Monthly Archives: April 2015

Entrepreneurs Face Wicked Problems

IMG_0370April 18

Who are the most important contributors to our society?  Scientists? Doctors? Politicians?  Inventors?  Business Leaders? Parents?  Does the question even make any sense?

Jim Clifton and Sangeeta Bharadwaj Badal think so. Not only is the question important for them – even crucial –  but they also offer an answer, one they share with us in Entrepreneurial StrengthsFinders.

They begin with a rhetorical question:  Do we want to enjoy a satisfying, fulfilling future?  Of course we do!  Yet we are facing so many almost insurmountable problems, they insist that unless we make critical changes, our future is seriously imperiled.  They believe our most important problems are economic ones, and it is urgent that we find ways to confront them.  Otherwise, the chances are good that we will be worse off tomorrow than we are today.

A bright and happy future for us all can only be assured  if we can find ways of ensuring a constantly expanding economy, one that will create more jobs and grow the GNP.  No surprise here.  But this premise has implications in deciding who are the most important contributors to our future well-being as a society.   While artists, scientists, military leaders politicians, educators, doctors, and parents are all important and are nice to have around, Clifton and Badal suggest that they are not the creators of wealth,  and so are not high on the list of those who can make the most important contributions in the future.

So, who is high on the list?

Drilling down into the assumption that continual economic growth is the key to the future, one would expect Clifton and Badal to identify the titans of Big Business as the most important people for the future – The Warren Buffets, the Tim Cooks, or the Jamie Dimons of the World of Business.   Wrong,  say Clifton and Badal,  wrong, wrong, wrong!   The most important people for the future of  America, and by extension for the world, are entrepreneurs: Those intrepid, restless, risk-takers who start with an idea and through persistent effort and sacrifice turn it into a thriving business.  ”Only Entrepreneurs Can Save America and The World,” they proclaim.

Why Entrepreneurs?

It is often reported that there are 26 million businesses in America.  Actually, there are only slightly more than 6 million.  Twenty million are inactive businesses that have no employees, customers, sales or profits.   Of those that actually produce and sell something,  3.8 million have four or fewer employees,  one million have five to nine employees,  and 600,000 have 10 to 19 employees.  By a huge margin, most of the businesses in America – 5.4 million –  are small businesses that employ fewer than 20 people.

Furthermore, all businesses start small!  They all begin with someone having an innovative idea for a product or service.   But having a new idea means little. We all have new ideas  - and most of them disappear without a trace.  What is central to all progress everywhere  is that someone takes that new idea and does something with it.

It is the entrepreneurs who make things happen.  They don’t let their good ideas fade away.  They dig in and find ways to turn them into something useful and, through endless work and sacrifice, may even make enough money to survive.  Successful entrepreneurs start things:  new companies and businesses.  They create things:  taking  new ideas, they transform them into useful products and services that meet people’s needs, and so are able to create new jobs.  And it is the jobs that entrepreneurs create  that strengthen the economy and make possible productive lives for others.

Trouble  in Entrepreneur Land

If it is on entrepreneurs that we must depend in order to create a future of economic security and growth that makes everything else possible, then the news is not good.  Trouble is brewing.  In The Illusions of Entrepreneurship, Scott Shane reports the following:

  • Twenty percent of those who say they are launching a new business never actually start anything;
  • Only 33 percent of those who start a new business get it up and running within seven years;
  • Fifty percent of all new start-up businesses fail within five years;
  • The new venture failure rate grows to 70 percent over a ten-year period.

The news is equally bleak from another perspective.  Clifton and Badal point with alarm to a gap between the annual births and deaths of small businesses.  According to the U. S.  Census Bureau,  400,000 new companies are born each year while 470,000 die! While the optimists cry “The economy is coming back,” Clifton see it differently: “Let’s get one thing clear,”   writes Clifton in a chapter of Entrepreneurial StrengthsFinder, “This economy is never coming back unless we reverse the birth and death trends of American businesses.”  He continues:

I don’t want so sound like a doomsayer but when small and medium business are dying faster than they’re being born, so is free enterprise.  And when free enterprise dies, America dies with it.
 

Clifton’s description of the problem is clear:  How are we to go about reversing “the birth and death trends of American businesses?”

