What if the best way to solve problems… is to stop them from happening in the first place?
In this episode of The Agent of Wealth Podcast, the Bautis Financial team discusses another book in their Book Club series: Upstream: The Quest to Solve Problems Before They Happen by Dan Heath.
Through real-world examples and insights from the book, the team explores why organizations often get stuck reacting to problems instead of preventing them — and what it takes to shift toward upstream thinking.
In this episode, we discuss:
- Why many problems persist due to the “diffusion of responsibility” — and how assigning clear ownership is critical to preventing recurring issues.
- How “tunneling” keeps individuals and organizations stuck in reactive mode, constantly solving urgent problems without addressing the root causes upstream.
- Why changing outcomes often requires redesigning systems — not just asking people within those systems to work harder or behave differently.
- How identifying leverage points, early warning signals and meaningful metrics can help organizations detect problems sooner and measure whether prevention efforts are truly working.
- And more!
Tune in for a thoughtful discussion on how upstream thinking can lead to better decision-making, stronger systems and fewer crises — whether you’re running a business, managing a team or simply trying to improve processes in your everyday life.
Resources:
Upstream: The Quest to Solve Problems Before They Happen | Bautis Financial: 8 Hillside Ave, Suite LL1 Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call
Disclosure: The transcript below has been edited for clarity and content. It is not a direct transcription of the full episode, which can be listened to above.
Marc:
Welcome back to The Agent of Wealth Podcast, this is your host Marc Bautis. Today, we’re doing something a little different – it’s one of our Bautis Financial Book Club discussions.
If you’ve been following along, you know this series is all about exploring books that challenge us, inspire us, or help us grow – whether that’s professionally, personally, or both. It’s a chance for our team to dig into new ideas and share how we can apply them in the work we do with clients and in our own lives.
This is our 18th book, and this time, Kayla picked Upstream: The Quest to Solve Problems Before They Happen by Dan Heath – a book that really challenges the way we think about problems, prevention, and systemic change.
Kayla, what made you choose this book?
Kayla:
I picked this book because it comes from conversations that we’ve been having about how we can automate things. Internally, we’ve been talking about using Zapier, how we can utilize Google, and just other software that we use. Also, the playbooks that we use internally, so we’re constantly not doing manual things that we could just automate.
That way we could spend more time working with clients and doing things that are more fulfilling.
This book puts some framework around that mindset. Instead of reacting every time something breaks or gets missed, it asks why that issue exists in the first place and how the system could be built better.
We already have those internal workflows that I was talking about, but I think this book would be good to give us ideas for how we could refine them to prevent problems instead of just working through things as they come up.
Marc:
Yeah, nice. I think it’s definitely relevant to things we’re doing.
After — I guess this is our 18th one — you start to see the trend. Since we all rotate picking them, you notice the trends. I know you usually pick a financial book, so I was surprised when I saw this one. But even after reading it, I thought it was great and definitely relevant to what we’re doing.
So I’m going to hand it over to you, Kayla, to lead today’s discussion.
Kayla:
Thanks, Marc.
The first question is for John. What does going upstream really mean, and can we shift from reacting to prevention?
John:
Looking at this concept, it just seems so simple in its own right. But as humans, it’s not typically the way we operate.
It reminds me of when I wake up in the morning and go straight to my email. I start looking at taking care of things. What I mean by that is it could be something different for everybody — putting out fires, solving problems. Sometimes you just get so busy that you don’t necessarily have the time, or you never really have the focus, on what potentially is causing those problems because you’re always solving them.
I thought the author did an especially good job of giving examples throughout the book for all the concepts he was trying to get across and explain.
The first one really sets it up because it actually involves a stream. He talks about how there are two people standing by a stream, and they see a child drowning or struggling in the water. They go out and say, “Oh my gosh, we’ve got to save this child.” So they go out and save the child. Then they see another one, and they go out again, helping each other, saying, “Oh my gosh.” And they just keep coming, and you’re going out and saving these children as they’re coming downstream.
