Think oblique: How our goals are best reached indirectly
In business, in mountaineering and even in the pursuit of happiness, the most direct route isn't always best. Economist John Kay makes the case for obliquity
Thursday 18 March 2010
The American continent lies between the Atlantic Ocean in the east and the Pacific Ocean in the west. The Panama Canal represents the shortest route across the continent. However at the end of the canal, at Balboa Port on Panama's Pacific Coast, you find yourself at a point about 30 miles further east than Colon, where you left the Atlantic.
The shortest route heading due west across the continent, passing through Nicaragua, would have turned out to be a longer route than the one heading south-east through Panama. In the 16th century, the people who first found this route weren't looking due west and weren't looking for oceans. They were conquistadors looking for silver and gold. Not only was their route oblique, so was the means of its discovery.
Obliquity is the idea that complex goals are often best pursued indirectly. In general, oblique approaches recognise that complex objectives tend to be imprecisely defined. These objectives contain many elements that aren't necessarily or obviously compatible with each other. Furthermore, we learn about the nature of the objectives and the means of achieving them during a process of experiment and discovery.
Like the route through Panama, oblique approaches often step backwards to move forwards. All these things were true of the activities that engaged Vasco Nunez de Balboa, the first European to see the Pacific, in 1513. Like other great achievers, Balboa tackled a problem whose nature emerged only as he solved it.
Oblique approaches aren't only useful for explorers and bounty hunters. Happiness is a goal for everybody on the planet, and happiness, too, is not best achieved by those who pursue it. In 1980, Reinhold Messner performed perhaps the most spectacular mountaineering feat ever accomplished. He reached the summit of Everest from the more difficult Tibetan side alone and without oxygen. "I can scarcely go on... No despair, no happiness, no anxiety," he wrote. "I have lost the mastery of my feelings. There are actually no more feelings. I consist only of will."
Climbing high mountains is dangerous and exhausting. The people who undertake it are cold, short of breath, and prone to sickness. Asked why they do it, they frequently repeat the unsatisfactory answer attributed to George Mallory, who died on Everest in 1924 and may have been the first man to reach the summit: "Because it is there."
Why was Messner doing it? He wanted a variety of things: to see the world from its highest point, to complete a demanding climb, to achieve fame and personal satisfaction. He sought happiness by enduring misery. Mountaineering is an extreme example of an apparently unpleasant activity undertaken by people who could be instead, be quite comfortable. But there are many others. Common leisure pursuits involve demanding physical effort. Men and women chase a ball around a field until they are too tired to stand. They make themselves cold, wet and exhausted. We climb mountains only to descend again, we swim out to sea to be thrown back on land, we run until we are too tired to continue. Why?
Happiness is not something we achieve by repeating actions that make us happy – there is another word for that, which is hedonism.
John Stuart Mill was the most articulate advocate of utilitarianism, and he was certainly no hedonist. When, towards the end of his life, he came to write his autobiography, he had come to the conclusion that happiness "....was only to be attained by not making it the direct end. Those only are happy (I thought) who have their minds fixed on some object other than their own happiness: on the happiness of others, on the improvement of mankind, even on some art or pursuit, followed not as a means, but as itself an ideal end. Aiming thus at something else, they find happiness by the way."
If personal happiness is achieved obliquely, isn't commercial success achieved directly? The purpose of business is the pursuit of profit. But instead, we observe the profit-seeking paradox – that the most profitable companies are not the most profit-oriented.
The book Built to Last by the US business guru Jim Collins was based on paired comparisons between more and less successful firms in the same industries. Merck and Pfizer was one such comparison. Collins contrasted the oblique philosophy of George Merck – "We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear" – with that of John McKeen of Pfizer, who was direct: "So far as humanly possible, we aim to get profit out of everything we do." But Merck was not only the most admired company. It also made more money.
