How do you define upstream thinking, and why is it so powerful?

There’s a public-health parable that captures the distinction: You and a friend are having a picnic by the side of a river. Suddenly you hear a shout from the direction of the water — a child is drowning. Without thinking, you both dive in, grab the child, and swim to shore. Before you can recover, you hear another child cry for help. You and your friend jump back in the river to rescue her as well. Then another struggling child drifts into sight . . . and another . . . and another. The two of you can barely keep up. Suddenly, you see your friend wading out of the water, seeming to leave you alone. “Where are you going?” you demand. Your friend answers, “I’m going upstream to tackle the guy who’s throwing all these kids in the water.”

That’s what I’m getting at in my book, Upstream. So often, we get stuck in a cycle of reaction. We’re constantly putting out fires and responding to emergencies, and that cycle becomes self-perpetuating, because every minute spent reacting to a problem is a minute not spent preventing it. We can spend our whole lives in reaction mode unless we consciously shift our focus upstream.

You have said that focus is both the strength and the weakness of organizations. Please explain.

Organizations are designed for specialization. We push people into silos and functions and we grade them on how well they perform on certain constrained measures. And it works! It makes us more efficient — but it comes at a cost, too. It’s kind of like the blinders worn by racehorses: they make us faster, yes, but at the expense of our peripheral vision. We start losing our ability to answer really important questions that lie beyond our immediate role.

In the book there’s a case study of Expedia, which was receiving 20 million calls per year from customers asking for copies of their travel itinerary. The call-centre people who received these calls were measured on how quickly they could resolve the issue, and they did a great job whittling down that call time. That’s focus. But even as 20 million calls were fielded efficiently, there was no one in the organization whose job it was to wonder, "wait a second. Couldn’t we stop customers from needing to call us at all?" That’s an upstream question. When they finally did ask that question, they managed to drive down the number of itinerary-seeking calls to zero, basically. At a $5 cost per call, we can credit them with a $100 million upstream victory.

We can spend our whole lives in reaction mode—unless we consciously shift our focus upstream.

For most problems, we can take either an upstream or a downstream approach to a solution. Describe what these look like for a particular problem.

You can think of the downstream/upstream approaches on a spectrum. Let’s take the problem of drowning kids (from the parable), but transplant the setting to public pools. A downstream approach would be to wait until a child is drowning and then frantically attempt to rescue them. A few steps upstream from there would be to anticipate that drownings might happen. So, you put a lifeguard on duty with a life preserver. Even Further upstream from that would be a requirement for kids to wear armbands corresponding to their skill level, so that novice swimmers might wear yellow armbands. (This is something the YMCA does.) That visible signal helps lifeguards keep a more careful eye on inexperienced swimmers. And to go yet further upstream, we could teach swim lessons en masse to young kids. What better way to prevent drownings than to teach kids to swim?

Of course, this same spectrum applies to business challenges. LinkedIn, for instance, sells a recruiting product to corporations on a subscription basis. Years ago, its sales focus was on saving accounts in trouble. In other words, if you thought a customer might not renew their subscription, you’d send in an ace salesperson to save the day in month 11 of an annual license. But then a leader named Dan Shapero asked, “why don’t we stop spending money to save accounts and start spending it to onboard customers properly in the first month of their account?” That switch to an upstream focus — preventing dissatisfaction before it happened — ended up cutting their churn rate in half.

Is upstream always best?

No. I mean, all things being equal, we’d certainly rather stop problems before they happen. But all things are not equal. The issue is that the further upstream we go, the more complex and ambiguous the work becomes. If there’s a crime, you can catch the criminal afterward. That’s downstream and tangible. But if you think about what it would take to prevent crime, it gets much hazier. What would you do? How would you know it had worked? How exactly would you prove that a crime had not happened? Careful tracking of data is the answer, but of course that opens up a whole new can of worms regarding gaming, downgrading, and so forth. And think of the funding complications: We know the police force has a budget to solve crimes that have happened, but who exactly would pay for the crimes that did not happen? And so on.

To be clear, I actually think we’re too far downstream on crime, despite the obstacles discussed above. But the point is that going upstream is not always an easy win. There are times when we’ll decide that preventing a problem is too costly or uncertain to contemplate. For instance, we could eliminate most highway traffic fatalities by reducing the speed limit to 20 mph — but that doesn’t seem to be a trade-off that people would embrace.

You have identified three key barriers to upstream thinking. Please summarize them.

