Businesses need a Groundhog Day!
Businesses are still struggling to understand the new world we are living in. The sad statistic is that 70% of $2,28 Trillion investments by 2025 have and will likely fail to produce business benefits. Technology as a silver bullet and focussing on efficiency have been unable to show the benefit promised, because they are not the characteristics needed to be relevant. COVID-19 has not surprisingly ripped through every business that didn’t have the flexibility and characteristics needed in today’s world of wicked problems. Mindsets need to shift and the narrative that will finally click with the old mindset to leap-frog into the new might come from anywhere. It hasn’t come from big consultancies selling Agile and Customer-Centricity. Maybe it will come from a 1993 romcom starring Bill Murray.
Groundhog Day tells the story of a TV weatherman, who gets caught in a time loop on Groundhog Day repeatedly reliving the same day. He only escapes this phenomenon (spoiler alert) after he changes from a self-obsessed into a selfless mindset.
Bill Murray’s character goes through two stages, self-obsession and then resonance. Those might be strange terminologies to use to describe mindset in business, but stick with me for now, please.
I will be a bit more explicit to what characteristics he first rejects and then embraces which are needed in today’s business mindset. Our new world is made of wicked problems, which are problems that keep evolving even after you implemented a solution because the solution will affect the issue further. You can understand them as a moving target, a hydra in away. Our old world only needed to deal with tame problems, which can be easily understood. Solutions implemented to solve them does not affect the problem.
In many ways, they have characteristics that are opposite to each other. Static vs evolving, known adequately vs never fully understood. This leaves classic organisations relatively unprepared to deal with wicked problems like COVID-19 and the interconnected behaviour and interactions of millions of people with their secondary and tertiary impact ripple effects.
The new mindset has three characteristics:
- Being open to re-understanding and constant learning of the problem the organisation is trying to solve
- Knowing that effectiveness is a better investment than efficiency
- Enabling the new evolving problems space to be explored adequately through a shift in governance, away from leadership and to outcome-based teams
To a large extend, Groundhog Day is a perfect example of a mindset starting to understand and act within a world of wicked problems and ultimately mastering it.
In the movie, Bill Murray is unprepared by this change of context. He wakes up one morning and doesn’t notice things have changed. In the absence of understanding the new context, he uses familiar phenomena like deja vu to explain what is going on and expects everything to go away eventually.
Many businesses can relate to that. Without an understanding of the new context, no valuable action can be taken. In the same way, Bill stumbles through the first day, going with the flow that surrounds him, because he has no options or understanding of what he can do. You as an organisation will look at your close competition, as a bank you will look at Monzo, as a telco, you might look at amazon, yet in most cases, you want to copy or align, without a real understanding of why. You still measure the same things, so you only see the same old things. The new is hidden from you, and so are the opportunities that are right in front of you.
What is needed at this stage?
- Forget about the value you think your products have.
- You don’t need a new product or better-looking app; you need to allow yourself to re-assess who you are to the new world and their customers.
- Do you know the problem space you are working within? Expand and explore it for your unique positioning in a wicked problem world.
- Which wicked problem are you solving?
- If you are solving a tame problem, you will be automated and are stuck in a commoditised market.
- Wicked companies explore their problem space and become the best at understanding the problem, which then makes them the most effective and valuable.
Old companies think the ydon’t have time to re-assess who they are. So they keep losing millions on making bad decisions based on an outdated reality. It is too costly to fish in the dark.
Old companies try to look modern by copying the look of Monzo and Airbnb and are diluting their brand value.
Old companies never test more than one solution being live.
Organisations like Nationwide have a great founding history of a bunch of people helping each other buy a house. In the old world, selling mortgages was the best one could profitably do. Today there is more than selling mortagages an organisation can do to help people buy a house. They would be well advised to re-assess their problem space and kill it in today’s world. Are they doing this? No, they are stuck with old world products that they know won’t create the growth they need for the future.
Bill’s mindset is still stuck in his old world. Because of his character, he interprets the new context in the most selfish of ways; he believes it is still about himself. He steals money, tricks women into having sex with him and challenges the police. But the real price, which in this occasion turns out to be Andie MacDowell, his love interest, eludes him, as his clinging onto his old values does not let him get to where he wants to. Even though he starts using the time loop, his new tool, to chase his old goals. He does not see that he is using new tools only to polish old values. He ends up so depressed that he tries to kill himself and the groundhog, in the most spectacular ways, but fails yet again to escape his new context even with this most desparate of actions.
