case analysis business problem solving

Problem-Solving in Business: CASE STUDIES

• ABOUT THIS LIBGUIDE
• PROBLEM-SOLVING DEFINED AND WHY IT IS IMPORTANT
• SKILLS AND QUALIFICATIONS NEEDED IN PROBLEM-SOLVING
• PROBLEM-SOLVING STEPS
• CASE STUDIES
• MORE HELPFUL RESOURCES

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• Last Updated: Mar 23, 2024 4:47 PM
• URL: https://libguides.nypl.org/problem_solving_in_business

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The HBS Case Method

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• The HBS Case Method →

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• Harvard Business School

How the HBS Case Method Works

How the Case Method Works

• Read and analyze the case. Each case is a 10-20 page document written from the viewpoint of a real person leading a real organization. In addition to background information on the situation, each case ends in a key decision to be made. Your job is to sift through the information, incomplete by design, and decide what you would do.
• Discuss the case. Each morning, you’ll bring your ideas to a small team of classmates from diverse professional backgrounds, your discussion group, to share your findings and listen to theirs. Together, you begin to see the case from different perspectives, better preparing you for class.
• Engage in class. Be prepared to change the way you think as you debate with classmates the best path forward for this organization. The highly engaged conversation is facilitated by the faculty member, but it’s driven by your classmates’ comments and experiences. HBS brings together amazingly talented people from diverse backgrounds and puts that experience front and center. Students do the majority of the talking (and lots of active listening), and your job is to better understand the decision at hand, what you would do in the case protagonist’s shoes, and why. You will not leave a class thinking about the case the same way you thought about it coming in! In addition to learning more about many businesses, in the case method you will develop communication, listening, analysis, and leadership skills. It is a truly dynamic and immersive learning environment.
• Reflect. The case method prepares you to be in leadership positions where you will face time-sensitive decisions with limited information. Reflecting on each class discussion will prepare you to face these situations in your future roles.

Student Perspectives

“I’ve been so touched by how dedicated other people have been to my learning and my success.”

Faculty Perspectives

“The world desperately needs better leadership. It’s actually one of the great gifts of teaching here, you can do something about it.”

Alumni Perspectives

“You walk into work every morning and it's like a fire hose of decisions that need to be made, often without enough information. Just like an HBS case.”

Celebrating the Inaugural HBS Case

“How do you go into an ambiguous situation and get to the bottom of it? That skill – the skill of figuring out a course of inquiry, to choose a course of action – that skill is as relevant today as it was in 1921.”

• Encyclopedia of Management
• Case Method of Analysis

CASE METHOD OF ANALYSIS

The case method of analysis involves studying actual business situations—written as an in-depth presentation of a company, its market, and its strategic decisions—in order to improve a manager's or a student's problem-solving ability. Cases typically investigate a contemporary issue in a real-life context. There are multiple issues to consider and many "correct" or viable alternatives to solve the case issues are presented. Case studies provide students with a "note of reality" that makes learning more relevant and enjoyable.

Cases are written and published in textbooks by students, faculty, or consultants. Cases may be based on actual company experiences, like a consulting project, or may be developed from articles and events in business periodicals and newspapers. Cases include actual information of a company's decisions and may include interviews, observations, or data from firm and industry records, as well as database records and published historical facts on the company and the industry. Barbazette identified five types of cases studies:

• Identification cases studies help learners identify positive and negative characteristics of the situation.
• Problem-solving case studies use systematic and creative problem-solving techniques.
• Practice case studies require students to use a new idea or try a new skill.
• Application cases studies are used at the end of a training program to summarize and review.
• Serial case studies progressively add new elements.

HISTORY OF CASES

The case method was invented by the Harvard Business School over 80 years ago, where it still remains the foundation for teaching and research. By studying and examining actual cases, professors believed students could develop better insight as to how organizations reach conclusions. This method of study and analysis is seen as an effective way to train young business leaders to consider facts and present them more efficiently.

POPULARITY OF CASES TODAY

Today, cases remain a popular method of study in business schools—especially at Harvard and the University of Virginia, where they are used heavily in the Master of Business Administration (MBA) programs. While technology, computer simulations, and other learning methods continue to grow, cases fill a much-needed function in the educational process of students, future managers, and leaders. Cases are used in a wide variety of disciplines and areas of study. They are also popular for executive training and are used in weekend-format continuing education and professional development programs.

In their study of the skills of technologists, Birchall and Smith found that technologists are often seen as not having sufficient input into the strategic decision-making process of organizations. Thus, many turn to MBA programs to develop their knowledge, understanding, and personal competencies. The case method has traditionally been used to aid in this educational process. They also stress the use of multimedia tools and groupware to create enhanced learning opportunities based on a dynamic case analysis.

Many groups and organizations also publish cases for educational use. Sources for cases for business schools include:

• The Aspen Institute Business and Society Program
• The Batten Institute, Darden Graduate School of Business, University of Virginia
• Harvard Business School
• Richard Ivey School of Business, University of Western Ontario
• South-Western Publishing Company's CaseNet
• Stanford Graduate School of Business

The American Association for Business Communication, for example, included the best cases for teaching communications in a special issue of Business Communication Quarterly. Rogers and Rymer report that their reviewer panel of experienced instructors agreed that the best cases include the following attributes:

• Focus on the discipline
• Require decision making
• Furnish a business context
• Present an engaging story or scenario
• Provide sufficiently-realistic detail for analysis and response
• Function readily in a classroom setting
• Apply to a wide range of teaching philosophies and educational settings
• Relate to contemporary issues and problems

TEACHING WITH CASES

Cases rely almost exclusively upon discussion to elicit diverse ideas, experiences, and views about case material. Cases allow students to explore actual decisions made by companies. The case presents an account of what happened to a business or industry over a period of time, for example. It includes the events with which managers had to deal and charts various responses to these decisions. According to Hill and Jones, cases provide students with the experience of organizational problems they have not yet had the opportunity to experience first-hand. In a relatively short period of time, students have the chance to appreciate and analyze problems faced by many different companies and to understand how managers attempted to resolve them. Cases also illustrate underlying business theories.

To prepare a case analysis, students typically read the case several times before a classroom discussion. They first read for a general idea about the problem, the players in the case, the level of the decision, and the type of company or industry presented. On second and subsequent readings, students look for deeper problems and issues and try to differentiate symptoms from real case problems.

Some schools encourage students to research the company by locating articles on the company at the time the case situation occurred. Another research technique is to have students conduct a financial analysis of the company that might include ratio analysis or industry/competitor research. Many schools encourage students to discuss assigned cases in small groups or study teams before class. These teams may develop potential alternatives to solve the problems and ensure each member has considered the relevant facts in the case.

Class discussion occurs in either one large group or several smaller groups. In these groups, participants decide on the solution(s) and the proper course of implementation. They must also consider the time frame for implementation as well as evaluation and success measures. Class members or participants critique the various viable alternatives that are presented. The class is then presented with what the company under study actually did to solve the problem. Some cases are used as quizzes or exams.

Teaching with cases has changed relatively little over the years. However, a new approach, developed by Theroux, is called "real time case method.," In this method, a semester-long case is delivered in weekly installments and focuses on one company and the current events it faces. This method differs from the traditional case study method by its extended coverage and real-timeinteractivity.

STUDENTS'S PERCEPTIONS OF CASES

Although case method teaching has been used extensively in virtually all business schools for years, little research has been conducted to investigate the effectiveness and usefulness of the method. Among the few studies available is Weil's, which measures students's perceptions. Weil's study confirmed the usefulness of the case method.

Many students favor the case method because there are no "right" or "wrong" answers to the cases. Unlike solving a math or finance problem, there may be multiple ways to reach a successful solution for the case. Diversity of opinion and diversity of group make-up often bring unique solutions to cases. Students learn to respond quickly, formulate answers, speak up, and participate in class discussion. They learn to separate background information from the real problem. They learn to succinctly state problems, to recommend potential alternative solutions, and to explore the pros and cons of each solution. They learn to find hidden information in charts, graphs, tables, and financial data often included in cases.

Some students are discouraged by cases because they do not yield only one, clear answer. Students are forced to develop skills of critical thinking and these skills, while important to today's managers, take time to perfect. Students may also fear presenting their ideas to a large group. They may fear public speaking or presentation in general or they may fear their particular thoughts will be ridiculed by others. Some with limited work or life experience may not feel capable of critiquing a top-level manager's past decisions. However, these unique and fresh ideas often present interesting alternatives.

SEE ALSO: Business Plan ; Training Delivery Methods

Marilyn M. Helms

Revised by Judith M. Nixon

FURTHER READING:

Barbazette, Jean. Instant Case Studies: How to Design, Adapt, and Use Case Studies in Training. San Francisco: Pfeiffer, 2004.

Barnes, Louis B., C.R. Christensen, and Abby J. Hansen. Teaching and the Case Method. 3rd ed. Boston: Harvard Business School Press, 1994.

Birchall, David, and Matty Smith. "Developing the Skills of Technologists in Strategic Decision Making—A Multi-Media Case Approach." International Journal of Technology Management 15, no. 8 (1998): 854–868.

Christensen, C.R. Teaching by the Case Method. Boston: Harvard Business School, 1983.

