Developing your leadership skills within a start-up or scale-up not only has to do with helping making strategic decisions, but it's also about problem solving.

As an aspiring or new CFO, honing in on your problem-solving skills is key for your leadership development. By always leading with problem-solving value, you position yourself as an indispensable asset to your team and organisation.

There is a good project framework that I learnt as part of Six Sigma, and that is DMAIC.  This is very useful 5 step process that can also be used as part of problem solving.

The 5 Steps of Problem Solving

1. Define: Identify the problem.

The first step in solving any problem is to clearly define what it is. This involves understanding the root cause of the issue rather than just its symptoms. Here its worth taking the time to gather data, ask the right questions, and involve the right people to get a comprehensive understanding of the problem, rather than jumping straight to a solution (which is a common challenge, especially in a fast paced business like a start-up or scale-up).

Example: If your start-up is facing cash flow issues, don't just focus on the lack of funds. Investigate underlying issues such as delayed customer payments, excessive inventory, or inefficient use of resources.  Is it working capital or is there a cost-cutting exercise warranted?

2. Measure: Generate Potential Solutions

Once the problem is identified, measure the issues (what is some of the material issues?) and brainstorm possible solutions. Encourage your team to contribute ideas and think outside the box.  As I like to call it, you need a "white board" session.  This is one time that getting everyone in the same room is ideal.  It's hard to brainstorm via zoom.

Example: If the problem is inefficient processes, potential solutions might include restructuring workflows, providing additional training for staff or implementing new software.

3. Analyse: Evaluate and Select the Best Solution

Assess the feasibility, risks, and potential impact of each proposed solution. Consider factors such as cost, time, resources, and alignment with the company’s strategic goals. Choose the solution that offers the best balance of effectiveness and practicality.

Example: If implementing new software seems like the best solution, evaluate different software options, considering factors like cost, ease of integration, and user-friendliness.

4. Implement the Solution

Develop a clear action plan to implement the chosen solution. This includes assigning tasks, setting deadlines, and allocating resources. Communication is key at this stage to ensure everyone understands their roles and responsibilities.  Change management is a key factor to make this a success.

Example: If new software is being implemented, create a detailed rollout plan that includes training sessions for staff, a timeline for integration, and a support system for troubleshooting issues.

5. Control: Monitor and Review the Results

After implementation, continuously monitor the results to ensure the solution is working as intended. Collect feedback from your team and stakeholders, and be prepared to make adjustments as necessary. Regularly reviewing the outcomes helps in refining the solution and applying learned insights to future problems.

Example: Regularly review the performance of the new software, gather user feedback, and make necessary adjustments to optimise its use.

Problem Solving Skills for Leadership Development

Ways to develop your problems solving skills include the following:

1. Analytical Thinking: Develop the ability to break down complex problems into smaller, manageable components. Analytical thinking helps in understanding the root cause of issues and devising effective solutions.

2. Decision-Making: Effective leaders make informed decisions quickly. This involves weighing the pros and cons of different solutions, considering the impact on the business, and choosing the best course of action.

3. Communication: Clear and effective communication is essential for problem-solving. This includes listening to your team, articulating the problem, and explaining the chosen solution and its implementation plan.

4. Collaboration: Knowing your people and fostering a collaborative environment enhances problem-solving efforts. Encourage team members to share their ideas and work together towards a common goal.

5. Adaptability: Start-ups and Scale-ups are constantly changing, and so should your approach to problem-solving. Be open to new ideas and flexible in your strategies to address evolving challenges.

By focusing on these problem-solving skills, you can develop your leadership skills and effectively lead your team through any challenge. Always lead with problem-solving value to ensure you are not only addressing immediate issues but also driving long-term success for your organisation.

Remember, knowing your people and understanding their strengths and weaknesses plays a crucial role in effective problem-solving. Engage with your team, leverage their expertise, and foster an environment where problem-solving is a shared responsibility. This collaborative approach will enhance your leadership skills and position you as a valuable leader in your organisation.

Want to fast-track your finance career growth?  Check out the steps in our Framework below to get started:

1. Sign up to our next workshop.
2. Work with me in the Financial Leadership Foundations course  that includes monthly Q&A sessions where we can discuss all of your questions and how to apply your learnings to your current role. 
3. Download the Upgrade your Management accounts course to showcase your skills as a finance leader to the Founder, leadership team and the Board.