Hard Problems: What are they? What's the upside to solving them in 2026?
Hard problems persist. Are they getting easier - and more valuable - to solve?
Hard Problems: One word
Shared.
Hard Problems: One sentence
Hard problems are shared global challenges - affecting millions or billions of people - where the risks and the rewards are connected across borders, and no single actor has the mandate, money, or technology to solve them alone.
Hard Problems: One paragraph
Hard problems are where this decade’s outsized opportunities live. In 2026, they show up in climate transition, critical mineral sovereignty, AI safety, biosecurity, demographic shifts, planetary health, and institutional trust. They are hard partly because of technical complexity and partly because they are embedded in legacy infrastructure, culture, and politics. No one owns these problems end‑to‑end, yet everyone is exposed to their consequences, and in many cases they remain unsolved and are getting worse. They sit between public and private interest, where markets typically under‑provide and governments cannot move at the required speed and scale on their own. Now, exponential technologies and soft power actors, with strengthened agency, have shifted many of these shared challenges from stagnant to strategic. The advantage increasingly sits with leaders and founders who can orchestrate across borders and sectors to deliver tangible outcomes, rather than those who keep pulling a single lever of hard power and hoping it will be enough.
Why Soft Power and Hard Problems?
Soft power is the trust and influence an actor can deploy, and hard problems are the shared challenges where that effort can now unlock outsized strategic and commercial gains. They are the places where external leverage, coalitions, and new tools make solutions that once looked impossible suddenly actionable.Why this pairing?
Because in 2026, the real test of soft power is which hard problem it is spent on and whether that choice turns influence into system‑level outcomes, not just reputation.Read more on Soft Power in the link below.
Hard Problems: One page
Why hard problems now
Hard problems persist and yet they are changing. For leaders, boards, and founders in 2026, hard problems are no longer a CSR afterthought or someone else’s mandate; they are an emerging frontier of strategy, capital allocation, and survival. There are clear reasons for this, and there are practical ways to work with hard problems to generate outsized results.
Acting at system scale
Big moves are no longer available only to big players. Exponential technologies, AI agents, and global platforms mean even small, focused organisations or founders can now act at system scale. A well‑positioned board and a lean founding team can draw from essentially the same toolbox to tackle system‑scale problems. At the same time, climate risk, supply‑chain fragility, AI governance, and social instability now show up directly in revenue, cost of capital, and licence to operate. Treating these as externalities is an emerging strategic risk, rather than a neutral position.
Off‑track goals, on‑table opportunities
The UN Sustainable Development Goals (SDGs) are off-track, yet the opportunities to solve them are not. Global SDG assessments warn that most targets are unlikely to be met, with a significant share going backwards. In that context, inaction becomes an active decision to ignore massive unmet demand and systemic inefficiency. Those gaps sit inside systems designed for a different era, where risk and value are still mispriced. It is like coastal real estate being priced as if rising sea‑levels do not exist, or critical‑minerals supply chains priced as if geopolitical shocks do not happen. The mismatch between old assumptions and new realities creates some of this decade’s biggest commercial arbitrage opportunities.
Hard problems as a lens
Hard problems are already impacting business. Every major organisation is embedded in these systems, whether acknowledged or not: through where it sources, how it uses data and AI, which markets it depends on, and which communities it relies on for talent and legitimacy. Seen this way, hard problems are not insurmountable obstacles however they are a high‑resolution lens for strategy - a way to see where an organisation is most exposed, most essential, and most able to move the system. For some boards, that makes hard problems the natural home for one or two genuine moonshots rather than just another layer of incremental initiatives.
What makes a problem hard
Hard problems follow a recognisable pattern. A hard problem typically:
spans multiple jurisdictions and sectors;
has deep path dependence (today’s constraints were created by yesterday’s decisions);
involves competing narratives of fairness and legitimacy;
and is vulnerable to non‑linear shocks and feedback loops.
