Archive for the ‘Management’ Category
The ethical dimension of complex decision making – a metalogue
Salviati: Hello Simplicio, it is good to see you again, my friend. What are you up to these days?
Simplicio: Good to see you too, Salviati. I have been doing a class on decision making as part of my MBA degree. It is nice to go over something one already knows well…and even nicer that I was able to convince my employer to pay for the course.
Saliviati: Well done! What is the most important thing you have learnt so far?
Simplicio: Let me see…um, I think it is that decisions should be based on hard facts and evidence.
Salviati: Hmm. It is true that most decision-making approaches will tell you to focus on facts and evidence – that is, what you know or can find out about the problem. However, it is often difficult to find hard facts and evidence, particularly in situations where facts are scarce or contested. In such situations, you have no choice but to pay attention to what you don’t know, the uncertainties.
Simplicio: That does not make sense. How can you pay attention to something you don’t know?
Salviati: Let me give you an example. You have done projects before, haven’t you?
Simplicio: Of course, you know from our earlier conversation that I’m a project manager by profession.
Salviati: OK, so what are the key variables in a project?
Simplicio: Time and cost, two apexes of the iron triangle.
Salviati: That’s right. Whatever the project might be, you know that time and cost are key variables. However, you do not know their values upfront. Your job as a project manager, is to come up with good estimates for these. Is that right?
Simplicio: Uh huh.
Salviati: OK, so you need to understand this uncertainty and to do so you must pay attention to it. The interesting thing about uncertainty associated with time and cost is that it is quantifiable. That is, you can develop numerical estimates for these variables using a range of techniques like, say, Monte Carlo simulation. The point I want to make is that regardless of the technique used, quantifying uncertainty involving known variables is a rational and logical process. Would you agree?
Simplicio: Yes, that makes sense.
Salviati: Now consider another problem, that of formulating a business strategy. What are the key variables in this case?
Simplicio: Hmmm…that’s a difficult one. It depends on several factors, the financial position of the organization, market share, the environment, business forecasts…oh, so many things.
Salviati: What information would you need in order to figure out which of these factors is important?
Simplicio: Oh, that’s impossible to tell without knowing more about the situation. There are so many things that could be important. You need to know a lot more about the business and its operating context before you can figure that out.
Salviati: Yes, that’s true, and I should also point out that no amount of data, number crunching or logical analysis is going to get you anywhere until you figure out what is important. Would you agree?
Simplicio: Yes.
Salviati: So, let me ask you: what do people in your organization do when they develop their business strategy?
Simplicio: Ah, they ask the experts of course – they engage Big 4 consultancies.
Salviati: Right…who better than a rank outsider to tell you what to do? At an inflated billing rate too! Surely there is a better way.
Simplicio: Like what?
Salviati: I’ll get to that in a bit, but I first want to make another point. A few minutes ago, I said that dealing with project estimation is essentially a rational and logical process. Let me ask you now: what kind of process do you think strategy formulation is?
Simplicio: What do you mean?
Salviati: Well, it isn’t logical…but it obviously isn’t arbitrary either. So, what is it?
Simplicio: I’m not sure I understand what you are getting at.
Salviati: This is a difficult question so let me approach it in another way. We agreed that the difficult part in strategy formulation is to figure out what is important, right?
[Simplicio nods]
Salviati: So, let me ask you: important to whom?
Simplicio: to management, of course!
Salviati: Do employees not matter?
Simplicio: They do…but their job is to do as they are told.
Salviati: Really? You think it as Lord Tennyson noted: “theirs not to reason why, theirs but to do and die.”
Simplicio: That is over the top, Salviati. The situation of an employee in a modern-day organization is not comparable to the poor soldiers in the Charge of the Light Brigade. Nobody dies.
Salviati: May be not, but I think the analogy is justified. There are so many cases of ill-fated strategies that could have, should have, been questioned before implementation, but weren’t. The consequences for employees, though admittedly not fatal, are disastrous…and the point is, employees are rarely given a voice in the decision. It is akin to the Charge of the Light Brigade.
Simplicio: OK, maybe it is, but what is your point?
Salviati: Strategy development and implementation ought to be treated as ethical matters rather than a logical ones.
Simplicio: Yes, I suppose they are. But that begs the question: how does one develop a strategy in an ethical manner?
Salviati: That, my friend, is the key question and it is a difficult one. The difficulty arises from the fact that ethics is hard to talk about meaningfully. Indeed, the philosopher Ludwig Wittgenstein went so far as to state that ethics cannot be articulated. His point is that the term “ethics” is meaningful only in the context of actions, not words. (Editor’s note: see this lecture by Heinz von Foerster for more on Wittgenstein’s take on ethics)
Simplicio: So how does one act ethically in this context?
