How to solve "intractable" problems
JAROSLAV KAPLANS,
BUSINESS CONSULTANT
BUSINESS CONSULTANT
We live in a new market environment. The computing power of today's smartphone is many times that of the computer that put a man on the moon in 1969. Smartphones have connected most of the world's population, and this technology is only about thirty years old. But if we look at the principles and approaches we use in business today, we will rarely see significant differences from those we used five, ten or even twenty years ago. Obviously, the new environment has given us new tasks and challenges to deal with. The cost of this issue is higher than ever and we are being given less and less time to make decisions. The speed of change is staggering. At the very beginning of human history, a person could probably live a lifetime without noticing a single change in his perception of reality. The advent of stone tools was a huge breakthrough in human development, but the process of acceptance was slow. It took more than a million years for stone tools and the use of fire to become mainstream technologies for the human species. The agricultural revolution sped things up a bit, but it was still slow compared to how fast technology is advancing now. The development of writing was a huge leap, but it took more than 15 000 years before it became a scientific revolution. Compared to the speed of change in the 20th century, all other historical epochs are unimpressive. Our generation has already witnessed the digital revolution, quantum physics, the discovery of DNA, huge medical breakthroughs, space exploration, weapons of mass destruction, endless streams of social movements, globalisation, the emergence of social media as mass media, incredible successes in the automotive and aviation industries and much more. Today, we have to deal with several paradigm shifts every decade. Major technologies such as smartphones, social media platforms, cloud computing, streaming, artificial intelligence, blockchain, gene editing, electric cars and others have gone from being rare to commonplace at the speed of light. Returning to the issue of solving business problems, we need to look at this activity in the context of all these changes. The word problem itself comes from the Greek and means a task, a difficulty to be solved or a situation that causes difficulty or trouble. In this sense, the situation that is most difficult for entrepreneurs is interaction with consumers. And that, after all, is exactly what the mortality statistics in business tell us, namely that eight out of ten businesses do not survive to their fifth anniversary. Thus, the demand for growth and development in the business world is becoming greater every year, and growth and development itself is becoming a scarce commodity.
Interacting with consumers
Almost no one would dispute that the core business process is interacting with consumers. For all the obviousness of this statement, it is often the case that an organisation spends all its energy trying to sort things out internally and has no energy or attention to interact with customers externally. This leads to a very common problem nowadays, where, when trying to find a way out of a deep forest, one starts to scrutinise every single tree. This approach creates a lot of difficulties because in order to find a way out of the forest he needs to see the whole forest, figuratively speaking, instead of looking at each individual tree. The number of individual and unrelated tree (object) features can be very large, but once the relationships between them are known (e.g. the position of some groups of trees relative to others), the number of possible forest features is drastically reduced. One example is the position of gears inside and outside a mechanical clock. The number of possible gear positions in a clock is usually one, and the number of possible positions outside the clock is infinite. The connections of elements in a system form the boundaries for the interaction between parts and reinforce the structure of such objects. That is why, in business, we need to see the forest, not the trees, that is, to understand all aspects of interaction with consumers. Most market opportunities exist in new contexts of interaction with consumers. In other words, most business tasks (by my calculations, around 90%) turn into unsolvable tasks in two cases. The first is related to the dynamics of consumers' perception of the value of products, the second is related to an unpredictable variable.
Dynamics of value perception
The reason why it is precisely the interaction with consumers that becomes the main difficulty facing the entrepreneur is the high variability in what consumers consider to be valuable.
Any unsolvable business problem most often contains one or more contextual factors that act as an unpredictable variable in the problem. It is important to realise that expectations are nothing more than evaluation criteria through which all entrepreneurial actions are viewed. As markets are constantly being reshaped by preferences, technology, government regulation, politics and other reasons, the perceived value of products by consumers is also constantly changing.
Indeed, each person has his or her own preferences. Perceptions of taste, colour and smell are highly individual, so it is not surprising that the phrase 'taste is not an issue' is common in many cultures. Objective value, or the value of something in itself, apart from everything else, is an abstract concept. Until people realised the value of crude oil, when they found it on their land, they paid to get rid of this dirty mass. Later, when the economic potential of oil was realised, it went from being an unwanted waste to a lucrative commodity. What oil was, it remained, but perceptions of its value changed dramatically.
Any unsolvable business problem most often contains one or more contextual factors that act as an unpredictable variable in the problem. It is important to realise that expectations are nothing more than evaluation criteria through which all entrepreneurial actions are viewed. As markets are constantly being reshaped by preferences, technology, government regulation, politics and other reasons, the perceived value of products by consumers is also constantly changing.
