Effectual Reasoning – A piece of Wisdom for both Startups and Life

As we all know, lately there is a lot of hype – “fuzz an buzz” – related to the subject of entrepreneurship. Damn, nowadays it seems like everybody is working with or starting their own startups. Me being a notorious Devil’s advocate and a supporter of long-term thinking, have a somewhat of a critical standpoint toward this phonomenon of just striking gold and doing it fast. In my opinion, beautiful visions and mision are worth far more than their weight in gold.

The other day I was discussing with a very inspiring professor of Entrepreneurship. To challenge him and this academical subject, I decided to ask the professor for the most intresting and appealing idea wihtin his field that he have come accross. My expectations was to yet again to see emperor’s new clothes. Though as it turned out, I couldn’t have been more wrong.

So what did the professor give me? It was a paper on the philosophy of “Effectual reasoning”.

What is Effectual Reasoning?

Effectual vs. Causal Thinking

As the word “effectual” is inverse of “causal” and originates from the science of entrepreneurship. Causal rationality, or predictive reasoning, “begins with a pre-determined goal and a given set of means, and seeks to identify the optimal – fastest, cheapest, most efficient, etc. – alternative to achieve the given goal” and is often applied in strategic thinking (Sarasvathy, 2001). Thus the underlying logic is that the future is both predictable and controllable.

“Causal thinkers are like great generals seeking to conquer fertile lands (Genghis Khan conquering two thirds of the known world)“

 

However, effectual reasoning differs in the sense that it does not begin with a specific goal and that the future is unpredictable, but controllable and still to be made (Sarasvathy, 2001). According to Sarasvathy (2001) effectual reasoning “begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with”. Thereby effectual reasoning adjusts and adapts goals according to the surrounding contingencies and unfolding unexpected events.

“Effectual thinkers are like explorers setting out on voyages into uncharted waters (Columbus discovering the new world)”

It is clear that effectual reasoning is “inherently creative” philosophical approach that breaths execution and thus demands something more beyond the regular and domains specific skills and abilities, such as imagination; spontaneity, risk-taking and salesmanship (Sarasvathy, 2001). These features can be compiled into five conceptual principles.

The Five priciples of Effectual Reasoning

The first principle goes by the name “bird-in-hand” and refers to the process where the individual inspect their own means. In general, the means are divided into three categories that involves the audit of: “who they are” – their abilities and traits; “what they know” – experiences and knowledge; and, “whom they know” – social and professional networks (Effectuation, 2011; Sarasvathy, 2001).

The second principle is “affordable loss” which essentially is an evaluation of the potential downside risk for the overall project, if the worst case scenario would occur (Effectuation, 2011). The idea with the affordable loss principle is that it pre-established. That is how much resources is allowed and affordable to lose for a given project. If the pre-determined limit is reached, then the project is automatically rejected.

The third principle is called “lemonade” and revolves around the element of surprise (Effectuation, 2011). This means that contingencies and surprises are the norm for all projects and therefore ought to be welcomed and leveraged, instead of perceived as a misfortune.

The fourth principle is named “patchwork quilt” principle and is about building and establishing strategic partnerships (Effectuation, 2011). Thus, this principle encompasses trust and how to leverage this through collaboration.

The final principle is “pilot-in-the-plane” and is the combination of the previous four principles into an entity that forms “the belief that the future is neither found nor predicted, but rather made” (Effectuation, 2011). In a nutshell, the effectuation as philosophy is about iterating and leveraging competences and means in the most effective and adaptive way.

Thus, the priciples can be summarised in the following picture:

FivePriciples

Serendipities – The Core of Effectual Reasoning

The element of surprise is generally perceived as an undesirable and avoided state for any human-being and situation. This Despite the overlooked and powerful opportunities that serendipities potentially can provide with. A serendipity is defined by oxford dictionary as “the occurrence and development of events by chance in a happy or beneficial way”. In other words, serendipities is an actual word for unpredictable occurances and situations that provide with the most insightful knowledge, wisdom, and happiness for us all. Thus, serendipities are the core of effectual reasoning. (To read more about it, check this blog post).