Single fixes do not move these. They cannot be resolved with a single product, a one‑off capital project, or a press release. They require a portfolio of interventions over time: standards and incentives, technology and infrastructure, coalition‑building, and narrative shifts. Hard problems live at the intersection of hard power (capital, mandates, and assets) and soft power (trust, legitimacy, and convening power). Leaders who see only one side either over‑invest in blunt force or over‑index on talk; the work is in combining both.
Who hard problems are for
Hard problems are not for everyone. They tend not to suit leaders whose primary motivation is maximising short‑term financial returns or building a tech‑led business for its own sake. The leaders who increasingly gravitate here - in companies, institutions, or as founders - usually care deeply about the underlying problem, not just the product, valuation, or status that comes with working in the space.
They often bring soft power as well as hard skills: the ability to work across cultures and countries, to convene people who would not otherwise sit at the same table, and to advance the work without needing to be the star. Many are also impatient with the status quo: tired of watching hard problems go unsolved because of inaction, constrained budgets, or the failure to deploy the best tools and technologies that already exist. Those are the leaders for whom hard problems become a natural home, rather than a side interest or a rung on a career ladder.
Setting an advantage in the year ahead
Four dynamics are shaping how hard problems set an advantage in 2026:
1. From cost centre to strategic optionality
Hard problems are changing where they sit on the balance sheet. Historically, boards put them into buckets such as regulatory risk, sustainability, or reputation management - all important, yet conceptually separate from growth and competitive advantage.
The emerging move in 2026 is to treat them as sources of strategic optionality: new markets, new products, and new forms of resilience that appear when an organisation is designed to solve part of a system‑scale problem. Decarbonising a supply chain may begin as compliance, and it can also be a play for advantaged access to future customers, talent, and green capital. Building trustworthy, well‑governed AI may be booked as cost, and it can also become the entry ticket to high‑trust markets where opaque players are being legislated out.
In this frame, hard problems become the testing ground for an organisation’s ability to generate optionality under uncertainty, not a drag on earnings. This is where the few genuine moonshot‑scale bets live as deliberate 10× plays, not as side projects. The same logic applies from early‑stage ventures to listed companies: AI‑first startups are increasingly built around solving a slice of a global challenge from day one, using exponential tools that were previously reserved for incumbents.
2. Orchestrator vs builder
The focus is shifting from building things to orchestrating them. Working on hard problems no longer requires becoming a climate‑tech lab, AI research centre, or health‑tech giant; many powerful technologies are now accessible on demand and the barriers to accessibility continue to decrease.
Walmart’s Project Gigaton is an example. Rather than building all the solutions internally, Walmart set a goal to eliminate 1 billion tonnes of supply‑chain emissions by 2030 and then orchestrated thousands of suppliers, NGOs, and data tools to change how products are made and moved, using standards, calculators, and incentives instead of owning every asset or technology.
A founder‑led example looks similar in spirit, just on a different scale. Think of an early‑stage climate or health startup that assembles an ecosystem instead of trying to do everything in‑house: using off‑the‑shelf AI models and cloud infrastructure, partnering with universities for research, plugging into existing logistics networks, and coordinating corporates, regulators, and community groups around a specific hard problem mission. The value comes less from owning each component and more from seeing the system clearly, setting the direction, and getting diverse actors to move together.
Many leadership conversations, asked in traditional industries, ask “Do we want to be a tech company?”. An alternative question, which can yield greater insights, is: “Which system are we trying to shift, and what is our role in orchestrating the partners, tools, and capital to do it?”. In that role, boards and founders set direction, shape standards, and stitch ecosystems together rather than owning every component. When infrastructure and hard assets are increasingly available as services, the real constraint is less about technology and more about strategic focus and execution.
This is the governance shift behind mission‑oriented programmes and serious moonshots: treating hard problems less as engineering tasks and more as orchestration challenges. For founders, the primary moat is often not proprietary technology but soft power - the ability to convene talent, capital, and partners around a credible hard problem mission, and to use technology that lowers the cost and complexity of building, testing, and validating solutions.
