What’s New at CFI | Strategic Problem Solving with Jeroen Kraaijenbrink

Meeyeon (00:00)
Hi everyone and welcome back to another episode of What’s New at CFI. I am a familiar face, Meeyeon, VP of Content and Training here at CFI. And today, I am joined by Jeroen Kraaijenbrink. Today, we are diving into a brand new course called Strategic Problem Solving. Now, if you’ve ever struggled to determine whether you are solving the right problem or found yourself just jumping too quickly into solutions,

this course is designed to help you slow down, think clearly, and make better decisions under uncertainty. And as I said, I am joined today by one of the course’s co-authors, Jeroen Kraaijenbrink strategy expert and co-founder of Strategy, Inc. So in this episode, we’re going to talk all about what truly makes problems strategic, why defining the problem is often harder than actually solving it, and how to make confident decisions when the stakes are.

And we’re going to do all this without giving too much away of the course. So let’s dive right in. So let’s talk first a little bit about what makes a problem strategic. Now, what do you think in your opinion separates a truly strategic problem from a, I don’t want to say run of the mill, but from a routine operational one?

Jeroen Kraaijenbrink (01:16)
Thank you, Meeyeon. Let me start with explaining what I think strategic doesn’t mean. And I think we often hear the word strategic. We kind of glue it to any other term like strategic HR, strategic marketing, strategic IT, strategic problem solving. And typically what we do is glue that word to that other word to make it more important, to make it sound more important.

I think that’s not what it is about. Of course, strategic problems are important, but I think the main difference from, let’s say, the more routine problems, the more down-to-earth problems, there’s actually plenty of differences. One important is the impact. For me, a strategic problem is one with substantial impact. So if you make a decision, if you face the problem or if you don’t solve the problem

that has major impact, major consequences for yourself, for your organization, for other stakeholders and so on. So the impact is one important part. And in the course we highlight, I think, no less than eight specific features. But one other that I would like to emphasize is also the uncertainty associated with the problem. For simple problems, it’s pretty clear what the problem is. And typically, it’s also

pretty clear what the solution is. For strategic problems, it’s typically not very clear what the problem is, and there’s plenty of ways of formulating it, defining it, there’s different perspectives, it’s partly subjective. And for the solution, it’s uncertain by definition because strategy, we were talking about, typically talking about the future, short-term and long-term, and the impact, the consequences of what we do.

We just don’t know them. So those are two of the main differences between a strategic problem and a more routine or operational problem.

Meeyeon (03:27)
And it sounds like these types of problems are, you know, by nature more difficult to really encompass and define so that you can work towards a resolution. And that leads me to say, I could understand why it’s hard for most people to define, but when people are in leadership positions, leading companies at C-suite levels, why do you think that it is so, so often that leaders can also misdefine a problem?

Jeroen Kraaijenbrink (03:58)
Several reasons. think one is the pressure, the urge to come with solutions instantly. So there’s in many companies, there’s barely any time to think, to reflect, to step back. And that’s exactly what we do in the course, like step back, reflect on what actually is the problem. Let’s think about this for a while. So the pressure and the other part of it is also

many people, even if they are in high leadership positions, they haven’t learned what a strategic problem is, let alone how to solve it. Because the typical strategy course, strategy program that also I’ve been involved in teaching in several MBA programs, it’s not focused on competencies, it’s not focused on skills, it’s not focused on recognizing, identifying, and solving strategic problems.

Meeyeon (04:56)
Now, when we talk about defining the right problem, so this is the, I would say the most challenging part is when you are faced with uncertainty, clearly there is a strategy play and you have to define that problem. When you explore a complex issue, you often end up with multiple versions of the problem. Now, I don’t want to end up sharing our entire course, but how do tools like

pattern recognition and criteria-based assessment help narrow down that definition? And maybe you could give us an example, like a very, very broad strokes example of a problem, a strategic problem.

Jeroen Kraaijenbrink (05:35)
Mm-hmm.

Yes, so think you’re mentioning specifically pattern recognition and criteria-based assessment, which is a good selection because they work very differently. And I think with my co-founder, Tim, you will be talking about, let’s say, the more divergent phases of strategic problem solving, like how do you generate the different problems, versions and solutions. What you do with pattern recognition is kind of step back and look

underneath the problem. You might have kind of have five variations of a problem, and then with pattern recognition, you look okay, what’s common, what’s the commonality, what’s the bigger problem behind it. So it’s a kind of root cause analysis but really trying to figure out like what do these different problems have in common. Criteria-based assessment that’s probably something that most listeners are more familiar with.

