Hand out sticky notes and markers. Write the big problem you want to solve onto a note and stick it to the top of a wall or big board. Ask the participants to write down ideas of what they can do to solve the problem. Post them one level below the original problem. Repeat this for each note on the new level. For every idea ask whether it can be done in a single iteration and if everyone understands what they need to do. If the answer is no, break it down and create another level in the problem solving tree.
Once you have lower levels that are well understood and easy to implement in a single iteration, dot vote to decide which to tackle in the next iteration.