Copeland, M. "The Genesis of the Case Method in Business Administration." In The Case Method at the Harvard Business School. ed. Malcolm P. McNair. New York: McGraw-Hill, 1954.

Hill, Charles W.L., and Gareth R. Jones. Strategic Management: An Integrated Approach. 5th ed. Boston: Houghton/Mifflin Publishing Co., 2001.

Hunger, J.D., and Thomas L Wheelen. Essential of Strategic Management. 3rd ed. Upper Saddle River, NJ: Prentice Hall, 2003.

Klein, Hans E., ed. The Art of Interactive Teaching with Cases, Simulations, Games, and other Interactive Methods. Boston: The World Association for Case Method Research and Application, 1995.

Oyelere, Peter, Joanna Yeoh, Colin Firer, and Sidney Weil. "A Study of Students's Perceptions of the Usefulness of Case Studies for Development of Finance and Accounting-Related Skills and Knowledge." Accounting Education 10, no. 2 (2001): 123–146.

Rogers, Priscilla S., and Jone Rymer. "Business and Management Communication Cases: Challenges and Opportunities." Business Communication Quarterly 61, no. 1 (1998): 7–25.

Theroux, J., and C. Kilbane. "The Real-Time Case Method: A New Approach to an Old Tradition." Journal of Education for Business 79, no. 3 (2004): 163–167.

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Home / News / University News / How case analysis helps FSU business students solve real-world problems, hone career skills

How case analysis helps FSU business students solve real-world problems, hone career skills

The ability to extract data and analyze information critically, solve a current business problem or grow an existing business is crucial for business students.

That’s why Florida State University works to ensure students develop the creative reasoning skills integral to their business success and career growth.

Tim Kinney, an associate lecturer in the College of Business Department of Marketing, strives to help his students acquire problem-solving skills pertinent in the modern business world. Kinney has taught at the FSU College of Business for the past eight years and previously worked for 28 years in engineering and sales at IBM — one of the world’s largest information technology firms.

Kinney has been enhancing critical thinking in key upper division courses since 2015, when he earned a faculty fellow grant through the Office of Critical Thinking Initiatives.

His Case Analysis and Marketing Strategy courses are based upon real business situations, which students analyze as a means of developing their critical thinking skills.

“Students put themselves in the seat of the decision maker,” Kinney said. “They have to think through what is happening in the outside world, in their industry or with the competition, what is happening within their company, and what they would do to solve specific business problems.”

Case studies reinforce decision-making processes, require students to identify and understand the problem and solve that problem based upon the context. Kinney believes this is an effective instructional approach and makes students more marketable.

“Companies are not going to hire college students to do exactly what they are told,” Kinney said. “Rather, they are going to ask them to think creatively and solve business problems.”

Kinney also uses “think-fast exercises” to strengthen students’ critical thinking by posing business problems and giving students 20 minutes to solve the problem in a group setting before presenting solutions to class.

This exercise gives students the opportunity to take a large amount of information and sift through it quickly, and then come up with initial ideas and recommendations. It also deepens students’ ability to link their thoughts together and to work as part of a team, which are essential skills for success in the business world.

Kinney also organizes case competitions in which students form teams and come up with solutions to real-life business problems. In fall 2017, he invited Frontier Communications, a telecommunications company working to expand into the millennial market, to meet with FSU students and solve a real-life business case over three days.

Students had to identify the problem, gather and analyze relevant information, develop recommendations that they could support through analysis, and present those solutions to consultants and business professionals. Through these competitions, students learn about themselves and how to perform under pressure, develop their communication skills, and receive valuable feedback from the judges.

Case analysis also better prepares students for interviews and job acquisition. Today, rather than requesting job candidates tell them about a difficult situation and how they handled it, potential employers often ask candidates to demonstrate how they would solve a real business problem that the company is currently facing. Kinney said case analysis training gives students long-term problem-solving skills and immediate job acquisition skills.

“Instilling critical thinking among students is crucial as demand to understand business issues and needs in competitive and fast-paced environments, and appropriately respond, will determine success and career growth,” Kinney said. “Creative problem solving, solution development and communication skills are vital for future success in our fast-paced world.”

To learn more about the FSU Critical Thinking Initiative, visit https://criticalthinking.fsu.edu/ .

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Case Analysis Business Problem Solving Hardcover – Import, January 1, 1967

• Print length 256 pages
• Language English
• Publisher McGraw-Hill Education
• Publication date January 1, 1967
• ISBN-10 0070554706
• ISBN-13 978-0070554702
• See all details

Product details

• Publisher ‏ : ‎ McGraw-Hill Education (January 1, 1967)
• Language ‏ : ‎ English
• Hardcover ‏ : ‎ 256 pages
• ISBN-10 ‏ : ‎ 0070554706
• ISBN-13 ‏ : ‎ 978-0070554702
• Item Weight ‏ : ‎ 1 pounds

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BA Techniques

Challenge yourself by keeping up with practical business analysis techniques you can apply on the job.

Problem Solving With Root Cause Analysis

Root Cause Analysis is quite simply, a technique used when analysing the symptoms of a problem in an attempt to identify its definitive cause. One important point to clarify is that an event that deters a process from flowing efficiently is known as an “issue" whereas the repetition of an issue continuously can be described as a problem. Root Cause Analysis can be applied to problem analysis. When problems are not effectively studied, unsuitable resolutions may be endorsed. 

By applying the root cause analysis technique to problem solving, one can avoid proffering an incorrect solution to a problem. Business analysts should not offer a solution recommendation until the underlying cause of the problem has been identified and understood. The first step in solving a problem is identifying the root cause of the problem. 

The fishbone diagram (see below) visually illustrates how root cause analysis is structured. The main classes of possible causes are linked to the “backbone” of the fishbone diagram as shown below. The diagram helps to organize ideas for further analysis.         

Fishbone Diagram

Perhaps the most ideal and complementary technique that aids in describing root cause analysis is the five whys.

The Five Whys

When conducting a root cause analysis, “Why” becomes a key question for the business analyst to ask. This is because it is often used to establish the root cause of a problem and can be applied multiple times in problem analysis for as long as it takes to arrive at the correct answer. The “five whys” model allows one to ask “why” as many times as possible until the root cause of the problem is known. The root cause may even be identified after a few whys without necessarily reaching the 5th why or beyond. 

The five whys technique can be illustrated using the example below:

Problem: The organisation is currently experiencing a lot of theft 

1.  Why? The security agents are afraid of confrontation

2.  Why? They are defenceless 

3.  Why? They are not sufficiently equipped to deal with the menace 

4.  Why? The organisation did not allocate enough funds to equip them

5.  Why? Management did not prioritise the matter (root cause) 

Root Cause Analysis is based on the presumptions that:

There may be more than one factor contributing to existing problems

A problem is best corrected from its origin instead of dealing only with its visible effects.

As a form of proactive analysis, the root cause technique may also be used for identifying problems that are likely to occur and design preventive actions to tackle them when they do.

When using this technique, it is important to ensure that it is the root cause that is identified and not the symptoms of the problem.  

Picture Attribution:  Download “Analysis Word Shows Investigation Or Research” by Stuart Miles/freedigitalphotos.net.

User story maps are an interesting and collaborative way of eliciting user requirements. One of the reasons why I find it so powerful is because it provides a unique approach for aligning discussions relating to the user, their goals, the process that supports the accomplishment of their predefined goals; and the requirements that need to be addressed to solve business problems.

Data mining can be described as the process of improving decision-making by identifying useful patterns and insights from data.

A data dictionary holds data about the fields in a database, such as field definitions, meanings and allowable values that reflect how data is used within a domain or organization.

Are you a business analyst involved in the documentation of business rules and creation of complex decision tables?

A concept model provides a great way of documenting definitions and communicating precise meanings of terms to stakeholders.

Employing the user journey mapping technique involves adopting a user-centric approach to product design, revealing opportunities to delight customers and identifying pain points that can be addressed thereby creating a product with an improved user experience.

Within the context of agile software development, the product backlog is a platform where all the potential work (product backlog items) that need to be delivered are recorded, tracked and prioritized. Though owned by the Product Owner, anyone may suggest items to add to it.

Failure Mode and Effects Analysis (FMEA) is a proactive technique that can be applied to the early detection of failures or defects in products and services. It is a systematic risk assessment process used by analysts looking to reduce the chances of faults by detecting problems and their possible repercussions in time for remediation.

If you are in business, here is a brief overview of how cause and effect analysis helps you find viable business solutions. Guest post by Lucas Cappel.

A roles and permissions matrix, an audit requirement in some organizations, is used to ensure that business activities are covered by identifying the responsibilities and roles linked to them.

Business Process Model and Notation (BPMN) is a global standard for constructing process models, with more organizations using it and schools teaching it as a subject.

Business Analyst Learnings

This business analyst blog contains practical insights into business analysis, software testing and business process management. I will be sharing business analyst tips, CBAP Certification tips, lessons learnt and insights into all the things I've learnt during my BA career.

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Business Problem-Solving Case

During a typical trip to the doctor, you will see shelves full of folders and papers devoted to the storage of medical records. Every time you visit, your records are created or modified, and often duplicate copies are generated throughout the course of a visit to the doctor or a hospital.

