A few years back I was lucky enough to chair a series of talks at The Royal Institution in London. The audiences were made up of finance types usually with a science background and the idea was to a get a series of speakers in to range across a number of topics that would spark lively debate. A particularly memorable speaker was the distinguished American physicist Larry Krause. His theme was the importance of questioning and critical thinking in science, and indeed in life in general.

Professor Krause raised an important idea that really resonated with me; namely when confronted by a problem or examining an issue, we tend to rush towards asking Why? This seems particularly true in my own field of finance. Why is the Dow lower? Why are people buying gold? Why are “those idiots” buying at these levels?

Krause suggested that we should not forget to ask How?  Indeed, How, might often be the more appropriate question and may lead to a wider set of possible answers. By thinking about the How, it draws our mind to seek to understand the underlying mechanics and relationships that may help better explain things. We should acknowledge that this wider set of explanations can be a good thing – all too often we grab at the first answer to a problem, and fondly believe that it, must be the solution. Regrettably the human desire for slam dunk solutions knows no bounds and can lead to bad decision making.

By way of example he noted that in his own specialised field many outsiders, particularly non-scientists, spent a lot of time asking Why and Who created the universe, but rarely thought enough about How it came to be. As ever of course, there can be an uncomfortable twist – answering How may be devilishly difficult and potentially impossible. Hence the rush to concentrate on answering Why (or at least present a plausible scenario) and quickly move on, triumphantly announcing the issue was “solved”.

But why may answering How be impossible? Well some of the most difficult issues we face do not readily give up the answer to How. We have to understand that many interactions in life; science, markets, business, and our own behaviour do not always follow predictable linear paths. The past may be an extremely poor guide to the future, and so teasing out the structure or pattern of a current situation and how it may unfold may be impossible. We find this doubly a problem as humans are very attracted to pattern matching, finding patterns in random or noisy data that not really there. (The age-old example of the supposed image of Jesus on burnt toast comes to mind).

So tackling How can mean a very big challenge. In recent years interest in and the application of Complexity Science and understanding non-linear networks has attracted a lot of attention. This is still very much a developing field, but decision makers need to be aware of it might unlock the How puzzle and lead to a wider set of better decisions.

If you are interested in learning more about Complexity, and its applications I would suggest the following links:

Books

Positive Linking – By Paul Ormerod 

The Tangled World by myself and Terry Lloyd

Elsewhere

New England Complex Systems Institute

https://necsi.edu/an-introduction-to-complex-systems-science-and-its-applications

Santa Fe Institute 

https://www.santafe.edu/applied-complexity/office