COVER THEME
Why
breadth
may soon
trump
depth
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t
Hedgehog
logic has
boxed out foxy
thinking –
with students
becoming
increasingly
interested
in learning
what to think
rather than
how to think
image: getty images
There are no hard and fast answers in business
anymore. Specialised knowledge is no longer as
valuable as it once was when it comes to managing
the complexity and ambiguity of the current
environment. To future-proof their organisations,
leaders must be increasingly sceptical, diffident in
their projections, and ready to adjust their thinking.
In this new world, breadth will prove as valuable as –
if not more valuable than – depth.
oday’s political and
business leaders are
forced to make decisions in ambiguous,
poorly defined and highly uncertain
situations with incomplete information. Within this complex, volatile and rapidly changing environment, ambiguities rule the day.
The global environment was
not always this uncertain. During
the Cold War – when the US and
the USSR led opposing political,
economic and military blocs – the
US attempted to solve a fairly simple
(albeit extremely important) problem. It needed to determine how
many Soviet warheads there were,
where these missiles were located,
and their possible targets.
The US’s problem was a “puzzle”,
in that it had an answer. The US
military knew the answer existed; it
just needed to be found. The standard problem-solving approach was
to acquire more data – to literally
generate more and more dots on a
map until the density of data turned
into insight. Unsurprisingly, the US
embarked on a massive intelligence
gathering effort that included flying
spy satellites over suspected areas
and intercepting communications
to generate enough “dots”. (Incidentally, at its 1989 peak, the USSR is
believed to have had 1,379 launchers
with 7,031 warheads.)
While puzzles such as the USSR’s
missile count represent one extreme
of the problem-type spectrum, the
other extreme is something I refer
to as a “mystery”. Mysteries are
fuzzy; they are ambiguous, uncertain and probabilistic. Mysteries
do not have answers. Instead, the
best one can hope for is to generate an understanding of the various
scenarios that may play out, and the
ramifications of each development.
Think about the rate of Japanese inflation next year. In a gross
simplification, you could consider
running scenarios, such as differing
oil prices and currency fluctuations
between the Japanese yen and US >>
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U nder s tandin g dot s
Leaders now operate in multiple
spheres of interconnected domains
with responsibility to nested
layers of stakeholders that transcend corporate and geographic
boundaries. As a result, there is a
dizzying array of complexities and
apparent contradictions plaguing
today’s business environment.
For example, as economic growth
has resumed, central banks are
threatening to alter their accommodating position, which could
result in a financial sell-off. That’s
right; the positive news of economic growth now creates the bad news
of falling markets.
It is not surprising that navigating such uncertainty and
interconnected complexity is
difficult for business leaders. In
this environment, how leaders
make decisions becomes even
more important. Leaders need to
be comfortable understanding the
nuances of both puzzles and mysteries, and adopt appropriate approaches to tackle them. However,
until recently, most leaders have
tended towards specialising only
in puzzles, with disproportionate
attention to developing dots. The
time has come to emphasise connecting them as well.
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dollar, in an attempt to understand the likelihood of inflation.
But you can analyse all the data
you want – heck, you can even
interview Shinzo Abe – unfortunately there is no definitive
answer to a mystery.
Unlike a puzzle, where if you
generate enough dots the answer
is likely to emerge, to understand
a mystery you need to connect
those dots. As the above examples
illustrate, the correct approach to
addressing a topic is contingent
upon the type of problem. For
puzzles, we need to generate dots.
For mysteries, we need to focus on
connecting the dots.
H ed g eho g s s eem
to b e winnin g…
Despite the need for broad thinkers
with diversified skills and the ability
to draw from different domains to
address new and evolving problems,
we have been training our future
leaders to become increasingly
specialised. Many people and organisations see domain expertise as
an enduring source of advantage in
today’s competitive environment.
By valuing expertise so highly,
governments and corporations
have placed a tremendous premium
on depth rather than breadth. In
our quest to capture this excess
value, we have heavily discounted
the value of breadth. Surely a better
balance exists.