Salviati: To answer that question, I will turn to Heinz von Foerster’s ethical imperative: act always to increase choices. (Editor’s note: see this lecture for more on von Foerster’s ethical imperative)
Simplicio: Umm…please explain.
Salviati: It is simple: if you do things that increase everyone’s choices then you are behaving ethically.
Simplicio: OK…but how do you “increase everyone’s choices” in practice?
Salviati: By involving them in the decision of course, and there are ways to do that. However, let me be clear, the aim is not to make a decision that satisfies everyone. That is impossible. It is to get as many different perspectives on the problem before making a decision. If you think about it, this is the only way to ensure that you do not miss important factors that could cause your decision to fall apart later.
Simplicio: That sounds idealistic and impractical.
Salviati: It might be idealistic, but it is not impractical. The basic idea is to make the different perspectives on the problem explicit. This can be done by eliciting the preferred options of the different stakeholder groups and documenting arguments for and against them. There is a visual notation called IBIS (Issue Based Information System) that facilitates this. With IBIS, we can visualize the informal logic of conversation using three types of nodes: questions (or issues), which capture the problem being discussed; ideas, which are options offered by the different stakeholders; and arguments for and against those options (pros and cons). By making the different viewpoints and the arguments explicit, you set the stage for making an ethical decision. Of course, one must also have in place the conditions that allow for open dialogue, and there are ways to do that as well.
Simplicio: So, the choices are matters of opinion, not fact? That does not sound right.
Salviati: Of course not. If someone makes a claim that needs to be validated or is factually incorrect, it can be challenged by others, even after the debate.
Simplicio: Ah, I see. This is interesting, I’d love to see how it works.
Salviati: I’ll send you some books, papers and articles on IBIS (Editor’s note: here are some articles and a couple of books.).
Simplicio: But I still don’t see how this makes the decision ethical.
Salviati: If you think about it, ethics is about doing what is good. The problem is if you try to define what is good and what is not good, you will tie yourself up in knots. It is impossible to come up with a meaningful universal definition of “goodness.” Wittgenstein was right when he claimed that it is impossible to talk about ethics. If one cannot speak about ethics meaningfully, the only possibility is to do it… and that is what von Foerster’s dictum is about. It tells us that ethical action is about doing things that increase choices for everyone. By eliciting multiple perspectives, you are increasing choices for the group. If the environment is one in which open dialogue can occur, then the choices can be freely debated by all and a decision reached. Even if the final decision does not make everyone happy – which it won’t, of course – everyone will agree that the process followed was inherently ethical.
Simplicio: OK, I think I see now. Since complex problems are multifaceted, one has to elicit diverse viewpoints on the problem to ensure one has not missed something important…and by doing so, one is also acting ethically.
Salviati: That’s exactly right! Incidentally, such complex, multifaceted problems are often called wicked problems. Much of the literature on wicked problems focuses on the surfacing and debating diverse perspectives, but very few writers (if any) comment on the inherently ethical nature of this process.
Simplicio: This is fascinating Salviati, thank you for broadening my perspective on complex decisions.
Salviati: My pleasure…but you should keep in mind that the process discussed will ensure that you surface and debate options comprehensively. The decision itself is yet to be made.
Simplicio: Oh! So, how does one make the decision.
Salviati: Unfortunately, there is no formula for that Simplicio. As you will appreciate, this is not simply a matter of picking the best option because different stakeholder groups may have different opinions on which one is best.
Simplicio: Hmmm, so what does the decision maker do if the group cannot settle on an option?
Salviati: Well then, the decision maker must make the call.
Simplicio: On what basis?
Salviati: I think I have already answered that. He must choose so as to maximise the number of future choices for all.
Simplicio: Hmm, we have already gone through that…
Salviati: There is no algorithm I can give you for this, if there were it would be a calculation not a decision – a matter of logic rather than ethics. All I can say is that, you, the decision maker must decide how you must act…and that should be in a way that increases choices for the greatest number of stakeholders. It may be further discussion or something else, it depends on the specifics of the situation. Regardless, it is a call you must make…and the choice you make says more about you anything else.
Simplicio: That is an unsatisfying answer.
Salviati: I’m sorry, but its as simple as that…and that is what makes it so hard.
–x–
Notes
A metalogue is a real or imaginary conversation whose structure resembles the topic being discussed. This piece is inspired by Gregory Bateson’s metalogues in Part 1 of his book, Steps To an Ecology of Mind.
