“Complex situations do not lend themselves to a solution, and it is folly to spend the time, energy, or effort even to attempt to create solutions. Yet this is exactly how the complicated way of thinking works. It is in evidence when companies try to optimize complex activities such as marketing strategy, production schedules based on demand, or long-range planning. This form of thinking is especially evident in economics, as politicians all promise solutions to economic ills.”
Dr. Rick Nason
The children’s game of tic-tac-toe and the adult game of chess are both examples of complicated systems. Tic-tac-toe is a game that can be solved. That is, you can predetermine a precise set of rules that lead to the optimal results each time you play. Theoretically, you can also do the same for chess, although the computer large enough to do so has not been invented yet (and perhaps will never be developed). The number of possible combinations of moves in chess is simply too large for even the most powerful computers to calculate. Thus, the most experienced chess masters only try to anticipate a few moves ahead and play more for position than solving of an optimal problem. It is a “manage, not solve” mentality. Tic-tac-toe and chess illustrate that complicated systems can be either very easy to understand or so complicated that they are virtually unsolvable.
Now consider the game of business. Is business more like tic-tac-toe, in that there are a limited number of moves and combinations, or is business more like chess? The quick answer is that business is more like chess, in that there are an infinite number of combinations that can be played out in any business situation. Furthermore, in business there is the presence of emergence, so the task of “solving” becomes even more impossible. So, if it is not possible to “solve” a game of chess, does it not also make sense that it is not possible to “solve” business problems?
Complex situations do not lend themselves to a solution, and it is folly to spend the time, energy, or effort even to attempt to create solutions. Yet this is exactly how the complicated way of thinking works. It is in evidence when companies try to optimize complex activities such as marketing strategy, production schedules based on demand, or long-range planning. This form of thinking is especially evident in economics, as politicians all promise solutions to economic ills.
When playing chess, you have to play in the moment, based on the actions of your opponent, keeping in mind as well your relative position at any given point in time. It is not possible to plan out all situations, and of course the unexpected can always happen. For instance, your opponent may make a particularly ill-advised move. Perfectly rational planning would imply that such an event could not occur as that would imply that you opponent is stupid and irrational. Any businesses that are run stupidly and irrationally are soon replaced by more astute rivals. Likewise, our opponent can make a particularly spectacular move that you will unexpectedly need to defend against. In chess, you have to manage the situation. A similar strategy also words for business.
The key is to think “manage, not solve.”.
(Excerpt taken from It’s Not Complicated – The Art and Science of Complexity in Business Pages 94 & 95)
Dr. Rick Nason
Associate Professor; Program Director, MBA(FS)
Rowe School of Business