Pain Points & Bottlenecks

Hi there,

If you read my newsletter, you know that I say "start with the business" when starting with AI - and too often this is already a challenge.

What are relevant business problems, anyway? Many people struggle to identify and articulate these problems in a way that actually facilitates problem solving - especially with AI.

So today I'm going to share a framework I use in my consulting practice that can help you with this.

Let's dive in!

When you have an AI hammer, everything looks like a nail

Many people struggle to pinpoint or articulate the issues within their organization that AI can effectively address.

It's easy to fall into the trap of thinking that AI is a one-size-fits-all solution, like assuming that when you have a hammer, everything looks like a nail.

However, to harness the true potential of AI, it's essential to focus on the specific pain points and bottlenecks in your business - and then assess whether they are actually a good fit to be solved by AI.

To help you navigate this process, I'd like to introduce the Pain Points & Bottlenecks Framework. This framework categorizes business problems into two main areas:

• Pain points are things that are hurting your business right now.

• Bottlenecks are things that will hurt your business in the future.

Depending on your role and priorities as a business leader, you might find yourself focusing more on one of these categories. Let’s explore how to approach this based on different scenarios.

Where to look for Pain Points & Bottlenecks

The approach to identifying pain points and bottlenecks will differ depending on your role within the organization.

C-level executives need to take a high-level view, mapping out pain points and bottlenecks across the entire organization. This helicopter view allows them to quickly identify where to focus attention and also which approach to AI adoption makes sense.

Business unit or department leaders will focus more on specific processes or product journeys within their area of responsibility. For example, a sales manager might break down the sales process into stages such as lead generation and closing to identify where improvements are needed.

As an example, here's how this might look like when filled in for a hypothetical Request for Proposal (RFP) process:

Product leaders need to take a very similar approach to department leaders, but instead of looking at process steps, they will look at steps in their user journeys, mapping user stories between an initial user start state and a desired end state:

Recognizing your specific role and context will help you choose the right starting point. Keep in mind that the C-Level organizational mapping is just a start. At some point, you will need to dive into process steps or the product journey if you want to get really specific.

Pain Points

To recap: Pain points are things that are hurting your business NOW. It’s either revenue lost, unnecessary costs or bad customer experience.

To uncover pain points in your business, consider the following strategies:

• Identify Frustrations: Start with internal surveys or interviews to understand where your team or customers are facing the most frustration. High-effort tasks that bring little value are prime candidates. For example, a sales team might struggle with a manual CRM system, leading to inefficiencies and lost opportunities.

• Analyze Existing Workflows: Look into your current workflows and identify areas where tasks are repetitive, time-consuming, or prone to human error. AI can often augment these tasks, freeing up human resources for more valuable work.

• Customer Service Analysis: Customer service interactions can be a goldmine of pain points. Analyze complaints and queries to understand what aspects of your product or service could be improved.

• Competitive Analysis: Look at where competitors are just doing things better than you. This can highlight industry pain points that are ripe for innovation.

Document your findings so you can prioritize them in the next step.

The Pain Scale: Assessing Pain Points

Right now, you don't need to worry about what to do first. But it definitely helps to get a first idea of which pain points are more painful than others.

To do this, you can use a pain scale similar to healthcare settings, where issues are rated from 1 to 10. Higher ratings indicate greater disruption or customer frustration. Broadly, there are three types of pain:

• Low on the Pain Scale (1-3): Minor inefficiencies causing slight delays or frustration but not significantly impacting performance, like a slightly outdated user interface.

• Moderate on the Pain Scale (4-6): More disruptive issues creating noticeable inefficiencies or customer dissatisfaction, such as missing or delayed insights when tracking marketing performance.

• High on the Pain Scale (7-10): Critical issues severely impacting business, causing significant inefficiencies, customer churn, or goal prevention, like a frequently crashing critical system leading to downtime and lost revenue.

Understanding where different pain points fall on this scale helps you gauge their urgency and potential impact on your business, setting the stage for effective prioritization later.

Bottlenecks

Bottlenecks will only become real problems in the future. They are things that limit your competitive advantage or prevent you from realizing new business potential (aka innovation).

To find bottlenecks in your organization, consider the following:

• Capacity Limitations: Check where your operations hit a ceiling. This could be data processing limits, the speed of analyzing information, or physical constraints in production or service delivery.

• Skill Gaps: Are there areas where your team lacks expertise, causing bottlenecks? Popular topics include data literacy, agile delivery, and developing digital products.

• Scalability Issues: Consider where your current processes may not scale efficiently with growth because they become either too expensive or inferior in quality. On-brand content creation, relevant business intelligence, and first-level customer support are prime examples.

• Innovation Blockers: Sometimes the desire to innovate is there, but technological or organizational limitations stand in the way of delivering new ways to delight your customers. Think about new product features, services, or entirely new business models.

The Pressure Gauge: Evaluating Bottlenecks

Similar to pain points, try to quantify or describe the relevance of these bottlenecks to your business operations, revenue, customer experience, etc. For bottlenecks, you can measure ratio between perceived (possible) output and the current implementation. Think of it as a pressure gauge. The more significant the bottleneck, the greater the pressure that builds up—and the more value is trapped behind it.

What would happen if you remove the bottleneck? Would the gauge implode or would the needle hardly change?

• Low Pressure (1-3): Minimal impact on operations, slight growth constraints, e.g., minor scalability issues in data processing.

• Moderate Pressure (4-6): Noticeable delays or inefficiencies as business grows, e.g., a customer service team nearing capacity.

• High Pressure (7-10): Critical bottlenecks causing significant disruptions, e.g., production process limiting ability to meet demand.

Next Steps

All of the above gives you a lever to innovate and proactively work for your future business success.

In many cases - not all - AI can be a big help.

With a list of prioritized pain points and bottlenecks, you're in a great position to map out AI capabilities and do an initial quick assessment to see how complex it would be to facilitate supporting problem solving with AI. (A topic I'll write about in another issue).

From there, you're one step further down your AI roadmap.

And before you know it, you'll have unlocked business AI solutions you wish you'd had yesterday.

Keep innovating!

Until next Friday,

Tobias