Getting Started Solving Problems | Customers, Etc.
Getting over mental blocks; also, how to approach finance and accounting academic work.
“I don’t know how to solve this problem.”
That’s the first thought that goes through my brain when I encounter a paragraph of text that involves computing some sort of numeric solution. It’s not that I can’t solve the problem in front of me, or even that I can’t figure it out, but rather that my brain immediately puts up a stop sign and says, “This is hard. You don’t want to do this.”
I’ve been having this particular feeling a lot lately. In both my finance and accounting classes, I’ve had this experience where I stare at a set of problems, feel overwhelmed, and then don’t know where to start.
But that’s the trick: just start. Once I get started, I can usually work through the problem just fine.
Although it seems painstakingly straightforward, I’d like to walk through the process of what it’s like to encounter a problem I don’t know and the steps I go through to arrive at a solution. Even if you’re not planning to go to business school any time soon, hang around for the end, where I’ll bring it back to how I’m noticing this same process in my everyday work.
Put the problem in a spreadsheet
Let’s say I have the following problem:
Compute the future value of $1,250 compounded annually for:
a. 10 years at 5 percent,
b. 10 years at 10 percent,
c. 20 years at 5 percent,
d. Why is the interest earned in part (c) not twice the amount earned in part (a)?
True story: as I was going through my finance textbook looking for an example problem to use for this newsletter, I kept skipping over problems because they seemed hard. Or rather, I skipped over them because I didn’t get a signal from my brain that “this is easy.” Many of these problems are quite similar to those on my midterm that I just took last weekend, so you’d think my brain would be accommodating. Nope, still a chore.
To get over the mental fog, I find it helpful to just copy the entire problem to a spreadsheet. I’ll start typing the words I see in the paragraph into cells in the spreadsheet. This often has the effect of telling my brain, “see, this isn’t as bad as you thought.”
Notice I haven’t solved anything. I even added a cell where I typed the word “Annually”, which I’m 99% sure I won’t need later. Whatever, I still typed it. This short exercise got me over the hump of getting started, just by typing numbers into cells on a spreadsheet.
Research
Sometimes when I’m typing numbers into a spreadsheet, the solution will start to jump out at me. But other times I have to do research, looking back through the textbook or class notes to figure out next steps to solve the problem.
This example might seem rather obvious—compound interest is one of the easier concepts in my finance class—but there are always going to be things we don’t know or maybe we aren’t as confident about in our own knowledge. Research helps us shore up our confidence and fill in gaps. In this particular example, I experienced an “of course, duh” moment once I had the equation in front of me. But in order to get to that point I had to actually start the research.
Work it out in writing
At this point, I know the formula I need to use, so I could go straight back to the spreadsheet, plug in the formula and call it a day. But a lot of the time, I like to work through the problem by writing it down, which helps me make sure I really understand it. This also gives me a way to check my answer once I return to the spreadsheet.
Sometimes it’s easier to visualize a problem when it’s written out. For my take-home exams on a recent finance midterm, I worked through every problem in writing in addition to working it out via spreadsheet.
Manually, in the spreadsheet
To double check my work by hand, I’ll do the work again “manually” in a spreadsheet. This helps me double check my calculations that I’ve written down and gives me yet another reference point when I’m comparing my answers to the formula.
Spreadsheet formula
Finally, now that I’ve worked through the problem by hand, I’ll circle back to the original spreadsheet and insert the formula I found in the textbook.
Checking my work
You may have noticed in the preceding screenshots how the same value of $2,036.12 showed up as the correct answer in both the “manual” spreadsheet and the one that used the formula. Having worked out the problem by hand and verified that the result matches the solution from the formula, I’m confident that the formula is correct for all of the other values.
Even though the underlying problem set in this example is relatively straightforward, this process helps to avoid simple mistakes. Also, it’s incredibly helpful when working through more complex problems like capital budgeting or cost-volume-profit analysis.
Getting started
I’ve found this approach to be helpful in a work environment as well. Just today I was working on a forecasting model and I wasn’t sure exactly where to get started. Rather than procrastinate or continue trying to think my way out of the problem, I just started working on the spreadsheet. I didn’t like how the forecast was laid out, so I spent a bit of time transposing the data and cleaning up how some of it was labeled. This helped me get my head in the right space. As I moved things around on the spreadsheet, I started having ideas about what I wanted to do with the forecast. Once I had my spreadsheet the way I wanted, I was able to get to work and the solution wasn’t that far out of reach.
John Steinbeck wrote letters to his editor each day as a way to get into the headspace for writing his magnum opus, East of Eden. I expect many of us have problems like this, where we need a bit of warm-up work to get our heads in the write space. I used to feel guilty about time spent “not doing the work”, but now I’m learning to trust the process.