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The art and science of the possible

Author Archives: lnedelescu

The power of holistic thinking or how Albert Einstein’s Theory of Relativity could not have been a crowd-sourced innovation

13 Thursday Dec 2012

Posted by lnedelescu in innovation, knowledge, science, society, technology

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Crowd Sourcing, Einstein, Innovation, science, Society, Technology

I have claimed that all the hype about how the information technology revolution,  culminating with Apple and Facebook, has changed the quality of our civilization may be over-rated.

A lot of the benefits hype associated with social networks and other interconnected means of communication facilitated by information technology may be just that: hype. Networks come with volume (people, information, “likes” and so on) and they do have their benefits: speed with which the information propagates for one and the beginnings of the creation of a global village. But we should not confuse information with wisdom, intelligence and creativity; more quantity of information delivered ever faster does not necessarily mean an increase in the quality of our understanding or wisdom. I’ve used the following example to make my point to several audiences lately: “Einstein’s Theory of Relativity could not have been a crowd-sourced innovation”. And I honestly believe that is true, having provided at least one supporting argument from the management consulting industry (see my blog entry “Russell Ackoff, the Albert Einstein of Management“).

And so I have claimed, supplied limited examples, and will continue to argue over the course of coming posts that some of the world’s top thinkers are in fact aligned with a view that argues for qualitative, holistic path to the world’s progress that can be traced all the way back to roots of Western civilization in ancient Greece.

Below are three examples of insights that go against commonly accepted wisdom. These insights share a common denominator and namely that quality is more important than quantity which is equivalent to effectiveness being more important than efficiency. See also my post on this blog of the fallacy of the business performance consulting model.

In his Harvard Business Review Blog, Jeff Stibel makes the case for intelligence and creativity being a qualitative rather than quantitative, a primarily individualistic rather than group phenomenon:

http://blogs.hbr.org/cs/2011/06/why_a_great_individual_is_bett.html

In a Q&A with Alan Hall at Forbes, Clayton Christiansen, the innovation guru, argues that our obsession with efficiency, based largely in quantitative methods and thinking, is killing innovation:

http://www.businessinsider.com/clay-christensen-our-obsession-with-efficiency-is-killing-innovation-2012-12

The same finger prints of holistic, qualitative thinking can be noticed in Roger Martin’s and Jack Welch’s motivations when arguing against the “shareholder value” concept in economics and business:

http://www.forbes.com/sites/stevedenning/2012/08/29/is-the-hegemony-of-shareholder-value-finally-ending/

Democracy full circle: its invention may hold the key to its future

12 Wednesday Dec 2012

Posted by lnedelescu in business, capitalism, democracy, design thinking, future, philosophy, society

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compassion, competitiveness, convergence, creativity, democracy, future, futurism, ideology, philosophy, politics

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Over two and a half millennia ago, the Greek philosophers gave us the “dialectical” method of constructive argument. In the 21st century democracy is faced with significant challenges, and moving forward may require searching for solutions from the wisdom of democracy’s inventors.

The dialectic method is a form of reasoning based on dialogue of arguments and counter-arguments, advocating propositions (theses) and counter-propositions (anti-theses). The dialectical method of dialogue is unique and different from rhetoric and debate in that it aims to converge the opposite points of view and form a new and superior point of view from the synthesis of the initial arguments. This transcendence is possible by searching for commonalities between the two opposing points of view when considered in the larger context or whole of which they are both part. The transcendence of thesis and antithesis into synthesis represents a qualitative improvement of the argument, bringing both participants closer to understanding the whole of reality as an evolving process. Ancient history not applicable to the problems of today’s highly technologized and interconnected world, right? Not necessarily.

