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Team Performance Management

ISSN : 1352-7592

Article publication date: 1 May 1999

To date, many of the models and theories that seek to explain problem solving and decision making, have tended to adopt an overly reductionist view of the processes involved. As a consequence, most theories and models have proved unsuitable in providing managers with a practical explanation of the dynamics that underpin problem solving. A substantial part of a manager’s time is taken up with problem solving and decision making issues. The question of whether managers possess the necessary problem solving skills, or have access to “tools”, which can be used to manage different types of problems, has become an issue of some importance for managers and organisations alike. This paper seeks to contribute to the current literature on problem solving and decision making, by presenting a conceptual model of problem solving, which is intended to assist managers in developing a more holistic framework for managing problem solving issues.

• Strategic management
• Problem solving
• Decision making

O’Loughlin, A. and McFadzean, E. (1999), "Toward a holistic theory of strategic problem solving", Team Performance Management , Vol. 5 No. 3, pp. 103-120. https://doi.org/10.1108/13527599910279470

Copyright © 1999, MCB UP Limited

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Adopting a holistic approach to problem-solving in business

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“Price discounting is one of my pet peeves,” says Sharmila Chatterjee. No, the academic head for the Enterprise Management (EM) Track of MIT Sloan School of Management’s MBA program doesn’t have it out for customers looking for a deal. Rather, this is a stitch in a running thread of conversation about bigger-picture thinking honed from years of research.

Chatterjee is a business-to-business (B2B) marketing expert and an award-winning case writer who examines issues in the domains of channels of distribution, sales force management, and relationship marketing. “No one should be engaged in price gouging, of course,” she says, “but get an equitable return on the value delivered through your offerings, such that you can sustain investments for the long-term success of your brand.”

Citing Millward Brown’s finding that brands account for more than 30 percent of the stock market value of companies in the S&P 500 index, The Economist acknowledged that for many companies, their brand is their most valuable asset. Consider United Airlines' 2017 branding crisis that resulted in their stock plummeting $1.4 billion in a matter of days after video footage emerged showing the forced removal of a passenger from an overbooked flight.

Brand, according to Chatterjee, is a function of customer experience. In a 2019 opinion piece for USA Today , Chatterjee outlined the importance of customer experience by examining the case of bricks-and-mortar (B&M) retailers. When e-commerce emerged in the early 1990s, traditional retailers tried to compete by slashing prices. As a result, they were forced to cut costs elsewhere: They whittled down sales teams, neglected investment in training, and ignored merchandising and product development — all to the detriment of the in-person customer experience.

Their misapprehension of the situation resulted in a self-fulfilling prophecy. Customers flocked online for discounts, leaving, among others, big brands like RadioShack, Toys R Us, and Sears to file for bankruptcy. In an unexpected twist, the rise of the digital age exposed the importance of the human interface. Today, savvy retailers recognize the benefits of combining e-commerce and B&M, integrating online and offline. “Technology is a great facilitator and enabler. Problems arise when we turn to technology as a panacea,” warns Chatterjee. “Human capital is critical for successful outcomes in most cases — minimizing this comes at a great cost.”

For further evidence of the need for human-tech complementarity, we need look no further than the high rates of technology implementation failures experienced by businesses today. In 2001, Gartner reported a 50 percent failure rate of customer relationship management (CRM) implementation. Fast-forward to 2021, and those numbers have only increased. How to reconcile this with the fact that CRM spending shows no sign of slowing down, and for many businesses, CRM has become the largest revenue area of spending in enterprise software?

Meanwhile, a recent study conducted by MIT Sloan Management Review with Boston Consulting Group found that technology implementation failure rates of 70 percent or higher are the norm, and only 10 percent of companies report significant returns on their AI investments. “There is obviously enormous potential for technology to deliver value, but the potential is not being realized, and therein lies the role of human capital,” says Chatterjee.

In an effort to understand the high rate of technology implementation failures, particularly in the B2B context, Chatterjee conducted an empirical analysis of buying organizations that purchased and implemented business intelligence software. She found that the most significant predictors of both successful technology assimilation and overall customer satisfaction were related to a set of intangibles that the buyer assigned to the software seller; the “soft” service facet, reflecting a holistic understanding of the customer’s business context, value creation potential, and pathway to value.

