Systems thinking is a big idea that’s remarkably… simple.
It’s a simple idea about complex phenomena. And the principle virtue of systems thinking is that it reminds us that the real world is far from simple.
Indeed, when we try to apply simple solutions to complex problems, the solution tends to fail: often spectacularly. And it’s systems thinking that points us in the right direction. We need to think about the whole messy, complex, inter-connected system, if we are to have any chance of finding a solution that makes our problem better.
The Pareto Principle – also known as the ’80-20 Rule’ – is one of those ideas that crops up in many places. It is ubiquitous because it is an expression of a general principle of nature. It is an example of a power law. Extremely long rivers are rare. Small ones are very common. A small number of words appear frequently within a language, whilst there are very many words that we hardly use at all.
But what makes the Pareto Principle a valuable version of this phenomenon is that it is easy to articulate and understand. And it is therefore easy for managers to apply, to get better results. Consequently, since Joseph Juran rediscovered and named the idea in the 1930s, it has become an indispensable snippet of knowledge, for anyone in management.
Some big ideas have become commonplace, and everyone understands them. Others have become commonplace terms, which we often misuse. Lateral Thinking is one example of the latter. Yet it’s had a big impact over the last fifty years and will, I suspect, continue to do so over the next fifty.
Lateral Thinking is the brainchild of Maltese thinker and educator, Edward de Bono. It first appeared in his short 1967 book, ‘The Use of Lateral Thinking’. And it’s currently still in print, as ‘Lateral Thinking: An Introduction’(US|UK). But since then, he’s written a whole library on this and related topics.
The thing about cognitive biases is their pervasiveness. They can affect all areas of our thinking. But some have a bigger impact on management, leadership, and business decisions. And one example is the Halo Effect.
The halo effect can take a single example of excellence, and create the impression that we have a star in our midst. This could be company results, an effective middle manager, or a new hire.
With all of these, we have the ability to see something great and assume it is part of a pattern. The evidence for this may be lacking. Indeed, it may be a one-off hot-spot in a field of mediocrity.
In understanding how we think, one big idea has dominated in recent years. It became widely known through Daniel Kahneman‘s phenomenal best-seller, ‘Thinking, fast and slow’. It’s the idea that we process information in two ways. There are two parallel thinking systems in our minds: System 1 and System 2.
There are many terms for these two systems. They have been called:
associative and rule-based
implicit and explicit
intuitive and analytical
experiential and rational
and many more
The terms System 1 and System 2 are marvellously neutral. They first emerged in a paper by Keith Stanovich and Richard West. But it’s Kahneman’s adoption of this language and the popularity of his book that gave them fame.
Creativity is all about having brilliant new ideas.
Go on… Have one now.
Creative ideas don’t just come to us when we want them. The whole process is mysterious, and cannot be called up on demand. Or can it?
Yes, it can. Or so said William Gordon and George Prince. If you know how to, you can find creative solutions when you need them. And their research into the creative process led them to a methodology still used today: Synectics.
William (Bill) Gordon was born in 1919.He attended the University of Pennsylvania, but it is not clear whether he graduated. Between 1950 and 1960, Gordon led the Invention Design Group at consulting firm Arthur D Little & Co. He was, himself, a prolific inventor, with numerous patents to his name.
Synectics had its origins just after the Second World War. Gordon started studying how individuals and groups act creatively. This became more intensive and systematic, leading to him forming the Invention Design Group within Arthur D Little. There, he helped set up synectics groups within several client companies.
It was while leading this team, that Gordon met future Synectics co-founder, George Prince. With two further colleagues, they left Arthur D Little in 1960 to found Synectics Inc. There they pursued further research, developing and selling their model for how to run a creative process.
However, Gordon did not remain at Synectics Inc for long. He left to found Synectics Education Systems, to promote problem‑solving and education based on the use of metaphor.
Gordon died in 2003.
George Prince was born in 1918 and grew up in New York State. He attended college at Phillips Exeter Academy and Williams College, graduating in Geology. The second World War saw him serving as a junior officer in the US Navy, in the North Atlantic.
Upon his return, Prince joined an advertising company in Rochester, where he rose to VP. He then learned of the work of Arthur D Little’s Invention Design Group, led by William Gordon. He joined the Arthur D Little company in the 1950s to be a part of that group.
In 1960, he, Gordon and two other colleagues left Arthur D Little to found Synectics Inc (now Synecticsworld). This company researched, developed and promoted their creative problem-solving methodology, Synectics.
Prince remained with the company for most of his, life, as Chairman. In 1970, he wrote ‘The Practice of Creativity‘, which remains in print. He died in 2009.
