Businesses often follow a define-plan-execute method of problem solving: spend time up front rigorously defining a problem, develop a solution plan, and execute.
This sounds simple enough, but businesses large and small inevitably spend excessive resources following this method only to realize that, in hindsight, they should have solved a different problem. To lead an innovative company, learning to find the right problems is at least as important as solving them well.
The right problems are often concealed by deceptively unambiguous problem statements. For example, in 2006, Netflix offered a $1 million award to anyone who could figure out a way to improve their viewing recommendations algorithm by 10 percent. Hitting the benchmark took competing teams from top companies and universities almost three years. While the amount of work procured for $1 million was impressive, the effort failed to solve the right problem and was never fully implemented.
If Netflix had framed the problem ambiguously, i.e., “we want to improve recommendations” rather than “we want to improve our recommendation algorithm,” the answer might have been easier to come by. As Netflix’s business evolved to accommodate the preferences of each family member and provide more personal recommendations, they found this problem could be solved by simply splitting family accounts. Read more…