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3 or 7, truth or trust

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“It is clear that ethics cannot be articulated.” – Ludwig Wittgenstein

Over the last few years I’ve been teaching and refining a series of lecture-workshops on Decision Making Under Uncertainty. Audiences include data scientists and mid-level managers working in corporates and public service agencies. The course is based on the distinction between uncertainties in which the variables are known and can be quantified versus those in which the variables are not known upfront and/or are hard to quantify.

Before going any further, it is worth explaining the distinction via a couple of examples:

An example of the first type of uncertainty is project estimation. A project has an associated time and cost, and although we don’t know what their values are upfront, we can estimate them if we have the right data.  The point to note is this: because such problems can be quantified, the human brain tends to deal with them in a logical manner.

In contrast, business strategy is an example of the second kind of uncertainty. Here we do not know what the key variables are upfront. Indeed we cannot, because different stakeholders will perceive different aspects of a strategy to be paramount depending on their interests – consider, for example, the perspective of a CFO versus that of a CMO. Because of these differences, one cannot make progress on such problems until agreement has been reached on what is important to the group as a whole.  The point to note here is that since such problems involve contentious issues, our reactions to them  tend to be emotional rather than logical.

The difference between the two types of uncertainty is best conveyed experientially, so I have a few in-class activities aimed at doing just that. One of them is an exercise I call “3 or 7“, in which I give students a sheet with the following printed on it:

Circle either the number 3 or 7 below depending on whether you want 3 marks or 7 marks added to your Assignment 2 final mark. Yes, this offer is for real, but there a catch: if more than 10% of the class select 7, no one gets anything.

Write your student ID on the paper so that Kailash can award you the marks. Needless to say, your choice will remain confidential, no one (but Kailash) will know what you have selected.

3              7

Prior to handing out the sheet, I tell them that they:

  • should sit far enough apart so that they can’t see what their neighbours choose,
  • are not allowed to communicate their choices to others until the entire class has turned their sheets.

Before reading any further you may want to think about what typically happens.

–x–

Many readers would have recognized this exercise as a version of the Prisoner’s Dilemma and, indeed, many students in my classes recognize this too.   Even so, there are always enough of “win at the cost of others” types in the room who ensure that I don’t have to award any extra marks. I’ve run the exercise about 10 times, often with groups comprised of highly collaborative individuals who work well together. Despite that,15-20% of the class ends up opting for 7.

It never fails to surprise me that, even in relatively close-knit groups, there are invariably a number of individuals who, if given a chance to gain at the expense of their colleagues, will not hesitate to do so providing their anonymity is ensured.

–x–

Conventional management thinking deems that any organisational activity involving several people has to be closely supervised. Underlying this view is the assumption that individuals involved in the activity will, if left unsupervised, make decisions based on self-interest rather than the common good (as happens in the prisoner’s dilemma game). This assumption finds justification in rational choice theory, which predicts that individuals will act in ways that maximise their personal benefit without any regard to the common good. This view is exemplified in 3 or 7 and, at a societal level, in the so-called Tragedy of the Commons, where individuals who have access to a common resource over-exploit it,  thus depleting the resource entirely.

Fortunately, such a scenario need not come to pass: the work of Elinor Ostrom, one of the 2009 Nobel prize winners for Economics, shows that, given the right conditions, groups can work towards the common good even if it means forgoing personal gains.

Classical economics assumes that individuals’ actions are driven by rational self-interest – i.e. the well-known “what’s in it for me” factor. Clearly, the group will achieve much better results as a whole if it were to exploit the resource in a cooperative way. There are several real-world examples where such cooperative behaviour has been successful in achieving outcomes for the common good (this paper touches on some). However, according to classical economic theory, such cooperative behaviour is simply not possible.

So the question is: what’s wrong with rational choice theory?  A couple of things, at least:

Firstly, implicit in rational choice theory is the assumption that individuals can figure out the best choice in any given situation.  This is obviously incorrect. As Ostrom has stated in one of her papers:

Because individuals are boundedly rational, they do not calculate a complete set of strategies for every situation they face. Few situations in life generate information about all potential actions that one can take, all outcomes that can be obtained, and all strategies that others can take.

