Management thinking for complex issues: The superior perspective

Is there a superior way for managers to think? Here, ‘managers’ defined in the broadest of terms to mean anyone involved in the process of realisation of objectives and goals defined by humans. This follows the definition of ‘management’ by Petersen and Plowman as “the process by means of which the purpose and objectives of a particular human group are determined, clarified and effectuated.”

Scholars and commentators have repeatedly pointed out that we live in a period of rapid change and overwhelming complexity. It has been suggested that old ways of thinking will be incapable of managing the complexity of modern life. As Pankaj Mishra puts it: mankind “cannot understand this crisis because our dominant intellectual concepts and categories seem unable to process an explosion of uncontrolled forces.” Some of the urgent challenges facing mankind include climate change, global terrorism, biodiversity depletion, global financial crises, transnational money laundering, global economic inequality, water shortage, corruption, global disease epidemics and xenophobia.

Daniel Kahneman was awarded the Nobel Prize for Economics (officially The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2002), for “having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.” Kahneman collaborated with Amos Tversky for most of his career, together they revealed systematic errors in human thinking, linked to cognition rather than emotions. Kahenman went on to describe two systems of thought: System 1 ‘fast’ and System 2 ‘slow’. System 1 is reflexive and quick, relatively effortless with “no sense of voluntary control.” System 2 is more effortful and mentally tasking, more voluntary, typically used for complex calculations: “the operations of System 2 are often associated with the subjective experience of agency, choice and concentration.”

Reductionist (linear) and holistic (complexity) are two modes or perspectives of thinking which belong to Kahnemen’s System 2: they are deliberate, conscious, voluntary and typically used by managers. ‘Reductionism’ in simplest terms means the breaking down (reduction) of complicated phenomena into smaller parts, for easier understanding. This attempt to explain entire systems in terms of their individual, constituent parts and their interactions, has been successfully applied in the sciences: ‘methodological reductionism.’ In reductionist methodology, ‘cause’ and ‘effect’ are usually not far from each other. The reductionist perspective often reveals linear causality. The Enlightenment philosopher René Descartes greatly influenced the development of the reductionist method. This Cartesian method (named after Descartes) involves decomposing problems into smaller aspects for individual scrutiny, then, if necessary, reconstructing the decomposed parts into a whole again, to understand the integrated form).

However, before Descartes’s perspective came to dominate Western thinking, the worldview of the ancient Greek philosopher and scientist Aristotle, reigned supreme. Aristotle’s aim was to catalogue the world and organize it by observing patterns and systems in all complexity. Aristotle believed that the whole is something distinct from the parts it is composed of – the total of the constituent parts is not just made up of a heap of the parts. He believed that the study of the unity of such complexes is distinct from the study of the parts. True knowledge for Aristotle, comes not necessarily from breaking up the parts, but from the consideration of the whole rather than the constituent parts. This is complexity or ‘systems’ thinking.

The Walters Foundation describes the following “Habits of systems thinkers”:

1. Seek to understand the big picture; 2.Observe how elements within the system change over time, generating patterns and trends; 3. Recognize that a systems’ structure (elements and interactions) generates behaviour; 4. Identify the circular nature of complex cause-and-effect relationships; 5. Surface and test assumptions; 6. Change perspective to increase understanding; 7. Consider an issue fully and resist the urge to come to a quick conclusion; 8. Consider how mental models affect current reality and the future; 9. Use understanding of system structure to identify possible leverage actions; 10. Find where unintended consequences emerge; 11. Recognize the impact of time delays when exploring cause-and-effect relationships; 12. Check results and change actions if needed: “successive approximation.”

Why is holistic/complexity/systems/nonlinear thinking superior? This perspective produces more insight for the manager, especially when presented with complex systems. Through this perspective, causality at the heart of patterns of change and adaptation in complex systems are revealed, especially those characteristics that have long-term effects. From business management to combating global warning or curbing terrorism, complex issues require the right management perspective because wrong interventions informed by an inferior perspective often exacerbate complex problems. Scholars have discovered that although reductionist thinking has its benefits when dealing with simpler phenomena, it has severe limitations and can be a blind-spot for managers when complex issues are at stake.

 

Uyiosa Omoregie

(Dr Uyiosa Omoregie is a Corporate Planning Analyst at Brass LNG

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