Synectics is a rich methodology for solving problems creatively. However, the principles are easy to grasp:
look for alien concepts and things that seem irrelevant, and join them together.
Embrace emotions over intellect, and the irrational over the rational.
In applying these principles, Gordon and Prince assumed that the creative process can be described and then taught to others. They also believed that their process, Synectics, will apply widely to different domains of endeavour and can be used by groups and individuals.
They start with a cycling between the ‘operational world’ of routines and procedures, and the ‘innovation world’ of speculation and experimentation. New solutions become more available as we move out of the reality of the operational world, and increasingly embrace fantasy, metaphor, and absurdity.
The process they articulate is at its simplest:
Articulate the task.
Explore options, generating radical ideas that they called ‘Springboards’.
Select the best idea. Synectics presumes a preference for newness over feasibility at this stage.
Develop that idea, and how it might work in practice.
Two ideas stick with me from my learning about Synectics many years ago
The first one is the use of ‘How to…’
I love the way Synectics reframes every problem as ‘how to…’ I like it because it presupposes a solution exists and therefor the problem becomes finding it.
And once a selected idea emerges, the emphasis becomes intensely practical. We work on ‘how to make it work’. We constantly articulate the challenges and problems of implementation as ‘how to…’ Each time we solve this, we can modify the trial solution until, with no further issues, we have a possible solution, worthy of putting to the test in the real world.
The second is ‘In and Out Thinking’
Often, when we are in a meeting particularly a long one that is trying to solve a problem, our minds wander. We have ideas and thoughts that come from ‘inside’, as well as from the meeting: ‘outside’.
We can make best use of these by dividing our notebook page in two – I like to draw a vertical line. On one side, make notes about what you hear or see in the meeting – the Outside thinking. On the other, note down ideas that come from your own thoughts – the Inside thinking. Often these will be connections or distinctions, but sometimes they are seemingly random thoughts. Seemingly, because they are almost certainly triggered by something, but to you, they seem irrelevant, because you are not aware of the link.
Surfing Malcolm Gladwell’s wake on the wave of popular social science books came a pair of writers who set the stage for many journalist/social scientist combinations. Steven Levitt was a rising star in the world of economics when he was interviewed by successful journalist Stephen Dubner.
When the publishing world offered sufficient incentives (in the form of an author’s advance), they began their collaboration that has resulted in four books and over 5 million sales. More important, it opened our minds to the world of perverse incentives that the two dubbed ‘Freakonomics’.
Steven D Levitt
Steven Levitt is a successful academic. Born in New Orleans, in 1967, he studied economics at Harvard, graduating in 1989. He then spent a couple of years in management consulting, specialising in decision-making, before enrolling in a PhD programme at MIT.
His time at MIT was far from conventional. Whilst his peers did the standard thing of analysing case studies and studying theory, Levitt discerned a simple truth about academic life: success depends on published papers. So before even starting his formal thesis work, he was gathering and analysing his own data, conducting his own research, and writing his first papers.
His varied and curious approach to economics, and his succession of published papers, paid off. he was awarded his PhD in 1994 and, following a period as a research fellow at Harvard, was offered a post in arguably the most prestigious economics department in the US, at the University of Chicago. In just two years, he was made a professor.
He is now William Ogden Distinguished Service Professor of Economics and was, in 2003, the recipient of the John Bates Clark Medal. This is awarded every two years by the American Economic Association to the most promising US economist under the age of 40.
In the same year, a New York Times journalist interviewed Levitt for an extended article. That journalist was Stephen J Dubner.
Stephen J Dubner
Stephen Dubner was born in 1963 (AVGY), in New York, and started writing young. His first published work was in a children’s magazine . He studied at Appalachian State University in North Carolina. He graduated in 1984 and focused on a music career until he switched to writing in 1988 and enrolled in a Master of Fine Arts in Writing programme at Columbia University. After graduating in 1990, he taught in the English Department and started work as a journalist, becoming a story editor at The New York Times Magazine.
Dubner’s journalistic writing is highly regarded, and he has also written for Time, The New Yorker, and the Washington Post. In 2003, he interviewed a rising star among academic economists, called Steven Levitt.
The Spirit of Freakonomics
The thing about Freakonomics is that the book series, New York Times columns, and blogs range over a wide arena of social science and economics. What connects it all is the idea that, whilst everyone knows that people respond to incentives, research shows that some of our responses are surprising. So surprising, shocking, delightful, and curious, that the stories of what happens are compelling, and the unravelling of why it happens often reads like the most gripping of detective fiction.