She calls this the “value mindset.” Once a business has a competitive product, they need to be able to communicate how to best extract the potential value from the technology. This means, among other things, sharing with the buyer the change management needed in the legacy processes as well as best business practices and lessons learned from failure. Sellers that communicated “value mindset,” according to Chatterjee, experienced significantly higher rates of customer satisfaction — to the extent of a three-to-one effect. “Again, this demonstrates in spades the incredible value of the human interface — value not communicated is value not delivered. Again, technology and humans as complements,” she explains.

Chatterjee's research began with a fascination with information silos fostered during her time as a graduate student at the Wharton School, where she first became aware of a statistic that found a mere 30 percent of marketing leads were pursued by sales teams. This revelation regarding the gap in the sales-marketing interface was something Chatterjee channeled into years of research in the domain of sales lead management and customer retention. Focused on this disconnect between human behavior and the rhythms of capitalism, she would go on to conduct some of the first studies in the critical area of the sales-marketing interface, specifically sales lead management, including a study she and her colleagues titled " The Sales Lead Black Hole: On Sales Rep’s Follow-up of Marketing Leads ."

A self-proclaimed empiricist in her research, Chatterjee employs surveys coupled with econometric methods for analysis that tests models in the real world. This focus on real-world business challenges extends to her administrative role leading the EM Track at MIT. All MBA programs deliver content, whether it be in finance, marketing, operations, or leadership. But at the Institute, Chatterjee emphasizes the importance of mindset. From the outset, students in the EM Track are encouraged to think like CEOs while on a pathway to future leadership. In practice, this means training students to move away from siloed thinking while adopting a holistic, cross-functional approach to problem-solving in order to transform organizations.

The best way to instill this leadership mindset is for students to work on real-life business projects and challenges with companies while applying theoretical concepts and frameworks learned in the classroom. In their first year, students are thrown into the deep end. Through the Enterprise Management Lab (EM-Lab), EM Track students are provided the opportunity to work hands-on with large enterprises to address business challenges. "My students' work on real business challenges embodies the MIT motto “mens et manus,” mind and hand,” she says.

Companies like Procter & Gamble/Gillette, Amazon, BMW, and IBM have all participated in EM-Lab projects. “Multinationals come back to us year after year because we deliver useful findings that they can implement in their companies,” says Chatterjee. At the same time, MIT students benefit from the real-world experience, refining their research skills while developing the mindset of future business leaders. “It’s a very symbiotic relationship, a partnership that benefits all involved,” Chatterjee says.

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A More Holistic Approach to Problem Solving

• B V Krishnamurthy

When you’re stuck on a problem, it often helps to step back and look at the bigger picture. You see things differently and discover new solutions. What I ask participants in my Total Leadership program to do is take the “four-way view” – the interaction among work, home, community, and self – and come up […]

When you’re stuck on a problem, it often helps to step back and look at the bigger picture. You see things differently and discover new solutions. What I ask participants in my Total Leadership program to do is take the “four-way view” – the interaction among work, home, community, and self – and come up with creative ways of bringing them together into a more coherent whole. I’ve found that when you do this, you see opportunities for change to which you were previously blind. The happy result: improved performance and satisfaction all the way around.

• B V Krishnamurthy is the Director and Executive Vice-President of Alliance Business Academy in Bangalore, India, where he is also the ASI Distinguished Professor of Strategy and International Business.

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🇺🇦    make metadata, not war

Toward a holistic theory of strategic problem solving

• Andrew O\u27Loughlin
• Elspeth McFadzean
• Journal Article
• decision making
• problem solving
• strategic management

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1 An Overview of Strategic Thinking in Complex Problem Solving

• Published: January 2016
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The first chapter, “An overview of strategic thinking in complex problem solving,” gives a general description of the book and introduces the case study that is used in each chapter to exemplify how the tools apply to a practical case. The case study requires no specialized knowledge: a friend’s dog disappears on the very day that the friend dismissed his temperamental housekeeper; did the dog escape or was he kidnapped? The chapter also introduces five key concepts that come at various points along the resolution process: using alternatively divergent and convergent thinking, using issue maps to identify all possible answers to a question exactly once (by using a mutually exclusive and collectively exhaustive (MECE) structure), acquiring the right skills, simplifying to reveal the underlying structure of a problem, and not fooling oneself and others.