Fast forward to the 21st century: Roger Martin, #6 on the top fifty management thinkers of 2011 (http://www.thinkers50.com/biographies/95) is the creative force behind two of the most valued management models: integrative thinking and design thinking. Roger Martin defines integrative thinking as: “the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative solution of the tensions in the form of a new model that contains elements of the individual models, but is superiors to each” (http://rogerlmartin.com/devotions/integrative-thinking/). Sound familiar? Roger Martin’s concept was actually developed by interviewing some of the world’s top business leaders and entrepreneurs. Apparently these “integrative thinkers” go about solving problems differently than “conditional thinkers”; and step 4 of the figure below has an uncanny resemblance to the dialectical method.

picture_integrative_thinking2

And so, without the benefit of modern technology or access to a study group, Socrates said pretty much the same thing more than 2500 years ago. And as we look to the challenges faced by democracy in the 21st century, we may have to take Socrates and his fellow Greek philosophers seriously.

But what is the main challenge of our century’s advanced democracies? A lot of the challenges can actually be related to one dominant culprit: complexity. Small start-ups are good sources for inspiration when it comes to agility, but past a critical mass agility gives way to complexity as a bureaucracy grows in size. And advanced democracies are experiencing the “complexity” by-product of progress to a growing degree (see the 2008 financial crisis and other systemic events). And so, in the current construct of democratic progress, agility and complexity seem to be mutually exclusive. So much so that the left and right political ideologies of the leading modern democracy, the USA, are aligned to the agility thesis and complexity antithesis. On one hand, the left ideology is advocating for a top-down, bureaucratic approach to tackling complexity. The right by contrast is advocating for a agile bottom-up, government free approach to tackling complexity. In true agreement with the dialectical method, the future of democracy may well need a transcendence of those two viewpoints into a synthesis that would bring together agility and bureaucracy: the innovative, agile government.

But there are more subtle ideological differences between the left and right political parties. There are so to speak, emotional and behavioral differences in how the individual is perceived. The left ideology emphasizes a compassionate view of the individual, and sharing opportunity with the less fortunate, those that are somehow left outside the system with all its benefits. At the same time, the right ideology emphasizes the competitive human side that is by definition not in alignment with compassion. Are these ideologies, apparently opposed, actually facets of the same human construct when regarded from a more holistic perspective? Are human beings both compassionate and competitive? For a successful society that both makes progress and takes care of its less fortunate, are these attributes not required simultaneously? And if so, is there a model that could reconcile these so that democracy itself has a future? Is the distant future of democracy predicated upon the disappearance of the left and right ideologies?

Roger Martin’s second area of interest, Design Thinking, may provide the solution to an ideology-free democratic construct. Design Thinking, closely related to Integrative Thinking, can be described as a style of thinking that is generally associated with the ability to combine empathy for the context of a problem, creativity in the generation of insights and solutions, and rationality to analyze and fit solutions to the context. A Design Thinking approach to political ideology could bring the two dominant ideologies closer together, by demonstrating a shared concern for the individual’s well being, both in terms of the basic need for individualism (competitiveness) and inclusiveness (compassion).  Creativity, which is a key component of Design Thinking, represents that uniquely human trait that could lead the way to a future world where competitiveness and compassion are symbiotic and simultaneously harmonious: that is, there is no need to alternate between the two every four years.

Performance reviews: an alternative perspective to the latest thinking

10 Monday Dec 2012

Posted by lnedelescu in business, human capital, management

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HR, human capital, human resources, performance reviews, promotion

One of the latest articles on LinkedIn features a thought leader proposing that, and I quote, “when you start telling someone, ‘you are really great at x, but when you do y…’ the BUT negates all the goodwill that you are building up with the first part of your sentence.  The BUT gets someone’s defenses up, and makes them way less able to hear the important thing you want them to listen to.” (see https://www.linkedin.com/today/post/article/20121130041419-9947747-how-to-give-great-employee-feedback).

This is another good example of superficial understanding of how human beings function. In short, my argument is as follows: human beings are adaptive beings. So during a performance review they can easily adjust their mental sensors to read through the lines quite effectively and decode whether “AND” really means they are deficient in some respect. So replacing “BUT” with “AND” is in my humble opinion not an effective way to get positive results in the short term or help the employee to grow in the long run.

A much more effective (in the transformative sense) approach is to give the employee the larger context, to show them how their behavior affects the bigger picture, and to encourage them to find ways to upgrade their individual behavior accordingly. That is a powerful motivator and it’s a way of treating the employee with due maturity and respect. It can be the beginning of a fruitful partnership in achieving a larger vision and mission.