Indeed, each person has his or her own preferences. Perceptions of taste, colour and smell are highly individual, so it is not surprising that the phrase 'taste is not an issue' is common in many cultures. Objective value, or the value of something in itself, apart from everything else, is an abstract concept. Until people realised the value of crude oil, when they found it on their land, they paid to get rid of this dirty mass. Later, when the economic potential of oil was realised, it went from being an unwanted waste to a lucrative commodity. What oil was, it remained, but perceptions of its value changed dramatically.
The unpredictable variable
When we talk about the relevance of a product to its target audience, we must do so with some caution. For example, the same bottle of water has a different perceived value to consumers in the desert or in the supermarket. So, in this example, there is another factor (besides the product and its target audience) - the environment in which the interaction with consumers takes place. And it is this factor that is most often overlooked in business. But in vain, because it is this factor that allows many business problems to be discovered and solved. It is the environment in which the interaction with the consumer will take place (or the environment in which the consumer will use the product), i.e. it is the unpredictable variable that separates success from failure.
What is the quality of the product or service? The very definition of quality is the compliance of a product with certain standards, regulations or requirements. For example, the quality of a truck, a car and a pleasure boat engine will be determined by different requirements and evaluation criteria - they will have different quality standards. The concept of quality is therefore a context-sensitive factor that changes over time. The qualities of a product can only be discussed if the context of its use is known. Without knowing the context in which the product will be used, the concept of quality is abstract and not linked to anything concrete. The context of use of the product starts to act as a contingent variable. Indeed, if we expected our imaginary bottle to be sold in the desert, but it ended up on a supermarket shelf, then we cannot count on the success of this experiment.
The failure statistics for new product launches also bear this out. According to Professor Clayton Christensen of Harvard Business School, more than 30 000 new products are launched every year, 95% of which are unsuccessful. University of Toronto professor Inese Blekbernas estimates that the failure rate of new products in grocery stores is between 70 and 80 per cent. It seems that almost the entire entrepreneurial world produces its new products without the slightest idea of the context in which they will be sold and used.
What is the quality of the product or service? The very definition of quality is the compliance of a product with certain standards, regulations or requirements. For example, the quality of a truck, a car and a pleasure boat engine will be determined by different requirements and evaluation criteria - they will have different quality standards. The concept of quality is therefore a context-sensitive factor that changes over time. The qualities of a product can only be discussed if the context of its use is known. Without knowing the context in which the product will be used, the concept of quality is abstract and not linked to anything concrete. The context of use of the product starts to act as a contingent variable. Indeed, if we expected our imaginary bottle to be sold in the desert, but it ended up on a supermarket shelf, then we cannot count on the success of this experiment.
The failure statistics for new product launches also bear this out. According to Professor Clayton Christensen of Harvard Business School, more than 30 000 new products are launched every year, 95% of which are unsuccessful. University of Toronto professor Inese Blekbernas estimates that the failure rate of new products in grocery stores is between 70 and 80 per cent. It seems that almost the entire entrepreneurial world produces its new products without the slightest idea of the context in which they will be sold and used.
A typical example: a corporate programme to reimburse employee training costs
At first sight, it would seem that reimbursement of training costs should make employees want to learn, increase competence and result in reduced staff turnover. But the truth is not so obvious.
The main influence on the staff turnover rate was the cital - the military- Jeras management programme. Where it was used, compensation for training led to a reduction in staff turnover, while where it was not, compensation for training, on the contrary, led to an increase in staff turnover. It turns out that the same factor (a staff compensation programme for training) leads to completely opposite results depending on the presence or absence of another component (a career management programme). We are referring to those factors which have a significant latent impact on the field of activity and largely determine the outcome of such activities (e.g. the career management programme in the above example). These are contextual factors. And it is the knowledge of these contextual factors that determines the ability of the entrepreneur to get answers to his questions, such as: will the employee training compensation programme be effective in combating employee turnover? Any unsolvable problem in business most often contains one or more contextual factors that act as an unpredictable variable in the problem. Solving such a problem without understanding the contextual factors is like trying to calculate 2 + 2 with a calculator and not knowing that the calculator is stuck on the button with the number 5, which is always added to the result of the addition. In this case, the result of this addition will always be 2 + 2 = 9. With such a computational defect, it will be difficult to agree with other people that 2 + 2 = 9.
Doing things to the end People who cannot do things to the end are people who cannot get answers to their questions. If a person cannot get answers to his questions, he will not be able to take action. He actively takes on a task, faces a problem, tries to deal with it, but fails. He is confused. In such a situation, evaluation of the data is impossible. It is impossible to evaluate thoughts or anything else. The tricky thing about this situation is that, more often than not, we see any problem as a problem of action.
The main irrationality of entrepreneurship is that people often start taking action to solve a problem without first formulating, structuring and identifying its key elements, including contextual factors.
