Is ignorance the most important aspect of problem solving?

When confronted with business challenges, sometimes the best place to begin is with your own ignorance, says contributor William Cohen. Here’s why.

When Peter Drucker first began instruction in the classroom, he sometimes made a seemingly outlandish statement to make a point. In class one day Drucker began to speak about his work with various corporations. He told us that it was often very simple things that an outsider could suggest which, if adopted, would have a major impact. This was because regular managers were frequently much too close to the issues and also because they assumed things from their past experience that they incorrectly thought were identical in the present situation. Yet, two situations are never perfectly identical. An outsider would wonder and question these things that a practicing manager in that organization often missed (although of course all managers needed to train themselves to ask questions and are responsible for doing so).

Asked the secret of his own success as an outside consultant, Drucker responded, "I ask the right questions."

But a classmate immediately asked three questions of his own in quick succession: "How do you know the right questions to ask? Aren’t your questions based on your knowledge in the industries in which you consult? What about when first starting out with no experience - how did you have the knowledge and expertise to do this when you first started?"

This didn’t faze Drucker. He immediately responded: "I never ask these questions or approach these assignments based on my knowledge and experience in these or other industries. It is exactly the opposite. I do not use my knowledge and past experience with the subject at all. I use my ignorance. Ignorance is the most important factor in problem solving."

Other student hands shot up, but Peter waved them off. "Ignorance is not such a bad thing if one knows how to use it," he continued, "and all managers must learn how to do this. You must frequently approach problems with your ignorance and not what you think you know from past experience. What you think you know is probably wrong."

The Value of Ignorance

Drucker immediately launched into a story to prove his point. His stories covered the wide range of Drucker’s reading and thinking --- from the Catholic Church to Japanese culture, politics, history, Jewish mysticism, warfare, and of course, business.

I won’t tell you the story he told us here, but since ignorance was something that I had an abundance of, his admonition that there was a value in ignorance inspired me to adopt a simple methodology to allow me to analyze issues in this way. Although I found many methods, the following is my favorite and most often used by me. I heard originally that it was developed by the Army in the late 19th century. It is still taught by our armed forces as the staff study method. However, I have also heard it referred to as the Harvard Case Study Method. Moreover, an attorney I know told me that he was taught this method in law school under yet a different title, and some years ago I found my wife using the method professionally in her practice as a clinical psychologist.

Clearly the method has a universal value in problem solving stemming from ignorance that Drucker would have approved. It begins with definition of the problem.

Problem Definition

You can’t get "there" until you know where "there" is. That’s not one of Peter Drucker’s injunctions; it’s one of mine. That’s my way of emphasizing that in order to solve any problem, you’ve got first to understand exactly what the problem is. The famous case in which Drucker analyzed the problem of restructuring GE for legendary CEO Jack Welch with only two questions was based on Drucker defining the problem as how to manage a number of dissimilar businesses that didn’t fit the strengths of the corporation.

So Drucker asked: 1. what businesses wouldn’t GE be in if you had the power to change the situation? and 2. Since you have the power, what are you going to do about it?

You can see where Drucker’s instruction to begin with ignorance is so important. Had a large consulting concern accepted GE’s problem and defined it as simply the restructuring of GE, they probably would have embarked on a massive program of analysis of each individual business owned by the corporation. While eventually a common theme of which businesses GE should or should not have shed may have emerged, it would have taken far longer and used up many more resources to arrive at this solution. Further, it might have ignored Welch’s eventual strategic criteria since Welch himself would never have been forced to struggle with the issue of which businesses he would have GE enter if it were not already in the business.


What are the Relevant Factors?

Welch’s problems had a number of factors that were directly relevant to the problem situation. Therefore, he needed to gather additional data. Welch had to decide which businesses he would or would not cut or retain measured against a common standard. He decided on those in which GE could not be number one or two in the market, disregarding the factor that most might consider the most important. That is, whether these businesses were profitable or not.

Considering Alternative Courses of Action

All alternatives have both advantages and disadvantages. Welch probably sold off some really valuable companies using his criteria. He knew that this could, and probably would happen in some instances. That was a disadvantage to this alternative. Yet it clearly had advantages. With the resources thus saved, he could concentrate them where GE had its strengths and it could dominate or nearly dominate the market in that industry.

Analysis, Conclusions, and Decision

During the analysis, the manager essentially compares the relative importance of each alternative’s advantages and disadvantages. Some alternatives have few disadvantages, but no great advantage either. In any case, the manager needs to think it through and document his thinking. This helps this method to be really effective in explaining the decision to others after the decision is taken.

The conclusions come from the analysis and the eventual decision should be obvious after the analysis is complete. Still, Welch would have needed to explain the situation to his board, senior executive team, and eventually to GE stockholders as to why certain businesses, even if profitable, had to be sold in order to secure the future growth and higher profitability of the corporation.

Drucker Lesson Summary

My own conclusions regarding this Drucker lesson is that no one need be afraid of being incapable of solving any problem, managerial or otherwise. While a manager may lack specific knowledge, experience or expertise at the beginning of a quest, this is not necessarily a bad thing. On the contrary, beginning with ignorance, and recognizing it, is possibly the best way to approach any problem to ask the right questions, define the issue, gather the factors that are relevant, consider alternative solutions, accomplish a thorough analysis which leads to conclusions and ultimately to the optimal solution. The outline can even be used to present this solution to others. As Drucker claimed, "Ignorance is good."