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Why Organizations Need a Holistic Approach to Innovation

Jan 3, 2019

Oli Qirko EMBA '18

In the fast-paced world of technology, everything you do is at risk of becoming obsolete. This is particularly true in my area, the automotive electronics industry, which is going through tremendous disruption with electrification and self-driving cars. However, we aren’t the only ones in this situation. Many industries face the same challenges with change.At MIT, we learn about innovation in all types of organizations. I’ve found that there is not just one approach to innovation. Instead, the key to success is to take a holistic approach.

Assess strategy

A first step in this holistic approach is to determine which growth vertical will be a good fit for your organization. You will need to honestly assess fit between your growth mission and organizational capabilities, processes and culture. Pivoting to capture disruptive growth may require a simultaneous investment in organic development that is close to a core competence and a financial strategy that enables acquisitions to intercept growth opportunities or geographic expansion. A likely necessary culture shift can be eased by an alignment of processes, incentives and experimentation. The Organizational Processes, Competitive Strategy and Finance courses designed specifically for the EMBA program work in harmony, enabling leaders to apply different lenses, while assessing each situation.

Use quick iterative learning

Next, you need to revamp execution processes to fit innovation. Many hardware development companies utilize a linear “waterfall” development process for their new product designs. This strategy is ill suited for a dynamic environment where the product features may already be outdated by the time a development is complete. During our Innovation-Driven Entrepreneurial Advantage (IDEA) course, we utilized a short cycle to develop a “proof of concept” product to collect customer feedback and/or experiment. We then iterated using customer feedback or test results and tried it again. This fundamental loop of experimentation, learning and repeating is the motto of successful innovation during uncertainty and change.

Deal with uncertainty and be OK with “failure”

Throughout the process of experimentation, there will be many unknowns and “failures.” Shifting the decision-making process from the need to have all the data/answers/specs to driving key experimentation and smaller milestones, helps the organization develop a growth mindset, necessary in times of change. Moreover, System Dynamics analysis demonstrates that dividing the overall projects into smaller milestones can help reduce the “worse before better” phenomenon. Utilizing structured questioning methods during brainstorming helps leaders uncover key hidden information and effectively design experiments that lead to the ultimate solution more quickly. Finally, it is important to convert small failures to shared and applied knowledge. This shift in mindset from failure to learning is something many companies miss, but it is an important part of innovation.

Optimize work flow

Analyze work flow through a systemic lens. As part of my Organization Lab project, I applied the four basic principles below to an early-phase innovation at my company. As a result, we were able to reduce the time it took from idea to proof of concept prototype, from an average of six months to less than eight weeks. This acceleration enabled early and effective customer engagement, which is key to success in a competitive market like ours.

• Reconcile activity and intent – Each person doing the work needs to know why they are doing the work. This empowers individuals to make the right decisions at the right time, rather than waiting for a chain of command.
• Connect the human chain – Use simple and collaborative visual management tools to manage work flow and transitions from one person to another. This ensures you always know what is going on and can address delays and gaps to optimize results.
• Use structural problem solving – Synthesize problem statement, background, analysis, improvements, and recommendations in one single-page document (Toyota’s A3 or K-briefs). The goal is to use a common tool for problem solving and information transfer, so that anyone can easily pick up where you left off.
• Manage the optimal challenge – As previously discussed, instead of making a major change, take on smaller challenges that move you toward your goal. Utilize the innovation loop approach to learn and iterate while making small improvements.

Map out your own innovation work flow and ask if any processes violate these principles and if the metrics and incentives are aligned with the end goal.

