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?
Running a business is one of the most practical of all skills and things always seem more difficult than any theory suggests; 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 the real problem be that we have failed to correctly define the issue faced by the firm?
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.
In Ackoff’s hierarchy the first level is Mess. 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.
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 – 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… “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, or occasionally as problems.
However, 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 writes:
“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.