INVESTED: In Markets, in the Future, and in Society.

The Research and Development team at Viewpoint is a big fan of design thinking. The iterative cycles of understanding the problem space, ideating, prototyping, and testing have compelling parallels to the quantitative research process. One of those parallels is a concept from design theory that captures the complexity of working in global financial markets: Wicked Problems. Wicked problems are characterized by ambiguity in their aims and definitions of success, contradictory or changing requirements, and constantly evolving domains.
While wicked problems were first introduced to highlight the complexities of addressing issues in human systems such as government planning and social policy, we find that the properties of wicked problems also apply to the investment management space. 

• Wicked problems consist of one-shot operations on unique problems. There is no opportunity or learning by trial and error.
• There is no binary right or wrong answer. There are potentially infinite solutions of varying degrees of quality.
• There is no stopping rule, no way to know if your solution is final.
• There is no immediate test of a solution: feedback systems are delayed and by the time you realize you’re wrong it can be too late.
• There is no “right to be wrong,” there is no tolerance for mistakes and problem-solvers must be fully responsible for their actions. The effects of their decision can matter a great deal to the people who are affected by those actions.

Think about the impact of the COVID-19 lockdown measures in the context of wicked problems. This was a unique problem in human history, and the policy decisions created resounding effects on the economy and people’s lives; it was impossible to know if we were on the right track, and we will likely never know if lockdowns were the right decision.