At some point, one of them gets out of the water and starts walking upstream. The other person says, “Well, what are you doing?” And he says, “I’m going to go upstream and figure out who’s throwing these kids in the water.”
It’s an interesting concept because, like I said, it involves the stream. We’re sitting there saying, “Oh my gosh, save the kids, save the kids.” But somewhere upstream, someone’s throwing the kids in the water.
I thought it was a great way to lay the groundwork, because almost everything in our lives could potentially apply to this.
It reminds me of my experience as a runner and being in the running world. One of the biggest issues you see in running — and if you’ve done some running at some point, or even just any activity — you may have heard of shin splints.
When you think of shin splints, obviously it’s a pain on the inside of your shin. When you get that shin splint, you might say, “Okay, there’s pain in my shin. Let’s look at that problem.”
Usually it’s a high-volume situation where someone is doing a lot of running, or maybe they’re increasing their running too much. But the shin splint is really the symptom. The cause of that symptom is not always immediate to someone who might not understand biomechanics, where it’s usually related to arch support.
When it comes to injuries, I think a lot of times you start looking upstream. You say, “Okay, well, there’s knee pain. There’s probably something else causing it.” But you’re tempted to say, “All right, let’s put a knee brace on. Let’s take some ibuprofen to alleviate the pain.”
Throughout this conversation, we’re probably going to hear a lot of examples explaining this. There are reasons for it, but in the end it’s really just looking at a problem.
The cool thing about the upstream concept is that the stream could be long. You can go upstream to the next thing, but there could be several different things that are actually upstream.
How far you go upstream can sometimes determine how effective you are at solving that potential problem in your life.
So in the end, it really is a great name for the concept because what you’re looking at is this: there’s a problem, and you go upstream. There might be one thing that helps it, but you can continue pushing upstream to potentially resolve some of those problems even more effectively the more time you take.
In the end, you’re pushing upstream.
Kayla:
Yeah, I agree. I liked some of the stories that he used in there too.
The next one is for Dylan. Why do some issues stay invisible until it’s too late?
Dylan:
Thanks, Kayla.
This chapter really explains that the first barrier to prevention is something they call problem blindness. Problem blindness is the tendency to fail to recognize a serious issue and instead treat it as something normal or inevitable — or just assume that nothing can be done about it.
John, you just brought up shin splints and injuries. The book actually shared a story that I thought was a really good example of problem blindness.
It involved the New England Patriots team doctor and physician. They had a lot of hamstring injuries occurring among their players. Most people just think that injuries are part of playing a sport — that they’re just freak injuries and simply part of the game.
But this doctor and trainer had a different philosophy about it. He thought about it in a different way.
He believed that most injuries were the result of bad training. So he developed an individualized approach instead of a one-size-fits-all program.
He would study each player’s strengths and weaknesses — how they ran and the muscle imbalances they had. For example, if one hamstring was stronger than the other.
Then he would split the players into groups based on their risk for injuries: high risk, moderate risk, and low risk.
The high-risk group would train more aggressively in the offseason to correct the muscular warning signs that the doctor identified.
As a result of this new training program and this new way of identifying muscular imbalances and players at different risk levels, the next season they were able to drop the number of hamstring injuries significantly.
The previous season they had 22 hamstring injuries, and they were actually able to get that number to drop to just three the following season.
Back to your question — why do problems stay invisible?
It’s because we tend to normalize problems. When something happens often enough, it stops feeling alarming and we begin to assume that it’s just how things are.
The urgent problems we see grab our attention, and the slow-building ones don’t. We focus on what’s loud instead of what’s important.
If we can’t name a problem, then we can’t address it. When you name a problem, you make it visible — and visibility is the first step toward change.
If you don’t see the problem, you can’t solve it upstream.
Kayla:
Thanks, Dylan. Marc, who’s responsible when problems arise, and how does ownership drive prevention?
Marc:
Yeah, so you’re like, “Not my problem,” type of thing.
But what Heath argues is that many problems persist because they fall into either cracks or between departments or jurisdictions. When people see a problem, they don’t feel either empowered, obligated, or responsible to fix it because it’s not in their job description.