“Serendipities are the occurrence and development of events by chance in a happy or beneficial way”.

On that note, embrace surprises and unpredictive event. These might be the things/opportunities you are actually looking for. And apply the philosophy of effectual reason to make and form your future. Do it. Do it now.

/Drill

 

References:

Effectuation, 2011. Principles of Effectuation. [Online] Available at: http://www.effectuation.org

Sarasvathy, S.D., 2001. What makes entrepreneurs entrepreneurial?.

 

Time Mangement –  A Misunderstood Art

Running-Sand-Through-Hour-Glass

The general trend in wester civilization and society for the past 200 years is to constantly become more productive. In other words, get more things done in the same amount of time (or same amount of work in less time). This idealization or worship has lead to a vicious circle of increasing stress and loading that often appear unmanageable.

Nothing new. We all know this.

In this blogg post I will introduce the best practices that i have come accross in the aspect of time management. The main reason why I consider this as a such an important topic is not to enable you to do more things, but to have more time for what really is important: to spend time with our loved ones. 

Procastination – The Thief of Time 

I am a procastinator. I said it and I am now officially out of the closet. For you who do not know what a procastinator is, I have listed an inofficial definition below:

“A procrastinator is a person who delays or puts things off — like work, chores, or other actions — that should be done in a timely manner. A procrastinator is likely to leave all the Christmas shopping until December 24th. Procrastinator comes from the Latin verb procrastinare, which means deferred until tomorrow.”

Thus a procrastinator can be summarized into the following picture:

Many procrastinations have the tendency of exploring the “weird” and fascinating world of YouTube. I was no exception. During one of mine adventures in the YouTube-world, of course a day before an important project dead-line (student syndrome), I found a video lecture held by Randy Pausch under the title: Time Management. Little did I know that this seemingly harmless “procrastination-webb-click” would result in a suicide for my inner procrastinating-self.

Randy Pausch – The Guru of Time Management

Randy is by far one of the most inspiring human-beings I know. At first glance Randy appears as geeky engineer with great sense of humor. However, what makes Randy so extraordinary is because he is a man of his word. Literally. Randy has only months left to live as a result of a severe cancer. Despite this devastating reality, he is holding lectures and doing his work. Why? Why on earth is he not spending his last amount of time with his family instead? Well, according to him this is possible because he manages his time so well.

So what are the methods and practices that Randy Pausch uses? Here is a few:

  1. Always plan – The most important thing about time management is planning. Without one you will fail every single time. Randy said it so well with “not having a plan is planning to fail”.

    “Not having a plan is planning to fail”

  2. Covey’s Quadrant – This framework is all about priotising the things you need to do (see figure below). This framework super useful and has helped me alot! The idea is that the matrix have rows of: “important” and “not important”. While the columns have: “due soon” and “not due soon”. By putting all the things you will do in this framework, you will see what is the thing you need to work on right now and what is redundant. 2717821786_29c33f7c87
  3. Empty email inbox – When was the last time you had an empty inbox? If your answer is ” I don’t remeber” Oh boy you have a long way to go. In the end of the day always have an empty inbox, learn how to put your email into folders. NOTE your email should never be your todo – list!
  4. One drawer policy – Buy a box where you put all your important papers ALWAYS. This will save you a lot of headaches and time.
  5. Multiple desktop screens – Once you have them you will never give up them.
  6. Keep a time diary – Keep a diary on how you spend your every quater of your day. By doing this you get hard data on how you really spend your time.
  7. Pacts are golden – When somebody asks for your time, always make a pact. For example, if your friend asks your help in moving stuff, say that you will come if he can get 3 more guys to help. Another classic is that you give them only 3 hours, no less or no more.
  8. Eat the ugliest frog first – Do the most burdensome task first thing in the morning. So simple, but it will make you so much more productive.
  9. Limits and Deadlines – The people that have limited time always get so much more done. A great example of this is students who have families, their time is limited and they adapt according to it. Therefore, always use deadlines! They are a means to an end to make you achieve more with less.

Here is the transcript of Randy’s presentation.

