Being Open To Emergent Explanation

Business Theory Validation Falsification

(This post continues my look at the role of theory in business. A basic concept in my work is liminality, which is a stage of ambiguity and disorientation that precedes a new way of thinking. Note I use [.] as a place holder instead of 'manager', 'management', ‘leader’ or ‘leadership’. I don't buy into the leader vs manager debate: it feels too much like a false dichotomy. The idea is that by taking the word away we can see these people more clearly. I'm keeping the blog simple and free of fiddle faddle. If you want to talk things through please hit me up on Twitter (@rl_rohan) or LinkedIn (Rohan Light).

Like it or not, we all have a strong tendency to favour a particular way of thinking. This is to be expected. We tend towards thinking along the same lines over and over until it becomes a familiar, comfortable place. The more familiar and comfortable, the more likely we are to think consistently. We look for consistency as a strong signal of coherence and value. There's something about consistency that is deeply satisfying. So we favour consistency over completeness.

There is a trend in the leadership community to focus on storytelling as a leadership technique. It’s a good technique if well used. It’s also a destructive technique if applied without data and verification. Our brains love a good story and we will edit out disconfirming information in order to preserve the story. A good story is both consistent and causal. Plus we imagine ourselves in the centre of it. What could be better?

We habituate ourselves to a way of seeing the world. It’s self-reinforcing and seeks out additional information that confirms our wisdom. We look for opportunities to be right. A prolonged use of framing effects makes it possible for us to build ourselves a cosy little world indeed. We then tend to force people out who make it less cosy. This is a bad thing in a liminal world.

We need disconfirmation. We need to be shocked out of our habituated thinking. We need to get out of the well worn tracks of our mental models. To use a Kiwi expression, we need to 'cut our own track'. We need to entertain different explanations of the world. We’d like to think we can do it by ourselves but that’s a folly. The thing we’re aiming for is heterogeneity between explanations. This means one explanation doesn't rely on or isn't strongly connected to another. But achieving that without specific devices is very hard indeed.

Even taking different approaches at building a business model canvas or mind maps or your design tool of choice isn't likely to get you want you need. We want the results of one thought experiment to have minimal effect on the generation of the next one. Because we love a good story and our brains are pattern sensing machines, we leap to conclusions and make connections where we shouldn't. Our preferences, experiences and urge to fulfil our visions mean we have to look for ways to shock us out of habituated thinking.

One way to do this is to build broad teams. Another is to hire more generalists than specialists. Yet another is to find a way to randomize elements of business theory building. Or to make use of several different frameworks at once. I'm a fan of the business model canvas but I don’t use it exclusively. I keep in the back of my head the idea that whatever explanation I'm coming up with is inaccurate, incomplete and misleading. It’s a hard habit to maintain and unpopular at times. But it helps us stay open to emergent explanations that give us a better chance at achieving breakthroughs.

I've mentioned a couple of times the problem of the word ‘validation’ creeping into the lexicon of the business professional. To validate is to prove that something is based on truth or fact. It also means to make something officially acceptable. Perhaps unsurprisingly given the impact the software industry is having on business, the latter sense of the term is becoming widespread. In the testing world validation is about checking that software meets specifications. I hear the word used in business circles in both senses, sometimes in the same conversation. In business I’d like to see both terms used much less. Of the two it’s the former that concerns me more.

Business theory uses the disciplines of the social sciences and ‘proving that something is based on truth or fact’ is challenging if not impossible in this domain. It is useful in the physical and mathematical sciences but much less so in the social. My point is that because validation in the business context is misleading, we must find some other device to get us past ‘because I said so’. Without recourse to validation, it is we who control the survival of our ideas and explanations about what our business is and what it should be.

And given our problems with habituated thinking that favours causal explanations (with ourselves at the centre), this is a significant challenge to overcome. We want to overcome this challenge because the whole point of good business theorizing is to reveal hitherto unseen relationships that give us cause to rethink what we’re doing.

In developing the theory of our business we are looking to disconfirm our expectations. Which is another reason to distrust validation exercises in business. We want to put time and effort in shaping our expectations of what is 'true' and then find ways to test those expectations in such a way that we discover how off the mark those expectations were. This gives us the opportunity to learn more about our expectations, where the weak point was and then incorporate that discovery into our theory.