Pragmatic Consulting Club - Simple Vs Complex Problems

Simple problems can be solved with clear instructions.

A B2C website development consultant, for example, solves a simple problem. The client may go with a templated website (faster and cheaper) or prefer to build a completely customized one (including specific features and functionalities). Both have the same goal though: Communicating detailed info on the product and allowing visitors to buy it or contact the company.

There's a consensus on what success looks like (loading speed, time spent on page, click rates). You can measure those KPIs quickly and easily, and compare them against your industry's benchmarks. If any of these need to be corrected, there's an abundance of well-documented best practices for the consultant to implement.

This is not the case for a complex problem.

Choosing which market segment or niche to focus on (making a change to your positioning strategy) is an example of a complex problem. Just like building a website, it's a universal problem both smaller and larger companies need to solve. There are some important differences though:

• The problem involves many people with different values and priorities. The partners or founders of a company may have contrasting visions for the business in the future. Some are more ambitious and risk-averse, others more conservative and pragmatic. Each stakeholder has a different idea of what the final outcome should be.
• The problem's roots are complex and interconnected. Changing your target audience will affect what you sell, how you communicate it, how you deliver it, how you price it. How well do you know the different niches being considered? Do you have the capabilities to create products or services that look attractive to them? How do the current brand and relationships impact this decision? The problem spans the entire organization.
• The challenge was never faced before. Shifting the positioning of a company is a long and complicated process. It might mean making changes to a brand image or reputation that took decades to be built. Or ending commercial relationships with long-time partners that are now irrelevant. There's no formula or clear manual to get this done.
• There’s nothing to indicate the right answer to the problem. A company can go upmarket to increase margins, but it will need to create relationships with larger or wealthier clients. You can narrow your focus to a niche where you already have existing connections and advocates. Or you might even choose the challenging road of creating a new market segment. It's impossible to predict what the best strategy is.

These are some of the reasons why high-level strategic or cultural problems are difficult or impossible to solve, and can never be successfully productized. There's a clear lack of clarity in both your goals and solutions. You need to deeply understand your client, build consensus, and help them change.

More on change management in tomorrow's post.