The last decade has seen accelerated business change more than any time before. The maturity of connected technology, the scale of global growth and the breadth of new business models have delivered a wholly different set of opportunities for businesses to work through. Most large enterprise businesses are evolutions and conglomerations of 20th-century industries that efficiently solved complicated problems around scaled development, distribution, price and marketing.
While these attributes may have conquered vertical integration and built resiliency at one time, today, they are no longer sufficient to address the business issues of our connected markets and empowered consumers. This is even more evident now in a post-pandemic world. Businesses in 2021 are being challenged by interdependent complex issues and new delivery models, which require an experience–led approach to problem-solving.
The Critical Difference Between Complicated and Complex Business Problems
Understanding the difference between a complicated and complex business problem is crucial. Before a problem can be managed effectively, it must be recognized for what it is. If you manage complex things as if they are merely complicated, you’re likely setting your company up for failure.
So, what is the difference between a complicated 20th-century business problem and a complex 21st-century business problem?
Complicated problems are hard but can be resolved through systematic reasoning and processes. With complicated problems, you often can identify the constituent parts, optimize each individually and deliver value across a solution. Clear, MECE and broadly applicable. Whether that was global supply chains, optimizing manufacturing or franchising service experiences, the goal has been to optimize elements in the process to improve the bottom line and create efficient scaled solutions.
Complex problems, on the other hand, involve many unknowns and are created when different actors and systems interact in a way that can result in unexpected cause-effect scenarios. These can be as distinctive as looking to improve retail employee career support globally, building a green energy marketplace or delivering home health care for people with chronic conditions.
Dealing with such complex problems requires a more nuanced approach, including firsthand knowledge of how different incentives and constraints within a network of actors might adjust the experience for the people you are looking to deliver value for. This type of work cannot easily be strategized or architected from afar. Instead it requires individuals to be active in the participation and immersion of the experience to identify the user needs, craft insightful hypotheses, test their ideas in the real world, thoughtfully measure outcomes and iterate.
Recently we worked with a large retailer to help them understand the opportunity to create a B2B prosumer offering. Through interviews and testing, we realized that a major improvement to attracting and retaining customers in this new audience required better data-driven services for their front-line employees. Through rapid prototyping in coordination with their employees, we developed a new inventory interface, tested with real customers, and operationalized this in under 12 weeks to unlock a new experience and expand the share of wallet with a new audience.
Business Problems Today Need a More Resilient, Experience-Led Approach to Solve Them
Applying a 20th-century solution approach to a complex 21st-century problem will invariably fail to account for all the conditions, levers and expectations of the people involved. The focus should be less on knowing the answer and more on understanding the opportunity deeply. It is the best time to innovate. It is the worst time to stand still.
Taking an experience-led approach to problem-solving helps businesses to:
- Achieve desired outcomes
- Build business value by finding new ways to delight users with solutions that are fit for purpose
- Capture better intelligence and awareness of the context in which users are interacting
- Solve for non-obvious needs that create greater value for the user
Ultimately, an experience-led approach to problem-solving helps you to deeply understand a complex environment and context in order to iterate a solution that delivers against multiple needs. Companies are better positioned to thoughtfully understand what needs people have and deliver more impactful experiences as a result.
We worked with a large healthcare company to identify new product offerings for a very complex set of patients. In working with the customers and the client’s customer support team, we found that many services that were meaningful fell into categories like supporting the caregivers, coordinating third-party care services and restorative care for the families of patients. This insight led us to develop a more holistic product offering through partnerships instead of relying on the client to build or own all the capabilities and still monetize a product.
More Businesses Need to Become Outcome Obsessed
You have probably heard the phrase of focusing on ‘outcomes over outputs’. However, focusing on what a great outcome looks and feels like for the user, helps us to think more broadly on all the contexts we can use to design experiences and products. In a world where better, cheaper and quicker is not enough, focusing on outcomes helps us to frame opportunities that are inspirational instead of simply tactical.
This is a fundamental shift in focus for many. It brings with it a lot of baggage in questioning the norms and constraints that we have worked under for centuries – and that have underpinned the development of, what by all rights, is a successful society. We are no longer judged on only what we can deliver and if it was functional, but if it was impactful and delightful for the user. When we help companies create new business offerings, or reinvent their existing product capabilities, our goal is to make sure we are not just optimizing for complicated issues but developing muscles to compete in an increasingly complex environment.
Prophet’s Experience & Innovation practice can help you to underpin a rigorous approach to business problem-solving. Get in touch here.