One of the best parts of the 2021 Cascade Strategy Fest was hearing speakers and participants share mental models that they used to cultivate strong strategic thinking. Often these models encoded some timeless business wisdom but did so in a way that was easy to remember and act. And once one of these clicks, it can completely transform the way you think about a particular concept or idea.
One of these particular moments came from Jessica Nordlander who shared with us a subtle but powerful distinction between what she calls complex and complicated problems.
This distinction was the catalyst for a change in our thinking when it comes to strategy – and it might just do the same for you.
The Bridge Analogy
The best way to kickstart this is to run through an analogy that Jessica shared that perfectly illustrates the two different kinds of problems.
Jessica moved to a small mountain town in British Columbia, Canada because of the serene environment, great skiing conditions, and a generally great place to work remotely. In the middle of the town, there is a beautiful river that personifies the nature that is in the region.
Imagine that the mayor of the town has a strategic plan for its infrastructure and wants to build a new bridge over the river to unlock future economic benefits. In order to do so, the mayor and their team must solve a range of different problems, all of which can be separated into two different types.
The actual act of building the bridge is a complicated problem. It’s not easy to build a bridge, especially over a river of that size. You need a lot of engineers to work together and come up with the right plans. You need to select the right materials that fit the budget and the construction plans. You need to go through lots of checks and balances to ensure that the bridge is structurally sound and is going to hold the weight that you’re expecting. All of this is complicated.
But, with enough resources and the right people, you can solve this problem. It’s not going to be easy, but it is tractable. And we can be relatively confident that we can find a way to get this bridge built. It’s a complicated problem.
On the other side of the coin, you might find that one of the problems that this project faces is convincing the people in the town that the bridge is a good idea. Imagine that half of the town isn't buying into the project and they think that it will actually have detrimental effects by ruining the natural beauty and bringing more unwanted tourists into this small mountain town.
Dealing with these social dynamics is a complex problem. When you’re trying to come up with a viable solution here, there are no experts that you can turn to and outsource the work to. You can’t just throw money at the problem. You can’t even solve it necessarily.
Instead, you have to accept that this complex problem is one that you’re going to have to manage over time. The social disagreement is going to linger forever, and all you can do is try to make the best decision you can, and manage whatever conflict comes along with it.
With that example in mind, let’s now apply this mental model to business strategy.
In the world of business strategy, we like complicated problems. There’s a certain reward to tackling something complicated and coming up with our perfect plan to tackle it. We speak to the right people, we adjust the right budgets, and we arrive at a plan that’s going to solve everything.
A common example of a complicated problem in the space of strategy development is figuring out what the size of your total addressable market might be.
In these situations, we are able to use data, expertise, and experience to make good progress in the direction we’re aiming – and even if we don’t get it right immediately, we have the comfort of knowing that it is solvable if we just apply the right efforts and incentives.
We also have tools that can help us here. We have project management tools, Gantt charts, financial models, and a myriad of other resources that can help us think through these problems and solve them over time. We can work against expectations and make the necessary adjustments to move in the right direction.
This tight feedback loop makes for decisive action and it is a key part of any company’s strategy. This is the core of the stated objectives, it’s the goals we set for ourselves. But just because a problem is tractable, does not mean that it is easy to overcome. It takes a high level of skill, resourcefulness, and perseverance to execute the planned solution.
One of the most common obstacles we encounter when dealing with complicated problems is that we don’t have the right people on board. Without knowing it, we can often bang our heads against the wall time and time again because we just can’t see the right way to look at a particular problem. We have blind spots that impede our ability to make progress.
However, when we get the right person at the table that can bring their skills and expertise to bear on the problem, things can change dramatically. It can often just be a change in perspective that makes all the difference. And if we can get that sooner, rather than later, we’ll save ourselves a lot of time.
This doesn’t necessarily mean that we have to hire people. We can leverage knowledge in a myriad of ways including partnerships, advisors, mentors, trade exchanges, and so much more. All that matters is that we can bring the right expertise into play to solve the problem in front of us.
This requires us to put our ego aside for a bit and recognize that we probably don’t have all the answers. But when we do that, we can greatly improve our effectiveness and drive the company forward because we have the right people.
Your human resources are paramount for solving complicated problems.
Don’t take them for granted.
Complex problems are much more insidious because they are often not tractable in the way we want them to be. It’s very common for companies to misdiagnose complex problems as complicated ones because we overestimate our abilities to change things that are actually out of our control.
It requires a dose of realism and a keen awareness to identify complex problems for what they are. These are the problems that you’re never truly going to have a handle on. These are the issues that will forever live in contradiction, and you need to come to terms with that.
Businesses get into trouble when they don’t make that realization and instead, they think that they can maneuver their way out of it by throwing resources or people at it.
“The more complex a problem is, the less likely it is that it will be solved by having a group of experts hacking away at it.”
As such, it’s crucial that we are always looking out for complex problems that need to be managed rather than solved. Because once we get to that point, we can take steps in the right direction. We can stop deluding ourselves with the perfect solution that we could find if we just had more time. Instead, we can start to put into action our plan to manage the situation over the long term.
