A wise man knows one thing – the limits of his knowledge
Thursday, 1 December, 2011 7 Comments
If you haven’t come across Prof John Kay before but “get” the following, I can recommend more of his writings. He is a regular contributor to FT and wrote an excellent book with invaluable lessons on modern business life: Obliquity
…I have been looking at some of the models people use, in both the public and private sectors to predict events.
The models share a common approach. They pose the question: “How would we make our decision if we had complete knowledge of the world?” With such information you might make a detailed assessment drawing together many different pieces of relevant information on matters such as costs, benefits, and consequences.
But little of this knowledge exists. So you make the missing data up. You assume the future will be like the past, or you extrapolate a trend. Whatever you do, no cell on the spreadsheet may be left unfilled. If necessary, you put a finger in the air.
If we now know what we “don’t know”, we should already know that, underestimating the unknown (unknowable?!) impact of future (unforeseen or unforeseeable) events, based upon assumptions, carries unknown dangers.
Organizations need to learn to distinguish between the kinds of problems that can be handled with traditional perspectives, where precise prediction and solution is possible, and the kinds of problems associated with unavoidable complexity.
- Knowledge Economy: business as part of not apart from community (fitforrandomness.wordpress.com)
- Review: Obliquity (thejoyofbooking.com)
- What if “counterintuitive” is THE mark of a leader? (fitforrandomness.wordpress.com)
- Survival in the Age of Complexity | World Economic Forum (fitforrandomness.wordpress.com)
- Establishing “cause and effect”: don’t be misled (fitforrandomness.wordpress.com)
- Presentation: deeper understanding by thinking in systems (fitforrandomness.wordpress.com)
- Power Laws & Complexity Management (fitforrandomness.wordpress.com)
- Five Reasons Companies Fail at Business Model Innovation – HBR (fitforrandomness.wordpress.com)
- Risk: If we already “know” what we can’t but… (fitforrandomness.wordpress.com)
- Video: “Practice without sound theory will not scale” – invaluable lessons for model transformation (fitforrandomness.wordpress.com)
- “Physics Envy…” presentation by Prof Andrew Lo: Risk & Uncertainty (in financial systems) (davidgwilson.spaces.live.com)