Obliquity— John Kay

Preface

But it isn’t just economists who make that mistake. Politicians, investors, bankers and business people believe that although they don’t solve problems according to a standard model of rational decision making, they ought to. So they pretend that they do— to others, and perhaps to themselves.

Part 2: The need for obliquity

7. Muddling through

In 1959, Charles Lindblom described ‘The science of “Muddling Through”’. He contrasted two modes of decision making. The root, rational, comprehensive method was direct and involved a single comprehensive evaluation of all options in the light of defined objectives. The oblique approach was characterized by what he called successive limited comparison. Lindblom called the latter ‘the science of muddling through’.

‘Muddling through’ was a process of ‘initially building out from the current situation, step-by-step and by small degrees’.

The modesty of Lindblom’s phrase ‘muddling through’ invited Dr Ansoff’s scorn. The phrase involves intended, but misleading, self-deprecation, and Ansoff fell into the trap. I think that obliquity is a better term. Obliquity is a process of experimentation and discovery. Success and failures and the expansion of knowledge lead to reassessment of our objectives and goals and the actions that result.

Oblique approaches to high-level objectives should not be equated with unstructured, ‘intuitive’ decision making. Lindblom’s vision of ‘muddling through’ is a disciplined, ordered process. Picasso, Sam Walton, Buffet— each ‘muddled through’, in Lindblom’s sense. None relied on a root analysis of defined objectives. Each improvised, constantly. Each pursued a combination of high-level objectives, intermediate goals and basic actions. Each drastically limited the alternatives that were reviewed and relied on successive limited comparisons rather than a comprehensive evaluation of all available options.

The intelligence agents who anticipated the attack on the Twin Towers were not praised for their prescience, and the risk managers who warned banks of impending nemesis were fired. It is good for reputation to succeed against the odds. But it is often better for reputation to fail against the odds than to improve them. In an uncertain situation the effect of improving the odds is never obvious, either before the event or after it.

Captain MacWhirr, limited man though he was, understood that dilemma. Machiavelli, the epitome of the oblique decision maker, was the archetypal fox. Five centuries before Tetlock confirmed it empirically, Machiavelli understood that to be an effective decision maker it was wise not to seek public credit for the success of your decisions. Yet another of obliquity’s many paradoxes.

Real businesspeople operate in ‘large worlds’, in which problems are ill defined and there are no objectively correct answers. Moreover, the ‘right’ answer will often not be apparent, even in retrospect. Effective decision-makers in large worlds are not maximising; they do not have and never can have the information needed to make the relevant calculations. They confront radical uncertainty. Often they not only do not know what will happen but do not even know the kinds of things that might happen. Although we must abandon ‘the pretence of knowledge’, individuals, institutions and businesspeople need to act in the face of uncertainties.