Instead, they use heuristics (experienced-based methods), norms (value-based techniques) and rules (mutually agreed regulations) to arrive at “good enough” decisions.  Note that Ostrom makes a distinction between norms and rules, the former being implicit (unstated) rules, which are determined by the cultural attitudes and values)

Secondly, rational choice theory assumes that humans behave as self-centred, short-term maximisers. Such theories work in competitive situations such as the stock-market but not in situations in which collective action is called for, such as the prisoners dilemma.

Ostrom’s work essentially addresses the limitations of rational choice theory by outlining how individuals can work together to overcome self-interest.

–x–

In a paper entitled, A Behavioral Approach to the Rational Choice Theory of Collective Action, published in 1998, Ostrom states that:

…much of our current public policy analysis is based on an assumption that rational individuals are helplessly trapped in social dilemmas from which they cannot extract themselves without inducement or sanctions applied from the outside. Many policies based on this assumption have been subject to major failure and have exacerbated the very problems they were intended to ameliorate. Policies based on the assumptions that individuals can learn how to devise well-tailored rules and cooperate conditionally when they participate in the design of institutions affecting them are more successful in the field…[Note:  see this book by Baland and Platteau, for example]

Since rational choice theory aims to maximise individual gain,  it does not work in situations that demand collective action – and Ostrom presents some very general evidence to back this claim.  More interesting than the refutation of rational choice theory, though, is Ostrom’s discussion of the ways in which individuals “trapped” in social dilemmas end up making the right choices. In particular she singles out two empirically grounded ways in which individuals work towards outcomes that are much better than those offered by rational choice theory. These are:

Communication: In the rational view, communication makes no difference to the outcome.  That is, even if individuals make promises and commitments to each other (through communication), they will invariably break these for the sake of personal gain …or so the theory goes. In real life, however, it has been found that opportunities for communication significantly raise the cooperation rate in collective efforts (see this paper abstract or this one, for example). Moreover, research shows that face-to-face is far superior to any other form of communication, and that the main benefit achieved through communication is exchanging mutual commitment (“I promise to do this if you’ll promise to do that”) and increasing trust between individuals. It is interesting that the main role of communication is to enhance or reinforce the relationship between individuals rather than to transfer information.  This is in line with the interactional theory of communication.

Innovative Governance:  Communication by itself may not be enough; there must be consequences for those who break promises and commitments. Accordingly, cooperation can be encouraged by implementing mutually accepted rules for individual conduct, and imposing sanctions on those who violate them. This effectively amounts to designing and implementing novel governance structures for the activity. Note that this must be done by the group; rules thrust upon the group by an external authority are unlikely to work.

Of course, these factors do not come into play in artificially constrained and time-bound scenarios like 3 or 7.  In such situations, there is no opportunity or time to communicate or set up governance structures. What is clear, even from the simple 3 or 7 exercise,  is that these are required even for groups that appear to be close-knit.

Ostrom also identifies three core relationships that promote cooperation. These are:

Reciprocity: this refers to a family of strategies that are based on the expectation that people will respond to each other in kind – i.e. that they will do unto others as others do unto them.  In group situations, reciprocity can be a very effective means to promote and sustain cooperative behaviour.

Reputation: This refers to the general view of others towards a person. As such, reputation is a part of how others perceive a person, so it forms a part of the identity of the person in question. In situations demanding collective action, people might make judgements on a person’s reliability and trustworthiness based on his or her reputation.’

Trust: Trust refers to expectations regarding others’ responses in situations where one has to act before others. And if you think about it, everything else in Ostrom’s framework is ultimately aimed at engendering or – if that doesn’t work – enforcing trust.

–x—

In an article on ethics and second-order cybernetics, Heinz von Foerster tells the following story:

I have a dear friend who grew up in Marrakech. The house of his family stood on the street that divide the Jewish and the Arabic quarter. As a boy he played with all the others, listened to what they thought and said, and learned of their fundamentally different views. When I asked him once, “Who was right?” he said, “They are both right.”

“But this cannot be,” I argued from an Aristotelian platform, “Only one of them can have the truth!”

“The problem is not truth,” he answered, “The problem is trust.”