The characters in this metalogue are borrowed from Galileo’s Dialogue Concerning The Two Chief World Systems in which the character Salviati is a proponent of the Copernican “heresy” that the Earth is not at the centre of the universe whereas Simplicio favours the Geocentric view proposed by the Greek philosopher Ptolemy.
From ambiguity to action – a paper preview
The powerful documentary The Social Dilemma highlights the polarizing effect of social media, and how it hinders our collective ability to address problems that impact communities, societies and even nations. Towards the end of the documentary, the technology ethicist, Tristan Harris, makes the following statement:
“If we don’t agree on what is true or that there’s such a thing as truth, we’re toast. This is the problem beneath all other problems because if we can’t agree on what is true, then we can’t navigate out of any of our problems.”
The central point the documentary makes is that the strategies social media platforms use to enhance engagement also tend to encourage the polarization of perspectives. A consequence is that people on two sides of a contentious issue become less likely to find common ground and build a shared understanding of a complex problem.
A similar dynamic plays out in organisations, albeit on a smaller and less consequential scale. For example, two departments – say, sales and marketing – may have completely different perspectives on why sales are falling. Since their perspectives are different, the mitigating actions they advocate may be completely different, even contradictory. In a classic paper, published half a century ago, Horst Rittel and Melvin Webber coined the term wicked problem to describe such ambiguous dilemmas.
In contrast, problems such as choosing the cheapest product from a range of options are unambiguous because the decision criteria are clear. Such problems are sometimes referred to as tame problems. As an aside, it should be noted that organisations often tend to treat wicked problems as tame, with less-than-optimal consequences down the line. For example, choosing the cheapest product might lead to larger long-term costs due to increased maintenance, repair and replacement costs.
The problem with wicked problems is that they cannot be solved using rational approaches to decision making. The reason is that rational approaches assume that a) the decision options can be unambiguously determined upfront, and b) that they can be objectively rated. This implicitly assumes that all those who are impacted by the decision will agree on the options and the rating criteria. Anyone who has been involved in making a contentious decision will know that these are poor assumptions. Consider, for example, management and employee perspectives on an organizational restructuring.
In a book published in 2016, Paul Culmsee and I argued that the difference between tame and wicked problems lies in the nature of uncertainty associated with the two. In brief, tame problems are characterized by uncertainties that can be easily quantified (e.g., cost or time in projects) whereas wicked problems are characterized by uncertainties that are hard to quantify (e.g., the uncertainties associated with a business strategy). One can think of these as lying at the opposite ends of an ambiguity spectrum, as shown below:
It is important to note that most real-world problems have both quantifiable and unquantifiable uncertainties and the first thing that one needs to do when one is confronted with a decision making situation is to figure out, qualitatively, where the problem lies on the ambiguity spectrum:
The key insight is that problems that have quantifiable uncertainties can be tackled using rational decision making techniques whereas those with unquantifiable uncertainties cannot. Problems of the latter kind are wicked, and require a different approach – one that focuses on framing the problem collectively (i.e., involving all impacted stakeholders) prior to using rational decision making approaches to address it. This is the domain of sensemaking, which I like to think of as the art of extracting or framing a problem from a messy situation.
Sensemaking is something we all do instinctively when we encounter the unfamiliar – we try to make sense of the situation by framing it in familiar terms. However, in an unfamiliar situation, it is unlikely that a single perspective on a problem will be an appropriate one. What is needed in such situations is for people with different perspectives to debate their views openly and build a shared understanding of the problem that synthesizes the diverse viewpoints. This is sometimes called collective sensemaking.
Collective sensemaking is challenging because it involves exactly the kind of cooperation that Tristan Harris calls for in the quote at the start of this piece.
But when people hold conflicting views on a contentious topic, how can they ever hope to build common ground? It turns out there are ways to build common ground, and although they aren’t perfect (and require diplomacy and doggedness) they do work, at least in many situations if not always. A technique I use is dialogue mapping which I have described in several articles and a book co-written with Paul Culmsee.
Regardless of the technique used, the point I’m making is that when dealing with ambiguous problems one needs to use collective sensemaking to frame the problem before using rational decision making methods to solve it. When dealing with an ambiguous problem, the viability of a decision hinges on the ability of the decision maker to: a) help stakeholders distinguish facts from opinions, b) take necessary sensemaking actions to find common ground between holders of conflicting opinions, and c) build a base of shared understanding from which a commonly agreed set of “facts” emerge. These “facts” will not be absolute truths but contingent ones. This is often true even of so-called facts used in rational decision making: a cost quotation does not point to a true cost, rather it is an estimate that depends critically on the assumptions made in its calculation. Such decisions, therefore, cannot be framed based on facts alone but ought to be co-constructed with those affected by the decision. This approach is the basis of a course on decision making under uncertainty that I designed and have been teaching across two faculties at the University of Technology Sydney for the last five years.