The business performance consulting model: a mediocre way to seek progress, or a good way to seek mediocre progress (Part I)

02 Sunday Dec 2012

Posted by lnedelescu in business, consulting, taxonomy

≈ 1 Comment

Image

Many of today’s management consulting firms promise business performance. “High Performance. Delivered” assures the motto of one of the top business management consulting firms in the world.

And just how do these consultants prove the success of their methods? They benchmark existing performance and then demonstrate a performance increment after their intervention. Straight forward and hard to argue against. Or is it?

How about asking a next level question: how is the benchmark itself derived? Well, let’s take a quote from the same company with the motto: “XYZ draws upon research and our experience across industries and business functions to help our clients improve their business performance”. And so, to paraphrase this consulting company’s approach, an average of indicators associated with high performing enterprises in a certain market sector is used to create “best practices” benchmarks.

So, in this consulting model, what does the client really pay for? Well the client pays the consultant to help them emulate the best in the client’s respective market sector. But a successful outcome is dependent on a few assumptions: first is the assumption that the best do not move forward, and second there is the assumption that the emulation effort is designed and executed flawlessly. Even if ignoring the validity of these assumptions, the “performance” consulting model is at best a mediocre way to seek progress, or a good way to seek mediocre progress. That is because the “emulation” model is not just flawed in terms of its underlying assumptions, but also presents a logical paradox: how can progress be even possible in a model where all everyone does is benchmark? Eventually entire market segments would converge to a set of religiously accepted best practices and progress would stagnate to a halt. And we know that’s not true: we know that markets are not that predictable and well behaved and that disruptive new entrants can unseat established incumbents. So this “linear” model of increasing one’s performance by emulation is at best incomplete and at worst flawed.

And yet, why is it so successful? Well maybe because as a global society we have a deeply embedded quantitative mindset bias. What is abstract and not easily measurable is deemed as not rigorous and not actionable, and so, not necessarily as valuable as the concrete and measurable. In other words performance trumps creativity, even though markets have repeatedly proven that significant leaps in business value are usually based in a disruptive innovation itself inspired by creative insights.

In Part II of this post I will present a model based in personal experience that sheds light into how increments in qualitative, hard to measure attributes can lead to significant leaps in performance, not otherwise achievable through the benchmarking model. I will look to elucidate the connection between some of the most abstract attributes of an enterprise such as its identity and vision and its overall capacity to produce and leverage value. Please stay tuned…

The generalized fingerprints of profound value: simple terms, logical clarity and tacit mechanics

16 Friday Nov 2012

Posted by lnedelescu in business, Communication, Investment, knowledge, society

≈ 11 Comments

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business, Communications, Effective Communications, effectiveness, Intelligence, Investment, Validity, Writing

I’ve often wondered whether there is a way to discern value in a piece of writing, without being a specialist in the particular domain. This is a pertinent issue as the proliferation of social media has exponentially increased not just the amount of specialized writing, but the preference for short and succinct writing. And as “more” is not necessarily “better”, it would be useful to have a way to gauge whether our highly technologized world is more value-full in terms of communicating meaning.

I propose that the generalized fingerprints of value can be detected by the non-specialist possessing the right lens.

Simplicity and clarity are two unmistakable signs of intelligence. No matter how complex the subject introduced, an intelligent specialist will reduce it to simple, generalized explanations. And the logical clarity of the message “architecture” will reinforce the simplicity of the content.

Still, simplicity and logical clarity are a necessary sign of intelligent writer but not sufficient to prove the value of the message itself. Another ingredient is needed, which I tentatively term “tacit mechanics”.

The best illustration of the tacit mechanics feature is a concrete example.

Stephen Kann’s “Microcap Investment Strategies” blog article is a brief overview in simple terms and clear logic of the microcap investment algorithm. I propose this article is a value-full piece of writing based on the simplicity-clarity-tacit mechanics logical construct.

In this particular case, simplicity and clarity alone demonstrate an astute writer. But there is more to this article than coherence; there are the fingerprints of fundamental value.

