Implementation of organisational change is failing. The wrong problems are being solved and new problems are being created as a consequence according to MIT Management Senior Associate Dean, Peter Hirst (2026). Hirst reassures that it is nothing to do with intelligence or effort, but the need for a change in the way we think.
Problem solving has traditionally been a linear process: define the problem, analyse the options, choose a course of action, and execute. However, this approach doesn’t take into account how changing one factor within a system can have far-reaching consequences. “In reality, decisions unfold through feedback loops. Every action changes the system, and those changes influence what happens next.” (Hirst). So when a part of a system is altered, the knock on effects to other parts can add extra complexity, and consequently, further disruptions or problems within systems.
Making decisions in isolation may reap the required changes, however solving a problem in this way is unlikely to lead to sustainable effects. For example,
a professional services business is experiencing high staff turnover and decides the problem is employee dissatisfaction. In response, management introduces higher salaries and a range of new benefits. Initially, the results look positive. Resignations slow, recruitment becomes easier and employees appear more satisfied.
But the decision has changed other parts of the system. Higher wages increase operating costs, which puts pressure on margins. To compensate, management reduces training budgets, delays investment in technology and increases the number of billable hours expected from employees. Managers have less time to support their teams, workloads increase and employees begin to feel that the additional salary comes with greater pressure. Six or twelve months later, turnover starts rising again — but for different reasons.
The original decision wasn't necessarily wrong. The problem was that it treated staff turnover as an isolated issue rather than considering the wider system that was contributing to it. The organisation solved the symptom, while unintentionally creating conditions for the problem to return.
OR
a national food chain who is experiencing declining revenue invests in a long term and expensive reminder advertising campaign. This will create positive results in the short to medium term. However, the impacts up and down the system will include suppliers, staffing, competition, customer service, wages, stock, debt, and many more. Reminder marketing is effective if the company has addressed the reason customers left in the first place. However, if they have not investigated beyond the symptoms, and resolved the cause, revenue will revert to unacceptable levels and the customers may also be reminded why they originally went elsewhere. The campaign benefits may end up covering the cost of its investment and little else.
When a decision is made with an incomplete view of the system and feedback is slow or distorted, leaders receive positive signals from early success and that can reinforce their flawed strategies.
Decisions that are made accounting for feedback loops and side effects can mean making less decisions, having less problems developing in the background, and more sustainable positive outcomes. So the challenge for leaders is not simply making better decisions, but understanding the systems that require the solutions.
Why Smart Leaders Keep Solving the Wrong Problems https://executive.mit.edu/blog/why-smart-leaders-keep-solving-the-wrong-problems.html 2026. Peter Hirst