In a paper, soon to be published in Management Decision, a leading journal on decision making in organisations, Natalia Nikolova and I describe the principles and pedagogy behind the course in detail. We also highlight the complementary nature of collective sensemaking and rational decision making, showing how the former helps in extracting (or framing) a problem from a situation while the latter solves the framed problem. We also make the point that decision makers in organisations tend to jump into “solutioning” without spending adequate time framing the problem appropriately.
Finally, it is worth pointing out that the hard sciences have long recognized complementarity to be an important feature of physical theories such as quantum mechanics. Indeed, the physicist Niels Bohr was so taken by this notion that he inscribed the following on his coat of arms: contraria sunt complementa (opposites are complementary). The integration of apparently incompatible elements into a single theory or model can lead to a more complete view of the world and hence, how to act in it. Summarizing the utility of our approach in a phrase: it can help decision makers learn how to move from ambiguity to action.
For copyright reasons, I cannot post the paper publicly. However, I’d be happy to share it with anyone interested in reading / commenting on it – just let me know via a comment below.
Note added on 13 May 2022:
The permalink to the published online version is: https://www.emerald.com/insight/content/doi/10.1108/MD-06-2021-0804/full/html
Conversations and commitments: an encounter with emergent design
Many years ago, I was tasked with setting up an Asia-based IT development hub for a large multinational. I knew nothing about setting up a new organisation from scratch. It therefore seemed prudent to take the conventional route – i.e., engage experts to help.
I had conversations with several well-known consulting firms. They exuded an aura of confidence-inspiring competence and presented detailed plans about how they would go about it. Moreover, they quoted costs that sounded very reasonable.
It was very tempting to outsource the problem.
–x–
Expert-centric approaches to building new technical capabilities are liable to fail because such initiatives often display characteristics of wicked problems, problems that are so complex and multifaceted that they are difficult to formulate clearly, let alone solve. This is because different stakeholder groups have different perspectives on what needs to be done and how it should be done.
The most important feature of such initiatives is that they cannot be tackled using rational methods of planning, design and implementation that are taught in schools, propagated in books, and evangelized by standards authorities and snake oil salespeople big consulting firms.
This points to a broader truth that technical initiatives are never purely technical; they invariably have a social dimension. It is therefore more appropriate to refer to them as sociotechnical problems.
–x–
One day, not long after my conversations with the consulting firms, I came across an article on Oliver Williamson’s Nobel prize winning work on transaction costs. The arguments presented therein drew my attention to the hidden costs of outsourcing.
The consultants I’d spoken with had included only upfront costs, neglecting the costs of coordination, communication, and rework. The outsourcing option would be cost effective only if the scale was large enough. The catch was that setting up a large development centre from scratch would be risky, both politically and financially. There was too much that could go wrong.
–x–
Building a new sociotechnical capability is a process of organisational learning. But learning itself is a process of trial and error, which is why planned approaches to building such capabilities tend to fail.
All such initiatives are riddled with internal tensions that must be resolved before any progress can be made. To resolve these tensions successfully one needs to use an approach that respects the existing state of the organisation and introduces changes in an evolutionary manner that enables learning while involving those who will be affected by the change. Following David Cavallo, who used such an approach in creating innovative educational interventions in Thailand, I call this process emergent design.
–x–
The mistake in my thinking was related to the fallacy of misplaced concreteness. I had been thinking about the development hub as a well-defined entity rather than an idea that needed to fleshed out through a process of trial and error. This process would take time; it had to unfold in small steps, through many interactions and conversations.
It became clear to me that it would be safest to start quietly, without drawing much attention to what I was doing. That would enable me to test assumptions, gauge the organisation’s appetite for the change and, most importantly, learn by trial and error.
I felt an opportunity would present itself sooner than later.
–x–
In their book, Disclosing New Worlds, which I have discussed at length in this post, Spinosa et. al. note that:
“[organisational] work [is] a matter of coordinating human activity – opening up conversations about one thing or another to produce a binding promise to perform an act … Work never appears in isolation but always in a context created by conversation.”
