A podcast about management through the lens of the theory of knowledge (epistemology): problem solving, knowledge creation and (infinite) progress. My attempt at applying the ideas of Karl Popper (and his epistemology "Critical Rationalism") and David Deutsch (author of "The fabric of reality" and "The beginning of infinity") to management.
How malinvestments (investments that go against the time preference of consumers but are undertaken nevertheless) are caused by monetary policy and how they cause in return a transition from boom to bust in the economic cycle
Decarbonisation can (and should) be evaluated in terms of how effectively it reaches its goal, or in other words, how well it solves the problem it purports to solve.
In the science of economics, there are different schools of thought, they all give different answers to economic problems how is prosperity caused in a society, under conditions of scarcity. Some schools will emphasize the role of government more than others, … Each school has a position on the relative importance of production versus consumptions to generate prosperity, .. also they have positions on how consumers behave (rational / contextual behavioural/ choosing means to satisfy ends, ….) Now you can compare all the different positions of each school and then make up your mind what school to follow But there is a more fundamental criterion if you want to figure out what schools are really relevant and which ones are less so, and that criterion is the methodology Austrian Economics is different from all other schools in terms of methodology
We can experience different "states" when working. I distinguish 3 of them here: monotony, politics and problem solving. I argue that only the latter is fun (e.g. allows the experience of Flow to arise) and has the potential to cause progress.
Connecting 3 things: philosophy of (climate) science, the actual climate science and the morality of it (i.e. "What should we do about it ?")
In this episode, I try to cover the 2 related problems: 1) The scientific problem: how does climate/ temperature work ? What explanatory theories do we have? What can we predict/ not predict ? 2) The moral problem: what should we do about it ? I give an overview of what scientific theories we have, and how they are involved (both mainstraim and non-mainstraim) plus some of the "bad" ways to solving the problems (instrumentalism, bridging the is/ought gap)
Can we get out of recessions through government spending ?
Key concepts of Critical Rationalism: All knowledge is conjectural Realism Conjecture and refutation Fallibilism
What is the SSIA approach ? Why that approach and not some other ?
To sell is to create knowledge about what actions influence your prospect's subjective valuation most optimally
Empiricism in the philosophy of science emphasizes evidence, especially as discovered in experiments. It is a fundamental part of the scientific method that all hypotheses and theories must be tested against observations of the natural world, rather than resting solely on a periori reasoning, intuition or revelation
What is induction ? The process of going from a set of observations to a generalisation See multiple objects with a characteristic X, all such objects have characteristic X The sun rose every morning already (every observed morning had the characteristic that the sun rose) … so the sun will rise every morning, so tomorrow the sun will rise again “The future will behave like the past”
In the philosophy of science, instrumentalism is the view that concepts and theories are merely useful instruments whose worth is measured not by whether the concepts and theories are true or false (or correctly depict reality), but by how effective they are in explaining and predicting phenomena.
Suppose you are a sales perons, and have a product that allows the customer to be 3% more efficient in his operations Why is just tranferring that knowledge to the customer not enough to make him buy your product ? You may be wrong There may be conflicting ideas still in the mind of the customer Knowledge needs to grow in the mind before it can be enacted upon
What problem ? “What can I do to influence the subjective valuation of my product by the prospect?” Why that problem ? You only sell something if the customer values your product more than its price (and more than alternatives)
Why is epistemology so important ? And why is it not talked about ?
3 concrete tips: Express ideas as explanations Say how an action will transform a situation or capability, and why that action NOT : subjective opinion about importance (loose actions / goals) Avoid positive arguments Arguments appeal to authority Encourage alternative ideas What other actions could lead to the same goal What other better goals can be achieved via these actions ?