For me, that last line summarises the lesson implicit in the admittedly artificial scenario of 3 or 7. In our search for facts and decision-making frameworks we forget the simple truth that in many real-life dilemmas they matter less than we think. Facts and  frameworks cannot help us decide on ambiguous matters in which the outcome depends on what other people do.  In such cases the problem is not truth; the problem is trust.  From your own experience it should be evident it is impossible convince others of your trustworthiness by assertion, the only way to do so is by behaving in a trustworthy way. That is, by behaving ethically rather than talking about it, a point that is squarely missed by so-called business ethics classes.

Yes,  it is clear that ethics cannot be articulated.

Notes:

  1. Portions of this article are lightly edited sections from a 2009 article that I wrote on Ostrom’s work and its relevance to project management.
  2.  Finally, an unrelated but important matter for which I seek your support for a common good: I’m taking on the 7 Bridges Walk to help those affected by cancer. Please donate via my 7 Bridges fundraising page if you can . Every dollar counts; all funds raised will help Cancer Council work towards the vision of a cancer free future.

Written by K

September 18, 2019 at 8:28 pm

The “value add” tax – a riff on corporate communication

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A mainstay of team building workshops is the old “what can we do better” exercise.  Over the years I’ve noticed that “improving communication” is an item that comes up again and again in these events.  This is frustrating for managers. For example, during a team-building debrief some years ago, an exasperated executive remarked, “Oh don’t pay any attention to that [better communication], it keeps coming up no matter what we do.”

The executive had a point.  The organisation had invested much effort in establishing new channels of communication – social media, online, face-to-face forums etc.  The uptake, however, was disappointing:  turnout at the face-to-face meetings was consistently low as was use of other channels.

As far as management was concerned, they had done their job by establishing communication channels and making them available to all. What more could they  be expected to do? The matter was dismissed with a collective shrug of suit-clad shoulders…until the next team building event, when the issue was highlighted by employees yet again.

After much hand-wringing, the organisation embarked on another “better communication cycle.”  Much effort was expended…again, with the same disappointing results.

Anecdotal evidence via conversations with friends and collaborators suggests that variants of this story play out in many organisations. This makes the issue well worth exploring. I won’t be so presumptuous as to offer answers; I’m well aware that folks much better qualified than I have spent years attempting to do so. Instead I raise a point which, though often overlooked, might well have something to do with the lack of genuine communication in organisations.

Communication experts have long agreed that face-to-face dialogue is the most effective mode of communication. Backing for this comes from the interactional or pragmatic view, which is based on the premise that communication is more about building relationships than conveying information. Among other things, face-to-face communication enables the communicating parties to observe and interpret non-verbal signals such as facial expression and gestures and, as we all know, these often “say” much more than what’s being said.

A few months ago I started paying closer attention to non-verbal cues. This can be hard to do because people are good at disguising their feelings. Involuntary expressions indicative of people’s real thoughts can be fleeting. A flicker of worry, fear or anger is quickly covered by a mask of indifference.

In meetings, difficult topics tend to be couched in platitudinous language. Platitudes are empty words that sound great but can be interpreted in many different ways. Reconciling those differences often leads to pointless arguments that are emotionally draining. Perhaps this is why people prefer to take refuge in indifference.

A while ago I was sitting in a meeting where the phrase “value add activity” (sic) cropped up once, then again…and then many times over. Soon it was apparent that everyone in the room had a very different conception of what constituted a “value add activity.” Some argued that project management is a value add activity, others disagreed vehemently arguing that project management is a bureaucratic exercise and that real value lies in creating something. Round and round the arguments went but there was no agreement on what constituted a “value add activity.” The discussion generated a lot of heat but shed no light whatsoever on the term.

A problem with communication in the corporate world is that it is loaded with such platitudes. To make sense of these, people have to pay what I call a “value add” tax – the effort in reaching a consensus on what the platitudinous terms mean. This can be emotionally extortionate because platitudes often touch upon issues that affect people’s sense of well-being.

Indifference is easier because we can then pretend to understand and agree with each other when we would rather not understand, let alone agree, at all.

Written by K

November 19, 2015 at 8:02 am

Catch-22 and the paradoxes of organisational life

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“You mean there’s a catch?”

