I was watching some MBA presentations this week, and they reminded me of a section of “On Exactitude in Science” by Jorge Luis Borges. In this short story, Borges describes a map the size of the world (From Jorge Luis Borges, Collected Fictions, Translated by Andrew Hurley Copyright Penguin 1999):

. . . In that Empire, the Art of Cartography attained such Perfection that the map of a single Province occupied the entirety of a City, and the map of the Empire, the entirety of a Province. In time, those Unconscionable Maps no longer satisfied, and the Cartographers Guilds struck a Map of the Empire whose size was that of the Empire, and which coincided point for point with it. The following Generations, who were not so fond of the Study of Cartography as their Forebears had been, saw that that vast Map was Useless, and not without some Pitilessness was it, that they delivered it up to the Inclemencies of Sun and Winters. In the Deserts of the West, still today, there are Tattered Ruins of that Map, inhabited by Animals and Beggars; in all the Land there is no other Relic of the Disciplines of Geography.

Suarez Miranda,Viajes de varones prudentes, Libro IV,Cap. XLV, Lerida, 1658

A map is a type of model, and any time you make a model, you have to leave things out for the model to be useful. Otherwise you end up with a map the size of the world.

The MBA talks got me thinking about the models that we make when we study business. We can classify these models based on how they reduce the system that we are trying to describe down into some kind of (ideally) more coherent set of ideas. In doing so, we are trying to follow Albert Einstein’s advice that “Everything should be made as simple as possible, but not simpler.”

In the MBA presentations, I saw three types of models:

1. Simplistic: these are the most common types of models in business, and they don’t follow Einstein’s advice – the actually make things simpler. These are models or frameworks that lack depth. Because of this, the ideas being put forward often fail to include critical information. In most cases, simplistic models are not just inaccurate, they can be dangerous to take seriously. One example of a simplistic model is “house prices can only go up.” We’re still trying to sort out the results of many people taking this simplistic model too seriously. That’s the danger of simplistic models. The good side of simplistic models is that these are the type of models that you get when you approach things with a Beginner’s Mind. So simplistic models can be useful for finding underlying assumptions that experts overlook or assume away.
2. Complex: these are models that are closer to “map of the world size”. They add in a lot of details – a whole lot. Complex models are the ones that lead to the creation of powerpoint slides with 250 words of text on them. Complex models are often better than simplistic ones, because they include more of the relevant details. However, the trade-off for this increasing accuracy is a reduction in clarity.
3. Simple: you get simple models when you really understand a topic. I used to do industrial water treatment consulting. I would design treatment programs for plants, but on a day-to-day basis these programs had to be executed by the plant’s operators. Usually these were people with limited education, and often with English as a second language. Despite these obstacles, my manager used to say that if you couldn’t explain the principles of our programs so that the operators understood what we were trying to do and why, then you didn’t understand it yourself. He wanted us to be able to explain simple models – ones that really were as simple as possible, but not simpler.

What I observed while working with the MBA students is that the presentations would work their way through all three types of models. We would start with simplistic ones. Sometimes these would provide unique insight, but usually they were too basic to be useful. In response to this, the students would load them up with every fact and idea that they could generate, leading to complex map of the world type models. These were better, but difficult to understand. Eventually, they could take these facts and ideas and distill out the critical points. That is when they got to simple models.

Two people that have done some great thinking on how to effectively deal with complexity in business are Dave Snowden (example here) and Ralph Stacey (example here). They both worry that most business models are simplistic, and they try to develop ways of seeing and acting that avoid this problem.

When you think of how the world works, are you using a simple model or a simplistic one? The difference is important. You can only get to simple with a deep understanding of the system you are trying to picture.

(picture from flickr/Chuck “Caveman” Coker under a Creative Commons license)