Executive Leadership & Innovation: Why Your Best People Can’t Solve New Problems
Breaking the "Einstellung Effect" in High-Performing Teams
You hand a team of experts a new problem. They are smart, experienced, and motivated. You expect a breakthrough.
Instead, they give you the same solution they used last time—just slightly tweaked.
We often blame this on a lack of creativity or risk aversion. But often, the culprit is simply the way the human brain is wired for efficiency. It's the brain’s efficient, yet dangerous,tendency to treat new challenges exactly like old ones.
Two classic experiments explain why this happens—and what leaders can do to break the cycle.
A Candle, a Book of Matches, and a Box of Thumbtacks.
In 19351, German psychologist Karl Duncker published a study that gave us the concept of functional fixedness.
Participants were given a candle, a book of matches, and a box of thumbtacks. Their task: attach the candle to the wall so it burns without dripping wax onto the table below.
Most participants tried to tack the candle directly to the wall2 (it splits) or melt the wax to stick it (it falls). They failed because they saw the box solely as a container for the tacks. They could not mentally "detach" the box from its current function to see it as a potential shelf.
When Duncker repeated the experiment but presented the tacks outside the box, participants solved it almost immediately. The mental block wasn't a lack of intelligence; it was a rigidity in how they defined the objects in front of them.
In the corporate world, this shows up when we treat the weekly status meeting as the only place to share updates, ignoring that a shared document could do it faster and free up that time for debate. It happens when we look at a budget line item for "Training" and see only a compliance requirement, rather than capital available to solve a retention problem. We see the administrative box, not the strategic lever.
The Water Jar Trap
If Duncker showed us how we get stuck on objects, Abraham Luchins showed us how we get stuck on processes.
In 1942, Luchins conducted the famous water jar experiment. He gave participants three jars of different capacities and asked them to measure out a specific amount of water.
For the first few problems, the solution followed a complex formula: Fill Jar B, pour out enough to fill Jar A once, and Jar C twice (B - A - 2C). Participants performed this calculation over and over, becoming efficient and confident.
Then, Luchins gave them a new problem. This one could be solved with the complex formula, but it also had a laughably simple solution: just fill Jar A and pour it into Jar C (A - C).
The result was that most participants used the complex, old formula. They were so set in their method that they couldn't see the shortcut staring them in the face.
Even worse, when given a final problem that only worked with the simple method, many failed entirely. Their expertise had blinded them. This is the Einstellung effect—a state where our prior experience prevents us from seeing a better solution.
If “thinking outside the box” is the goal, the Einstellung effect is the cognitive barrier that keeps us trapped inside it.
The Outsider Advantage
Leaders often try to solve this by demanding "fresh thinking" or booking a leadership alignment workshop. But the brain doesn't let go of a proven pattern just because you ask it to. You can't willpower your way out of a neurological loop; you have to derail it with an external jolt.
This is where the research on team composition moves from "nice to have" to "strategic necessity."
Research by Katherine Phillips at Northwestern University used murder-mystery puzzles to test how teams solve problems. She found that groups with a "socially distinct newcomer" (an outsider) significantly outperformed groups3 of friends who knew each other well.
Homogenous teams (people with similar backgrounds, tenure, or expertise) share the same functional fixedness. They all "know" how the industry works. They all "know" what the tack box is for.
A distinct "outsider" often lacks this "expertise." They ask the "dumb" question that reveals the box is actually a shelf. They break the Einstellung effect not necessarily because they are smarter, but because they haven't learned the rules yet.
What Leaders Can Do
- Audit your "always" rules. When a team member says, "That’s just how the vendor process works," treat it as a red flag. Ask: "If we were building this process from scratch today, would we do it this way?" If the answer is no, you are dealing with procedural fixedness.
- Bring in the "naïve" perspective. For your next complex problem, invite someone from a completely unrelated department to the kickoff. Tell them their job is to ask basic questions about why things are done a certain way. Their lack of context is their value.
- Frame the problem, not the method. Luchins’ subjects failed because they were focused on the formula (the method) rather than the outcome (the water). Give your team a clear goal ("Win the client’s trust in the Q3 review") but explicitly forbid the standard crutch ("You cannot use a slide deck"). Constraints often force the brain to abandon its preferred path and find a new one.
1 Duncker’s original work, "Zur Psychologie des produktivenDenkens," was published in Berlin in 1935. It was posthumously translatedinto English as "On Problem-Solving" in 1945, the date most frequently cited in American psychology texts.
2 In Duncker’s original lab setup, this was a wooden door or screen, though it is commonly cited as a "wall" in modern literature.
3 The study found that better performance didn't feel better. The diverse groups actually felt less confident, despite outperforming the comfortable, homogenous teams.
