Monday, September 1, 2008

The power of distal stimuli

Freakonomics PicFreakonomics is the study of how powerful causes have distant effects. Henry Kissinger once asked Zhou Enlai, premier of People's Republic of China, to assess the consequences of the French Revolution. His response: "It's too soon to say." That's what we mean by the art of considering and discovering distal stimuli!

Using massive data sets, Levitt and Dubner methodically dismantle the "conventional wisdom" that the economist, John Kenneth Galbraith, disdained: "We associate truth with convenience...with what most closely accords with self-interest and personal well-being." Real understanding of economic and social behavior entails attention to complexity. Comprehending the true character of events "is mentally tiring. Therefore, we adhere, as though to a raft, to those ideas that represent our understanding," rather than to those that might lead us to richer insight.

Because Structural Dynamics is a way of seeing connections that might not be intuitively obvious, it is closely aligned with the mode of thought presented in Freakonomics. This way of thinking can lead to radical and controversial conclusions. Violent Crime RateAnd, nowhere is this more evident in Levitt and Dubner's work than in their analysis of the sharp decline in crime rates that began in the 1990s.

Ranking their frequency of mention in article in the US' ten largest circulation newspapers from 1991-2001, eight crime-drop explanations are investigated:
  1. Innovative policing strategies
  2. Increased reliance on prisons
  3. Changes in crack and other drug markets
  4. Aging of the population
  5. Tougher gun control laws
  6. Strong economy
  7. Increased number of police
  8. All other explanations (e.g., gun buybacks)
Their conclusions: While a few of these factors contributed to the drop in crime (e.g., increased incarceration sentences for violent crime), none come close to explaining the extent of the decline.

Instead--and here's where it gets controversial--the authors found a direct and powerful connection between the decline in unwanted babies being born and the drop in crime that occurred approximately eighteen years later. "A woman who does not want to have a child, usually has a good reason. She may be unmarried or in a bad marriage. She may consider herself too poor to raise a child. She may think her life is too unstable or unhappy or she may think that her drinking or drug use will damage the baby's health. Norma McCorvey She may believe that she is too young or hasn't received enough education....Two factor--are among the strongest predictors that a child will have a criminal future. Growing up in a single-parent home roughly doubles a child's propensity to commit crime." Thus, in 1973 when the US Supreme Court said that Norma McCorvey (aka Jane Doe), a poor, alcoholic drug-user who had already given up two children for adoption at age 21 had privacy rights that included the right to an abortion, the pool of those who were likely to commit crimes against others became much smaller. (It should be noted that McCorvey renounced abortion in 1994.)

Even though Levitt and Dubner take great pains to not state an opinion on the morality of abortion, the very fact that they demonstrated a direct link between the right to an abortion and a precipitous drop in crime has made their book both reviled and celebrated.

LIke manyexploration of systemic dynamics Freakonomics is an presents the narrative without presenting the picture. (See our blog entry on Microtrends for a more detailed example of the negative consequences of this approach to information.) However, it makes a potent case for the value of structural dynamics. Understanding anamolies--phenomena that aren't easily explained--will usually take us far past the first, the second or even the third answer, the conventional wisdom, into an analysis of the system of interrelated forces that tweaked one way or the other produce very different outcomes.

All-Hands-On-Strategy: Strong Relationships Make for Better Decisions

Anika and Michael are on the board of directors of the Boston Chapter of the Association for Strategic, with Anika serving as President and Michael as Program Chair. We are very pleased that our colleague and friend, Diana Smith, will be addressing the September 10th meeting of the ASP at the new InterConitnental Hotel in downtown Boston. Diana's talk, "When Good Strategies Go Bad: Strategically Critical Relationships Are Usually At Fault" will present ideas developed in her current top selling book, Divide or Conquer: How Great Teams Turn Conflict into Strength.

A $50 registration fee includes a networking reception with hearty appetizers and wine/beer as well as the presentation. So, this occasion is definitely a great reason to spend the evening in the heart of Boston. [Diana's talk will occur in conjunction with a conference on measurement in organizations hosted by the Palladium Group: contact us for special pricing for the conference.]

Diana and Michael were both students of Chris Argyris, with whom Diana and Bob Putnam authored the important book, Action Science. Like Diana, Art of the Future's perspective emphasizes the relationship between cognition, emotion, and language in the behavior of individuals and groups. Our particular concentration is on the way in which decision-makers consider and make choices about organizational futures.

Divide or Conquer
offers a range of concepts and tools the "reflective practitioner" (a term coined by Don Schön, another mentor to Michael, Diana and many others and a close collaborator of Argyris') can use to consider his or her or their own practice in strategically critical relationships or in any interaction that is important. We all hold "frames" about others, i.e., interpretations of who others are, what they mean, what they want, how they are feel about us, what we can expect of them. As a reviewer of Diana's book notes, "Frames turn patterns of interaction into more enduring relationship structures without the people involved even realizing it."

The notion that "only senior managers can or should be involved in strategic planning" is a common frame that limits organizational creativity and resilience. As our article, "Futures Thinking by Middle Managers" points out, this assumption is tied to other unseen and/or undiscussible dynamics of organizational life. For example, left on automatic, organizational forces will push middle managers away from one another. They become weaker partners in strategic thinking because their relationships don't incline them to share information, insight and wisdom. Encouraging middle managers to develop closer, authentic connections can bring a fuller spectrum of organizational talent to the challenge of making good choices.
Making the assumed, but unconsidered, frames that shape the realities of organizational life explicit can yield transformative results.

Diana's work demonstrates tremendous power comes from designing and constructing an "all-hands-on-deck" learning system that pays attention to the quality of key organizational relationships. It may take time for the payoff to reverberate throughout the system, but the positive consequences are long-lasting. Our own work indicates that contributions to organizational learning about the possibilities of the future exist at all organizational levels and leadership with foresight will commit to building a relationship system that releases understanding and wisdom wherever it resides.