Problem Statement

What is Problem Statement?

A Problem Statement is the foundation of every PIPS improvement project. It describes three things: the current state (As-Is), the desired state, and the measurable gap between them. A well-crafted problem statement is specific, measurable, and free of blame or assumed solutions. It grounds the team in shared reality before anyone proposes a fix.

When to Use It

• •At the start of every PIPS project — Step 1 always begins here
• •When a team senses a problem but has not yet defined it precisely
• •When stakeholders disagree about what the real issue is
• •When you need to justify an improvement effort with data

How to Use It: Step by Step

1. 1

   Describe the current state (As-Is)

   Write what is happening right now, using observable facts and data. Avoid opinions, blame, or assumed causes. Example: "Payment posting takes an average of 4.2 business days."

2. 2

   Define the desired state

   Write what the ideal outcome looks like, using the same metrics. Example: "Payment posting should complete within 1 business day."

3. 3

   Quantify the gap

   Calculate the difference between As-Is and Desired using percentages, dollars, time, or error counts. Example: "The gap is 3.2 business days, affecting 1,200 payments per month."

4. 4

   Assess the impact

   Document who is affected and what it costs the organization. Include financial, operational, and human impact where possible.

5. 5

   Validate with the team

   Review the draft problem statement with all stakeholders. Confirm agreement before proceeding to root cause analysis in Step 2.

Pro Tips

• ✓Use SMART criteria: Specific, Measurable, Achievable, Relevant, Time-bound
• ✓Never include a solution in the problem statement — "We need a new system" is a solution, not a problem
• ✓Quantify in multiple dimensions: time, money, error rate, and customer impact
• ✓Start by having each team member independently write what they think the problem is — the differences are revealing

Facilitation Guide

Gather the team for a 60-minute session. Start with each person silently writing what they believe the problem is (5 min). Share and cluster similar statements (15 min). Draft a unified As-Is / Desired State / Gap statement together (20 min). Quantify the impact with available data (15 min). Close by confirming team agreement on the statement (5 min).

Other Tools in Step 1