Making Sense of a Changing World

Introduction
Risk can be calculated but never definitively or explicitly enough so that it over rides the uncertainty and risk of failure or being less successful than planned. Uncertainty is the unknown, we can only predict the future, we will never know it until it happens, in business we tend to be “control freaks” afraid to take risks knowing that it might not pay off and ultimately lead people to question our credibility as a leader or employee.

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Elahi uses the concept of “Unknown unknowns” in order to enable us to maximise our interactions with the concept of uncertainty. In order to prevent an ignorant attitude or a dismissive one at least as a leader we first need to know the extent of knowledge already present and how that knowledge is presented and distributed to prohibit the dismissing of unknown unknowns as well as idealist unknown knowns.
We need to learn and actively recognise that there are many types of situations that can arise in business such as; simple, complicated, complex and chaotic: (Cynefin framework) aids thinking and acting appropriately in leadership (Snowden and Boone 2007). Frameworks are only useful if they enable those who use them to an appropriate response to a given action, this framework does that and effectively enables better business decisions to be made dependant on the situation we find ourselves in.
One of the keys parts of uncertainty that I agree strong with is Berlow, who hypothesises that we are unable to predict the future until we are in it. That being said, we ultimately are the masters of our own destiny, therefore we can plan what we want the future to look like and then through our own actions get as close to that idealised world as possible. Starting from a junior position, visualising the future, “the dream” embracing our mistakes and having the ability to adapt, we can mitigate the risks of uncertainty. By looking at the interactions of so many day to day experiences, as a leader we are able to focus on those that are able to be influenced and changed most effectively – not necessarily the easiest, enabling a simpler, less complex and stressful decision to be made. I am someone who gets stressed fairly easily when situations become needlessly complex, therefore I felt it appropriate to try and write this assignment from the point of view of making simpler less complex decisions.
Complexity as an overarching concept is actually quite simple when you stand back and look at it, addressing issues and categorising them, embracing mistakes and their resultant failures, there can be no such thing a mistake as long as a learning outcome can be drawn from it. We can try and predict the way in which a system could emerge, but ultimately we won’t ever be able to do so with 100% precision.
Theories on adaptive management have shown that if stakeholder involvement, dialogue throughout the business, as well as monitoring and adjusting business plans is pivotal to this learning experience (Williams 2011 and Armitage et al 2009). From my point of view, this means questioning “the norm”, just because it worked in that situation, does not mean it will work every time, as a leader I need to work on being open with staff and customers as well as reflective in my learning, this is something that admittedly I do struggle with at times which can lead to my actions being, reactive as opposed to proactive.
Rationality
Reductionist economic models such as neoliberalism and its quest for a deregulated independent of state controlled economy could be seen to assume that human rationality is a relatively statistically neat, with a perfect world view which would be finished with complete information (Farmer and Foley 2009). The challenge that arises is that as problems and situations become ever more complicated and complex with significantly more possible outcomes and interactions, we as humans struggle to deal with and reason with deductive decision making in both business and personal situations.
Outcomes within any situation either business related or not nearly always are uncertain and we would be naïve to believe that there are gaps in our knowledge, nobody knows everything about something. In addition to uncertain outcomes we also need to add and account for the unpredictability and subjectivity of colleagues and customers behaviour which leads us down a path where it would be easy for us to view the whole concept of rationality as rather bounded (Arthur 1994). Learning as you go is paramount to success, realising that different situations and contexts require different approaches to gain a competitive advantage. By not acknowledging the contextual variation of a given situation or interaction could potentially result in the failure or dissolution of a system. One of the most commonly noted limitations of neoliberal theory in economics is that all behaviour is rational and can be predicted. The world sadly does not follow this rule, otherwise, business would be a lot less stressful!
In my experience, in both personal and work situations, people either don’t want too for fear of exposing emotional weakness or lack to the motivation to reason through problems or instead tend to rely on what could be interpreted as a flight response, also known as fast responses creating an emotional thought process and mind set.
As humans we naturally want to be in control of every situation we find ourselves in, this innate desire can blur our thought processes, as individuals, we again ignore our ignorance, maintaining an illusion to ourselves of validity, simplifying events that have happened in the past and over predicting and over complicating the future, causing a greater degree of stress and unwanted thought processes.
