Problem-solving? Use your brain, not the company’s wallet

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December 9, 2025 | 12:00am

For more than 20 years — and after working with more than 10,000 participants who attended my Kaizen workshops — I’ve refined a simple yet powerful tool that makes problem-solving useful for everyone. It’s my eight-step problem-solving guide, a framework that has helped organizations save millions by reducing, and often eliminating operational wastes.

I spelled out these steps in my 2016 book, Total Quality by Maximization (TQMax), which champions one simple but often forgotten truth: “Problem-solving is not progress if you have to spend money just to fix it.” In other words, if your “solution” requires a purchase order thick enough to choke a photocopier, you’re doing it wrong.

My philosophy is simple: “Use your wisdom, not your wallet.” It’s a derivative of Taiichi Ohno’s classic reminder to “use your brain, not the company’s money.” I’ve seen this principle in action several hundreds of times during my annual visits to nearly 250 factories in Japan, Spain and the Philippines since 1993.

The secret of these model companies? Ingenious solutions that cost less than your average merienda. In learning from those best practices, I count on the four elements of TQMax: Maximize continuous improvement. Maximize current resources. Maximize employee contribution. And maximize customer satisfaction.

All of these elements are co-equals. No one is above the rest as all of them can’t move without the other. It’s all about maximizing organizational resources toward achieving total quality. My Kaizen-mindedness continue to help me distill the values of TQMax which is the core behind the successes of world-class organizations.

Eight-step problem-solving guide

Brace yourself for an exciting trip with your team, preferably not more than six to seven members who are familiar with the most difficult issues in your company operations. You may also invite an outsider to be the devil’s advocate. So, be ready to do the following steps:

1. Define the problem. Do you think it’s easy? Think again. To give you a clue, list down all costly and recurring operational issues. Then choose the most costly and disturbing problem from the list. If it’s not solved, how much money would the company lose? If there are unquantifiable issues, focus on them down later. Your first priority is to solve expensive low-hanging fruits.

2. Know your goal. Use the SMART strategy. Be SPECIFIC by reducing, if not eliminating the waste, imbalance or stressful condition that makes it difficult for the employees and customers to follow. Make it MEASURABLE. Give a specific amount or value (percentage) of target say, in a month, quarterly, or yearly.

Ensure that it’s ATTAINABLE. Don’t aspire for the moon. Simply state your action plan on how to achieve your goal. Make it RELEVANT by using only practical, low-cost solutions. Have a TIME-BOUND schedule by defining the final date of completion.

3. Analyze the root cause. The easiest tool is the Fishbone Diagram. First, require each team member to list down all possible root causes of the problem. Then brainstorm with the team on the number one root cause from a list classified under manpower, method, material, machine, measurement and milieu (French word for Mother Nature or employee morale).

4 Validate the root cause. Are you sure it’s the real cause of the problem? Chances are, you don’t know the answer. Therefore, ask at least Five Whys. Probe for more until you reach the answer to the 20th Why. You’ll be surprised to get the solution at the 10th Why.

5. Generate more solutions. If you’re still missing on the solutions, then brainstorm again with the team. Remember, your job is to list down all low-cost solutions by defining the current but unutilized resources in your organization. If not, be practical with your investment.

6. Seek the consensus of everyone. Seek the approval of internal and external customers and other stakeholders like the suppliers. Then prepare to present your findings to management. Anticipate all possible objections and prepare your counter-proposals. This should be a breeze when all team members are onboard.

7. Implement the solution. Write a new policy. Standardize. Disseminate and educate the new policy and procedure. Be open to answering all questions. This process should help strengthen the new system.

8. Monitor the implementation of the new system. Find out how to make the new system robust. Review the efficacy of the solution. Adjust as soon as you discovered something unusual or irregular. What are the remaining issues to be solved?

Bigger issue

It would be difficult for everyone to follow this problem-solving guide without 5S good housekeeping. First, you Sort — because apparently that stapler graveyard in your drawer is a ‘productivity risk.’ Then you Set in Order so everything has a place, including that one pen everyone keeps stealing.

Shine means cleaning like your boss is bringing VIP guests, even if no one ever visits your department. Standardize ensures everyone follows the same rules, especially the person who keeps sabotaging the broom. And finally, Sustain – that one step where we pretend, we’ll maintain the discipline forever like a typical Japanese.

Finally, management must confront an uncomfortable truth about itself. As Peter Drucker, the greatest management thinker of our era, warned: “Most of what we call management is simply making it harder for people to do their jobs.”

Rey Elbo is a quality and productivity enthusiast. Email [email protected] or DM him on Facebook, LinkedIn, X or via https://reyelbo.com. Anonymity is guaranteed to those who hate problem-solving.