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It is not uncommon for a company to face one or more deeply complicated, intertwined and seemingly unsolvable problems. The enormity and complexity of such challenges can feel so overwhelming that some business leaders bury their head in the sand and hope the problem resolves or goes away. For recent examples, we need only look at look at Kodak, Borders, Bed Bath & Beyond, Radio Shack, Sweet Tomato, Blockbuster, Circuit City, and Toys R Us.
In the US, the today’s problems can indeed feel enormous and untenable. Cybersecurity attacks by hackers who are increasingly savvy. Compliance challenges imposed by governments. Marketplace unpredictability. Economic instability. Obsolescence due to AI and Blockchain technology. Political upheaval. Shrinking labor pool due to a 50% surge in new business applications and massive deportation of immigrants. Even one of these problems can sink a small or mid-sized company. More than one can torpedo even a large, sophisticated company. Part of the challenge with such thorny problems is that it can become difficult for leaders to plan and execute. But, as the saying goes, when you fail to plan, plan to fail. So what’s a company to do? To find a way forward, it helps to start by considering the past.
Big Hairy Problems in the Past
Big hairy business problems are not a new phenomena. For 200 years, industrialists and entrepreneurs have faced significant challenges and changes all over the world. Consider that English textile workers in the 19th century protested the introduction of new, automated textile machinery that they believed threatened their livelihoods and way of life. They destroyed new machinery, such as stocking frames and cropping frames, in organized raids, particularly between 1811 and 1816. They were known as the Luddites. They saw the new machinery as a tool for employers to replace skilled artisans with cheaper, less-skilled laborers, leading to job losses and a decline in quality workmanship.
Were the Luddites right? While the Luddites raised valid concerns about job displacement, the historical evidence shows that while the “new machinery” of that time did displace many artisans, technology also drove job creation and economic growth in the long run. Technological advancements led to the emergence of entirely new industries and roles that did not exist before. Technology increased productivity, allowing businesses to produce more goods and services at lower costs. That economic growth led to increased demand for workers in various sectors. And, as technology became more advanced, demand for individuals with specialized skills grew. Machinery then gave way to newer technology such as computers and robotics. That gave rise to areas like artificial intelligence and data science. Those roles required advanced education and training and were associated with higher wages. It also created new tasks and roles that complemented automated processes. For example, the introduction of computers led to the need for programmers and IT support specialists, and it led to the creation of social media which exploded with new career paths.
So what was the net impact? While machinery replaced hand-made products and technology replaced some machinery, compensating mechanisms outweighed the displacement effect. The rapid pace of change did lead to a skills gap — a mismatch between the skills workers possess and the skills required for new jobs – but it created way more jobs than it destroyed. However, that process disproportionately affected workers in low-skilled occupations and exacerbated inequalities. To mitigate the negative effects of technological change on employment, investment in new education and training programs equipped workers with the skills needed for future jobs. Technical colleges and universities rose to meet the challenges.
If that problem sounds familiar, that’s because it is. Today, ad agencies, film production companies, writers, artists, designers, musicians and others fear AI will replace skilled artists – graphic designers, sound engineers, cinematographers, editors, etc. — with artificially-created content that will result in job losses and a decline in authenticity, creativity and innovation. But just as the development of the internet led to the creation of e-commerce, social media, and cybersecurity industries — which now employ millions of people – development of AI is sure to open the door to occupations that cannot be foreseen today. AI is just one of the complex problems facing business owners. But there are many.
Facing the Big Hairy Challenges
So how to tackle these big hairy challenges? Perhaps the way forward is to cut the “Gordian knot”? In a business context, the “Gordian knot” is a metaphor representing a complex, intertwined, and seemingly unsolvable problem or challenge. It’s a difficult situation that defies easy solutions, much like the legend of the Gordian knot that was so intricately tied that no one could untie it.
So what is the Gordian knot? Legend has it that the Gordian knot was tied by Gordius, king of Phrygia, in ancient times. It was so intricately tied that seemingly no one could untie it. Many tried, but none succeeded. It was said that whoever could untie the knot would rule Asia. Upon reaching the knot, Alexander the Great is said to have drawn his sword and cut it in half, thus solving the problem in a decisive and unconventional way. The solution was not to untie or unravel it. Now, while Alexander the Great was a real person and the city of Gordium, the capital of Phrygia, was named after Gordius and is a real archaeological site, it’s not certain if Gordius and the Gordian Knot were real or mythological. But the concept of cutting a Gordian Knot has lasted far longer than the people or place in the legend.
The Gordian knot has come to symbolize a difficult, complex, or intractable problem that seems impossible to solve. In business, this can manifest in various ways, such as: intertwined issues that hinder growth, like uncertainty, changes in customer expectations, or talent acquisition problems.
- Complex challenges in digital marketing or sales strategies, such as incomplete data, privacy regulations, or customers moving across platforms.
- Difficult leadership situations where leaders face complex problems and need to make bold decisions.
- Employee challenges like turnover, burnout, mental health issues, or blurred work-life boundaries.
- Systemic business problems that require unconventional and decisive solutions.
How does a Leader cut the Gordian Knot?
The so-called “cutting” used to describe solving a complex problem with a bold and decisive action, often a non-traditional approach. It’s tantamount to stepping outside of the box. It points to the idea that sometimes there is a need to break away from the conventional way of thinking and find a direct, forceful solution to overcome a seemingly impossible challenge. This can involve taking risks, making unconventional decisions, or implementing drastic measures to address the core issue.
Case in Point. As Netflix was attempting to build its business on mail-order delivery of DVDs, Blockbuster’s leadership could have been researching and learning about the up-and-coming technology evolving at the turn of the 21st century called “streaming.” Blockbuster could have rapidly embraced streaming and moved to transform from a brick-and-mortar operation to a digital platform. They could have squashed Netflix – which was a much smaller and less capitalized company – before Netflix had a chance to pivot from DVD rentals to streaming and then the development of its own content. But Blockbuster could not turn away from the very knot that became its downfall.
At its peak in 2004, Blockbuster operated 9,094 stores worldwide and had 84,300 employees globally. Over 4,500 of those stores were in the US. At that point, they reached a $3 billion valuation. Rather than those stores being its strength, it was actually its Gordian Knot, keeping it from evolving. Streaming technology had already been invented and was being pioneered by companies like RealNetworks in the late 1990s. Ever more compressed formats that could be sent over the internet, even over dial-up connections, were appearing. By 2004, it was clear that streaming would soon be able to deliver movies digitally. Blockbuster did nothing. They buried their head in the sand. By 2007, Netflix began offering online movie streaming and by 2008, Hulu had also launched its platform. Did Blockbuster see the writing on the wall and pivot then? No. In the case of Blockbuster’s leadership, “denial” was not just a river in Egypt. All of those stores and employees became the intricately knotted rope that was used to hang the Blockbuster chain.
Cutting the Gordian Knot Today
What might some examples of Gordian Knots be today? Above we mentioned a few. Cybersecurity attacks. Compliance challenges. Marketplace unpredictability. Economic instability. AI and Blockchain technology. Political upheaval. Labor shortage from 50% surge in new business applications. Massive deportation of immigrants. So how does a company cut one of these thorny problems? Tune in next week and we dive into the slice-and-dice world of cutting Gordian Knots. Stay tuned.
Quote of the Week
“Inside every problem lies an opportunity.” Albert Einstein
© 2025, Keren Peters-Atkinson. All rights reserved.