He claims there are two main reasons why ownership is rare — why someone takes ownership of a problem.
The first is the diffusion of responsibility. In a large system, responsibility gets spread thin and therefore becomes invisible. So basically no one’s responsible.
Or there’s the workaround culture. You kind of think of this one where you’re praised for being the hero. You fix a crisis or solve the immediate problem downstream rather than being the architect — or the one who prevented it, fixed the system, or addressed whatever the flaw was upstream.
So we celebrate those crisis solvers, when in fact we should be celebrating or praising the people who fixed the problem upstream.
I think both Dylan and John have mentioned stories from the book, and I think Heath does a great job. In each chapter he gives multiple stories. They’re short, they don’t drag on, and they get to the point.
The one that I liked from this chapter was where he talks about a hypothetical scenario in a hospital where a patient falls.
Now, whose problem was it that they fell?
Is it the nurse’s fault because they weren’t watching the patient?
Is it the janitor’s fault because the floor was wet?
Is it the administrator who didn’t buy non-slip mats that would have prevented this?
When the responsibility is shared across all these different departments, what happens is no one actually figures out what caused the problem.
So to have upstream success, what you need is someone to say, “I’m the owner of this problem. I’ll figure out what caused it, and we’ll fix or change the failure that allowed it to happen.”
What you want to do is change the question from “How do I fix this?” to “How do I prevent it?”
The basement’s flooded — “Okay, I’ll get a mop to wipe it up.”
But the preventive, upstream thinking is: “Why is the pipe leaking? Let’s replace the plumbing or fix the leak.”
This chapter made me think of another book we covered in our book club — Extreme Ownership by Jocko Willink.
Now they’re a little bit different, right? Heath is coming at this more from a social experiment or systems-thinking perspective, whereas Willink is an ex–Navy SEAL.
But one of Jocko’s most famous mantras is: There are no bad teams, only bad leaders.
This chapter in Upstream echoes that through the lens of systems.
The parallel is what Heath says: when a problem belongs to everyone, it belongs to no one.
This is what Jocko calls the failure of leadership.
The story he gives is when he recounts a mission where there was what’s called a blue-on-blue, which is friendly fire. He took full responsibility even though he wasn’t the one who pulled the trigger and caused the shooting of their own troops.
What Heath would argue is that Jocko, by taking ownership, moved upstream to be the owner of the problem — fixing the communication protocols rather than just blaming the individual soldier downstream.
So I thought this was one of the core chapters of the book where it really hit home about taking ownership and how critical that is, no matter what you’re trying to improve.
Kayla:
Yeah, taking ownership was a big takeaway from the book, I thought, too.
Back to John — can you talk about tunneling and how narrow focus can blind us to bigger issues?
John:
It’s interesting. A lot of these chapters kind of bleed together.
This concept is really intertwined with what Marc was talking about and what Kayla was talking about. It’s really one of the reasons why we, as humans, get caught in this repetition of just looking at the problem and solving the problem.
The book talks specifically about how you’re just in this busy day and almost have blinders on. You get so used to solving those problems that it just becomes normal. It’s just like any other day, and you don’t really have the time — or take the time — to look upstream.
It even talks a little bit about how we, as humans, find comfort in that spot and in being in the tunnel, where you get the opportunity to save the day.
He tongue-in-cheek says something like:
“Oh, thanks to Steve for putting out that fire yesterday. We would’ve never gotten those reports in on time if it wasn’t for him.”
There’s comfort in that kind of familiarity.
Like, “Okay, we need more towels. We’re out of towels, so I’m just going to take them from another department.” Then that department just ends up running out.
But no one actually takes the time to say, “Hey, look, why are we running out of towels? If there’s a three-day weekend, we need more.”
So it’s really the concept of explaining why we potentially get caught in this loop of solving problems instead of going upstream.
Kayla:
Marc, the next chapter is called “How Will You Change the System?” What are some strategies for making meaningful systemic changes rather than just patching symptoms?
