Are you solving the right problems?
Seth Campbell is Head of Innovation at Etch Horizon. With over 12 years of experience delivering innovation programmes, Seth leads strategies for clients looking to transform their ecosystems, services, products and pipeline processes. He has worked with brands such as Coca-Cola, Volkswagen, Virgin, and Hargreaves Lansdown and high growth start-ups like Receipt Bank.
As part of the Etch Horizon team, Seth brings a wealth of experience to organisations looking to innovate and grow. Problem-solving forms an integral part of this process, in which many organisations find themselves either tactically, or strategically considering. In this three-part Q&A, we caught up with Seth to better understand why businesses should be thinking in terms of problems and not solutions, to understand the pros and cons of particular problem-solving approaches, and to give our readers some practical tips when looking to problem solve themselves.
Why is it useful to think of things in terms of problems?
Businesses usually have a world view, which informs what needs to be done next. Each person in the business brings their own view, in terms of their priorities, their team's priorities, their business units’ priorities, and the organisation’s priorities. Businesses are about progress, so solutions are often wrapped up in that worldview.
Looking at organisational evolution from a problem-solving perspective is about trying to get a clear grasp of what’s really happening in the operating environment before thinking about solutions. It recognises that solutions are an articulation of what the right thing is to do, given a set of assumptions. When you think about something in terms of solutions, you're hiding the fact that there are several assumptions about what would have to be true for a proposed solution to succeed. So, when you look at it the other way, you’re trying to diagnose what is actually wrong as clearly as possible.
So, where’s the best place to start?
This is about the origin of inquiry and trying to get verifiable evidence about what the issue is, or what the problem is. An often misquoted saying, misattributed to Einstein is:
“If I had only one hour to solve a problem, I would spend up to two-thirds of that hour in attempting to define what the problem is.”
Unnamed head of Industrial Engineering, Yale University, 1966
The idea is that the richer you understand the situation, and what the issues are, the more likely solutions will present themselves. So it's about taking a moment to understand what's wrong and why, before you overlay a set of assumptions about what right could be. It doesn't have to be perfect at the start, but it's about looking at organisational learning from that kind of perspective.
But you’ve got to start somewhere, I guess…
Yeah exactly. The idea we have is that you should start by exploring the current situation and understanding what evidence you have for there being a problem. An organisation is typically going to have a strategy in place. Whether implicit or explicit, there'll probably be several imperatives associated with that, and then there'll be a set of choices and a set of actions that cascade down from that in some way, shape or form.
And usually, there will be myriad ways to assess the performance of a current strategy and usually not all of those will be in the green light. So, you start with the data and work out to what extent is the environment interacting positively with the choices that the organisation is making, and to what extent changes are happening in the environment that are outside of the organisation's control that might reduce the potential value of the existing strategy. So, we’re looking for a gap between current choices and where we think that the market is going to shift, to zone in on what could happen, what are the signals that are showing us that there might be change afoot and then clarifying that and articulating that as a problem.
And like I said, it may not be exact, and you can do this quickly. Remember, you’re not thinking about the assumptions about how to solve it yet, you're just thinking about what we know is true right now, and what this implies for potential future scenarios. You can then continue the process of learning discovery, making new choices, and testing those strategic choices to see what might move the needle and by how much.
How would you classify different types of problems?
Some examples would be:
- Product problems – these might be centre on user acquisition, conversion, satisfaction, engagement, churn, retention, lifetime value, etc.
- Business problems – changes in market share, growth rates, relevant capabilities, cost structures and profit pools, etc.
- Systemic problems – complex and involving multiple interconnected actors. For example, how do you keep growing while decreasing your carbon footprint in absolute terms? Or how do you help foster a consistent talent pool to draw on in your community? Or how do you ensure you are not just meeting regulations but exceeding in areas where policies and investment strategies are evolving?
With that in mind, what are some different approaches to problem-solving?
There are several approaches. There are strategy consultancy-style approaches. Then there are design thinking-style approaches, born out of human-centred design. And there is a growing application of systemic design-style approaches, based on systems theory. Each method has its pros and cons, and you don’t necessarily use one method over another. At Etch Horizon, we blend these approaches.
What about organisations that don’t think there’s a problem?
There are those businesses that are not interested, right now. Perhaps everything is running smoothly. A lengthy strategy process has run its course, the year one budget has been set. The personal and political dynamics have died down and everyone is getting on with the immediate priorities. Sometimes in these cases, we use futures thinking to probe uncertainties and look at what is happening from an ‘outside in’ view, to explore what Rita McGrath calls ‘inflection points’, moments where not pivoting or renewing business models would result in a loss of ‘transient advantage.’ We forecast potential scenarios for the future and think about proprietary transformation potential in this light. Every business can look at its winning aspirations and spot the deviations that warrant exploration early.
To innovate, you need to understand what is happening now. This starts with good data about problems. How are people’s needs being met today and which needs are not being met? Which growing areas of the operating arena is the business not set up properly to serve? Is your existing strategy aligned to address this?
James Perrin was talking to Seth Campbell, Head of Innovation, at Etch Horizon – a future-focused consultancy with an ecosystem-focused approach to problem-solving.
In part two, James will explore with Seth the delivery methods, starting with the blend between the strategic consultative and design thinking approach, followed by the blend between the design thinking and systems design approach.
For organisations looking to problem-solve at speed, Etch Horizon’s Starter For Twenty model helps businesses to develop and rapidly test new propositions, assess value-capture potential, explore your route to market, and de-risk further investments.