The Power of Habits

procrastination is a habit and habits are powerful. Professor Barbra Oakley (creator of the most viewed MOOC on Coursera – Learning about Learning) acknowledges this fact and has observed the process of making and establishing habits. According to her the use of pomodoro technique is an effective way to develop a productive or “good” habit. The name pomodoro origins from italian word for “tomato”, though the actual technique has very little to do with the fruit (recently I learned that tomato is not a vegetable!). Instead it uses a timer. The fundamental idea is that you set the timer for e.g. 15 – 25 min and start to work on your given project. When the time is up, you take a 5 min break before repeating this cycle. After 4 cycles take a longer break of 30 min and then start the procedure all over again. It is simple, but super effective! There are many pomodoro applications available, I myself uses one on my mobile.
It is worth mentioning that this method focuses more on learning new things. Thus I will make a more extensive post later on this specific subject. 

The Illusion of  Time Management

There is a clear misconception regarding time management that the concept is resulting in more time. This is both wrong and naive. As Laura Vanderkam put it in her TED talk: “everybody got 24 hours (or 168 hours a week), no more or less“. This means that cultural and pop icons such as Beethoven and Roger Federer are in the same position as you – we have the same 24 hours a day. So what does time management provide us with then? Simply put, it allows to make more of what we already have, but does not increase our original resource – the time. However, istead she points out that time is highly elastic. What this means is that if we truly must and need to do thing, we somehow find the time to do so. For example, stressful people who seem to have no extra time availabe, will arrange it, if it’s truly urgent. A very intresting view of things. Laura Vanderkam gives us also some good news: we have more than enough time. It is a mere illusion that we don’t have it.

“Time is highly elastic.”

Essentially this elastic nature of time comes from the fundamental priciple of all time management:

“I don’t have time” = It’s not a priority

So when somebody next time tells you that she don’t have time, then in other words you are not that person’s priority. It is the harsh and raw truth. No need to cry over that. Intrestingly, people alos make time literally elastic. A study conducted shows that people often exaggerate their amount working hours by about 5 to 10 percent.

Not surprising.

But what really is surprising is that people who states that they work over 70 hours had it wrong by 25 hours. Same with those who stated they work 65–74 hours were off by close to 20 hours. Likewise, those who stated 55–64 hours were still about 10 hours north of the truth. You get the trend.

Therefore when working with time management, there are many illusion and biases that distort our understanding of the reality. Hence, to truly improve our use of time, we must become 110% objective and true to ourselves. Break the illusion!

Efficient vs. Effective

Mårten Mickos is the author of the great blog – School of Herring. In one of his posts he defines the distinction between efficient and effective. At first glance both concepts appear the same, so what is the difference then? Stunningly it is like day and night.

Efficient can be compared with the physics metric of effect, which is defined as the amount of work done over time. Essentially this means that the more efficient one are the more work you do. Effective on the other hand focuses more on doing the right things.

Metaphorically speaking, this could be compared with a wall and a wrecking ball. The job is to break the wall over 1 day. If one were efficient one would use 100 random swings to break the wall. If one were instead effective, then she would use say seven correctly focused swings to break the very same wall. However, the downside with the latter alternative is that it probably will require some time-consuming calculations. The point is there is two ways of doing the work within the given timeframe. The quote below is another illustration of this idea:

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

―Abraham Lincoln

Regardless the point is clear. There is a huge difference between efficient and effective.

Slow is the New Fast

I believe that doing things effectively is the ultimate core of time management, not doing things efficiently. The reason for me to say this is that the outcome of a good time management may result in higher efficiency (being efficient), but it is certainly not generating/leveraging the same value opportunities as being effective. Seth Godin makes a similar interesting distinction between the concepts of “long work” (efficient) and “hard work” (effective) which I find very compelling and close to the truth of what great time management actually is.

“I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it.”

―Bill Gates

Being effective means sometimes to be slow (or appear lazy as Bill Gates put it) and taking small baby steps before you can make a run. This means that temporaily you may be frusrated at the pace of progress, but in the long run it will pay-off. Big time. Bill Gatesunderstood the importance of being effective and it payed him off. Also doing things “slower” than other gives you new insights that other efficient people may oversee or miss. For instance, it can be something concrete like a simple and beautiful solution, or it can take form in new valuable intangible assets.

