Over the past 15 years, I’ve been studying how companies create strategy—the most important responsibility of senior executives. Many corporations, I find, have replaced the annual top-down planning ritual, based on macroeconomic forecasts, with more sophisticated processes. They crunch vast amounts of consumer data, hold planning sessions frequently, and use techniques such as competency modeling and real-options analysis to develop strategy. This type of approach is an improvement because it is customer- and capability-focused and enables companies to modify their strategies quickly, but it still misses the mark a lot of the time.
Companies tend to ignore one complication along the way: They can’t develop models of the increasingly complex environment in which they operate. As a result, contemporary strategic-planning processes don’t help enterprises cope with the big problems they face. Several CEOs admit that they are confronted with issues that cannot be resolved merely by gathering additional data, defining issues more clearly, or breaking them down into small problems. Their planning techniques don’t generate fresh ideas, and implementing the solutions those processes come up with is fraught with political peril. That’s because, I believe, many strategy issues aren’t just tough or persistent—they’re “wicked.”
Wickedness isn’t a degree of difficulty. Wicked issues are different because traditional processes can’t resolve them, according to Horst W.J. Rittel and Melvin M. Webber, professors of design and urban planning at the University of California at Berkeley, who described them in a 1973 article in Policy Sciences magazine. A wicked problem has innumerable causes, is tough to describe, and doesn’t have a right answer, as we will see in the next section. Environmental degradation, terrorism, and poverty—these are classic examples of wicked problems. They’re the opposite of hard but ordinary problems, which people can solve in a finite time period by applying standard techniques. Not only do conventional processes fail to tackle wicked problems, but they may exacerbate situations by generating undesirable consequences.
In the areas of public policy, software development, and project design, experts such as Peter DeGrace, Leslie Hulet Stahl, and Jeff Conklin have developed ways of spotting wicked problems and coping with them. DeGrace and Stahl wrote Wicked Problems, Righteous Solutions: A Catalogue of Modern Software Engineering Paradigms (1990); Conklin authored Dialogue Mapping: Building Shared Understanding of Wicked Problems (2006). Policy makers, in particular, have put this powerful concept to good use, but it has been largely missing from strategy discussions. Although many of the problems companies face are intractable, they have been slow to acknowledge the wickedness of strategy issues.
Between 1995 and 2005, I completed three research projects that provided insights into wicked strategy problems. First, as part of benchmarking projects that the APQC (formerly known as the American Productivity & Quality Center) and the Hong Kong Productivity Council conducted, I analyzed 22 North American, European, and Asian enterprises that use innovative strategic-planning techniques. They include ABB, Alcoa, Honeywell, John Deere, PPG Industries, Royal Dutch Shell, Siemens, Sprint, Whirlpool, and Xerox (China and USA). Second, I studied strategy implementation in depth at seven of these enterprises. Third, a colleague, Gaurab Bhardwaj, and I tracked DuPont’s pharmaceuticals business to learn how companies draw up strategies when returns will accrue only in the long run and are highly uncertain. Based on these studies, I’ll explore in the following pages how companies can tame—since they can’t solve—such problems. I’ll conclude by describing a planning process that helps PPG Industries tackle wicked issues.
What Is a Wicked Problem?
There are several ways to define a wicked problem, but according to Rittel and Webber, it has some or all of 10 characteristics. (See the sidebar “The 10 Properties of Wicked Problems.”) Caveat: The criteria are not a set of tests that mechanically determine wickedness; rather, they provide insights that help you judge whether a problem is wicked.
Wicked problems often crop up when organizations have to face constant change or unprecedented challenges. They occur in a social context; the greater the disagreement among stakeholders, the more wicked the problem. In fact, it’s the social complexity of wicked problems as much as their technical difficulties that make them tough to manage. Not all problems are wicked; confusion, discord, and lack of progress are telltale signs that an issue might be wicked.
In my consulting work, I’ve found that when five characteristics are present in a strategy-related issue, executives agree they have a wicked problem on their hands. I’ll list the key criteria below and use them to show how the challenge of growth that Wal-Mart faces today may well be wicked.
