{"id":1250,"date":"2021-05-11T08:04:53","date_gmt":"2021-05-11T08:04:53","guid":{"rendered":"http:\/\/janbosch.com\/blog\/?p=1250"},"modified":"2021-05-11T08:04:59","modified_gmt":"2021-05-11T08:04:59","slug":"rule-7-think-holistic","status":"publish","type":"post","link":"https:\/\/janbosch.com\/blog\/index.php\/2021\/05\/11\/rule-7-think-holistic\/","title":{"rendered":"Rule 7: Think holistic"},"content":{"rendered":"\n
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Image by lifestylehack from Pixabay<\/figcaption><\/figure>\n\n\n\n

The traditional way of organizing companies was in functional departments where people with the same skillset and education could focus on specific challenges, solve these and then hand over the result to the department that would integrate all the parts from all the functions into one working system. The perceived advantage was that each expert could just focus on his or her domain and not bother about anything else.<\/p>\n\n\n\n

In practice, that model didn\u2019t work very well and the inter-team \ncoordination cost easily skyrocketed as each function made all kinds of \nassumptions about the other parts of the system that generally didn\u2019t \nprove to be accurate as these assumptions were based on historical data.\n As the saying goes, assumption is the mother of all screw-ups.<\/p>\n\n\n\n

As individuals, we tend to take the same approach. Whenever we need \nto solve a problem, we look for ways to reduce it to the bare essentials\n and ignore everything we don\u2019t think is relevant. The challenge is that\n most of us tend to ignore more than what\u2019s actually relevant.<\/p>\n\n\n\n

This is problematic for at least two reasons. First, in a digital \nworld, the pace of change is much faster than before and continues to \naccelerate. As a consequence, things you earlier could assume to be \nstable are now likely to shift while you\u2019re focusing on the challenge at\n hand. The risk is that by the time you\u2019ve solved the problem with a \nbeautiful, elegant solution, the problem itself has shifted and the \nsolution doesn\u2019t fit the context anymore as interfaces it assumes are no\n longer present.<\/p>\n\n\n\n

A beautiful example in automotive is the CD player. For years, \nautomotive companies were looking for reliable solutions to store \nseveral CDs in the infotainment system to give drivers access to as much\n music as possible. Just when good solutions were becoming available, \nthe industry shifted to Bluetooth access and mobile-phone-based \nstreaming solutions. We now all listen to Spotify while driving instead \nof juggling CDs.<\/p>\n\n\n\n

Second, we tend to underestimate second-order effects. Whenever we \ndevelop solutions, we tend to focus on the particular outcome we\u2019re \nlooking to accomplish, ie the first-order effect. However, especially in\n complex systems, the effect of actions isn\u2019t easy to predict and the \noutcome may easily be the opposite of what was intended.<\/p>\n\n\n\n

The world is awash with examples of unintended consequences. Most \nhistorians consider the Treaty of Versailles at the end of World War I \nas the root cause for World War II, even if it was intended to ensure \nGermany was curtailed and wouldn\u2019t be able to wage war. Another \nillustrative example is the Four Pests campaign by Mao in China where \nthe population was encouraged to eradicate sparrows as these ate seeds \nafter planting. The consequence was plagues of locusts causing entire \ncrops to be lost. Both of these examples led to millions of deaths.<\/p>\n\n\n\n

A controversial current example is the approach governments take to \ncombat Covid-19. With entire societies shut down and all medical staff \nfocused on treating corona patients, many wonder what the secondary \neffects are in terms of avoidable deaths from diseases left untreated, \nincluding cancer, as well as poor mental health and increased suicide \nrates due to the lack of human contact. Could it be that the deaths and \ndeteriorated quality of life due to the secondary effects exceed the \nlives saved because of shutdowns and focusing the entire medical \nestablishment on Covid?<\/p>\n\n\n\n

The best approach to deal with these issues is, I believe, threefold,\n ie scope, humility and experimentation. First, whenever taking on a \nchallenge, the first step has to be to ensure that you\u2019re not \nunintentionally scoping the problem down to too narrow a focus. As \nEinstein famously said: you should make everything as simple as possible\n but not simpler. In most cases, this means including more in your scope\n than what you traditionally would have done as everything changes so \nquickly.<\/p>\n\n\n\n

Second, we need to exercise humility. Rather than assuming we know, \nit\u2019s wise to accept that most of the time, we actually don\u2019t know \nanything. This is the case as there\u2019s much more to know than what our \npoor brains can encompass and because many things simply are unknowable \nuntil they happen. Look no further than the stock market: even people \nwho have worked in the industry for decades and spend all their time in \nthe market are unable to beat the market in the long run. Of course, \nthere are exceptions, like Warren Buffet, but these are exceptions that \nconfirm the rule. The Dunning-Kruger effect not only shows that people \nnew to a field tend to overestimate their skills but also that true \nexperts know how little they know about their field.<\/p>\n\n\n\n

Third, rather than taking decisive action in the face of uncertainty,\n the better approach is to figure out how to run experiments to test the\n effect of certain actions. One illustration is the Peltzman effect \nwhere, as an example, regulation to increase safety in traffic tends to \ncause traffic participants to take more risks as the perceived safety \nincreases. Many laws and regulations don\u2019t have the effect intended by \nlawmakers but rather are neutral or negative, due to secondary effects. \nIn many cases, the only way to gain an understanding of the consequences\n of an action is to run the experiment, learn from it and then decide on\n the next steps.<\/p>\n\n\n\n

In a digital world, the pace of change is fast and increasing. As a consequence, factors that earlier could be considered sufficiently stable to be ignored when addressing a challenge need to be incorporated in the scope. Therefore, it\u2019s important to think holistically, to accept that there\u2019s much that we don\u2019t know or even can\u2019t know and to experiment where possible to understand whether the intended effects are indeed achieved and negative consequences avoided. The road to hell is paved with good intentions, but I don\u2019t think any of us wants to end up there.<\/p>\n\n\n\n

To get more insights earlier, sign up for my newsletter at <\/em>jan@janbosch.com<\/em><\/a> or follow me on<\/em> janbosch.com\/blog<\/em><\/a>, LinkedIn (<\/em>linkedin.com\/in\/janbosch<\/em><\/a>), Medium<\/a> or Twitter (<\/em>@JanBosch<\/em><\/a>).<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The traditional way of organizing companies was in functional departments where people with the same skillset and education could focus on specific challenges, solve these and then hand over the result to the department that would integrate all the parts from all the functions into one working system. The perceived advantage was that each expert … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"generate_page_header":"","footnotes":""},"categories":[5,8,10],"tags":[],"_links":{"self":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1250"}],"collection":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=1250"}],"version-history":[{"count":1,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1250\/revisions"}],"predecessor-version":[{"id":1252,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1250\/revisions\/1252"}],"wp:attachment":[{"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=1250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=1250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/janbosch.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=1250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}