The Missing Piece

If it is true that it is the entrepreneurs who “can save America and the world,”  and yet most of them are unable to get their small businesses off the ground and into profitability, than clearly we have a serious problem.  It isn’t that we lack people with an entrepreneurial spirit;  it is that most of them are unprepared for what they are getting into.  They seem not to be aware of what they must know and do in order to become successful entrepreneurs.  As we shall see,  researchers agree that all successful entrepreneurs must acquire and  master a specific combination of knowledge, skills, attitudes and values.  And what does the right combination of  ”knowledge, skill, attitude and values” consist of?  It is the ability to find and manage successfully an endless array of problems, some small, some huge, many tame, but most wicked.

It Really Is About Problems

Entrepreneurship, like all other organized activities, is primarily a process of finding and successfully managing an unending series of problems   What this means in practical terms is that almost everything that new entrepreneurs, as well as experienced ones, must deal with can be best described as a problem.  And there is more: Almost everything that entrepreneurs have accomplished in the past  began as a problem, one that they were able to deal with.  Clearly, in order to be successful, entrepreneurs must be exceptionally good with problems.  And since most either never get started, or, once started, fail,  it is difficult to avoid the conclusion that most of them are not even “moderately” good with problems.  Most of the failures of small business start-ups –  at least 470,000 each year – can be explained as failures to manage successfully the many problems of making entrepreneurship a successful endeavor.

 More “Wickedness” For Entrepreneurs Than For Others?

All people who run things – businesses large and small, communities, nations, families,  athletic teams, military units, courts, theaters, universities –  face endless arrays of problems, and while many are tame, most of them are wicked.  But those who have an entrepreneurial bent, those who couple a good idea with a strong desire to make something of it,  face at least three complicating factors that make their challenges more difficult than for others:

First, since they have a burning desire to make something of what is a new idea, they have no choice but to enter Terra Incognita, an unexplored land with unknown combinations of opportunities, obstacles and hazards. There are no maps to consult, there are no landmarks nor mile markers which they can use to orient themselves.  They have no choice but to move forward and deal with whatever they discover.

Second,  most of their previous experience has limited value in this new and unknown land.  They must literally start from square one and try to understand what is happening and what should be done.  They must make sense of what seems to be senseless, create order out of confusion. “What’s going on here?” they say again and again,  ”And what should I do now?”

And  finally, they they will inevitably face these problems with little support.  People who work in established organizations and who face difficult problems are able to count on many resources.  Such organizations have vast amounts of explicit and implicit knowledge about what has worked and what hasn’t.  As a result of contending with many problems over many years,  all successful organizations have in place a number of potential “solutions”: traditions, “best practices,” policies, norms, and rules, both formal and informal, written and unwritten.  While it is true that quite a few of these organizational “answers and solutions” may be obsolete, irrelevant, or even counterproductive, many are not, and if located and applied successfully, they can provide valuable assistance.  Within the structures of established organizations, perhaps the most important benefit is that there are other people to talk to: People who have “been there, seen that, and done that,” and are often available for questions and conversations – and for suggesting things that could be tried.

On the other hand, entrepreneurs  face their problems essentially alone. Almost every situation they face is new; every potential problem is unfamiliar;  and almost every decision is one that is they have never made before.  And when they turn around and look for someone who can offer suggestions and recommendations, no one is there.

What Entrepreneurs Should Do

What is it that successful entrepreneurs do? Clifton and Badal  report research in Entrepreneurial StrengthsFinder that identifies distinctive behaviors which separate successful from unsuccessful entrepreneurs:

  • They were more likely to clearly articulate the competitive advantage of their companies to their clients;
  • They were more likely to make decisions about pricing and product or service developments with their customers in mind;
  • They spent a great deal of time planning for growth and aligning employee responsibilities with company goals;
  • They were more likely to align employees’ strengths with their roles, thus maximizing employee engagement and increasing individual performance.

