Life is not simple. Anyone who tells you differently is oversimplifying.
The drive for business managers to simplify has become a major competitive disadvantage for practitioners. Simplification distorts reality beyond something no less than fantasy. Managers who routinely proclaim statements like "keep it simple" or "make it simple, stupid" are the ones, for the most part, looking for quick and easy answers, not relevant ones. It could be argued that "quick and easy" is better described as "fast and frugal". Nevertheless, these demands for simplification should be used with great caution, maybe nothing beyond linear driving directions or other life activities that can be processed without (qualitative) discussion
Simplification may represent reality to the point of uselessness. Information derived from simplification is irrelevant because it does not reflect the context or complexity of the problem it is trying to address. Simplified information mistakes a conceivable appearance for reality, usually with clever, plausible and seemingly comprehendible narrative. This narrative, typically based on inductive logic, is used to convince others that the simplified information in question is valid enough to use as a basis for decision-making. The inductive narrative convinces because it weaves together happenings or facts in such a way that seem to make perfect sense. What the inductive narrative obfuscates is that it is based on a singular event or an individual experience, and is essentially un-testable and unrepeatable.
It is understandable that the concept of simplifying has prominence in modern business decisions; we have been simplifying for millions of years, yet our world is simultaneously speeding up and growing more complex. Under these pressures, it is natural to expect the human mind to demand simple explanations. These very words are simplified representations (categorizations) of a view of reality.
We have only been living with complex problems for ~0.04% of our species existence. For over five million (or so) years humans and their common ancestors (from Australopithecus to Homo erectus) only needed to make causal links, without the burden of intellectual incubation, because problem-solving (in terms of survival) was based mostly in the language of immediate solutions. A strategy meeting was not necessary when a hungry saber-toothed tiger pounced into camp. With that said, the causal links could be rather intense, but nevertheless casual.
Globalization has made the world much more complex and will continue to do so. The speed that information travels around the world today and continually affects events, in the form of recursive feedback loops, is unprecedented and complex. For example, talk of a recession can cause a recession. An inaccurate report that claims a company has liquidity problems can quickly proliferate though inductive email quotes and poorly researched news reporting, causing the company's equity and bondholders to panic sell. Before you know it, the company has a real liquidity problem. Other examples abound, but the globalization of financial services is glaring. Gone are the days when mortgages originated with and were held by depository institutions. Mortgages are now bundled together into mortgage-backed securities or structured credit products, rated by credit-rating agencies, and then sold to investors. As the 2007 / 2008 mortgage crisis grew, it created financial turmoil in a number of other areas, demonstrating the un-isolated complexity of the global financial system.
There are actions that can be applied that respect the complexities of business decision-making by providing clarity, not simplicity.
Intellectual Incubation
In order to maximize the opportunities that each decision presents, one must have a meaningful comprehension of the specific complexities of the problems and a way to sort through them. When confronted with new complex problems, the first step is to inventory the current knowledge banks for relevance and determine if there is any immediate learning that can be derived and applied. This is achieved through intellectual incubation: processing a problem in such a way that respects its unique properties, relevance and decision impact by addressing the intricacies of the current situation and establishing what will work going forward. Many business managers may think this takes too much time. However, do you want to make a decision on automobile fuel efficiency based on how much hay a horse can eat?
Thinking is an evolutionary process. There are no historical cases where a thought process was purely momentary, that is, derived from nothingness. All thinking and associated decisions happen over periods of time. Problem solving and decisions are the result of compounding knowledge that accumulates over time and space. Even what appears to be the quickest and easiest answer was not derived in an instant. It may have been communicated instantaneously, but the knowledge behind the answer had been stored, mulled, processed and organized well before the question. One of the most difficult intellectual exercises for a human is differentiating among the vast knowledge stored in ones head and applying it, with relevance, to current problems. A quick answer that has relevance to a complex problem is not necessarily quick. If it is quick and relevant then one would assume it has already been mulled (time has been spent thinking the question through before it was asked). The intellectual incubation was already established before the question was asked. So the answer only seems quick.
Critical Discussion
Making sure the team that is charged with solving a problem fully agrees on one defined problem and is interested in solving that problem is essential. If no one on the team is interested in solving the defined problem, then the team is not made up of the right people and/or the initially stated problem may not really be a problem worth solving. If more than one person is involved with solving the problem, then there has to be clear communal understanding of what the problem is. It cannot be assumed that everyone has the same understanding of a problem, even if there seems to be consensus. The process of solving complex problems should start with a critical discussion that will conclude with a common agreed upon understanding of the problem. It is common for a business manager to assume that all team members share their view of the problem. If there is no certified agreement of a common problem, then any attempt at solving the problem may be moot.
It is important for the team to go in depth at the onset of the critical discussion. The problem that convenes the team may not actually be the problem the team is eventually charged with solving. For example, at the executive management level, it is not unheard of for a team to be assembled for the task of launching a new product to end up tackling the company's organizational structure.
Learn from history, but do not theorize on it
Know history for what it is; past events or proceedings that resulted from thousands of prior non-linear, asymmetric events. Attempts to extrapolate "best practice" or actionable models from perceived past successes is an act of "simptortion", a simplified distortion of reality.
History offers plenty of examples of what not to do and some examples of what to do. It is best to be sure of what is wrong and skeptical of what is (or seems) right, true or convention. Many theories, hypothesis and explanations based on historical events are aesthetically pleasing but precarious when put into practice. This is because the developers of these presume they actually know the what and how of the historical event(s) for which they are theorizing. Events of the past are easy to fit into a convenient, plausible narrative once they have happened, which makes them easy to understand and categorize by reducing thousands, and possibly millions, of influences to several vivid actions and outcomes. What these historical narratives lack, and why they are so dangerous to theorize on, is the context and the minutiae of the time in which they took place and the intricacies of what did not happen. Every sliver of history has unique attributes that are applicable only to themselves. That is, known historical events are amalgamations of other events coinciding at a point in time. It is impossible for contemporaneous participants to know all the individual events that coalesced in time (and space) to create an event. This is evident in that most participants in historical events rarely know they are participating in an historical event at the time it happened, the full reasons why it is happening, or future implications.
Originally published March 18, 2008