Collins' book was published in 1994. Fifteen years later, in How the Mighty Fall, Collins would revisit the Merck story. "In his 1995 annual letter to shareholders, Merck's chairman and CEO, Ray Gilmartin, delineated the company's number-one business objective as 'being a top-tier growth company'". Merck's shift to a more direct approach did not have a happy outcome for the company. Both Merck and Pfizer sold powerful analgesics which proved invaluable for some patients, who have difficulty in tolerating established anti-inflammatory drugs such as aspirin. But the best route to revenue growth was to promote these drugs to a mass market for which such inexpensive substitutes were equally satisfactory. However, Merck's product aggravated heart conditions in a small minority of patients. The company finally withdrew its drug from the market.
Today, the pharmaceutical company which has created most value for its shareholders is Johnson & Johnson, whose oblique credo was set out in 1943 by Robert Johnson, a scion of the founding family and company chairman for 30 years. "We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services", it begins. The credo ends, many lines later, "when we operate according to these principles, the stockholders should realise a fair return". Events seem to have proved Robert Johnson right.
Few companies go as far as Sony's declaration of its oblique approach to profit in its founding statement, "We shall eliminate any undue profit-seeking". At the other end of the spectrum – of philosophy and outcome – were Bear Stearns and Lehman, probably the most profit-oriented corporations in the history of the world. Lehman went bust in 2008, having been rescued more than once before. Above the Bear Stearns trading floor hung the slogan, "Let's make nothing but money." Bear Stearns did indeed make nothing but money: not friends or loyal clients, not even many products that customers should have wanted to buy. And in the end the company lost all the money it had ever made.
If the most profitable companies are not the most profit-oriented, the richest men are not the most materialistic. Sam Walton, founder and principal shareholder of the world's largest retailer, Walmart, drove himself around in a pick-up truck until his death. "I have concentrated all along on building the finest retailing company that we possibly could. Period. Creating a huge personal fortune was never particularly a goal of mine." But create a huge personal fortune he did: the top places in Fortune's rich list are dominated by members of the Walton family.
I cannot honestly recommend you read Bill Gates's autobiography, but if you do, you will be in little doubt that his passions are not money, but business and computers.
Even the egregious Donald Trump begins his life story, Trump: The Art of the Deal, with, "I don't do it for the money. I've got enough, much more money than I'll ever need. I do it to do it. Deals are my art form." No doubt unconsciously, Trump echoes John Stuart Mill. He engages in "some art or pursuit, followed not as a means, but as itself an ideal end".
Building a large and successful business, as Walton and Gates did, requires devotion to business. There is no reason to think this characteristic is linked to greed and materialism, rather the opposite. People who are obsessively interested in money are drawn to get-rich-quick schemes, legal or criminal, rather than business opportunities. When these schemes come off, as occasionally they do, they are inclined to simply retire to villas in the sun.
That is true of business is true of architecture. The Modernist architects believed that modern technology relieved them of the constraints imposed by tradition and convention. "A house is a machine for living in," wrote Le Corbusier, as he designed tower blocks – in great detail, down to the furnishing of the flats.
But people didn't like to live in machines. The functions of a home are complex: the utility of a building depends not only on its design but on the reactions of those who live in it. The occupants of that Modernist urban housing scheme Pruitt-Igoe, in St Louis, Missouri, were alienated by an environment that saw no need for oblique, unplanned social interactions. They disliked the projects, they hated their flats, they trashed the common parts. The practicality of the blocks proved, in the end, not to be practical (and the scheme was demolished in 1972).
The traditional, more oblique approach to building construction recognises that experience of both previous and current problems guides the search for answers. Many people contribute to the outcome, and even after that outcome has been realised none of them necessarily holds a full understanding of how it came about. That is how the Cathedral of Notre Dame was built – by many hands over two centuries. And it is still appreciated seven centuries later.
An old story tells of a visitor who encounters three stonemasons working on a mediaeval cathedral, and asks each what he is doing.
"I am cutting this stone to shape," says the first, describing his basic actions. "I am building a great cathedral," says the second, describing his intermediate goal. "And I am working for the glory of God," says the third, describing his high-level objective. Of course, all of them were right.