Among the essential traits, skills and attitudes needed in order to be successful,  they list

  1. Confidence;
  2. Creativity;
  3. Delegator;
  4. Determination;
  5. Relationship-Builder;
  6. Risk-Taker.

Michael J. Glauser, Executive Director of the Center for Entrepreneurial Excellence at Utah State University in Logan, Utah, comes at this question in a different way.  Having interviewed several hundred business founders, Glauser, in Entrepreneurial Leadership:  What Successful Entrepreneurs Teach Us About Building Thriving Businesses, was able to identify the leadership attributes and activities that led to success.  The most important “differences that made a difference” were:

  • Adequate planning to take advantage of opportunities;
  • Finding partners, including  ”Building a Brain Trust,” and “Building Powerful Teams;”
  • High levels of performance consisting of “Working with Zealous Tenacity”, and “Creating More With Less;”
  • Purpose, which includes “Giving Distinguished Service,” and “Serving a Broader Purpose.”

 Mostly Wicked Problems

According to these findings,  intrepid entrepreneurs must be able to articulate clearly the advantages of their products or services, make good decisions, be effective planners, set company goals and align employee responsibilities with these goals,  define employee roles and then align them with employee strengths in order to increase engagement and effective performance, express confidence, take risks, be creative, practice effective delegation and build good relationships.

Also on the agenda should be “Building Powerful Teams,” “Working with Zealous Tenacity”,  and “Serving a Broader Purpose.”

What do all of these behaviors and attitudes have in common?  First, they are all problems to be addressed, and second,  all of them are wicked.  It is interesting, and perhaps important, that the problems  identified by these  researchers that “make a difference” are not tame problems but wicked. And yet there is no doubt that many of the problems that entrepreneurs must work on are tame.  Perhaps, as one astute observer put it, “Tame problems abound, but wicked problems confound!”

What makes the problems identified by the researchers wicked and not tame is that first, there is not just one way to be successful at any one of them, but many ways.  Next, in order to learn how to do them all and then do them in the right way at the right times, one is required to Figure It Out. There are no recipes to fall back on, no answers in the back of a book to turn to, no previous solutions that others were able to make work, no experts to provide specific answers.  For example,  no one is entirely sure how to go about “building a powerful team.” All that can be done is, first learn as much as possible about teams and how they work, then get people together, and go to work.  And then learn from the many mistakes that will follow.   And even with good intentions and persistent effort, there is no guarantee of success.

And finally, the necessary abilities and skills for effective entrepreneurship are wicked because the task of mastering them is never finished.  Even if an entrepreneur is able to “build a powerful team,” the entrepreneur cannot consider it finally done and move on.   The challenge of building powerful work teams is never over, but must be returned to repeatedly;  the same is true of all of the other recommended attributes.  As the Nike Ad proclaims, “There is no finish line!”

The Bottom Line

The meta-challenge for entrepreneurs everywhere is to be knowledgeable about and competent in attacking a constantly changing set of wicked problems.  Is this important? Jim Clifton and Sangeeta Badal argue “Only Entrepreneurs Can Save America and the World.”  If this is true, there is important work to be done before “Saving America and the World” salvation can be even partially realized.  Given that entrepreneurship is by definition a process of finding and solving problems, the best way to remedy the gap between the 400,000 new businesses that are started each year and the 470,000 that fail – clearly a losing equation – is to reframe the real work of the entrepreneur:  Yes, it does consists of  starting new businesses that survive and flourish,  but that will only happen when one learns to be good at tackling one problem after another, most of which are wicked.  

For those who choose to become entrepreneurs, the best way  forward is to begin with a clear understanding that the principle work that lies ahead is working with an endless flow of problems:  Some will be financial; others will be finding and keeping the right people; others will be finding ways to please their customers; and others will have to do with product quality.   And while all are different, they all fall into the same category: Problems-That-Must Be-Addressed.  Gaining knowledge and skills in dealing with problems – especially wicked ones – is the missing piece in the puzzle of why of all those who begin an entrepreneurial  journey, so many fail along the way.

This may be old news to successful entrepreneurs.  The entrepreneurial way of working – taking action, making mistakes, reflecting on mistakes, learning better ways, finding new resources, then more action, more mistakes,  and so on – is in its essence a problem solving approach, one that experienced and successful entrepreneurs must be good at.  Otherwise, they would have been among those who didn’t make it.

What may be most helpful for experienced entrepreneurs is to learn that their continual struggle has a name -”So, these problems are wicked!” – and that there is information available to help them learn how to be even more successful in working with them.

