Why smart companies become stupid: the Preventable Problem Paradox

Have you ever wondered why a smart company like Facebook is also the undisputed World Champion of Self-Inflicted Debacles?

Why does Google fall prey to avoidable mistakes—across its products, policies, and governance—over and over again?

And what about the mistakes Uber and so many others in our industry have made over the years? 

Mind you, I’m not talking about mistakes in hindsight. All of us have been guilty of those.

Rather, I'm talking about mistakes that you can file under the “What The Heck Were These People Thinking?” category. 

When we read exposés in the press that lay out the timeline and events leading up to such mistakes (and there have been so many in just the past 5 years), the most common conclusion tends to be:

“The people in these companies are stupid”

I can assure you they are not. 

The next most common conclusion tends to be:

“The people in these companies are evil”

Again, I can assure you they are not.

So, what is really going on when an otherwise smart, well-meaning organization makes obvious blunders?

And why do some organizations tend to do this over and over again?

While the exact details surely vary by situation, one organizational cognitive bias is most often at the root. What is it?

Dear reader, I present to you the Preventable Problem Paradox.

Now, why do smart, even tremendously-successful organizations fall prey to this?

To understand that, we must watch this scene from the movie Superman II.

It is, in my very humble opinion, among the greatest 200 seconds in motion picture history.

Watch it. I’ll wait.

No, really, watch that scene before scrolling down.

Welcome back. So, what did we just see?

Let’s break it all down.

Clark Kent (who is actually Superman) is at Niagara Falls with colleague (and love interest) Lois Lane.

Clark notices that a little boy is about to climb up on the railing of the observation deck. This is not good (for the boy).

Clark rushes towards the boy, asking him to stop. Boy’s mom also notices and manages to get the boy down. He's safe now, thanks to Clark.

Notice, Lois is oblivious of Clark's attempt to save the boy during this whole time. This is important. Remember this for later.

Clark runs back to Lois asking her if she saw what just happened.

Lois just ignores Clark and responds that she’s hungry. Clark heads over to the nearby hot dog stand.

Meanwhile, the boy is at it again. But this time, putting himself in even greater danger. He’s now on the other side of the railing.

And sure enough...

Boy is falling!

Now, Lois springs into action. Somebody help!

Clark, at the hot dog stand by now, hears the commotion.

Unidentified man yells “Somebody do something” (as an aside: 1980s special effects at work here)

Clark Kent has now transmogrified into Superman, zips towards the falling boy.

So close.

Crowd cheering Superman along.

Superman manages to reach the boy just as the boy is mere inches from certain death.

The crowd's appreciation begins.

The return journey.

Almost safely back on the ground.

Look at those faces, in awe, and appreciative of what Superman has just done.

Look at Lois Lane. Pretty much ignored Clark Kent earlier when he tried to save the boy, but is vying for Superman’s attention after this dramatic save.

Scene ends.

Now, I have a question for you.

If Clark Kent is like most of us — if he cares about appreciation for a job well done — what will he do the next time he’s in this situation?

(A) Will he try to prevent the boy from falling? Or,

(B) Will he let the boy fall, transform into Superman within a nanosecond, and heroically rescue the boy from certain death?

It should be obvious that, if he’s motivated by appreciation and accolades (as certainly most humans are), you should bet on (B), not (A), being the correct answer.

Mind you, this is not merely an academic question.

Because what you just saw happens in the organizations that we’re part of, every... single... day....

This is such a common phenomenon that once you understand it, you’ll notice it everywhere. Companies, non-profits, government. Especially the government.

The Preventable Problem Paradox:

Any complex organization will over time tend to incentivize problem creation more than problem prevention.

And while no organization (or leader) wants to incentivize problem creation over problem prevention, they unwittingly end up doing it anyway.

This paradox is so important for us to understand, as a community and as a society, that I’m going to share another example.

Below, you'll see a remarkable couple of paragraphs from Rolf Dobelli’s excellent book, The Art of The Good Life.

Paragraph 1:

Paragraph 2:

With this contrast between how humans innately perceive problem solving vs. problem prevention, is it any surprise that this paradox permeates almost every complex organization?

Let’s bring this back to our role as leaders within an organization.

During the earlier stages of your career, it makes sense for you to go in and solve whatever problem the team is facing.

And while that is an eminently reasonable starting point, it's a terrible ending point. Because, after multiple years of doing this, many leaders convince themselves that problem solving is their job. They come into the office, look for the “problem of the day”, and then get to work. And having successfully solved today's problem, they go back home satisfied about "a job well done", within an environment that (to its own peril) rewards the perception of speed rather than true velocity.

By contrast, if you want to be a true and unselfish leader of people, to do what’s right for your organization and its customers, you need to be the captain who just avoids the iceberg, and not the one who unwittingly hits it and then heroically attempts to rescue everyone.

Which, in conclusion, brings us to this question:

Leaders looking to combat the Preventable Problem Paradox should:

1. Create awareness of its existence (within their teams and their company)
2. Change their team's norms for recognizing impact
3. Embrace pre-mortems
4. Advocate for changing company-level rewards systems

By reaching the end of this article, you have already taken the biggest step towards #1: all awareness starts with the self. The good news here is that #1 through #3 are within your singular control as a leader. And while by no means is it going to be easy, your customers, your team, your company, and ultimately, your industry will benefit from you recognizing the Preventable Problem Paradox and combating it with all you've got.

Footnote:

Want to explore this topic further?

Check out this video of my December 2019 SVPMA talk below. Start at 5:04 mark for the problem solving vs. problem prevention piece, along with a deep-dive on pre-mortems.

Also be on the lookout for more content on the ways to combat the Preventable Problem Paradox here on LinkedIn.