Use the power of data for insights

Insights from data reduce the amount of uncertainty and supports our business intuition about where the market is going, what the next thing is going to be, and how we can do our jobs better. MIT’s focus on data analytics equips business leaders with useful tools needed to make robust and sustainable decisions. Many companies today either underutilize their data or have no useable data to extract insights. Yet, it is critical to set up a holistic data strategy that is in harmony with all other functions in your organization, from marketing to manufacturing.

Focus on the full customer journey

When developing a new product, deep customer knowledge and engagement is critical. Many corporations understand this need, hence a lot of effort is placed upfront to engage with customers. However, facilitating the full customer journey means not only developing desirable products and pricing to capture value, but also moving customers from problem recognition to purchase. This journey is even more complex in the business to business environment where each of the phases are handled by entirely different organization structures. Shifting your thinking from innovation as product features to end-user experience, turns cool technology into value creation and a sustained business profit for your organization.

In summary, innovation isn’t easy, but if you look at it holistically, you will have a better chance of success.

What is your approach to innovation at your organization?

Oli Qirko, EMBA '18, is the Senior Vice President, US Industrial Consumer and Energy Division at Cambridge Consultants.

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Holistic Problem Solving in Healthcare

In a medical setting, a holistic approach to problem solving refers to addressing the whole person, including their physical, mental, and emotional health, while taking social factors into consideration. This could be specific to diagnosis, in which case a holistic approach might consider all possible symptoms, or holistic treatment which may be very creative and empowers the patient to take charge of their own care.

What Does Holistic Mean?

In simple terms, “holistic” refers to the understanding of the relationship between all of the parts of a whole. In problem solving, a holistic approach starts by first identifying an obstacle, then taking a step back to understand the situation as a whole. When it comes to healthcare, solving problems holistically can make a huge impact on the quality of patient outcomes.

1. Practice Functional Fluidity

• 2. Focus on Accurate & Relevant Information

3. Make NO Assumptions

4. refrain from placing blame, 5. listen actively.

• 6. Enhance Your Nursing Practice

There’s more than one way to look at, or solve, a problem. Just because something worked before doesn’t guarantee it to work again. When you’re stuck on a single way of looking at a problem or solution, and unwilling to think about it differently, consider that there might be a solution you, or others, haven’t thought of yet. There are a number of different ways that people go about solving a problem. Some of these strategies might be used on their own, but working as a team enables the group to employ a range of approaches to figure out and fix a problem. Avoid rigidity and try to stay fluid when it comes to finding a creative solution to a problem.

2. Focus on Accurate and Relevant Information

Interpersonal blow-outs are often rife with irrelevant information. You’ve probably experienced a conflict with a sibling, significant other, or co-worker in which the actual fight was actually about something very different. Holistic problem solving requires cool-headedness and accuracy. So start by assessing what parts of the conflict are related to the issue at hand, and which are about something else entirely. When a problem is very complex, solutions come easier when you push misleading or irrelevant information to the background and focus on the facts.

When dealing with a complication, people often make assumptions about the constraints and obstacles that prevent certain solutions. Try to examine everything you presume is true about the situation – and then consider that it may not be. The other person might not have the same information as you and they might have interpreted something differently. Start by assessing the facts and looking at the problem broadly to avoid making assumptions.

The fastest way to shut down the line of communication is to place blame on someone else. If someone hears they’re wrong, it’s natural to be defensive — which can actually escalate a conflict. Use “I” statements rather than “you” statements to explain your position. It’s about staying neutral and making the others involved in the conflict understand you at the most basic human level. After all, the only person you can control is you.

Communication skills are essential to effective holistic problem solving, and one such primary skill is active listening. Avoid taking a “you” vs “I” approach when solving problems collectively. When someone vocalizes what they’re feeling, make eye contact and repeat back to them what you heard. This is especially helpful in speaking with patients. It reinforces the feeling that they’re being listened to and creates empathy and appreciation. It’s also an opportunity for the patient to refine or correct their statement to ease misunderstandings.

6. Stick to Holistic Nursing Principles

In the medical world, solving for patient issues from a holistic approach is quite specific. The American Holistic Nurses Association has identified six principles to leverage when approaching problems in patient care.

