Today's leaders have invariably received plenty of training in solving problems with puzzle-like qualities. With persistence and ingenuity, using analysis and rigorous logic, they have become accustomed to arriving at a right solution. The analysis, of course, depends on facts and data. And the facts and data point to insights. The insights in turn allow the leader to wield a set of known tools and procedures to launch a frontal attack that promises a certain solution to the problem.
The classic puzzle in management is the “traveling sales rep problem.” What's the shortest route for someone to drive or fly to a fixed number of cities and return to the original city? The problem, even once you get to a large number of stops, has a definitive answer, even if not easy to determine. The same is true of many analogous questions of optimization in planning, logistics, manufacturing and other fields. The traveling sales rep problem is a favorite of mathematicians.
Solving puzzles like this brings a lot of satisfaction to most people, and it's easy to see why. As in crossword puzzles, picture puzzles or chess, so in operations management, product development, and customer service, people have learned again and again to win—and feel like a winner—with a fixed solution.
Note that by referring to puzzle-like problems like Sudoku, we don't imply simplicity. Many problems with what appear to be straightforward solutions are complicated and difficult. For example:
Determining the lowest-cost providers of materials for manufacturing.
Determining the impact on margins of currency fluctuations in non-U.S. businesses.
Identifying the technical training requirements for operating new logistics software.
Determining consumers' level of satisfaction with a new product launched in Asia.
Determining the impact on client portfolios if the yield on municipal bonds drops.
Forecasting price points based on shifts in commodity markets.
These are tough puzzles to figure out. They have many parts, and the parts interact in many ways—and yet as complicated as they are, they still have single best solutions. And they can still be solved most of the time by just one smart person. As an example, the head of a health care business we know, an executive with lots of experience, had to develop a strategy to resuscitate a money-losing hospital device business. Competitors had invented new technologies and lowered costs, squeezing her unit's margins. Hospitals were replacing some of her business's core products in surgical devices.
The first step for this executive was to come up with a new strategy. She faced some complicated questions: Which segment of the market was growing the fastest? Which customers had the most money to pay for supplemental surgery and medical devices? Which governments reimbursed the most for medical procedures? Which competitors' technology was declining? Which was most promising? Questions like this go on and on. But each has an answer, and she could formulate her strategy based on an analysis of the facts at hand. Coming up with the strategy was still hard, and it was important. To grow her business at that point, the most important challenge was to get the strategy right. But she was facing a puzzle, albeit a complicated one, nothing more.
A complex problem has no straightforward solution, defies purely logical analysis, and never yields to one answer. Complex problems are paradoxes. Distinguishing between complicated and complex is another way of distinguishing between puzzles and paradoxes. That many leaders don't make that distinction goes a long way toward explaining why company leaders so often ask us to come in and help them—and why we often trace their challenges to resolving paradoxes.