The world is full of uncertainty, information is often blurred, and facts can be incomplete or sometimes deliberately hidden by the competition. So how can we plan successfully for the future when faced with such conditions?
We can characterise many decisions in life as messy, indeed much of business life can be described as a mess; this is not a statement of the current state of the commercial climate, but in fact a way of describing the decision landscape that firms operate in.
Running a business is one of the most practical of all skills, and things always seem more difficult than any theory suggests, and just like warfare there is a constant fog that seems to make decision making so much harder. Theoretical and so called correct solutions don’t always work, and in some cases can make things worse. Naturally business managers blame the solution or strategy employed but could in fact the real problem be that we have failed to correctly define the issue faced by the firm?
Many challenges can be described as a Mess. I am using the term Mess in particular way. In the 1970’s the decision analyst Russell Ackoff developed a rather neat way of describing complex problems. He defined them as Messes, Problems and Puzzles, each with their own characteristics and crucially each needing different tools and approaches to tackle them.
A Mess can be defined as a complex issue, critically one that doesn’t have a well defined form or structure. When you are in mess it is very hard to even know the true nature of the problems you face. Most very large issues in the world start out as messes. An example may be defence policy after the Cold War has ended, the issues to be faced are numerous and complex; money, new threats, new technologies, foreign policy implications etc. In business good examples of messes include; national energy policy (what part will be state owned, what will the role be of the private sector, and how and if they can raise the necessary capital, not to mention a wide variety of stakeholders from consumers, to shareholders through to special interest and lobbying groups).
In Ackoff’s hierarchy the next level is a Problem, here the issue does have a defined structure or form, and as result there are a number of potential solutions, but not one clear cut way to solve it. Problems have a number of defined variables and it is possible to know something of how they interact and shape things. A good example of a problem might be weather forecasting or trying to predict who will win the next election.
The final group are Puzzles – these are well defined issues with a solid structure around them and have a specific solution that someone can work out. There are myriad of these of course – and we encounter and solve many of them on a day to day basis.
Interestingly Ackoff’s research ties in with another area – that being the study of risk taking and decision making by both groups and individuals. Research shows humans crave certainty and as much control over events as they can muster, indeed this may be particularly true of business leaders etc…”Give me the facts, get the experts in….I want a solution now!” This hard wired human desire for certainty has an unfortunate by-product in Ackoff’s hierarchy of issues; as we tend to demand solutions, so we have a bias to treating most issues as puzzles and occasionally as problems.
Whereas the actual situation may be a mess, or at best a problem, and certainly not one with a defined solution that can be achieved. The desire for the correct solution, and a short cut answer, blinds us to the fact we haven’t even correctly categorised or properly thought through the challenge or issue we face.
Michael Pidd in his book “Tools for Thinking” (1996) neatly described it as
“One of the greatest mistakes that can be made when dealing with a mess is to carve off part of the mess, treat it as a problem and then solve it as a puzzle – ignoring its links with other aspects of the mess”.
Indeed one could go as far as to say this is the biggest trap that decision makers fall into – the overwhelming desire for a definitive answer can lead to very bad decisions and outcomes.
Risk taking and decision making will always be filled with uncertainties, but careful analysis of the nature of the issues encountered and then correctly applying the appropriate tools should and can transform the way we plan for the future.