Linear thinking for non-linear puzzles in Business: Human interface & information blind spots

The human mind is hard-wired to think linearly, if A=B & B=C, then A=C; it is the lazy mind's habit to simplify or think in logical sequence than to delve into multi-dimensions.

If there is a change in input, there must be a change in output, this is the fundamental premise on which businesses rely on, which comes from this linear thinking pattern. If this premise is not valid, all businesses will be working on a chaotic framework, where there would be several solution possibilities to the same problem and each one could be equally likely or unequally likely making the case even more difficult to comprehend.

Thus this leads to the most sighted theorems of our times, Hartman-Grobman theorem, which says that all non-linear systems behave linearly close to their equilibrium point.

Business thinking is about this attempt to linearize non-linear systems such that we can simplify a complex puzzle that can be understood and solved using simple tools or reasoning at our disposal.

Take the most simple non-linear puzzle in business, ensuring safety, no matter what inputs you provide, the output can never be predicted based on the inputs you have provided to ensure safety. So to simplify this problem, one can break the puzzle into various constituent parts and try as much linearization as possible.

First will be to find what causes what, this finding of causation with different variables at play is at the root of the simplification and linearization. If every employee wears hard-hats, it will eliminate accident caused by falling objects from the top of an installation. Or if all vehicle pathways within an installation is made separate from walkways of pedestrians then chances of accidents would be eliminated between a pedestrian and a vehicle.

Taking each cause of accident and eliminating a root cause is a handiwork of linear thinking. However when several of the causes are inter-linked, or when one is a dominant cause and there is a bias involved in the behavior of workers we have a complicated problem at hand. Here providing adequate safe guards if what you can do at best but you are not eliminating the root cause.

Business problems have a large 'human' interface, coupled with that we have "information blind spots" and here we delve into the realm of complexity.  Then we have to deal with biases and to top it all we have constraints, time constraints in particular make the problems move into a very difficult sphere.

Planning puzzles are about linear programming, finding optimization in a complex environment. Start on a clean slate, get the picture of the current situation and then find the next best solution through trials. But information blind spots is the crucial problem to deal with, without the right information sets or unbiased information sets, the puzzle could be solved completely wrong.

Dealing with information blind spot is an organizational problem and it ranges from planning puzzles to marketing launches as well.

New product in new markets against an array of possibilities is a complex problem, here merely by the choice of your inputs, you cannot be sure that the output will follow the rule of a connection with your input. For all you know you could have multiple solutions, like in a quadratic equation, x= a or b.

This is precisely the reason out of hundreds of product launches very few succeed or conversely with one single product launch you could be at the pinnacle of success.

Linearization of these complex puzzles are done by entrepreneurs and managers by collective thinking, brainstorming, experimentation and hypothesis testing on a massive scale. Sometimes accidental solutions emerge, which apparently do not satisfy a logical reasoning or a line of thought that stems from linear thinking.

Engineering problems are mostly linear in nature until we get into environmental puzzles, which are seriously falling into the realm of non-linear systems.

Stock picking is a non-linear puzzle but we "efficiently" think to make it appear linear, if more people think a stock has chances of appreciation it will appreciate, but this is not true closer to the catastrophe when even one person thinking differently could initiate the cascade.

This brings us again back to the Hartman-Grobman Theorem, finding the equilibrium closer to which all systems will behave linearly is where the trick will lie. Most entrepreneur-leaders know this or have the sense of this before the others sense it.