In his 1953 essay The Fox and the
Hedgehog, philosopher and scholar
Isaiah Berlin posited that there are
two fundamental human types:
hedgehogs and foxes. Drawing on an
old European fable, Berlin contrasted hedgehogs, who “relate everything
to a single, central vision”, with foxes,
who “pursue many ends… connected,
if at all, only in some de facto way”.
Berlin’s classifications are really a
story of specialists versus generalists.
The move towards specialisation
can be clearly seen in the sphere of
education, where career-relevant
skill development dominates. As
evidence, consider that in 1991 the
most-popular undergraduate programmes of study at Yale University
were History and English, with 165
students graduating with an English
degree. In 2012, only 62 students
graduated from Yale with an English
major. Anecdotal evidence from
students suggests parental pressure and “job market realities” have
been driving this trend. For the class
of 2013, the most popular majors
among graduating seniors at Yale
were Political Science and Economics. If this is a dynamic taking place
within a leading liberal arts college,
one can only imagine the severity of
the shift within education at large.
Hedgehog logic has boxed out foxy >>
The earning potential of hedgehogs vs. foxes
The Wall Street Journal’s 2011 analysis of employment data
in the US – titled From College Major to Career – confirmed
that specialisation pays. Graduates with engineering degrees face a 3% to 4% unemployment rate on average, while
humanities majors had an 8.4% unemployment rate. Salary
data was equally convincing: engineering salaries were approximately double those of humanities graduates. In this
environment, which would you suggest your child study –
Literature, Economics or Petroleum Engineering?
Arts, Humanities, and
Social Sciences graduates
major:
MEDIAN INCOME :
UNEM P LOYMENT RATE :
Science, Business, and
Engineering graduates
major:
MEDIAN INCOME :
UNEM P LOYMENT RATE :
H i st o ry
Petroleum Engineering
r at e : 5. 6 %
r at e : 4 .4 %
L i b e r a l A rt s
Mining / Mineral
Engineering
$50,000 $127,000
$48,000 $101,000
r at e : 7. 6 %
r at e : 4 . 3 %
Humanities
Mechanical Engineering
r at e : 8 .4 %
r at e : 3. 1 %
P h i l o s o ph y
Geological engineering
r at e : 7. 2 %
r at e : 0.0 %
L i t e r at u r e
Computer Science
r at e : 1 0. 2 %
r at e : 3. 5 %
drama
Economics
$45,000 $81,000
$42,000 $73,000
$42,000 $77,000
$40,000 $69,000
r at e : 7. 1 %
r at e : 6. 3 %
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Hiring
Perhaps recruiters need to look more
favourably upon liberal arts graduates. Should Asian or multinational
corporations begin hiring philosophy,
arts, and literature majors to diversify
their human talent’s perspective?
If “the ability to learn is the most
important quality a leader can have”,
as noted by Padmasee Warrior, Chief
Technology Officer for Cisco Systems, then graduates from liberal arts
programmes will become increasingly
hot commodities.
Given the breadth of knowledge
presented in many liberal arts programmes, most graduates draw
on different perspectives. They are
perhaps better placed to embrace
uncertainty, often developing solutions within it rather than seeking to
abolish inherent ambiguity. Forwardlooking companies should begin hiring
liberal arts graduates from schools
like the recently launched Yale-NUS
College, the first liberal arts college in
Singapore. Such programmes provide
students with multiple lenses and tools
with which to interpret and attack new
problems. This could materially reduce
organisational groupthink. Further,
when evaluating candidates, diverse
experiences – across functions,
companies and industries – should be
viewed as evidence of possible dotconnecting skills.
Ta l e n t d e v e l o p m e n t
When setting development plans
for potential leaders, emphasise
variety of experience over depth of
knowledge. Support and encourage those talents who demonstrate
combinatorial skills, as well as those
who develop and integrate disparate
perspectives. Force rotations amongst
employees in order to take ambitious
professionals out of their comfort
zones. As seemingly illogical as it
seems, place your rising marketing
stars in charge of an engineering
project. Provide opportunities for operations executives to interface with
– if not lead – public relations.