And for those who have just discovered their Big Idea and are beginning the difficult process of turning  their dream into a small business that works, understanding more accurately the nature of what they are facing may not only help then get on a right path, but stay on it as well.

 

 

 

 

 

From “Messes” to Problems

IMG_0438

March 30

The issues and situations that trouble us and at times keep us awake at night have many names:  predicament, dilemma, conundrum, double bind, challenge, quandary, enigma.  The term we most often use when we talk about these concerns is Problem.  It is a word we use frequently and one that everyone understands:  Something isn’t working the way it should; or a situation is unacceptable and needs to be changed; or something has happened that has interfered with the way we think things should be.

Yet whenever we talk about problems – a problem,  my problem, or our problem – rather than taking a step forward, we can easily take one backward.  Even with all of our good intentions, when we try to discuss a problem,  we often create a new one.  We say “problem,” thinking that all who hear us know what we mean.  But frequently what we are talking about, and want to “fix,”  is not a problem at all,  but something else – a “mess.”  Not being aware of the difference between “mess” and problem only compounds the difficulties we have with problems.

This new problem that often appears when we talk about problems has a name:  Misunderstanding.

The  concept of a “mess” when applied to situations that trouble us comes from the writings of systems theorist Russell Ackoff.  I quoted his definition of mess in the last essay:  ”[People] are not confronted with problems” …but with dynamic situations that consist of systems of changing problems that interact with each other.  I call such situations ‘messes.’ [People] do not solve problems; they manage messes.”

When we talk about problems, and think we are talking about “problems,”  what we are usually referring to are “messes.” We end up setting the stage for new problems:  Serious misunderstandings often leading to premature conclusions,  blaming and fault finding, increased frustration, and unhelpful conflict.

Confusions About The Drug Addiction “Problem”

Suppose, for example, you are convinced that there is a drug problem in your community and you want to to do take action against it. You gather your neighbors together and begin by saying, “We have a drug problem in our neighborhood and we need do something about it.”   “Drug problem” signals that you are concerned about drugs.  So far so good.  But says little about the nature of your concern and what you think should be done about it. There are, after all, many drug problems.  Are you concerned that high school students are smoking pot;  or that the rate of addiction to pain medication is skyrocketing; or middle-aged, middle-class professionals are smoking joints in their homes on weekends;  or that people in economic difficulties can’t get the medicine they need for their illnesses;  or that people are smuggling  marijuana into the state from Colorado and selling it on street corners; or that the rate of heroin addiction is rising rapidly; or that people who are apprehended with small amounts of marijuana are being unfairly convicted and sent to prison, and on and on.  To say “We have a drug problem” obscures the fact that there are actually many drug problems, all involving drugs, all connected in one way or another with each other, and also connected with almost everything else in society: relationships, families,  the military, schools, health, safety, economic and political issues, and even national security. “Drug problem” is in actuality a big, complicated, confusing “mess.”  And as Ackoff observes, messes cannot be solved, they can only be managed. The first step in managing messes is to find the potential problems within the messes that concern you and then  turn them into problems that can be worked on.  If productive work is expected on the “drug problem” or any other problem,  then moving from “messes” to problems is required.

We Need Real Problems

Messes are hard to ignore.  They are all around us:  compelling, demanding, disgusting, upsetting.  They often threaten our sensibilities, our values, and our convictions of how things ought to be from our perspective.  Given our tendencies to be dissatisfied with situations and conditions that do not meet with our approval, we often feel that something should be done!  And sometimes we step forward and volunteer to do it. Yet most of the time, the actions we take to “solve” messes are premature and consequently ineffectual.  Rather than make things better, they often make them even “messier.”

What we need in order to make a difference are problems that we can do something with.

What Are Problems?

The most useful definition of problem has several parts:

  • Problems are abstractions.  They do not exist fully formed.  They begin as vague concerns, persistent worries, and debilitating fears about certain issues, situations and events.
  • Problems are created by people:  ”Problems are abstractions extracted from messes by analysis” writes Russell Ackoff.  ”They are to messes as atoms are to table and chairs.”  In order to move from vague feelings to specific problems, someone needs to give them substance and form.
  • A problem is defined as a gap between the present state and a future one, between where we are today and where we want to be tomorrow.
  • Problems  begin to emerge when we become emotionally involved with the existence of this gap.  Certain issues or situations matter to us, and we want to see something done about them. That we are “here” and not “there” bothers us, and can be a challenge for us to take action.
  • And finally,  while a problem is a gap we want to see closed – we want to get from here to there – we lack the knowledge and/or the skills to make it happen.

