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Why do employers hire employees? To help them solve problems. Whether you’re a financial analyst deciding where to invest your firm’s money, or a marketer trying to figure out which channel to direct your efforts, companies hire people to help them find solutions. Problem-solving is an essential and marketable soft skill in the workplace.
So, how can you improve your problem-solving and show employers you have this valuable skill? In this guide, we’ll cover:
Why are problem-solving skills important, problem-solving skills examples, how to include problem-solving skills in a job application, how to improve problem-solving skills, problem-solving: the bottom line.
Problem-solving skills are the ability to identify problems, brainstorm and analyze answers, and implement the best solutions. An employee with good problem-solving skills is both a self-starter and a collaborative teammate; they are proactive in understanding the root of a problem and work with others to consider a wide range of solutions before deciding how to move forward.
Examples of using problem-solving skills in the workplace include:
Problem-solving skills are the most sought-after soft skill of 2022. In fact, 86% of employers look for problem-solving skills on student resumes, according to the National Association of Colleges and Employers Job Outlook 2022 survey .
It’s unsurprising why employers are looking for this skill: companies will always need people to help them find solutions to their problems. Someone proactive and successful at problem-solving is valuable to any team.
“Employers are looking for employees who can make decisions independently, especially with the prevalence of remote/hybrid work and the need to communicate asynchronously,” Eric Mochnacz, senior HR consultant at Red Clover, says. “Employers want to see individuals who can make well-informed decisions that mitigate risk, and they can do so without suffering from analysis paralysis.”
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Problem-solving includes three main parts: identifying the problem, analyzing possible solutions, and deciding on the best course of action.
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Research is the first step of problem-solving because it helps you understand the context of a problem. Researching a problem enables you to learn why the problem is happening. For example, is revenue down because of a new sales tactic? Or because of seasonality? Is there a problem with who the sales team is reaching out to?
Research broadens your scope to all possible reasons why the problem could be happening. Then once you figure it out, it helps you narrow your scope to start solving it.
Analysis is the next step of problem-solving. Now that you’ve identified the problem, analytical skills help you look at what potential solutions there might be.
“The goal of analysis isn’t to solve a problem, actually — it’s to better understand it because that’s where the real solution will be found,” Gretchen Skalka, owner of Career Insights Consulting, says. “Looking at a problem through the lens of impartiality is the only way to get a true understanding of it from all angles.”
Once you’ve figured out where the problem is coming from and what solutions are, it’s time to decide on the best way to go forth. Decision-making skills help you determine what resources are available, what a feasible action plan entails, and what solution is likely to lead to success.
Employers looking for problem-solving skills might include the word “problem-solving” or other synonyms like “ critical thinking ” or “analytical skills” in the job description.
“I would add ‘buzzwords’ you can find from the job descriptions or LinkedIn endorsements section to filter into your resume to comply with the ATS,” Matthew Warzel, CPRW resume writer, advises. Warzel recommends including these skills on your resume but warns to “leave the soft skills as adjectives in the summary section. That is the only place soft skills should be mentioned.”
On the other hand, you can list hard skills separately in a skills section on your resume .
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Explaining your problem-solving skills in an interview can seem daunting. You’re required to expand on your process — how you identified a problem, analyzed potential solutions, and made a choice. As long as you can explain your approach, it’s okay if that solution didn’t come from a professional work experience.
“Young professionals shortchange themselves by thinking only paid-for solutions matter to employers,” Skalka says. “People at the genesis of their careers don’t have a wealth of professional experience to pull from, but they do have relevant experience to share.”
Aaron Case, career counselor and CPRW at Resume Genius, agrees and encourages early professionals to share this skill. “If you don’t have any relevant work experience yet, you can still highlight your problem-solving skills in your cover letter,” he says. “Just showcase examples of problems you solved while completing your degree, working at internships, or volunteering. You can even pull examples from completely unrelated part-time jobs, as long as you make it clear how your problem-solving ability transfers to your new line of work.”
Problem-solving doesn’t just require finding solutions to problems that are already there. It’s also about being proactive when something isn’t working as you hoped it would. Practice questioning and getting curious about processes and activities in your everyday life. What could you improve? What would you do if you had more resources for this process? If you had fewer? Challenge yourself to challenge the world around you.
“Employers in the modern workplace value digital problem-solving skills, like being able to find a technology solution to a traditional issue,” Case says. “For example, when I first started working as a marketing writer, my department didn’t have the budget to hire a professional voice actor for marketing video voiceovers. But I found a perfect solution to the problem with an AI voiceover service that cost a fraction of the price of an actor.”
Being comfortable with new technology — even ones you haven’t used before — is a valuable skill in an increasingly hybrid and remote world. Don’t be afraid to research new and innovative technologies to help automate processes or find a more efficient technological solution.
Problem-solving isn’t done in a silo, and it shouldn’t be. Use your collaboration skills to gather multiple perspectives, help eliminate bias, and listen to alternative solutions. Ask others where they think the problem is coming from and what solutions would help them with your workflow. From there, try to compromise on a solution that can benefit everyone.
If we’ve learned anything from the past few years, it’s that the world of work is constantly changing — which means it’s crucial to know how to adapt . Be comfortable narrowing down a solution, then changing your direction when a colleague provides a new piece of information. Challenge yourself to get out of your comfort zone, whether with your personal routine or trying a new system at work.
Just like adapting requires you to challenge your routine and tradition, good problem-solving requires you to put yourself in challenging situations — especially ones where you don’t have relevant experience or expertise to find a solution. Because you won’t know how to tackle the problem, you’ll learn new problem-solving skills and how to navigate new challenges. Ask your manager or a peer if you can help them work on a complicated problem, and be proactive about asking them questions along the way.
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Step 1 of 3
Companies always need people to help them find solutions — especially proactive employees who have practical analytical skills and can collaborate to decide the best way to move forward. Whether or not you have experience solving problems in a professional workplace, illustrate your problem-solving skills by describing your research, analysis, and decision-making process — and make it clear that you’re the solution to the employer’s current problems.
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Daniel Croft is an experienced continuous improvement manager with a Lean Six Sigma Black Belt and a Bachelor's degree in Business Management. With more than ten years of experience applying his skills across various industries, Daniel specializes in optimizing processes and improving efficiency. His approach combines practical experience with a deep understanding of business fundamentals to drive meaningful change.
Problem-solving is an important component of any business or organization. It entails identifying, analyzing, and resolving problems in order to improve processes, drive results, and foster a culture of continuous improvement. A3 Problem solving is one of the most effective problem-solving methodologies.