Stephen references in this blog two flavors of tacit mechanics associated with microcap investment that demonstrate a profound  and value-full understanding of the topic: “information arbitrage” and “inflection points”.

Information arbitrage for microcap investment can be related to a universal mechanics of commercial operations: success of any commercial operation is dependent on exploiting physical, or in this case informational market differentials.

Inflection points also are a proxy for an appreciation of the non-linear business growth process that is particular of smaller enterprises, and the dynamics of which cannot always be derived from historical performance and statistical trends. The dynamics implied in Stephen’s inflection points are in fact aligned with the latest management and business strategy thinking that embraces complexity science and system-theoretic principles, which go much beyond standard economic and financial modeling.

The reference to the article follows:

http://microcapminute.wordpress.com/2009/11/19/microcap-investment-strategies/

Manifesto against the “5 steps to [topic of your choice]” recipe to success

27 Saturday Oct 2012

Posted by lnedelescu in business, Communication, consulting, human capital, Organizational Development, problem solving, society

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business, business strategy, culture, personal success

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Let me start with a telling quote from Russell Ackoff: “the appeal of gurus lies to a large extent in the simplicity of the doctrines they put forth. They are simple no matter how complex the problems at which they are directed. They provide a life raft to those who are incapable of handling complexity.”

In today’s fast paced life, the “5 steps to…” recipe for success is pervasive. This type of headline template dominates both mass media and social media.

I will pick just one of the many examples to make a quick argument for the “5 steps to…” template being intellectual noise at best, and dangerous advice to follow at worst. One of the newly minted “thought leaders” on the LinkedIn social network recently posted the 6 lessons he lives by. Number one on his list is: “surround yourself with people who are smarter than you and move out of their way”. My assertion is that this basically tells us nothing. It is an incomplete statement devoid of context. It sounds great but doesn’t provide any meaningful path to wisdom.

I picked this one example because I usually take issue with the “people smarter than you” leadership anecdote. It’s insufficient in that it doesn’t tell what the leadership still adds to the mix. Your employees can be “smarter than you” in terms of information, knowledge, and even understanding. The leader still has to supply the wisdom, which is synthesized knowledge and understanding, and it is future oriented. Russell Ackoff proposes a clear hierarchy of mental content value going from data to information to knowledge to understanding and finally to wisdom, which is the hardest to acquire in life. These simple classifications of reality that start with “5 simple ways to…”, “the ten traits of…” and so forth are counterproductive to understanding the full beauty and complexity of life. In Ackoff’s words, they provide a false life raft. The modern world, not unlike the ancient world, is full of false prophets. The problem of calling their bluff remains.

Russell Ackoff: the Albert Einstein of Management

24 Wednesday Oct 2012

Posted by lnedelescu in consulting, knowledge, learning, management, problem solving, strategy

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Ackoff, business, Einstein, Leadership, Learning, management, problem solving, strategy

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Russell Ackoff is likely the Albert Einstein of management. The reasoning is this: he created what is in essence a Generalized Ontology of Problem Solving just as Einstein created the Generalized Theory of Relativity.

By comparison,  most management gurus, consulting principals and executives only master a special case problem solving heuristic. Lower level managers and consultants are only able to reproduce a priori defined special case problem solving algorithms.

Professor John Geto of Krasnow Institute of Advanced Study cautions that without an ontology we are liable to continually reinvent new terms for existing knowledge, making it difficult to achieve a strong foundation on which to build. Management in general and management consulting in particular can in large part be paraphrased as problem solving common sense; yet, the generalized problem solving ontology carefully crafted by the genius of Ackoff has not been widely adopted. In a hierarchy management masters Ackoff’s generalized and universal thinking pedestal is permanent and situated on significantly higher ground than the altars at which most of us currently worship: innovation and Clayton Christiansen, Design Thinking and Roger Martin, Gary Hamel and Management 2.0, etc.

As in the popular “Matrix” movies, Ackoff is “the one”. But, it appears we may need a Morpheus character like advocate within the management discipline. And we need to overcome our latest infatuation with progress only possible in teams; the Theory of General Relativity could not have been a crowd sourced innovation on Facebook. Sometimes it takes “the one”.

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