Strategy, Anomalies & Scientific Revolutions

Why Settling Unsettles Me

Recently, I was spurred to think about the notion of settled science, and its implications for strategy, which I decided to make the subject of this Playing to Win/Practitioner Insights (PTW/PI) piece called Strategy, Anomalies & Scientific Revolutions: Why Settling Unsettles Me. As always, you can find all the previous PTW/PI here.

The Spur

The spur for my rethink was the recent retraction by the World Climate Research Program (WCRP) of its RCP8.5 (and successor SSP-8.5 but I will use the former term because it is better known) scenario, which fed into the various influential Intergovernmental Panel on Climate Change (IPCC) reports. RCP8.5 is the most apocalyptic climate scenario, featuring a disastrous rise in sea level, widespread ecological collapse, and food security crises. While it was only one of many scenarios, it was the one that was typically featured most prominently in climate change news – because it sounded so terribly ominous.

We have been told for decades that climate science is settled and can’t be discussed critically, and RCP8.5 was treated as part of the consolidated body of settled science.

I have written a lot about sustainability, including this Harvard Business Review article and two dozen articles for The Guardian (that can be found in this tab). When working with co-authors and editors and rolling around what I thought to be novel ideas (because that is my oeuvre), if such ideas appeared to be critical in any respect, I was reminded that the science was settled, a not so subtle hint that we should stop talking about the subject in play.

I always knew – and anyone who cared to look could see – that RCP8.5 was entirely made up. There was zero science involved – only wild extrapolations outside any data set. But only now, WCRP has admitted that it was neither science nor settled. My purpose here is not to relitigate climate change – it is to litigate settled-ness. In fact, I congratulate WCRP for fessing up after many years. It must not have been easy.

The whole retraction harkened me back to one of the most stressful episodes of my life when I was a freshman at Harvard College. I grew up in a tiny hamlet and attended a regional secondary school. But suddenly, I was living in a big city for the first time at a world-famous elite university – way out of my comfort zone. I had a roommate, who I will call Rich, who came from a town on nearby Cape Cod. A couple of months into the fall semester, Rich started attending a church in his hometown with his mother and older sister. He expressed wild enthusiasm for the charismatic (literally and figuratively) cleric who had arrived at an Episcopalian church in the seaside town and engineered a departure from the Episcopal denomination to join the Syro-Chaldean Church of the East.

One by one, Rich took impressionable young men (freshman dorms were unisex then) from the rooms off our dorm hallway to the church, with a goodly percentage soon attending every Sunday.

There were no anomalies – all swore by the church, including a football-playing hall-mate who fell in love with and later married Rich’s sister. The pressure mounted on me attend at least one service – otherwise I was a ‘close-minded denier.’ Reluctantly, I did and the experience scared the crap out of me. The cleric whipped the congregation into a frenzy of speaking in tongues, which I had seen before in a legitimate setting, but this was clearly staged and highly choreographed, featuring obvious accomplices.

I sat impassively at the back and when it was time to go, the cleric confronted me to advise me that God was crying for me because I didn’t participate. Then I was hounded for the first 60 minutes of the 90-minute trip back to campus in a packed car of zealots who prayed for me continuously. Finally, I couldn’t take it anymore and asserted that they were in a cult headed by a conman. I bet them that they had zero visibility into where the collections from the offering plates went – they didn’t.

They were mortified and angered. How could I say such things? The issue was settled and I was simply a denier. Another 30 minutes of praying for me ensued and then continued with prayer sessions to save my soul every morning in our sitting area.

About twelve months later, the FBI raided the church and arrested the cleric who they had been pursuing for years. He was a serial conman using the same playbook multiple times – take over a church; break away; adopt the name of an obscure but real church (yes, the Syro-Chaldean Church of the East is a real church, though the service would have been in Aramaic if it had been legit); create a cult-like following; steal all the money; and skip town before feds arrive. But this time he stayed too long and got nailed.

The point of retelling the story is not that I am so smart. I’m not – it is more a story of there but for the grace of God go I. I could have been as emotionally vulnerable at that precise point in time as were some of my hallmates.

The point is that I was the anomaly. But because the matter was settled, I was 100% ignored. And they all had to live with the fact that were scammed members of a cult, who needed to be saved by the FBI because they were incapable of rescuing themselves. The experience wrecked the life of one of my roommates, and the football guy ended up tragically married to the woman responsible for getting him into a scam cult.

The similarities between WCRP RCP8.5 and the Cape Cod church are striking to me – though I am sure that some readers will see them as having nothing to do with each other. Though one involves physical science and the other social dynamics, the key is that in both cases, the ‘truth’ was portrayed by its proponents as completely settled and anomalies were systematically suppressed.

And in both cases, when the ‘truth’ is found to be utterly baseless, many people feel manipulated. That revelation impugns the underlying subject, whether climate change or organized religion, leaving observers wondering what else about this is a scam?

Karl Popper and Thomas Kuhn

Of course, I am not the first person to talk about this subject. Two philosophers famously did and each wrote a book that is easily within the ten most important books I have ever read – and books that are required reading if you want to be a great strategist.