“What new intangible assets?” you may ask. Let me tell a true story that I came across the other day. It is about a NBA basketball player called Isaiah Thomas. He is currently one of the greatest in the game, however the road to greatness has not come easily. Hard facts speak for themselves, Isaiah Tomas is 5ft 9 in (1.75 m) in professional league where the average player is listed at 6 ft 7 in (2.01 m). This obvious and clear disadvantage made Thomas always underrated as a player. But made him more dedicated and more effective when developing his game. As a result, he “slowly” developed new intangible talents, such his outstanding cool mentality, which makes him into the winner he is today. Thus, although he may physically have the smallest heart in the league, he clearly proves that his heart is greater than anyone else’s on the basketball court.

Slow is the new Fast. Period.

Rome wasn’t Built in a Day

Rome wasn’t buil in a day. This is especially true for huge project, such as Sagrada Família. Despite this I am convinced that almost all building project take to much time and consume to much financial resources. Is this true for all bulding projects?

No.

Randy Pausch had gave an amazing example. The whole original Disneyland park was built in just 366 days. Amazing. How did they do it? This was Walt Disney’s blunt reply:

“We used every one of them.”

―Walt Disney

This is being effective in a nutshell. Not that one can utilize ones man-power to the fullest extent, but to put all the different multi-dimensional resources to its best use. This involves having the perfect preparation and strategical plan (remeber, slow is the new fast) and to prefectly execute it. Therefore the conclusion is that being effective is a multi-dimensional process, while efficient is a one-dimensonal view.

My advice is to widen that view of yours! Become more effective rather than efficient! Remeber that efficient people are often too obsessed with the one-dimensional perspective and therefore have a tendency to drown in work and become burnout. Being effective is the key to a successful time management take is slower in order to become faster. While being efficient isn’t a bad thing, I share a word of caution: Rome wasn’t built in a day, but it sure burnt down in one.

nero-rome

Time is the only luxury we do not have

Finally, the key take from this post is that time is a precious commodity, which we need to defend with all our might and power. After all “we might have less of it than we think”.

Rest in peace Randy Pausch (1960-2008)

/Drill

DIKW Hierarchy – Understanding the Concept of Wisdom

A fundamental corner stone for all information and knowledge literature is the data-information-knowledge-wisdom (DIKW) hierarchy model. A beloved child has many names, thus the hierarchy is also called: information hierarchy, knowledge pyramid and wisdom hierarchy. Essentially this model involves four entities of: data, information, knowledge and wisdom. These are ordered in a hierarchical structure (Figure above) with respect to one another in order to explain the relationship and transformation process between these various entities (Rowley, 2007). The idea with a hierarchical structure is that the higher types of entities “includes the categories that fall below it” (Ackhoff, 1989).

The figure in the beginning of the post is an illustration of the DIKW pyramid, which includes vectors that indicates the characteristics in the aspect of meaning and value (Rowley, 2007).

According to Aven (2012) the origins of the DIKW hierarchy in its current state and form can be traced back to the 80s, however, the first appearance of the model was registered in T.S. Eliot’s poem “The Rock” in 1934 with the following citation:

“Where is the life we have lost in living?

Where is the wisdom we have lost in knowledge?

Where is the knowledge we have lost in the information?”

Data

The lowest element of the DIKW pyramid is data. Data is in its purest form is plain symbols, such as numbers or letters, and is per definition unorganized or unprocessed and lacks whatsoever any meaning or value (Rowley, 2007). Therefore, data can be seen as observable and measurable properties that are represented in symbols.

Information

Information is defined as data that is given a context or data that have been organized into a structure (Rowley, 2007). The fundamental principle is that a refining process has been applied to the data, which now evolves to information that possesses a meaningful purpose or value.

