April 20, 2017

How Problem Solution Mapping was invented…and why it wins more revenue

The History of Clearhead's Problem Solution Mapping (PSM) Methodology

I want you to imagine two businesses.

In the first business, which we’ll call the Company A, the team is busy with projects. They love their projects. Projects everywhere. Company A has a navigation redesign project. They have a personalization project. They have a responsive design project. Everyone is busy working on projects.

How do these projects get started? I’ll give you some examples. You may relate to these…

  • Table stakes. The example here is, “Oh, we just absolutely need to add zoom function and an infinite scroll and we need to go responsive. These are table stakes. Without this, we cannot succeed.”
  • Low hanging fruit. “Oh, we’ll work on the big problems after we solve these really, really small things that are broken or that are obvious no-brainers that we can all agree with and solve in the next few weeks.”
  • Go responsive. “Three quarters of our traffic is mobile. The only way we can improve mobile performance is by going responsive. Let’s go responsive.”
  • Keeping up with the Joneses. “Hey, I saw a case study” or, “Did you see our competitors doing this? We absolutely have to do that.”
  • Sexy new software. “Hey, did you hear about this social personalization app that we can put on all of our pages? They offer a great deal. It looks amazing. I like the salesperson. Let’s go try it.”

These are the projects that get approved. The goals that they impact are what you might call “fuzzy goals”.

Company A’s employees know they need to hit a financial target…but they’re so busy working on ideas-turned-projects that they’re not asking fidelity questions about when or how they need to achieve these goals.

Finally when they finish these projects they high five, go out for drinks and reminisce about the debates they had along the way. They never ask the question, “Did we move the needle?” Nor do they ask, “Did we negatively affect a goal?” Company A is in love with their ideas, their projects and getting them done.

Now I want you to imagine Company B.

Company B’s team has crystal clear goals. Their goals are S.M.A.R.T. (Specific, Measurable, Attainable, Realistic, Time-based). Before they start a project they ask themselves, “What problems do we need to solve to achieve these goals?”

They don’t just stop there. Company B researches and validates each of these problems. They realize that some of those problems are opinions, some of those problems are noise, but they also realize that some of those problems are signals of major opportunities or obstacles.

After identifying these problems, they begin to cluster them into themes and concepts. They land on a number of problems that are most worth solving at that time.

Then…and only then…do they start developing solutions. Or more specifically, solution hypotheses, because unlike the first business, Company B is a company that wants to know. Company B’s team wants to know what problems they’re solving and if their solutions moved the needle (and how much) on the goal.

Does the Company A sound familiar? Does Company B sound like Xanadu? A completely data-driven business where people get the gratification of knowing that their work mattered, that their time was valuable.

Clearhead today – within our company as well as the work we do for our clients — is closer to that Xanadu than ever before, but I have to admit that it wasn’t always the case.

Clarity Through Baseball

In starting Clearhead, I started a business that’s built around the concept of experimentation. However, our first year of business, flat out, we were chasing hypotheses. Everyone was exuberant in the market.

“Can you believe what this technology can do for us?” Yes.“Clearhead, we want to test these 10 things. Can you help us?” Yes. “Clearhead, what are the things that you’ve tested for other people?” Well, here they are. “Can we test those?” Yes. “Clearhead, I spoke to a colleague. These are things that I saw in a case study. Can you test those?” Yes.

We were growing our business and winning tests. But over time, two big trends started happening:

  1. Our experimentation win rates started regressing to what would be considered an industry mean. We really thought our approach and our hypotheses were pretty darn good. We started asking ourselves, “Well, why is that happening? Why are we not doing better than the mean?”
  2. Another thing that started happening was the proliferation of a sentiment similar to, “Whether you win or lose in a test, it doesn’t matter. What matters is that you learned.”

Both of these things started feeling very wrong to me. There’s an inner stats nerd in me that started thinking about both of these.

I started channeling my inner Billy Beane from Moneyball. There’s a stat in advanced baseball statistics called WAR, wins above replacement. It’s sometimes called VORP, value over replacement player. The concept is very simple. You have a finite number of roster spots. How many win shares are created by the players that you’re putting on the field based on their stats?

I started thinking about experiments that way. With a finite amount of capital units, human units and time, were the experiments we’re running the best use of those resources?

The answer is pretty simple. We weren’t solving big enough problems. Like a lightning bolt, we were hit with a revelation. It was dead simple: There’s a physics around optimization: value is created in direct correlation to your ability to solve problems. Businesses are not valued on their hypotheses. They’re valued on the problems they solve for customers.

Increasing ROI with Clearhead's Problem Solution Mapping Methodology
Clearhead’s physics of ROI: As problems decrease, ROI increases.

If you solve critical problems for your customers, value is created and metrics go up. Conversely, if you dabble or don’t solve problems and the problem stack starts getting higher and higher, you’re going to see the metrics go down.

There is something elegant and almost metaphysical about this. It changed our entire business. Born out of that is Problem Solution Mapping (PSM).

Let Your Problems Guide the Way

With PSM we redistributed our units of investment away from solutions and towards problem research and understanding.

Rather than letting solutions guide our investments and focus, our problems now became the fulcrum of optimization and experimentation. Not your hypotheses. Your problems are your guides. They’re your compass. Love them as much as you love your experiments and ideas.

What we do at Clearhead falls into two buckets:

  1. We research and understand problems worth solving.
  2. We design, develop, and validate solutions for those problems.

We do each of those nearly equally. I’m proud to say in the last three years that is the biggest evolution, not just in our business, but our client’s businesses.

Whether we are executing a complete site redesign, an ongoing testing program, personalization campaigns or disruptive innovation, we use the Problem Solution Mapping methodology to make sure what we launch for clients will work. We also facilitate PSM workshops to teach clients how this works for digital and organizational optimization.

Drop me a note if you’d like to see how Problem Solution Mapping works in real life. And if you’re interested, here’s the prequel to Problem Solution Mapping, and my story of how I got to start Clearhead in the first place.