Take a look at your doctor’s office and chances are you’ll see a bevy of clerks bent over desks filled with paper forms, mostly insurance claim documents. The majority of medical records are currently paper-based, making effective communication and access to the ecords difficult: only 8 percent of the nation’s 5,000 hospitals and 17 percent of the nation’s 800,000 doctors use computerized health care records of any kind.Americans made well over a billion visits to doctors and hospitals over the past year, with each American making approximately four visits on average. As a result, there are millions of paper medical records lining the corridors of thousands of local medical practices, and for the most part, they cannot be systematically examined, and they are difficult to share. Now for some good news: the administrative waste ould be largely eliminated by a massive investment in a nationwide health care record system based on standardized record formats, and the participation of all elements in the health care provider industry. The United States spends about $2 trillion on healthcare, and about $700 billion or one-third is “waste,” loosely defined as costs that could be shed if the healthcare industry followed best practices.

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This waste is a major reason why the United States has the highest-cost medical system per capita in the world. Among the many sources of waste are fraud, duplicate tests, unnecessary are, medical mistakes, administrative inefficiency, redundant paperwork, and a paper-based health records system. The outdated administrative procedures and records situation causes an estimated 25 percent of the total “waste,” or about $175 billion a year.There’s more good news about medical records: the new Obama administration in February 2009 set aside $19 billion to fund a Health Information Technology program as a part of the American Recovery and Reinvestment Act of 2009. The goal: computerize all health records by 2014.

And the major technology ompanies are banding together and offering up solutions, responding to the opportunity of billions of dollars of government contracts. IBM , Google , Microsoft , and a consortium of medical device makers and other companies have formed an alliance to create a software platform that will allow medical data from at-home devices like glucose meters and blood pressure moni- Case Study Questions 1. What concepts in the chapter are illustrated in this case? Who are the stakeholders in this case? 2.

What are the problems with America’s current medical record keeping system? How would electronic edical records alleviate these problems? 3. What management, organization, and technology factors are most critical to the creation and development of electronic medical records? 4. What are the pros and cons of electronic patient records? Do you think the concerns over digitizing our medical records are valid? Why or why not? 5. Should people entrust Google with their electronic medical records? Why or why not? 6. If you were in charge of designing an electronic medical record keeping system, what are some features you would include? What are features you would avoid?

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Innovations in Teamwork for Health Care

Don’t leave teaming up to chance. Create better teamwork through science.

In this course, experts from Harvard Business School and the T.H. Chan School of Public Health teach learners to implement a strategy for organizational teamwork in health care.

What You'll Learn

Health care is a team effort. From the front desk administrators to the nurses, doctors, insurers, and even the patients and their families, there are many people involved in an individual’s care. To deliver quality care in today’s fast-paced environment, practitioners and caregivers must go beyond medical problem-solving and rely on effective collaboration and communication skills.

While other businesses may organize around a functional area or project, allowing team members to learn each other's working styles and strengths over time, health care workers often find themselves in ad hoc scenarios, coordinating with near-strangers on life and death situations. As a leader, how do you encourage trust and meet shared goals when teams are formed quickly? How do you strengthen flexibility and collaboration even as team membership and structures fluctuate across departments? 

In Innovations in Teamwork for Health Care, leaders in the field of organizational behavior and teamwork, Amy Edmondson, Professor at Harvard Business School, and Michaela Kerrissey, Assistant Professor at the Harvard T.H. Chan School of Public Health, share their latest research and present their concept of "teaming" as it relates to the health care and life science industries.

In this course, you will explore the complexities of collaboration in dynamic cross-functional teams and its impact on quality of care. You will examine the theory of teaming – where individuals join together to lend their expertise – to appreciate what enables effective teamwork and why teamwork fails; articulate the importance of psychological safety and a joint problem-solving orientation; understand the particular needs of time-limited teams; and rethink the role of hierarchy and leadership in the context of teaming.

You’ll hear firsthand from experts with experience inside and outside the health care industry, from CEO and President of the Cleveland Clinic, Tomislav Mihaljevic, to Andres Sougarret, the engineer who led the miraculous rescue of 33 Chilean miners in 2011. 

Ultimately, this course provides you with the tools needed to implement effective teaming strategies for patient-centered care and provides your organization with a framework to empower robust communication, improve efficiency, and elevate patient safety.

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Amy C. Edmondson  is the Novartis Professor of Leadership and Management at Harvard Business School, a chair established to support the study of human interactions that lead to the creation of successful enterprises that contribute to the betterment of society. She has pioneered the concept of psychological safety for over 20 years and was recognized in 2021 as #1 on the Thinkers50 global ranking of management thinkers. 

She is the author of Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy (2012), The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth (2018), and Right Kind of Wrong: The Science of Failing Well (2023).

Michaela Kerrissey  is an Assistant Professor of Management at the Harvard T.H. Chan School of Public Health. She conducts research on how teams and organizations innovate, integrate, and perform, with a focus on health care.   Dr. Kerrissey has authored over 30 publications on these topics and has won numerous best-paper awards, such as from the Academy of Management. She designed the Management Science for a New Era course at Harvard’s School of Public Health. In 2023, she was listed on Thinkers50 Radar, a global listing of top management thinkers.

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Learn from the President and CEO of the Cleveland Clinic about how to implement joint problem solving in complex care organizations.

Maya Rupert

Hear from a top political strategist and campaign manager about how she leads within a teaming structure.

Trishan Panch, MD, MPH

Learn from Harvard faculty and founder of Wellframe about the importance of team learning.

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• Study the Mining Accident Rescue and Cleveland Clinic cases.
• Understand the concept of teaming and how it can be applied to the health care industry.
• Brainstorm how to organize with a team to rescue 33 trapped miners.
• Analyze the problems solved and new challenges created by organizational structures that were implemented to facilitate teamwork at the Cleveland Clinic.
• Outline and analyze an individualized teaming breakdown for your organization. 
• Study the NASA and Google cases on psychological safety.
• Collaborate with team members and leadership to create a space of psychological safety. 
• Identify the indicators of psychological safety in a group. Analyze data from Project Aristotle’s study of teams at Google.
• Consider how past experiences can affect current feelings of psychological safety.
• Study the Cleveland Clinic ,  Boehringer Ingelheim , and  Cincinnati Children’s Hospital Medical Center cases.
• Implement a joint problem-solving orientation in which team members view problems as shared and solutions as requiring collaboration.
• Match different types of diversity in the workplace with the interpersonal boundaries that they imply.
• Articulate what you bring to a team and what you might need from others.
• Walk down the ladder of inference to get to the root of a problem.
• Study the  Virginia Mason Medical Center and  Institute for Healthcare Improvement cases.
• Cultivate an organization where team learning is valued and mobilized for improved performance.  
• Identify different kinds of work on the process knowledge spectrum.
• Brainstorm how a nursing team could learn from an accidental morphine overdose.
• Study the cases of Julio Castro's Presidential Campaign and Wellframe . 
• Practice leadership skills that include coaching, enabling, and ensuring that the right voices are present or represented within the team structure. 
• Build a leadership workshop for your team using the concepts addressed in this course.
• Practice asking meaningful questions as a way to encourage input and express authentic humility.
• Learn the difference between confirmatory and exploratory responses.

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Addressing employee burnout: Are you solving the right problem?

The COVID-19 pandemic has accelerated and exacerbated long-standing corporate challenges to employee health and well-being , and in particular employee mental health. 1 When used in this article, “mental health” is a term inclusive of positive mental health and the full range of mental, substance use, and neurological conditions. This has resulted in reports of rapidly rising rates of burnout 2 When used in this article, “burnout” and “burnout symptoms” refer to work-driven burnout symptoms (per sidebar “What is burnout?”). around the world (see sidebar “What is burnout?”).

About the authors

This article is a collaborative effort by Jacqueline Brassey , Erica Coe , Martin Dewhurst, Kana Enomoto , Renata Giarola, Brad Herbig, and Barbara Jeffery , representing the views of the McKinsey Health Institute.

Many employers have responded by investing more into mental health and well-being than ever before. Across the globe, four in five HR leaders report that mental health and well-being is a top priority for their organization. 3 McKinsey Health Institute Employee Mental Health and Wellbeing Survey, 2022: n (employee) = 14,509; n (HR decision maker) = 1,389. Many companies offer a host of wellness benefits such as yoga, meditation app subscriptions, well-being days, and trainings on time management and productivity. In fact, it is estimated that nine in ten organizations around the world offer some form of wellness program. 4 Charlotte Lieberman, “What wellness programs don’t do for workers,” Harvard Business Review , August 14, 2019.

As laudable as these efforts are, we have found that many employers focus on individual-level interventions that remediate symptoms, rather than resolve the causes of employee burnout. 5 Anna-Lisa Eilerts et al., “Evidence of workplace interventions—A systematic review of systematic reviews,” International Journal of Environmental Research and Public Health , 2019, Volume 16, Number 19. Employing these types of interventions may lead employers to overestimate the impact of their wellness programs and benefits 6 Katherine Baicker et al., “Effect of a workplace wellness program on employee health and economic outcomes: A randomized clinical trial,” JAMA , 2019, Volume 321, Number 15; erratum published in JAMA , April 17, 2019. and to underestimate the critical role of the workplace in reducing burnout and supporting employee mental health and well-being. 7 Pascale M. Le Blanc, et al., “Burnout interventions: An overview and illustration,” in Jonathan R. B. Halbesleben’s Handbook of Stress and Burnout in Health Care , New York, NY: Nova Science Publishers, 2008; Peyman Adibi et al., “Interventions for physician burnout: A systematic review of systematic reviews,” International Journal of Preventive Medicine , July 2018, Volume 9, Number 1.

