Using Concepts To Solve Management Problems – by Mike Metcalfe

April 25, 2014

Business Management

problem solving jigsawMike Metcalfe’s new book How Concepts Solve Management Problems offers a process for conceiving solutions to complex, wicked, messy, swampy or socio-technical problems.  When charged with complex problem solving, he argues, a useful set of concepts needs to emerge, be agreed, and acted upon.

In the following article, Mike offers an insight into his own life experiences where using concepts to solve problems has come to the fore.

I argue that problems are resolved by using new concepts to think about them. Russell Ackoff called this synthesis to distinguish it from analysis. Karl Weick called it sensemaking. Gary Klein called it naturalistic thinking or patterns recognition. Let me give you some examples from my own experience.

My first job was as a navigator in the merchant navy. Back then, one of the problems facing the merchant navy was the cost of general cargo loading and unloading at ports. Docks were heavily unionised and cargos loaded by dockside cranes and wharfie gangs, by the old innovation of the pallet load. Disputes were common, resulting in numerous delays. My 21st birthday was spent at anchor in a long line of ships in the Thames, waiting for another London dock strike to be resolved. We carried chilled beef from the Argentina, chilled apples from South Africa and frozen mutton from New Zealand, all perishable even in an English summer.  The solution to this cargo handling problem was containerisation. Containers were pallets with large, secure boxes of standard sizes that were loaded and customs-sealed at the owners’ inland depots, only to be opened at their final destination. The docks were far less of a bottleneck and the loading could largely be mechanised. It was expensive; special ships and cranes were necessary, docks had to be redesigned, warehouses replaced by container parks. But it seemed worth it. The consequence was that Wharfies almost disappeared.

I am calling containerisation a concept rather than an invention, or an idea, because it enables me to plug into the problem solving philosophy of the pragmatists. Terms like invention and ideas get caught up in idealist philosophy with its spiritual connotations.  A pragmatic concept is an experience, a pattern of activity. Smiling and running are examples. It is an experienced activity, not a description of appearances, the function not the form. Things are what they do, the consequences of their existing, they are not explained by what they look like. This is important to pragmatic philosophy because they define how we know anything in this way. Containerisation is the activity of packing general cargo into a steel box for storage and transportation plus having the machinery to handle it.   Using the concept of containerisation says what needs to be done. This is a good start when problem solving.

Let me provide another example of how to solve problems by shifting the concept used.  Having realised that the problem of ships’ crew costs was being resolved by the concept of ‘Flag Of Convenience’, I changed jobs to commerce. In commerce, the problem I was involved with was that of financial control. The solution concept was called budgeting, although I preferred the term profit forecasting. Organisations wanted to be able to predict their costs and incomes, in some detail, up to a year in advance. This provided the opportunity to make changes where required, and it impressed investors. Historically accounts were summarised at year end. When announced, there would either be redundancies announced or free drinks handed out, depending on whether a profit or loss had been calculated. Some budgets were considered realistic; they predicted what costs and income would most likely be. Some budgets were idealistic, using what the costs and income should be. The concept of budgeting is now universally used by most large organisations; it is expensive to run, requiring every invoice to be compared with the budget and differences recorded. Computers help. If anything it is a waning concept as people often work to the forecast figures rather than constantly seeking to minimise costs or increase income at every exchange. Allocated monies get spent regardless of need, to ensure next year allocation is not reduced.

Having overdosed on spread sheets a little, I looked around for something a bit more physical. The British Parachute Regiment was looking for part-time soldiers, weekend warriors, so I joined up. The problem facing generals had historically been logistics, or more precisely, coordinated mass mobility. As is sometimes said, amateur generals worry about tactics; professional generals worry about logistics – how to get an overwhelming amount of the right equipment in the right place at the right time. However, after Vietnam and given Northern Ireland, a new problem was arising, one requiring new concepts to resolve it. The problem was terrorism, insurgency, asynchronous warfare, or what is sometimes called targetless warfare, where the enemy is hidden from view, merged in, protected and indistinguishable from the local population.  The concepts used to resolve this problem were still being worked out in Iraq and Afghanistan, but included nation building, intelligent individual tracking, drones, shoot-on-sight, elite rapid teams, and training up local police.

Back at my full time job, budgeting was so successful in industry that there were jobs opening up teaching it in universities. I joined a business school. The problem facing this industry was, and still is, one of appropriate research design, or knowing what advice to give to students. One concept offered as the solution is naive science, saying knowledge must be derived from a rigorous deductive, quantitative, repeatable and objective process of observation. Another solution concept is that of interpretivism, induction, wanting to solve problems rather than just observe behaviour. This includes wanting to understand what concepts managers are using, and might use, to interpret their problems. These concepts are induced from their linguistic explanations of why they prefer some actions over others.  Another concept in use for solving the research design problem is to provide stories of why the successful are successful. While each research design concept, like Kuhn’s paradigm schools, still maintains its followers, the old concept of dialect argumentation is acting to resolve their differences. A well-argued claim, supported by convincing evidence, is agreeable to all parties.

As a last example of appropriate concepts resolving problems, let me end with another job I had as a Ministerial (Senator) advisor. My Minister was Treasurer and Deputy Premier of South Australia, as well as one time Minister for Mines, Energy, Police, and Urban Development in a State about the size of the UK and France combined.   The problem he faced was how to manage legislation including taxation to increase economic development while protecting the environment (natural and cultural). The concept used to resolve this problem was called competition policy, which removed the legislative support for any monopoly practices. This included restrictive licences on gambling, fishing, electricity wires, telecommunications towers, local government services, utility supply and mining licences. When opened up to competitive forces, the weak had to be protected.

Book coverHopefully, I have convinced you that concepts can be used to organise the response to managerial problems. Once a resolution concept has been agreed, then science can be brought in to provide the detailed analysis. First concepts, then analysis. In Ackoff’s terminology, knowing what concepts to use to think about a situation changes a mess into a calculable problem. Other writers put it differently, the unstructured into the structured, it gives pattern to a situation, it sensemakes. The problem this concept language raises is that of how the right concepts might be induced from the concerned stakeholders involved. My book How Concepts Solve Management Problems explains how to use qualitative cluster analysis to go about this in a democratic manner, but creativity will always be part of the process.


MetcalfeMike Metcalfe’s main expertise is in managerial problem solving. He has published extensively on this topic.  His pragmatic pluralism comes from a lifetime of engaging with change from the contraction of the British Empire, through the IT revolution, to careers in the Merchant Navy, being a British Army Parachute Regiment Reservist, working in industry, Government, and as a lecturer at Universities in England, New Zealand and Australia. At one time he was a senior policy adviser to the Deputy Premier and Treasurer of South Australia. 



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