For example, when mowing a field, you would assume that after the first hour 20ha has been cut, naturally you would then assume that the same rate would continue throughout the day, until a breakdown or something happens. I have been guilty in the past of placing the blame on the machinery operator for breakdowns, saying they must have been doing something wrong when they might not have been. Reality is, performance is variable and, to a degree, unpredictable.
It is at times when we feel at risk or uneasy within a given situation that we even consider a more in depth, demanding thought process and ideas, termed as slow thinking (Kahneman 2011). The more complex the decisions that are required of us, the more we are likely to look for a simple answer.
An example I have witnessed when “on farm” would be a time when the highest producing dairy cow on farm was injured, she would have made a recovery in approximately nine months but would need to miss a year’s milking, this idea wasn’t even considered as it would have been “too much effort to have her on farm not producing for a year” The vet was not against this idea as it was the “simplest solution” I think trying to embrace the tenets of Eco Leadership particularly in the Agricultural Industry with its intense public scrutiny surrounding the treatment of animals, particularly in the dairy sector could help ease pressure, in this example instead of being motivated by financial factors, the farm would have kept the animal, recognising their social responsibilities instead of profit ones. Education is the key here, teaching young students – not just university students but sixteen to 18 year olds as well to accept responsibility for their environmental and public facing commitments may well reduce stress levels within the industry. A way of offsetting the financial “burden” of increased social responsibility and a steering group network of both you and older farmers as well as highlighting changes to the public would ultimately benefit all.
Complexity
It does seem that in our reluctance to embrace complexity and risk in business, the end result is inevitably a more stressful and complex situation that the one we started with (Morieux 2013). I do wholeheartedly disagree with the concept of “something that is more complex is more likely to fail”, after all the world’s largest businesses are incredibly complex units with literally millions of interactions in their day to day functioning, it is not necessarily how complex something is that leads to an increased risk of failure but rather who built those systems in the first place and who now guides them as well as the manner they are guided in?
It has been hypothesised that in order to evolve and progress as a business it is imperative that we acknowledge the impact people make in organisations and generate a value for those people in organisations (Nair 2012). Perhaps this is a reason that large global businesses are now looking to employ “Natural Capital Managers/Directors” responsible not just for the external sustainability of a business but also internal sustainability. This doubles down on the concept of “Eco Leadership” spreading the balance of power throughout the organisation and looking past the concept of a wholly profit focused business but moving towards one that embraces inclusion leadership, allowing the responsibility and power to lie with all (Western 2013).
Holism is a relatively new concept to the world of business, first proposed in 1926 by Jan Smuts, it proposes the idea that various systems should be viewed as wholes, not merely as a collection of parts. Hayek took the view that, in economics at least, we cannot apply a reductionist view of the world/situation we are presented with in order to predict the future (Hayek 1974). If we did try and apply a reductionist approach fully to a given situation we could very likely run the risk of ignoring the fact we are being ignorant, ultimately resulting in business uncertainty and an inability to adapt to situations, creating a reactive business rather than a proactive one.
Snowden suggests the expression of knowledge between individuals can be considered as both a flow and a thing, essentially he suggested that as an individual I know more than I tell others and that I can tell more than I would write down. This concept could be applied to school examinations in the UK and globally, where it could be seen that students only really know what we know when we need to know it, essentially memory recall is what’s required for examinations.
Knowledge and Knowhow
When one first thinks about solving a complex situation, there is an overarching desire to approach the issue with the delusion that solving it would be simple, until I started studying on the MBA program and working my way through this module that would have been my original thought processes. There is a vast array of books filled with management theories and models that best explain “how to manage” which is great, but what they lack is the knowhow of the best way to put it into practice (Hidalgo 2015). The science of complexity demands a different kind of mind-set, one that enables us to best place ourselves so that we can question our experiences and interactions, adapt quickly and efficiently to new situations and learn from experience, collaborate with colleagues and stakeholders to ascertain best solutions, fail and still be happy through the knowledge that mistakes do not exist unless we do not learn from them, and ultimately developing an enhanced level of knowledge.
Expertise and knowledge are two traits that are very difficult to transfer effectively between individuals. The ability to learn as a network is traditionally more challenging than learning as a single individual, largely due to the number of interactions required to facilitate this. In my opinion it relies upon a shared “passion” for a given subject, the trust between colleagues and peers to explore that subject and the ability to ask questions and articulate thoughts. It could be hypothesised therefore that the structure of this MBA course with its distance learning aspect should make it easier for us as individual students to collate information and create learning. The rise of the internet and the increased complexity of the world we live in means as humans we are transitioning into a world that we find impossible to be separated from each other, either physically or mentally, ultimately, is this healthy and conducive to a better life? I think not.