By developing talent with the explicit
objective of balancing depth with
needed but tough-to-get breadth,
home-grown talent pools will be
larger, more accomplished, and more
effective at leading – making organisations less vulnerable to labour market
conditions. Consider the generalist approach to be an ongoing process and
support it constantly.
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foxes know
many little
things, draw
from an
eclectic array
of traditions,
and accept
ambiguity
and contradictions
T he ca s e for g enera l i s t s
While the current environment appears to favour the
specialist, there are two reasons I believe the future
belongs to the generalist. First, generalists appear better
suited to navigate mysteries, while specialists may be
less well suited to tackling the increasingly fuzzy problems facing leaders today.
Consider the oft-cited work of Dr Philip Tetlock. Over
20 years, he asked 284 mainly political experts to predict the probability of various occurrences – both within
and outside of their areas of expertise. Analysis of 27,451
forecasts found that experts are less accurate predictors
than non-experts in their area of expertise.
Tetlock concluded that when seeking accuracy of
predictions it is better to turn to non-experts who – like
Berlin’s prototypical fox – “know many little things,
draw from an eclectic array of traditions, and accept
ambiguity and contradictions”. Ideological reliance on
a single perspective appears detrimental to one’s ability
to successfully navigate poorly defined situations, which
are more prevalent today than ever before.
Second, our dynamic global economy drives increasing interconnectedness, with seemingly distant and
unrelated events affecting each other. For example,
recent developments in China’s economy include a rapidly decelerating growth rate driven by slowing capital
investments. Given the commodity linkages between
the Chinese and Australian economies, it should not be
surprising that changes in Chinese capital investment
ripple into the Australian mining sector.
But what if we consider broader ramifications? Might
Australia’s housing market (seemingly driven by local
image: getty images
generalist Implications for
human capital management
thinking – with students becoming increasingly interested in learning what to think rather than how to think.
The story does not stop there. It continues on through
professional development post-graduation. In the 60
years since Berlin penned his essay, hedgehogs have
come to dominate academia, medicine, finance, law, and
many other professional domains. Research conducted
by executive recruitment firm Spencer Stuart found that
33% of the CEOs heading companies in the S&P 500
held undergraduate engineering degrees. There are also
literally hundreds of tech-industry CEOs that have computer science backgrounds, and more executives trained
in business administration than any of us can count.
In some sense, this is not surprising. Education and
professional development has responded to competitive
incentives. Business thinkers, organisational psychologists and leadership trainers point to domain expertise
as an enduring source of advantage in today’s competitive environment. The logic is straightforward: learn
more about your job, acquire expert status and you will
go further in your career.
dynamics) be vulnerable to developments in China? Consider the following. Global job hunters are attracted by
high-paying mining jobs in Australia, which fuels significant immigration. As a result, demand for housing grows,
and housing prices and incomes rise concomitantly. The
resulting price strength emboldens Australian banks to
lend more aggressively, comforted – incorrectly, I believe
– by the assumption that the price trend will continue.
Is it then possible that Australia could suffer a systemic
banking crisis as a result of a Chinese slowdown?
F uture - p roofin g
The stakes are high. Globalisation, economic and financial interconnectedness, and international resourcebased linkages are the reality of today’s socio-politicaleconomic existence. National economies and large
corporations are increasingly in need of dynamic, flexible
human capital that knows how to think, not what to think.
Technological innovations have effectively commoditised information. As a result, value has shifted
from generating the dots – something a specialist is well
suited to doing – to connecting them, which is a more
pronounced skill among generalists. Specialists are still
needed. Without specialist-generated dots, generalists
would have nothing to connect. Nonetheless, while it
may seem axiomatic that tomorrow’s surprises are likely
to be new and unexpected, our preparation for facing
them seems misaligned. The fact that our world is more
mysterious means we need to be less rigid and embrace
the power of generalist thinking.
Vikram Mansharamani, PhD, is a Lecturer at Yale University and a
Senior Fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School. He is the author of
Boombustology: Spotting Financial Bubbles Before They Burst.
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