Meeyeon (06:23)
Hmm.

Jeroen Kraaijenbrink (06:35)
is you create a set of criteria against which you are going to evaluate not just the solutions but also the problems like clarity, like how clear is the problem and you would be surprised how often it’s not very clear what the problem is where we are excellent at very vague high level problem statements. So that’s the main difference. You also asked for an example. ⁓

Meeyeon (07:03)
No.

Jeroen Kraaijenbrink (07:04)
Suppose we’re witnessing that our profits, our margins go down. I think a not-so-good problem statement would be that our margins go down because that’s a very high-level, very generic. It’s not very clear. It’s very hard to find solutions for because there could be like 700 different causes on why this happens. So part of the challenge is to come up with more accurate

versions of the problem statements. So it could be because our costs are too high because, I don’t know, exchange rates. So that could be one possible way of looking at the problem. You could have other problem statements like, okay, it’s still in the cost, but just suppliers have raised their prices because of increased material cost. And so on, you could have different problem statements. And with,

this is a very simplistic example. I admit that immediately, but these two problem statements kind of what they have in common is kind of the raising cost part. And that’s, that’s a very kind of simplistic way of how, for instance, pattern recognition works and how you will get from a not so good statement because it’s either too generic, too high level or too narrow, too specific and too much kind of

solution oriented because that’s one of the problems that we see a lot in problem solving and strategic problem solving is that people basically just formulate the solution that they can think of in a problem statement form. And that’s exactly what we’re trying to avoid by spending so much attention to especially also the problem formulation part in the process.

Meeyeon (08:57)
Yeah, and that reminds me of, I know the statement that you said is so broad about, you know, profits and expense, but I had a recent headline that I think maybe some of our global listeners would be familiar with is that there are certain grocers here in North America that were seeing record profits during a time when grocery prices have been the highest they’ve ever been. And just thinking about that makes me want to apply.

the lessons in this course to this to truly understand what the nuances behind that were. For example, just reading underneath the headlines a lot, know, that large grocers tend to own their own suppliers. And so when you say your suppliers are raising the cost, so I have to raise my costs and then so your groceries are more expensive, it’s one of the underlying problems that really asks you to define the right problem.

Jeroen Kraaijenbrink (09:28)
Hmm.

Meeyeon (09:52)
But I’m excited to apply the lessons learned from this into my own kind of personal case study and interests. But something else that you introduced, I haven’t, yeah, something I haven’t, I haven’t really heard about before, I have taken the behind-the-scenes tour of the course, is you introduced something called whole brain thinking. Now, I’m actually reading a book called Whole Brain Child, which is very different, but whole brain thinking combines

Jeroen Kraaijenbrink (09:59)
Good. Take the course.

Mm-hmm.

Meeyeon (10:20)
analysis and something that we all know that is innate within us, you can’t avoid it, is intuition. Why is intuition so important here? And I feel like intuition is always something that’s like a knee-jerk reaction, right? Like you can’t help it. Is it necessarily going to lead you in the right direction? Not necessarily, but I think it is important to address it. And so I’d love to understand from your perspective why intuition is so important here.

Jeroen Kraaijenbrink (10:48)
Yes, I’d love to because this is one of the totally underestimated parts. It’s kind of a blind spot in strategic problem-solving and decision-making because this whole field has become so rational, analytic, numbers-driven, and data-driven. And it’s important to realize that if you look at our brain, about 5% of it is our conscious brain. So that’s the part we actively use when we think, when we calculate, when we analyze.

The other 95 % of the capacity is kind of a subconscious or unconscious part of the brain where intuition sits, where judgment sits, where all these kind of non-analytical parts of thinking sit. And there has been a lot of research by many scientists on how do you combine these two parts? Because that’s the essence of whole brain thinking is it’s not just make an intuitive guess.

I think that’s what many kind of self-made entrepreneurs would tell you. Yeah, I just do this fully on intuition. Good. That could work for some, but research shows that the best way is combining the two and in a nutshell, and this is explained in much more detail in the course, but you start very consciously. So you collect lots of detailed information. Then you do something else. You let your unconscious brain do the work.

