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The Managerial vs Complexity Ontologies. Philosophical Assumptions Matter in Business Success.

<strong>The Managerial vs Complexity Ontologies.</strong> Philosophical Assumptions Matter in Business Success.

In my writing for business I avoid the word “philosophy” whenever possible. Of course, some philosophers reveal brilliant insights in their work and decades ago I quite enjoyed a couple of Kirkegaard books then more recently discovered the writings of Edgar Morin and, especially, Isaiah Berlin.

So why avoid the term? No other term puts business readers to sleep faster than the mention of “philosophy.” In part, it is taken to imply obsessing ad infinitum over ideas of little matter. After all, those doing business often perceive action as more important than understanding. While there IS philosophical writing oriented around action, I understand the fear of abstractly boring philosophical discussions.

So I was surprised when my lawyer brother, having read early parts of my book about complexity and business, asked me whether complexity is a science or a philosophy. We discussed it a bit and my book is now circulating among publishers and still omits snore inducing discussions of philosophy.

Unfortunately, questions of philosophy in business matter a great deal as those doing business act according to highly limiting assumptions  — or a philosophy — about how the world works. And they don’t realize they’ve even made this compromise.

Philosophies and Psychology

The question returned recently while reading Toward a Process Approach in Psychology by Paul van Geert and Naomi de Ruiter. This excellent academic book looks at the study of psychology contrasting two “ontologies” — one based on traditional reductionist science (the “substance ontology”) and one based on complexity (the “process ontology”). Despite the obscurity of the word ontology among the business community, it is useful (if frustrating). Essentially, an ontology refers to a set of underlying assumptions about the parts of a field, how they relate, and what happens in practice. In this way, an ontology guides both approaches to study and approaches to action in a field.

The book noted above looks at these two philosophies or ontologies using self-esteem as an example.

  • Substance Ontology has firm assumptions about self-esteem. First, it is assumed to be a specific, inherent quality within each human — as in “how much self-esteem does X have?” Second, it is assumed the quality can be measured through psychological testing. Third, it is assumed that self-esteem is stable (essentially fixed) across time and situations. Finally, it is assumed that averages of “self-esteem” are meaningful.
  • The Process Ontology arrives at a very different understanding. It suggests that we only know self-esteem through behaviors and that these are both situationally dependent and vary across even small intervals of time. Further, these behaviors come when whatever self-regard we might consider self-esteem interacts with other elements of an individual. Even further, they depend on relationships beyond that individual. None of this is found in the Substance Ontology view of the world.

In truth, laying both these out it seems absurd to expect that there is a detached, identifiable quality for every human which we can call “self-esteem” and it’s shocking to think that psychologists believe that they are being scientific by believing this. But that is a reality in psychology.

De Ruiter, who wrote the chapters on self-esteem, does not recommend rejecting substance ontology out-of-hand as she sees value to society from its study. However, she also notes it is of little help to individuals. I concur. A practicing psychologist friend of mine years ago became very frustrated by how academic psychology was lost searching for universal absolutes. As a result, academic psychological work no longer offered insight he could use when helping an individual sitting in a nearby chair. This thought had added significance since he had founded and also led one of the university psychology programs in Oregon.

A Managerial “Ontology” Dominates the Study and Practice of Business

Business today reminds me of substance ontology work. Businesses use data, averages, and statistics to remove every significant specific about individual businesses. The claim is that by finding what is common among all businesses something has been found which is “universal.” This is a giant leap of assumption. Especially since success depends heavily on the specific details of each individual business.

We must also note that while a substance ontology dominates study in psychology, researchers take on this ontology without realizing it. If you will, the assumptions are in the water of their training but never explicitly discussed.

This is also true in business. Anyone doing business must appear to embrace a managerial ontology to work with people or to get funding. Because its assumptions are cultural expectations, few know they have chosen a specific philosophy. That we are unaware is made more powerful because the culture of business is one where everyone makes the same assumptions. Worse, apart from those with an excellent track record of highly significant success, anyone refusing to “buy in” to the managerial ontology is shunned. Shunning is, of course, the common sanction or control measure cultures use to try to hem in those who violate rules (no matter how implied and silent).

The “managerial ontology,” then, dominates business without anyone realizing it also limits how much they can understand about business reality or that it limits the arena within which they can act.

Hidden Assumptions of Managerialism vs What Complexity Shows 

Let’s sample a few assumptions from the managerial ontology and compare that with what complexity (and a brief bit of critical thinking) suggest is true.

