🧭 Dojo Compass
Module: Decision-Making, Innovation and Lateral Thinking; The Entrepreneur’s Mind and Sustainable Performance
Focus Area: Decision-Making and Judgment; Decision-Making Under Uncertainty
Key Article Point
Entrepreneurs and business leaders spend a great deal of time searching for solutions.
How can we increase revenue?
How can we reduce employee turnover?
How can we improve productivity?
How can we win more customers?
How can we make this product perform better?
These appear to be problem-solving questions. But there is a danger hidden within them: the question itself may already contain an incorrect assumption about the problem.
This is the essence of what can be called the X/Y Problem.
The X/Y Problem occurs when someone focuses on solving Y without first confirming that Y is actually the problem preventing them from achieving X.
A company may believe that it needs more revenue to become profitable when its real problem is excessive costs. A manager may believe that salaries must increase to reduce turnover when the real cause is poor leadership or a toxic working environment. A musician may believe that more practice is required when the instrument itself is out of tune.
In each case, considerable effort may be directed toward finding a better solution to the wrong problem.
The result is not simply wasted time.
The wrong solution may consume resources, create new problems, and allow the underlying issue to become more deeply embedded in the organization.
The practical discipline is therefore:
Before asking, “What is the solution?” first ask, “How certain are we that we have identified the right problem?”
🎯 Key Challenge
How can entrepreneurs and decision-makers avoid becoming trapped by an incorrect definition of the problem they are trying to solve?
Most problem-solving processes begin too late.
They begin with the assumption that the problem has already been correctly identified.
A leadership team sees that profitability is declining and immediately begins discussing how to increase sales.
A company experiences employee turnover and immediately reviews compensation.
A product receives poor customer feedback and immediately begins redesigning features.
The problem is that each of these responses begins with an untested causal assumption.
The logic looks like this:
We want X.
We do not have X because of Y.
Therefore, we need a solution to Y.
But the critical question is:
How do we know that Y is the reason we do not have X?
Perhaps profitability is declining because costs have increased faster than revenues.
Perhaps employee turnover is caused by weak managers rather than inadequate compensation.
Perhaps customers are dissatisfied because the product is difficult to use rather than because it lacks features.
Perhaps sales are weak because the company is targeting the wrong customer segment.
The X/Y Problem is particularly dangerous because people can become extremely sophisticated at solving the wrong problem.
A company can hire consultants, develop detailed implementation plans, create new KPIs, invest heavily in technology, and hold dozens of management meetings—all focused on an issue that is not actually causing the desired outcome to remain out of reach.
The organization becomes highly active.
But activity is not the same as progress.
🥋 Dojo Solution
The Dojo approach is to treat problem definition as a hypothesis-testing exercise rather than a statement of certainty.
Instead of beginning with:
“The problem is Y.”
Begin with:
“We are trying to achieve X. What factors may be preventing us from achieving it?”
This creates a four-stage process:
1. Define the Desired Outcome
First, clearly define what you are trying to achieve.
Do not begin with the presumed problem.
For example:
Instead of:
“How do we increase revenue?”
define:
“How do we achieve sustainable profitability?”
Instead of:
“How much should we increase salaries?”
define:
“How do we reduce voluntary employee turnover?”
Instead of:
“How do we improve this product feature?”
define:
“How do we improve the customer experience?”
The desired outcome becomes the starting point.
This is X.
2. Develop Multiple Problem Hypotheses
Next, identify the possible reasons why the desired outcome is not being achieved.
These are not yet established facts.
They are hypotheses.
For example, if the desired outcome is improved profitability, the possible hypotheses might include:
- Revenue is too low.
- Gross margins are too low.
- Fixed costs are too high.
- The company has too many unprofitable customers.
- Pricing is inadequate.
- The product mix is weak.
- Growth is creating excessive operational costs.
The original assumption—“we need more revenue”—is now simply one hypothesis among several.
This is an important shift.
A problem statement should be treated as a hypothesis until sufficient evidence supports it.
3. Challenge the Hypotheses
Once the hypothesis set has been created, the objective is not to defend the preferred explanation.
It is to try to disprove it.
This is where disciplined problem-solving begins.
4. Solve the Most Supported Problem
Only after the hypothesis set has been examined should the organization move into solution design.
This sequencing matters.
The first objective is not:
Find the best solution.
It is:
Make sure the solution is directed at the problem that actually matters.
🏗️ Putting It into Practice
Step 1. Define the Outcome, Not the Presumed Problem
Start with a clear statement of the desired result.
Ask:
- What are we trying to achieve?
- What would success look like?
- How would we know that we had achieved it?
- What evidence demonstrates that we are currently falling short?
For example:
Poor starting point:
“Our sales team is not productive enough.”