• A body of knowledge
• Evidence-based research
• Sophisticated skills
• Defined standards of practice
• A diversity of modalities from a broad range of practices
• A philosophy of living and being

Solving problems holistically means examining the whole behavior. The key to a patient’s problem might not be obvious; the issue might be found in thoughtful consideration of the whole person, their environment, and lifestyle.

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Success in sustainability: two cognitive strategies for effective problem-solving.

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Thomas Lim is the Vice-Dean of Centre for Systems Leadership at SIM Academy. He is an AI+Web3 practitioner & author of Think.Coach.Thrive!

Systems thinking and critical thinking are distinct yet complementary cognitive tools essential for effective problem-solving. Systems thinking allows businesses to understand and address the broad impacts of their actions on an interconnected system, while critical thinking sharpens decision-making, ensuring that outcomes are viable, ethical and based on solid reasoning.

Systems thinking provides a holistic perspective, focusing on how various components of a system interact and affect each other within a broader context. It emphasizes understanding the interconnections, dynamics, long-term impacts and patterns within systems to predict future behaviors and develop sustainable solutions.

This approach is particularly valuable in complex environments like organizational change, environmental management, and technological systems, where understanding the big picture is crucial.

On the other hand, critical thinking adopts a more analytical approach, concentrating on evaluating information and arguments, identifying logical inconsistencies, and making reasoned judgments. It involves dissecting complex problems into manageable parts, emphasizing evidence-based decision-making and rigorous evaluation of ideas and assumptions.

Critical thinking is key in activities that require clear, structured thinking, such as logical reasoning, decision-making, and solution evaluation, often focusing on scrutinizing existing solutions and preventing errors.

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Together, these methodologies enhance decision-making and problem-solving by providing both macro and micro analytical perspectives to the challenge at hand.

Integrating both of these ways of thinking into sustainability initiatives offers organizations a robust framework for tackling complex challenges through a structured yet flexible approach. It helps organizations transform their approach to sustainability from fragmented efforts into a coherent, strategic agenda that drives real change.

Here's how organizations can implement these two ways of thinking effectively:

Step 1: Articulating Vision And Current Reality

Begin by defining a clear sustainability vision and objectively assess the current state to identify gaps. What is the desired future and the existing barriers or deficiencies preventing its realization? Engaging in this step ensures that all stakeholders have a unified understanding of the objectives and challenges.

For instance, a government agency might aim for sustainable urban development while recognizing current inefficiencies in urban infrastructure. The systemic structure would take into consideration manpower availability, lifetime cost of building projects and green funding availability.

Step 2: Structuring Decisions Based On Evidence

Detail decisions across all levels from strategic to tactical, ensuring that each decision aligns with the overarching sustainability goals.

This step often involves using decision hierarchies to maintain clarity and relevance at every level, thus preventing duplications and identifying gaps in strategies.

For example, a multinational corporation might structure decisions around reducing its carbon footprint through supplier engagement programs. Using critical thinking methodologies, they could create an analytical and evidence-based workflow and test assumptions on handoffs to ensure compliance.

Step 3: Prioritizing Challenges At Different Levels Of Perspectives

Identify the most impactful sustainability challenge and focus resources and efforts on areas where they can make the most significant difference to help maximize impact.

For example, a healthcare provider may prioritize waste reduction in its facilities by improving waste segregation and processing and develop the necessary systems and processes in keeping with the new disposal methods. They may modify or eliminate altogether outdated policies, leading to new behaviors of pattern over time in personnel involved.

Step 4: Developing Nested Solutions

Use both systems and critical thinking to create comprehensive, innovative and interconnected solutions. This might involve using systems diagrams to visualize problems and how they relate and employing logical reasoning to evaluate potential solutions for effectiveness and feasibility.

Remember the government agency aiming for sustainable urban development? In this scenario, they may create a stakeholder map aligning and enabling various parties to translate purpose into strategy. This would allow them to co-create multifaceted urban plans that integrate green spaces and renewable energy solutions. As a result, corresponding tactics and activities happen in an integrated, not haphazard, way.