3. Hard problems as the ultimate stress test
Hard problems are a live diagnostic. Used deliberately, they reveal how leadership, culture, and governance actually perform under constraint.
To see this in action, set a leadership team a concrete challenge - for example: stand up a critical‑minerals recycling loop across three continents, take 40% of emissions out of your freight network, or deploy safe AI copilots across every major customer journey - and constrain it to existing assets and tight budgets.
What happens next is revealing:
• Who reaches first for hard spend - more headcount, new capital, or a re‑org.
• Who mobilises soft power - existing coalitions, standards, narrative, or partnerships.
• Who recognises the organisation’s soft power balance sheet - with a plan to leverage trust, relationships, and convening power as a usable asset.
Handled this way, hard problems become a stress test of strategic imagination, internal alignment, and orchestration capability. They expose whether an organisation can sustain ambition, learning, and coalition‑building over years.
A useful question follows: who else has this hard problem, and where in the world is it already being solved or seriously tackled? Instead of assuming the full solution must be built in‑house, boards and founders can ask whether lower‑cost, lower‑risk, more scalable models already exist that could solve it for multiple players, not just one organisation. That additional dimension - estimating the time and cost to solve the problem system‑wide, not just within a single footprint - creates a clearer choice: is this a mission to own, or is there more leverage as a reference client and scale partner for those solving it globally?
4. Why the board or founder should care
Hard problems are an organising principle as well as a risk category. They offer an efficient lens to test whether strategy, risk appetite, and culture are suited to the next decade.
They force zoom‑out questions:
Which systems truly underpin the business?
Where is the organisation a price‑taker - and where could it be a standard‑setter?
Which coalitions is it part of by accident rather than design?
Could a billion‑dollar business be built by solving a global challenge in this system?
Could a billion people be positively affected if this mission actually delivered?
They also guide zoom‑in decisions:
Which experiments to fund.
Which technologies to adopt.
Which markets to exit.
Which narratives to own.
Which under‑used soft power assets - trust, relationships, and convening power - could be mobilised to support outsized results.
A board that can articulate its hard problem thesis is often ahead of competitors reacting piecemeal to regulations, headlines, or activist pressure. Maersk is an example: its thesis is that decarbonising global shipping is a non‑negotiable hard problem, so it has committed to net‑zero emissions by 2040 and is investing in green‑methanol vessels and long‑term fuel offtake agreements, while many rivals still treat climate rules as intermittent compliance events.
Hard problems, framed this way, become an organising principle for serious leadership. They align portfolio, technology bets, partnerships, and culture around a small number of system‑relevant missions - including one or two clearly defined moonshots where a 10× outcome would materially shift strategic position, even if the path includes productive failure and spillovers. The same lens that helps a board distinguish price‑taker from standard‑setter helps a founder decide which arena to play in - and how to use a small, high‑trust footprint to punch above its weight.
Soft Power, Hard Problems
Soft power is the fuel; hard problems are where it’s now worth spending it.
This piece is part of an ongoing exploration of how hard problems and soft power can give founders and leaders a different way to play the next decade. What are you seeing, experimenting with, and achieving when you use soft power to solve hard problems? What wins are currently out of reach that you’d like to materially edge closer to this year (without emulating zero-sum tactics)?
