By John Kay
(Summarised by Paul Arnold – Trainer & Facilitator – email@example.com)
Content = ***** Readability = *** Clarity & Structure = ***
IN A NUTSHELL
The book is built upon the principles of complexity and systems theory.
We are not totally rational in our decision-making – hence rational approaches do not always work (especially if the situation is complex)
We falsely believe the optimum root to a quality decision is to evaluate all the options and then implement the best one.
But the world is too complex for this to work in reality. We never have ‘complete information’ and cannot control everything. Thus any decision we make has resultant consequences that change the ‘system’ we are trying to influence – thus potentially nullifying the effect of our decision-making.
In such complex environments we are better to iterate towards a solution, constantly adapting to the changing environment (rather than devising ‘the grand strategy’).
The myth of rationality
-We are not totally rational in our decision-making (and often influenced unconsciously by seemingly irrelevant information).
-Nor can we explain consciously a lot of what we do.
-Computing power has seduced us into the belief that we can now measure and assess all options. But the number of possible actions/responses available in a complex situation soon outstrips even the most advanced computers.
-And just because we can measure something, does not mean it is relevant and important.
-Furthermore, we over-rely on ‘models’ that simplify a complex situation and suggest a mechanistic response that is consistent and easy to control.
-It is a false belief that a totally rational approach leads to the best decisions – the attempts in the 60’s of the RAND whizz kids showed that a totally rational, analytical approach does not provide the depth to make successful decisions.
-Yet we live in a culture that values rational decision-making – especially in business. It is a myth that that is how we actually make many decisions. Kay quotes Franklin’s Gambit – which suggests that we often create a rational back-story to explain our decisions.
Obliquity is the more common route to successful outcomes
-In reality we rarely achieve our goals through a direct path, but more commonly through a more oblique approach – both on a personal and professional basis. E.g. Companies focused solely on maximising shareholder wealth tend to make less money than those focused on a higher mission/purpose. Also many discoveries came about obliquely, such as penicillin, principles or displacement and the theory of relativity. Furthermore, many advances are made through gradual evolution and development rather than through the revolution of a ‘master plan’ (cf how churches and airplane development has taken place, with many individuals contributing over time).
-The definition for obliquity is the process of successfully achieving complex objectives indirectly.
Why is this?
We live in complex environments (‘systems’)
-Our environments are in constant flux, with many influencing factors.
-People are irrational decision makers (and hence do not act consistently) – and the more people who are involved the number of possible outcomes rapidly escalate.
-Objectives are rarely clear cut (and often change).
-You can’t be outside the system i.e. you are affected by and affect other elements in any given system.
-Problems are rarely solved in one go – and often solving one problem creates a secondary problem.
Thus it’s impossible to be in total control
-Many a leader has come unstuck with the belief of their omnipotence.
-No one person holds all the information, all the answers and all the power – yet many leaders believe they can make their strategy happen.
-It is difficult to come up with the perfect solution because:
-There is rarely one perfect answer that solves all the interlinking issues (thus the notion of ‘the best solution’ is often misleading).
-There is rarely total information available.
-Furthermore when one has ‘devised’ the perfect rational solution, in reality it’s almost impossible to execute as:
-People do not respond consistently or logically.
-Strategy ¹ outcomes as our decisions impinge on and depend on the responses of others.
So what happens in oblique decision-making?
-They accept the complexity of a situation, accept there will never be ‘complete’ information and hence accept that they are not in total control of the situation (and so have to be flexible and adapt to the changing situation).
-They only assess a few options (rather than confusing themselves with endless options), and then make constant, successive adaptations to the changing environment.
-They make decisions based on experience (as experience is a culmination of past events of what happens in reality rather than theory).
-They adapt, evolve and iterate their way to their desired outcome – what Charles Lindblom described as ‘the science of muddling through’.
-They accept that the problem/solution will adapt as they start working on it (cf Goodhart’s law – Responses changes the nature of the problem itself).
-They keep focused on the end vision but are flexible/creative on the strategy (e.g. Japanese invaders cycled through the Malaysian jungle to capture Singapore whose guns faced out to sea). Cf the unique approaches adopted by Henry Ford, Walt Disney and Steve Jobs.
-They recognise their limitations and have the courage to switch strategies if it’s not working – as Roosevelt once said, “Try something. If it fails, admit it frankly, and try another”.
-They accept that no one person has all the answers, and that a realistic working solution involves both central as well as local information.
-They are open to ‘serendipity’ e.g. the success of Honda came from supplying their US salesmen with a cheap form of transport that took off more by chance than design.