The three barriers are problem blindness, a lack of ownership, and tunneling. That latter is a term from the great psychology book Scarcity. Problem blindness says that we can’t fix a problem if we can’t see it. Sometimes a problem is so ubiquitous that we don’t code it as a problem; it just seems like an inevitable part of life. Think of sexual harassment in the workplace in the 60s and 70s. It was so widespread that, at the time, women were often encouraged to just roll with it.

The lack-of-ownership barrier relates to the focus issue described earlier. If your house is on fire, it’s clear who owns the solution: the fire department. But if you ask, Whose job is it to ensure that my house doesn’t catch on fire in the first place? That’s a much murkier question. The homeowner? The construction firm that built the home? The bureaucrats who wrote the building codes? All of them? Unfortunately, when ownership is fragmented like that, it often means that no one will respond.

Tunneling refers to a lack of bandwidth to solve problems. In a tunnel, you try to make your way forward. If you hit a problem, you just want to work around it and get it behind you so you can keep moving. You don’t have the time or energy to ask, Why did that problem happen? Could I solve it at a systemic level? You just keep going. Tunnelling is very familiar, I suspect, to most of us. But it’s a terrible trap. Because every problem that you work around is a problem that will keep recurring.

So, in short, problem blindness says: I don’t see the problem; a lack of ownership says, That problem is not mine to fix; and tunneling says, I can’t deal with that right now. And the combination of these factors keeps us downstream.

We all love heroes who save the day—but what about all the people who keep the day from needing to be saved?

You have said the industry that is most in need of upstream thinking is healthcare. Talk a bit about how the current scenario exemplifies this need.

I interviewed Patrick Conway, a former deputy administrator of CMS (Medicare/Medicaid) in the U.S., and he said: “We’ll pay $40,000 a year for the price of insulin, but we won’t pay $1,000 to prevent someone from ever getting diabetes.” That’s basically the story of our health system. I mean, the problem is more extreme in the U.S., but I think there are comparable dynamics in many countries. Healthcare functions as an expensive Undo button. If something is wrong with you, we’ll try to correct it. Broken hip? We’ll fix it. Blocked artery? We’ll unclog it. With some luck, you’ll be restored to your previous state. But that’s all downstream. It’s hard to find people in the health system whose job it is to make you healthier — as distinct from fixing the problems that make you unhealthy. That is changing somewhat, thanks to different kinds of payment models and incentives. But the change is slow and incremental.

Are there organizations or leaders who personify upstream thinking?

One obvious answer is Toyota — in the sense of a culture that encourages employees to analyze problems and tweak systems. Toyota’s employees basically never get caught in the tunneling trap described earlier. And a great upstream leader was Intel’s Andy Grove, who had an uncanny ability to spot problems on the horizon and address them early. His memoir was called Only the Paranoid Survive, which is pretty diagnostic of his overall ethos.

But to me, the larger issue is that, as a society, we’re absolutely terrible at recognizing and celebrating upstream heroes. We love heroes who save the day: firefighters and first responders and turnaround artists and cops and emergency-room surgeons. But what about all those people who keep the day from needing to be saved? One reason I wrote Upstream was to shine a light on their work — the invisible heroes who are quietly, competently making the world a better place.

Do you advise that we take this approach as individuals and as citizens as well?

I have a friend who told me about a revelation she had one day in a parking lot. She said that whenever she was parking at the mall or grocery store, she’d zip around in her car, hunting for the perfect spot. And she’d make herself crazy trying to beat other cars to a spot that opened up. And then it dawned on her: I’m wearing a step counter on my wrist, yet I’m driving myself mad to keep from walking 50 extra steps. Would it really kill me, she wondered, to just park a little further away?

From that moment forward, she resolved to park in the most remote spot in the lot. She thought of it as a VIP space. No one would park close enough to bang their door into her old Honda Accord. She’d pick up some extra steps on the way to the door, and she would never endure another second of anxiety or anger about where she’d park. How many problems in our lives do we tolerate because we’ve forgotten that we can fix them?

For leaders who want to embrace this approach, what are the first steps?

The first step is a somewhat counterintuitive one: Taking ownership for a problem that may not be of your making. Downstream/reactive work demands action. A tornado devastates a town; a patient suffers a heart attack; a toddler soils a diaper. These problems must be addressed. It doesn’t feel like there’s a choice. Meanwhile, despite the enormous stakes, upstream work is often voluntary. A group of people come together and declare: We did not create this problem, but we will be the ones to fix it. What could be more powerful than that?

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This article originally appeared in the Fall 2020 issue of Rotman Management magazine.