Decision Loom

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• Publisher: Triarchy Press
• Year: 2011
• Print ISBN: 9781908009449
• eBook ISBN: 9781908009517
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Decision-making has been one of the principal victims of 'modern' thinking. The 'analytical' approach has, of course, brought us vaccines, electricity and the internal combustion engine. But, in seeking to break things down into their component parts and improve the parts, governments and businesses continue to make some astonishingly bad decisions. What's more, many enterprises still pay close attention to 'decisions' and 'decision-making' whilst overlooking the bigger picture: the organizational system within which those decisions get made. This elegant book is a guide for any public, private, government or non-profit organization that needs a system for making better decisions. It sets out to change our 'analytical' habit and invites enterprises to consider the bigger picture. Author Vince Barabba presents an elegantly simple approach to making better decisions. He calls this approach 'The Decision Loom' and bases it on Systems Thinking, Design Thinking and Complexity Theory. He also describes the four core capabilities that any organization must put in place for this approach to work. What's more (because we're humans and prefer stories to instruction manuals) the tapestry of the book is embroidered with fascinating examples from the author's lifetime of experience at the head of American corporate and public decision-making.

Part 1: The Journey

And now to the stories that will provide the basis for considering the type of thinking and interactive decision-making capabilities that are described in Part 2. The stories make clear that we still need the decision loom that Edna St. Vincent Millay wrote about in the 1940s.

I believe that, even by themselves, reviewing each of these individual stories has value. Their true value, however, is revealed when combined with the totality of the lessons learned from the other stories. In the spirit of this book’s title, like threads in a tapestry, single threads of information all have value. However, when woven together properly they form a coherent pattern of even greater value. That tapestry, based on these individual threads, is described in Part 2.

Episode 1: Planting the Seed

Had I collected and used information based solely on what was being taught in business schools and industry seminars in the early 1960s, many of the experiences upon which this book is based probably would not have occurred. At that time the primary focus of problem-solving was on analysis. We learned how to break a problem down into its components, and then improve the way that each part operated. If we were not able to deal with the complexity or the uncertainty of a particular component, we simply held it constant. By avoiding complexity and uncertainty, we created the illusion that we could accurately predict what was going to happen.

Pretending certainty

In the early part of the 20th Century, the eminent economist Lord Alfred Marshall characterized both the benefits and the limitations of the economist’s approach to addressing uncertainty in his discussion of the role of Ceteris Paribus, which is Latin for ‘all else being equal.’

The element of time is a chief cause of those difficulties in economic investigations which make it necessary for man with his limited powers to go step by step; breaking up a complex question, studying one bit at a time, and at last combining his partial solutions into a more or less complete solution of the whole riddle. In breaking it up, he segregates those disturbing causes, whose wanderings happen to be inconvenient, for the time in a pound called Ceteris Paribus. The study of some group of tendencies is isolated by the assumption other things being equal: the existence of other tendencies is not denied, but their disturbing effect is neglected for a time. The more the issue is thus narrowed, the more exactly can it be handled: but also the less closely does it correspond to real life (my emphasis).

Marshall then went on to justify the action by saying:

Each exact and firm handling of a narrow issue, however, helps towards treating broader issues, in which that narrow issue is contained, more exactly than would otherwise have been possible. With each step more things can be let out of the pound; exact discussions can be made less abstract, realistic discussions can be made less inexact than was possible at an earlier stage. ⁵

What has become clear is that decision-makers no longer have the benefit of putting a critical variable on hold “…in a pound called Ceteris Paribus.” We can no longer wait to address certain variables later or act as if we are operating in a world of certainty. In Capability 4 (in Part 2) there is a partial list of decision approaches that address the issue of uncertainty in a more transparent manner.

Addressing complexity

We now better understand the downside of fixing one part of a system at the expense of other parts and, as illustrated in this journey, we have also learned that we need not just to understand how the components of issues we are working on interact but also to consider interactions with the containing system in which the issue exists. Russ Ackoff provides a succinct description of the role of management in a world of synthesis:

Management should be directed at the interactions of the parts and not the actions of the parts taken separately.

An introduction to the silo problem

My first encounter with the silo problem occurred in 1962 during my senior year at California State University at Northridge (then called San Fernando Valley State College). One of my professors had developed a computer-based business simulation game in which he divided students into teams that competed in making and selling a product. The year I took the class, instead of assigning students to a particular team at random, he organized the teams according to a student’s academic major. This led to strikingly different team outcomes:

The Marketing majors (my team) spent most of our time and money on sales and promotion. We acquired an impressive share of the total market, but at high cost, and were bankrupt before the game ended.

The Accounting majors aimed at maximizing profits by minimizing investments in products and promotion. With no new products and only meager promotion of existing ones, the accountants lost market share and slipped by degrees into bankruptcy.

