March 21, 2015

Summary "The Moment of Clarity: Using the Human Sciences to Solve Your Toughest Business Problems" by Christian Madsbjerg & Mikkel B. Rasmussen

The Moment of Clarity: Using the Human Sciences to Solve Your Toughest Business Problems by Christian Madsbjerg & Mikkel B. Rasmussen

What is default thinking?

Having reviewed and worked with hundreds of strategic plans for some of the world’s largest corporations, we have learned that something is missing. It is striking how similar to one another the strategies look these days. The structure, language, key analysis, evidence, arguments, recommendations are almost identical, whether it is a beverage company, a producer of building materials, or a retail chain.

Most of these strategies, created with a linear model of problem solving, aim at getting the maximum growth and profit out of the business through rational and logical analysis. This linear mind-set borrows its ideals from the hard science like physics and math:learn from past examples to create a hypothesis you can test with numbers.It works extraordinarily well when the business challenge demands an increase in the productivity of a system. But what happens when the challenge involves people’s behavior? When it comes to cultural shifts, the use of a hypothesis based on past examples will give us a false sense of confidence, sending us astray into unknown waters with the wrong map.

Less straightforward challenges - navigating in a fog - benefit from the problem solving utilized in the human science like philosophy, history , the arts and anthropology. We call this problem solving method sensemaking.

How do the human sciences differ from other sciences?
  • The human sciences include disciplines like anthropology, sociology, and psychology as well as art, philosophy and literature
  • Unlike the more quantitative arms of the social science, the human sciences, primarily shed light of phenomenology: how do people experience the world?
  • The hard sciences are focused on data with properties (hard objective facts like weight and distance), while the human sciences collect data that allows us to see aspects, or the way people experience such properties.

Default thinking               
Hypothesis-based inquiry       
Answers, what and how much?     
Research on what is and has been       
Problems with lower levels of uncertainty   
Hard, measurable evidence           

Exploratory inquiry
Answers, why?
Research on what is to come
Problems with higher levels of uncertainty
Qualitative evidence

Three levels of business problems
  1. A clear-enough future with a relatively predictable business environment
  2. Alternative futures with a set of options available
  3. High levels of uncertainty with no understanding of the problem

If we really want to understand why we continue to get  people wrong, we need to unpack the fundamental assumptions that make up the culture of most of our days.

Assumptions 1: people are rational and fully informed
Assumptions 2: Tomorrow will look like today
Assumptions 3: Hypotheses are objective and unbiased
Assumptions 4: Numbers are the only truth
Assumptions 5: Language needs to be dehumanizing

Thinking outside the box and default thinking are ultimately two sides of the same coin. The coin atomizes the complexity of human behavior into discrete parts, neglecting the importance of holism and context. it is the coin that continues to get people wrong.

How thinking outside the box works?

Let’s us explore five of fundamental assumptions about creativity in business.

Assumption 1: Creativity is strange
Assumption 2: Creativity is a process
Assumptions 3: Ideas come from out of the blue
Assumptions 4: Creativity is about radical change
Assumption 5: Creativity is playful and fun

The big-data solution seduces us by promising a win in markets. Someone needs to have a perspective on what the algorithms deliver. It is this perspective - the moment of clarity - that requires time, deep thinking and experience. Big data can’t deliver on any of those solutions (Steve Jobs solution, customization solution, social media solution)

The human Sciences

Human sciences or soft sciences are not based on the quantitative methods of natural sciences. the study of people, cultures, relations, power, norms, and values requires different skills from those required in the study of molecules, crops, and stars.

Phenomenology is the study of how people experience life. Phenomenology is the philosophical inspiration behind a method like sensemaking. it is the study of everything we feel in the world, everything that gives our lives meaning.

We break down the study of human experience into three blocks:

  1. A fairly sophisticated outlook on what it means to be a human being and on life in its totality
  2. Human-science theories and tools such as ethnography, thick description, an understanding of worlds and double loop
  3. The methodology of abductive reasoning

Martin Heidegger, the philosopher who argued that human beings are at their best when deeply embedded in the world. Not every decision people make is rational and diligent. They buy things they don’t need, do things that are a waste of time, and sometimes hold sacred their various decisions made on a whim. This is why religion, magic, love, art, beauty, literature and national parks don’t make any sense in a rational universe.  Over the last millennia, this deep divide between rational thought and real life has led philosophers to divide human beings into strange sets of two: body and spirit, subject and object, sense and sensibility.