You will have seen this. As organisations train themselves in Agile, Design Thinking and customer-centricity, as they buy design agencies, AI and other expensive assets, they never create value, because they never use the assets or capabilities in the way they need to be used today. Efficiency is stil the focus, not effectiveness in new value areas as it should be. These new tools have the potential to bring in exponential growth, but used for marginal linear fixes they are a misinvestment every time.
I have seen banks spending money on creating faster account opening, even though research shows that customers don’t find that being that big of a pain. A company with over 14,000 employees tried to make things efficient by reducing two different tools to one. Only to nearly miss the fact that there were zero issues to be fixed and training everyone up on the same app would lead to no benefit and cost millions.
What do you need at this stage?
- Just looking modern is spending money without return, so stop doing that.
- If you know your problem space, you will know what needs exist, and your ideas for solutions should inform the tech not the other way around.
- Do you need more researchers and ideators to test more solutions? If you have explored the new problem space, this is a capability that should drive effectiveness.
- Do you have enough insights that justify buying an ecosystem that helps you in your problem space in 2–5 years? If not, don’t buy it and invest in finding out more about your problem first.
- Wicked companies know that spending more time exploring and finding the right WHY is cheap and fast and heavily de-risks failure later in any project.
- Wicked companies know that people and behavioural economics lead the market, not tech, tech has commoditised.
Old companies stay within their commoditised market, where they struggled before and will eventually be bought up or automated away by their new competition.
Old companies think that design is fluff, only benefits customer value and can’t build a business case. Unfortunately that’s very wrong.
Old companies think that tech leads to new opportunities.
Eventually, Bill is shifting his mindset. He turns his focus from what he wants and starts to listen to what others need. He stops being cynical and is committed to others. He learns to play the piano and starts to structure his life towards helping others and saving lives. he does though by exploring the village and its inhabitants bit by bit. This is where things change for him. He becomes the town hero, the cool guy that everyone wants to be around and eventually even gets the girl.
Authenticity and commitment play a large part in this wicked problem world. Experimenting every day to nudge a bit closer in small but valuable steps is what makes wicked companies so successful. The infinite game is becoming more critical.
Because wicked problems keep evolving, there is plenty of space for organisations to explore where within the problem space they want to stand. It is enough space to consider partnerships with the previous competition. Every industry has vast areas to explore and create new value.
Some of the hygiene factors that make a wicked company:
- Is leadership on board to invest and enable the change?
- Can you treat the real purpose of your business as an assumption and explore a new insight-backed vision?
- Can your teams build business cases?
- Can you remove decision-making powers from your team manager or product owner?
- Are they ready to become enablers?
- Can you allow them to fail 98% of the time?
- Can you shift from more significant releases to small iterative steps?
- Could your self-organising team report back to the c-level and it would make a valuable meeting?
- Can you shift your outcome targets from efficiency to effectiveness, from feature-based to outcome-based?
- Wicked companies take 1,000 steps each year to inch closer to the wicked problem they are out to solve. In the process, they create new value every day and customers will pay for that. As an organisation, you will move away from a commoditised market every day. Can you support small steps like that?
The investments companies take on change will grow to $2,28 Trillion by 2025. According to McKinsey, 70% of those fail to produce value or real change. COVID-19 has accelerated the need for more significant change by a good 5–10 years.
It is never clear how many days Bill Murray needed to understand his context and finally commit. Maybe the above helps you identify where you are standing today and what else you might need to do. When Bill is asked “are you god or is this a trick?” he answers “maybe god is not using a trick either, maybe he has just been around for long enough”. Translate that into testing and exploring and therfore producing something every day. Customer centricity is not only about theory and data analysis everyday. It is as much about putting something live and testing it every day.
These are just some of the insights I have collected over decades working with companies. Metaphors and analogies are not for everyone, but this one is oddly close to the iterative, complex and VUCA world of wicked problems we live in today.
I would very much like to hear back from you where you think you are standing and what keeps you from becoming a wicked company. I believe every company can be.