What is burnout?

According to the World Health Organization, burnout is an occupational phenomenon. It is driven by a chronic imbalance between job demands 1 Job demands are physical, social, or organizational aspects of the job that require sustained physical or mental effort and are therefore associated with certain physiological and psychological costs—for example, work overload and expectations, interpersonal conflict, and job insecurity. Job resources are those physical, social, or organizational aspects of the job that may do any of the following: (a) be functional in achieving work goals; (b) reduce job demands and the associated physiological and psychological costs; (c) stimulate personal growth and development such as feedback, job control, social support (Wilmar B. Schaufeli and Toon W. Taris, “A critical review of the job demands-resources model: Implications for improving work and health,” from Georg F. Bauer and Oliver Hämmig’s Bridging Occupational, Organizational and Public Health: A Transdisciplinary Approach , first edition, Dordrecht, Netherlands: Springer, 2014). (for example, workload pressure and poor working environment) and job resources (for example, job autonomy and supportive work relationships). It is characterized by extreme tiredness, reduced ability to regulate cognitive and emotional processes, and mental distancing. Burnout has been demonstrated to be correlated with anxiety and depression, a potential predictor of broader mental health challenges. 2 Previous meta-analytic findings demonstrate moderate positive correlations of burnout with anxiety and depression—suggesting that anxiety and depression are related to burnout but represent different constructs (Katerina Georganta et al., “The relationship between burnout, depression, and anxiety: A systematic review and meta-analysis,” Frontiers in Psychology , March 2019, Volume 10, Article 284). When used in this article, burnout does not imply a clinical condition.

Research shows that, when asked about aspects of their jobs that undermine their mental health and well-being, 8 Paula Davis, Beating Burnout at Work: Why Teams Hold the Secret to Well-Being and Resilience , Philadelphia, PA: Wharton School Press, 2021. employees frequently cite the feeling of always being on call, unfair treatment, unreasonable workload, low autonomy, and lack of social support. 9 Jennifer Moss, The Burnout Epidemic: The Rise of Chronic Stress and How We Can Fix It , Boston, MA: Harvard Business Review Press, 2021. Those are not challenges likely to be reversed with wellness programs. In fact, decades of research suggest that interventions targeting only individuals are far less likely to have a sustainable impact on employee health than systemic solutions, including organizational-level interventions. 10 Hanno Hoven et al., “Effects of organisational-level interventions at work on employees’ health: A systematic review,” BMC Public Health , 2014, Volume 14, Number 135.

Since many employers aren’t employing a systemic approach, many have weaker improvements in burnout and employee mental health and well-being than they would expect, given their investments.

Organizations pay a high price for failure to address workplace factors 11 Gunnar Aronsson et al., “A systematic review including meta-analysis of work environment and burnout symptoms,” BMC Public Health , 2017, Volume 17, Article 264. that strongly correlate with burnout, 12 Sangeeta Agrawal and Ben Wigert, “Employee burnout, part 1: The 5 main causes,” Gallup, July 12, 2018. such as toxic behavior. 13 The high cost of a toxic workplace culture: How culture impacts the workforce — and the bottom line , Society for Human Resource Management, September 2019. A growing body of evidence, including our research in this report, sheds light on how burnout and its correlates may lead to costly organizational issues such as attrition. 14 Caio Brighenti et al., “Why every leader needs to worry about toxic culture,” MIT Sloan Management Review, March 16, 2022. Unprecedented levels of employee turnover—a global phenomenon we describe as the Great Attrition —make these costs more visible. Hidden costs to employers also include absenteeism, lower engagement, and decreased productivity. 15 Eric Garton, “Employee burnout is a problem with the company, not the person,” Harvard Business Review , April 6, 2017.

The McKinsey Health Institute: Join us!

The McKinsey Health Institute (MHI) is an enduring, non-profit-generating global entity within McKinsey. MHI strives to catalyze actions across continents, sectors, and communities to achieve material improvements in health, empowering people to lead their best possible lives. MHI is fostering a strong network of organizations committed to this aspiration, including employers globally who are committed to supporting the health of their workforce and broader communities.

MHI has a near-term focus on the urgent priority of mental health, with launch of a flagship initiative around employee mental health and well-being. By convening leading employers, MHI aims to collect global data, synthesize insights, and drive innovation at scale. Through collaboration, we can truly make a difference, learn together, and co-create solutions for workplaces to become enablers of health—in a way that is good for business, for employees, and for the communities in which they live.

To stay updated about MHI’s initiative on employee mental health and well-being sign up at McKinsey.com/mhi/contact-us .

In this article, we discuss findings of a recent McKinsey Health Institute (MHI)  (see sidebar “The McKinsey Health Institute: Join us!”) global survey that sheds light on frequently overlooked workplace factors underlying employee mental health and well-being in organizations around the world. We conclude by teeing up eight questions for reflection along with recommendations on how organizations can address employee mental-health and well-being challenges by taking a systemic approach focused on changing the causes rather than the symptoms of poor outcomes. While there is no well-established playbook, we suggest employers can and should respond through interventions focused on prevention rather than remediation.

We are seeing persistent burnout challenges around the world

To better understand the disconnection between employer efforts and rising employee mental-health and well-being challenges (something we have observed  since the start of the pandemic ), between February and April 2022 we conducted a global survey of nearly 15,000 employees and 1,000 HR decision makers in 15 countries. 16 Argentina, Australia, Brazil, China, Egypt, France, Germany, India, Japan, Mexico, South Africa, Switzerland, Turkey, the United Kingdom, and the United States. The combined population of the selected countries correspond to approximately 70 percent of the global total.

The workplace dimensions assessed in our survey included toxic workplace behavior, sustainable work, inclusivity and belonging, supportive growth environment, freedom from stigma, organizational commitment, leadership accountability, and access to resources. 17 The associations of all these factors with employee health and well-being have been extensively explored in the academic literature. That literature heavily informed the development of our survey instrument. We have psychometrically validated this survey across 15 countries including its cross-cultural factorial equivalence. For certain outcome measures we collaborated with academic experts who kindly offered us their validated scales including the Burnout Assessment Tool (BAT), the Distress Screener, and the Adaptability Scale referenced below. Those dimensions were analyzed against four work-related outcomes—intent to leave, work engagement, job satisfaction, and organization advocacy—as well as four employee mental-health outcomes—symptoms of anxiety, burnout, depression, and distress. 18 Instruments used were the Burnout Assessment Tool (Steffie Desart et al., User manual - Burnout assessment tool [BAT ] , - Version 2.0, July 2020) (burnout symptoms); Distress Screener (4DSQ; JR Anema et al., “Validation study of a distress screener,” Journal of Occupational Rehabilitation , 2009, Volume 19) (distress); GAD-2 assessment (Priyanka Bhandari et al., “Using Generalized Anxiety Disorder-2 [GAD-2] and GAD-7 in a primary care setting,” Cureus , May 20, 2021, Volume 12, Number 5) (anxiety symptoms); and the PHQ-2 assessment (Patient Health Questionnaire [PHQ-9 & PHQ-2], American Psychological Association) (depression symptoms). Individual adaptability was also assessed 19 In this article, “adaptability” refers to the “affective adaptability” which is one sub-dimension of The Adaptability Scale instrument (Michel Meulders and Karen van Dam, “The adaptability scale: Development, internal consistency, and initial validity evidence,” European Journal of Psychological Assessment , 2020, Volume 37, Number 2). (see sidebar “What we measured”).

What we measured

Workplace factors assessed in our survey included:

• Toxic workplace behavior: Employees experience interpersonal behavior that leads them to feel unvalued, belittled, or unsafe, such as unfair or demeaning treatment, noninclusive behavior, sabotaging, cutthroat competition, abusive management, and unethical behavior from leaders or coworkers.
• Inclusivity and belonging: Organization systems, leaders, and peers foster a welcoming and fair environment for all employees to be themselves, find connection, and meaningfully contribute.
• Sustainable work: Organization and leaders promote work that enables a healthy balance between work and personal life, including a manageable workload and work schedule.
• Supportive growth environment: Managers care about employee opinions, well-being, and satisfaction and provide support and enable opportunities for growth.
• Freedom from stigma and discrimination: Freedom from the level of shame, prejudice, or discrimination employees perceive toward people with mental-health or substance-use conditions.
• Organizational accountability: Organization gathers feedback, tracks KPIs, aligns incentives, and measures progress against employee health goals.
• Leadership commitment: Leaders consider employee mental health a top priority, publicly committing to a clear strategy to improve employee mental health.
• Access to resources: Organization offers easy-to-use and accessible resources that fit individual employee needs related to mental health. 1 Including adaptability and resilience-related learning and development resources.