Similar to psychology, as demonstrated quite clearly in the above book, critical thinking quickly challenges the assumptions of a managerial ontology. Those challenges are supported by the study of business from a complexity framework — or ontology. Surprising, in both business and in psychology, while tremendously smart people work in both fields, few of them ever do this critical thinking and even fewer understand complexity.

“One Ontology to Rule Them All”? Not In Business Practice. 

The world in which we live and do business is far too complex for a single human crafted ontology, philosophy, or world view to usefully guide all our actions.

Managerialism has powerful value as we do business. Yet, managerialism is not enough for success. To use one of the above examples, there ARE times when optimizing the parts is critical. This is, after all, what we do when we fix an automotive engine — where fixing each part leads the engine to run optimally. Yet business is not an engine. So while some parts of doing business might be tuned up by tweaking the parts, if we seek our best whole result all parts of doing business must compromise or the whole cannot be optimal.

In business, then, the complexity ontology and managerial ontology must live side-by-side. And I DO MEAN side-by-side.

Too much work around complexity (especially in consultancies) attempts to force the complex into the old wine-skin of managerialism. As is typical of new wine into old skins, the brittle skins must break as the new wine continues to ferment. Too much so-called “complex thinking” is so limited and restricted that it becomes no more than managerialism with a patina of complexity. (Fortunately, thinkers like JP Castlin, Rory Sutherland, and Rick Nason have refused to do this.)

Is Complexity a Science or Philosophy?

The answer to my brother’s question about whether complexity is science or philosophy is that it is some of both.

  • Complexity science is a specific scientific study looking at how patterns emerge from masses of interacting parts whose behaviors, interactions, and adaptations appear chaotic and even accidental.
  • To understand complexity science, though, we must accept that coherent whole patterns emerge from masses of interacting parts. In other words, we have to shift our world view away from traditional reductionist science.

Thus, for anyone in business to engage with complexity, we must find ways to work without the managerial mindset dominating — we must learn to work according to a second ontology or set of assumption about how the world works.

Free market theory is an example of a commonly accepted idea which depends on a complex ontology. The free market assumption is that good economic whole results emerge out of the chaotic actions of individuals, businesses, economic trends, investors, government, society, and more.

Intriguingly, though, economic training relies on reductionist scientific assumptions which conflict with complexity. So while economists embrace free market theory many economists also struggle to realize there is far more to learn from the complexity based world view. They struggle, for example, to see how similar self-organization to the free market is at the core of modern democracy and how families self-organize society,

Making matters worse, economists named their focus “the economy.” But naming is a funny thing. This name reduces a vast field of action into merely one “thing” (a noun). It reminds me of how substance psychologists named “self-esteem” in order to treat it as a thing. Just as there is no universal thing such as self-esteem, the economy is also not a thing but an active result of a huge mass of actions.

In other words, there is society and it includes individuals, governments, businesses, associations, ideas, and much more. Self-organization in the economy involves all of these with even government an interacting part with businesses. What we hope emerges from this chaos is the economic well-being of society — that a useful self-organization emerges. (I highly recommend investigating the thinking of economists like Brian Arthur, David Collander, and John Miller who are well versed in complexity.)

A Complex Leader with a Capable Managerial Assistant

It is useful to compare the managerial and the complex with Iain McGilchrist’s view of the two hemispheres of the brain. In his view, the left hemisphere abstracts the world into details and parts in order to manipulate the parts (aka managerialism) while the right hemisphere pays attention to the whole result of what is around us (aka complexity).

Who should be in charge? The complex ontology.

One of the distinctions between the hemispheres is that the right hemisphere seems to be able to use what the left hemisphere knows, but the left hemisphere doesn’t seem capable of taking into account what the right hemisphere knows.

Thus, managerialism is so limited it cannot be allowed to lead as it is impossible to perceive complexity at work from within a managerial mindset. Yet, it is entirely reasonable for those with a complexity mindset to realize where managerialism might be highly effective. While businesses must rely on both ontologies, complexity must lead with the managerial an able and excellent assistant.

Philosophy lesson complete. Until next time, be well.

(Iain McGilcrhist quote from this podcast transcript.)

Thanks for JP Castlin and Timothy C. Ely for their comments on draft versions.

©2024 Doug Garnett — All Rights Reserved


Through my company, Protonik LLC, I consult with companies as they design and bring to market new and innovative products. I am writing a book exploring the value of complexity science for driving business success. Protonik also produces marketing materials including documentaries, websites, and blogs. As an adjunct instructor at Portland State University I teach marketing, consumer behavior, and advertising.

You can read more about these services and my unusual background (math, aerospace, supercomputers, consumer goods & national TV ads) at www.Protonik.net

Categories:   Business and Strategy, Complexity in Business

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