Step 5: Crafting A Theory of Success

Develop a clear and actionable theory of success that outlines the key actions and leverage points. This theory should detail how the proposed solutions will address the identified challenges and lead to the desired change, identifying where small interventions could lead to significant systemic improvements.

In the case of the multinational corporation, their leverage was in incentivizing suppliers to adopt low-carbon technologies. Their theory of success was not in "shifting the burden" but in creating a positive reinforcement loop where they focused on the quality of relationships for long-term commitment.

Step 6: Implementing And Adjusting The Strategy

Put the strategies into action while establishing mechanisms for ongoing monitoring and adaptation. This includes setting up feedback loops to continuously gather data on the effectiveness of the interventions and making necessary adjustments based on empirical evidence and changing conditions.

For the healthcare provider addressing waste management challenges, this might involve adjusting waste management procedures based on ongoing feedback and outcomes. They might realize they are oftentimes reactive in their problem solving and therefore intend to conduct an intentional analysis and internalize and operationalize key insights.

As businesses become more complex and interconnected, the ability to think both systemically and critically isn’t just an advantage; it’s essential to survival and success in an interconnected world.

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Intuition versus analysis: Strategy and experience in complex everyday problem solving

• Published: April 2008
• Volume 36 , pages 554–566, ( 2008 )

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• Jean E. Pretz 1  

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Research on dual processes in cognition has shown that explicit, analytical thought is more powerful and less vulnerable to heuristics and biases than is implicit, intuitive thought. However, several studies have shown that holistic, intuitive processes can outperform analysis, documenting the disruptive effects of hypothesis testing, think-aloud protocols, and analytical judgments. To examine the effects of intuitive versus analytical strategy and level of experience on problem solving, 1st- through 4th-year undergraduates solved problems dealing with college life. The results of two studies showed that the appropriateness of strategy depends on the problem solver’s level of experience. Analysis was found to be an appropriate strategy for more experienced individuals, whereas novices scored best when they took a holistic, intuitive perspective. Similar effects of strategy were found when strategy instruction was manipulated and when participants were compared on the basis of strategy preference. The implications for research on problem solving, expertise, and dual-process models are discussed.

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Correspondence to Jean E. Pretz .

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Study 1 was part of a doctoral dissertation submitted to Yale University. Support for this project was provided by a Yale University Dissertation Fellowship, an APA COGDOP award, and an APA dissertation award.

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Pretz, J.E. Intuition versus analysis: Strategy and experience in complex everyday problem solving. Memory & Cognition 36 , 554–566 (2008). https://doi.org/10.3758/MC.36.3.554

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Received : 12 June 2007

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Issue Date : April 2008

DOI : https://doi.org/10.3758/MC.36.3.554

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Charting a pathway to next-gen biofuels.

By Colton Poore, Andlinger Center for Energy and the Environment

May 22, 2024

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From soil to sequestration, researchers at Princeton University and the Great Lakes Bioenergy Research Center have modeled what a supply chain for second-generation biofuels might look like in the midwestern United States.

These next-generation biofuels are emerging as a more sustainable substitute for fossil fuel-derived gasoline and diesel that, if carefully managed, could remove more greenhouse gases from the atmosphere than they emit over the course of their lifecycle. And unlike conventional or first-generation biofuels, which are produced from crops like corn and sugarcane that could otherwise be used for food, second-generation biofuels are derived from agricultural waste or non-food crops grown on low productivity or recently abandoned land.

Yet as a still-nascent technology, these next-generation fuels must contend with considerable uncertainty about their role in a low-carbon energy future.

Previous studies on biofuels tend toward two extremes, either focusing on the ‘bio’ — incorporating crop growth, productivity, and land use data without considering downstream supply chain concerns in detail — or the ‘fuels’ — mapping out a supply chain and biorefinery design using overly simplistic land and crop data.

The Princeton study unites the two perspectives to provide a more comprehensive forecast of a supply chain for biofuels across an eight-state region in the Midwest, grounded in highly detailed data. The findings were published May 22 in Nature Energy.