20th Century leadership dynamics relied upon companies being steered by a relatively small number of individuals with massive power, whose only job was to chase profits, no matter the cost to the company’s internal or external sustainability. The concept of Eco Leadership (Western 2013) points us towards the redistribution of power, the view of a business as an eco-system where all parts need to be healthy in order to thrive. The huge barriers of cultural, political, and widespread public mistrust are beginning to come to the fore, the public now want to buy into a company’s moral compass when purchasing goods, companies must adapt or become irrelevant to the consumer. I think the rise of interconnectivity and complexity is here to stay, but should it be monitored closer in terms of growth? Ultimately is there a limit to how big something can get before it collapses? Many smaller networks could be viewed as more beneficial to success than highly populated interconnected networks.
There is no such thing as failure as long as something is learnt from it.
Big Data
This has to be the topic I have found the most interesting throughout the module. The emergence and huge growth of Big Data even in the past ten years is amazing to look at. Over the past thirty years, the world has effectively shrank as the internet took hold and allowed access to worldwide communication at the click of a button. Big Data has morphed into a hugely complex interconnected world with billions of day to day interactions, all of which are either hidden from the end user or shared with them. It has led to the development of a whole new analytical field, data analysts are freely using this subtly hidden information that has been gathered by companies to greater understand the kind of questions they should be asking.
The sheer volume, and range of big data is undeniable. However, it has been noted that there are significant ethical hurdles to overcome if Big Data is to carry on growing at the same pace. (Jin et al 2015). An increase in the information that can be analysed would generally be assumed to be valuable and of benefit to businesses and organisations. A proposition would be that the data that we determine to be helpful in aiding us to predict and, therefore, try and limit or even is potentially useful to us in terms of helping humankind rather than just business. On the flip side, it could be hypothesised that we trying to slow down and almost stop natural selection and enable machines and algorithms to do the thinking for people to eliminate and minimise error of choice, rather than letting humans select, and ultimately be accountable for their own behaviour? I think it wont be long now before humans begin to blame machines for their actions in a court of law, take Tesla for example, the cars drive themselves when on Autopilot, if that car hits a pedestrian, would the human driving be responsible or whoever designed the software to stop the car hitting someone?
Ultimately the analysing of the data gathered by companies is objective in its design but I think subjective in its nature, questions about what data analysts are looking for can be skewed to find “the correct answer”, alongside the huge emerging issue of invading the personal privacy of peoples’ lives without their consent and/or knowledge (McAfee 2012). We all sign up and love to use loyalty cards in supermarkets and online to analyse what we buy, ultimately just for the reward of additional points or a small discount on our next shop. It has to be questioned as to whether it is worth it the ongoing harassment that is marketing emails.
For me Big Data is a good thing, if ethically monitored and carried out, it has the potential to help consumers and companies. Big data aids the understanding and interpretation of complex and chaotic systems (Xu et al 2016). Big Data is here to stay, however it needs to be ethically managed with privacy at the forethought, those that manage it also need to be accountable. Research questions will need to remain open minded and accountable hidden from cognitive bias, allowing the data to reveal itself rather than be manipulated into showing what people want to see.
Finishing thoughts
The whole concept of what it means to be a leader in business in now being given fresh thought. It is so much easier to fail as a leader than to achieve something as one, you have to wonder why? It could be said that perhaps in the web of complexity and networks that we have forgotten what we have created (Chapman 2016). Complex management and leadership literature share considerable traits, it could also be argued that they are two variations of the same concept?
Simple problems ultimately do not require complex solutions, why do we always feel this is the case? Couldn’t it be better solved by a simple solution? That being said however, complex problems force us to use a very different approach and for our rationality to be questioned when making decisions.
It has been suggested we have confused management and leadership, is leadership even a real concept or are leaders just very effective managers who enable staff to be the best they can be?
Complex problems cannot be solved by managers’ models, in the way the models are currently formulated.
Leadership is a complex and almost undefinable concept. It involves the embracing of uncertainty, networks of interactions, and a whole host of traits that cannot be measured. It is now becoming increasingly important for diversity, flexibility, accountability to be part of a leaders toolbox. I feel that if we are to use complex adaptive management as the sole or even founding solution to complex problems that we are at a risk of continuing along the path of applying a model rather than sense making as individuals.
References
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