The digital economy has opened new doors for business through its fusion of digital and material business worlds. It has opened cracks, too, unfilled by traditional product and service offerings, that offer a business home for a myriad of new entrepreneurs eager to hop the tiny hurdles to marketplace entry. For the foreseeable future, all will be innovation, resulting in huge engineering challenges for those involved in business. The continued delivery of transparently adequate products and services to this new tangled marketplace is an incredible challenge. Business problem solving in the new landscape depends critically on understanding the linkages between the players, their contexts and their needs.
It is commonly thought that problems like these have have no solutions. But that's a defeatist attitude. We must simply find new models from which analysis, prediction and synthesis of fit-for-purpose business solutions can be forged. This article explores how to create problem-solving techniques that deal with the wicked tangle of business problems.
Tangling might seem to suggest that problems are extended objects, like pieces of string, capable of wrapping themselves around themselves and each other, and tending to clump together. It may also suggest that the problems are difficult to follow: focusing your gaze on only one part of the tangle and trying to follow how it weaves in and out, and how it relates to the other problems, is difficult if not impossible.
The butterfly's tangle
Maculinea arion is a large blue butterfly, an extraordinarily beautiful creature that lives most of its pre-butterfly life underground with a very distant relative, the red ant.
Simply put - and to cut a long story short - the large blue became extinct in 1979 in parts of the UK. But Professor Jeremy Thomas didn't like the cut-short story, and he discovered a complex web. The butterfly, as a caterpillar, is parasitic on its red ant relative, spending quality time within ant nest, duping the ants into treating it like royalty. The butterfly cannot live without the ant.
Like many UK natives, red ants like the sun, but - sadly - don't get enough of it. As they burrow underground - under grass - they grow cooler as the grass grows its shade, as might happen, for instance, when rabbits are not grazing it. Without rabbits, the ants die off. And why didn't the rabbits graze? Because in the 1970s they were struck by myxomatosis.
The butterfly needed the ant and the ant needed the sun and that's what they got it so long as the rabbit grazed. No rabbits, no sun; no sun, no ants; no ants, no large blue butterfly. It's a simple chain when you've heard the story, but until Thomas came along no-one understood just why the big blue butterfly was fluttering into obscurity.
It's a salutary tale: the problems of the butterfly (how to live), the ant (needing the sun) and the rabbit (living in a world with myxomatosis) tangle together. But, fixing the focus solely on the butterfly's problem - or the ant's or the rabbit's - gets you nowhere. It's only by understanding the tangle that you can solve the problem: Thomas has seen that the reintroduction of the large blue is succeeding.
Tangled problems exist in the business world too
Meet Kate and Daniel, fun-loving small entrepreneurs who work full-time in organisations facing the credit crunch. They have lowered their expectations of job security. They pay their bills and taxes. They face an unsatisfactory educational and health system and choose independent schools and private healthcare for their children. They worry about greenhouse gases as much as anyone and want to do their bit. Their life is already a tangle of problems, but in the spirit of innovation that characterises the best entrepreneurs, they make a molehill out of their mountain and begin an online energy-saving lightbulb web-store. Of course, K&D's step online doesn't solve their problems. Indeed, for a short time it makes things much more complex: now their friends become potential customers, now they have to rely on their bank manager for advice and funds, now they have creditors and suppliers - some in the UK, some in Asia - legal and business advisers, an accountant, each of whom have their own problems to solve.
K&D's problems are of a different nature to those of the butterflies, ants and rabbits. But they're still all-a-tangle: their business environment is tangled with their business is tangled with their family life is tangled with their social life is part of their business environment.
To get a handle on the complexity of a tangle, we will first look at individual problems, beginning with an engineering model of a problem, adapted for the business.
The problem of engineering
In his book, The Nature of Engineering, GFC Rogers provides a practice-based definition of engineering: "Engineering refers to the practice of organising the design and construction of any artifice which transforms the physical world around us to meet some recognised need."
According to Rogers, engineering is all about identifying the real-world environment that will be transformed, recognising a need and designing and constructing something - the artifice - that will meet it.
Current research at the Open University takes Rogers' definition, and makes that triple of environment, need and solution the basis of problem-solving. The breakthrough was to see that triple as an engineering design problem and to think of ways in which it could be solved as such.
Let's look again at K&D in the light of this triple. K&D have their recognised need (personal financial security) and a complex real-world environment (including all the players mentioned above) and they are building their solution (an online lightbulb business) to meet that need. They have a business problem and are developing their solution.