“What we’re doing with this study is bringing together two different approaches to studying biofuels,” said Christos Maravelias , the Anderson Family Professor of Energy and the Environment and professor of chemical and biological engineering . “A lot of high-quality data at fine spatial scales went into our analyses, giving us a much more holistic view of these systems.”

Optimization from crop growth to sequestration site

Supply chains for biofuels are complex. Feedstocks for biofuels must be grown and harvested from a fragmented network of land. Those feedstocks must then be transported to a centrally located refinery. At the refinery, several different technologies could convert the plant matter into liquid biofuel, and any carbon emissions produced through the conversion process can be captured and subsequently sequestered offsite.

Consequently, decisions made at every point along the supply chain could result in systems with widely diverging costs and emissions impacts, from the crop chosen as a feedstock to the distance between field and refinery and the technology used to convert the plant into biofuels.

“Even seemingly isolated or unrelated decisions, like how much incentive you plan to provide for carbon capture or which conversion technology you favor, can have dramatic impacts on the landscape design of a bioeconomy,” said coauthor Caleb Geissler , a graduate student in chemical and biological engineering.

Thus, Geissler said, the optimal landscape design depends on the starting goals: What quantity of biofuels should be produced, at what cost, and at what carbon intensity?

While the researchers cautioned that their model was not designed specifically as a decision-making tool, Maravelias said it provides valuable insights into the economics and environmental impacts of a future bioeconomy. And since second-generation biofuels have yet to achieve widespread commercialization, proactive research now can inform efforts to ensure the fuels are meaningfully implemented into the future energy system.

“The model accounts for all the components of the system, so we can use it to answer many different types of questions,” said Maravelias. “We can use it to identify the optimal way to produce a certain quantity of biofuels while minimizing economic costs. We can use it to identify the system that produces the same amount of fuel while minimizing environmental impacts. Or we could have it design a system that strikes some balance between the two.”

Highlighting the impact of policy

Using their model, the research team could also probe the role of policy incentives in shaping the preferred technologies and emissions impact of a biofuels supply chain.

For instance, the team found that the 45Q tax credit for carbon capture , which provides $85 per ton of sequestered carbon, sufficiently incentivized carbon capture across the system. However, tax credit values below $60 per ton of carbon — the 45Q tax credit was only worth $50 prior to the Inflation Reduction Act of 2022 — were insufficient to drive investment in carbon capture and sequestration. In this case, the system generated rather than removed carbon emissions, though it still produced far fewer emissions compared to today’s fossil fuels.

“Even if the value of an incentive changes, we still wanted our results to be informative,” said Geissler. “It’s also a way to inform policymakers about how varying incentives support different technologies and configurations for the system.”

And while current incentive schemes only assign a monetary value for the carbon captured at the refinery itself, the researchers also modeled alternative scenarios that sought to minimize emissions from the entire supply chain, including both direct emissions from transportation and indirect emissions embodied in the electricity used to power the system.

These alternative scenarios highlighted even more tradeoffs. The tax credit would have to be worth at least $79 a ton to begin incentivizing carbon capture at the refinery and worth around $100 per ton for carbon capture to be installed at every refinery. Below those values, it would often be more cost effective to reduce transportation and offset emissions from purchased electricity before investing in carbon capture.

The researchers even charted pathways that mitigated carbon emissions beyond financial incentives, using site-specific soil carbon sequestration potentials and management decisions, such as whether to fertilize, to yield a landscape design with the greatest overall environmental benefits.

“Because these next-generation biofuels are still emerging as a technology, the model we developed allows us to make sure we’re designing these systems properly,” Maravelias said. “It’s important to have as much information as possible now, before we lock ourselves into less-than-ideal technologies and system configurations.”

The paper, “ Large-scale spatially explicit analysis of carbon capture at cellulosic biorefineries ,” was published May 22 in Nature Energy. In addition to Maravelias and Geissler, Eric O’Neill, who performed the research while a graduate student at Princeton University, was first author of the paper. The work was supported by the Great Lakes Bioenergy Research Center .

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Christos Maravelias

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