How leaders can engage China to solve hard problems faster, easier, and with greater scale, and the soft power plays that make this possible:
Further Reading
Hard problems, missions, and moonshots
Mazzucato, M. (2018). Mission‑oriented research & innovation in the European Union: A problem‑solving approach to fuel innovation‑led growth.
https://op.europa.eu/en/publication-detail/-/publication/5b2811d1-16be-11e8-9253-01aa75ed71a1/language-enEuropean Commission – Mission‑oriented R&I policies: in‑depth case studies (Apollo, others).
https://research-and-innovation.ec.europa.eu/knowledge-publications-tools-and-data/publications/all-publications/mission-oriented-research-and-innovation-policy-depth-case-studies_enKrantz, S. (2023). “What is the global problem you could solve from where you are?”
https://open.substack.com/pub/sophiekrantz/p/what-is-the-global-problem-you-could?r=wpxa&utm_campaign=post&utm_medium=webPNAS (2023). “The macroeconomic spillovers from space activity.”
https://www.pnas.org/doi/10.1073/pnas.2221342120NASA History. “Managing America to the Moon: A Coalition Analysis.”
https://www.nasa.gov/history/SP-4219/Chapter8.html
SDGs and why hard problems are worsening
UN Statistics Division (2025). The Sustainable Development Goals Report 2025.
https://unstats.un.org/sdgs/report/2025UN Statistics Division (2023). The Sustainable Development Goals Report 2023: Special Edition – Progress at the Midpoint.
https://unstats.un.org/sdgs/report/2023World Economic Forum (2025). “Sustainable Development Goals: Are we on track for 2030?”
https://www.weforum.org/stories/2025/09/sdg-progress-report-2025Earth.org (2024). “Only 16% of SDG Targets on Track to Be Met by 2030, Report Finds.”
https://earth.org/only-16-of-sdg-targets-on-track-to-be-met-by-2030-report-findsAmnesty International (2025). “Why are the Sustainable Development Goals way off track?”
https://www.amnesty.org/en/latest/campaigns/2025/06/why-are-the-sustainable-development-goals-way-off-track
Exponential tech, agentic AI, and small‑unit agency
World Economic Forum (2025). From Safer Cities to Healthier Lives: The Top 10 Emerging Technologies of 2025.
https://www.weforum.org/stories/2025/06/top-10-emerging-technologies-of-2025World Economic Forum (2026). Technology Convergence Report 2025 (digest).
https://www.weforum.org/publications/technology-convergence-report-2025/digest/Google Cloud (2025). “5 ways AI agents will transform the way we work in 2026.”
https://blog.google/innovation-and-ai/infrastructure-and-cloud/google-cloud/ai-business-trends-report-2026DeepL / Press (2025). “69% Global Executives Predict AI Agents will Reshape Business in 2026.”
https://www.deepl.com/en/press-release/69_global_executives_predict_ai_agentsMicrosoft WorkLab (2026). “Agents are here - is your company prepared?”
https://www.microsoft.com/en-us/worklab/agents-are-here-is-your-company-preparedRezolve.ai (2026). “One Billion AI Agents by 2026: What This Means for ITSM and Beyond.”
https://www.rezolve.ai/blog/one-billion-ai-agents-by-2026
Boards, founders, and soft power
Brand Finance (2026). Global Soft Power Index 2026.
https://static.brandirectory.com/reports/brand-finance-soft-power-index-2026-digital.pdfWorld Economic Forum (2026). “Next‑generation leadership can help move the world forward.”
https://www.weforum.org/stories/2026/01/leaders-wef-trust-ygl-new-kinds-of-leadersFasterCapital (2025). “The Soft Power in Startup Leadership Development.”
https://www.fastercapital.com/content/The-Soft-Power-in-Startup-Leadership-Development.htmlStartup Genome (2025). Global Startup Ecosystem Report 2025.
https://startupgenome.com/contents/report/gser-2025_4786.pdfInnovations Venture Studio (2025). “The Rise of AI‑First Startups: What 2025 Will Look Like.”
https://innovationsventure.studio/the-rise-of-ai-first-startups-what-2025-will-look-like
Love your take on these.. The hard problems require many people to come together and attempt to solve them from multiple angles all at the same time and in co-ordination..
The way our systems are set up, they dont encourage this kind of collaboration.. So, it will take a leader determined to bring together the different attempts at solving any of these hard problems and enable collaborations at scale, using the soft power that you mentioned in your previous post.