When solutions are abundant but valuable problems are scarce

I have sat through enough strategy discussions to know that the hardest work often happens before anyone opens a spreadsheet. A team can model a market beautifully and still be answering a question the business had no reason to ask. Once a framing takes hold, the quality of the analysis can make it harder, not easier, to challenge the premise.

A recent working paper by Felix Feng, Brett Green, Curtis Taylor and Mark Westerfield puts an economic frame around that problem: when solutions become easier to produce, finding a valuable problem becomes more important. The title is "When Solutions Are Abundant but Problems Scarce". It is a useful way to test what AI is changing in a strategy team, although I would want to read the paper itself before making claims about its model or results.

Generative AI makes many forms of analysis quicker and cheaper. That is valuable, particularly when a team already knows what it needs to learn. Yet speed can also fill a board pack with plausible answers before anyone has asked whether the decision behind the work is the right one. A fluent response does not tell us whether the opportunity is real, the constraint is binding or the customer problem is worth solving.

I would change what gets rewarded. If an organisation measures knowledge workers mainly by the number of reports, recommendations or presentations they produce, AI will make that measure less useful. The person who notices that a brief is built on the wrong assumption, finds a better question and persuades others to test it may save more money than the person who delivers the polished answer. That judgement is hard to see in an output dashboard, so leaders need to make room for it in reviews and investment decisions.

This does not mean abandoning analysis or pretending that questions are more valuable in the abstract. A good question has consequences: it narrows a decision, exposes an assumption that could be wrong and changes where time and capital go. When the cost of producing an answer falls, the standard for deciding which answer is worth buying should rise.

Where in your organisation can someone stop a well-resourced piece of work by showing that it is answering the wrong question, and would that person be rewarded for doing so?

Source: https://lnkd.in/grSggVpB

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