• Clearer Thinking Team

Learn a simple model for tackling complex problems from ClearerThinking founder Spencer Greenberg

Persistent problems — such as public health threats, or problematic company culture at a workplace — can seem intimidating or even insurmountable when you first encounter them. If many others have tried and failed to solve these problems, how can you justify believing that you will succeed? But even complex challenges of this sort can be conquered if you take a methodical, well-reasoned approach to solving them that starts with understanding why others have failed. In the video below, ClearerThinking.org founder Spencer Greenberg lays out a simple framework for tackling even knotty large-scale dilemmas.

This talk was given at TiE, a 5000 person conference focussing on entrepreneurship, but the four ways to think about big challenges that Spencer describes — Incentives, Ignorance, Investment, and Irrationality — can help you sort through many kinds of large-scale problem of all kinds. You can watch his presentation in full below; we'll summarize some of his main points beneath the video.

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Some important takeaways:

As a society, we face lots of complicated, seemingly intractable problems:

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At work, especially if we've founded our own company, we also will encounter problems that persist despite efforts to solve them, such as these:

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Generally speaking, a few conditions need to be met before you can solve thorny problems such as these. People need to have an incentive to solve the problem; they need to understand the problem well enough to know how to solve it; and they need to have the appropriate resources available to solve the problem. Rationally speaking, these factors should be sufficient for people to resolve such problems, but people don't always behave rationally. So we have one more condition to satisfy: the people involved must be acting rationally.

As a result, there are four Eyes (i.e. four perspectives, all beginning with the letter "I") to consider when approaching persistent problems: Incentives, Ignorance, Investment, and Irrationality. We'll briefly discuss each of these Eyes, one at a time.

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The first Eye is Incentives. If people aren't rewarded for behaving in the way that solving the problem requires, they often don't do so. If you can change incentives then you can leverage self-interest towards solving the problem.

Whatever your problem is, ask yourself:

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On a social-policy level, creating the proper incentives for solving a major problem might involve encouraging people to work on solutions by creating public grants and competitions; alternately, it might be more effective to create incentives against certain types of action, such as taxes or regulations. If you're running a business, you might encourage employees to work towards solving the problem at hand by offering bonuses or recognition — or, to discourage problem behavior, you might establish rules and monitoring.

The second Eye is Ignorance. Ignorance (i.e. lack of knowledge) can decrease the likelihood that individuals behave in beneficial ways because they don't know why they should behave that way, and it can prevent policymakers from making good decisions because they simply don't know how to achieve the results they desire.

Ask yourself:

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Social problems that derive from ignorance can often be tackled by spreading information to the relevant group through education and advertising, or through basic scientific research to resolve questions that society as a whole can't yet answer. In the business world, training can rectify ignorance among employees, and data collection (e.g. surveying customers) can make new information available to managers.

The third Eye is Investment. Many systemic problems arise from a simple misapplication of the available resources — too little oomph going into effective pursuits, and too much going towards tactics that don't work very well.

Ask yourself:

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If you conclude that you're facing a broad-scale social issue that's caused in part by inadequate resource investment, you can try to direct more resources towards it yourself (if you have them at your disposal) — or you can try to publicize the problem in an effort to encourage others to redirect some resources towards it. Company managers can tackle such issues by either expanding the budget associated with the problem, or by hiring more people to help deal with it.

The fourth Eye is Irrationality. Because the human brain often makes complicated decisions based on unconscious snap judgments, it's susceptible to a number of built-in reasoning quirks called cognitive biases. These biases can mess up decisions badly — from simple consumer choices to major policy questions. We've dealt with this subject a lot here at ClearerThinking; our mini-courses on the Planning Fallacy, the Sunk Cost Fallacy, and Explanation Freeze can all help you learn to avoid some dangerous biases.

Ask yourself:

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This can be tricky to determine, but fortunately, there are some useful tactics available for both social problems and business challenges.

In the former case, you can reward rational behavior, for instance, if people aren't saving enough money, by giving them rewards for doing so. You can also avoid certain cognitive biases by setting default options that use people's biases for good. One example of this kind of tactic is making organ-donor status the default setting for the population, so that individuals need to opt out of being an organ donor, rather than opting in as they do in the United States. (Many other countries use this "presumed consent" model and enjoy stronger per capita organ transplant supplies as a result, which saves lives.)

Businesses can take a procedural approach to unraveling bias-based problems, such as by requiring employees to use checklists for complex procedures even if they know them well already (as surgeons often do), or by organizing major decisions such that plenty of second opinions get taken into account.

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