Customers are drowning in products but searching for innovative solutions to their problems. Only the organizations that truly understand their customers and the problems they face can rise above the cacophony of sales pitches, marketing buzz, and ‘me too’ products. Every business, from the tiniest startup to the enormous multinational, needs to solve problems to survive. The larger a business becomes, the more problems it needs to solve – many of these problems are internal issues relating to strategy, structure, business operations, people, and culture. For a business to even exist, it must have conquered ‘stage one’ of problem solving - identifying problems and opportunities in the market. However, many fail in the second stage - understanding the problem deeply and scaling that understanding so they can solve it in a way that creates a genuine competitive advantage.
Many organizations that have been successful and grown significantly over decades can trace their origins back to one or more founders who had a vision, passion, and deep understanding of a problem that existed for customers, the community, or society at large. These origin stories often hold the secrets to what makes and breaks companies. In an increasingly volatile and complex business world, even the largest and most historically successful companies often need to relearn the lessons of how leaders build and scale their problem-solving culture and capabilities. Extensive research by Harvard Business School professor Noam Wasserman found that 65% of startups fail due to poor management and founder conflict, stemming from fundamental issues related to vision, personality, and expectations among the leaders. To survive and scale, leaders often need to get out of their own way, Wasserman identified that 40% of Founders had moved out of the CEO role after their second capital raising and 60% after their fourth.
A common challenge for businesses is the presence of leaders with great knowledge and know-how (Subject Matter Experts or ‘SMEs’) who aren’t great at communicating and coaching others, which impairs the wider team’s ability to develop their own knowledge and skills to understand and solve the problem at scale. And the irony is that the thing many leaders resist doing is the thing that often saves them and their business – delegation and coaching. According to an analysis of over 10,000 leaders in DDI’s Global Leadership Forecast, 71% of leaders are experiencing significantly higher stress since stepping into their leadership roles, yet 81% lack proficiency in the #1 Factor in preventing burnout – delegation. Organizations limit their growth and survival prospects if they struggle to scale, and they compound key person risk if they can’t transfer the knowledge and know-how of key individuals. This is where many business owners and founders need to step back, check their egos, and recruit other leaders with the right personality to help them take their business to the next level.
Even established corporates can learn from smaller organizations that have grown rapidly and successfully scaled their problem-solving engines. A deep understanding of the problem a business exists to solve requires two key things - ‘knowledge’ and ‘know-how’. Knowledge is knowing what is required to solve a problem, while know-how is knowing how to apply that knowledge and possessing the applicable skills. Anyone who drives a car knows to press the accelerator to go faster (knowledge), but few people have the know-how to be a Formula One driver (know-how). While this sounds straightforward, it represents several challenges, particularly when people may perceive the problem in one way while the real cause of the problem, and the genuine business opportunity, is very different. Even small misperceptions of the problem can result in an organization missing out on substantial revenues, taking far too long to get a solution to market, or major reworks that erode profit and customer confidence.
Why solving problems requires ‘knowledge’ and ‘know-how’
In philosophy, a field of study known as epistemology encompasses the knowledge acquired and the systems used to acquire it. Different systems of knowledge have different tools to gather, evaluate, and use the knowledge. An example from scientific and marketing research is qualitative versus quantitative research – one system captures descriptive data while the other captures numerical data. This highlights the first major challenge with ‘knowledge’ - knowing which systems to use in certain situations and stages is complex yet critical to understanding the problem. It’s all about the right tool for the job, and more diverse tools allow for more diverse understanding.
Even when the right systems and tools are applied, there is the second major challenge - sets of knowledge can be known or unknown. A matrixed analysis of ‘knowns and unknowns’ has been used by NASA for decades and is represented in the Johari Window and the Rumsfeld Matrix. If a business already knows it possesses knowledge on a topic, this is a ‘known-known’ – it must be leveraged, enhanced, and scaled. There may be ‘unknown-knowns’ where individuals in the business have knowledge, but the business itself is not leveraging it (talking to current employees who have previously worked for customers or competitors is a simple way to enhance knowledge). There are things that the business knows it does not know – ‘known-unknowns’ such as the future impact of changing market dynamics. The weird and wonderful category of ‘unknown-unknowns’ is only uncovered by exploring the other categories. Using this type of analysis can help leaders and organizations identify gaps in their understanding and build teams that are truly knowledgeable about all facets of the problems they are solving.
Complimenting knowledge is know-how. While knowledge is very cognitive, know-how is skill and experience-based. Knowing a wall must be perfectly vertical is not the same as being able to lay bricks that are level. Typically, mastery of a skill comes from thousands of hours applying it in increasingly challenging and varied situations. In psychology, a central concept for know-how is self-efficacy, which is the confidence a person has in their ability to perform a task. This has been shown to influence performance and behaviours, and when a person has belief and skill they can do something, they are more likely to do it and do it well. For someone to perform well under enormous pressure (think Olympic athletes competing with billions watching) requires years of development, coaching, trial and error, backed by resilience to keep going, and constant refinement through perfect practice. For a business to excel, it needs people with this level of know-how, and as it grows, it requires more people at this level – a massive challenge.
Why great leaders need to make themselves redundant
As a business grows larger and more complex, a business identifies more problems to solve for customers and the community, but it also has more people, processes, and policies that create more internal problems. A leader knowing how to solve the technical or product problem isn’t the same as knowing how to lead and coach a diverse group of people to solve the problem at scale. This is where SMEs can get stuck working ‘in’ the business rather than ‘on’ the business. They may lack the fundamental leadership personality to mobilize others to deliver results – scaling and developing people, processes, and applying technology to solve the problem at scale.
Leadership is a behaviour not a title, and when someone lacks the fundamental ability to mobilize others, they cease to be a leader. As a business scales, SMEs who can’t lead but continue in leadership roles may end up causing more problems than they solve. If they are poor communicators, then they will increase ambiguity and confuse their teams around how to gather and apply the right knowledge. If they are fixed in their views and insistent on ‘their way or the highway’ then they will increase conformity and stifle views on new and potentially better ways of understanding and solving the problem - think Kodak and BlackBerry.
If they are poor coaches they may simply point out flaws but not provide guidance and feedback, which will increase anxiety and create excessive worry in the team about how they’re performing and thinking about their own problems rather than the problem they’re paid to solve. Some leaders lack the fundamental personality to connect with people and apply the right level of motivation and stimulation, so the team may become bored or distracted at critical moments when they need to have a laser-like focus on the problem they need to solve. If a leader is a bit toxic and monopolizes knowledge, fails to scale their know-how, and doesn’t delegate critical tasks then the team may wonder what their role is or question their value and purpose, which leads to more anxiety.
For a team to truly be a high-performing team and function at a high level, then the leader must have the personality to not only drive results but do it in a way that doesn’t burn people out. The modern leader needs to be socially aware and protect the psychosocial safety of their team – minimizing their anxiety and ambiguity, creating the right stimulation and energy, and ensuring low levels of conformity so people collaborate and feel free to innovate, not just follow the leader. The leader’s ability to ‘lead’ rather than ‘do’ and create the right level of psychosocial safety is what enables companies to move from startup to scaleup and, when they are larger and more complex, accelerate from good to great.
To gain a genuine competitive advantage in problem-solving, organizations must measure how capable their leaders are of unlocking the problem-solving potential of their people. To find out more and measure the problem-solving potential of your leaders and their impact on the psychosocial safety of their teams, check out the science behind The GreyScale Leadership Assessment tool and find helpful resources at http://tgsleadership.com
