As part of a broader performance transformation, I once asked an engineer at a major company to describe how he solves his customer's problems collaboratively with his team. He looked at me with a puzzled expression and said, "I have no idea what problem we're solving."
In my first engineering job at a giant company, I felt the same way—completely unaware of what problem we were solving. I had a general understanding of my task, but that was it. Consider a cook who can only follow recipes (i.e., the task), without understanding how or why that recipe comes together to form a delicious dish (i.e., the problem to solve). That cook would not be able to do distinctive work.
Most leaders know that a problem solving-oriented operating model can perform significantly better than a task-based operating model.
In this article, we'll share how we turn companies into problem-solving machines. You'll learn how to organize teams, how to break down your strategy into problems that teams can own, and most importantly, how to inspire every colleague to act like an owner.
Iteration versus goal orientation
There are two ways to chart a path to growth for a team:
- Iteration - this is working forward from your current state. Iteration (through experimentation) is often critical to fully solve a problem. However, when over-iterating, a team wastes time and resources on low-value work. They have moved past the Pareto point.
- Goal orientation - this is working backward from your future state. Goal orientation is critical to solve for global optima, not local optima. Often, iteration can lead to dead-ends, and a completely new approach is needed.
A team needs to be built to do both well, and that can come from structural choices.
For example, another large tech company where we're leading a performance transformation would disband their development teams once a feature was released. This tactic prevented iteration, and as a result, their organization was littered with products and features that didn't achieve product-market fit. Moreover, because everyone knew these teams would be disbanded, stakeholders would cram as much scope into their first release as possible. This meant even their first releases came out slowly.
On the other hand, another tech company we worked with was organized into small, cross-functional teams. However, because the team lacked goal orientation, it spent its time on low-value iteration, improving things that didn't create much value for anyone.
And in one other case, one organization had a strong sense of its goals, but each goal needed a lot of cross-team problem solving. As a result, progress was incredibly slow.
What all three of these organizations show is that the structures you build profoundly impact your teams' ability to drive growth through iteration or goal orientation.
The motivational implications of structure
We often write about how motivation drives performance. We encourage you to read some of our previous work or our worldwide bestselling book Primed to Perform if you want to learn about this topic more deeply.
To recap, when a person is driven by play, purpose, and potential for their work, they will outperform. When a person feels manipulated with emotional pressure, economic pressure, or inertia, they will underperform. These motives can be impacted deeply by the structure of a team:
Setting up problem solving organization structures, in five steps
Conceptually, setting up a problem solving org structure is not complicated. The challenge is creating the right dividing lines in what will often feel like highly integrated and intertwined problems.
Here are five steps to unlock problem solving through good organizational structure:
- Factor the problems of the organization
- Assign each team a problem (or set of problems)
- Assign teams the most relevant non-problem solving work
- Make sure your teams have the right leadership roles
- Start the strategy process
STEP 1: Factor the problems of the organization
What we recommend is to start by factoring (i.e., breaking down) the problems that your organization must solve to achieve its growth strategy in the next three years. Three years usually gives teams enough time to build expertise and iterate fully. (Hardware companies may want to lean closer to five years.)
For example, imagine you're building the technology for a ride hailing application. You can imagine the problem factoring like this:
We generally recommend doing this exercise for a three-tiered vertical slice of your organization all at once. For example, the following tiers would work together on their problem statements:
- Tier 1 - leadership teams
- Tier 2 - middle management teams
- Tier 3 - working teams
It takes time and discussion to get this right. That's why problem factoring should be part of the quarterly strategy rhythm of your organization. When factoring problems becomes part of a quarterly cadence, it should become much easier - like pruning a bonsai tree rather than dealing with an overgrown forest.
When factoring problems, we often pressure test executives by asking things like:
- Which problems are critical for creating competitive advantage? In other words, which problems will really differentiate you from your customers? Those problems usually should be elevated to tier 1 or tier 2.
- What is your main growth bottleneck? Are those bottlenecks represented as tier 1 or tier 2 problems? For example, one company's main bottleneck is that their differentiators are not obvious to their buyers.
- What problems are simple to solve? For example, achieving competitive parity in a certain area is an easy-to-solve problem (since competitive benchmarking is often enough). These simpler problems should be pushed deeper in the structure to tier 3 teams.
STEP 2: Assign each team a problem (or set of problems)
Once you have factored your main growth problems, you may realize that you have more level 3 problems than teams. In this case, sort the problems into groups so that similar problems are together. From there, assign groups of problems to teams.
For most organizations, the problems or problem groups will align pretty neatly with the existing org structure. So, ideally, this step is not that difficult; you're essentially mapping all your people to problem spaces.
For example:
You could have reversed step 2 and step 1 if that is conceptually easier. But doing so creates the risk that you're overly biasing your problem solving to fit your existing org structure. This creates the potential for Conway's Law to become a curse rather than a competitive advantage. (In a nutshell, Conway's Law states that an organization's solutions end up mirroring its structures.)
STEP 3: Assign teams the most relevant non-problem solving work
This five-step process is focused on growth-oriented problem solving. But there is a lot of other work that is needed to keep the lights on. Your next step is now to map that work back on to each team.
We generally recommend doing this mapping at the tier-2 layer, because this group will need the ability to make slight adjustments in scope to fit the "sand" (i.e., small, keep-the-lights-on work) between all the boulders (i.e., the major growth drivers).
When mapping work to teams, there's no way to be perfect. And it doesn't have to be. But you do need to be able to explain the logic of your choices to each team - and you would be wise to engage working team leaders in helping you refine the mapping of "boulders" and "sand" to each team.
STEP 4: Make sure your teams have the right leadership roles
Driving growth as a company or as a team is much more difficult than it used to be.
- Growth ideas are much more complex. For example, we're working with a group of retail stores who have learned that winning is no longer about showing up. Instead, retail store employees need to figure out how to engage with their communities in ways that scale through social media.
- Companies are much better at copying each other, so innovative ideas don't create the same runway. Apple's iPhone, a groundbreaking smartphone technology, saturated in market share within only a few years of launch.
As a result, in every team, problem solving is more difficult. Colleagues must become:
- Explorers who are constantly finding new ideas
- Visionaries who are integrating those ideas into coherent visions and strategies
- Galvanizers who mobilize people to achieve visions
- Achievers who are getting things done and solving everyday obstacles
Rarely do you find people who excel at all four problem solving roles, and even rarer still at the tier 2 or 3 layers in your organization. But in order to make sure that each problem gets solved, there needs to be representation of all four of these problem solving personas.
So, at this stage, you want to map these problem solving leadership roles to your teams, especially at tier 2.
For example:
When you use the Factor platform to manage your goals and problem solving, you can easily see:
- The problem solving preferences of each colleague
- When teams are misbalanced
- Which problem solving skills would be useful for each colleague to master based on their preferences
STEP 5: Start the strategy process
At this point, the structure side is more or less complete. Now teams should take their main problems ("boulders") and related work ("sand") and break them down just one more level, into concrete problems that can be solved in a matter of weeks.
Where to get started
Every step in this process is meant to create clarity and velocity. An organization that seeks to create leverage has to make it plainly clear what problems each team is solving. This may seem daunting at first, but this is a critical step in building an ultra high-performing culture. Once each person has a clear problem to solve it, they shift from order-takers to owners.
To manage this process at scale, use the Factor platform. It helps teams solve problems, factor problems, manage problem solving preferences and habits, and grow problem solving skills.
To learn more, reach out to us or join our next webinar.