“The fastest way to grow knowledge is to set up a "competition" between *multiple* ideas, all vying to solve the *same* problem”
Mistaken for multiple reasons: - You cannot be 100% clear about ideas - It's coercive - It's good that we have conflicts of ideas: only those lead to improvement of ideas
Sales is not easy, and all things not easy can be made fun. More on that later What is not fun about sales now Inherently disappointing : getting so many no's for 1 yes' We make it dull or frustrating in two ways by the typical KPI management Discussions about numbers By throwing vague ideas around Customer is key / our products have value Can say that about everything at all times, it does not solve any problem By justifying “the right way” all the time “You should just sell like this and the business will grow” If it doesn't work, it is frustrating to having to repeat that all the time It does not allow for alternative trials/ suggestions What do we do to compensate, but what does not make it more fun Coaching Often analysis of who you are and what you should do to improve At the level of your personhood, not ideas to can help you sell more Also quite generic, simple tests, simple ideas (be more self conscious, we are all in this together) What can actually make sales more fun ? Approach it as a problem solving exercise The problem of what to do or say so that the subjective valuation of your product by the customer goes up You need a theory About the valuation About what to say or do You need to improve your theory Find better ways to convey You can do that together with other sales people Not as just sharing opinions But really testing the theory “what is we did A instead of B, what would happen, and why ?” Creativity ! new ideas / improved theories ! The role of data: to point to an issue / not something you derive conclusions about All actions are a test of your theory. They provide useful information to change it or improve it. Don't just celebrate succes, but more importantly learn from mistakes ! There is an objectively best theory about what to do to persuade a customer, it's fun trying to seek it out, by throwing out ideas that don't work and replacing them with ideas that might work
Ideas/ knowledge can only change in 3 ways: Preventing them from changing: you secure them from changing by justifying their truth, by adding arguments to them that say why they are true, e.g. appeal to authority arguments. Subjectively adding parts to them (without critically investigating) that you feel are missing / or throwing out parts that you feel are not needed Actually improving them: you find flaws in them and try to correct them
About the (intuitive) misconception: it's people who solve problems, not really ideas
"Hard" management methods: Focused on measurements (deviation between a target/ forecast and actuals), setting up authority (hierarchy, roles & responsibilities), predictions (visions, targets, goals, …), providing "clarity", ... "Soft" management methods: Focused on putting “people” central, with the idea that performance follows when people feel good
Sharing a quibble I have with the "blue" people characteristic in the Insights Disovery people assessment method.
The same question "why?" about some phenomenon in reality can have 2 very different types of answers: (i) the proposal of a causal explanation and (ii) the justification of the truth of the phenomenon
An explanation is a consistent mental model of a transformation/ task/ change, and it contains: The result or goal you want to achieve The actions required to achieve that goal The arguments why (why that particular goal (and not some other), why will those particular actions lead to the goal (and not some others))
Epistemology is relevant when explaining *any* human activity, as it is a better/ deeper explanation than explanations at the level of behaviours (actions) or personality (assessments of persons as a whole)
Key aspects discussed related to how companies typically use KPIs Start from the KPI and not from the problem and solution (for which the KPI was supposed to be an indicator) Corrective actions are parochial and without causal power Corrective actions that have causal power are corrective explanations and contain not only an action but also a goal and argument for how the action will cause the goal, but the corrective explanation is disconnected from the original explanation, i.e. does not serve to improve either one of both or both KPI focus leads to the idea that only KPIs are a relevant source to criticise a solution. Whereas *any* creative argument can serve as good criticism to improve a solution (think about the aspects of a solution that are still not measurable because too early stage for example)
There are no "problem solving methods". Reason being that if there were such a method, we would be able to automatically crank out solutions by simply following it. The same goes for the "scientific method" (science is also problem solving). For example, Einstein had 2 miracle years (1905 and 1915), but followed "the scientific method" every day of his 40+ year career. If there was a valid scientific method, his output would have been much more smooth over that entire period. Solutions to problems come from creativity, and improvement in solutions comes from correcting mistakes in the solutions. Both creativity (having ideas) and error-correction can not be prescribed by a method. Which is a good thing ! It allows novelty, progress, improvement, ... By the way, there is a method for "problem definition" though: the steps to take to define a problem, i.e. the AS-IS vs the TO-BE, the obstacles in between, the root causes of them, ... But defining a problem is still independent from the idea that will solve it.
Does money printing create wealth ? Austrian economics says no and with a very simple but powerful logical argument.
