There are few management skills more powerful than the discipline of clearly articulating the problem you seek to solve before jumping into action.

It’s hard to pick up a current business publication without reading about the imperative to change. The world, this line of argument suggests, is evolving at an ever-faster rate, and organizations that do not adapt will be left behind. Left silent in these arguments is which organizations will drive that change and how they will do it. Academic research suggests that the ability to incorporate new ideas and technologies into existing ways of doing things plays a big role in separating leaders from the rest of the pack,1 and studies clearly show that it is easier to manage a sequence of bite-sized changes than one huge reorganization or change initiative.2 But, while many organizations strive for continuous change and learning, few actually achieve those goals on a regular basis.3 Two of the authors have studied and tried to make change for more than two decades, but it was a frustrating meeting that opened our eyes to one of the keys to leading the pack rather than constantly trying to catch up.

In the late 1990s, one of the authors, Don Kieffer, was ready to launch a big change initiative: implementing the Toyota production system in one of Harley-Davidson Inc.’s engine plants. He hired a seasoned consultant, Hajime Oba, to help. On the appointed day, Mr. Oba arrived, took a tour of the plant, and then returned to Don’s office, where Don started asking questions: When do we start? What kind of results should I expect? How much is it going to cost me? But, Mr. Oba wouldn’t answer those questions. Instead he responded repeatedly with one of his own: “Mr. Kieffer, what problem are you trying to solve?” Don was perplexed. He was ready to spend money and he had one of the world’s experts on the Toyota production system in his office, but the expert (Mr. Oba) wouldn’t tell Don how to get started.

The day did not end well. Don grew exasperated with what seemed like a word game, and Mr. Oba, tired of not getting an answer to his question, eventually walked out of Don’s office. But, despite the frustration on both sides, we later realized that Mr. Oba was trying to teach Don one of the foundational skills in leading effective change: formulating a clear problem statement.


1. R. Gibbons and R. Henderson, “What Do Managers Do? Exploring Persistent Performance Differences Among Seemingly Similar Enterprises” in “The Handbook of Organizational Economics,” ed. R. Gibbons and J. Roberts (Princeton, New Jersey: Princeton University Press, 2013), 680-731.

2. N.P. Repenning and J.D. Sterman, “Nobody Ever Gets Credit for Fixing Problems That Never Happened: Creating and Sustaining Process Improvement,” California Management Review 43, no. 4 (summer 2001): 64-88.

3. A study by Towers Watson reported than only about one in four change efforts are effective in the long run. See Towers Watson, “How the Fundamentals Have Evolved and the Best Adapt: 2013 - 2014 Change and Communication ROI Study,” (December 2013), Others have reached similar conclusions; for example, see J.P. Kotter, “Leading Change” (Boston, Massachusetts: Harvard Business School Press, 1996); and M. Beer, R.A. Eisenstat, and B. Spector, “Why Change Programs Don’t Produce Change,” Harvard Business Review 68, no. 6 (November-December 1990): 158-166.

4. A. Mangi and N.P. Repenning, “Dynamic Work Design Decreases Post-Procedural Length of Stay and Enhances Bed Availability,” manuscript available from the author; S. Dodge et al., “Using Dynamic Work Design to Help Cure Cancer (And Other Diseases),”MIT Sloan School of Management working paper 5159-16, June 2016,

5. For very readable summaries, see D. Kahneman, “Thinking, Fast and Slow” (New York: Farrar, Straus, and Giroux, 2011); and J. Haidt, “The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom” (New York: Basic Books, 2006). For recent overviews of scholarly work, see J. St. B.T. Evans and K.E. Stanovich, “Dual-Process Theories of Higher Cognition: Advancing the Debate,” Perspectives on Psychological Science 8, no. 3 (May 1, 2013): 223-241; and S.A. Sloman, “Two Systems of Reasoning, an Update” in J.W. Sherman, B. Gawronski, and Y. Trope, “Dual-Process Theories of the Social Mind” (New York: Guilford Press, 2014), 107-120. For a collection of reviews, see Sherman, Gawronski, and Trope, “Dual-Process Theories of the Social Mind.”

6. K.E. Stanovich, “Rationality and the Reflective Mind” (New York: Oxford University Press, 2011).

7. G.A. Klein, “Sources of Power: How People Make Decisions” (Cambridge, Massachusetts: MIT Press, 1998).

8. J. Singh and L. Fleming, “Lone Inventors as Sources of Breakthroughs: Myth or Reality?” Management Science 56, no. 1 (January 2010): 41-56.

