What do you do if you face a problem so complex that it can only be described as wicked?
Is it possible to confound competitors?
How Companies Conquer Complexity and Confound Competitors
John Camilius, author of Wicked Strategies: How Companies Conquer Complexity and Confound Competitors outlines a number of ways that managers can handle the most difficult problems. Camilius is the Donald R. Beall Professor of Strategic Management at the University of Pittsburgh.
“We shape our buildings; thereafter they shape us.” -Winston Churchill
For those who don’t know your work, what is a wicked problem?
In the early seventies, Horst Rittel and Melvin Webber, two professors of design and urban planning, recognized that there are certain problems that are not amenable to resolution by traditional, accepted problem-solving techniques. They evocatively labeled these problems as “wicked” and identified ten distinguishing characteristics. Ten characteristics are difficult to remember, and over the years, I have whittled them down to just five. If a problem displays these five criteria, you can be pretty sure you are facing a wicked problem.
The first characteristic is deceptively simple and requires some thought: Is the problem one that is substantially without precedent, something that you have not encountered before?
Second, are there multiple significant stakeholders with conflicting values and priorities? You need to go beyond the traditional big three stakeholders—employees, customers and shareholders. Non-government organizations, multiple layers of government, creditors, communities in which you are located, political parties in power and out of power are all becoming more significant and demanding.
Third, are there several causes and are they interactive and tangled? For instance, the future of social media is driven by a complex brew of technology advancements in hardware and apps, changing demographics, evolving social and cultural mores, government regulations, privacy expectations, geopolitical developments, educational practices, disposable income, and economic and social mobility.
“If we don’t change direction soon, we’ll end up where we’re going.” -Irwin Corey
Fourth, there is no sure way of knowing you have the right answer. Another way of phrasing this is that there is no stopping rule—you can continue searching indefinitely for a “better” answer.
Fifth, the understanding of what the “problem” is changes depending on the “solution” being considered. In other words, the problem and the solution are interactive. For instance, entry into a country that does not permit foreign multi-brand retailers might be accomplished by creating a cash-and-carry model for small retailers or by being a minority partner with a local retailer or by entering an entirely new business employing a distinctive competency such as logistics. Each of these responses to the wicked problem of accessing the huge purchasing power of emerging economies’ populations creates a wholly different set of issues.
A note of warning may be in order. In the public policy arena, the wickedness of problems is hard to overlook. Problems such as immigration policy, violence against women, religious fundamentalism, and public education are overtly wicked. In the business world, however, the thing about wicked problems is that though they can show up anywhere, they are likely to be perceived as “tame” problems.
Wicked problems are certainly more common than most managers realize. Not recognizing that they were facing wicked problems, I believe, led to the dissolution of Westinghouse, the demise of Polaroid, and the decline of Kodak, RadioShack and Atari. Though wicked problems can occur anywhere, it is more likely than not that you will encounter wicked problems if you are a public company, operate globally, and are in a technology-driven business.
“Every threat to the status quo is an opportunity in disguise.” -Jay Samit
3 Megaforces Challenging Business
You talk about 3 megaforces that are challenging business. How do these trends help create wicked problems?
While there are a variety of forces and environmental factors that can create wicked problems, over the years I’ve identified three forces that are widely experienced which, in concert, are a major source of wicked problems. They are: the inevitability of globalization, the imperative of innovation, and the importance of shared value. The first two forces are well understood. Shared value, which has been brought to the attention of the managerial world by Michael Porter, is the notion that social benefit and economic value are synergistic. It also raises the issue of the appropriate sharing of value across diverse stakeholders.
The interactions of these three forces create strategic challenges that combine to create wicked problems. For instance, innovating to meet the needs of unserved, low-income customers across the world results—as the guru of disruptive innovation Clayton Christensen has affirmed—in disruptive technologies that can upend industries. Innovation also creates changes that differentially impact stakeholders, creating the likelihood of conflict between stakeholders as the organization transforms. The extreme complexity and uncertainty embodied in the global economy coupled with the conflicting priorities of multiple stakeholders creates unknowable futures. This roiling cauldron of disruptive technologies, conflicted stakeholders and unknowable futures is what spawns wicked problems.
I like to illustrate the interaction of these forces in a Venn diagram.
Three Mega-Forces and their Strategic Challenge
These three forces can interact to create wicked problems in any context. Of course, other environmental forces can also breed wicked problems, but I have chosen to focus on these three because they are so ubiquitous and powerful.
I believe there are business contexts or “industries” that will be breeding grounds for wicked problems. Health, software, information technology, fossil fuels, water, automobiles, and public transportation are prime examples. Technological innovation, drastically changing regulations, geopolitical developments, and changing notions of social responsibility make these industries particularly prone to encountering wicked problems that demand that firms develop and deploy wicked strategies.
“The human spirit is to grow strong by conflict.” -William Ellery Channing