A3 Problem solving is a structured and systematic approach to problem-solving that originated with the lean manufacturing methodology. It visualizes the problem-solving process using a one-page document known as an A3 report. The A3 report provides an overview of the problem, data analysis, root causes, solutions, and results in a clear and concise manner.
A3 Problem Solving has numerous advantages, including improved communication, better decision-making, increased efficiency, and reduced waste. It is a powerful tool for businesses of all sizes and industries, and it is especially useful for solving complex and multi-faceted problems.
In this blog post, we will walk you through the A3 Problem Solving methodology step by step. Whether you are new to A3 Problem Solving or simply want to improve your skills, this guide will help you understand and apply the process in your workplace.
A3 Problem Solving is a structured and systematic approach to problem-solving that makes use of a one-page document called an A3 report to visually represent the process. The A3 report provides an overview of the problem, data analysis, root causes, solutions, and results in a clear and concise manner. The method was created within the framework of the Lean manufacturing methodology and is based on the principles of continuous improvement and visual management.
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A3 Problem Solving was developed by Toyota Motor Corporation and was first used in the manufacture of automobiles. The term “A3” refers to the size of the paper used to create the report, which is an ISO standard known as “A3”. The goal of the A3 report is to provide a visual representation of the problem-solving process that all members of the organisation can easily understand and share. A3 Problem Solving has been adopted by organisations in a variety of industries over the years, and it has become a widely used and recognised method for problem-solving.
The following are the key principles of A3 Problem Solving:
These principles serve as the foundation of the A3 Problem Solving methodology and are intended to assist organisations in continuously improving and achieving their objectives. Organizations can effectively solve problems, identify areas for improvement, and drive results by adhering to these principles.
Importance of clearly defining the problem.
The first step in the A3 Problem Solving process is critical because it lays the groundwork for the remaining steps. To define the problem clearly and accurately, you must first understand the problem and identify the underlying root cause. This step is critical because if the problem is not correctly defined, the rest of the process will be based on incorrect information, and the solution developed may not address the issue effectively.
The significance of defining the problem clearly cannot be overstated. It aids in the collection and analysis of relevant data, which is critical for developing effective solutions. When the problem is clearly defined, the data gathered is more relevant and targeted, resulting in a more comprehensive understanding of the issue. This will enable the development of solutions that are more likely to be effective because they are founded on a thorough and accurate understanding of the problem.
However, if the problem is not clearly defined, the data gathered may be irrelevant or incorrect, resulting in incorrect conclusions and ineffective solutions. Furthermore, the process of collecting and analysing data can become time-consuming and inefficient, resulting in resource waste. Furthermore, if the problem is not accurately defined, the solutions developed may fail to address the root cause of the problem, resulting in ongoing issues and a lack of improvement.
The first step in the A3 Problem Solving process is to clearly and accurately define the problem. This is an important step because a clearly defined problem will help to ensure that the appropriate data is collected and solutions are developed. If the problem is not clearly defined, incorrect data may be collected, solutions that do not address the root cause of the problem, and time and resources may be wasted.
A problem can be defined using a variety of techniques, including brainstorming , root cause analysis , process mapping , and Ishikawa diagrams . Each of these techniques has its own advantages and disadvantages and can be used in a variety of situations depending on the nature of the problem.
In addition to brainstorming, root cause analysis, process mapping, and Ishikawa diagram s, best practices should be followed when defining a problem in A3 Problem Solving. Among these best practices are:
Organizations can ensure that their problem is defined in a way that allows for effective data collection, analysis, and solution development by following these best practices. This will aid in the development of appropriate solutions and the effective resolution of the problem, resulting in improvements in the organization’s processes and outcomes.
Gathering data in a3 problem solving.
Data collection is an important step in the A3 Problem Solving process because it allows organisations to gain a thorough understanding of the problem they are attempting to solve. This step entails gathering pertinent information about the problem, such as data on its origin, impact, and any related factors. This information is then used to help identify root causes and develop effective solutions.
One of the most important advantages of data collection in A3 Problem Solving is that it allows organisations to identify patterns and trends in data, which can be useful in determining the root cause of the problem. This information can then be used to create effective solutions that address the problem’s root cause rather than just its symptoms.
In A3 Problem Solving, data collection is a collaborative effort involving all stakeholders, including those directly impacted by the problem and those with relevant expertise or experience. Stakeholders can ensure that all relevant information is collected and that the data is accurate and complete by working together.
Overall, data collection is an important step in the A3 Problem Solving process because it serves as the foundation for effective problem-solving. Organizations can gain a deep understanding of the problem they are attempting to solve and develop effective solutions that address its root cause by collecting and analysing relevant data.
In A3 Problem Solving, several data collection methods are available, including:
The best data collection method will be determined by the problem being solved and the type of data required. To gain a complete understanding of the problem, it is critical to use multiple data collection methods.
Once the data has been collected, it must be analysed and visualised in order to gain insights into the problem. This process can be aided by the following tools:
These tools can assist in organising data and making it easier to understand. They can also be used to generate visual representations of data, such as graphs and charts, to communicate the findings to others.
Finally, the data collection and analysis step is an important part of the A3 Problem Solving process. Organizations can gain a better understanding of the problem and develop effective solutions by collecting and analysing relevant data.
Identifying the root causes of the problem is the third step in the A3 Problem Solving process. This step is critical because it assists organisations in understanding the root causes of a problem rather than just its symptoms. Once the underlying cause of the problem is identified, it can be addressed more effectively, leading to more long-term solutions.
The process of determining the underlying causes of a problem is known as root cause analysis. This process can assist organisations in determining why a problem is occurring and what can be done to prevent it from recurring in the future. The goal of root cause analysis is to identify the underlying cause of a problem rather than just its symptoms, allowing it to be addressed more effectively.
To understand Root cause analysis in more detail check out RCA in our Lean Six Sigma Yellow Belt Course Root Cause Analysis section
There are several techniques for determining the root causes of a problem, including:
These methods can be used to investigate the issue in-depth and identify potential root causes. Organizations can gain a deeper understanding of the problem and identify the underlying causes that must be addressed by using these techniques.
It is critical to follow these best practices when conducting root cause analysis in A3 Problem Solving:
Organizations can ensure that root cause analysis is carried out effectively and that the root cause of the problem is identified by adhering to these best practises. This will aid in the development of appropriate solutions and the effective resolution of the problem.
Developing solutions is the fourth step in the A3 Problem Solving process. This entails generating ideas and options for dealing with the problem, followed by selecting the best solution. The goal is to develop a solution that addresses the root cause of the problem and prevents it from recurring.