“Sure there’s a catch”, Doc Daneeka replied. “Catch-22. Anyone who wants to get out of combat duty isn’t really crazy.”

There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions…”   Joseph Heller, Catch-22

Introduction

The term Catch-22 was coined by Joseph Heller in the eponymous satirical novel written in 1961. As the quote above illustrates,  the term refers to a paradoxical situation caused by the application of  contradictory rules.  Catch-22 situations are common in large organisations of all kinds, not just the military (which was the setting of the novel). So much so that it is a theme that has attracted some scholarly attention over the half century since the novel was first published  – see this paper or this one for example.

Although Heller uses Catch-22 situations to highlight the absurdities of bureaucracies in a humorous way, in real-life such situations can be deeply troubling for people who are caught up in them. In a paper published in 1956, the polymath Gregory Bateson and his colleagues  suggested that these situations can cause people to behave in ways that are symptomatic of schizophrenia .  The paper introduces the notion of a  double-bind, which is  a dilemma arising from an individual receiving two or more messages that contradict each other .   In simple terms, then,  a double-bind is a Catch-22.

In this post, I draw on Bateson’s  double bind theory to get some insights into Catch-22 situations in organisations.

Double bind theory

The basic elements of a double bind situation are as follows:

  1. Two or more individuals, one of whom is a victim – i.e. the individual who experiences the dilemma described below.
  2. A primary rule which keeps the victim fearful of the consequences of doing (or not doing) something.  This rule typically takes the form , “If you do x then you will be punished” or “If you do not do x then you will be punished. “
  3. A secondary rule that is in conflict with the primary rule, but at more abstract level. This rule, which is usually implicit, typically takes the form, “Do not question the rationale behind x.”
  4. A tertiary rule that prevents the victim from escaping from the situation.
  5. Repeated experiences of (1) and (2)

A simple example (quoted from this article) serves to illustrate the above in a real- life situation:

One example of double bind communication is a mother giving her child the message: “Be spontaneous” If the child acts spontaneously, he is not acting spontaneously because he is following his mother’s direction. It’s a no-win situation for the child. If a child is subjected to this kind of communication over a long period of time, it’s easy to see how he could become confused.

Here the injunction to “Be spontaneous” is contradicted by the more implicit rule that “one cannot be spontaneous on demand.”  It is important to note that the primary and secondary (implicit) rules are at different logical levels  –  the first is about an action, whereas the second is about the nature of all such actions. This is typical of a double bind situation.

The paradoxical aspects of double binds can sometimes be useful as they can lead to creative solutions arising from the victim “stepping outside the situation”. The following example from Bateson’s paper illustrates the point:

The Zen Master attempts to bring about enlightenment in his pupil in various ways. One of the things he does is to hold a stick over the pupil’s head and say fiercely, “If you say this stick is real, I will strike you with it. If you say this stick is not real, I will strike you with it. If you don’t say anything, I will strike you with it.”… The Zen pupil might reach up and take the stick away from the Master–who might accept this response.

This is an important point which we’ll return to towards the end of  this piece.

Double binds in organisations

Double bind situations are ubiquitous in organisations.   I’ll illustrate this by drawing on a couple of examples I have written about earlier on this blog.

The paradox of learning organisations

This section draws on a post I wrote while ago. In the introduction to that post I stated that:

The term learning organisation refers to an organisation that continually modifies its processes  based on observation and experience, thus adapting to changes in its internal and external environment.   Ever since Peter Senge coined the term in his book, The Fifth Discipline, assorted consultants and academics have been telling us that although a  learning  organisation is an utopian ideal, it is one worth striving for.  The reality, however,  is that most organisations that undertake the journey actually end up in a place far removed  from this ideal. Among other things, the journey may expose managerial hypocrisies that contradict the very notion of a learning organisation.