Knowledge

Knowledge as a concept is far more complex to comprehend than the other lower elements. Aven (2012) defines knowledge as structured and organized information as a result from cognitive processing and validation. Other definitions go into similar abstractions that knowledge is generated as a mix of both data and information, where the human contribution of experiences and rules increases over time. An oversimplified suggestion is that knowledge answers to the “how” questions (Cooper, 2014). Despite the differences, all definitions agree that knowledge can be divided into two categories: tacit and explicit knowledge. Where explicit knowledge can be transferred and documented, while tacit knowledge cannot because it is part of an individual’s human mind (Bocij, Chaffey & Hickie, 2003). All in all, Rowley (2007) summarises this well that all definitions of knowledge combine a mix of information, understanding, capability, experience, skills and values.

Wisdom

Wisdom is arguably the most elusive of all these four elements and concepts. According to Ackoff (1989) wisdom is the only element that concerns with the future, while the other elements deal with the past. A similar view is shared with Awad and Ghaziri (2004) who suggest that “Wisdom is the highest level of abstraction, with vision foresight and the ability to see beyond the horizon”. Rowley (2007) elaborates the definition even further and concludes that wisdom involves moral and ethics, such as human intuition, understanding, interpretation and actions. Cooper (2014) likewise defines wisdom as “an extrapolative process which includes knowledge in an ethical and moral framework”. Another definition by Perwitt (2002) presents wisdom as a double loop of learning in reflection to the three earlier element stages, though an integration of both mind and soul are required in order to obtain wisdom. Therefore, wisdom has a clear element of spirituality embedded to it.

On that note….

Finally, the DIKW pyramid can be well summarised and described by Zeleny’s (2005) appealing metaphor as follow: “know-nothing” (data), “know-what” (information), “know-how” (Knowledge) and “Know-why” (Wisdom).

/Drill

 

References:

Ackoff, R.L., 1989. From data to wisdom. Journal of applied systems analysis, 16(1), pp.3-9.

Aven, T., 2013. A conceptual framework for linking risk and the elements of the data information–knowledge–wisdom (DIKW) hierarchy. Reliability Engineering & System Safety, 111, pp.30-36

Awad, E.M. and Ghaziri, H.M., 2004. Knowledge management, 2004. ed: Prentice-Hall, Upper Saddle River, New Jersey.

Cooper, P., 2014. Data, information, knowledge and wisdom. Anaesthesia & Intensive Care Medicine, 15(1), pp.44-45.

Rowley, J.E., 2007. The wisdom hierarchy: representations of the DIKW hierarchy. Journal of information science. 33(2), pp. 163–180

Zeleny, M., 2005. Knowledge-information autopoietic cycle: towards the wisdom systems. International Journal of Management and Decision Making, 7(1), pp.3-18.

The Beginning – The Power of Listening

Listening

My first post sure feels odd. I have never read other peoples blogs and even less ever considered myself of actual doing one. To be honest I have still not understood the concept of blogging. My common sense tells me: “who on earth would read other peoples opinions and world views? Isn’t that a completely a waste of time?”

On a second thought, reading other blogs i very similar to listening, which in my opinion is by far one of the most important ability and quality one can have. In other words, there is a strong reason for why we have only one mouth but have two ears. Likewise, there is a reason for why we have two eyes for reading (blogs) and only one mouth for speaking.

What also motivated and inspired me to start blogging is Seth Godin, the author of the fantastic book “Whatcha Gonna Do with That Duck?” that I warmly recommend for anybody to read. In this book, Seth Godin really provokes and challenges the status Que that we are living in, though often from a business perspective. Seth strongly encourages everybody to start blogging. I hit the bandwagon and here we are now.

We have two ears and one mouth so that we can listen twice as much as we speak

However, returning to the subject of listening. The other day I came across a TED video (Gosh, already the first TED reference in this blog) held by Celeste Headlee. In this roughly 12 minute video Celeste Headlee clearly comes to the conclusion that we people have lost our capacity to listen to others, and the main blame for this is that new technological advances provide us with instant information and facts that kills conversations or result in unhealthy arguments. Thus, “conversational competence is the single most overlooked skill failed to teach” in the 21st century, essentially this concerns the aspect of listening, which is a view that I fully support.

