Defining the Problem: Telling the Story of the Mess
This is post 12 of 23 in a series on “Systems Thinking: Managing Chaos and Complexity” by Jamshid Gharajedaghi (ISBN 978-0-7506-7973-2).
Previous: Defining the Problem - Searching and Mapping
Your Mess Means Nothing If Nobody Gets It
So you mapped out all the problems. You drew the diagrams. You found the feedback loops. Now what?
Gharajedaghi makes a point that a lot of people skip over. The mess formulation is useless if you can’t communicate it. Knowing the mess is step one. Getting everyone else to see it is step two. And step two is just as hard, maybe harder.
He puts it like this: the mess is not a prediction. It’s an early-warning system. The whole point is to show people an undesirable future that’s already baked into how the organization currently operates. If they don’t buy it, nothing changes.
How to Tell the Story
The chapter lays out a few principles for how to narrate the mess so it actually lands.
Assume everything goes wrong at once. The story should show how all the problems interact and compound. Not one bad thing happening. All of them happening together. That’s what creates resonance. That’s what makes people go “oh no, that actually could happen.”
Don’t blame anyone. This is huge. If the mess story sounds like a list of accusations, people get defensive and stop listening. Gharajedaghi says the mess should be presented as a consequence of past success, not as a result of failure. The things that got the organization here were smart decisions at the time. The world just changed underneath them.
Make it a shared understanding. The goal isn’t to scare people. It’s to create a common picture of reality that everyone can agree on. Once you have that, the desire for change emerges naturally.
There’s a great line in this section: “The world is not run by those who are right; it is run by those who can convince others that they are right.” That’s basically Gharajedaghi telling you that being correct about the problems doesn’t matter if you can’t sell the story.
The Management Paradox
Here’s something interesting that comes up. Management teams often don’t want to share the mess with the rest of the organization. Their reasoning? It might discourage people.
Gharajedaghi pushes back hard on this. He says that in his experience, the people inside the organization already know the mess exists. They live in it every day. They just aren’t allowed to talk about it, or they can’t articulate it in a structured way.
What they actually don’t know is whether management sees it too. So when you finally share the mess openly, the reaction isn’t panic. It’s relief. People go “finally, someone said it out loud.” And that relief turns into willingness to do something about it.
This makes total sense if you think about it. Nothing is more demoralizing than working inside a broken system while leadership pretends everything is fine. The mess formulation gives everyone permission to stop pretending.
The XYZ Corporation: A Full Example
The second half of the chapter is basically a complete walkthrough of a real mess formulation. Gharajedaghi calls it XYZ Corporation to keep it anonymous, but he’s upfront that it represents the typical American utility company in the early 1990s. Most utility companies of that era would recognize themselves in this picture.
The mess has eight interconnected elements. Let me walk through the big ones.
The Cost-Plus Trap
XYZ operates as a regulated monopoly. It doesn’t compete with anyone. Regulators set the prices, and the company gets to pass costs through to customers. For decades this worked great. In the 1960s, new energy sources kept pushing costs down. Rates actually decreased. Everyone was happy.
Then the 1970s hit. Oil shortages. Inflation. Environmental regulations. Costs shot up, and regulators started layering in social programs and mandates. The companies became really good at one thing: managing cost allocations to satisfy the regulator.
The regulator became the real customer. Not the person paying the electric bill. When your survival depends on pleasing a regulatory body rather than outperforming competitors, you develop a very specific set of skills. And those skills have nothing to do with being good at your actual business.
A Culture That Rewards Average
Because there’s no competition, the culture drifts toward the middle. Gharajedaghi describes it as a “force field that drives everything toward average.” Being different is risky. Being ambitious is threatening. Being excellent is actually a problem because it makes everyone else look bad.
The compensation system makes this worse. Pay is based on the job, not the person doing it. Everyone with the same title gets essentially the same salary regardless of performance. What gets rewarded? Seniority. Budget size. Number of direct reports. Not output. Not innovation. Not results.
This creates some predictable side effects. Empire building. Resistance to change. Promotions to higher levels of incompetence (just so people can get a raise). The workforce gets inflated. Process becomes an end in itself. People create internal work to keep busy because there’s no external pressure to be efficient.
The Mediocrity Machine
These three elements (monopoly, non-competitive culture, input-based pay) feed into each other and create what Gharajedaghi calls a systemic gravitation toward mediocrity. Innovation gets treated like a social disease. Risk is avoided. The system develops a tolerance for incompetence because competence doesn’t matter for survival.
The painful part is the paradox. People inside the system know it’s wasteful. But they also enjoy the security and the predictable career path. That tension leads to denial. People blame individuals for problems that are actually systemic.
No Strategy, Just Nostalgia
Because the old model worked so well for so long, strategic thinking dies. American utilities were once icons of modern management. But success bred complacency. Why improve something that’s already perfect?
What passes for “strategic planning” is really just annual to-do lists. No real vision. Just a constant struggle to preserve the past.
The Structural Mess
XYZ’s structure is the classic divisional model that Alfred Sloan built at GM. Semiautonomous divisions under centralized control. Works perfectly when nothing changes.
But deregulation is coming. Competition is coming. And the structure can’t handle it. Service and control functions are jammed together, making both ineffective. Things that should be shared get duplicated. Things that need flexibility are locked down. The centralization vs. decentralization question can’t be answered in the abstract. It always depends on context.
The Lesson Behind the Example
The XYZ case shows something important about how messes work. No single element created the problem. The monopoly didn’t cause the culture. The culture didn’t cause the personnel policy. They all created each other. They form what Gharajedaghi calls a “second order machine” that makes the organization behave the way it does.
That’s why piecemeal fixes don’t work. You can’t solve the culture problem without changing the compensation system. You can’t change the compensation system while the regulatory model rewards cost allocation over performance. Pull on one thread and the rest of the web holds it in place.
Gharajedaghi lands on a line that basically summarizes the whole chapter: “Success changes the game and converts, by default, the very secrets of success to the ultimate seeds of destruction.” The mess isn’t a failure. It’s the natural outcome of winning for too long without adapting.
My Take
The XYZ Corporation example is the most useful part of Chapter 6 for me. It’s one thing to talk about “formulating the mess” in the abstract. It’s another to see it done step by step on a real organization.
What struck me is how recognizable the patterns are, even though this was written about utilities in the 1990s. Swap out “regulated utility” for any large organization that’s been dominant for a while, and the same dynamics show up. The drift toward mediocrity. The confusion between managing costs and creating value.
The storytelling advice is also underrated. A lot of smart analysis dies because it’s presented as a report that nobody reads. Gharajedaghi is saying: turn it into a story that people feel, not just a diagram they see. And don’t make it sound like you’re pointing fingers.
The connection to solution design is clear too. You can’t design a better system until you understand why the current one behaves the way it does. The mess formulation isn’t just diagnosis. It’s the foundation for everything that comes next.