Marc:
In the first chapter I talked about — I think it was chapter three — that was about finding someone to own the problem.
This chapter, which turns out to be chapter six, is the blueprint for what that owner of the problem actually does to fix it. This is the architect phase of the book.
What he argues is that if you want to change the outcome, you have to stop shouting at the people inside the system and start redesigning the system itself.
He leans on a classic systems-thinking adage: Every system is perfectly designed to get the results it gets.
So if your company has high turnover, or your city has high crime, the system is currently working to produce those results.
If you want to change those results, you have to change the rules, the incentives, or the environment.
The way he suggests doing that is by identifying levers.
Systems are held together by specific points of pressure called levers. A lever could be a policy or a default setting.
If you identify those and change them — and it doesn’t even have to be a big change — you can create a massive ripple through the system and improve what’s going on.
You want to shift your thinking from the point of service to the point of origin.
Instead of fixing the person at the end of the line downstream, you want to go wherever the problem is born.
Like I mentioned earlier — instead of getting the mop to clean up the puddle, you fix the leak where it’s coming from.
He also says systems often fail because they lack a sensor that tells you where they’re failing in real time.
One thing he insisted on throughout this chapter is that you have to have real-time triggers or real-time measurements to know where your system is breaking down.
The story I liked most in this chapter involved Chicago Public Schools.
They had a crisis where only half of their students were graduating.
The downstream way of thinking would be to focus on seniors because they’re closest to graduating. So you’d try to fix why they aren’t graduating when they’re already close to the finish line.
But when they researched the problem, they found that ninth-grade performance was the single best predictor of graduation.
So the lever they created was something called a freshman success team.
Instead of just tutoring students, they redesigned the system. Every time a freshman missed a single class, what they called the data wall was updated — that was their real-time trigger — and a teacher intervened that same day.
They didn’t wait a week, a month, or some predetermined period of time.
The result was that graduation rates skyrocketed because they stopped trying to fix seniors and started designing successful freshmen.
Kayla, when you talked about the systems and operating procedures and playbooks we use internally, this really hit home.
If we start looking at the procedures we’re doing from the start, and we have a handle on those, it creates more successful outcomes downstream.
Kayla:
Thanks, Marc.
I’m going to talk about the next chapter, which builds on a lot of what everyone else has been saying. It’s called “Where Can You Find a Point of Leverage?”
This chapter is about finding a small part of the system where change can make a big difference.
One example he used that I liked was in healthcare. Hospitals were seeing medication errors, and the initial response was simply more training and reminders to staff.
But later they implemented a process where they standardized labels and used checklists. After they had a well-established system, the errors dropped because the system made it harder to make those mistakes.
The main idea of this chapter is that leverage often exists in predictable places.
If something keeps getting missed, it’s usually because the process allows it to get missed.
This connects back to what we’re doing, where we’re trying to automate things so there’s a clear process, clear next steps, automated triggers, and a standardized way of doing things.
The takeaway is that a good system guides behavior without needing constant attention.
Kayla:
Kyra, you have the next two chapters: “How Will You Get Early Warning of the Problem?” and “How Will You Know You’re Succeeding?”
Kyra:
At the start of this book, all I could really focus on was the “How.” So let’s start with Chapter 8, which answers the question:
“How Will You Get Early Warning of the Problem?”
This chapter is all about detecting risks.
One example Heath gives in LinkedIn. They created a recruiting product, offered as a subscription, that was designed to help companies find new hires. It was selling very well, but the churn rate was high. Churn rate is the percentage of customers who don’t renew their subscriptions, and it’s a critical diagnostic of health for any subscription business.
They hired an employee in 2010 who discovered that low engagement within the first 30 days predicted later churn. They used this early signal to refocus their efforts from “saving” accounts (working closely with customers — especially those feared to be at risk of leaving — around the time of renewal) to improving the onboarding process.
The key here was that in onboarding a new client to the product, the team didn’t just show the customer how to use the product… they would actually do some of the work for them.