The Production majors spent all their money on product development and manufacturing processes. They ended up with great products at the right prices, but, with no money to tell customers about them, they, too, went out of business.

To the consternation of all concerned, the Personnel majors won. The Marketing majors ran out of money, the Accountants ran out of products, and the Production majors ran out of customers. The Personnel majors occupied themselves with endless changes to the organization chart. Having spent no money, they simply ran out of time and won the game by default.

The silo problem that was made evident by the business simulation game was partially a result of how business classes were taught, with the curriculum tailored to a particular function. One of the most succinct descriptions of the problem associated with silo thinking was provided by Abraham Maslow:

I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.⁶

This business case simulation of a real-world problem provided context as I came to understand the ramifications of the silo mentality. With a greater appreciation of the importance of looking across functions throughout my career, I kept looking for something besides my functional hammer to improve my capacity to help decision-makers – even if I have to go outside the comfort zone of my own training and experience.

Learning to question what appeared to be true

Also that year, I was taking two other classes: one in market research and the other in the history of philosophy. Both classes were taught by teachers who were tolerant of unusual requests.

Toward the end of the semester, the class assignment in market research was to define and show the relationship between Philosophy, Science, and Market Research. At the same time the Professor in the Philosophy course was telling us about the 5th Century B.C. in Athensand about Plato’s concern over the rise of Sophism which he used (as we frequently do now) as a term of disparagement.

While preparing to write the paper for the Marketing course, I was reading materials for my Philosophy course when I ran across a passage from the Dialogues of Plato in which he expressed his concern about the Sophists by having Socrates point out:

… knowledge is the food of the soul; and we must take care… that the Sophist does not deceive us when he praises what he sells, like the dealers wholesale or retail who sell the food of the body.

After observing the differences between buying food or drink which you take home in some sort of a vessel, he drives home his main point:

For there is far greater peril in buying knowledge than in buying meat and drink… you cannot buy the wares of knowledge and carry them away in another vessel; when you have paid for them you must receive them into the soul and go your way, either greatly harmed or greatly benefited; and therefore we should deliberate and take counsel with our elders; for we are still young – too young to determine such a matter.⁷

The passage caused me to think about what appeared to be a similarity between the behavior of the Sophists and some of the practices involved in marketing goods and services. Since the similarities were observed by no less an authority than Plato, I accepted what I read and began to think about writing one paper for both classes around the possible similarities between Sophism and Marketing.

When I suggested to both professors that it might be interesting to write one paper for both classes, they, to their credit, did not laugh, even though each did crack a thin smile. Although quite skeptical, they were persuaded to let me try when they saw the proposed title of the paper:

SOPHISTS, INC. The Trivium Building Madison Avenue Athens, Greece

The introduction to the paper started out this way:

If we are to find a common ground between Philosophy, Science, and Marketing Research, I believe it lies in the area of the search for truth. The difference being, the degree of truth that is obtained, or even desired, and the use to which it is put.

The paper drew primarily on the writings of Plato, who said that the Sophists, rather than searching for truth, “were skilled at making the worse case appear the better.” I tied the Marketers to the Sophists using the criticisms of marketing found in The Hidden Persuaders by Vance Packard. After 20 pages, I concluded that the Sophists of both the 5th Century BC and 20th Century AD were happy to have information that advanced their arguments in ways that masses of people would believe and that they weren’t overly concerned with truth. Both professors accepted the paper. The Philosophy professor gave a passing grade with the side comment, “the title of the paper carried the day.”

Although meeting my initial goal of passing two classes with one paper, the paper’s conclusion – which limited the role of marketing function to, as Plato suggested “…making the worse appear the better” – left me in a somewhat conflicted state. Given that marketing was to be my chosen profession, could I really be comfortable in a career where my goal was to “make the worse appear the better”?

An opportunity to revisit the question of my chosen profession occurred a year later when I was enrolled in the MBA program at UCLA. One day I discussed my concern over the conclusion to my Sophists Inc. paper with one of my professors. He suggested that I revisit the paper, challenge the facts that I presented and determine whether the conclusion still held.

There is, of course, another side to almost any story

While at UCLA I was employed as an instructor in the marketing department at California State University at Northridge. One day, while discussing my concerns with Mal Sillars who was in the speech department at the University, he said he would look over the original paper and provide his observations. His review was quite direct. He in essence said:

Vince, you have a very shallow understanding of the Sophist movement and what it actually contributed. You’ve based your understanding on what you have read from the philosophers who were being challenged by the Sophists. They were not hi...

Table of contents

• Front Cover
• Copyright Page
• Dedication
• Acknowledgements
• Contents
• Foreword
• Introduction
• Part 1: The Journey
• Part 2. The Design of an Interactive Decision Loom
• Conclusion
• Appendix A
• Appendix B
• Bibliography
• About the Author
• About the Publisher
• Related Titles and Authors from Triarchy Press
• Index
• Back Cover