So you sleep, you do some activity, you do some other work. And after a while you come back to the problem. You don’t think about it, but you make an intuitive decision. And this applies to, I think, private life as well and in business. Any complex decision, there’s research that this is actually the most effective way. And the reason is that most strategic decisions are far and far too complex to decide consciously.

Because like our brain can work with a couple of parameters, but not many. And there are many strategic problems. There’s like 10, 20, 100 parameters, if not more. And consciously we can’t process that complexity and our unconscious brain can do that. And that’s why, and we call it whole brain thinking or whole brain problem solving, because you’re using your whole brain.

Meeyeon (13:12)
And that leads me to my next question. I think I can already anticipate your answer, but choosing under uncertainty, there’s so much uncertainty when we look at strategic problems of global businesses. They have so many various different types of operations, so many different business units. And as you said, that can lead to hundreds of, if not thousands of variables and an endless combination and permutation of scenarios. It’s very difficult for our conscious brain to process that.

Why do you think it’s so important to apply scenario thinking and choose between several solutions that are possible and plausible?

Jeroen Kraaijenbrink (13:52)
Yes, scenario thinking is definitely not to predict the future. That’s kind of a mistake that quite some people make. This is kind of to find the most probable, plausible or likely solution and then kind of use that as a basis. It’s meant to think about possible futures. And the reason why it’s so important in strategic problem solving is that when we try to solve a problem or come up with a

solution, we don’t know whether it’s going to work, and especially in very highly uncertain situations. But some solutions are more robust than other solutions. Like some solutions just work under very specific conditions. Other solutions are much more robust and they work in several conditions. That’s exactly what scenario thinking is about. It’s kind of identify possible scenarios, like a good case or a best-case scenario,

worst-case scenario, like a crisis scenario or any type of scenario, then look at the different solutions that you have proposed and basically assess like to what extent does this solution work in this scenario. And if one of the solutions kind of works in all three or five scenarios, it’s probably the better choice. So that’s idea with scenario thinking in strategic problem solving.

Meeyeon (15:18)
And something that I, something that sticks with me, because I think it’s a very, I don’t want to say lighthearted, but it is positive. And it is like energizing when I hear someone say that often the final solution is just the starting point. It’s almost like a happy ending to a story that looks forward into something in the future. Why do you think that mindset really matters when you say, you the final solution is often just a start?

Jeroen Kraaijenbrink (15:46)
it’s a happy scenario or it’s kind of a depressing thing to say. Like you’ve worked all your way going through the course, going through all the steps and come up with a final solution and then have to acknowledge that this is just a starting point, but that’s life. What we’re doing in this course is kind of the conceptual side, is the thinking side, trying to come up with the best possible kind of hypothetical solution before we implement it.

Meeyeon (15:49)
Yeah.

Jeroen Kraaijenbrink (16:15)
But we also know that this is not, we can’t know for sure. So it’s an iterative process. And when we compare, for instance, the process in this course to kind of the long-term strategic planning, the cycle is much shorter. So we do start with kind of thinking before we start doing, because that’s one of the other features, or one of the features I started with about the strategic problem, the impact is typically very high.

And that also means that typically it’s also very hard to just experiment because the cost of failure are just too high. So before we start a blind trial and error process, we don’t want to do that. So you want to have, an informed decision, like what would be the most likely solution to start with. And as we also highlight in the course,

depending on how high the stakes are, how urgent the problem is, in some cases you want to spend more time with the steps that we outline in the course. In other cases you want to kind of go quickly through them. We do strongly recommend to always go through all the phases, which means like a problem definition or a problem exploration and definition and a solution development and decision process, so divergent and convergent phases.

But that could be within an hour, it could be within days, depending on the scale of the problem and the urgency of it.

Meeyeon (17:45)
And if someone that takes this course changes just one thing about how they approach problems in this course, hopefully in a workplace setting, what do you hope that it is?

Jeroen Kraaijenbrink (18:01)
Don’t jump to solutions. Spend time sitting with the problem. I think that’s the single most important message for me in the course, because that’s what I see kind of go wrong most often in practice.

Meeyeon (18:18)
And think that’s a great message because as I get older, one of the things that has really resonated with me is the idea of sitting with a problem. You don’t need to necessarily jump to solutions and jump very reactively with the very first solution that comes to mind because it’s often not the best one.

