Whose Problem Is It?
Whose Problem Is It?
Your customer, your business, and the problems that matter
In my last article I wrote about the problem lens.
I explained its role in defining strategy, and in linking strategy to innovation—whether for digital transformation (DX) or otherwise.
I showed how defining strategy in terms of problems to solve can help you:
Avoid the distraction of “shiny” new technologies
Shift your focus from solutions to outcomes
Widen the scope of your innovation search
Apply methods—such as agile, lean startup, design thinking, or product management—that emphasize iterative problem solving over rigid product development
In this post, I want to explain how to put the problem lens to work inside your own business.
Two Kinds of Problems in Strategy
When defining problems to solve, I always ask executives to begin with the most pressing unmet needs of their customers.
Why? Because we need to overcome our bias to think from the point of view of our business.
So instead, we strive to focus on the customer’s point of view. Our goal is to fall in love with the customer’s problem.
But that is not the only path to innovation!
For our strategy to create and capture the most value, it should also focus on problems faced by the business itself.
I recently discussed this in a meeting with the digital team of a hospital network. For them, innovation is not only about solving problems for patients. It must also include solving problems for physicians, nurses, and others providing care.
Strategic Problems: Ecommerce
Let’s take another example.
Imagine you are in charge of running a fulfillment center (i.e. a warehouse for storing and shipping inventory) at an ecommerce business.
Of course, there are customer problems to solve—relating to delivery speed, tracking, notifications, and the returns process.
But that is not all.
Two of the most important problems that you need to continually get better and better at solving are “picking” and “packing.”
“Picking” entails responding to every incoming order by picking the right products, among thousands, from the right shelves and getting them into a single plastic bin on a conveyor belt—as fast, and as accurately as possible.
“Packing” is the problem at the other end of that conveyor belt. With each order, you need to select the optimal packaging for an assortment of products, and pack them up—as quickly as possible and with minimal wasted space or cardboard.
Running a fulfillment center is mostly about getting better and better at solving the problems of picking and packing.
Strategic Problems: Subscription Service
I’ve written recently about the TV industry, and how legacy players are facing new problems as they pivot to subscription business models—problems of customer acquisition and retention.
On a similar note, in “The Digital Transformation Roadmap,” I describe the subscription model of an industrial gas company, Air Liquide. One unit of Air Liquide provides subscription deliveries of specialized gas canisters to small and mid-sized businesses.
An important problem for their customers is to know when their tanks of gas (oxygen, hydrogen, etc.) are running low so that they can be replaced before running out. (If you’ve ever owned a gas grill for cooking, you can sympathize with the customer!)
Solving this problem requires innovations in the tanks’ digital sensors, analytics, user alerts, and a seamless reordering experience.
But Air Liquide also faces a different problem: how to predict subscriber churn. Solving this requires building AI models to predict which customers are at greatest risk of unsubscribing from its service in the next thirty days.
Note that this is not a problem experienced by the customer. It is a problem for Air Liquide’s marketing director in charge of customer accounts and retention.
Customer Problems vs. Business Problems
We can think of strategy as focusing on two kinds of problems. Let’s define each here:
A customer problem:
An important problem faced by the customer that you (or your team, function, or business unit) serve.
A business problem:
An important problem that you (or your team, function, or business) face in doing your own work.
Applying the Framework to Internal Functions
This distinction may seem clear if your team has a role—like marketing, or product development—that directly touches external customers.
But how do you apply the two kinds of problems if you are leading an internal-facing business function?
You start by defining your “customer”: the stakeholders within the enterprise that your team is meant to serve.
Imagine you are in human resources (HR). You may define your customer as the other business units that you help meet their talent needs (acquisition, retention, training, etc.).
An example of a customer problem for HR might be to “help the Data Science team hire machine learning experts in a competitive market.”
An example of a business problem might be to “measure the impact of learning programs that HR creates for employees.”
(Note that we define this as a business problem because the HR team is solving it on its own behalf.)
Common Business Problems
Much innovation theory focuses only on defining customer problems to solve.
But I have learned, through work with diverse companies, that solving business problems is also critical to growth.
Some of the most critical types of business problems I have seen fall into these categories:
Forecasting
Planning and coordination
Business development and sales
Customer relationships
Operational accuracy and speed
Safety and employee experience
Data and IT integration
In the table below, you can see examples of real-world business problems from companies that I have led in strategy development workshops.
Who Owns the Problem?
Every problem has an owner—the person, or job role, that experiences the problem most directly.
This may be someone outside your team/function/business (think of the Air Liquide gas subscriber).
Or it may be someone inside your team/function/business (the Air Liquide marketing director).
Whenever you define an important strategic problem—it is critical to ask, “WHOSE problem is it?”
Every problem has an owner—the person, or job role, that experiences the problem most directly.
You need to know this upfront, because only the owner can validate or confirm: your definition of the problem, the severity of the problem, the workarounds (“existing alternatives”) currently being used, and the unmet needs or frustrations that remain.
Once a problem is validated and clearly understood, any potential solution must be developed for that problem owner.
Think of the small business owner receiving deliveries of gas canisters from Air Liquide, for whom the company wants to design a new notification tool and reordering system. Every aspect of Air Liquide’s solution must be designed to work for that customer in the context of their daily work.
Or think of the marketing director within Air Liquide, who needs help predicting which customers are more likely to churn. Any new analytics tool must help that marketing director in the context of their daily workflow.
Whatever your strategic goal, the solution must be tailored to the needs of the owner of the problem that it is meant to solve.
After all, your innovation will only succeed if THEY adopt it.
Evolving and Rethinking the Problem You are Solving
What problem you are solving is not always clear, nor is it fixed in stone from the start.
Even who you are solving for can evolve in the process of customer interviews and experimentation.
Here’s a real world example. A well-known enterprise technology company was successful at selling a new software-as-a-service (SaaS). But it struggled with high customer churn.
The question was, why?
After customer discovery interviews, it turned out that users loved the promised benefits of the software, but they found it exceedingly difficult to use. So, after a few months of paying for it without reaping its benefits, they unsubscribed.
Once this was understood, the company shifted its focus to developing a better training program to accompany new sales.
This solved the customer problem (too hard to use), which in turn solved the original business problem of new buyers unsubscribing without using the tool.
The Limits of the Problem Lens
Defining urgent problems for your customers and business is a powerful tool for defining strategy and linking it to innovation.
But there are important limits to the problem lens.
By its nature, the problem lens will tend to steer your strategic thinking toward your current customers and your current business.
Indeed, I have seen how many customer insight tools—like customer journey mapping—are extremely effective at uncovering problems within your current business as you run it.
But at the same time, they can allow you to miss opportunities for innovation that serves new kinds of customers, or that might unlock growth in new directions.
Too much dependence on defining “problems” can lead you to focus on fine-tuned improvements to the business you already know best—your current core.
Thinking Beyond Problems
How can we overcome this inherent bias of the problem lens?
We can start by pressing more deeply into our customer insight work to seek the deeper underlying motivations or needs behind a customer’s actions.
But we can also expand our search for strategic priorities by deploying a second lens to give us another perspective on the search for growth: the opportunity lens.
I will return to explain the opportunity lens in our next article.
NEW BOOK:
“THE DIGITAL TRANSFORMATION ROADMAP: Rebuild Your Organization for Continuous Change”
ORDER NOW:
Hardcover: https://amzn.to/41U85dl
Kindle: https://amzn.to/3OWD437
Audiobook: https://bit.ly/DXR-Audiobook
Bulk orders up to 60% off: https://bit.ly/DXR-bulk-orders