Tempo 2.0 - Chapter 3: Your company is a system and section 3.1: The Monty Hall Problem

To manage a system effectively, you might focus on the interactions of the parts rather than their behavior taken separately.

— Dr. Russel Ackoff

Companies and other organizations are systems. All systems have some properties in common. As you will soon see, these properties can be counter-intuitive. If we rely only on intuition, we will make the wrong decision, even when we have all the information we need to make better ones.

The Monty Hall problem

We are used to solve problems through analysis. To analyze means to split a problem into parts, and trying to understand the whole by understanding each part separately. The idea is that understanding the parts enables us to understand the whole. This way of viewing the world is called reductionism, and it has been the dominating way of viewing the world in Western culture for hundreds of years.

Analysis is indeed a powerful tool, but it has limits. When we try to understand a system by examining its parts, we loose the full picture. This can lead us to making bad decisions. Here is a classic example, the Monty Hall problem:¹

You are a contestant in a game show. The game show host, Monty, puts three cards on a table. All cards are face down. Monty tells you that one of the cards is a winning card, the other two are blanks.

Monty asks you to pick a card, but keep it face down on the table. Then, Monty flips one of the two remaining cards over. It’s a blank.

Now you get to choose: You can either stick with the card you have, or you throw it away and pick the remaining card on the table.

Think it over before you turn the page and read the answer. What would you do, and why? Does it matter what you choose?

Figure: A Future Reality Tree with the solution to the Monty Hall problem.

The diagram above has the solution. Read the diagram in the direction of the arrows, from the bottom, and up, to the top.

The diagram is called a Future Reality Tree (FRT) and it is one of the tools you will learn from this book. It is fairly easy to read the diagram even if you have never seen a Future Reality Tree before.

Boxes with rounded corners contain text describing reality as it is right now. Boxes with straight corners describe things we do to change reality. The ellipses mean and. No ellipsis means the content of any one box can cause the effect on its own. Note that in a complete tree, all the boxes must describe things that actually do exist. Speculation and guesswork should not be present in the diagram itself.

The four boxes at the bottom of the diagram are read like this:

If there are three cards on the table face down and only one of the cards is a winning card, and I pick a card, but I do not look at the face side, then there is a 1/3 chance I have picked a winning card.

Analysis can easily lead you astray when you are dealing with anything even slightly complicated. If you break the problem down in separate parts, you end up in a situation where you have two cards to pick from, the one in your hand and the only remaining card on the table. It is easy to conclude that there is a 50-50 chance of winning, regardless of whether you switch cards or not. Because of this, most people choose to keep the card they picked at the start.

If you follow the diagram all the way to the top, you will see that after Monty has flipped a blank card, there is a 2/3 chance that the remaining card on the table is the winning card!

Really! Please do not take my word for it, after all, I could be wrong, or even trying to trick you. Walk through the diagram yourself. Even better, go get a deck of cards, and try it out a couple of times.

The Future Reality Tree helps us combine two different ways of thinking, analysis, and synthesis:

●  Analysis is breaking down the problem into parts. That is what I did when I split the problem up in little boxes.

●  Synthesis means putting different ideas together to form a whole. I did that when I organized the boxes, and drew arrows and ellipses.

You can think of it as laying a puzzle. Analysis is when you look at the shape and color of each piece. Synthesis is when you put the pieces together, so we can see the entire picture.

In this book, I use one of the best methods I know to understand complicated problems, The Logical Thinking Process (TLTP). I explain how you can use The Logical Thinking Process to solve problems and develop both strategies and tactics in Part C: Navigation.

It is fairly easy to read TLTP diagrams even if you do not yet know how to create them, so I’ll use them whenever I want to be extra careful to show cause and effect, and to build logical arguments.

Like all other tools, TLTP diagrams are based on certain assumptions of how things work, and that means they have certain limitations. We will have a look at those limitations later on, when we get to complexity theory and Cynefin. The reason I mention the limitations now, is I do not want you to believe that just because I show you a really great hammer, all problems are nails. We will deal with both nail-shaped, and not-nail-shaped problems and solutions in this book.

Takeaways

●  Analysis is when you break a problem into smaller pieces to try to understand each piece.

●  Synthesis is when you organize and connect pieces of a problem, so you get an understanding of the whole.

●  We need analysis and synthesis together to understand and solve complicated problems.

●  Visual methods, like The Logical Thinking Process can be a great help when analyzing and synthesizing problems and solutions.

●  Just because you have a hammer, not every problem will be a nail. The tools in this book has limitations, and to use them well, you must understand not just how and when they work, but also when they do not work.

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¹ The Monty Hall problem got its name from Maurice “Monty Hall” Halperin, who led the game show Let’s Make a Deal in the sixties and seventies.

Tempo 2.0 - Chapter 2: Strategy, tactics, and maneuver

 

This is the second draft chapter in Tempo 2.0.
Link to the previous chapter.

“We must be able to examine the world from a number of perspectives so that we can generate mental images or impressions that correspond to that world.”

