Ditch the heroism and solve upstream problems

Dan Heath’s books are always well researched and his new book “Upstream” is no exception. He selects case studies related to complicated societal issues that require solutions involving many stakeholders. His earlier book “Switch” grapples with developing a growth mindset to enable a change while the current book “Upstream” is about treating the root cause of a problem instead of focusing on symptoms. Dan recommends pushing efforts as “Upstream” as possible to solve a problem.

Dan begins by identifying the key barriers to our upstream efforts. He then goes on to recommend the framework required to implement the upstream changes. I think Dan’s recommendations are concrete, functional and show us a path.

Why is it tough to identify the root cause or upstream problems?

• We accept the status quo — Accepting a problem requires to shed our problem blindness and stop seeing the problem as inevitable. Many years back, a company I was engaged with had a problem with freshmen students leaving after admission. While the problem was acknowledged, we accepted this phenomenon to be normal and solved it by overbooking. Overbooking solved the issue of lower enrolments but didn’t address the core issue of dissatisfaction of the customers who left us. Later, when we addressed the root problem, we identified several improvement areas that led to the creation of a separate customer service team. In the book, Dan gives a similar example of the low graduation rate in Chicago Public School and how an on-track program helped in addressing student attrition problem at its root. At times, problem blindness is unintentional as we remain focused on the job and lose sight of peripheral happenings akin to “missing a gorilla in the room”. Accepting a problem is also a denial process to avoid an obligation to rack our brains. Imagine situations where we have substituted an original hard question by an easy question. Shall I buy the stock of Tesla?” was replaced by “Do I like Tesla cars?” Daniel Kahneman calls swapping questions a cognitive bias in his book Thinking Fast and Slow.
• Our short-sightedness — Our mind acts on immediate issues and discards giant problems. Dan calls this phenomenon “Tunneling”. There is also glory and sensation in fixing immediate problems and we all enjoy the accolades since the solution can be attributed to the problem instantly. Many of us have stayed back at work to meet deadlines and might have become addicted to the heroism. We are reactive when we let events drive our actions and it’s an endless loop. Reactive actions might also hinder long-term fixes because of their inherent misalignment. Opposite of Tunneling is System thinking which begins with root cause analysis and working towards creating a sustainable solution.
• We think root problems are not urgent — Prevention of disease requires an action from a leader. All of us can relate to the current challenging situation the world faces due to COVID_19. The situation requires immediate response and almost all countries have taken drastic steps under the leadership of the head of state. While the steps are obvious in the current situation, a slow-moving disease can be overlooked as the situation was not demanding enough to make the cure a priority. Nonessential problems do not have an owner. In an organization, leadership might not emerge due to the failure of allocating the problem to a specific function. How can we have a person who will identify upstream problems worth fixing? The next section offers guidance.

How will we implement Upstream change?

Dan gives a comprehensive framework to surmount the challenges we face working towards identifying the root cause, addressing and fixing the problem at its core. I have changed the order of solutions within the framework to suit my thought process