John Shotter and Ann Cunliffe flesh out the importance of conversations via their notion of managers as authors [of organisational reality]. Literally, managers create (or author) realities through conversations that help people make sense of ambiguous situations and / or open up new possibilities.
Indeed, conversations are the lifeblood of organisations. It is through conversations that the myriad interactions in organisational life are transformed into commitments and thence into actions.
–x–
A few weeks later, a work colleague located in Europe called to catch up. We knew each other well from a project we had worked on a few years earlier. During the conversation, he complained about how hard it was to find database skills at a reasonable cost.
My antennae went up. I asked him what he considered to be a “reasonable cost.” The number he quoted was considerably more than one would pay for those skills at my location.
“I think I can help you,” I said, “I can find you a developer for at most two thirds that cost here. Would you like to try that out for six months and see how it works?”
“That’s very tempting,” he replied after a pause, “but it won’t work. What about equipment, workspace etc.? More important, what about approvals.”
“I’ll sort out the workspace and equipment,” I replied, “and I’ll charge it back to your cost centre. As for the approval, let’s just keep this to ourselves for now. I’ll take the rap if there’s trouble later.”
He laughed over the line. “I don’t think anyone will complain if this works. Let’s do it!”
–x–
As Shotter and Cunliffe put it, management is about acting in relationally responsive ways. Seen in that light, conversations are more than just talk; they are about creating shared realities that lead to action.
How can one behave in a relationally responsive way? As in all situations involving human beings, there are no formulas, but there are some guiding principles that I have found useful in my own work as a manager and consultant:
Be a midwife rather than an expert: The first guideline is to realize that no one is an expert – not you nor your Big $$$ consultant. True expertise comes from collaborative action. The role of the midwife is to create and foster the conditions for collaborative action to occur.
Act first, seek permission later (but exercise common sense): Many organisations have a long list of dos and don’ts. A useful guideline to keep in mind is that it is usually OK to launch exploratory actions as long as they are done in good faith, the benefits are demonstrable and, most importantly, the actions do not violate ethical principles. The dictum that it is easier to beg forgiveness than seek permission has a good deal of truth to it. However, you will need to think about the downsides of acting without permission in the context of your organisation, its tolerance for risk and the relationships you have with management.
Do not penalize people for learning: when setting up new capabilities, it is inevitable that things will go wrong. If you’re at the coalface, you will need to think about how you will deal with the fallout. A useful approach is to offer to take the rap if things go wrong. On the other hand, if you’re a senior manager overseeing an initiative that has failed, look for learnings, not scapegoats.
Distinguish between wicked and tame elements of your initiative: some aspects of sociotechnical problems are wicked, others are straightforward (or tame). For example, in the case of the development centre, the wicked element was how to get started in a way that demonstrated value both to management and staff. The tame elements were the administrative issues: equipment, salary recharging etc (though, as it turned out, some of these had longer term wicked elements – a story to be told later perhaps).
Actively seek other points of view: Initially, I thought of the development centre in terms of a large monolithic affair. After talking to consultants and doing my own research, I realised there was another way.
Understand the need for different types of thinking: related to the above, it is helpful to surround yourself with people who think differently from you.
Consider long term consequences: Although it is important to act (the second point made above), it is also important to think through the consequences of one’s actions, the possible scenarios that might result and how one will deal with them.
Act so as to increase your future choices: This principle is from my intellectual hero, Heinz von Foerster, who called it the ethical imperative (see the last line of this paper). Given that one is acting in a situation that is inherently uncertain (certainly the case when one is setting up a new sociotechnical capability), one should be careful to ensure that one’s actions do not inadvertently constrain future choices.
–x–
With some trepidation, we decided to go ahead with the first hire.
A few months later, my colleague was more than happy with how things were going and started telling others about it. Word got around the organisation; one developer became three, then five, then more. Soon I was receiving more enquiries and requests than our small makeshift arrangement could handle. We had to rent dedicated office space, fit it out etc, but that was no longer a problem because management saw that it made good business sense.
–x–
This was my first encounter with emergent design. There have been many others since – some successful, others less so. However, the approach has never failed me outright because a) the cost of failure is small and b) learnings gained from failures inform future attempts.
Although there are no set formulas for emergent design, there are principles. My aim in this piece was to describe a few that I have found useful across different domains and contexts. The key takeaway is that emergent design increases one’s chances of success because it eschews expert-driven approaches in favour of practices tailored to the culture of the organisation.
As David Cavallo noted, “rather than having the one best way there can now be many possible ways. Rather than adapting one’s culture to the approach, one can adapt the approach to one’s culture.”
–x–x–
Eight to Late 