The other vital aspect of the spirit of freakonomics is the combination of an academic economist’s eye for data and the story-telling capability of a seasoned journalist. These are held together by the glue of a shared sense of curiosity and delight in the phenomena that Levitt and Dubner explore.
The books make for a great read. They are thought-provoking and enhanced by Levitt’s analysis of large amounts of data. Indeed, the use of data is another theme. However, this is not to say that Levitt and Dubner’s conclusions have gone unchallenged. With astonishing claims, like ‘abortion cuts crime’, come a welter of critique.
In some cases the critiques have hit home, in other cases, Levitt and Dubner have successfully countered them. What all of their writing is, is entertaining and thought-provoking. It is no wonder that their books have sold so well. And, on the margins, they also highlight some important truths that managers would do well to note:
People respond to incentives.
People’s response to incentives is not always what you would expect and is sometimes hard to understand.
Big data sets can hold within them valuable and surprising conclusions. We can uncover useful insights and, equally, demolish cherished assumptions.
Working with big data sets in the messy and complex world of human interactions is tricky. Separating coincidence from causation among correlated data is hard. And extracting data where many confounding variables are present will open you up to biting challenge.
Socio-economic evidence should inform policy, but not dictate it.
Ikujiro Nonaka has been described by a long-term colleague and collaborator as the ‘Father of Knowledge Management’. He takes a radical view – in the true sense of radical: he goes to the route of how we acquire, create and share knowledge.
Very Short Biography
Ikujiro Nonaka was born in 1935 and grew up in Tokyo. He studied political science at Waseda University, gaining his BS in 1958. He started work that year at Fuji Electric, where his principal accomplishment was to create their management programme. He went on to further develop this, in alliance with Keio University.
Nonaka left Fuji in 1967, to study in the United States, at the University of California, Berkeley. He was awarded his MBA in 1968, and his PhD in Business Administration, in 1972. He took posts at US universities (Claremont Graduate University and then the Haas Business School at UC Berkeley), before returning to Japan, as a professor at the Graduate School of International Corporate Strategy, Hitotsubashi University.
There he collaborated with another staff member, whom he had known as a grad student at Berkeley, Hirotaka Takeuchi. It was the latter who describes Nonaka as the ‘Father of Knowledge Management’.
At the heart of Nonaka’s thinking is the rejection of the common view of Knowledge Management as fundamentally an IT function. The data management part of knowledge management is a minor – indeed, incidental – component. The fundamental part is the creation and sharing of knowledge, which takes place via the relationships between people.
He therefore asserts that spending tens, or hundreds of thousands of dollars on technology systems misses this essential truth and argues that true knowledge creating companies are ones with a generous community feel.
‘Ba’ is a word Nonaka coined to mean a meeting place for minds. Whilst it can be a physical space within the organisation, Nonaka sees it more as a mental state, where people are able to share and create knowledge together. He likens the concept to that of ‘flow‘ – in the sense that both are states of total focus and immersion. However, unlike flow, Ba is a shared mental state.
The SECI Model
Nanak and Takeuchi’s most notable contribution is their SECI Model of how knowledge transforms in organisations. Regular readers of Pocketblog will know just how much we love models, so here goes.
The SECI Model is a representation of the dynamic way that knowledge flows from explicit to implicit and back. It sets out to unite the Western preference for Explicit knowledge (‘Know why’ or, to use the ancient Greek term, ‘episteme’) and the Japanese focus on tacit knowledge (‘know how’, or ‘techne’).
Nanaka and Takeuchi start their cycle with social knowledge sharing to build tacit knowledge and move around to internalization of explicit knowledge to make it implicit, or tacit. They then see that knowledge being shared, restarting the cycle (they originally drew it as a continuos spiral, but I prefer the loop metaphor). At each stage, knowledge is converted, and made more useful.
In his latest work, Nanaka draws the ancient Greek analogies of episteme and techne, and highlights a third sort of wisdom that the ancients cherished: ‘phronesis’, or ‘practical wisdom’. He describes phronesis as the wisdom to know what must be done – judgement, if you like. He sees this as the antidote to an overly rigid focus on theoretical know-why knowledge, or practical, know-how. In Aristotelian ethics, phronesis is usually seen as rational thinking and prudent judgement.
Nonaka thus connects up knowledge management with leadership. Phroneis gives us a clearer understanding of how our organisation relates to the rest of the world: purpose, choices, actions. This can give the organisation a resilience that a less self-aware organisation will lack. Nonaka argues that phronetic leaders can foster improved judgement and decision-making by creating a culture of sharing, nurturing, and creating knowledge through informal social connections: ‘Ba’.
Nonaka in his Own Words