From “Messes” to Problems

In order to make progress with the issues and situations that concern us, we need to move from “messes” to problems.  We need to be able to point to and talk about the gaps between where we are and were we want to be. The key words from Ackoff’s definition quoted above are abstraction; extracted from messes;  and  analysis.  Problems are not apples hanging from tree branches waiting to be picked, or nuggets of fools gold on the ground waiting to be gathered up and put into a basket.  They are created by human beings who extract them from messes by talking, analyzing, arguing, insisting, and contending.  Only when people get to some measure of agreement on what the problem is – defining the gap between Here and There – can they begin do productive work.

When the concerned citizens come up with a definition of their drug problem -”The part of the drug problem we have agreed to tackle is the selling of drugs by dealers in Pioneer Park. We want it stopped!” – then we can begin to go to work, first by defining the nature of the gap itself – its depth, breadth and and length – then by identifying the obstacles that stand in the way of reaching their goal, and finally by coming up with ways to attack the obstacles.

Ford Executives Move From Mess To Problem

It is 1984.  Lew Ross,  the senior vice-president of Ford Motor in charge of factories, was at the end of his rope.  He was frustrated with the constant bickering and in-fighting between Engineering and Manufacturing. Ford had tried for decades to get the two departments to work together collaboratively with no success.  Finally,  Ross called a meeting of the dozen upper-level managers from both departments and laid it on the line.  ”I am sick of the petty arguments and fights that have gone on for over twenty-five years. Enough is enough! We don’t care how long it takes, but we want you to answer one single question:  Will Engineering report to Manufacturing, or will Manufacturing report to Engineering?”  Then he left the room.  As one participant put it later, “When Ross left the room, there was hell to pay!”

And there was hell to pay! For weeks! Even though the two groups met often, the meetings were not productive.  They were full of accusations, recriminations, and power struggles, with each side blaming the other for refusing to give in.  Little progress was made. Among the reasons for their continuing struggles was that they had been given a “solution,” not to a problem but to a mess!  And for messes there are no solutions.

Now, picture a meeting room eight months later.  All around the room are organizational charts, and team members are discussing the merits of one chart  when compared to another.  ”There is a lot of give and take” writes Richard Pascale in his book Managing on the Edge.  ”Someone asks with an edge of frustration, ‘Which of these organizational charts is best?’”  There is a long pause.  No one speaks.  Finally someone says, “Maybe this (i.  e. the process we’re now engaged in) is?”  The silence continues.  People are suddenly seeing things differently, perhaps for the first time. “Then it dawns on us that the medium is the message.  It was about how we were working together, not finding the perfect organizational structure,” remembered a member of the group.

When the team was able to move away from the organization “mess” of power, dominance, control, and status (Who was going to report to whom?) and toward their real problem –  not spending quality time actually talking and sharing and working together – things begin to move in a positive direction.  At last they had a problem they could agree on and do something about.  ”We took the next month,” reported a member, “to put together an organization that didn’t reorganize at all, but simply realigned the flow of communication across the chimneys.”  And they made it work. They moved from the simplicity on this side of complexity – “Engineering will report to Manufacturing, problem solved!” – to the simplicity on the other side:  ”It doesn’t really matter who reports to whom; what we need to do is find ways to keep communication channels open and then communicate, communicate, communicate.”

Creating “Real” Problems

Our problems  - gaps that exit between where we are and where we want to be – do not appear by themselves, by magic. They must be created by human beings who are involved in the situation, who care about it, and who want to see changes made.  As Ian Mitroff warns us,“Real problem are not given to us. They must be extracted, often with much difficulty, from often messy and difficult situations.”

Here is how problems can be “extracted…from often messy and difficult situations:”

Embrace the Mess:  Often, it is tempting to deny the existence or the importance of what is happening around us.  In fact, there is a movement among some so-called experts and gurus to deny the existence of problems . “There are no problems,” says Wayne Dyer, “you only think there are.”