9. C. Perrow, “Normal Accidents: Living With High-Risk Technologies” (Princeton, New Jersey: Princeton University Press, 1999).

10. A. Dijksterhuis and L.F. Nordgren, “A Theory of Unconscious Thought,” Perspectives on Psychological Science 1, no. 2 (June 1, 2006): 95-109; and A. Dijksterhuis, “Automaticity and the Unconscious,” in “Handbook of Social Psychology,” 5th ed., vol. 1, ed. S.T. Fiske, D.T. Gilbert, and G. Lindzey (Hoboken, N.J.: John Wiley & Sons, 2010), 228-267.

11. J. W. Forrester, “Industrial Dynamics” (Cambridge, Massachusetts: MIT Press, 1961), 449.

12. E.A. Locke and G.P. Latham, “Building a Practically Useful Theory of Goal Setting and Task Motivation,” American Psychologist 57, no. 9 (September 2002): 705-717.

13. G. Oettingen, G. Hönig, and P. M. Gollwitzer, “Effective Self-Regulation of Goal Attainment,” International Journal of Educational Research 33, no. 7-8 (2000): 705-732.

14. T.M. Amabile and S.J. Kramer, “The Power of Small Wins,” Harvard Business Review 89, no. 5 (May 2011): 70-80; and T.M. Amabile and S.J. Kramer, “The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work” (Boston, Massachusetts: Harvard Business Review Press, 2011).

15. For a summary, see J. Sterman, “Business Dynamics: Systems Thinking and Modeling for a Complex World” (Boston, Massachusetts: Irwin/McGraw-Hill, 2000).

16. K.E. Weick, “Small Wins: Redefining the Scale of Social Problems,” American Psychologist 39 (January 1984): 40-49; Kotter, “Leading Change”; and T.M. Amabile and S.J. Kramer, “The Power of Small Wins.”

17. J. Shook, “Toyota’s Secret: The A3 Report,” MIT Sloan Management Review 50, no. 4 (summer 2009): 30-33.

18.“Fishbone Diagram (Ishikawa) — Cause & Effect Diagram | ASQ,”

19. For a summary of root-cause analysis techniques, see

20. In other work, we have proposed four principles for effective work that may be helpful in more complex situations. See Dodge et al., “Using Dynamic Work Design.”

5 Comments On: The Most Underrated Skill in Management

  • Geoff Davis | March 17, 2017

    Thank you so much for a clearly written, insightful, and enormously helpful contribution to clarifying an important, overlooked skill in management. Your article was captivating and pulled my attention in by its style, its content, and its insight. I appreciate this work and look forward to more sharing from you all.

  • Timothy Wilson | March 18, 2017

    Very interesting article. I was wondering if there are any examples of this process working in a smaller environment such as a small IT business with say twenty employees.

  • Michael Bremer | March 21, 2017

    I’m giving a speech tomorrow on “how to do a gemba walk” your research & experience on Problem Definition fits very closely with the way I talk about “purpose.” Why is this important for us to do? What are we seeking to accomplish? How will we monitor our progress toward fulfilling that purpose. I had not considered it to be similar to problem solving…but it surely is. If we were to exchange your word “problem” and insert “purpose” I suspect most of the article would still flow and the logic laid out would fit with some simple rewording of the sentences. Thanks for stimulating my thinking.

  • Abhijit Bhattacharya | March 27, 2017

    Thank you for this article providing so much of clarity.

    It would be certainly very interesting to know what kind of implementation difficulties can crop up when the TPS is applied to an industry that is subject to very high rate of disruptive changes. It is quite possible that the real learning after a cycle may not be very useful for the next cycle because of the imminent disruptions say, to its business model coming from a fledgling startup.

    I’m also quite surprised to see how some reputed Japanese companies are paying less attention to the measurement issue and thus reducing scope for their performance improvement. I’ve recently relocated to India and purchased a fairly high-end vehicle of Honda. Quite surprised to see how the dealer was putting emotional pressure on me to give high customer satisfaction score. When I explained to the executive that by doing this they were harming further improvement possibilities of the company, I only received a non-appreciative look.

  • Kavita Sarwal | May 17, 2017

    Excellent article that speaks to exactly what I experience daily in my work as a leader of strategic transformations. The examples of health care are clearly articulated as is the exhibit A3 tool . I am motivated to use this tool in my work.

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