A3 solution development Problem solving is an iterative process in which options are generated and evaluated. The data gathered in the previous steps, as well as the insights and understanding gained from the root cause analysis, guide this process. The solution should be based on a thorough understanding of the problem and address the underlying cause.
There are several techniques that can be used to develop solutions in A3 Problem Solving, including:
These techniques can help to generate a range of options and to select the best solution.
It is critical to follow the following best practices when developing solutions in A3 Problem Solving:
Organizations can ensure that the solutions they develop are effective and sustainable by adhering to these best practises. This will help to ensure that the problem is addressed effectively and that it does not reoccur.
The final and most important step in the A3 Problem Solving methodology is solution implementation. This is the stage at which the identified and developed solutions are put into action to address the problem. This step’s goal is to ensure that the solutions are effective, efficient, and long-lasting.
The implementation process entails putting the solutions developed in the previous step into action. This could include changes to processes, procedures, and systems, as well as employee training and education. To ensure that the solutions are effective, the implementation process should be well-planned and meticulously executed.
A3 Problem Solving solutions can be implemented using a variety of techniques, including:
It is critical to follow these best practices when implementing solutions in A3 Problem Solving:
Make certain that all relevant stakeholders are involved and supportive of the solution. Have a clear implementation plan that outlines the steps, timeline, and resources required. Continuously monitor and evaluate the solution to determine its efficacy and make any necessary changes. Encourage all stakeholders to communicate and collaborate openly. Organizations can ensure that solutions are effectively implemented and problems are effectively addressed by adhering to these best practices. The ultimate goal is to find a long-term solution to the problem and improve the organization’s overall performance.
In conclusion, A3 Problem Solving is a comprehensive and structured methodology for problem-solving that can be applied in various industries and organisations. The A3 Problem Solving process’s five steps – Define the Problem, Gather Data, Identify Root Causes, Develop Solutions, and Implement Solutions – provide a road map for effectively addressing problems and making long-term improvements.
Organizations can improve their problem-solving skills and achieve better results by following the key principles, techniques, and best practices outlined in this guide. As a result, both the organisation and its stakeholders will benefit from increased efficiency, effectiveness, and satisfaction. So, whether you’re an experienced problem solver or just getting started, consider incorporating the A3 Problem Solving methodology into your work and start reaping the benefits right away.
Daniel Croft is a seasoned continuous improvement manager with a Black Belt in Lean Six Sigma. With over 10 years of real-world application experience across diverse sectors, Daniel has a passion for optimizing processes and fostering a culture of efficiency. He's not just a practitioner but also an avid learner, constantly seeking to expand his knowledge. Outside of his professional life, Daniel has a keen Investing, statistics and knowledge-sharing, which led him to create the website learnleansigma.com, a platform dedicated to Lean Six Sigma and process improvement insights.
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Problem solving is a critical skill for success in business – in fact it’s often what you are hired and paid to do. This article explains the five problem solving steps and provides strategies on how to execute each one.
Before we talk about the stages of problem solving, it’s important to have a definition of what it is. Let’s look at the two roots of problem solving — problems and solutions.
Problem – a state of desire for reaching a definite goal from a present condition [1] Solution – the management of a problem in a way that successfully meets the goals set for treating it
[1] Problem solving on Wikipedia
One important call-out is the importance of having a goal. As defined above, the solution may not completely solve problem, but it does meet the goals you establish for treating it–you may not be able to completely resolve the problem (end world hunger), but you can have a goal to help it (reduce the number of starving children by 10%).
With that understanding of problem solving, let’s talk about the steps that can get you there. The five problem solving steps are shown in the chart below:
However this chart as is a little misleading. Not all problems follow these steps linearly, especially for very challenging problems. Instead, you’ll likely move back and forth between the steps as you continue to work on the problem, as shown below:
Let’s explore of these steps in more detail, understanding what it is and the inputs and outputs of each phase.
aka What are you trying to solve? In addition to getting clear on what the problem is, defining the problem also establishes a goal for what you want to achieve.
Input: something is wrong or something could be improved. Output: a clear definition of the opportunity and a goal for fixing it.
aka What are some ways to solve the problem? The goal is to create a list of possible solutions to choose from. The harder the problem, the more solutions you may need.
Input: a goal; research of the problem and possible solutions; imagination. Output: pick-list of possible solutions that would achieve the stated goal.
aka What are you going to do? The ideal solution is effective (it will meet the goal), efficient (is affordable), and has the fewest side effects (limited consequences from implementation).
Input: pick-list of possible solutions; decision-making criteria. Output: decision of what solution you will implement.
aka What are you doing? The implementation of a solution requires planning and execution. It’s often iterative, where the focus should be on short implementation cycles with testing and feedback, not trying to get it “perfect” the first time.
Input: decision; planning; hard work. Output: resolution to the problem.
aka What did you do? To know you successfully solved the problem, it’s important to review what worked, what didn’t and what impact the solution had. It also helps you improve long-term problem solving skills and keeps you from re-inventing the wheel.
Input: resolutions; results of the implementation. Output: insights; case-studies; bullets on your resume.
Once you understand the five steps of problem solving, you can build your skill level in each one. Often we’re naturally good at a couple of the phases and not as naturally good at others. Some people are great at generating ideas but struggle implementing them. Other people have great execution skills but can’t make decisions on which solutions to use. Knowing the different problem solving steps allows you to work on your weak areas, or team-up with someone who’s strengths complement yours.
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very helpful and informative training
Thank you for the information
YOU ARE AFOOL
I’m writing my 7th edition of Effective Security Management. I would like to use your circular graphic illustration in a new chapter on problem solving. You’re welcome to phone me at — with attribution.
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i love your presentation. It’s very clear. I think I would use it in teaching my class problem solving procedures. Thank you
It is well defined steps, thank you.
these step can you email them to me so I can print them out these steps are very helpful
I like the content of this article, it is really helpful. I would like to know much on how PAID process (i.e. Problem statement, Analyze the problem, Identify likely causes, and Define the actual causes) works in Problem Solving.
very useful information on problem solving process.Thank you for the update.
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It makes sense that a business would want to have an effective problem solving strategy. Things could get bad if they can’t find solutions! I think one of the most important things about problem solving is communication.
Well in our school teacher teach us –
1) problem ldentification 2) structuring the problem 3) looking for possible solutions 4) lmplementation 5) monitoring or seeking feedback 6) decision making
Pleace write about it …
I teach Professional communication (Speech) and I find the 5 steps to problem solving as described here the best method. Your teacher actually uses 4 steps. The Feedback and decision making are follow up to the actual implementation and solving of the problem.
i know the steps of doing some guideline for problem solving
steps are very useful to solve my problem
The steps given are very effective. Thank you for the wonderful presentation of the cycle/steps/procedure and their connections.
