How to Solve Impossible Problems: Inversion
Use the thinking tool of philosophers, inventors, and billionaires
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Every day we’re presented with seemingly impossible challenges. Issues that you or your company can’t seem to crack. Even after weeks, months, or sometimes years of trying.
How do you approach these challenges? Do you have a strategy that you follow, or do you just hold a brainstorming session and hope for the best? Do you tell yourself, “Think harder!” and pray inspiration will strike?
There’s a better way to solve problems like these — improve the quality of your thinking.
To solve impossible problems, improve the quality of your thinking.
Better thinking, problem-solving, and reasoning are skills. They can be developed through self-examination, learning new frameworks, and expanding our mental models.
Lucky for us, brilliant thinkers throughout history have left behind strategies, frameworks, and tools for considering impossible problems.
Inversion is one of those tools.
What is Inversion?
Inversion describes how we can find a solution by thinking about our problems in a different way. Instead of asking yourself how to find a successful solution, you consider how to avoid failure. Popularized by investor Charlie Munger, he described Inversion this way:
“Don’t think about what you want.
Think about what you want to avoid.”
If your goal is to find a new way to sell more of a product, think about the many ways you could NOT sell it. For example, you could consider:
What actions would cause this product to fail?
How could we target the customers who would never buy our product?
What messages and strategies would turn off potential customers the most?
Flesh out these strategies for failure, and then avoid them.
It’s that simple.
A Real-World Example of Inversion in Action
To see this thinking tool in action, let’s consider a real-life business failure and how Inversion might’ve helped avoid it.
In 2011, the American department store JCPenny was in trouble.
Once one of America’s most popular department stores, Penny’s was now a tired and failing retail brand. After decades of declining sales, a shrinking customer base, and rising competition, JCPenny needed a miracle.
In response to this downturn, the board did something surprising. They knew JCPenny needed new leadership. But they didn’t hire a CEO with experience turning around failing retail brands. Instead, they hired Ron Johnson, a first-time CEO who’d successfully led retail at Apple and Target.
Johnson formulated a bold strategy and quickly got to work. First, he rebranded the company, starting with its logo and name:
He refreshed the look and feel of JCP’s retail stores in an attempt to draw in younger shoppers.
Last, Johnson introduced what he called a “Fair and Square” pricing strategy. In the past, JCPenny was a discount destination. Savings were featured in the “sale” and “clearance” sections, and bargain-hunting customers loved them.
Although Johnson had an impeccable track record at other retailers, he made some big mistakes at JCP:
First, he didn’t test anything with JCP’s customers. In fact, Johnson bristled at the mere suggestion that he test his ideas, famously telling the media, “We didn’t test at Apple.”
Second, Johnson based much of his JCP strategy on his past success at Apple. Johnson may have become a superstar at Apple, but he was unwilling to acknowledge that JCPenny and Apple were very different types of retailers. Johnson ignored what was working for JCP, in favor of mimicking Apple’s approach. He stopped regular marketing emails, killed clearance prices, and launched lukewarm discounts on Black Friday — one of the biggest sales days on the retail calendar.
But Johnson may have avoided his misguided strategy if he’d used Inversion. Instead of starting his strategic planning by asking, “What worked at Apple, and how can we copy this at JCPenny?” Johnson would’ve begun with questions like:
1. We have a loyal customer base that we need to maintain. What would turn them off?
The core JCP customer was driven into the store to browse sales. They were value-driven bargain hunters. If we wanted to turn them off, we could kill our discounting strategy completely. That way our core customers wouldn’t have any reason to visit the store.
This question might’ve avoided the introduction of Fair and Square pricing completely.
While the strategy might’ve been simple and easy for Johnson to understand, Fair and Square didn’t make sense for JCPenny’s customers. The core JCPenny customer wanted to feel like they had saved money, even if they hadn’t.
The perception of getting a discount was more important to JCPenny’s customers than the reality of getting a deal. As the former CEO of the company, Allen Questrom put it,
“The customer has said she’s very much into value, and coupons and sales are very much part of her vocabulary.
It’s hard to tell people another way to do something when they like to do it a certain way.”
2. Which customers would be least likely to shop at J.C. Penny?
Existing Penny’s customers were older, lower middle class, and looking for items that fit their budget. The least likely customers to find Penny’s appealing would be affluent Millennials, who at the time were driving record growth at Target.
By creating a retail experience that looked, sounded, and felt different, JCP’s core customers were alienated. And after millions of dollars worth of renovations, younger customers still thought of JCP as JC Penny — the uncool place your mom or grandma shopped to find a bargain.
Inversion Examples from the Real World
1. Weather Reports That Save Lives
When investor Charlie Munger was a meteorologist during World War II, he was tasked with making sure pilots avoided bad weather.
Instead of asking himself, “How do I get better at predicting the weather?” he used Inversion. Munger asked himself, “Suppose I want to kill a lot of pilots. What would be the easy way to do it?”
That helped Munger narrow down the ways that pilots could die as a result of bad weather. They might fly into cold weather and ice up or run out of fuel before landing.
Charlie Munger knew if he could avoid these two scenarios, he was doing a pretty good job.
2. What’s The Worst That Could Happen?
When Jeff Bezos started Amazon, he wasn’t just a guy with a dream. He was also a successful investment banker making big money in New York City.
Bezos might have had a “normal” job, but he also had the entrepreneurial itch. He told his boss he wanted to quit and start a business on a relatively new thing called “the internet.”
Knowing that their yearly bonus was on the way, his boss told Bezos to think over his decision and make sure it was the right one.
Instead of asking himself what the “right” decision was in the moment, Bezos asked himself what the worst decision would be. And he didn’t look at the “best” and “worst” decisions for the moment. Instead, Bezos imagined himself at eighty years old. As Bezos put it:
“…I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionising event.”
The Bottom Line
“A lot of success in life comes from knowing what you want to avoid.”
— Charlie Munger
Don’t confuse Inversion with being negative or purposely poking holes in an idea. Instead, think of it as a way to avoid an overly optimistic strategy.
Too often, we base our approach on a fragile pyramid of assumptions about what could go right. But we spend almost zero time asking ourselves about how to avoid going wrong.
Inversion is a simple thought exercise that helps us see the most practical solution to any problem. Best of all, Inversion is easy. To get started, all you have to do is ask yourself,
“What do I want to avoid?”
If you enjoyed this article, you might enjoy my book “How to Solve Impossible Problems” — available worldwide on Amazon. Click here to check it out. (paid link)