The first is Karl Popper’s 1959 classic The Logic of Scientific Discovery. In it, he argues that science doesn’t prove eternal truths but rather, it systematically eliminates false beliefs. For example, Newton’s laws of motion weren’t the eternal truth, even though they appeared to be and were treated as such for over two centuries until Einstein’s theory of relativity came along. Relativity didn’t demonstrate that Newton was wrong, but just not 100% right in all circumstances – an advance.

For Popper, settled science was an oxymoron. By design, science is fundamentally unsettled.

The second is Thomas Kuhn’s seminal 1962 book, The Structure of Scientific Revolutions, in which he describes the underlying pattern by which science advances. When scientific discovery creates a new insight, other scientists crowd around it and perform more scientific work focused on honing and refining existing scientific paradigm, work Kuhn termed ‘normal science.’ Everyone who performs this sort of work is supported, while anyone who dares to do work on any conflicting view is suppressed – typically brutally.

Inevitably, data arise that don’t fit the dominant paradigm. However, they are dismissed as anomalies – exceptions that prove the rule. But in due course, enough arise that someone develops a theory that demonstrates how these anomalies in the existing paradigm are to be expected in a new model. And that is a scientific revolution, which generates and establishes a new paradigm – and the process is repeated.

Popper and Kuhn helped me understand the critical is importance of anomalies. Ignore them at your peril. Suppress them only if you have a death wish.

Implication for Strategy

One’s strategy is, in essence, a paradigm. That is, my strategy represents my theory that if I make a given set of choices across the five boxes of the Strategy Choice Cascade, I will have the best chance of achieving my desired outcomes. While I argue that having such a strategy theory is critically important, it isn’t ‘the truth.’ It is just the best theory with which I can come up based on the extent of my knowledge at this moment in time. By enacting it, I hope it will produce the desired result.

Despite my enthusiasm for my strategy, it is critical for me to watch for anomalies. And based those anomalies, I must ask what theory would make those anomalies expected rather than anomalous? Then I can further ask the most important question in strategy: What Would Have to be True (WWHTBT) for the theory that makes the anomalies expected to be a sound theory? That logical exploration helps me figure out whether to abandon my current theory and adopt the alternative theory, or not.

On this front, I will always remember the anomaly of many BMWs and Mercedes being observed in Walmart parking lots in the late 1980s. The then-dominant theory held that folks that rich weren’t supposed to be there shopping in a crude cinder block building with spartan displays, featuring dirt-cheat prices.

However, they could get the same Tide or Crest there as in a beautiful Ralph’s or Wegman’s store. And due to Walmart’s superior replenishment system, the exact item those BMW/Mercedes drivers wanted would be on the shelf, so they didn’t have to make a time-consuming further trip to find it or settle for a less-preferred item.

Studying that and other anomalies – an effort that the P&G sales organization fought tooth and nail against me exploring – helped me convince P&G to switch paradigms in the early 1990s from the rise of Walmart is a worrisome development to Walmart may be a terrific partner.

Practitioner Insights

When people inform you that ‘the science is settled,’ they are providing prima facie evidence that they are profoundly unscientific. They are seeking to stop scientific progress by suppressing true exploration. They are a danger to you and to the world. Like me, you should be entirely unsettled by the assertion that any issue is settled, whether scientific or otherwise.

Ignore these people entirely and continue exploring the anomalies. Expect widespread skepticism and attacks on you. They will find something about you that can be used for ad hominem attacks, which they will make enthusiastically. Believe me, I have gotten plenty of those.

But a great strategist will innovate not based on accepting competitive patterns, customer behaviors, etc. as settled. It is in periods of this normal science – ‘this is how it is done in this industry’ – that the greatest strategic opportunities can be found.

In fact, if people are freaked out by what you are doing, chances are, you are onto something. Every time I have successfully innovated across my career, I have been struck by the anger directed at me by people who, in fact, stand to be helped by my innovation.

For example, when I opened the Monitor Toronto office in 1987, I made the bold move to pay the same salaries as in our Boston office. It was because I believed Canada deserved better than to be served by McKinsey’s Canadian consultants who were being paid 70% of what their colleagues were being paid in their New York or Cleveland offices and who were mainly used as low-cost sourcing for McKinsey projects in the US. This triggered the Managing Director of McKinsey’s Canadian practice to invite me to lunch, during which he furiously lectured me on how I was going to destroy the entire Canadian strategy consulting business because Canadian companies would never pay the consulting rates necessary to support paying US-level salaries to Canadian-based consultants.

I ignored his anger (and veiled threats) and went on to demonstrate that world-class strategy consulting could be done in Canada, which helped McKinsey prosper in Canada and attracted both Boston Consulting Group and Bain & Company into the Canadian market resulting in a vibrant strategy consulting industry in Canada – a dramatic change from the pre-1987 period.

In retrospect, I realize that if the McKinsey guy wouldn’t have cared, my idea would have probably been an inconsequential one!

So, don’t settle and if people tell you an issue is settled, don’t be cowed by them. It is a signal that it is your job to create a superior paradigm – because they certainly won’t.