I like the steps for problem solving
It is very useful for solving difficult problem i would reccomend it to a friend
this is very interesting because once u have learned you will always differentiate the right from the wrong.
I like the contents of the problem solving steps. informative.
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In today’s fast-paced and fiercely competitive business world, organisations must find ways to continuously adapt, evolve, and excel. Amidst the myriad methods and techniques for achieving improvements and driving continuous improvement, few have proven as profound and transformative as Toyota’s A3 problem-solving approach.
A significant driving force behind the company’s rise to global prominence, the A3 process fosters a culture where problems are embraced as opportunities for growth and learning. In this article, we’ll explore the origins and underlying principles of the A3 approach and uncover the secrets to its success in unlocking the power of improvements.
The A3 methodology is an integral part of the Toyota Production System (TPS), a set of principles and practices that have shaped the company’s approach to manufacturing, management, and continuous improvement over the years. Named after the A3 sheet of paper that was historically used to capture the plan, analysis, and follow-up on a single page, the A3 process represents a simple, yet powerful, tool for addressing complex challenges and discovering lasting solutions.
At its core, the A3 approach is rooted in three key elements:
1. Thorough problem analysis: The foundation of the A3 process lies in digging deep to diagnose the true nature and root cause of an issue, rather than jumping to hastily devised fixes that merely address symptoms.
2. Structured documentation: The A3 report serves as both a communication tool and an iterative planning device, with each section building on the previous ones to guide problem solvers through a comprehensive analysis, solution development, and execution process. It’s the foundation of good continuous improvement.
3. Cyclical learning and improvement: Leadership and employees alike are encouraged to commit to hypothesis-driven inquiry, observation, experimentation, and reflection, leading to a culture that actively seeks and leverages opportunities for growth by solving problems.
The Lean Thinking A3 approach can be distilled into seven essential steps:
Clearly articulate and define the issue at hand, avoiding the temptation to jump to solutions or assume important facts to be self-evident..
When identifying the problem, it is important to ensure that all relevant stakeholders in the organisation are consulted. This helps to ensure that the issue is accurately described and understood from multiple perspectives. A thorough problem analysis should also include conducting research into possible causes or root issues, and clearly documenting any observed symptoms of the problem. Additionally, it is essential to identify any major risks associated with not finding a solution and recognise any constraints (both external and internal) that may exist which could limit potential solutions. Lastly, it is important to consider any potential opportunities which may arise from addressing the issue that may have been overlooked at first glance. This is the problem statement part which is a critical component that identifies the difference between the current condition and the target condition.
At this stage, we are not looking at how to solve problems being faced or at the potential solution to solving problems. It’s about developing a good understanding of how the actual results differ from the expected results and providing an in-depth systematic approach to process improvement and developing problem-solving skills.
Provide a high-level overview of the problem, describing the stakeholders involved, relevant data, and the broader organisational context in which the challenge has arisen..
It is important to ensure that all stakeholders are properly considered when identifying any potential solutions as their perspectives can play a vital role in determining an effective solution. All related data should be thoroughly analysed to understand the full scope of potential solutions. This includes resources, costs, timelines, and any legal or regulatory issues that may need to be considered. Additionally, it is important to consider how well-proposed solutions fit within existing organisational policies and procedures as this could impact implementation success. Finally, understanding how proposed solutions would interact with other initiatives or processes currently taking place in the organisation can help inform decisions about whether or not they are viable options. It may include conducting some value stream mapping to dig deeper into the current state.
It is important to fully explore any underlying factors that may be contributing to the issue at hand and ensure in-depth problem analysis. This includes looking deeper into existing systems, structures, and processes related to the problem in order to identify potential areas of improvement or optimisation. Additionally, it is essential to consider any relevant industry trends or external influences that could impact how the problem manifests within the organisation.
When analysing a problem, collecting data from various sources is important to get a more comprehensive understanding of how a particular issue can be addressed. This includes mapping the current process using the VSM, SIPOC, Process Mapping or Flowcharting techniques. Additionally, interviews and surveys can be conducted with stakeholders to gain insights into how they perceive the issue and their perspectives on potential solutions. Lastly, it is important to observe any real-world activities related to the problem to uncover key areas where time, effort, resources, money etc is being wasted. This is the time improvement that may not have been identified otherwise.
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Get 3-days free access to our green belt course, accelerate your career, 3. set a goal:, now that you have identified the problem and outlined the relevant context, it is time to set a project goal or outcome..
This involves clearly articulating the desired state of affairs and any key deliverables of the proposed solution. Whether it is reducing operational costs, increasing efficiency, improving customer experience, or something else entirely – defining specific objectives with measurable metrics can help ensure that project teams stay focused and remain aligned on their ultimate destination.
At this stage, it is also important to consider how long it will take to reach the desired outcome. Establishing an implementation timeline will help safeguard progress and provide a framework for tracking results along the way. Setting milestones for achieving particular goals at certain points in time can be especially helpful in keeping teams accountable throughout the process. Additionally, having a plan for evaluating success after reaching the end target will allow stakeholders to gain further insights into how effective their approach has been in addressing underlying problems, as well as how well-proposed solutions have fared once implemented.
Use a variety of techniques (e.g., the 5 whys, fishbone diagrams, pareto charts) to probe the problem’s underlying causes and avoid settling on proximate reasons..
The process of identifying root causes is essential when using data-driven tools. We always want to find the simplest root cause approach.
One of the most widely used methods for root cause analysis is the ‘5 Whys’ technique. This method involves asking a series of ‘why’ questions to determine the underlying cause of a particular symptom or issue. The goal is to keep asking “Why?” until you reach an answer that can provide insight into how to address the problem and prevent it from occurring in the future.
Another commonly used tool for root cause analysis is the fishbone diagram (also known as Ishikawa diagrams). This approach involves visualising all potential causes which could be causing a symptom or issue in a logical format, allowing users to identify patterns and uncover links between root causes and their respective effects. This technique can be helpful in identifying and focusing on key areas for improvement, as well as helping to identify interdependencies between components within an organisation’s systems.
Finally, Pareto Charts are useful for analysing data collected from surveys, interviews, observations, etc., concerning the severity or frequency of occurrence. This type of chart helps users quickly identify which factors are contributing most significantly towards an issue, allowing them to focus resources towards addressing those areas first and foremost. Additionally, Pareto charts can also be used to prioritise different solutions based on their estimated effectiveness in addressing an issue.
