Fluidly Dealing with Business Complexity

How we reason pays dividends in more ways than one. In business, reasoning with rationality has tended to take precedence over more expansive ways of thinking.

That's because rationality has been viewed as key to success in business. Solving problems analytically does have its advantages, but to what extent does it outweigh more creative ways of solving business challenges?

A rational model for making decisions applies that we have the ability to analyze relevant data to arrive at the goal. This can be seen as an ideal model for decision making that is often unattainable by people in organizations that implement the strategy. This is because value is derived from decisions that have characteristics of certainty or risk where probabilities can be calculated.

While this may be relevant for purely programmed decisions - ie decisions applied to very structured or routine problems, this model misses the boat when considering more complex problems for which we don't have defined, rational frameworks to solve.

I will highlight this according to the way we go about reasoning when making decisions. There are 3 ways we can reason, 2 of which take up most of our focus in business. I would argue that the third way of reasoning holds more potential for development.

• Deductive reasoning: this is inference from purely logical premises
• Inductive reasoning: this is a generalization from specific instances
• Abductive reasoning: this is the generation of new ideas and an understanding (analysis & evaluation) of how they apply generally

In the traditional mindset of solving problems, constraints are seen as a barrier to idea generation and implementation. In the emergent mindset, constraints are embraced as an integral part of idea generation. Ideas emerge out of the constraints.

As opposed to solving problems analytically using deductive and inductive reasoning, what are the results of placing more emphasis on the use of abductive reasoning?

1. It allows for greater scope when it comes to inventing something to solve our problem. We aren't as limited by the confines of a purely rational framework to arrive at the goal. 
2. We question our motive or assumptive base from which we create to solve the problem. This means our vision is not as narrow as before. 
3. It opens the door for us to make a difference. We're not just solving a problem as part of a statistic. Instead we apply our minds to creatively solve problems for further reaching benefits to the environment or community.

In conclusion I think much of the way we reason has been shaped through mindset. This involves beliefs or assumptions according to the way we solve a problem. In business this focus tends to gravitate more towards rational frameworks. We love defined rules and statistics that present a definite solution to any given problem. 

But the way the world is evolving, business can no longer focus on this aspect alone. Greater complexity in all spheres of business requires more fluid ways of solving problems. And abductive reasoning can help us in tackling such challenges.