How to recognize problems

Key massage: To recognize problems we need a "sense of possibility".

Today's world is becoming more and more complex. There are a multitude of different developments that influence each other. The understanding of this complexity is also growing. Only those who think systematically can recognize the new opportunities and threats and see them as problems that need to be solved.

A problem exists when a person is not satisfied with a current situation but does not know how to achieve a desired goal situation (see on Learn-Study-Work "How to solve problems").

"Problems in the sense of the SE [Systems Engineering] mainly express themselves in a discomfort, a more or less well-founded criticism of an unsatisfactory situation, in the representation of a possible opportunity or an impending danger and the related questions. ... The problem can be formulated in a relatively concrete manner, or it may merely consist of vague assumptions about problems and their causes." (Daenzer, W. F. (1976) Systems Engineering: Leitfaden zur methodischen Durchführung umfangreicher Planungsvorhaben. Peter Hanstein Verlag, Köln, p. 41)

If a situation is unsatisfactory, then this is a clue to look for the problem that is causing this dissatisfaction. But even if a situation is satisfactory, it may be improved or it may change for the worse. We have to look to the future: What we are satisfied with today may be unsatisfactory tomorrow.

"A sense of possibility ... imagines something that might be possible but has not been considered possible or even potentially possible so far. (... sense of
possibility is often used synonymously with imagination even though imagination is not the same as sense of possibility, for imagination also encapsulates the impossible)." (Dörner, D., & Funke, J. (2017). Complex problem solving: What it is and what it is not. Frontiers in Psychology, 8,1153, p. 7)

There are a multitude of possibilities that may come true in the future. But we cannot imagine and think through all the possibilities, because that would mean too much effort. Therefore, we must first be clear about the two extremes: What would be the best case and what would be the worst case that could occur.

"Smart mathematicians are not ashamed to think small, because general patterns are easier to perceive when the extreme cases are well understood (even when they are trivial)." (Graham, R. L., Knuth, D. E., Patashnik, O. (1884). Concrete Mathematics: A Foundation for Computer Science. Addison-Wesley, p.2)

But it also makes no sense to imagine extremes that are unrealistic, i.e. that have only a vanishingly small probability of becoming true.

"A sense of possibility does not aim for the moon but imagines something that might be possible but has not been considered possible or even potentially possible so far. ... It is necessary to constantly switch between our sense
of possibility and our sense of reality ..." (Dörner, D., & Funke, J. (2017). Complex problem solving: What it is and what it is not. Frontiers in Psychology, 8,1153, p. 7)

A SWOT analysis examines the strengths and weaknesses that apply to an organization (system) and the opportunities and threats that exist for the organization in the environment. Strengths and weaknesses are internal factors that can be influenced, while opportunities and threats are external factors that cannot be controlled.

"The internal appraisal examines all aspects of the organisation covering, for example, personnel, facilities, location, products and services, in order to identify the organisations strengths and weaknesses (Fig. 1). The external
appraisal scans the political, economic, social, technological and competitive environment with a view to identifying opportunities and threats." (https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=eea3c0b07423dc95d202cd46507a291e03f718cf, 18.02.23, p. 632)

A SWOT analysis has advantages and disadvantages:

"SWOT analysis has been praised for its simplicity and has been in continued
use since the 1960s. However, in practice it cannot oer an ecient
result and sometimes may lead to a wrong business decision (Wilson & Gilligan,
2005; Coman & Ronen, 2009). This is because the traditional approach
of SWOT analysis is based on qualitative analysis in which SWOT factors are
likely to hold subjective views of managers or planner judgements. Besides,
SWOT factors in each region are either not measurable or ranked by the significance towards an organisation's performance." (https://eprints.soton.ac.uk/394441/2/elsarticle-template.pdf, 18.02.23, p. 2)

It would be surprising if it were possible to analyze complex situations (= systems) with a simple method. A situation is a system at a certain point of time. What are the characteristics of a complex system?

"According to Funke (2012), the typical attributes of complex
systems are (a) complexity of the problem situation which is
usually represented by the sheer number of involved variables;
(b) connectivity and mutual dependencies between involved
variables; (c) dynamics of the situation, which reflects the role of
time and developments within a system; (d) intransparency (in
part or full) about the involved variables and their current values;
and (e) polytely (greek term for “many goals”), representing
goal conflicts on different levels of analysis." (Dörner, D., & Funke, J. (2017). Complex problem solving: What it is and what it is not. Frontiers in Psychology, 8,1153, p. 2)

Creating a list of possible SWOT factors is easy, but estimating their effects and probabilities of occurrence is difficult, especially when it comes to future developments as well. But this is exactly what would be necessary if you want to rank the factors and determine the extremes. So whether you can identify all the important problems with a SWOT analysis depends on how you do it.

"Of the 50 companies reviewed ... over 20 companies used a SWOT involving 14 consulting companies. All the applications showed similiar characteristics - long lists (over 40 factors on average), general (often meaningless) descriptions, a failure to prioritize and no attempt to verify any points. But the most worrying general characteristic was that no-one subsequently used the outputs within the later stages of the strategy process." (Hill, T., & Westbrook, R. (1997). SWOT analysis: it's time for a product recall. Long range planning, 30(1), p. 46)

To fully analyze a complex system, such as a larger company, is very labor intensive and takes a long time. It is easier to focus only on certain aspects of the complex system. That is why we want to find the extremes that the system can take.

"One of our examples concerned a food company with a dominant customer (X) taking more than 50 % of the company output. On their SWOT analysis, strengths include “the value of our contract with X”, while among the weaknesses are “over-reliance on company X”. Here, where the same point is raised as a strength and a weakness, the contradiction in itself could have been a spur to analytical action. ... What conditions were needed for over-reliance to do harm, and what actions to avert that? ... Or what actions might increase the closeness to the customer to ensure this factor became a more important strength?" (Hill, T., & Westbrook, R. (1997). SWOT analysis: it's time for a product recall. Long range planning, 30(1), p. 51)

It does not have to be a contradiction. If the food company were to lose this customer, it would be extremely negative. However, it would also be possible that the customer would purchase a lot more goods, which would be extremely positive. Once these two extremes have been identified, it is important to analyze exactly how the negative extreme can be prevented and the positive extreme can be realized.

Thus, a complex system is first considered as a black box and only three to four negative and three to four positive extremes that could occur are asked. It is important to consider several extremes because the future cannot be predicted with certainty. We need a "sense of possibility." These extremes are then analyzed in detail: What factors might interact, and how, to make them come true? (see on Learn-Study-Work "How to analyze situations = systems").

The analysis of extremes will also identify measures which, although not having extreme effects, are nevertheless recommended because they improve the system.

Once we have recognized a problem, then we can start to analyze it.

Continue with the next steps of the problem-solving process: "How to analyze situations = systems", "Set goals and requirements", "How to be creative"