We can all agree upon (hopefully) that the power of listening is an extremely valuable and important  skill. However what actually is listening ? According to Wikipedia, listening can be defined as “a broad term to refer to complex affective, cognitive, and behavioral processes. Affective processes include the motivation to attend to others; cognitive processes include attending to, understanding, receiving, and interpreting content and relational messages; and behavioural processes include responding with verbal and nonverbal feedback”. Thus, listening is clearly about connecting with others. Ironically, although the internet “connects us” more than ever, the fact is that because of it we listen less than ever. This point illustrates well with the following quote (yes, I am well aware that quotes are cheesy, but I like them):

“Most people do not listen with the intent to understand; they listen with the intent to reply.”
― Stephen R. Covey

In my opinion, this quote by Stephen Covey  reflects the reality as we see it. Nowadays listening is definitely not about understanding each other, instead it is about the intent of reply. This means that our focus of replying is  actually “unconnecting” people – the opposite of listening – hence resulting in a more confusing, frustrating, and lonesome world. I believe that this phenomenon is very familiar for everyone and even the best of us falls victim for this at times.

Republican-presidential-candidates

The natural question that follows is: “how is listening then done ?”. As I recently concluded, the core of listening is to understand and respond to others. This means that we need to focus on others, a common advise found almost everywhere. We can all agree on that this is true, but it requires a lot of patience and focus from us, and worst of all it may lead nowhere. Personally, I consider myself as a great listener and this situation is one that I often find myself in on almost daily basis. I call this phenomenon for one-sided listening. The problem with one-sided listening is that it only uses a portion of the full the full potential of listening.

One-sided listening is listening, but it is not using the true potential of listening

Huh, so what unlocks the true potential of listening then? My twist on this is that the full potential of listening is achieved, when all involving parties are truly committed to listen to each other. In other words, it takes two to tango. This is both easy to understand and comprehend, but (as with the most of the things) very hard to execute. And as we all know you can’t force people into listening. Nevertheless I have found a trick that is works, it is not waterproof, but damn sure to be effective.

Silence is golden

Silence truly is golden, especially when it comes to listening. My strong belief is that silence can speak louder than words. Therefore silence is a loud and intimidating voice that can make anyone to start listen. It is so simple, yet rarely used.

The use of silence is closely aligned with Robert Greene’s fourth law: always say less than necessary. (For you who don’t know Robert Greene, he is the author of “The 48 Laws of Power“, a classic must read). Personally, the fourth law compels me, because it makes  silence into an art. Also, I have come to the conclusion that one needs to have a strong mind and soul in order to fully use silence. The reasoning for this is that it is wide known that insecurities always shines through, therefore the awkwardness that most of us are familiar with emerges. I have learned to see the awkwardness as one of the most important emotions one can have in your life, thus try to make friends with it. After all, it is a very beautiful and fragile emotion that needs to be cherished more.

An example of the power of silence is a story presented by Percy Barnevik, the former and notorious CEO of ABB. In this story, the Finnish and the Swiss manufacturing division found themselves in a dispute. This because the Swiss division felt that the Finnish division “stole” an order from under their noses. After a while Barnevik finally got tired of the Swiss divisions complaining and accusation, and decided that the Swiss divisions must sort this situation with the Finnish division, without his inference. After this Barnevik never heard anything concerning this issue. He found this somewhat odd because the head of the Swiss department was extremely furious and was for sure to come back to him regarding this very same issue. Thus, Barnevik decided to call the head of the Finnish division and ask him how this issue was so smoothly solved?

The Finn replied:

“When he (head of the Swiss department) called me, he sure was furious and angry. He started out with yelling. After a while, it turned into talking. And after a while, there was silence. And after a while, he apologized.”

Barnevik asked:

“So what did you tell him?”

The Finn replied:

“Nothing… (gave him just silence). When he asked me something I answered him”

Barnevik was of course very impressed of the Finn’s humble mentality and scarce use of words. In my opinion, this story illustrates extremely well how powerful silence can be. It proves that silence can make people listen and is one of the core components in the art of listening.

Finally, how is the power of listening compared to the  power of blogging? Well, I will try to find/drill an answer to that.

/Drill