This blog post is part of a series on our Good Problems team. Each post looks at a different step in the process of designing a funding programme and makes suggestions about how to optimise to achieve a greater impact.

• Identifying a Good Problem
• Understanding a Community of Solvers
• Designing an Incentivisation Approach

Of all the problems facing the world, how do funding organisations pick one to focus on?

Identifying a problem to fund is a huge responsibility. Whether you’re a charity, foundation, funding agency or philanthropic organisation, the problem you choose will mobilise and energise people, it will focus their attention and interests, and it will use up their time and resources. It’d better be a good problem.

Finding a good problem to focus on may seem straightforward. There are so many problems out there that it’s almost ridiculous to think that finding a good one to focus on might be a challenge. But it’s precisely this abundance that makes identifying good problems difficult. It creates the impression that focusing on anything is likely to be of some use to someone. But when you’re dealing with increasingly limited resources and a growing pressure to demonstrate impact, identifying a good problem becomes essential.

In this post we’re outlining some of the things we found to be of help in this process - from defining a ‘good problem’, to creating engaging stimulus materials and using them in conversations with domain experts, users or potential solvers to gather feedback.

Defining a Good Problem

When you start scouting for a good problem it is extremely useful to have a set of criteria to search for. This will help set priorities, structure research, and shape conversations with formal or informal advisors. Here is our list of criteria for what makes a good problem.

1. A good problem identifies a real obstacle to be overcome. The challenge here is being able to make a distinction between the root-cause and a symptom of a problem. Misdiagnosed problems often end up being only symptoms of larger, poorly understood problems. Trying to address these symptoms brings limited value as it ultimately fails to solve the underlying issue. A good problem will identify an actual barrier that, if addressed, can enable progress.

2. A good problem is worthwhile. The ‘worth’ of a problem is dependent on a funding organisation’s desired impact. This can be anything from a positive impact on a specific group of people, to a significant advancement of scientific knowledge. A good problem, when solved, will unlock the type and scale of impact sought by the funder.

3. A good problem is timely. Problems are not defined in isolation. A good problem is one where current external factors – political, economic, legal, social – are not barriers, but are conducive to innovation and positive change. A good problem will take advantage of technological advancements, but will also be aware of their constraints.

4. A good problem draws together a community of solvers. A good problem should provoke and incite curiosity. Regardless of the topic, a good problem will have some aspect that will entice an existing or new community of solvers to come up with new ideas and work on refining them into viable solutions.

5. A good problem is one that a funding organisation can do something about. Even though a problem may be ‘good’ according to the above criteria, it is important that funding organisations appreciate whether the problem is good for them and whether they are best placed to do something about it. This means making sure that they have the relevant funding, capacity, networks, or convening power necessary to support and incentivise problem-solving.

While the above are a good starting point for defining a good problem, these criteria will need to be adjusted and expanded on to match the vision, ambitions, and resources of a funding organisation.

For instance, for our project around designing Tech Challenge Prizes for the European Commission Horizon’s 2020 Programme, we looked for problems that focused on technological limitations, had a significant European impact, and could be solved by launching a multi-million EUR prize. For our work with The Humanitarian Innovation Fund we identified problems related to the adequate provision of water, sanitation and hygiene in the specific context of a humanitarian emergency.

Having a clear understanding, from the beginning, of what makes a good problem helps narrow and focus research. Instead of investing time and effort into evaluating problems that might not be suitable for a funding organisation, resources can be directed towards investigating the suitability of relevant and impactful problems.

Investigating a Good Problem

To build an accurate understanding of a problem we speak with a wide range of stakeholders. By ‘stakeholders’ we mean people who are either directly affected by the problem, involved in researching it, or working on building solutions.

This process can quickly become overwhelming as stakeholders can have different, often conflicting opinions about a problem. To overcome this challenge and make the most out of the feedback received we stick to three guiding principles:

1. Create an engaging stimulus and focus conversations around it. There are many variables to consider when speaking with different stakeholders - various backgrounds, interests, cultures, and perspectives. Having a constant in these conversations can help make sense of feedback, structure it, and act on it. In our conversations, this constant is often a stimulus material that reflects our understanding of a problem. This stimulus can be anything from a document, to a visual map of a problem and the barriers preventing its resolution. Its design depends on how well the problem is defined and the level of feedback we’re interested in gathering. We share these materials with people during interviews or workshops and ask them to help us fill out gaps and validate or disprove assumptions.

2. Update the stimulus when you start hearing repetitive feedback. We speak with a variety of stakeholders because we want to get a balanced view of a problem. After a number of conversations using the same stimulus, patterns will begin to emerge. Changes that we need to make to the materials will become obvious, while new questions about the problem will appear. At this point, we update the materials to reflect our latest understanding of the problem and focus conversations on the new questions.

3. Keep track of feedback and decisions made. Using a stimulus makes it easier to record feedback and group it around specific aspects of a problem. This makes it easier to communicate divergent views and reach a consensus about next steps. We found that having a transparent record of feedback received and decisions made is incredibly useful as it offers a clear and evidence-based justification for the focus on a particular problem. It can also encourage open conversations around the desired impact of a funding organisation and the extent to which focusing on a particular problem is going to achieve that impact.

While these principles make the process of engaging with stakeholders and validating a problem easier, it’s never easy. It takes practice to learn how to design an engaging stimulus, what questions to ask, how to collate feedback, and how to act on it. Every community will be different, but collaboration is crucial to identifying a problem worth solving.

Funding organisations are under increasing pressure to evaluate and demonstrate the impact of their funding programmes. This pressure comes from an increased scrutiny from donors, a diminishing of resources, and an increase in the scale of the challenges they face. Most organisations try to measure the impact of their programmes after the moment they allocate funds. But funders might find that they are able to access a great deal of untapped potential by improving the way that they identify good problems.