How Leaders Get Tricked Into Focusing on the Wrong Problems

How Leaders Get Tricked Into Focusing on the Wrong Problems

Fixing the Now is fine. But not at the expense of creating the Next. Every day, thousands of very smart people at excellent companies devote vast amounts of time and energy to tasks that feel important but really aren’t. 

It was a seismic moment in the world of soft drinks: for the first time in years, sales data revealed that Dr. Pepper beat out Pepsi to be America’s second most popular soda behind Coca-Cola.

The story of how the 139-year-old drink broke the decades-old Coke-Pepsi stranglehold on the U.S. soda market sent a buzz through the marketing world and prompted reams of analysis on how Dr. Pepper did it, including its smart use of TikTok videos to attract younger fans. 

In response, a senior marketing executive for one of the beverage giants told me she was spending half of her time trying to figure out how to harness TikTok and other social platforms to grow market share as well. I told her that was great, but I also advised her to not spend too much time focusing on the problem. After all, when you zoom out from the quarterly race for market share, it becomes clear that soda makers are fighting a losing battle. Americans’ consumption of soft drinks fell 44% from 2005 to 2022, reflecting growing consumer awareness of the health risks around sugary beverages and the related move toward better eating habits. Fixing the Now is fine. But not at the expense of creating the Next.

My friend’s story is something I see repeated across companies and industries. Every day, thousands of very smart people at excellent companies devote vast amounts of time and energy to tasks that feel important but really aren’t. 

The “Fast Thinking” Brain Trick

Sometimes people focus on the Now because their hands are tied by their job role or performance targets. Maybe your company has already decided to diversify into more promising categories—as most soda makers have—and it just needs you to keep the current business going. Someone else is worrying about the Next, so please help us attend to the Now.

Often, though, it’s not a company-wide division of labor that encourages executives to ignore the Next. Rather, we see everyone focusing on solutions to immediate growth problems, with no one attending to the long-term. When that happens, there may be something deeper going on.

In his brilliant 2011 book, Thinking, Fast and Slow, behavioral economics pioneer and Nobel Prize winner Daniel Kahneman describes how our brains play a clever trick on us: “When faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.”

He gives the example of an investor he knew who bought tens of millions of dollars of Ford Motor Company stock after visiting a car show and being impressed by the quality of Ford’s vehicles. His real, salient question (“should I invest in Ford stock?”) had been replaced by a much easier—and far less relevant–-one (“do I like Ford cars?”). 

When faced with a future that seems scary, our brains switch to focusing on present problems that might be complicated but which we at least know how to solve. Business history is littered with examples of leaders who have fallen into this trap. At the time, they felt like they were nailing it. In hindsight, it looks more like they were rearranging the deckchairs on the Titanic. 

The Lesson of Blockbuster vs. Netflix

In the early 2000s, dominant video rental firm Blockbuster was zealously focused on perfecting the complex inventory management system. Execs believed that was key to realizing Blockbuster’s promise that customers would “Go Home Happy” with the movie they wanted. The threat posed by the rapid rise of a weird little DVD mailing service called Netflix was on its leadership’s radar but not treated as a priority. 

Perhaps that’s because the Netflix problem would have been deeply painful to tackle, requiring a fundamental questioning of Blockbuster’s whole business model. It was psychologically far easier to focus on a complicated logistical problem that the team knew how to fix. 

Netflix did the exact opposite. By the mid-2000s it had a fast-growing DVD mailing business approaching a billion in revenues. But rather than prioritizing the growth of that business, CEO Reed Hastings focused relentlessly on realizing his much harder-to-achieve vision of movies delivered through streaming. As he succinctly put it, “Yeah, we’re doing great… but we’re not called Mailflix…”

Blockbuster focused on the problem it knew how to solve. Netflix focused on the problem it knew was the most important. And it took Netflix several iterations to figure out a workable solution. Faced with the challenge of low-bandwidth networks, the company even tried to launch a set-top box with dismal results.

We need to force our brains to stay focused on the most important problems, independent of whether we know how to solve them. Individuals need to carve out time to focus on less immediate problems, even if they are hard or scary or difficult to assess. Teams should ask themselves what are the biggest challenges that threaten the long-term success of a project. And companies have to balance their focus on immediate, day-to-day challenges with attention to the hairy future ones.

Rewiring Your Brain 

Since we’re hard-wired to focus on immediate, solvable problems rather than tough, nebulous ones, this is by no means easy. It requires practice, discipline and constant self-questioning. 

My colleagues and I at Jump Associates often struggle with this, even though tackling gnarly future business challenges is what we’re all about. When working on a project, we make sure to constantly check in with one another to ensure we haven’t gotten sidetracked from the core strategic question we need to answer.

The challenge isn’t to just think about the future—it’s to identify and prepare for weaker signals that could grow to have an outsized impact on your business or industry. 

For example, it seems that everyone these days is scrambling to work out their strategy on generative AI. They’re right to view the technology as important, but the seductive promise of AI risks blinding them to the other trends that may be coming to transform their business. As a senior executive at a major entertainment company told me the other day, “Yeah, I get that AI is huge. But I want to know what else I should be worried about, too.”

Paying attention to less obvious social, economic and technological shifts is the key to grasping opportunities and getting ahead of market disruption. For example, every car company knows they need to figure out a working model for electric vehicles. Far subtler is America’s gradual shift away from car culture.  My teenage daughter isn’t clamoring to get a driver’s license like I was at her age. A license just isn’t the badge of adulthood that it was a generation ago. Indeed, the share of 16-19 year olds with driver’s licenses dropped from 65| % in 1995 to under 40% in 2021. Whether that’s due to rising costs, available rideshare options, or Gen Z being happier behind a screen than a wheel, it’s a trend that could have big future implications for car makers.

Growth is tough. And figuring out scary, future-focused challenges is hard to do. But we need to stay focused on the future. Even if our brains don’t like to do it.

Dev Patnaik

CEO

Dev Patnaik is the CEO of Jump Associates, the leading independent strategy and innovation firm. He’s a board member of Conscious Capitalism. Dev has been a trusted advisor to CEOs at some of the world’s most admired companies, including Starbucks, Target, Nike, Universal and Virgin.