As business problem solvers, K&D's designed their e-business to work within their business landscape, populated by bank managers, friends, suppliers, customers, ISPs, accountant, legal team and family, to satisfy their need for a sustainable living wage. K&D share their business environment with others, and indeed, their e-business venture contributes to the solutions of many others' business problems. Their suppliers build their business on the many businesses that use their products; their accountant and legal advisers sell their goods and services to K&D too; K&D's family get a living wage; the shops and businesses in their home town benefit from K&D's success by serving them better; even the taxman gets a bigger slice of a bigger pie. And, just as K&D solve their problems with a business, so K&D's customers solve their problems (being greener) with K&D's products. K&D's economic footprint has grown; and like the laces in K&D's sneakers, problems overlap and tie together in simple ways to create a tangle. In fact, here are the six basic overlaps between the three elements of two problems:
Environment/environment overlap: the credit crunch problem
It is a fantastically fortunate business that doesn't have the current credit crunch as a dominating factor in their business environment, although any two businesses' fortunes will vary or co-vary as their environment experiences its ups and downs. There is no causal linkage in that variance, however, as long as they are otherwise insulated from each other in their business relationships. It's a benign relationship, one to the other.
Environment/solution overlap: the fashion industry's problem
It all started in 1858 when Englishman Charles Frederick Worth opened his high-fashion shop in Paris. Today, the importance of professional designers in a changing fashion world has increased to the point where almost all clothes in almost any high-street shop, from bijou boutique to colossal chain, are inspired by their work.
But the "fashion problem" (that of coming up with tomorrow's fashion in today's world) keeps reinventing itself. The fashion dynamic is cyclic, recurring, revisited. As Paul Smith's catwalk shows determine the new fashion, it quickly becomes the new norm in the environment of the new. The new fashion while tangled with and conceived in the old defines the new solution: the fashion solution simultaneously solves and sustains the fashion problem.
Of course, it isn't always a single problem that tangles with itself. Extended loops in which one solution enters the environment of another, which is then newly solved, only to disturb another, are common. Indeed, it is essentially the loops between problems that sustain creativity, business and value creation. And this makes environment/solution overlaps some of the most interesting problem tangles to look at.
Need/environment and need/solution overlap: the French President's problems
What should we do with the Louvre? That was the problem given to Emile Biasini, head of the Grand Louvre project, by the president of the French Republic in the early 1980s. Biasini listened to the president, and tried to understand his need - in that sense, the president's need was part of Biasini's environment. In understanding and recording the need, Biasini produced the solution to his own problem, which he could then task the world-renowned architect IM Pei with designing. The result, of course, was Pei's pyramid:
Solution/solution overlap: the software developer's problem
A very large collection of problems overlap on the solution, because they form the producer/consumer class of business relationships. Examples include the developer who produces software for another business: the software developer's problem of producing a sustainable business is (one might assume) solved by the software that solves the customer's problem. Of course, the relationship isn't always sweet, and a poor solution might not really solve either problem, and perhaps even both: software that crashes and burns constantly solves neither customer's nor developer's problem - although it seems that some organisations can continue to get away with it.
Need/need overlap: the competitor/collaborators' problem
Finally, and indicative of needing to find a closer business relationship, two problems that have overlapping needs (but not environments) suggest looking together for solutions. On the other hand, if environments are also overlapping - located within the same marketplace, for instance - that's a potentially competitive relationship, although collaboration (on standards, self-regulation, etc) can still sometimes pay dividends.
The subtlety of timings
Problems do not need a designed solution, of course: the rabbit/ant/butterfly relationship is a nature-solved problem which does without. But in business the moves are too quick for a purely evolutionary approach to problem solving. Business problems have to have more-or-less designed solutions, whether a new package or service, a new market for an old product, a changed maintenance regime, rebranding, a new business model, etc. Before a designed solution can exist, however, a real-world context and identified need must be recognised even if no detail of them is known: "I have a dream" is a powerful statement of real-world, not dream-world, intent.
The knowledge of the need for a solution necessarily precedes the solution, but it may not precede it by very long. Although defining new problems, the digital economy provides solutions in record time. With service-oriented architectures (SOAs), for instance, business problem solvers can respond ever more quickly and cost-effectively to their environment. iTunes University delivers knowledge without pesky semesters. All the web is geared for speed. Although no fit-for-purpose solution is cheap, the search for an engineered solution - let's call it siftware engineering, if you'll forgive the pun - makes rapid solution possible.
Business problem solving in this new landscape depends critically on understanding the linkages between the players, their contexts and their needs.
Problems of the global economy
There aren't too many ways in which two problems can overlap. Just as pick-up sticks would be a very boring game with just two sticks, the real fun comes when there are hundred, thousands, millions of problems tangled together. Just like there are in the global economy.
Although online economies are beginning to appear, the real-world global economy is as big as it gets. Even so, it is driven by simple interactions between problems. Its highs, its lows, its twists and its turns are all products of the solving of problems.
Dr Jon G Hall is a senior lecturer and researcher in the computing department at the Open University. His current research is to provide complementary practical and theoretical foundations for computing as an engineering discipline.
This was first published in March 2010