In conclusion, understanding the root cause of an issue through rigorous techniques such as 5 Whys, fishbone diagrams, and Pareto charts provides invaluable insight into how best to address it effectively while preventing it from reoccurring in the future. By leveraging these tools along with other data-led approaches such as process mapping and flowcharting, organisations can ensure that any proposed solutions are well-informed by both qualitative and quantitative data sources as well as ensure they are building consensus across the entire organisation.
Identify the right countermeasures (corrective actions) to implement that will directly impact the root causes identified..
Brainstorming is a useful tool for identifying potential improvements. It involves coming up with ideas and solutions in an open and collaborative manner, without judgement or criticism. By allowing team members to share their thoughts freely, brainstorming can help uncover innovative solutions that may have otherwise gone unnoticed. Additionally, looking at how waste reduction, flow and pull can be used to improve processes can also provide valuable insights into where improvement opportunities lie.
Brainstorm potential solutions that directly target the root causes and create detailed action plans for implementation, complete with assigned roles, responsibilities, and timelines.
Once the countermeasures are identified, it is important to design an implementation plan and assign roles & responsibilities. This will help ensure that all stakeholders understand their part in the implementation and can work together to achieve the desired outcome. Additionally, it is important to track progress along the way – setting measurable milestones that can be tracked against goals established during the initial problem-solving phase will help keep teams accountable and allow for course corrections if needed.
By utilising A3 Problem Solving Tools such as a template, organisations can easily document and share their analyses with relevant stakeholders throughout each stage of the project. Having detailed record-keeping like this also helps teams stay on target over time while providing insights into how proposed solutions may need to be re-evaluated down the line. This implementation plan provides the entire organisation with a clear project status on a one-page report.
Measure the impact of your countermeasures against the problem, using well-defined success criteria, key performance indicators, or other relevant metrics..
Once the countermeasures have been implemented, it is essential to measure and evaluate their success. This can be done by tracking performance against the initial objectives established during the goal phase, as well as establishing key performance indicators to gauge how well the proposed solutions have fared.
Additionally, stakeholders should also consider conducting a post-implementation evaluation in order to assess how successful their approach has been in addressing underlying issues and determining what lessons can be learned from the experience. This will enable teams to identify strengths and weaknesses within their existing processes and make any necessary adjustments going forward. By understanding the outcomes of their improvements, organisations are able to gain valuable insights into how well they’ve succeeded in achieving their goals and ensure continued success moving forward.
Once the countermeasures have been implemented and their success measured, it is important to compare the results against the initial objective. This can be done in a variety of ways, including graphical analysis such as charts, process maps or flow diagrams. Graphical analysis helps to visualise the differences between results achieved before and after the implementation of new measures in a meaningful way. It also provides an increased level of clarity when assessing whether the desired outcomes have been achieved or not.
Process maps can be useful in understanding how changes made during the improvement phase have impacted processes within an organisation. By mapping out existing processes and then comparing them against those following implementation of countermeasures, teams can easily pinpoint where improvements were made and analyse how they led to improved performance overall.
Charts, on the other hand, enable users to quickly identify trends that may have emerged from data collected during the project. For example, if performance metrics are tracked before and after countermeasures are implemented, users can use charts and graphs to more clearly observe any patterns that may indicate an improvement or regression in performance over time – providing further insights into which areas need further attention or adjustment moving forward.
Finally, dashboard views provide an effective means of displaying results at a glance while highlighting any anomalies that might warrant further investigation. Dashboards allow stakeholders to gain access to important information quickly and easily while also helping them keep track of progress towards goals set out during initial problem-solving phases. Additionally, because dashboards support data visualisation capabilities they offer a highly interactive user experience which can help teams understand underlying trends with greater clarity and precision.
If a countermeasure proves successful, integrate it into the organisation’s standard operating procedures and share it with other teams as a best practice..
Once the countermeasures have been successfully implemented and measured against the initial objectives, these changes need to be integrated into the organisation’s standard operating procedures (SOPs) and shared with other teams as best practices. This will ensure that any improvements made during the problem-solving phase are consistently applied across all teams within the organisation.
In order to ensure that these improvements become part of the organisation’s long-term strategy, process maps should be updated to reflect the new improved way of working. Process maps provide a visual representation of how workflows are structured within an organisation, and by updating them in line with newly-implemented countermeasures, organisations can ensure that their processes continue to remain up-to-date and efficient moving forward. It may also be necessary to build a follow-up plan if not all tasks are fully completed as well as develop a Lean-focused PDCA cycle to ensure long-term effective collaboration on the solutions that were implemented.
Process documentation should also be updated in order to keep track of changes made during problem-solving. By documenting not just the solutions that were proposed but also why they were proposed, teams can gain valuable insights into their decision-making process which they can leverage for similar future problems.
Furthermore, it is important to update key performance indicators (KPIs) to accurately reflect any progress made during problem-solving. By tracking performance against objectives established before and after countermeasures were implemented, organisations will be able to identify any areas that may still need improvement or require further adjustment going forward. Additionally, tracking KPIs over time will help teams understand whether or not their current strategies are leading them towards meeting their goals in a timely manner or if additional measures may need to be taken in order to achieve desired results more quickly.
Finally, organisations should share successful solutions with other teams in order to promote collaboration and knowledge sharing amongst stakeholders throughout different parts of the business. This will allow for ideas generated through one team’s problem-solving efforts to benefit multiple departments – helping foster creativity and innovation while ensuring that everyone is on board with necessary changes being made throughout the organisation. The last step is key to Toyota’s PDCA management system designed for the entire organisation.
By breaking down the problem-solving process into these seven discrete stages, the A3 method offers practitioners a comprehensive, end-to-end framework for tackling complex challenges and driving improvements in any organisation.
To get A3 started, everyone in the entire organisation needs to learn how to use this single-sheet or single-page document. This means training people across all parts of the company so that everyone knows how to use the A3 Problem Solving Tool and A3 template. Training will help make sure that everyone follows a structured approach when using A3.
Getting the organisation fully onboard with A3 Problem Solving is not an easy task and will require a dedicated effort to ensure its successful implementation. To this end, it is important to start with specific areas of the business – whether it be operations, finance or marketing – by setting up targeted training sessions for both operational teams and senior managers. This will help everyone understand how and why A3 is used, as well as the potential benefits it can bring to their business.