We have loose, high-level objectives – to glorify God – which we can realise only by translating them first into specific goals – building the cathedral – and then specific actions – cutting the stone. We learn about all of this by doing them.
What we want from a building, a business, or our lives has many components, often incompatible and incommensurable. Achievements of our goals and objectives is the outcome of a complex process which we do not fully understand.
"The mind-bending genius of David Beckham" was the headline in The Daily Telegraph on 21 May 2002. In the previous year, the England footballer had secured victory against Greece. Dr Matt Carré, a specialist in computational fluid dynamics at the University of Sheffield, analysed the process. "We know that the shot left his foot at 80 mph from 27 metres out, moved laterally over two metres during its flight, due to the amount of spin applied, and during the last half of its flight suddenly slowed to 42 mph, dipping into the top corner of the goal. The sudden deceleration happens at the moment when the airflow pattern around the ball changes (from turbulent to laminar mode) increasing drag by more than 100 per cent." Dr Carré went on to say that "Beckham was instinctively applying some very sophisticated physics calculations to scoring that great goal." But that statement doesn't make sense. Beckham isn't a physics genius. Whatever he did, he didn't solve a set of complex differential equations, in his head, on the spur of the moment.
People spend inordinate amounts of time asking public figures like Beckham for the secret of their success. They don't come away much the wiser. There is no reason to think that there is any answer to the implicit question: what set of principles or rules would enable millions of youngsters to bend it like Beckham? The message is the same when you read the biographies or auto- biographies of successful businessmen. They (or at least their ghostwriters) are more articulate than Beckham. But, like Beckham, they describe their achievements rather than explain them. More long-windedly, they repeat John Paul Getty's explanation of his business success: "Strike oil." They do not tell us the secret of their success because they do not know what it is.
But to say we do not fully understand why the oblique approach so often outperforms the direct one, is not to say we know nothing. Beckham is good at what he does not only because he has exceptional talents but because he has trained and been trained to be good at it over many years.
We often describe actions such as Beckham's, as intuitive or instinctive. But these descriptions don't add anything to our knowledge, and certainly don't explain why Beckham, who can't do the differential equations, is (injuries notwithstanding) a better footballer than Dr Carré, who can. In his book Blink, Malcolm Gladwell famously describes the allegedly fake kouros, a Greek statue expensively purchased by the Getty Museum and authenticated by careful science, which some art experts immediately perceived as a fake. Supporting a thesis of first impressions, Gladwell emphasises the speed of their judgment. But the speed of isn't the main point. The main point is that there is such a thing as expert judgment. If you or I asserted that the kouros was a fake, no one would be very interested: just as our intuitions as to what footballers should do are worth very little. The people who suspected the kouros was a fake were established authorities, whose skill and expertise had been developed over many years and who had earned respect for their opinions and judgments in other matters.
The skills of Beckham and the capabilities of the respected art expert are real and verified (as is the expertise of Dr Carré). If "instinct" leads Beckham to kick winning goals, if "intuitions" enable art experts to identify objects as fake, these instincts and intuitions are not voices in the air. They are finely honed, well developed abilities.
By lumping a bundle of things together under the headings of instinct and intuition, and contrasting them with a particular kind of rationality, we not only fail to recognise how good judgments are arrived at and good decisions made, we open the door to much ascientific nonsense, and irrationality. Most of what people claim to know through intuition is nonsense. But the tacit, poorly articulated understanding of skilled practitioners is real. Most descriptions of why people made the decisions they made are ex post rationalisations.
If we were to insist that Beckham gave an account of why he proposed to kick the ball in that particular way before he was allowed to do so, we would quickly lose faith in him. Fortunately, we don't have time. Moreover, if he could give us a specific account of how he scores, anyone could score goals by following that account. There would no longer be such a thing as a skilful footballer.