A typical call might go like this “I know you were looking to hire a software engineer in Atlanta. I’ve taken the liberty of designing a search to help you find people who fit that profile. I’ll walk you through how to adjust the search parameters as you see fit…”
Low engagement was the smoke. That was the signal.
And preventing problems requires building systems that detect that smoke early — before the fire spreads.
These predictors can be data-driven signals, like engagement metrics, or human observations, like behavior changes. The key is spotting patterns early enough that you still have time to act.
Then Chapter 9 asks a different but equally important question:
“How Will You Know You’re Succeeding?”
This is one of the trickiest parts of upstream work — because when you prevent something from happening, success is invisible.
In downstream work, success is obvious. A fire is put out. A broken machine is fixed. But upstream? Nothing happens. And that makes it harder to measure.
Heath warns about what he calls “ghost victories.” These happen when the numbers look good, but the mission isn’t actually being achieved.
There are a few ways this shows up:
- Metrics improve due to outside factors, not your efforts.
- Short-term measures conflict with long-term goals.
- Or the measure becomes the mission — and people start optimizing for the metric rather than the outcome.
For example, you might hit target stats while neglecting the very people the work was meant to help.
To avoid that, Heath suggests “pre-gaming” your measures — thinking ahead about how they could be gamed or misinterpreted. Pair quantitative metrics with qualitative checks. Ask:
- What else could explain this improvement?
- How could someone technically hit this goal without really solving the problem?
The goal is to design metrics that actually reflect upstream progress — not just activity
Kayla:
Thanks, Kyra. Now, back to Dylan, how do we ensure that prevention doesn’t create new problems?
Now back to Dylan — how do we ensure that prevention doesn’t create new problems?
Dylan:
The first thing I thought of after reading this chapter was that prevention isn’t automatically good.
When we try to prevent problems upstream, we can accidentally create new ones. If we’re not careful with how we design solutions, we can shift the problem somewhere else and make it even worse — or even hurt the people we’re trying to help.
Every system is interconnected. When you change one part, incentives shift and people react in unexpected ways.
Prevention efforts can backfire if we ignore unintended consequences and act too confidently without supporting evidence.
Prevention isn’t a one-time fix — it’s an ongoing process of learning.
To ensure prevention doesn’t create new problems, we need testing, feedback, and learning from data.
Upstream work should be experimental and adaptive rather than rigid.
Before acting on any solution, we should ask questions like:
“What problem are we trying to prevent?”
“What new problems might we accidentally create?”
From there, start small. Run a test with a small sample size, measure the data, and gather feedback from the people affected.
It’s important not just to track the original problem, but also to watch for new issues that may appear elsewhere.
People closest to the problem often see risks others miss, so it’s important to get their feedback.
Prevention is powerful, but it isn’t risk-free. It works best when it’s experimental, measured with humility, and not rushed.
Kayla:
Thanks, Dylan.
I’m going to talk about one of the last chapters of the book. It’s called “The Chicken Little Problem.”
This chapter is about why people ignore risks that feel distant or out of reach, even when the downside is huge.
The example Heath uses is wildfire prevention.
For years, experts warned that dry forests could build up enough fuel to spread massive wildfires. But because it doesn’t happen every year, people see the warnings and dismiss them as overreactions.
When fires actually do happen, they’re devastating and incredibly costly. By that point everyone realizes the risk was real — but the damage is already done.
The issue isn’t that people are irrational. It’s that repeated warnings without immediate consequences train people to tune them out.
That’s why Heath calls it the Chicken Little problem — the warnings start to sound exaggerated, even when they’re accurate.
The solution he suggests is making risks tangible and assigning ownership.
Going back to the core idea of the book: someone has to be responsible for prevention work, even when nothing bad is happening. Otherwise, it never feels urgent enough to prioritize.
Marc:
Alright, that’s all we have for today’s Book Club discussion. I want to thank the Bautis Financial team for being here, and thank you to everyone who tuned in. If you have a suggestion for our next Book Club book, we’d love to hear it. You can email suggestions to [email protected].
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