Once everyone has mastered the basics of working with an A3 template, companies should look to regularly review and evaluate its effectiveness. This could include setting up quarterly reviews or running workshops where teams discuss successes and areas for improvement when using the A3 tool. Doing this will ensure that any issues are identified early on, allowing the team to quickly adjust accordingly.
At Leanscape, we understand that transitioning to A3 Problem Solving can be a daunting task. With our team of specialists, we can provide your teams with the necessary training and coaching to ensure that they are able to adapt quickly and efficiently. Our comprehensive approach to A3 will equip your team with the knowledge and skills needed to successfully use this powerful tool for improving performance in all areas of your business.
We are committed to helping you develop a culture of continuous improvement within your organisation by teaching best practices and providing guidance through every step of the problem-solving process. Through our specialised training programs, we will help your teams learn how to use the A3 template more effectively, as well as how to interpret data visualisations quickly and accurately – enabling them to take action swiftly when required. Our experienced coaches will also share insights from industry experts on how best to integrate countermeasures into standard operating procedures (SOPs) and process maps, keeping up-to-date with industry trends in order to stay ahead of the competition.
By leveraging Leanscape’s expertise in A3 Problem Solving, you can rest assured knowing that your team is in good hands. Our team is dedicated to providing you with the support needed for successful implementation so that you can achieve sustained performance improvements over time.
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The implementation of A3 Problem Solving provides a comprehensive framework for organisations looking to successfully address complex problems in an efficient and cost-effective manner. By breaking down the problem-solving process into seven distinct stages, users can structure their approach and track the progress of their countermeasures over time.
In order to ensure successful implementation, organisations should dedicate time towards training their teams on how to use the A3 Problem Solving Tool and A3 template. This will give everyone a solid foundation for carrying out future problem-solving activities more effectively, as well as provide insights into the effectiveness of certain countermeasures over time.
Through Leanscape’s specialised training programs, you can ensure that your team is fully equipped with the necessary skills to successfully adopt and incorporate A3 Problem Solving into all areas of your business. Our experienced coaches are committed to helping you develop a culture of continuous improvement within your organisation – providing guidance through every step of the process
The A3 approach is an invaluable tool for unlocking the power of improvements within any organisation. By leveraging its structured framework and cyclical learning approach, businesses can remain agile and responsive to ever-changing conditions, allowing them to navigate change more successfully and emerge stronger than ever before. Ultimately, this makes Toyota’s A3 problem-solving process one of the most effective ways to ensure long-term success in today’s fast-paced and competitive market.
Reagan pannell.
Reagan Pannell is a highly accomplished professional with 15 years of experience in building lean management programs for corporate companies. With his expertise in strategy execution, he has established himself as a trusted advisor for numerous organisations seeking to improve their operational efficiency.
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As a factory manager, you’re already familiar with problem-solving, but how familiar are you with the A3 problem-solving method?
Today, we tell you everything about the A3 problem-solving method and why it can be precisely what you need to get your factory running as smoothly as ever.
Download your A3 problem-solving template
We already stated that the A3 method is a problem-solving method, so let us dig deeper.
A3 refers to the size of the paper you’d normally use to document this problem-solving process.
A3 paper is bigger than your regular A4, measuring roughly 30 by 42 cm in case you were wondering —or if you’re a fan of the imperial system, 11 by 17 inches—
The reason behind using this specific paper size is that it gives you enough space to present all problem-related information clearly and concisely.
This approach is highly structured, following a step-by-step process to help you develop and implement solutions.
Before the A3 method, we have A3 thinking. This is the heart of this whole problem-solving process.
A3 thinking deals with issues in a structured and logical way, always relying on the principles of continuous improvement. This means you should look at problems from different angles, gathering as much data as possible. Only then you’ll be able to make a truly informed decision.
The key operating principle behind A3 thinking is that the best way to solve a problem is by having an in-depth understanding of the problem and its causes. This is the only way forward to plan, develop, and implement a permanent solution.
Because this is a structured approach to problem-solving, there are a few key steps to follow to implement it right. Let’s take a look:
As with many other problem-solving methods —if not all— the first thing to do is identify the problem that needs solving.
You can use root cause analysis to make sure you’re tackling the root of the issue and not just fixing the problem at a superficial level.
Without proper data, your chances of fixing the problem for good are quite slim.
By getting all the information you can through all the sources available —collecting data, conducting surveys, speaking to relevant people involved with the problem— you make sure you have a complete picture of the problem and its magnitude.
This will help you get a comprehensive understanding of the problem, which is key when developing a solution to fix it permanently.
After gathering all the information, you develop a plan to solve the problem.
In this stage, you can hold a brainstorming session, evaluate different options, and select the best approach.
Time to put your plan into action!
A good way to secure success in your problem-solving efforts is to test your solutions before you implement them, adjust anything according to the situation, and monitor your results.
When you implement your solution, you need to evaluate your results to make sure your plan is working.
The best way to do this is by collecting additional data or analysing production metrics.
At this stage, you might identify areas for improvement — don’t ignore them, address them.
Some of the benefits of the A3 method are more obvious than others. Let’s take a look!
Better collaboration — To get the most out of the A3 method, you need to look at your problem from different angles. The best way to do this is by getting several relevant points of view. This improves collaboration and communication across the whole organisation.
Increased efficiency — Because this approach has a set number of steps, it becomes a predictable process. This means your teams will work more efficiently to solve the issue, as they’ll know what their next steps are. This also means you’ll successfully avoid wasting time or resources on solutions that won’t work.
Improved decision-making — By gathering data and focusing on factual information rather than opinions or gut feelings, you —and your team— will get better at decision-making. This means you’ll leave the guesswork out of your problem-solving process , ensuring your solutions are based on actual, updated data.
Continuous improvement — This method is a key part of any continuous improvement process. By identifying and solving problems, you can keep improving your operations, products, and services.
To harness the full potential of this method, you can use an A3 template.
A template helps you present information clearly and concisely, making the process way more efficient.
An A3 template typically includes the following sections:
By using an A3 template, you can ensure a standardised process for problem-solving. This helps everybody work more efficiently.
As far as problem-solving methods go, the A3 is quite effective and straightforward.
But we all know paper is hard to keep track of, and big chunks of A3 that are fundamental for your factory’s operations should be stored away safely for future reference.
Our mlean ® Production System (mPS) is the best way to ensure your problem-solving processes are digitally stored, accessible, and readily available when you need them.
Our software creates a knowledge database using the problems you’ve already solved . This makes your operations much more quick and efficient, increasing productivity, boosting continuous improvement processes, and accelerating your growth.
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The three-body problem is a physics conundrum that has boggled scientists since Isaac Newton's day. But what is it, why is it so hard to solve and is the sci-fi series of the same name really possible?