The alternative to denial, if  movement in a positive direction is to be expected, is to Embrace the Mess.  Speaking to leaders of organizations, Stanford professors Jeffrey Pfeffer and Robert Sutton write in their book, Hard Facts, Dangerous Half-Truths, and Total Nonsense:

Leaders who want accomplish change reasonably
quickly [must] embrace the mess, do the best they
can with the knowledge and evidence at hand,
learn as they go, and take action…
 

Find a problem:  After embracing the mess and agreeing that attention must be paid to it, the next step is that someone needs to get down in the middle of the mess,  then “muck around” in it until he or she comes upon an aspect or element that is important, relevant, and can be shaped into the beginnings of a problem.  ”Extracting” a problem from a mess starts with finding something that seems to be important,  then “pulling” it out of the mess (extracting it) and putting it on the table, so to speak.  ”Here is something important,” announces the problem finder.  ”It is something we need to go to work on.”

Own the New Problem:  Once a potential problem is found, then someone needs to take ownership of it.  It needs to become a high priority of someone:  ”This matters to me,” says the problem owner.  ”I am responsible for seeing that we do something about it!”

Name the Problem:  Once a potential problem has been extracted from the mess, and an owner has stepped forward and taken responsibility for it,  it needs to be named.  What something is called matters.  Without a name for the “problem-being-created,” it is difficult if not impossible to discuss it, let alone plan to do something about it.

Here is a an example from the business world: When someone says “Something is seriously wrong in marketing and we need to do something about it,” nothing much can be done.  Not yet.   If, however,  he or she can say, “It’s clearly  a problem of priorities.  There is a serious gap in Marketing between what they are doing and what we think they should be doing.” Now there is a a situation that can be addressed.  It has a name – Conflicting Priorities – and the beginnings of  an understanding of the gap between Marketing’s idea of priorities and Management’s.

Define the Problem:  The problem in Marketing has to do with priorities.  Defining a problem means making the gap in perception between Marketing and Management  clear, specific and actionable.  An actionable problem is one for which both the future state and the present states are described – “Here is where we are, and here is where we want to be by next January 1.”  It means setting goals that define the future.

Find the Obstacles:    And finally, since the purpose of defining a problem is to find ways of moving from Here to There,  the obstacles that stand in the way of reaching the future goal need to be discovered, identified, and plans made to address them.

There is even more to do before problems are fully “extracted” from the messes and actions can be planned and implemented.  Among the most important is finding other people who have a stake in the issue or situation and getting them involved in the process. Additional steps to be taken in order to create actionable problems will be reviewed in future essays.

Getting to the Other Side 

The complexity that stands in the way of getting to the Simplicity on the Other Side is made up of “messes.”  Even if we dive into them and do our very best, until we have actionable problems to work on, very little will be accomplished.  Over the last several decades a President of the United States has declared “war” on pornography, poverty, drug addiction and cancer.  Hundreds of thousands of people were engaged, billions and billions of dollars were spent, endless arguments raged, then died, then raged again.  And no victories have been declared.  Nor will they ever be.  Pornography, drug addiction, poverty, cancer, together with unclean air and water, lack of excellence  in education, inadequate health care,  and on and on, are not problems to be solved, but messes to be managed.

What the “extraction” of  issues and situations from messes and then turning them into actionable problems allows us to do is to get into the middle of the complexities that stand in our way, and then, if we are skillful and persistent enough, to move beyond these complexities that bog us down and hold us up and get to the simplicities on the other side.   Getting beyond the omnipresent “messes” and ending up with real problems that can be addressed productively – that is our Real Work.

Is the struggle to drill down into messes, then find and define problems, worth all the effort?  In one sense everything depends upon it.  ”Success is relative,” wrote the poet T. S. Eliot.  ”It is what we can make of the messes we have made of things.”  All of us want to be successful in our own way and with our own projects.  How can we increase our chances?  Eliot’s view, one that I share, is that it depends on what we can make of the messes that matter to us and that we find around us.  Some of these we have made for ourselves, and others have been made for us.  ”Making something” of the messes we care about means first, embracing them, then “extracting” problems from within it, then going to work to make those problems actionable:  owning, naming, defining, then finding and involving other people who can make their own contributions. This is what it means to get to the simplicity on the other side where so many rich possibilities for progress are to be found.