By Lisa Solomon. Before launching any new innovation initiative, the most important question to ask is not how much budget is allotted, how many resources can be allocated, or even what the deadline is. Rather, in a world marked by adaptive challenges within an an increasingly VUCA (volatile, uncertain, complex and ambiguous) context, leaders need to start with a more foundational query: What kind of problem are we trying to solve?
In a 2007 essay analyzing the fall of Enron, Malcolm Gladwell brilliantly articulated the importance of distinguishing between problems that are puzzles and problems that are mysteries.(1) Building on earlier analysis work by a national intelligence expert, Gladwell argues that puzzles are known problems with known or knowable solutions. They typically require data and deep analysis to solve. Much of what is taught in traditional business school programs on strategy is focused on mastering the skills and tools to solve difficult puzzles, often using techniques such as market research, competitive analysis, complex financial projections, comp ratios and other analytical frameworks. Quite often, the first person to get to the answer, especially if it’s the ‘right’ answer—is perceived to be the expert (and often wins the prize of a bigger title or bonus).
Mysteries, by contrast, are new or emerging problems with no known answer. Sometimes they are unknown problems with unknown answers (or as former Secretary of Defense Donald Rumsfeld was famous for saying, the “Unknown Unknowns”). What makes mysteries challenging and unwieldy for more traditionally trained problem solvers is that they can only be solved through discovery. Answers don’t appear readily available in textbooks, research papers, or through Bloomberg terminals, but rather through original observation, open-ended interviews, and disciplined hypothesis testing within a larger umbrella of ambiguity.
Why innovation fails
Innovation typically fails in organizations when mysteries are treated as puzzles. Bringing forward a new disruptive idea to the world requires ruthless curiosity and a commitment to persistent discovery: What is the need that the new offering is fulfilling? Does it create meaningful value? Will customers pay for it? Can your organization deliver the value consistently in a financially and operationally viable way? These questions require evidence gathered from research in the field, along with iterative and rapid-fire hypothesizing and testing.
This is where design-led innovation should be the discipline of choice: leading through observation, empathy-based inquiry, rapid prototyping and testing. By contrast, copying an existing product in a cheaper way or offering a brand extension is much more like a puzzle. How much more will a customer pay? What are the different ways to reduce the cost of a single unit? Can we make a premium product? These questions also require require disciplined analysis and data, but answers can often be found through internal expertise, available knowledge and disciplined financial analysis.
Figuring out how to toggle between problem solving for mysteries and puzzles may be the most important leadership skill demanded in these times of persistent change and dynamic possibility. I recently had an enlightening conversation with Carl Bass, the CEO of Autodesk, one of the leading technology companies leading the charge on multidisciplinary design-led innovation. Autodesk is betting its future on building robust software that will help solve some of the world’s most challenging mysteries, as documented in its stunning book Imagine, Design Create and on display at its public gallery in its San Francisco headquarters. As an accomplished mathematician, technologist and pioneering designer, Bass summed up his philosophy with a simple observation: “With math, there is only one right answer. But with design, there are many right answers.”
So the next time you are tempted to break out that spreadsheet or 100-slide powerpoint analysis to confront a challenging problem, consider grabbing your magnifying glass and blank field book instead and start gathering new evidence. This just may be the key to expanding successful innovation in your organization through design-led leadership.
(1) “Open Secrets,” The New Yorker, January 2007