Starkly put, the problem arises from the fact that in a true learning organisation, employees will  inevitably start to question things that management would rather they didn’t.  Consider the following story, drawn from this paper on which the post is based:

…a multinational company intending to develop itself as a learning organization ran programmes to encourage managers to challenge received wisdom and to take an inquiring approach. Later, one participant attended an awayday, where the managing director of his division circulated among staff over dinner. The participant raised a question about the approach the MD had taken on a particular project; with hindsight, had that been the best strategy? `That was the way I did it’, said the MD. `But do you think there was a better way?’, asked the participant. `I don’t think you heard me’, replied the MD. `That was the way I did it’. `That I heard’, continued the participant, `but might there have been a better way?’. The MD fixed his gaze on the participants’ lapel badge, then looked him in the eye, saying coldly, `I will remember your name’, before walking away.

Of course,  a certain kind of learning  occurred here:  the employee learnt that certain questions were taboo, in stark contrast to the openness that was being preached from the organisational pulpit.  The double bind here is evident:  feel free to question and challenge everything…except what management deems to be out of bounds.  The takeaway for employees is that, despite all the rhetoric of organisational learning, certain things should not  be challenged. I think it is safe to say that this was probably not the kind of learning that was intended by those who initiated the program.

The paradoxes of change

In a post on the  paradoxes of organizational change, I wrote that:

An underappreciated facet of organizational change is that it is inherently paradoxical. For example, although it is well known that such changes inevitably have unintended consequences that are harmful, most organisations continue to implement change initiatives in a manner that assumes  complete controllability with the certainty of achieving solely beneficial outcomes.

As pointed out in this paper, there are three types of paradoxes that can arise when an organisation is restructured. The first is that during the transition, people are caught between the demands of their old and new roles. This is exacerbated by the fact that transition periods are often much longer expected. This paradox of performing in turn leads to a paradox of belonging – people become uncertain about where their loyalties (ought to) lie.

Finally, there is a paradox of organising, which refers to the gap between the rhetoric and reality of change. The paper mentioned above has a couple of nice examples. One study described how,

friendly banter in meetings and formal documentation [promoted] front-stage harmony, while more intimate conversations and unit meetings [intensified] backstage conflict.”  Another spoke of a situation in which, “…change efforts aimed at increasing employee participation [can highlight] conflicting practices of empowerment and control. In particular, the rhetoric of participation may contradict engrained organizational practices such as limited access to information and hierarchical authority for decision making…

Indeed, the gap between the intent and actuality of change initiatives make double binds inevitable.

Discussion

I suspect the situations described above will be familiar to people working in a corporate environment. The question is what can one do if one is on the receiving end of such a Catch 22?

The main thing is to realise that a double-bind arises because one perceives the situation to be so. That is, the person experiencing the situation has chosen to interpret it  as a double bind. To be sure, there are usually factors that influence the choice – things such as job security, for example – but the fact is that it is a choice that can be changed if one sees things in a different light. Escaping the double bind is then a “simple” matter of reframing the situation.

Here is where the notion of mindfulness is particularly relevant. In brief, mindfulness is “the intentional, accepting and non-judgemental focus of one’s attention on the emotions, thoughts and sensations occurring in the present moment.”  As the Zen pupil who takes the stick away from the Master, a calm non-judgemental appraisal of a double-bind situation might reveal possible courses of action that had been obscured because of one’s fears. Indeed, the realization that one has more choices than one thinks is in itself a liberating discovery.

It is important to emphasise that the actual course of action that one selects in the end matters less than the realisation that one’s reactions to such situations is largely under one’s own control.

In closing – reframe it!

Organisational life is rife with Catch 22s. Most of us cannot avoid being caught up in them, but we can choose how we react to them. This is largely a matter of reframing them in ways that open up new avenues for action, a point that brings to mind this paragraph from Catch-22 (the book):

“Why don’t you use some sense and try to be more like me? You might live to be a hundred and seven, too.”

“Because it’s better to die on one’s feet than live on one’s knees,” Nately retorted with triumphant and lofty conviction. “I guess you’ve heard that saying before.”

“Yes, I certainly have,” mused the treacherous old man, smiling again. “But I’m afraid you have it backward. It is better to live on one’s feet than die on one’s knees. That is the way the saying goes.”

“Are you sure?” Nately asked with sober confusion. “It seems to make more sense my way.”

“No, it makes more sense my way. Ask your friends.”

And that, I reckon, is as brilliant an example of reframing as I have ever come across.

Written by K

June 22, 2015 at 9:54 pm

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