4 February 2020
How to leave the industrial and join the digital revolution. From tame to the wicked problem market.
“Digital transformation needs to move from increasing efficiency to focussing on solving wicked problems. Because they mainly do not, they tend to fail as investments.”
Digital transformation is all the rage. The dot-com boom might be over two decades old. Still, it has created a chasm of digital literacy, which has only been widened by industries stubbornly focused on the industrial revolution’s principles of efficiency increase and the idea that value creation is equal to adding a few features and achieving incremental cost reductions. The industrial revolution enabled us (only) to deliver things in a static, linear way. It did so really well.
However, the networked system we live in nowadays is more complicated. In system theory, the industrial revolution or mass production is called a ‘tame’ problem, linear and static. The internet and the people using it has upgraded the problems of the market to ‘wicked’ problems, challenges that are hard to define and keep evolving even when solutions are in place.
The market for wicked problems needs different leaders and different organisational processes. Digital transformation needs to move from increasing efficiency to focussing on solving wicked problems. Because they mainly do not, they tend to fail as investments. According to Forbes via Michael Gale, 84% of digital transformations fail to generate the business benefits they promise.
Three fundamental factors to embrace in driving your business digital transformation
The three hygiene fundamental factors derive from 20 years of working in innovation and transformation for organisations such as BT, GSK, Nationwide, Nissan, HSBC and many others:
1. Define the wicked problem for your organisation
Knowing the problem is half of the solution. The best ventures are not the ones with the most comprehensive solutions, but those that better understand the problem they are working on. Creating a mindset that understands how problems are evolving should be a priority for your business.
“A person who does not understand what the mission truly is will never create the right solution”
As a leader; you have to establish a mindset that accepts that a problem definition should be able to evolve or pivot. This also means the problem needs to be able to be read and be (re-)written vertically at every level of your business. The industrial revolution separated thinking and knowledge from the factory workers and locked it inside upper management. A person who does not understand what the mission truly is will never create the right solution. You also need to understand that as a leader, you are detached from understanding the problem yourself. Let people show you.
As a team, you need to get as close to the problem as you can. You need to be allowed to fail and pivot. And you need to be able to build a business case because of it.
2. Disrupt governance
In a wicked problem scenario, you need to be able to experiment and test things fast and often. Facebook does ‘dark-posting’ to 1,000 niche customers. Imagine each step would need days to be approved by your current management structure.
Today, Desirability, Viability and Feasibility (DVF) and other assessment models de-risk decision making. Cross-disciplinary teams outperform single silo teams in better decision making. Enable them so that you can test and succeed better and faster.
As a leader, remove product or service owners and establish ‘good enough’ as a decision model. Make sure research data drives the team’s and your decisions.
As a team, establish models like DVF, dot-voting, learn business casing or start with bringing cross-disciplinary people to your team. Before you know it, you don’t need middle management at all.
3. Create ‘wicked teams’
To truly enable organisational flexibility that counts, people should be able to work in any team they need to. Outcomes should be what teams assemble around, e.g. at the BT transformation programme, we established problem statements, not KPIs as targets to be solved, not the creation of features or other commodities. A product creates no customer value; experiences and solutions do. Flexibility means that a business has identified its new problem space in its market (e.g. banking is not anymore about giving customers simple products like a savings account, it is about helping people to save money. This is a much wider problem space that start-ups are already successfully exploring), and that it can create teams that solve areas of that space for customers and find the most impactful ones.
As a leader, you have to get closer to your outcome-based teams. Enable them, create a better way for them to learn problem-solving skills.
As a team, you should ask for training that is of the type of ‘while-you-work’, not something that takes you away from your office and ignores your working context. Ask for a career and work process that lets you take on roles depending on the team you are working in, not the silo you happened to sit in in the organisation. It will be fun. We are all more than just one task.
“As a leader, you have to get closer to your outcome-based teams. Enable them, create a better way for them to learn problem-solving skills”
We are at the precipice of how we work and how technology can enable us to solve big problems. Wicked problems are our future whether we like it or not. As an organisation, if you are still only solving tame problems, you will be innovated and automated away. If you start focussing on wicked problems, you might have relevancy in this new world.
This is a guest post by Marcus Kirsch, transformation, service design expert and author of The Wicked Company.
About Marcus Kirsch
Marcus Kirsch has worked as a transformation, service design and innovation specialist for over 20 years. He is a Royal College of Art alumnus and former MIT Medialab researcher. He led projects for companies like British Telecom, GlaxoSmithKline, Kraft, McDonald’s, Nationwide, Nissan, Science Museum, P&G, Telekom Italia, non-profits and startups. He won awards in the areas of creativity and innovation and has been publishing for the Guardian, Wired and other industry relevant publications. He is a thought-leader and keynote speaker. In his off-time, he is a mediocre indoor-climber, movie nerd, maker and likes a whisky.