Reader,

I’ve been writing about wicked worlds and wicked problems for a year or so, but I don’t want you to think that these are new. Here’s a story that’s over 30 years old.

IBM was in deep trouble in 1993. Its mainframe-centered business model was weakening. Personal computing was reshaping the industry. The company was losing billions of dollars. Its major divisions operated with competing priorities, and many experts believed IBM should be broken into smaller businesses.

At first glance, this appeared to be a conventional turnaround problem: cut costs, sell assets, reorganize, and (hopefully) restore profitability.

But IBM was facing something more wicked. Technological disruption, cultural fragmentation, changing customer needs, financial pressure, and uncertainty about the company’s future were interacting at the same time. It’s world was wicked.

And then they hired Lou Gerstner. He was an unusual choice to lead IBM because he was not a technologist and had never worked for a computer company. In fact, he was the first outsider to become IBM’s chief executive. And because of his lack of insider experience he approached it as a unique problem to be resolved.

His response can be understood through the four phases of the Sense–Response Cycle™.

Sense

Gerstner began by listening.

He met with customers, studied IBM’s businesses, and examined what was changing in the technology market. He recognized that customers were not simply looking for better individual products. They were struggling to connect hardware, software, networks, and business processes.

The visible signals pointed to a deeper shift: value was migrating from products toward integration.

Make Sense

The dominant interpretation was that IBM was too large and fragmented to survive. The proposed solution was to divide the company. But Gerstner reframed the situation.

IBM’s problem was not merely its size. Its problem was that its capabilities were disconnected and organized around internal products rather than customer needs.

They discovered that what appeared to be a liability could become an advantage. IBM possessed the breadth of expertise required to help customers manage increasingly complex technology environments.

Decide

Gerstner made the critical decision to keep IBM together.

Rather than dismantling the company, he repositioned it around integrated solutions and services. This was not a detailed blueprint for the future. It was a commitment based on the best available interpretation of a changing system.

The decision established direction without pretending that uncertainty had disappeared.

Act and Adapt

IBM reduced costs, changed incentives, sold noncore assets, strengthened services, and pushed divisions to cooperate around customer problems.

The transformation evolved through action, feedback, and adjustment. IBM did not execute one fixed plan. It learned and adapted as it moved.

That is the lesson of the Sense–Response Cycle™.

Wicked business problems are not solved through analysis alone. Leaders must continually sense changing conditions, make sense of incomplete signals, decide under uncertainty, and adapt as the system responds.

IBM developed a better way to navigate its wicked world.

QUESTION: Where is your organization still trying to solve a wicked problem with a fixed plan?

Book Update

My new book, Navigating the Wicked World, is finished and is available in the Lulu.com bookstore. It will be on Amazon soon, but it’s not there yet. You can check it out HERE.

Cheers,

Bill