“There's no way of really solving a complex problem, you can just manage it well or less well.”
The first thing we can do is to gather more information about the complex problem and try to understand both sides of the dilemma. As a business, you might think that you understand why people disagree with your proposed idea, but often your intuition is way off. You need to genuinely reach out to the detractors and spend time with them to understand why they feel what they feel.
Is there a point of view that you’re ignoring?
Is there an assumption of yours that is incorrect?
These discussions help to unearth the real reasons for the dilemma and when you do this effectively, you’re in a much better position to traverse the distance between the two sides. In fact, you’ll often find that a lot of the conflict stems simply from miscommunication and once you get that right – things are a lot more aligned. But you can never get to that point unless you are willing to hear the other side and take their point of view seriously.
In some cases, the mere act of listening is enough to bring people around and make them comfortable with the decision. If they feel that their objections have been heard and acknowledged, they are more likely to come on board, rather than shutting off completely.
After listening, you then need to take action and look for a compromise wherever possible.
If there are concerns that you come across that can be mitigated, then see what you can do in that regard. It’s often small things that you can improve on that show that you’re willing to compromise to try and reach a solution that works for everyone involved.
This back and forth is what managing a complex problem is all about. Keeping your stakeholders happy and content is what is going to give your project the time it needs to breathe. This is a continuous effort and requires regular maintenance, which is why so many decision-makers shy away from it. But it's part and parcel of what running a business is all about and it can be a significant factor in your overall success.
There is no manual or book that’s going to tell you how to solve these problems. There is no software tool that’s going to deliver the perfect solution. You have to be comfortable in the uncertainty. You have to acknowledge things for what they are and not let that get in the way of you taking it seriously.
It’s here in the depths of nuance, that companies can make their mark on the world, for good and for bad. This is because it deals with humanity at its core.
The Power of the Distinction
The great companies are those who can make this distinction effectively. When you’re able to differentiate between those problems that can be solved with resources and expertise, and those that deal with much more nuanced human complexity, you’re in the best possible position to succeed.
“So, what you probably need to do is involve as many people as possible to tap into the collective intelligence, democratize the process, increase the understanding, and ensure ownership of the execution.”
Jessica’s main takeaway here is that we should leave the complicated problems to the experts, while we activate the whole organization to solve the complex problems. This common alignment and open-minded thinking make for more harmonious and sustainable solutions that perform well over time.
It’s the dichotomy between these two different responses that help us better prioritize how we make strategic decisions. Too often we assume that there are only complicated problems and so we end up throwing more and more resources at something that actually isn’t tractable in any meaningful way. We’ve seen it time and time again where companies are searching for a perfect solution that is going to appease everyone- but it never comes. And so instead of moving forward with a workable solution, they remain paralyzed in the research phase as they try to figure it out.
There is something to be said about working your problems out in the open, especially when they are complex in nature. Even though it can be tiring and difficult, there is magic to be found when you engage meaningfully with your stakeholders to understand why they’re against this or that.
It goes beyond the problem in front of you and gives you a tremendous level of insight into the people around you that you might not have had previously. It also helps to build relationships and rapport because you are genuinely trying to manage what can often be difficult circumstances. This small piece of humanity goes a long way and it can even be transformational in how your business is perceived.
If this mental model acts as a trojan horse that gets you closer to your stakeholders, then it’s well worth it. Don’t shy away from this. Embrace the distinction for what it is and your entire organization can shift.
One last point that is worth mentioning here is that the way you track progress for each type of problem is going to vary. When you have a complicated problem, it's often quite easy to map out the step-by-step process to solve it, and you can track your progress according to that in order to stay accountable and on track. This is not the case with complex problems.
Complex problems are, by their nature, less tangible than their counterparts and so it’s more challenging to decipher whether you’re making progress or not. As such, you need to be a bit more creative with how you plan to monitor these issues. There may be some indirect ways in which you can quantify progress here but typically you’re going to rely on your intuition based on what reactions you’re getting from stakeholders.
What is key here is that you set up a time for regular reflection on these problems. Don’t let the lack of direct feedback mean you leave things to run as they are. As you’re managing complex problems over the medium and long term, you should be continually going back to the issue and evaluating how you’re doing. It’s only through forcing this internal feedback that you can adjust and adapt as you go along.
In summary, Jessica’s mental model in distinguishing between complicated and complex problems can prove incredibly useful when you take it seriously. Understanding the nuances of each type will serve you well in deploying the right resources and tools towards tackling each problem in your business setup.
In strategic decision-making, everything that we can do to better systematize these decisions is going to benefit us. So, it’s worth taking an internal inventory of all the problems you’re faced with right now as a business so you can categorize them accordingly. We think that if you take the time to work through this exercise, you’ll find that there are some complex problems that you’ve been treating as complicated ones. And when you realize that those issues can only be managed, rather than solved- you’ll take a big weight off of your shoulders.
Then, the remaining complicated problems can be handed off to the necessary experts while you seek to democratize the information for the complex ones. It might just radically shift how you view your business and its potential.
And the only way to find that out is to look inward. We certainly are.