— The Strategic Game of ? and ?, by Col. John Boyd

There are lots of books about business strategy. If you look closely at them, you will find that they are about many different things. Tempo 2.0 isn’t just about strategy, but strategy is an important part. Therefore, it is important to define what strategy means in this book. Strategic Navigation defines strategy likes this:

A strategy is the answer to the question: What is my ultimate objective, and what intermediate objectives do I need to achieve in order to achieve my ultimate objective?¹

Thus, a strategy is a set of linked objectives, but that alone won’t get us far. If we want things to happen, we also need to do things in a purposeful manner. For that, we use tactics:

A tactic is the answer to the question: How do we achieve a strategic objective?

Strategy and tactics together allows us to make plans and execute them².

Fig. 2-1: Strategic goals can be organized as hierarchies.

For example, one of your strategic intermediate objectives may be to deliver value earlier, so you can get paid sooner. There are many ways to do this. One tactic could be to reduce the amount of work done in each delivery cycle. Another tactic could be to do work in parallel, rather than sequentially. A third tactic could be to eliminate work that does not add value.

I decided to use this book itself to demonstrate how to deliver value early, in a manner that you as a reader can easily verify: I publish the first draft of each chapter on my blog, as I write them. You get value early, I get early feedback.

Of course, publishing all the material on my blog might undercut sales, but making a lot of money from book sales is not my goal. I am more interested in spreading useful knowledge, and I happen to like to write.

For those of you who believe there absolutely, positively, has to be a financial goal, yes, there is: So far, my books haven’t generated much money through sales. They are too specialized for that. However, they have contributed to me getting work I might otherwise have missed, so indirectly, they have been profitable.

A strategic goal and its corresponding tactics can be broken down into its own set of intermediate strategies and tactics. This book will teach you how to do that.

Sometimes the problem is that you don’t know what the problem is. All you know is that something hurts, and you want to hurt less, or something feels good, and you want more of it. You will learn how to get a handle on those situations too.

This book emphasizes merging strategic planning and implementation into a unified whole. Most strategy methods separate thinking and acting. That is a mistake I want to avoid, because just as the way you think will influence the way you act, the way you act will influence the way you think. Separate thinking and acting, and you will neither think, nor act, very well.

Strategic Navigation, the framework for thinking and doing in this book, is intended to support you all the way, with methods for how to think and how to do. What you think, and what you do, is up to you though.

The methods you will find in this book emphasize short planning and execution cycles, fast learning, and the ability to change quickly. In short: Agility!

You will learn visual planning, how to implement what you plan, how to make use of serendipitous events, and also how to tip the scale in your favor, so that serendipitous events occur a bit more often.

Strategic Navigation is a civilian adaptation of ideas from Maneuver Conflict, a military strategic framework created by Col. John Boyd, of the U.S. air force. His ideas have become very important both to military and business strategy. The ideas have also, over the past decade or so, become an increasingly important influence on agile software development, as well as the business agility movement.

In Strategic Navigation, the strategic framework, is combined with a powerful planning and problem solving tool, The Logical Thinking Process.

The original Thinking Process was developed by Dr. Eliyahu Goldratt, and is a part of the Theory Of Constraints. The version in this book is based on further developments of the method by Bill Dettmer, and to top it off, some ideas of my own.

The name Strategic Navigation is a homage to Bill Dettmer’s book of the same name. Over the years, my way of working has diverged a bit from what Bill Dettmer originally wrote, but if you read his book, which I recommend, you will recognize The Logical Thinking Process in Part C: Navigation.

Each organization is different, and that makes recipes for how to do things of limited value. Recipes will not fit your situation, and while trying to follow them might work, it can also lead to painful failure.

Your chances of success will improve if you understand how things work, why they work, when they work, and very importantly, when they don’t work. Thus, throughout the book, I will emphasize understanding, not just route doing. What you will need, is a good understanding of your organization, and the people in it, as a system, that is, a whole composed of interconnected parts.

Most of the time, how the parts connect is way more important than what the parts are, so we will spend a lot of effort on how to visualize and understand those connections.

A bunch of connected parts, that influence each other through their connections, is a system. The entire first part of this book is devoted to building a basic understanding of systems.

Takeaways

●  A strategy answers the question What is my ultimate objective, and what intermediate objectives do I need to achieve in order to achieve my ultimate objective?

●  A tactic is the answer to the question: How do we achieve a strategic objective?

●  Strategic objectives can be hierarchically organized.

●  There must be at least one tactic for each strategic objective.

●  Strategic planning and execution must be an organic whole! Split thinking and acting up, and you will neither think, nor act, very well.

●  Your chances of success will improve if you understand how things work, why they work, when they work, and very importantly, when they don’t work.

●         In a system, how the parts connect is way more important than what the parts are.

●         Your organization is a system.

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¹ In the first edition of Tempo, strategy was defined as “the means and methods required to fulfill the conditions necessary to achieve the ultimate goal of a system”. However, this definition conflates strategy and tactics. It is better to separate the two.

² The definitions of strategy and tactics used here borrows heavily from the Theory of Constraints. It is one of the few definitions of business strategy and tactics that is consistent with strategy and tactics in other contexts, such as war, game theory, and games.