A rocket launch. Our nearest stellar neighbor. A Netflix show. All of these things have something in common: They must contend with the "three-body problem." But exactly what is this thorny physics conundrum?
The three-body problem describes a system containing three bodies that exert gravitational forces on one another. While it may sound simple, it's a notoriously tricky problem and "the first real worry of Newton," Billy Quarles , a planetary dynamicist at Valdosta State University in Georgia, told Live Science.
In a system of only two bodies, like a planet and a star, calculating how they'll move around each other is fairly straightforward: Most of the time, those two objects will orbit roughly in a circle around their center of mass, and they'll come back to where they started each time. But add a third body, like another star, and things get a lot more complicated. The third body attracts the two orbiting each other, pulling them out of their predictable paths .
The motion of the three bodies depends on their starting state — their positions, velocities and masses. If even one of those variables changes, the resulting motion could be completely different.
"I think of it as if you're walking on a mountain ridge," Shane Ross , an applied mathematician at Virginia Tech, told Live Science. "With one small change, you could either fall to the right or you could fall to the left. Those are two very close initial positions, and they could lead to very different states."
There aren't enough constraints on the motions of the bodies to solve the three-body problem with equations, Ross said.
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But some solutions to the three-body problem have been found. For example, if the starting conditions are just right, three bodies of equal mass could chase one another in a figure-eight pattern. Such tidy solutions are the exception, however, when it comes to real systems in space.
Certain conditions can make the three-body problem easier to parse. Consider Tatooine , Luke Skywalker's fictional home world from "Star Wars" — a single planet orbiting two suns. Those two stars and the planet make up a three-body system. But if the planet is far enough away and orbiting both stars together, it's possible to simplify the problem.
"When it's the Tatooine case, as long as you're far enough away from the central binary, then you think of this object as just being a really fat star," Quarles said. The planet doesn't exert much force on the stars because it's so much less massive, so the system becomes similar to the more easily solvable two-body problem. So far, scientists have found more than a dozen Tatooine-like exoplanets , Quarles told Live Science.
But often, the orbits of the three bodies never truly stabilize, and the three-body problem gets "solved" with a bang. The gravitational forces could cause two of the three bodies to collide, or they could fling one of the bodies out of the system forever — a possible source of "rogue planets" that don't orbit any star , Quarles said. In fact, three-body chaos may be so common in space that scientists estimate there may be 20 times as many rogue planets as there are stars in our galaxy.
When all else fails, scientists can use computers to approximate the motions of bodies in an individual three-body system. That makes it possible to predict the motion of a rocket launched into orbit around Earth, or to predict the fate of a planet in a system with multiple stars.
— 'Mathematically perfect' star system being investigated for potential alien technology
— How common are Tatooine worlds?
— Mathematicians find 12,000 new solutions to 'unsolvable' 3-body problem
With all this tumult, you might wonder if anything could survive on a planet like the one featured in Netflix's "3 Body Problem," which — spoiler alert — is trapped in a chaotic orbit around three stars in the Alpha Centauri system , our solar system 's nearest neighbor.
"I don't think in that type of situation, that's a stable environment for life to evolve," Ross said. That's one aspect of the show that remains firmly in the realm of science fiction.
Skyler Ware is a freelance science journalist covering chemistry, biology, paleontology and Earth science. She was a 2023 AAAS Mass Media Science and Engineering Fellow at Science News. Her work has also appeared in Science News Explores, ZME Science and Chembites, among others. Skyler has a Ph.D. in chemistry from Caltech.
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The US construction sector seems set for a jobs boom. The US Bipartisan Infrastructure Law projects $550 billion of new infrastructure investment over the next decade, which our modeling suggests could create 3.2 million new jobs across the nonresidential construction value chain. That’s approximately a 30 percent increase in the overall US nonresidential construction workforce, which would mean 300,000 to 600,000 new workers entering the sector—every year.
This is a big ask for an industry that is already struggling to find the people it needs. In October 2021, 402,000 construction positions 1 Included both nonresidential and residential construction openings. Further granularity is not available from the US Bureau of Labor Statistics. remained unfilled at the end of the month, the second-highest level recorded since data collection began in December 2000.
In this environment, wages have already increased significantly since the onset of the COVID-19 pandemic, reflecting intense competition for employees, with employers offering higher pay or other nonwage benefits. Between December 2019 and 2021, construction wages grew by 7.9 percent. 2 Quarterly Census of Employment and Wages, US Bureau of Labor Statistics. Competition from other sectors for the same pool of labor is heating up, too. For example, over the same period, transportation and warehousing wages grew by 12.6 percent. The prospect of higher pay and better working conditions is already tempting experienced workers away from construction and into these and other sectors.
Today’s mismatches are likely to persist because of structural shifts in the labor market. The relationship between job openings and unemployment has departed from historical trends. In January 2022—two years from the start of the pandemic—the US unemployment rate stood at 4.0 percent, close to its prepandemic level of 3.5 percent. Job openings remained exceptionally high, however, with 10.9 million unfilled positions as of the end of December 2021, compared with 5.9 million in December 2019.
This labor supply imbalance has multiple root causes, some shorter term and cyclical while others are more structural in nature. For example, the pandemic brought forward the retirements of many in the baby-boomer generation, with an estimated 3.2 million leaving the workforce in 2020—over a million more than in any year before 2016. According to the American Opportunity Survey , among those who are unemployed, concerns about physical health, mental health, and lack of childcare remain the dominant impediments preventing reentry into the workforce. Research on the “Great Attrition/Great Attraction” also highlights the importance of nonwage components of the employee value proposition. Record job openings and quit rates highlight employees’ growing emphasis on feeling valued by their organization, supportive management, and flexibility and autonomy at work.
Additionally, the pipeline of new construction workers is not flowing as freely as it once did. Training programs have been slow to restart operations after pandemic-driven safety concerns led to their suspension the spring of 2020. The industry is finding it more difficult to attract the international workforce that has been an important source of talent for engineering, design, and contracting activities. Net migration has been falling since 2016, a trend accelerated by COVID-19 travel restrictions. 3 Population estimates, US Census Bureau. Between 2016 and 2021, net migration declined steadily from 1.06 million to 244,000.
Impact on projects.
The interconnected nature of the construction value chain means that the labor mismatch generates knock-on effects across the project life cycle and supply chain. By late 2021, project owners were reporting that up to 25 percent of material deliveries to sites were either late or incomplete. In project execution, the combination of higher hourly rates, premiums and incentives, and overtime payments was resulting in overall labor costs as much as double prepandemic levels. Meanwhile, difficulty accessing skilled and experienced people was leading some owners to report project delays related to issues around the quality and productivity of on-site work.