Some thoughts on David Deutsch” definition of knowledge as ‘information with causal power” Also some ideas on how to use this in organisations
It is not contested that managers rely on their teams to get problems solved. However, in practise this turns out less easy than stated here. I go into some of the reasons why it is not trivial and concrete ways for improving this.
What is a business cycle ? The role of money. The unhampered economy. The hampered economy
Unpacking the slogan ...
The natural state of any relationship is that fact that ideas differ. That is not “a shame” … or a proof that there is distrust. It is just the natural starting position. If it were a proof of distrust, then the first step would indeed have to be to start developing trust Instead, trust emerges, but is not a methodological primary step to achieve The moral process and the knowledge creation process run in parallel. Moral: being open, not lying, not being opportunistic, listening …. Knowledge creation : the correction of errors on both sides
DMAIC: Define the problem (Set the goal, ...) Measure the problem (AS IS, ...) Analyse (Root cause analysis, ...) Implement (Find solutions test and implement) Control (Monitor and sustain improvements, ...) Popper's method: Problem definition ( "What to do next ?" Given the ... Root cause analysis, AS-IS / TO-BE, ...) Tentative Solution (Tentative answer to the what to do next question, i.e. a guess for what to do to solve the problem) Error-correction (Using not only data but also argument) New Problem
Illustrating what methods don't mention via the DMAIC problem solving method
Comparing the Popperian method to problem solving to it's alternative
Thoughts on why I think ESG is not a good vehicle for moral progress in companies
Some thoughts on why and how I took up an interest in Austrian Economics
Start from a problem (incl. scope, conditions for good solutions, …) Generate ideas with idea owners Separate session on criticism in group (NOT adaptations) Idea owner's free choice to adapt idea or not
Knowledge creation is "evidence based" when it starts from evidence, and "explanation based" when it starts from a problem and a (guessed) explanation for how to solve it
All plans are wrong for 2 main categories of reasons The goal is wrong: What you really get when you execute the steps may not correspond to the stated goal. Or the goal conflicts with another goal you want to achieve The steps are wrong: you need different steps to achieve the goal you said to achieve There are 2 ways to deal with this: The bad way: seeking positive arguments The good way: seeking criticisms and improve the plan
Covering two opposite conceptions about what science is: the inductive method versus Popper's method Also briefly covering what the relevance of this is to all our "other" types of knowledge (e.g. sociological, political, moral, ...)
We seek answers to the question "Who am i ?" But is that possible ? What is the alternative ?
What you can not use a goal for: Derive what you should do next What you should not use a goal for: As an infallible prophecy of the future that cannot be wrong What you can use a goal for: Challenge your plans - eliminate things from your plan that will NOT get you to the goal Only one of the many ways to improve your plans, not the only one !
Introducing 2 possible approaches to answering this question ....
They cannot confirm your plans (only falsify them) They take away the attention from other ways to improve, other than measuring things (arguments) Both problems are soluble Notice KPIs only when they contradict a plan Spend more time on critical arguments rather than measurements only
We act upon our ideas - our behavior is a consequence of our ideas (goals, plans) Ideas can be explicit, inexplicit and subconscious Ideas evolve via conjecture and criticism Now, when we want to make people do things, we try to replace existing ideas with new ones
Departments like Finance, Sales, … are constructs (to label and structure where people are) What really exists are problems: conflict of ideas For example: Finance wants customer payment periods shortened for working capital reduction, sales want to give longer payment terms. 2 ideas are conflicting here. You can never say that Finance deals with this, because sales is going to counter argue. The solution to the conflict is never black and white IN a particular department It is a mistake to think it should. “We are finance so we decide on payment terms” It is all cooperation around a conflict of ideas from both sides. The solution that is implemented CAN EVEN come from a sales guy … or from any outsider. And those can be good solutions. Or a sales person can criticise an initial solution from Finance, making Finance change their solution. Can you then say that the Finance department solved it ? No you can't What is the concrete implication: do not restrict solutions too narrowly to departments, set-up open, cross-functional teams to solve these problems, understand that solutions evolve via criticisms from many parties, making them eventually much better than the initial idea
People are the collection of ideas plus a universal capacity to change or improve them When we hire people, we hire both aspects.
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