Biological thinking – BCG

I want to share this BCG article on Biological Thinking, messy management for a complex world.

Biological thinking matters for several important reasons:

First, in complex adaptive systems, there is no single formula or framework that always works. In fact, the very defiance of formulaic problem solving is what makes CAS management so challenging initially. It’s not possible to articulate before the fact how best to intervene in a given situation.

Second, actions that work in CASs do not make sense except in light of biological thinking. Mechanical management remains alluring precisely because it relies on a familiar and shared protocol for sense making: it focuses on measurable outcomes such as efficiency and profitability; it makes initiatives easy to explain; and it gives managers a sense of control. Biological management stops being counterintuitive only when business leaders adopt a new managerial worldview.

Third, managing businesses successfully in today’s environment involves new goals rather than just new problem-solving tools. In other words, businesses need a new what as well as a new how: for instance, surviving, in addition to winning; maximizing value for others, as well as for oneself; and prioritizing learning, as well as optimizing short-term performance. These new goals can be embraced only when businesses adopt biological thinking.

Therefore, instead of focusing on developing specific techniques or actions, managers should master the principles of biological thinking:

  • Pragmatism, Rather Than Intellectualism. In an old business joke, a strategist says of a new idea, “It might work in practice, but does it work in theory?” The reality is that managers also tend to want narratives and explanations. It is tempting to reject ideas that one cannot explain. Nevertheless, the lack of an obvious explanation does not imply that something does not work (or vice versa). Managers must acknowledge that things often work before we can explain why.
  • Resilience, Rather Than Efficiency. It’s hard to argue against efficiency. What few managers recognize, though, is that it often trades off against resilience. Like excessive dieting, trimming too much fat can in fact be harmful to companies. The difficulty is that the benefits of efficiency are often immediate and visible, while its risks are latent and invisible. To balance the calculus, companies must make resilience an explicit priority.
  • Experimentation, Rather Than Deduction. Paul Graham once claimed that “the best startups almost have to start as side projects.” That’s because when it comes to innovating, no one knows what will work. Great ideas, in particular, are often outliers that experts may have good reasons for rejecting. Biological management therefore demands getting your hands dirty and tinkering more often than it demands analyzing and theorizing.
  • Indirect, Rather Than Direct, Approaches. In her influential analysis of system leverage points, Donella Meadows pointed out that the most powerful leverage points in complex systems are all indirect, whereas the obvious leverage points like subsidies, taxes, and standards tend to be relatively ineffective. It’s an idea that most business executives intuitively understand but hesitate to put into practice. Acting on structure, goals, mindset, and other contextual drivers may seem unacceptably “soft,” but these levers are often more effective than direct levers in the long run.
  • Holism, Rather Than Reductionism. On the surface, reduction is a natural step in the problem-solving process. It makes problems more tractable and allows for division of labor. It works in engineerable systems, in which subcomponents interact minimally or linearly. But reduction often fails in complex systems because the crux of their behavior lies in the relationship between parts rather than in the parts themselves. The whole is not the sum of its parts.
  • Plurality, Rather Than Universality. Heterogeneity is the basic ingredient through which adaptation and therefore renewal and growth become possible. Innovation in cities scales superlinearly, not because their inhabitants are efficient and coordinated, but because their plural, competing viewpoints provide for constant growth and rejuvenation. Likewise, companies can achieve vitality not through dogma or universal solutions but by nurturing plurality.

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