Better starting point:
“We are not achieving our targeted level of new customer acquisition.”
The second statement leaves open multiple possible explanations.
The sales team may indeed be the issue.
But the problem may also involve:
- Product-market fit
- Pricing
- Lead quality
- Sales tools
- Brand awareness
- Customer targeting
- Sales management
- Competitive pressure
Do not narrow the problem before you have examined the evidence.
Step 2. Create a Problem Hypothesis Map
Once the desired outcome is clear, identify all plausible factors that could be preventing its achievement.
A useful question is:
What would have to be true for us to believe that this factor is causing the outcome?
For example, assume a company is experiencing high employee turnover.
The initial hypothesis might be:
“Employees are leaving because salaries are too low.”
But the broader hypothesis map might include:
| Possible Cause | What Evidence Would Support It? |
|---|---|
| Compensation | Employees are consistently leaving for materially higher salaries |
| Management | Turnover is concentrated under particular managers |
| Culture | Exit interviews identify recurring cultural problems |
| Career development | Employees see limited opportunities for advancement |
| Workload | Departures are concentrated in overworked teams |
| Recruitment | The company is hiring people who are a poor long-term fit |
The objective is not to create an exhaustive list of every conceivable explanation.
It is to avoid prematurely treating the first explanation as fact.
Step 3. Use Independent Problem Definitions
One of the strongest defenses against the X/Y Problem is to avoid allowing a single person—or even a single leadership group—to define the problem collectively from the beginning.
Ask key stakeholders to independently answer:
- What outcome are we failing to achieve?
- What do you believe are the three most important reasons?
- What evidence supports each explanation?
- How confident are you in your assessment?
This can reveal important differences.
The CEO may believe the problem is execution.
The sales leader may believe it is product positioning.
The finance team may believe the issue is unit economics.
The operations team may see a capacity bottleneck.
These differences should not immediately be treated as disagreement that needs to be eliminated.
They are part of the evidence-gathering process.
Different perspectives can expand the hypothesis set and expose assumptions that would otherwise remain invisible.
Step 4. Test the Hypotheses
The next stage is to subject each hypothesis to disciplined criticism.
Several techniques can be particularly useful.
Look for Disconfirming Evidence
Do not only search for facts that support the preferred explanation.
Ask:
What evidence would demonstrate that this hypothesis is wrong?
If the company believes compensation is causing turnover, examine whether employees with competitive salaries are also leaving at similar rates.
If they are, compensation may not be the primary cause.
Compare Across Groups
Look for patterns.
Is the problem occurring:
- Across the entire company?
- Only in one department?
- Only in one market?
- Only with a particular customer segment?
- Only after a specific change?
Variation can provide important clues.
If employee turnover is extremely high in one team but low everywhere else, a company-wide salary adjustment may be a poor solution.
Use the “Five Whys” Carefully
Repeatedly asking “why?” can help move from a visible symptom toward an underlying cause.
For example:
Why are customers leaving?
Because they are dissatisfied with the service.
Why are they dissatisfied?
Because delivery times are increasing.
Why are delivery times increasing?
Because operational capacity is overloaded.
The important warning is that the Five Whys should not become a mechanical exercise. Different causes may exist simultaneously, and the first causal chain identified may not be the only one.
4. Search for Alternative Explanations
Force the team to generate at least one credible alternative.
Ask:
If our current explanation is wrong, what else could explain the outcome?
This is particularly valuable when there is strong consensus.
Consensus can sometimes indicate clarity.
But it can also indicate shared assumptions.
Examine Timing
Ask:
When did the problem begin? What changed around that time?
A sudden decline in performance may be associated with a change in:
- Leadership
- Pricing
- Technology
- Market conditions
- Product design
- Customer mix
- Organizational structure
Timing does not prove causation.
But it can help identify where investigation should begin.
Step 5. Distinguish Symptoms from Causes
A common source of the X/Y Problem is confusing what can be observed with what is actually causing it.
For example:
Symptom: Revenue is declining.
Possible causes:
- Customer churn
- Reduced customer demand
- Increased competition
- Product problems
- Sales execution
- Pricing changes
- Market contraction
Revenue decline is real.
But it is not necessarily the underlying problem.
Similarly:
Symptom: Employees are leaving.
Presumed problem: Salaries are too low.
Possible underlying problem: Poor leadership, weak culture, excessive workload, or limited career development.
A useful discipline is to ask:
If we successfully fixed this issue, would the desired outcome necessarily improve?
If the answer is uncertain, you may be looking at an intermediate symptom rather than the real driver.
Step 6. Consider the Consequences of Being Wrong
Not every problem requires the same level of analysis.
If the decision is easily reversible and inexpensive, the organization can test a hypothesis through action.
But if the consequences are significant, the quality of problem definition becomes more important.
