Category Archives: Open

From reducing to absorbing complexity

This reminded me of the work we sometimes did as consultants with frameworks, strategy models and elaborate templates. I felt that we didn’t really capture the complexity, we reduced and simplified it in a way which didn’t really work. I don’t think we really saw and allowed for an open system which constantly emerges dynamically, but aimed more for a controlled setting with plans and execution:

“Boisot felt that a fundamental premise underlying bureaucracies was a belief that knowledge is something that can be simplified, and then easily transferred between parties – an orientation towards reducing complexity. (…)

Boisot recognised that shifting the way companies worked with knowledge presented significant cultural and organisational challenges. He felt that the ability to make the shift from reducing to absorbing complexity would be one of the key determining factors about which companies survive the transition to a knowledge economy and which would become the dinosaurs of a former era.”

The fewer assumptions a model has, the more flexible we are and the less obstructed in our observations. The higher our capacity for learning. And the swifter we can act and change course when needed.

Quote from article: Strategy as Hypothesis

 

Ray Dalio: Decision Rules – “Have we got this right?”

Admitted, I am not a big fan of the hedge fund industry and its remuneration. But what I found interesting is the way some of them work. A great article in The New Yorker about Ray Dalio’s Bridgewater Fund makes for a very interesting read – especially the part about the principle-based approach. Smarter thinking…

Some excerpts from the interview:

”Our greatest power is that we know that we don’t know and we are open to being wrong and learning.”

”I believe that the biggest problem that humanity faces is an ego sensitivity to finding out whether one is right or wrong and identifying what one’s strengths and weaknesses are.”

One rule of radical transparency is that Bridgewater employees refrain from saying behind a person’s back anything that they wouldn’t say to his face.

(On Meditation) “It’s just a mental exercise in which you are clearing your mind,” he said. “Creativity comes from open-mindedness and centeredness—seeing things in a nonemotionally charged way.”

“They (Bridgewater, VL) are consistently innovating—constantly soul-searching and asking, ‘Have we got this right?’”

To guide its investments, Bridgewater has put together hundreds of “decision rules.” 

“The duty of a leader, first and foremost, is to be transparent.”

“the intention is to make people better. . . . I have never seen a C.E.O. spend as much time developing his people as Ray.”

Dalio has published his principles on his company’s site, Bridgewater.

In a letter Dalio and his wife described their reasoning for their philanthropy and joining the Gates-Buffett giving pledge. Happiness does not increase after a certain level of wealth with more wealth, but through meaningful relationships and work. And by charitably giving making a positive impact on other people’s lives: