of non-
performance.
 Describe the outcome of the worst case scenario to
include the “3 D’s” (Dollars, Days, Defects). What will
it cost me in dollars, time spent, and quality for this to
be cured or if there is an error.
6/27/15 Armin J Cruz armin.j.cruz@hotmail.com 5

6.  Next up is the scope of the issue.
 Pay particular attention here. For LEAN practitioners
this has the infamous ability to create scope creep.
For Agile, scope may not be a concern for coding, but
it is a concern for the human use of the code.
 Try defining the scope based off of business unit
rather than by scenario or case (use cases come later)
 This will form an addition to the Key Stakeholders for
approving or rejecting your solution set as it will
impact their Line of Business (LOB)
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7.  Now, bring it full circle and tell me how we know
if we succeeded
 At this point we want to determine what success
looks like at a high level. The data collection
plan will tell us more details and we can define
our true metrics later. However, we want to
identify what will be critical to the quality (CTQ)
of our success.
 After review of the data, circle back and determine if
your CTQs are accurate, and create your Primary and
Secondary Metrics.
6/27/15 Armin J Cruz armin.j.cruz@hotmail.com 7

8.  If “Y” is your outcome/output and/or our
objective you must identify the components
that lead into your outcome or your inputs.
 After you define the previous components to
ensure proper scope, scalability, and business
case next identify the inputs to close the loop
6/27/15 Armin J Cruz armin.j.cruz@hotmail.com 8

9.  Summary of Steps to Solve a Business
Problem
 1) Define the Environment
 2) Define your Objective
 3) Create your Avenues of Approach
 4) Measure your Success and Create your
After-Action Report
6/27/15 Armin J Cruz armin.j.cruz@hotmail.com 9

10.  Armin Cruz is an operational excellence practitioner specializing in the
financial sector. Armin has worked for a “big four” bank for nearly 10
years and conducted turn-around operations in mortgage sales,
mortgage fulfillment, banking center and retail banking operations as
well as process excellence. Currently, Armin is tasked to drive the
process enhancements at the division/business unit level.
 Armin Cruz has a Master in Business Administration (MBA), as well as
several industry certifications such as Business process management
as well as in Six Sigma. Armin is a LEAN Master Black Belt (MBB) that
is passionate about enhancing and creating value through cost
avoidance and process optimization.
6/27/15 Armin J Cruz armin.j.cruz@hotmail.com 10