• Creating a mission team — Reserve resources towards finding insights into the operations and align the efforts of the team members by setting clear objectives to solve the root cause problems. Often what seems to be a problem might just be a symptom, and hence the mission team’s goal is to unearth the root cause. The mission team brainstorms with various functions of an organization regularly to find solutions that address the root cause. Multiple functions must be involved since problems are interconnected and the solutions require buy-ins from all stakeholders.
• Taking a proactive approach — Proactive approaches help to anticipate problems before they pose a risk to the system. Think of customer service – shall we proactively design a customer success program with a primary goal of keeping the customer happy without allowing her to complain? Customer success programs are common in hospitality industries and subscription based services. Churn, a big measure of customer satisfaction is the “downstream” problem solved by creating an “upstream” customer success program. In the book, Dan has given examples of identifying the risk of churn early in the life cycle of a customer for a successful intervention. Tracking usage and engagement metrics are tools to identify those “At Risk” customers and these are “smoke-detectors” according to Dan. Why don’t we create an onboarding specialist who shows customers the path to a happy engagement?
• Hunt for leverage points — Changing a system is hard because of the power it possesses and its existence over a long period. The complication also arises because a combination of multiple factors is responsible for the root cause. In the past, from my own experience, we ended up having dissatisfied customers who paid different prices for the same service in our stores. Uneven discount methods and decentralized sales teams were the fundamental issues that equated to customers having to pay dissimilar prices. Those were the swing factors or “leverage points” which needed upstream intervention. We had to create a system that generates an even discount method based on a rule and tweak the structure of the sales team. Once leverage points are identified, for a successful intervention we must immerse ourselves into the problem to find the cure. Short term ROI calculation is often a drag to find a solution. In the above example, a robust software may have dented our pockets in the short term, but it created a satisfied customer base leading to a higher ROI in the long run.
• Measure success — Define incremental and measurable success factors in line with the objectives and aligned with the true mission. Progressive small wins are necessary to reach that big daring goal. Dan makes a distinction between small wins in the short term and quick fix bandages which can be misaligned with the upstream measures. Another common pitfall is to shortchange the vision by acing it through unscrupulous means which we often call “gaming the system”. Consider the example that you may have heard before. During the British rule in India, the authorities announced bounties on successful catching of cobras, which increased its venomous presence across Delhi. The reward led to people breeding cobras instead of catching them. I am not sure if it’s a true story but the “cobra effect” has become a prime anecdote for misaligned incentive structure leading to gaming of the policies. We will never achieve a perfect structure in the beginning but to prevent gaming, we must quickly intervene and change after we have sniffed the misalignment. A CEO once told me “Setting incentives for alignment is a constant chess game”, so play it well.
• Take a bird’s eye view — Gaming also happens due to poor system design. While one function of an organization might benefit from an incentive structure, another function might be paying the price for it. Once, a consumer goods company set measures to reduce its manufacturing costs and ended up with consumers claiming excessive warranties. We choose to pay for a problem when it has already occurred, and when we haven’t paid for the prevention. Paying for prevention requires second-order thinking, experimenting with a closed feedback loop so it’s easy to reengineer the solution. We often call it beta testing, which is a controlled experiment with a feedback loop. A feedback loop helps in adjusting wrong practices. A footballer can practice shooting the whole day but without feedback from the coach, he will continue to use the wrong technique.

The system is constantly evolving, so let’s “dance with them”. To quote from the book “Success comes when right things happen by default — not because of individual passion and heroism”

What is takes to move away from our downstream bias?

Bias towards downstream activities is attacking urgent but not important problems. Let’s see its relevance in the current COVID_19 situation where businesses are exposed due to the absence of a business continuity plan. Nassim Taleb, the author of Black Swan says COVID_19 is not a black swan event. The epidemic was expected with growing travel across the world as predicted by several eminent personalities. Yet corporations and countries were not prepared with a response plan to a pandemic situation like this. During the early days of the breakout, travel continued which led to the spreading of the disease across the globe. In the book, Dan says preparing for a major natural disaster (hurricane in this case) requires practice and building a habit that can offset our “short-sightedness”. So, without a didactic tone, let a healthy lifestyle and preventive healthcare be our “upstream” intervention for ourselves in a post-Corona world. 

Lastly….

It’s hard to not like the book because of the real societal case studies Dan has used in his research. There are, however, few ideas that didn’t resonate with me. Dan mentions focus as a reason behind various company functions being myopic to root problems. In my opinion, focus brings deep expertise that can be utilized to solve critical problems. Harnessing expertise and creating harmony between various functions is the challenge we must solve to address the root problems in an organization. Dan also thinks we address upstream problems when it involves our kids. I would say its partially true. Being a father, do I not have short-sightedness dealing with my kid or am I always taking a proactive approach? Many of these principles can be applied in our personal life, nonetheless.