But this demand for "rational" explanation, which we know is absurd in application to Beckham and implausible when addressed to these art experts, is precisely what we do when faced with major decisions in business, politics and finance. Skilful players, who are skilful in understanding the rules of the corporate game, if not necessarily skilled in getting to the right answer, respond with accounts that bear little relationship to their real reasons for their decisions.
Mostly, we solve problems obliquely. Our approaches are iterative and adaptive. We make our choices from a limited range of options. Our knowledge of the relevant information and of what information is relevant, is imperfect. Different people will make different judgments in the same situation, not just because they have different objectives, but because they observe different options, select different information, and assess that information differently: and even with hindsight it will often not be possible to say who was right and who was wrong. In a necessarily uncertain world, a good decision doesn't necessarily lead to a good outcome, and a good outcome doesn't necessarily imply a good decision, or a capable decision maker. The notion of a best solution may itself be misconceived.
It is hard to overstate the damage recently done by people who thought they knew more about the world than they really did. The managers and financiers who destroyed great businesses in the unsuccessful pursuit of shareholder value.
The architects and planners who believed that buildings could be designed from first principles, that vibrant cities could be drawn on a blank sheet of paper, and that expressways should be driven through the hearts of communities. The politicians who believed they could improve public services by the imposition of multiple targets.
Acknowledgement of the complexity of the systems for which they were responsible and the multiple needs of the individuals who operated these systems would have avoided these errors.
Such acknowledgement might also have avoided the gravest cases of bad public decision making of the last decade – the Iraq War and the credit expansion of 2003-2007.
Both these developments were predicated on an assumed knowledge of the world the decision makers did not in reality possess. The men who occupied the White House imagined they could reconstruct the Middle East on the basis of a US model of lightly regulated capitalism and liberal democracy. Bank executives believed that their risk-control systems, which they mostly did not understand, enabled them to monitor transactions they also did not understand but believed to be inordinately profitable.
Obliquity recognises that there are no predictable connections between intentions and outcomes. Problem solvers cannot evaluate all available alternatives: they make successive choices from a narrow range of options.
Effective decision makers are distinguished, not so much by the superior extent of their knowledge, as by their recognition of the limitations of that knowledge.
Problem-solving is iterative and adaptive, rather than direct. Good decision makers are balancing incompatible and incommensurable objectives. They are eclectic and tend to regard consistency as a make of stubbornness, or ideological blindness, rather than a virtue.
Rationality is not defined by good processes, irrationality lies in persisting with methods and actions that plainly do not work – including the methods and actions that commonly masquerade as rationality.
* Objectives are clear
* Systems are comprehensible
* We know the available options
* What happens happens because someone intended it
* Rules can define the system
* Direction provides order
* Good decisions are the product of good processes
Obliquely does it
* We learn about our objectives as we strive for them
* Systems are complex and depend on unpredictable reactions
* We can consider only a few possibilities
* There is no clear link between intention and outcome
* Expertise is required, tacit knowledge is essential
* Order often emerges and is achieved spontaneously
* Good decisions are the product of good judgment
'Obliquity: Why our goals are best achieved indirectly' by John Kay is published in hardback by Profile this month (£10.99). To order a copy for the special price of £9.89 (free P&P) call Independent Books Direct on 08430 600 030, or visit www.independentbooks-direct.co.uk
The Panama Canal
On paper, the famous shipping route isn't the most direct crossing from east to west – but it did require less digging.
According to Kay, the mountaineer sought not the peak but "happiness by enduring misery," when he climbed Everest without oxygen.
Modernist vs traditional
It was the inflexible practicality of Modernist designs like Pruitt-Igoe in St Louis (right) which led to failure; the Notre Dame de Paris, "built by many over two centuries" has endured.
"Most of what people claim to know through intuition," says Kay, "is nonsense." Instead, it is the expertise behind the instinct that led historians to the oblique conclusion that the Getty Kouros, is a fake.
If the footballer could explain how he kicked a winning ball before doing so, it follows that anyone could score by copying his thinking. There would no longer be such a thing as a skillful footballer.
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