Can Sherlock Holmes help us make decisions?

Yes, I have a turn both for observation and for deduction. The theories which I have expressed there, and which appear to you to be so chimerical are really extremely practical—so practical that I depend upon them for my bread and cheese.” Sherlock Holmes. The Sign of Four, Chapter 2: The Science of Deduction. Sir Arthur Conan Doyle, 1890.

In the March 2015 blog Practical Reasoning: Decision making in Rainforest innovation ecosystems in this series, we quoted David Milligan from his book Reasoning and the Explanations of Actions, written in 1980 but still fresh. Milligan explains that a good deliberative reasoner is “not someone who simply obeys the rules of logic,” but someone who is also a sound judge, can make intelligent decisions, and can defend his or her decisions about how to act by pointing to reasons which support actions.decision-making-fork-2

Relating decision making to action, or a series of actions, based on these decisions goes far beyond explaining how a system state came to be, but produces interventions to change the present system state to a future desired state through reasoned actions.

We also noted that rather than downgrading the importance of logic, Milligan work launches us into the necessary search for non-deductive ways of reasoning and decision making in environments where there is an abundance of wicked problems – which is almost everywhere. (Don’t try to tame wicked problems: Part 1).

Let’s see how this works in practice by taking an example from commercializing university research through creating a new business around the technology (a spin-off company). See a previous blog in this series Solving the Right Problem: Part 1 for more on spin-offs.

What characteristics of the university’s innovation environment might support greater spin-off company activity? To make things simple, consider the case of trying to reason and choose one of just two options out of many possibilities:

  • Resources: make available more financial and supportive resources for spin-off creation.
  • Culture: develop a culture of innovation throughout the university and its broader stakeholder community.

After deliberation, two reasons emerge as reasons in favor of Culture which we will call P, and Q. Two reasons against Culture also emerge which we will call R and S. It turns out that P and Q outweigh R and S, therefore Culture development is the better option.

In linear systems the argument from the P and Q to the selection of Culture must be deductive, although neither P nor Q is necessarily a conclusive reason for Culture. In non-linear complex (Rainforest) systems where wicked problems are the norm, and deduction cannot be used, forming an acceptable good reason involves deliberation involving evaluations, sometimes called reason statements, which can be defended, or indeed changed if they fail to hold up against a challenge. This reasoning will typically involve drawing non-deductive conclusions from observations.

An example of this is when we deploy The Rainforest Scorecard: A Practical Framework for Growing Innovation Potential process and scoring model introduced in our January bonus-blog Measuring Culture, Performance, and Innovation.

When the Scorecard is applied reasoning is used in two ways.

  1. To qualitatively apply non-deductive reasoning to produce a quantitative score for each of the 6 Scorecard categories: Leadership; Frameworks, Infrastructure, Policies; Resources; Activities, Engagements, Role Models; and Culture.
  2. To find relationships between the 6 categories from Scorecard data collected during its application.

In both cases deliberation, producing reason statements, draws on experience, knowledge networks, references to related past results, cognitive insights, contexts, cost-effectiveness, and so forth. In some cases deliberation may also identify a small number of key variables which greatly influence results – more on this in a future blog.

For details of finding relationships between the 6 Scorecard categories see the Forbes blog by the Rainforest Scorecard co-author Henry Doss, Status Quo Leadership is the Biggest Impediment to Innovation.

As Milligan notes “reasons can be good and sufficient to justify a conclusion without being deductive… in the context of deliberations reasons which are not deductive are the most important.”

Or as Sherlock Holmes put it, don’t rely entirely on deduction to make a living.

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