Health outcomes assessed in our survey included:

• Burnout symptoms: An employee’s experience of extreme tiredness, reduced ability to regulate cognitive and emotional processes, and mental distancing (Burnout Assessment Tool). 2 Burnout Assessment Tool, Steffie Desart et al., “User manual - Burnout assessment tool (BAT), - Version 2.0,” July 2020.
• Distress: An employee experiencing a negative stress response, often involving negative affect and physiological reactivity (4DSQ Distress Screener). 3 Distress screener, 4DSQ; JR Anema et al., “Validation study of a distress screener,” Journal of Occupational Rehabilitation , 2009, Volume 19.
• Depression symptoms: An employee having little interest or pleasure in doing things, and feeling down, depressed, or hopeless (PHQ-2 Screener). 4 Kurt Kroenke et al., “The patient health questionnaire-2: Validity of a two-item depression screener,” Medical Care , November 2003, Volume 41, Issue 11.
• Anxiety symptoms: An employee’s feelings of nervousness, anxiousness, or being on edge, and not being able to stop or control worrying (GAD-2 Screener). 5 Kurt Kroenke et al., “Anxiety disorders in primary care: Prevalence, impairment, comorbidity, and detection,” Annals of Internal Medicine , March 6, 2007, Volume 146, Issue 5.

Work-related outcomes assessed in our survey included:

• Intent to leave: An employee’s desire to leave the organization in which they are currently employed in the next three to six months.
• Work engagement: An employee’s positive motivational state of high energy combined with high levels of dedication and a strong focus on work.
• Organizational advocacy: An employee’s willingness to recommend or endorse their organization as a place to work to friends and relatives.
• Work satisfaction: An employee’s level of contentment or satisfaction with their current job.

Our survey pointed to a persistent disconnection between how employees and employers perceive mental health and well-being in organizations. We see an average 22 percent gap between employer and employee perceptions—with employers consistently rating workplace dimensions associated with mental health and well-being more favorably than employees. 20 Our survey did not link employers and employees’ responses. Therefore, these numbers are indicative of a potential gap that could be found within companies.

In this report—the first of a broader series on employee mental health from the McKinsey Health Institute—we will focus on burnout, its workplace correlates, and implications for leaders. On average, one in four employees surveyed report experiencing burnout symptoms. 21 Represents global average of respondents experiencing burnout symptoms (per items from Burnout Assessment Tool) sometimes, often, or always. These high rates were observed around the world and among various demographics (Exhibit 1), 22 Our survey findings demonstrate small but statistically significant differences between men and women, with women reporting higher rates of burnout symptoms (along with symptoms of distress, depression, and anxiety). Differences between demographic variables across countries will be discussed in our future publications. and are consistent with global trends. 23 Ashley Abramson, “Burnout and stress are everywhere,” Monitor on Psychology , January 1, 2022, Volume 53, Number 1.

So, what is behind pervasive burnout challenges worldwide? Our research suggests that employers are overlooking the role of the workplace in burnout and underinvesting in systemic solutions.

Employers tend to overlook the role of the workplace in driving employee mental health and well-being, engagement, and performance

In all 15 countries and across all dimensions assessed, toxic workplace behavior was the biggest predictor of burnout symptoms and intent to leave by a large margin 24 Measured as a function of predictive power of the dimensions assessed; predictive power was estimated based on share of outcome variability associated with each dimension; based on regression models applied to cross-sectional data (that is, measured at one point in time), rather than longitudinal data (that is, measured over time); causal relationships have not been established. —predicting more than 60 percent of the total global variance. For positive outcomes (including work engagement, job satisfaction, and organization advocacy), the impact of factors assessed was more distributed—with inclusivity and belonging, supportive growth environment, sustainable work, and freedom from stigma predicting most outcomes (Exhibit 2).

In all 15 countries and across all dimensions assessed, toxic workplace behavior had the biggest impact predicting burnout symptoms and intent to leave by a large margin.

The danger of toxic workplace behavior—and its impact on burnout and attrition

Across the 15 countries in the survey, toxic workplace behavior is the single largest predictor of negative employee outcomes, including burnout symptoms (see sidebar “What is toxic workplace behavior?”). One in four employees report experiencing high rates of toxic behavior at work. At a global level, high rates were observed across countries, demographic groups—including gender, organizational tenure, age, virtual/in-person work, manager and nonmanager roles—and industries. 25 Differences between demographic variables across countries will be discussed in our future articles.

What is toxic workplace behavior?

Toxic workplace behavior is interpersonal behavior that leads to employees feeling unvalued, belittled, or unsafe, such as unfair or demeaning treatment, non-inclusive behavior, sabotaging, cutthroat competition, abusive management, and unethical behavior from leaders or coworkers. Selected questions from this dimension include agreement with the statements “My manager ridicules me,” “I work with people who belittle my ideas,” and “My manager puts me down in front of others.”

Toxic workplace behaviors are a major cost for employers—they are heavily implicated in burnout, which correlates with intent to leave and ultimately drives attrition. In our survey, employees who report experiencing high levels of toxic behavior 26 “High” represents individuals in the top quartile of responses and “low” represents individuals in the bottom quartile of responses. at work are eight times more likely to experience burnout symptoms (Exhibit 3). In turn, respondents experiencing burnout symptoms were six times more likely to report they intend to leave their employers in the next three to six months (consistent with recent data pointing to toxic culture as the single largest predictor of resignation during the Great Attrition, ten times more predictive than compensation alone 27 Charles Sull et al., “Toxic culture is driving the Great Resignation,” MIT Sloan Management Review, January 11, 2022. and associated with meaningful organizational costs 28 Rasmus Hougaard, “To stop the Great Resignation, we must fight dehumanization at work,” Potential Project, 2022. ). The opportunity for employers is clear. Studies show that intent to leave may correlate with two- to three-times higher 29 Bryan Bohman et al., “Estimating institutional physician turnover attributable to self-reported burnout and associated financial burden: A case study,” BMC Health Services Research , November 27, 2018, Volume 18, Number 1. rates of attrition; conservative estimates of the cost of replacing employees range from one-half to two times their annual salary. Even without accounting for costs associated with burnout—including organizational commitment 30 Michael Leiter and Christina Maslach, “The impact of interpersonal environment on burnout and organizational commitment,” Journal of Organizational Behavior , October 1988, Volume 9, Number 4. and higher rates of sick leave and absenteeism 31 Arnold B. Bakker et al., “Present but sick: A three-wave study on job demands, presenteeism and burnout,” Career Development International , 2009, Volume 14, Number 1. —the business case for addressing it is compelling. The alternative—not addressing it—can lead to a downward spiral in individual and organizational performance. 32 Arnold B. Bakker et al., “Present but sick: A three-wave study on job demands, presenteeism and burnout,” Career Development International , 2009, Volume 14, Number 1.

Individuals’ resilience and adaptability skills may help but do not compensate for the impact of a toxic workplace

Toxic behavior is not an easy challenge to address. Some employers may believe the solution is simply training people to become more resilient.

There is merit in investing in adaptability and resiliency skill building . Research indicates that employees who are more adaptable tend to have an edge in managing change and adversity. 33 Karen van Dam, “Employee adaptability to change at work: A multidimensional, resource-based framework,” from The Psychology of Organizational Change: Viewing Change from the Employee’s Perspective , Cambridge, England: Cambridge University Press, 2013; Jacqueline Brassey et al., Advancing Authentic Confidence Through Emotional Flexibility: An Evidence-Based Playbook of Insights, Practices and Tools to Shape Your Future , second edition, Morrisville, NC: Lulu Press, 2019; B+B Vakmedianet B.V. Zeist, Netherlands (to be published Q3 2022). We see that edge reflected in our survey findings: adaptability acts as a buffer 34 Estimated buffering effect illustrated in Exhibit 4. to the impact of damaging workplace factors (such as toxic behaviors), while magnifying the benefit of supportive workplace factors (such as a supportive growth environment) (Exhibit 4). In a recent study, employees engaging in adaptability training experienced three times more improvement in leadership dimensions and seven times more improvement in self-reported well-being than those in the control group. 35 McKinsey’s People and Organization Performance - Adaptability Learning Program; multirater surveys showed improvements in adaptability outcomes, including performance in role, sustainment of well-being, successfully adapting to unplanned circumstances and change, optimism, development of new knowledge and skills; well-being results were based on self-reported progress as a result of the program.

However, employers who see building resilience and adaptability skills in individuals as the sole solution to toxic behavior and burnout challenges are misguided. Here is why.

Individual skills cannot compensate for unsupportive workplace factors. When it comes to the effect of individual skills, leaders should be particularly cautious not to misinterpret “favorable” outcomes (for example, buffered impact of toxic behaviors across more adaptable employees) as absence of underlying workplace issues that should be addressed. 36 Tomas Chamorro-Premuzic, “To prevent burnout, hire better bosses,” Harvard Business Review , August 23, 2019.

Also, while more adaptable employees are better equipped to work in poor environments, they are less likely to tolerate them. In our survey, employees with high adaptability were 60 percent more likely to report intent to leave their organization if they experienced high levels of toxic behavior at work than those with low adaptability (which may possibly relate to a higher level of self-confidence 37 Brassey et al. found that as a result of a learning program, employees who developed emotional flexibility skills, a concept related to affective adaptability but also strongly linked to connecting with purpose, developed a higher self-confidence over time; Jacqueline Brassey et al., “Emotional flexibility and general self-efficacy: A pilot training intervention study with knowledge workers,” PLOS ONE , October 14, 2020, Volume 15, Number 10. ). Therefore, relying on improving employee adaptability without addressing broader workplace factors puts employers at an even higher risk of losing some of its most resilient, adaptable employees.