The main influence on the staff turnover rate was the cital - the military- Jeras management programme. Where it was used, compensation for training led to a reduction in staff turnover, while where it was not, compensation for training, on the contrary, led to an increase in staff turnover. It turns out that the same factor (a staff compensation programme for training) leads to completely opposite results depending on the presence or absence of another component (a career management programme). We are referring to those factors which have a significant latent impact on the field of activity and largely determine the outcome of such activities (e.g. the career management programme in the above example). These are contextual factors. And it is the knowledge of these contextual factors that determines the ability of the entrepreneur to get answers to his questions, such as: will the employee training compensation programme be effective in combating employee turnover? Any unsolvable problem in business most often contains one or more contextual factors that act as an unpredictable variable in the problem. Solving such a problem without understanding the contextual factors is like trying to calculate 2 + 2 with a calculator and not knowing that the calculator is stuck on the button with the number 5, which is always added to the result of the addition. In this case, the result of this addition will always be 2 + 2 = 9. With such a computational defect, it will be difficult to agree with other people that 2 + 2 = 9.
Doing things to the end People who cannot do things to the end are people who cannot get answers to their questions. If a person cannot get answers to his questions, he will not be able to take action. He actively takes on a task, faces a problem, tries to deal with it, but fails. He is confused. In such a situation, evaluation of the data is impossible. It is impossible to evaluate thoughts or anything else. The tricky thing about this situation is that, more often than not, we see any problem as a problem of action.
The main irrationality of entrepreneurship is that people often start taking action to solve a problem without first formulating, structuring and identifying its key elements, including contextual factors.
Doing things to the end
People who can't follow through are people who can't get answers to their questions. If a person cannot get answers to his questions, he will not be able to take action. He actively takes on a task, faces a problem, tries to deal with it, but fails. He is confused. In such a situation, evaluation of the data is impossible. It is impossible to evaluate thoughts or anything else. The tricky thing about this situation is that we most often see any problem as a problem of action, i.e. we start to do something and it fails. But before that, there is always some irrationality in the decisions we take.
From a substantive point of view, the formulation of problems in any field is itself a way of thinking, not a process of action. A key irrationality of entrepreneurship is that people often start acting to solve a problem without first formulating, structuring and identifying its key elements, including contextual factors. If the structure of the problem is known, then the task of the research is to identify the elements of the problem and their relationships to each other. Such a problem is called a wellstructured problem. The method of contextual analysis is primarily concerned with formulating the problem (!) and only then (secondarily) with finding a solution. This approach is not typical of the business consultancy market. Here the entrepreneur-client often approaches the consultant with a problem that he himself can see and recognise. However, more often than not, he sees only the symptoms of the real problem, not the problem itself. The real cause of the problem remains undiagnosed, hidden from the client in the form of one or other contextual factor that has an invisible impact on the whole area of activity. In this situation of false diagnosis, the counsellor operates within a very limited range of knowledge, tools and abilities and is most often only able to offer a formulation of the problem which he can then solve himself. This approach only alleviates the acute pain of the manifestations of the problem, but does not address its cause. Headaches cannot be cured by simply increasing the dose of painkillers. It is safe to say that soon this unrecognised cause of the pain problem is bound to give rise to a whole range of other problems, possibly with completely new manifestations. The pain pill approach, combined with ignoring the real source of the problem, often leads to fatal business results, as we see in the high bankruptcy rate statistics.
From a substantive point of view, the formulation of problems in any field is itself a way of thinking, not a process of action. A key irrationality of entrepreneurship is that people often start acting to solve a problem without first formulating, structuring and identifying its key elements, including contextual factors. If the structure of the problem is known, then the task of the research is to identify the elements of the problem and their relationships to each other. Such a problem is called a wellstructured problem. The method of contextual analysis is primarily concerned with formulating the problem (!) and only then (secondarily) with finding a solution. This approach is not typical of the business consultancy market. Here the entrepreneur-client often approaches the consultant with a problem that he himself can see and recognise. However, more often than not, he sees only the symptoms of the real problem, not the problem itself. The real cause of the problem remains undiagnosed, hidden from the client in the form of one or other contextual factor that has an invisible impact on the whole area of activity. In this situation of false diagnosis, the counsellor operates within a very limited range of knowledge, tools and abilities and is most often only able to offer a formulation of the problem which he can then solve himself. This approach only alleviates the acute pain of the manifestations of the problem, but does not address its cause. Headaches cannot be cured by simply increasing the dose of painkillers. It is safe to say that soon this unrecognised cause of the pain problem is bound to give rise to a whole range of other problems, possibly with completely new manifestations. The pain pill approach, combined with ignoring the real source of the problem, often leads to fatal business results, as we see in the high bankruptcy rate statistics.