Before committing substantial resources, ask:
- What will this solution cost?
- How reversible is it?
- What happens if our problem definition is wrong?
- What other opportunities will we lose by focusing resources here?
For highly consequential decisions, it can be valuable to seek the perspective of someone outside the immediate decision-making group.
External experts, experienced operators, customers, or independent advisors may identify assumptions that insiders cannot see.
This is particularly important when internal stakeholders have strong incentives connected to a particular explanation.
The sales team may naturally focus on sales.
The technology team may focus on technology.
The finance team may focus on costs.
An independent perspective can help widen the field of inquiry.
Step 7. Design the Solution Against the Confirmed Problem
Only after the hypothesis set has been narrowed should the organization move fully into solution design.
At this point, reconnect the solution to the original outcome.
Ask:
Which hypothesis are we trying to address?
Then ask:
How exactly will this action influence the underlying cause?
For example:
Desired outcome: Reduce employee turnover.
Supported hypothesis: Turnover is concentrated under managers with weak leadership capabilities.
A poorly targeted solution might be:
Increase salaries across the company.
A more targeted solution could include:
- Management coaching
- Leadership training
- Changes to management accountability
- Improved feedback mechanisms
- More regular employee engagement reviews
The solution should have a visible line of logic:
Outcome → Supported Cause → Targeted Solution → Measurement
If that line cannot be clearly explained, the organization may still be solving the wrong problem.
Step 8. Treat Implementation as a New Hypothesis Test
Even after a problem has been carefully defined, remain open to being wrong.
A solution is also a hypothesis.
The logic is:
“If our understanding of the problem is correct, then implementing this solution should produce this result.”
Define the expected outcome in advance.
Then measure what happens.
If the expected result does not appear, do not automatically conclude that implementation failed.
Return to the earlier stages.
Perhaps:
- The problem hypothesis was incomplete.
- Multiple causes are involved.
- The solution did not sufficiently address the cause.
- A previously unseen factor is influencing the outcome.
This creates a continuous learning loop rather than a one-time problem-solving exercise.
📌 Key Takeaways
- The greatest problem-solving mistake may occur before solution design even begins.
- A clearly stated problem is not necessarily a correctly defined problem.
- Begin by defining the desired outcome, not the presumed cause.
- Treat problem statements as hypotheses rather than certainties.
- Develop multiple plausible explanations before committing to a solution.
- Ask stakeholders to independently define the problem before comparing perspectives.
- Actively search for evidence that disproves your preferred explanation.
- Distinguish observable symptoms from underlying causes.
- Use comparisons, timing analysis, alternative explanations, and external perspectives to test hypotheses.
- Increase the depth of analysis when the consequences of being wrong are significant.
- A solution should have a clear connection to the supported underlying cause.
- Never become so focused on finding the right answer that you forget to confirm you are asking the right question.
🌿 Reflection
There is something psychologically comforting about believing that we know what the problem is.
Once the problem has a name, the path forward appears clearer.
We can organize meetings.
Assign responsibility.
Hire experts.
Develop plans.
Search for solutions.
The uncertainty feels reduced.
But certainty about the wrong problem can be more dangerous than uncertainty about the right one.
The entrepreneur may spend months improving sales processes when the business model is fundamentally weak.
A company may spend heavily increasing compensation while ignoring the managers who are driving employees away.
A leadership team may introduce new technology to improve productivity when the real problem is unclear decision-making and duplicated work.
In each case, the organization may become better at doing something that does not solve the issue that matters.
This is why good problem-solving requires intellectual humility.
The question is not:
“What do we think the problem is?”
The better question is:
“What evidence gives us confidence that this is the problem we should be solving?”
Sometimes the answer will confirm the original hypothesis.
Sometimes it will reveal that the organization has been looking in the wrong place.
And occasionally, the most valuable discovery will be that what appeared to be a single problem is actually several interconnected problems requiring different solutions.
The ability to stop, step back, and challenge the problem itself is therefore a strategic capability.
Because the quality of a solution can never exceed the quality of the problem it is designed to solve.
⚔️ Dojo Mission
Choose one important problem your company is currently trying to solve.
Before discussing possible solutions, create a one-page X/Y Problem Map.
Define X
Write down the desired outcome:
What are we actually trying to achieve?
List the Y Hypotheses
Identify at least five possible explanations for why the outcome is not being achieved.
Test Your Assumptions
For each hypothesis, identify:
- What evidence supports it?
- What evidence contradicts it?
- What information is still missing?
- How confident are we that it is a significant cause?
Challenge the Conclusion
Ask one final question:
If our current understanding of the problem is wrong, what would be the most plausible alternative explanation?
Only then move into solution design.
The goal is not simply to become better at solving problems.
It is to develop the discipline to ensure that your organization is solving the right problem in the first place.
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