Employees with high adaptability were 60 percent more likely to report intent to leave their organization if they experienced high levels of toxic behavior at work than those with low adaptability.

What this means for employers: Why organizations should take a systemic approach to improving employee mental health and well-being

We often think of employee mental health, well-being, and burnout as a personal problem. That’s why most companies have responded to symptoms by offering resources focused on individuals such as wellness programs.

However, the findings in our global survey and research are clear. Burnout is experienced by individuals, but the most powerful drivers of burnout are systemic organizational imbalances across job demands and job resources. So, employers can and should view high rates of burnout as a powerful warning sign that the organization—not the individuals in the workforce—needs to undergo meaningful systematic change.

Employers can and should view high rates of burnout as a powerful warning sign that the organization—not the individuals in the workforce—needs to undergo meaningful systematic change.

Taking a systemic approach means addressing both toxic workplace behavior and redesigning work to be inclusive, sustainable, and supportive of individual learning and growth, including leader and employee adaptability skills. It means rethinking organizational systems, processes, and incentives to redesign work, job expectations, and team environments.

As an employer, you can’t “yoga” your way out of these challenges. Employers who try to improve burnout without addressing toxic behavior are likely to fail. Our survey shows that improving all other organization factors assessed (without addressing toxic behavior) does not meaningfully improve reported levels of burnout symptoms. Yet, when toxic behavior levels are low, each additional intervention contributes to reducing negative outcomes and increasing positive ones.

The interactive graphic shows the estimated interplay between the drivers and outcomes, based on our survey data (Exhibit 5).

Taking a preventative, systemic approach—focused on addressing the roots of the problem (as opposed to remediating symptoms)—is hard. But the upside for employers is a far greater ability to attract and retain valuable talent over time.

The good news: Although there are no silver bullets, there are opportunities for leaders to drive material change

We see a parallel between the evolution of global supply chains and talent. Many companies optimized supply chains for “just in time” delivery, and talent was optimized to drive operational efficiency and effectiveness. As supply chains come under increasing pressure, many companies recognize the need to redesign and optimize supply chains for resilience and sustainability, and the need to take an end-to-end approach to the solutions. The same principles apply to talent.

We acknowledge that the factors associated with improving employee mental health and well-being (including organizational-, team-, and individual-level factors) are numerous and complex. And taking a whole-systems approach is not easy.

Would you like to learn more about the McKinsey Health Institute ?

Despite the growing momentum toward better employee mental health and well-being (across business and academic communities), we’re still early on the journey. We don’t yet have sufficient evidence to conclude which interventions work most effectively—or a complete understanding of why they work and how they affect return on investment.

That said, efforts to mobilize the organization to rethink work—in ways that are compatible with both employee and employer goals—are likely to pay off in the long term. To help spark that conversation in your organization, we offer eight targeted questions and example strategies with the potential to address some of the burnout-related challenges discussed in this article.

Do we treat employee mental health and well-being as a strategic priority?

This is fundamental to success. When a large organization achieved a 7 percent reduction in employee burnout rates (compared with an 11 percent increase in the national average within the industry over the same period), the CEO believed that leadership and sustained attention from the highest level of the organization were the “key to making progress.” 38 John H. Noseworthy and Tait D Shanafelt, “Executive leadership and physician well‐being: Nine organizational strategies to promote engagement and reduce burnout,” Mayo Clinic Proceedings , January 2017, Volume 92, Number 1. Senior executives recognized employee mental health and well-being as a strategic priority. Executives publicly acknowledged the issues and listened to employee needs through a wide range of formats—including town halls, workshops, and employee interviews (our research suggests that leaders are not listening to their people  nearly enough). They prioritized issues and defined clear, time-bound measurable goals around them—with a standardized measure of burnout being given equal importance to other key performance metrics (financial metrics, safety/quality, employee turnover, and customer satisfaction). Although anonymous at the level of the individual, results were aggregated at division/department level to allow executive leadership to focus attention and resources where they were most needed. 39 Liselotte Dyrbye et al., “Physician burnout: Contributors, consequences and solutions,” Journal of Internal Medicine , 2018, Volume 283, Number 6. This example highlights how CEOs have the ability to create meaningful change through listening to employees and prioritizing strategies to reduce burnout.

Do we effectively address toxic behaviors?

Eliminating toxic workplace behavior is not an easy task. Organizations that tackle toxic behavior effectively deploy a set of integrated work practices  to confront the problem, 40 Robert I. Sutton, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t , first edition, New York, NY: Business Plus, 2010. and see treatment of others as an integral part of assessing an employee’s performance. Manifestations of toxic behavior 41 “Why every leader,” 2022. are flagged, repeat offenders either change or leave, and leaders take time  to become aware of the impact their behavior has on others. If you lead part of an organization, looking at your own behaviors, and what you tolerate in your own organization, is a good place to start. 42 “ Author Talks: How to handle your work jerk ,” March 29, 2022.

Leaders with higher self-regulation may be better, less toxic leaders

Research shows that leaders’ development of self-regulation increases followers’ ratings of their effectiveness and is associated with higher team financial performance as well as a higher final team grade compared with a control group. The benefits of self-regulation also improved leaders’ development of task-relevant competencies. 1 Robin Martin and JooBee Yeow, “The role of self-regulation in developing leaders: A longitudinal field experiment,” Leadership Quarterly , October 2013, Volume 24, Number 5. Furthermore, building employees’ resilience and adaptability  skills leads to a higher sense of agency and self-efficacy, 2 Jacqueline Brassey et al., “Emotional flexibility and general self-efficacy: A pilot training intervention study with knowledge workers,” PLOS ONE , October 14, 2020, Volume 15, Number 10; and Jacqueline Brassey et al., Advancing Authentic Confidence Through Emotional Flexibility: An Evidence-Based Playbook of Insights, Practices and Tools to Shape Your Future , second edition, Morrisville, NC: Lulu Press, 2019; B+B Vakmedianet B.V. Zeist, Netherlands (to be published Q3 2022). which is related to reduced burnout and improved performance. 3 Charles Benight et al., “Associations between job burnout and self-efficacy: A meta-analysis,” Anxiety, Stress, & Coping , 2016, Volume 29, Issue 4; and Alex Stajkovic, “Self-efficacy and work-related performance: A meta-analysis,” Psychological Bulletin , 1998, Volume 124, Number 2.

Another component of eliminating toxic behavior is cultivating supportive, psychologically safe work environments , where toxic behaviors are less likely to spread  across the organization. 43 Annie McKee, “Neutralize your toxic boss,” Harvard Business Review , September 24, 2008. Effective leaders know that emotional contagion 44 John T. Cacioppo et al., Emotional Contagion , Cambridge, England: Cambridge University Press, 1994. may go both ways: displaying vulnerability and compassion  fuels more compassionate teams; displaying toxic behavior fuels more toxic teams. 45 Michael Housman and Dylan Minor, Toxic workers , Harvard Business School working paper, No. 16-057, October 2015 (revised November 2015). There are two caveats: toxic behavior may not be intentional—particularly if individuals are not equipped to respond with calm  and compassion under pressure—and regardless of intent, toxic behavior spreads faster and wider than good behavior. 46 “To prevent burnout,” 2019. To prevent unintentional dissemination of toxic behaviors, role modeling from adaptable , self-regulating, compassionate leaders may help (see sidebar “Leaders with higher self-regulation may be better, less toxic leaders”).

Do we create inclusive work environments?

Most leaders recognize the established associations between performance and inclusion , but inclusion does not happen by accident . Inclusion is a multifaceted construct that must be addressed comprehensively and proactively. Most companies define inclusion too narrowly and thus address it too narrowly as well. Over the past three years, we’ve broadened our perspective  on how to create truly inclusive workplaces and developed a modern inclusion model . The model includes 17 practices (based on frequency of desired behaviors) and six outcomes (based on perceptions of effectiveness). Each practice falls into one of three relationships that shape workplace inclusion: organizational systems, leaders, and peers/teammates.

The 17 inclusive-workplace practices , when done consistently well, drive workplace inclusion and equity for all employees by providing clarity into actions that matter. For example, among employees working in hybrid models , work–life support was the top practice employees desired improvements on—with nearly half of employees recommending prioritizing policies that support flexibility—including extended parental leave, flexible hours, and work-from-home policies.

A truly inclusive workplace implements systems that minimize conscious and unconscious bias , allowing employees to express themselves and connect with each other. It also features leaders who not only advocate for team members and treat them impartially but also uphold and support all organizational systems and practices . For example, one employer defined data-driven targets for the representation and advancement of diverse talent across dimensions (beyond gender and ethnicity) and role types (executive, management, technical, board)—leveraging powerful analytics to track progress and foster transparency along the way.

Do we enable individual growth?

