The evolution of problem solving

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The professionals who aim to tackle modern organizational challenges have to learn to deliver holistic solutions that drive value realization.

Over the past many decades, enterprising thinkers and organizations have developed many systems to solve for the same universal business problem — how to get and keep customers while increasing profitably. In the  decades just after World War II, W. Edwards Deming‘s model of total quality management (TQM) mapped out how to increase efficiencies through whole-enterprise workflow. Enterprise resource planning (ERP) went a step further by adding software and technology to the mix. Soon after, Six Sigma taught managers to drill down and cut waste to improve productivity.

Each of these methods of solving a big problem was spawned in an era dominated by manufacturing and durable goods, when technological advances were measured in years, and when consumers had far fewer options.

But things are different now. In the current service-driven economy, technology changes in an instant, and consumers — be they end-users or corporations — are more fickle, and willing and able to switch loyalties for better experiences. And so the discipline of problem solving has evolved accordingly over the past decade. Deploying the tools of design theory and agile management, companies aim to convert their enterprises into vehicles that can deliver superior experiences (rather than simply products or just a singular service). The method is to develop processes that yield iterative improvements and to deploy cross-functional teams to solve problems in new, faster ways.

The success of such efforts centers on a single premise: The companies that will ultimately prevail are ones that focus on the best solutions that can be deployed in the shortest amount of time. The solution may take different forms: a new tech product, an app, a customer experience, a service offering, or some combination of all of these.

Consider Philips, which started in 1891 with the lightbulb, then expanded into a wide range of products, including electronics and healthcare. Over the last decade, Signify (Philips’s spin-off of its lighting business) has shifted the focus to helping customers address sustainability issues and tapping into their interest in the circular economy. Lighting-as-a-service, introduced in 2017, for example, allows companies — even municipalities — to pay a monthly fee for a certain level of illumination, while Signify maintains the infrastructure. Philips’s healthcare business has been emphasizing refurbished products and recycled components paired with warranties for customers to enable a shift to a waste-free circular economy.

Or think about a company like SAP. It initially found success with products — packaged software and enterprise systems that solved the problems companies and people had at the time. But as its customers’ problems became more complex, and they wanted software to aid with integration, planning, and technology changes, the company evolved. SAP folded in its consulting subsidiary in the early 2000s so that it could more effectively offer solutions, not just products, to its global customers.

The delivery companies UPS and FedEx have made what seems like a round-trip evolution, from product to service to product again. They started by providing a simple product (shipping) that solved customers’ needs to move packages from one point to another. They evolved to offer shipping solutions (customs clearing, logistics, and small business support, among them), which solved customers’ needs to manage more complex shipments. They have further evolved by turning their automated shipping solutions into products that solve customers’ needs with technology that has elements that are repeatable, consistent, and enhanced by data.

The solutions solution

It turns out that business customers want the same things individual consumers say are highest on their list when it comes to customer experience: speed, convenience, ease of use, and results. And they’ll pay a premium for it — up to 16 percent, according to the PwC Future of Consumer Experience Survey 2017/2018. This truism also applies to customers of professional services firms.

A decade ago, a company picked a consulting partner, whose team would help it decide which technologies or platforms to deploy, with both deployment and results expected to materialize over a period of time — say, nine months to a year. That’s changed drastically. Today, a company will search for a technology or solution, and then decide which service partner will help deploy it in ways that can produce results instantly. Ideas, project plans, deeper tech decisions, and cultural change igniters — all the things needed to get the implementation and change done right — come second.

Because business moves so quickly, professional services firms have to deliver on the promise on Day One, not Day 180. And that has two implications. First, problems have to be solved holistically from the outset, rather than in stages. And second, it is vital to translate intellectual capital and insights into products that can be deployed and show results almost immediately. It’s not that professional services firms have a hankering to be in the products business or simply want to create new revenue streams (although that’s relevant). Nor is the move into products, developed in-house, changing consultancies’ core businesses — we’ve all seen companies move away from their core and struggle or fail to remain relevant. Rather, the translation of intellectual capital into technology is now the solution. And the form it takes is a product that can generate measurable, repeatable results.

This shift requires a change in mind-set in how solutions are presented. Consultants have typically sold services, time, and people power. But getting clients comfortable with products that solve problems demands a new, more intensive approach — research suggests that salespeople will need to spend 35 percent more face-to-face time talking to clients. What’s more, they will need a keen eye for what to present. Product clients want simpler decisions, not an overwhelming range of choices or customizations.

Consultant, heal thyself

Sometimes, the product you need to create to solve client problems comes from solving your own challenges. The popular workflow collaboration software Basecamp, for instance, was born out of a small design firm in Chicago, 37signals. Founder Jason Fried and his team needed to develop a simple project management system to manage their network of consultants, designers, and contractors associated with each project and client. Because they didn’t find anything they liked, they built one for themselves. As clients saw the simplicity and effectiveness of the program, they wanted to use it for their own projects. Within a year, Basecamp was more profitable than the Web design business.

Sometimes, the product you need to create to solve client problems comes from solving your own challenges.

We’ve seen this transition happen at PwC, too. We created Digital Fitness as an internal initiative to help employees develop their digital skills and mind-set through a gamified app that assessed what people already knew and increased their knowledge with quick, digestible bits of learning and content. When clients said they wanted the same thing, Digital Fitness was turned into a product for sale. Why is it appealing? The Digital Fitness app is tangible, it can be launched within weeks, and it can produce results that enable calibration almost instantly.

Whether the goal is to speed adoption and stronger ROI for new platforms or to build deeper insights on the fly to predict what will happen tomorrow, offering products as scalable solutions is an augmentation of the core professional services business. And it represents an important step in the evolution of problem solving. After all, when professional services firms can deliver a product that solves a portion of customers’ problems quickly, they make a strong case for being the right partner to help guide the rest of a transformation.

Tom Puthiyamadam

Tom Puthiyamadam is a principal with PwC US, based in New York. He leads the firm’s digital services practice and oversees its Experience Center, which helps clients create next-generation experiences for their customers, employees, and partners.

 

 
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