So currently global trade is a big, big hot topic and the idea of tariffs, whether they are going to be applied to various countries, whether they’re not, how much they’re going to be, has been very problematic for a lot of businesses, particularly ones that have global operations. For example, there’s countries, there’s companies that have, let’s say factories that were based in China and they’ve moved them to India based on a set of parameters that were dictated to them a couple of months ago, a year ago. Now, all of a sudden they’re like, my gosh.

like this is not the right strategy, we have to scramble and we had to think of a new solution right away. When it comes to a business that has a global manufacturing operation and is very heavily impacted by something like a tariff, how would you suggest, well, first of all, guess, what do you, do you think that is a strategic problem or is it an operational problem?

Jeroen Kraaijenbrink (19:38)
It’s definitely a strategic problem because as you the example you give just moving a factory from one country to another and that’s an extremely expensive and challenging operation with huge consequences, lots of uncertainties and so on. And I think the situation you’re describing is of course something that many companies face. And even if it’s not manufacturing, if you’re working internationally, also like ourselves, it becomes

part of the business, it affects the business. This linking this back to what I just said about scenario thinking, think that’s why scenario thinking is so important. Because what you want to do before you jump to conclusions, like, okay, we have to move to another country, which of course in hindsight, you can always say, you shouldn’t have done that because the tariffs are so unpredictable.

But I think that’s part of the analysis here. It’s not, the problem is not tariffs are there for China or tariffs are there for Europe or for India. The problem is tariffs have become an extremely unpredictable factor. So that’s kind of the big picture problem. And then you need to look for solutions. if tariffs are extremely uncertain and can come up every day and significant

like we’re not talking about 5%, but up to 50 or 100%. How can you make yourself less dependent on tariffs? I think that’s the core problem that you’re trying to solve. This is an excellent example where the example you gave is jumping to conclusions, jumping to solutions. While if you look at the problem, if you understand kind of the problem as a bigger picture,

using, for instance, the pattern recognition technique, you figure out like, okay, this is not, it’s not country-related or it is country-related, but the country that kind of imposes all the tariffs. So that’s an excellent example of where strategic problem-solving and especially spending time with the problem is so important.

Meeyeon (21:56)
Yeah, and I think that just as you said, it’s like intuitively several things come up. The first is like, oh my goodness, like we are going our costs are going to rise. We have to pass them on to the consumers. Our business like that. Our business is not going to be doing well in the next X number of years. Like so many questions come up like how do we do we know that this will be a problem in like four years time?

Do we really want to really overhaul our operations, because we have no idea whether or not this is going to have a lasting impact? But you’ve already steered, at least from my initial thinking, the heart of the problem: how do we just make ourselves less dependent on these tariffs? And that seems to kind of cut at the heart of the problem.

Jeroen Kraaijenbrink (22:47)
Yeah, and if I want to go even further, think that the heart of the problem is even further back. It’s our obsession with efficiency. And this is kind of a big thing, I think, in many, companies where I could probably speak about another hour. But we as organizations worldwide have become so obsessed with efficiency over the past century that there’s nothing that can happen, or the whole system collapses

If we compare organizations with nature, nature has a lot of redundancy. lot of like, if I lose an arm, I can still live. Yeah, you have another one. There’s some parts that are kind of harder to replace, but there’s a lot of redundancy.

Meeyeon (23:25)
Yeah, I still have another one, generally.

Yeah, like the engineering creates redundancies with purpose. Yeah.

Jeroen Kraaijenbrink (23:37)
Yes, and in organizations we have removed all redundancies and we’ve optimized, optimized, optimized, optimized. And there’s one thing that optimization does is create vulnerability. Because if there’s one kind of small hiccup in the process, somewhere in the chain, the whole thing collapses. I think that’s the real underlying problem. So if you really want to kind of dig deeper into what’s the real strategic problem here, it’s the obsession with efficiency, I would say.

Meeyeon (24:08)
I can’t think of a better note to end our podcast on. That just makes me, as a person who’s already taken a behind-the-scenes tour of this course, so excited to take it. I hope that if you are listening, you have really enjoyed this podcast and you are excited to take our latest course on strategic problem solving. I could see it being so incredibly useful in so many different aspects of our lives. And I think it’s something that is really valuable for everyone today.

So thank you, Jeroen, for joining us today. And I hope that if you’re listening, this is going to be the next course that you dive into. Until next time, I will see you all later.