Evidence suggests that individual growth, learning, and development programs are effective 47 Arnold B. Bakker and Evangelia Demerouti, “Towards a model of work engagement,” Career Development International , 2008, Volume 13, Issue 3. ways to combat burnout and to retain and engage employees, and therefore are important for addressing growing talent and skills shortages within organizations. Employers who “double down” on talent redeployment, mobility, reskilling, and upskilling tend to see improvement across a range of financial, organizational, and employee experience metrics. In a recent study of extensive employee data, offering lateral career opportunities was two-and-half times more predictive of employee retention than compensation, and 12 times more predictive than promotions 48 “Why every leader,” 2022. —signaling an opportunity for leaders to support employee desires to learn, explore, and grow way beyond traditional career progression.

Investing in your employees’ capabilities can drive financial returns, is often cheaper than hiring, and signals to employees that they are valued and have an important role in the organization.

Do we promote sustainable work?

Promoting sustainable work goes beyond managing workload. It’s about enabling employees to have a sense of control and predictability, flexibility, and sufficient time for daily recovery. It’s also about leading with compassion and empathy 49 “It’s time to eliminate bad bosses. They are harmful and expensive,” Potential Project, The Human Leader, April 2022. —tailoring interventions based on where, when, and how work can be done , and how different groups are more likely to (re)establish socio-emotional ties  after a long period of isolation and loss of social cohesion .

One technology company is using real-time data on employee preferences to rapidly test and iterate solutions that work for specific groups around return-to-office options. To find solutions that work for your employees, consider adopting a test-and-learn  mindset. This approach can help the organization make progress while adapting as context evolves (a hallmark of more productive  organizations).

Are we holding leaders accountable?

Many organizations consider people leadership criteria in their performance management. Yet, there is substantial room to grow when it comes to employers providing transparency around employee mental-health and well-being objectives and metrics. 50 Workplace Mental Health Blogs , One Mind, “Fix performance management by aligning it with employee mental health,” blog entry by Daryl Tol, March 2, 2022; Garett Slettebak, “Measuring progress on workplace mental health”, One Mind at Work, March 24, 2022.

Organizations that are doing this well have set clear expectations for managers to lead in a way that is supportive of employee mental health and well-being. 51 Taylor Adams et al., Mind the workplace: Work health survey 2021 , Mental Health America, 2021. They offer training to help managers identify, proactively ask about, and listen to employees’ mental-health and well-being needs. They also introduce mental-health “pulse” checks and incorporate relevant questions into the broader employee satisfaction surveys, to establish a baseline and track trends in how employees are feeling. Discussion on employee mental health and well-being can be incorporated into regular leadership meetings, including concerns, risks, and potential actions.

To encourage leaders to lead by example and increase their accountability, some employers embed employee mental-health support into leaders’ reviews based on anonymous upward feedback from their teams. Finally, some companies are exploring if they can go even further and tie incentives to short- and long-term employee mental-health and well-being objectives.

Are we effectively tackling stigma?

As noted in a previous McKinsey article , the majority of employers and employees acknowledge the presence of stigma 52 In the context of employee mental health, stigma is defined as a level of shame, prejudice, or discrimination toward people with mental-health or substance-use conditions. in their workplaces. Stigma has been shown to have real costs to workforce productivity, often exacerbating underlying conditions because of people being afraid to seek help for mental-health needs and driving down an employee’s self-worth and engagement.

We see several actions that organizations are taking to eliminate stigma. 53 Erica Coe, Jenny Cordina, Kana Enomoto, and Nikhil Seshan, “ Overcoming stigma: Three strategies toward better mental health in the workplace ,” July 23, 2021. Leading by example can make a difference, with senior leaders stepping forward to describe personal struggles with mental health, using nonstigmatizing language. 54 Evelien Brouwers et al., “To disclose or not to disclose: A multi-stakeholder focus group study on mental health issues in the work environment. Journal of Occupational Rehabilitation , 2020, Volume 30, Number 1. Leaders showing vulnerability helps to remove shame and promote a psychologically safe culture. 55 Global thriving at work framework , MindForward Alliance, 2020.

Stigma can also be reduced by companies prioritizing mental wellness as critical for peak performance instead of rewarding overwork at the expense of rest and renewal—rewarding an “athlete” mindset instead of overemphasizing a “hero.” This can begin to shift perception of signs of burnout or other mental-health needs as being indicative of a moral failing. Finally, creating a dedicated role to support employee mental health and well-being and appointing a senior leader, such as chief wellness officer, will increase awareness and show commitment.

Do our resources serve employee needs?

Leaders should evaluate whether mental-health and well-being resources are at parity with physical-health benefits and how frequently they are being used by employees. An increasing number of employers have expanded access to mental-health services 56 Charles Ingoglia, “Now more than ever, employers must provide mental health support for employees,” National Council for Mental Wellbeing, May 4, 2022. ; however, research  shows that almost 70 percent of employees find it challenging to access those services.

In a previous survey , 45 percent of respondents who had left their jobs cited the need to take care of family as an influential factor in their decision (with a similar proportion of respondents who are considering quitting also citing the demands of family care). Expanding childcare, nursing services, or other home- and family-focused benefits could help keep such employees from leaving and show that you value them. Patagonia, long the standard-bearer for progressive workplace policies, retains nearly 100 percent of its new mothers with on-site childcare and other benefits for parents.

Never in history have organizations around the world devoted so much attention and capital to improving employee mental health and well-being. It is lamentable that these investments are not always providing a good return regarding improved outcomes. Employers that take the time to understand the problem at hand—and pursue a preventative, systemic approach focused on causes instead of symptoms—should see material improvements in outcomes and succeed in attracting and retaining valuable talent. More broadly, employers globally have an opportunity to play a pivotal role in helping people achieve material improvements in health. With collaboration and shared commitment, employers can make a meaningful difference in the lives of their employees and the communities they live in.

The McKinsey Health Institute (MHI) is collaborating with leading organizations around the world to achieve material improvements in health—adding years to life and life to years. As part of that, MHI is focused on improving employee mental health and well-being at scale—in a way that is good for business, for employees, and for the communities they live in.

To stay updated about MHI’s initiative on employee mental health and well-being, sign up at McKinsey.com/mhi/contact-us .

Jacqueline Brassey is a director of research science in McKinsey’s Luxemburg office, Erica Coe is a partner in the Atlanta office, Martin Dewhurst is a senior partner in the London office, Kana Enomoto is a senior expert in the Washington, DC, office, and Barbara Jeffery is a partner in the London office; they are all leaders with McKinsey Health Institute (MHI). Renata Giarola , in the Southern California office, and Brad Herbig , in the Philadelphia office, are consultants with MHI.

The authors wish to thank Yueyang Chen, Elena Chit, Aaron de Smet, Soheil Eshghi, Lars Hartenstein, Tom Latkovic, David Mendelsohn, Roxy Merkand, Isidora Mitic, Bill Schaninger, Wilmar Schaufeli, Jeris Stueland, Berend Terluin, Karen van Dam, and Marieke van Hoffen for their contributions to this article.

This article was edited by Allan Gold, a senior editorial advisor in Washington, DC, and Elizabeth Newman, an executive editor in the Chicago office.

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10 Step Process for Effective Business Problem Solving

Posted august 3, 2021 by harriet genever.

When you start a small business or launch a startup, the one thing you can count on is the unexpected. No matter how thoroughly you plan, forecast , and test, problems are bound to arise. This is why as an entrepreneur, you need to know how to solve business problems effectively.

What is problem solving in business?

Problem solving in business relates to establishing processes that mitigate or remove obstacles currently preventing you from reaching strategic goals . These are typically complex issues that create a gap between actual results and your desired outcome. They may be present in a single team, operational process, or throughout your entire organization, typically without an immediate or obvious solution. 

To approach problem solving successfully, you need to establish consistent processes that help you evaluate, explore solutions, prioritize execution, and measure success. In many ways, it should be similar to how you review business performance through a monthly plan review . You work through the same documentation, look for gaps, dig deeper to identify the root cause, and hash out options. Without this process, you simply cannot expect to solve problems efficiently or effectively. 

Why problem solving is important for your business

While some would say problem-solving comes naturally, it’s actually a skill you can grow and refine over time. Problem solving skills will help you and your team tackle critical issues and conflicts as they arise. It starts from the top. You as the business owner or CEO needing to display the type of level-headed problem solving that you expect to see from your employees.

Doing so will help you and your staff quickly deal with issues, establish and refine a problem solving process, turn challenges into opportunities, and generally keep a level head. Now, the best business leaders didn’t just find a magic solution to solve their problems, they built processes and leveraged tools to find success. And you can do the same.

By following this 10-step process, you can develop your problem-solving skills and approach any issue that arises with confidence. 

1. Define the problem

When a problem arises, it can be very easy to jump right into creating a solution. However, if you don’t thoroughly examine what led to the problem in the first place, you may create a strategy that doesn’t actually solve it. You may just be treating the symptoms.

For instance, if you realize that your sales from new customers are dropping, your first inclination might be to rush into putting together a marketing plan to increase exposure. But what if decreasing sales are just a symptom of the real problem? 

When you define the problem, you want to be sure you’re not missing the forest for the trees. If you have a large issue on your hands, you’ll want to look at it from several different angles:

Competition 

Is a competitor’s promotion or pricing affecting your sales? Are there new entrants in your market? How are they marketing their product or business?

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Business model 

Is your business model sustainable? Is it realistic for how fast you want to grow? Should you explore different pricing or cost strategies?