In some US cities and their suburbs, wage growth has surpassed the level seen in core Gulf Coast counties at the height of the shale oil boom. Labor shortages in the shale sector drove wages up by 5 to 10 percent and were correlated with steep drops in productivity. The productivity of some tasks fell by 40 percent or more during shale construction peaks (exhibit), and overall productivity declined by about 40 percent per year when labor was in short supply. This forced owners to extend project timelines by 20 to 25 percent. The impact of a long-term, nationwide labor mismatch might be even more severe than the shale industry’s experience, given that oil companies were able to attract new workers from around the country.
The labor mismatch in the construction sector is bad today, and set to get worse. To avoid a decade or more of rising costs, falling productivity, and ever-increasing project delays, companies in the industry should consider thoughtful actions now.
Those actions could address three components of the challenge. First, companies could do everything possible to maximize productivity through measures aimed at improving efficiency across the value chain. Second, they could expand the pool of available labor by doubling down on accessing diverse talent and working harder to retain the employees already in their organization. Finally, they could consider making labor a strategic priority, with senior leadership attention within companies.
Companies could access a range of levers to reduce the labor content required per job and drive to improve productivity in project development and delivery. Those levers involve changes to project designs and fresh thinking about when, where, and how work is done.
Improvements in productivity occur long before work starts on the ground. They include rigorous control of project scope, design simplification, and standardization. Increasing the use of off-site and modular construction , for example, could allow projects to capture multiple benefits, including accelerated design cycles; the greater productivity associated with industrialized, factory floor manufacturing techniques; automation; and less time spent on site.
Smarter execution management, enabled by digital technologies and analytics techniques could drive better, faster decision making during project delivery. Real-time data collection, for example, gives project managers earlier, more detailed insights about progress, allowing them to intervene more effectively to maintain productivity and keep projects on track. Intelligent simulation software allows teams to evaluate hundreds of thousands of possible critical paths, identifying approaches that could be more efficient or less risky than the conventional wisdom.
Lean construction is another proven way to drive significant and sustainable productivity improvements. Establishing a centralized, continuous improvement engine could enhance on-site execution through integrated planning, performance management, and waste elimination. Key stakeholders across the project work with a common, agreed set of key performance indicators. That allows them to address issues in real time and facilitates collaboration to reduce waste and variability work. Capability building across the planning and construction teams could help team members understand and adopt lean construction practices.
Reimagining talent.
To ensure access to the skills they need, construction sector companies can accelerate the onboarding of recruits, boost retention by revisiting what employees want beyond wages, and invest more in developing their pipelines of future workers.
In the near term, employers could prioritize review of job applications and reduce the number of steps in both the interview and onboarding process. In the medium term, both the public and private sectors could look to reduce hiring timelines and shift to a skills-based approach when hiring.
In the medium term, retaining current staff and attracting new talent will both turn on understanding of what employees value beyond wages. Competitive wages are now table stakes, so employees are thinking about a broader set of benefits and workplace characteristics when making decisions about where to work. Research on attrition in the postpandemic workplace has shown that they are placing more emphasis on autonomy, flexibility, support, and upward mobility.
In the longer term, the construction industry can consider a new approach to talent attraction, development, and retention. Talent acquisition could begin early, through partnerships with educational institutions including universities, colleges, and high schools. These partnerships could boost awareness of the possibilities of a career in the sector and ensure future employees have appropriate skills prior to onboarding.
Companies could also look more widely for potential recruits, considering individuals who have taken alternative educational paths, such as technical degrees or hands-on experience. The Rework America Alliance , a Markle-led coalition in which McKinsey is a partner, illustrates the importance of skills-based, rather than credential-based, hiring. A skills-based perspective is key to tapping into the talents of the 106 million workers who have built capabilities through experience but whose talents are often unrecognized because they don’t have a four-year college degree. A skills-based approach could be complemented by reimagining apprenticeships to bring younger students and vocational talent into the industry at an earlier stage in their careers.
Employers could consider working with a range of nontraditional sources of talent, including veteran-transition programs, formerly incarcerated individuals, and others. Homeboy Industries provides an example of the local impact, effectiveness, and potential of working with often overlooked population segments. Moreover, identifying and attracting talent from outside the traditional paths used by the construction industry could also help it to increase the diversity of its workforce. Today, 88 percent of the sector’s workforce is White and 89 percent is male. 4 Labor Force Statistics from the Current Population Survey Database, US Bureau of Labor Statistics, accessed March 10, 2022.
Labor and skills shortages have the potential to slow growth and erode profitability across the construction value chain. For C-suites, there’s no other single issue that could protect against significant cost erosion. Companies could consider establishing a systematic talent acquisition and retention program, led by a C-level executive and a core part of the CEO agenda. That program could first be tasked with building a robust fact base on current and emerging labor needs and availability gaps. It could then identify a bold set of initiatives that address labor-related issues across the value chain. This exercise starts in the boardroom, but it doesn’t stop there. Leadership will likely need to be increasingly present in the field and on the job site too, celebrating and recognizing top talent throughout the organization.
The labor challenge extends well beyond corporate boundaries. Since the successful delivery of a project could be jeopardized by labor shortages in a single value-chain participant, project owners and contractors may want to adapt the structure of project relationships and contracts. Moving away from traditional contracting methods to collaborative contracts , for example, allows participants to share market risks and opportunities as a project evolves, rather than baking in worst-case estimates at the outset of negotiations.
The US construction sector is poised to revitalize, replace, and expand the country’s infrastructure. Done right, that will power inclusive growth and set up the economy for success in the 21st century. To do so, the sector will need to address its labor challenges. That calls for the application of a diverse set of tools and approaches to create better jobs, get the most out of its people, and optimize agility and collaboration across the value chain.
Garo Hovnanian is a partner in McKinsey’s Philadelphia office, Ryan Luby is a senior knowledge expert in the New York office, and Shannon Peloquin is a partner in the Bay Area office.
The authors wish to thank Tim Bacon, Luis Campos, Roberto Charron, Justin Dahl, Rebecca de Sa, Bonnie Dowling, Bryan Hancock, Rawad Hasrouni, Adi Kumar, Jonathan Law, Michael Neary, Nikhil Patel, Gaby Pierre, Jose Maria Quiros, Kurt Schoeffler, Shubham Singhal, Stephanie Stefanski, Jennifer Volz, and Jonathan Ward for their contributions to this article.
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