In Plato’s philosophy thinking things (human beings) strive for perfection in rational thought; the cleanness of theory is better than the particular things around us; and we are subjects giving meaning to objects in the world.

As social animals, we learn the rules of our worlds fast and adapt to them collectively, just as instruments in a symphonic orchestra are tuned together before the concert begins. Attunement - getting in sync with the a world or learning its rule is a key social skill that we all have.

Abductive Reasoning

In the late 1800s, American philosopher and logician Charles Sanders Peirce became famous for defining the three kinds of reasoning used to solve problems: abduction, induction and deduction - each appropriate for different levels of certainty. Peirce contended that only abductive reasoning - starting with observation and then moving next to possible hypotheses -was capable of generating new ideas. Deduction effectively evolved a hypothesis but was unable to incorporate new information. And the problem with induction, Peirce argued, was that the analysis was never exhaustive - one could always find more ways of looking at something.

Peirce said, putting forth four offenses that we commit when we reason:
  1. We make an absolute assertion that we are right
  2. We believe that something isn’t knowable, because we don’t have the techniques or technologies to figure it out
  3. We insist that some element of science is utterly inexplicable and unknowable
  4. We believe that some law or truth is in its final and perfect state.

We break sensemaking into five phases:
  1. Frame the problem as a phenomenon
  2. Collect the data
  3. Look for patterns
  4. Create the key insights
  5. Build the business impact

Difference between decision makers and sensemakers

Aspect of leadership              
Primary role           
Nature of effort                  
Primary skills needed           
Relationship to phenomena   
Role of data           

Leaders as decision makers:
Make timely and informed decisions   
Evidence based       
Analytical skills
Detached from phenomena       
Data gives clear answer       

Leaders as sensemakers:
Discover future direction
Judgment based
Synthesis skills
Absorbed in the phenomena
Data can be conflicting

We have observed three fundamental characteristics of great sensemaking leadership:

1.  Sensemakers care deeply about the products and services they make and the meaning that these offerings create for people

2.  Sensemakers have a strong perspective on their business - a perspective that stretches beyond the current time horizon and the current company boundaries

3.  Sensemakers are good at connecting different worlds inside the company. An organization should have a diverse set of skills to understand the big idea, translate it into action, and maintain the operation.

Martin Heidegger claimed that care is the very thing makes human. care is such a fundamental human condition that is noticeable in an instant - as its absence.
Cognitive scientist and linguistics have long argued that by using metaphors, we can see world in new ways. Since we have a hard time visualizing something unfamiliar, we instead take a word or concept we are familiar with and recast it into an unknown or abstract concept.  We understand new things by comparing them to things we already know. That is why a control unit of a computer is called a mouse, a tall building is called a skyscraper and a new pair of lightweight running shoes is called Air. metaphors open a new word for us by explaining how we will experience this world or the aspects of its particular phenomena.

A perspective is a strong view of what you would like the future to be, or how you want your company to shape the future. Normally there are four horizons is front of you. A perspective enabled you to lift your head as a leader and look out onto the furthest of the following four horizons:

  1. Yourself and your career: focus on what the company does for you, how much you earn, what career jump you can take and what legacy you will leave.
  2. The company: how can company improve its performance
  3. Industry: Who are the consumers, and how can we satisfy their needs?
  4. Society: What is our role in people’s life.

The human sciences provide the theoretical scaffolding that helps us get people right:

Human beings are, first and foremost, social creatures
We make most of our decisions according to our familiarity with the world
We change our preference according to the mood and social setting we are in
Our choices are often made spontaneously
We are at our best when we are fully engaged in the world

We believe that the best first step is to create a crisp and clear problem frame that precisely targets the issues you are dealing with and at the same time, encourages curiosity and discovery: re-frame the problem as a phenomenon. A good way to do this is to involve your colleagues in spotting signs that your company might be in a fog. Use the following questions to guide the conversation.

What is our long-term perspective on our business? Is it clear and inspiring?
Do we know where the future growth will come from?
Are we creating excitement in the market?
Do we understand the changes that are going on in the periphery of our industry?
Are we good at spotting and acting on changes in the market?
Are we creating demand or are we following the needs?

A more sophisticated method is to audit your current proposition to your customers. Use this to discuss the following questions:

Who are our customers?
What are we helping our customers achieve?
How do they experience our offerings?
Do we know the logic of how customers adapt to new products?
What will inspire and excite customers?
What don’t we know about our customers?

None of this will be easy. Changing our minds and our habits never is. Journey towards an understanding of how your customers actually experience life. This is the only journey that can deliver the moments that change everything: moments of clarity.

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