The basic thing is to face the problem. If one does not do it, the problem will chase him and it will become more severe. The earlier we face it, the earlier we will find a solution.

In fact, there are a number of problems that individuals, households and economies face. But once it is there, there is always a solution provided we face the problem boldly. According to Drucker one must

• Know the four types of problems. The four types are: 1) truly generic. 2) Truly unique. 3) generic, but unique for the situation 4) new generic problem.
• First identify whether the problem is generic or unique. Misery loves company. It is great to know if the problem you are facing is a problem that others have faced. Chances are you are not alone.
• Treat the root cause, not the symptoms. To find the cause, you need to ask ‘Why?’ You might need to ask ‘why?’ multiple times.
• Leverage the experience of others. How have others solved the problem? Who can you learn from? Who else might share the problem?

Use a principle-based approach to solving problems. This builds on the idea of leveraging the experience of others. What is the underlying pattern or principle of the solution? For example, I know one of the underlying principles for influence is ‘rapport before influence’. Knowing this, I adapt that principle to a variety of scenarios, whether it is pitching a project or coaching a team mate.
 
It is only then that the solution will be visible and hence, practical. The basic thing is to face the problem. If one does not do it, the problem will chase him, and it will become more severe. The earlier we face it, the earlier we will find a solution. We must follow the above-mentioned steps to judge a given problem, identify the kind of problem it is and then make use of the experience of others to find a way out. Once this procedure is aptly followed the solution will automatically appear. Of course we will have to make all efforts to find it, and apply it so that the given problem gets eliminated from its basic roots.

In the context of tracing the solution of a given problem, there is an important theorem in economics, called the theorem of the second best, which connotes the idea that it is not always possible to find the very best solution of a given problem because of many inbuilt assumptions that surround the given problem in various ways. As proposed the Canadian economist Richard Lipsey (1928-1980) and Australian economist Kelvin Lancaster (1924 to 1999), the theorem of the second best assumes that if one of the conditions necessary to achieve Pareto-optimality (which is a situation which exists when economic resources and output are allocated in such a way that no-one can be made better off without sacrificing the well-being of at least one person) is missing then the 'second best' position can only be reached by departing from all the other Paretian conditions. This theorem essentially applies to welfare economics, which is linked with the satisfaction of ‘optimum conditions’. Economists can draw up sets of ‘necessary and sufficient’ conditions for the efficient operation of an economy. If all but one of these conditions is already satisfied, it would always be beneficial to satisfy the remaining conditions. This would then give rise to a ‘first best situation’. If, however, some of the necessary and sufficient conditions can’t be met for any reason, then it may or may not be beneficial to satisfy any particular condition. This then requires investigation case by case. A second-best optimum is one where the best decisions are made about whether or not to satisfy some optimum conditions when others can’t be satisfied. The theorem can be extended to the third-best and even the last-best solution.
 
This theorem appears to be specific, but it does apply in all walks of life, as we observe in our daily routine. The basic point is that once there is a problem and we face it, then the very best solution seldom occurs. What occurs is the second best, or even the third best, an even the last best way out.