How To Avoid Unremarkable Business Outcomes?

The scientific method has made a welcome return to the profession of business management. It’s helped hasten the end of the age of the consultant. It’s given us an alternative to proprietary frameworks, methodologies and ten step paths to success. It means we can return to observing organizations as complex, adaptive and networked systems. We can think for ourselves again. Well, if we choose to that is.

The last few posts focused on two fundamental elements in my inquiry of the profession of business management. Futurity is the time span over which a decision is effective, where a decision is an intention fulfilled by action. Liminality is a stage of ambiguity and disorientation that precedes a new way of thinking. The two interact to invalidate many of our existing management practices. Our task is to find out which practices still work and develop replacements.

The purpose of this blog is to help me order my thoughts about the current state and future direction of the profession of management. Which, by the way, is my profession. So I'm not just sitting in the peanut gallery. I'm interested in getting this topic right because I'm interested in being successful. I don't buy into the leadership vs management debate: it feels like a false dichotomy to me. Too easy. Part of the problem is we need new words. So I use [.] as a place holder instead of 'manager', 'management', ‘leader’ or ‘leadership’. The idea is that by taking the word away we can see who these people actually are.

One of the main requirements of the [.] is that we hold a theory in our minds about what we are seeking to achieve. It’s not enough to attend meetings, answer emails, read some stuff, write some stuff and play around with various techniques with the idea that, if this stuff is done, then we’re doing our job. We need a sense of what’s going on and why. We need this if only to mitigate our infinite capacity for hindsight proving us eternally correct. We need to know when events prove us wrong. Those are the learning moments.

The original Greek for theory meant something along the lines of ‘to consider, speculate and contemplate’. By the 16th Century it had evolved into the sense of having a conception of something. Generally it has come to mean ‘a system of ideas intended to explain something, especially one based on general principles independent of the thing being explained’ (Oxford). Or more specifically, ‘an ordered set of assertions about a generic behaviour or structure assumed to hold throughout a significantly broad range of specific instances’ (J W Sutherland).

My point here is that the [.] must create and evolve a theory of their business. We must shape this theory and hold it close at all times, without getting precious or forcing it into a form it doesn’t suit. Peter Drucker summarized this as understanding ‘what is our business and what should it be’. We make so many uncertain decisions and commitments that to not have a guiding theory means we may as well be managing by the magic 8 ball. The world of the [.] is a rational one, but it also one that, if successful, changes inherent possibilities. Business success means changing the timeline, which means we must update our beliefs and adjust our theory.

Note also that rationality does not automatically equate to logic. It can be rational to forgo a logical response. Successful business requires creativity and imagination, two activities which can be harmed by logic. This is why the wise business leader balances their analysts with artists.

There are many good tools available to help us shape and envisage our theory. Everything from Occam's Razor to the Business Model Canvas. They’re critical for structuring and communicating our theories. But we must always take care not to just stop there. These tools are helpful in supporting our theories of business, but will not suffice by themselves. Neither will just following what others in our industry or profession are doing on the basis that they must be on to something. And it’s the same principle with just doing what MBA’s do, or what we read in HBR.

We need to take notice of these elements but they are no substitute for thinking through ‘what our business is and what it should be’. The type of business I'm talking about here are transforming or transformational businesses. Because the business world is in a liminal state, one thing we know for sure is that much of what used to work doesn’t cut it any more. This is why I don’t think the word ‘manager’ or ‘leader’ is sufficient to describe people who are thinking and creating the business models we’ll see more of going forward.

These people are taking responsibility for bringing something important forth and their social organizations will work differently. Which is why the [.] must construct and update a theory of what they are seeking to achieve: the theory of their business. This isn't an easy thing to achieve. Since establishing my own business, I've constantly struggled with the challenge of describing the new. We have a strong tendency to need something familiar to relate to.
People often view me as a consultant: but I don’t conceive of what I do as having much in common with the business model and behaviour of the modern consultant.

It took me weeks to come to the realization that what I do is help ‘organize decision behaviour’. Even with existing customers it’s a constant task to re-frame and de-anchor. Initially I couldn't even discern any difference between what I was setting out to do and what was already in the market. But I finally got there and now it’s beginning to take effect. It’s this sort of theory journey that I'm referring to in this post.

The way we build theory is important because it can predetermine our results. One thing we do a lot of is look for the ‘answer’, without reflecting that the answer tends to emerge from the question. Putting more time into the question is something we need to do in our Big Data era, but I see little appetite for this. It’s a similar issue with our theory building. This might seem much ado about nothing, but examining the foundation for business belief is a necessity in our liminal world.

Karl Weick wrote about this in his 2001 paper ‘Theory Construction as Disciplined Imagination. Together with the work of other thinkers and practitioners, it led me to review much of what I believed to be true with the management profession. For today’s post, I’ll close with Weick’s criticism of conventional descriptions of theory building;

“While each of the authors just mentioned has important ideas about the process of theory building, the descriptions portray theorizing as mechanistic, with little appreciation of the often intuitive, blind, wasteful, serendipitous, creative quality of the process. Nor do their descriptions make clear the choice points in the process where theorists can act differently and produce theories of better quality. Most existing descriptions of the theorizing process assume that validation is the ultimate test of a theory and that theorizing itself is more credible the more closely it simulates external validation at every step. Thus a dual concern with accurate representation and close correspondence between concepts and operations is evident virtually from the start in any theorizing activity. These concerns can be counter productive to theory generation”

“Most descriptions of theory construction sound very much like conventional linear descriptions of problem solving, which is unfortunate in at least two ways. First, as Bourgeois took pains to make clear, theory building involves simultaneous parallel processing, not sequential thinking. One might go even further and argue that when theorizing is modelled after linear problem solving, the outcomes are unremarkable. Second, when theorizing is equated with problem solving, the theorizing is dominated by the question ‘does this conjecture solve the problem?’ That construction is unduly narrow because theorizing does not always originate in response to a problem, and the single criterion of a solution is inadequate cover other reasons why a conjecture might be selectively retained in theorizing (e.g., plausibility, coherence, elegance, simplicity, usefulness)”

This and the next few posts will be on the necessity of holding a theory of business in our heads. The point is to understand how much of what we do in the profession of management may be ‘unduly narrow’ and lead to ‘unremarkable outcomes’.