Market factors

How are world events and the nation’s economy affecting your customers and your sales?

Are there any issues affecting your team? Do they have the tools and resources they need to succeed? 

Goal alignment 

Is everyone on your team working toward the same goal ? Have you communicated your short-term and long-term business goals clearly and often?

There are a lot of ways to approach the issue when you’re facing a serious business problem. The key is to make sure you’re getting a full snapshot of what’s going on so you don’t waste money and resources on band-aid solutions. 

Going back to our example, by looking at every facet of your business, you may discover that you’re spending more on advertising than your competitors already. And instead, there’s a communication gap within your team that’s leading to the mishandling of new customers and therefore lost sales. 

If you jumped into fixing the exposure of your brand, you would have been dumping more money into an area you’re already winning. Potentially leading to greater losses as more and more new customers are dropped due to poor internal communication.

This is why it’s so vital that you explore your blind spots and track the problem to its source.

2. Conduct a SWOT analysis

All good businesses solve some sort of problem for customers. What if your particular business problem is actually an opportunity, or even a strength if considered from a different angle? This is when you’d want to conduct a SWOT analysis to determine if that is in fact the case.

SWOT is a great tool for strategic planning and bringing multiple viewpoints to the table when you’re looking at investing resources to solve a problem. This may even be incorporated in your attempts to identify the source of your problem, as it can quickly outline specific strengths and weaknesses of your business. And then by identifying any potential opportunities or threats, you can utilize your findings to kickstart a solution. 

3. Identify multiple solutions with design thinking

As you approach solving your problem, you may want to consider using the design thinking approach . It’s often used by organizations looking to solve big, community-based problems. One of its strengths is that it requires involving a wide range of people in the problem-solving process. Which leads to multiple perspectives and solutions arising.

This approach—applying your company’s skills and expertise to a problem in the market—is the basis for design thinking.

It’s not about finding the most complex problems to solve, but about finding common needs within the organization and in the real world and coming up with solutions that fit those needs. When you’re solving business problems, this applies in the sense that you’re looking for solutions that address underlying issues—you’re looking at the big picture.

4. Conduct market research and customer outreach

Market research and customer outreach aren’t the sorts of things small business owners and startups can do once and then cross off the list. When you’re facing a roadblock, think back to the last time you did some solid market research or took a deep dive into understanding the competitive landscape .

Market research and the insights you get from customer outreach aren’t a silver bullet. Many companies struggle with what they should do with conflicting data points. But it’s worth struggling through and gathering information that can help you better understand your target market . Plus, your customers can be one of the best sources of criticism. It’s actually a gift if you can avoid taking the negatives personally .

The worst thing you can do when you’re facing challenges is isolating yourself from your customers and ignore your competition. So survey your customers. Put together a competitive matrix . 

5. Seek input from your team and your mentors

Don’t do your SWOT analysis or design thinking work by yourself. The freedom to express concerns, opinions, and ideas will allow people in an organization to speak up. Their feedback is going to help you move faster and more efficiently. If you have a team in place, bring them into the discussion. You hired them to be experts in their area; use their expertise to navigate and dig deeper into underlying causes of problems and potential solutions.

If you’re running your business solo, at least bring in a trusted mentor. SCORE offers a free business mentorship program if you don’t already have one. It can also be helpful to connect with a strategic business advisor , especially if business financials aren’t your strongest suit.

Quoting Stephen Covey, who said that “strength lies in differences, not in similarities,” speaking to the importance of diversity when it comes to problem-solving in business. The more diverse a team is , the more often innovative solutions to the problems faced by the organization appear.

In fact, it has been found that groups that show greater diversity were better at solving problems than groups made up specifically of highly skilled problem solvers. So whoever you bring in to help you problem-solve, resist the urge to surround yourself with people who already agree with you about everything.

6. Apply lean planning for nimble execution

So you do your SWOT analysis and your design thinking exercise. You come up with a set of strong, data-driven ideas. But implementing them requires you to adjust your budget, or your strategic plan, or even your understanding of your target market.

Are you willing to change course? Can you quickly make adjustments? Well in order to grow, you can’t be afraid to be nimble . 

By adopting the lean business planning method —the process of revising your business strategy regularly—you’ll be able to shift your strategies more fluidly. You don’t want to change course every week, and you don’t want to fall victim to shiny object thinking. But you can strike a balance that allows you to reduce your business’s risk while keeping your team heading in the right direction.

Along the way, you’ll make strategic decisions that don’t pan out the way you hoped. The best thing you can do is test your ideas and iterate often so you’re not wasting money and resources on things that don’t work. That’s Lean Planning .

7. Model different financial scenarios

When you’re trying to solve a serious business problem, one of the best things you can do is build a few different financial forecasts so you can model different scenarios. You might find that the idea that seemed the strongest will take longer than you thought to reverse a negative financial trend. At the very least you’ll have better insight into the financial impact of moving in a different direction.

The real benefit here is looking at different tactical approaches to the same problem. Maybe instead of increasing sales right now, you’re better off in the long run if you adopt a strategy to reduce churn and retain your best customers. You won’t know unless you model a few different scenarios. You can do this by using spreadsheets, and a tool like LivePlan can make it easier and quicker.

8. Watch your cash flow

While you’re working to solve a challenging business problem, pay particular attention to your cash flow and your cash flow forecast . Understanding when your company is at risk of running out of cash in the bank can help you be proactive. It’s a lot easier to get a line of credit while your financials still look good and healthy, than when you’re one pay period away from ruin.

If you’re dealing with a serious issue, it’s easy to start to get tunnel vision. You’ll benefit from maintaining a little breathing room for your business as you figure out what to do next.

9. Use a decision-making framework

Once you’ve gathered all the information you need, generated a number of ideas, and done some financial modeling, you might still feel uncertain. It’s natural—you’re not a fortune-teller. You’re trying to make the best decision you can with the information you have.

This article offers a really useful approach to making decisions. It starts with putting your options into a matrix like this one:

Use this sort of framework to put everything you’ve learned out on the table. If you’re working with a bigger team, this sort of exercise can also bring the rest of your team to the table so they feel some ownership over the outcome.

10. Identify key metrics to track

How will you know your problem is solved? And not just the symptom—how will you know when you’ve addressed the underlying issues? Before you dive into enacting the solution, make sure you know what success looks like.

Decide on a few key performance indicators . Take a baseline measurement, and set a goal and a timeframe. You’re essentially translating your solution into a plan, complete with milestones and goals. Without these, you’ve simply made a blind decision with no way to track success. You need those goals and milestones to make your plan real .

Problem solving skills to improve

As you and your team work through this process, it’s worth keeping in mind specific problem solving skills you should continue to develop. Bolstering your ability, as well as your team, to solve problems effectively will only make this process more useful and efficient. Here are a few key skills to work on.

Emotional intelligence

It can be very easy to make quick, emotional responses in a time of crisis or when discussing something you’re passionate about. To avoid making assumptions and letting your emotions get the best of you, you need to focus on empathizing with others. This involves understanding your own emotional state, reactions and listening carefully to the responses of your team. The more you’re able to listen carefully, the better you’ll be at asking for and taking advice that actually leads to effective problem solving.

Jumping right into a solution can immediately kill the possibility of solving your problem. Just like when you start a business , you need to do the research into what the problem you’re solving actually is. Luckily, you can embed research into your problem solving by holding active reviews of financial performance and team processes. Simply asking “What? Where? When? How?” can lead to more in-depth explorations of potential issues.

The best thing you can do to grow your research abilities is to encourage and practice curiosity. Look at every problem as an opportunity. Something that may be trouble now, but is worth exploring and finding the right solution. You’ll pick up best practices, useful tools and fine-tune your own research process the more you’re willing to explore.

Brainstorming

Creatively brainstorming with your team is somewhat of an art form. There needs to be a willingness to throw everything at the wall and act as if nothing is a bad idea at the start. This style of collaboration encourages participation without fear of rejection. It also helps outline potential solutions outside of your current scope, that you can refine and turn into realistic action.

Work on breaking down problems and try to give everyone in the room a voice. The more input you allow, the greater potential you have for finding the best solution.

Decisiveness

One thing that can drag out acting upon a potential solution, is being indecisive. If you aren’t willing to state when the final cutoff for deliberation is, you simply won’t take steps quickly enough. This is when having a process for problem solving comes in handy, as it purposefully outlines when you should start taking action.

Work on choosing decision-makers, identify necessary results and be prepared to analyze and adjust if necessary. You don’t have to get it right every time, but taking action at the right time, even if it fails, is almost more vital than never taking a step.  

Stemming off failure, you need to learn to be resilient. Again, no one gets it perfect every single time. There are so many factors in play to consider and sometimes even the most well-thought-out solution doesn’t stick. Instead of being down on yourself or your team, look to separate yourself from the problem and continue to think of it as a puzzle worth solving. Every failure is a learning opportunity and it only helps you further refine and eliminate issues in your strategy.

Problem solving is a process

The key to effective problem-solving in business is the ability to adapt. You can waste a lot of resources on staying the wrong course for too long. So make a plan to reduce your risk now. Think about what you’d do if you were faced with a problem large enough to sink your business. Be as proactive as you can.

Editor’s note: This article was originally published in 2016. It was updated in 2021.

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Harriet Genever

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