In the last few posts, I have been developing the idea of effectuation as a self-organization principle against the idea of expertise acquired by entrepreneurs via experience and deliberate practice. Following are two blog posts in which I have elaborated my thoughts.
Self-Organization: Paul Cilliers and Saraswathy: Here I assess effectuation using Paul Cilliers’s attributes of self-organization. Arguing that effectuation simulates the action models of self-organizing systems.
I have tried to demonstrate that the ideas proposed by effectuation might fit perfectly with self-organization principles. Advancing that point, the following are some of the complexity principles i find as potentially associated with effectuation and its core principles(heuristics).
1. Self-Organization/Effectual dynamics
I argue that “effectual dynamics” might be the dynamics of self-organization. Self-Organization refers to the feature of systems that appear to organize themselves without external direction or control. Self-organization has been used to describe swarms, flocks, traffic, and many other systems where the local interactions lead to a global pattern or behavior (Camazine et al, 2003; Gershenson, 2007). Intuitively, self-organization implies that a system increases its own organization. Self-organization of the effectual entrepreneur is initiated with an examination of the means available to an entrepreneur. The questions “Who am I?”, “What do I know?”, and “Whom do I know?” allow for an examination of the means available to an entrepreneur, which allows him or her to consider what he or she can do (Sarasvathy & Dew, 2005). Through interacting with others and engaging with stakeholders, the entrepreneur discovers new means and establishes new goals that allow for revaluation of means and possible courses of action (Fisher, 2012).
2. The attractor/ Intention
Self-organizing systems typically evolve towards a state of equilibrium, or an attractor state. Almost any dynamical system can be seen as self-organizing; if it has an attractor towards which the system dynamics will tend to move, thus increasing by itself its own organization. According to Kauffman(1995), “the trajectory converges onto a state-cycle attractor around which the system will cycle persistently thereafter. A variety of different trajectories may all converge on the same state cycle, like water draining into a lake. The state-cycle attractor is the lake, and the trajectories converging onto it constitute its basin of attraction”. So the question is, Who or what constitutes one of the key initial attractor according to effectuation. Is it the entrepreneur, or intention? Since effectuation has a lot of roots in the work of Herbert Simon, especially “The Sciences of the Artificial” (Simon, 1968), I prefer to take evidence from his work, quoted by Saraswathy herself; “For Simon, human intention and design were central to the social sciences, and the word ‘man-made’ was synonymous with artificial” (Sarasvathy, 2008). From that foundation, it is logical to assume recognition of “intention as the attractor (Juarrero, 2010)”. Intention is also a valid concept in entrepreneurship (Bird, 1989; Shapero and Sokol, 1982; Krueger and Carsrud, 1993). According to Juarrero(2004), “new intention reorganize the earlier state space into a more differentiated and complex set of qualitatively novel options. This means that once an agent formulates a prior intention, every possible behavioral alternative no longer requires consideration; only a partitioned subset does”.
3. Phase space disposition
According to Saraswathy, the process elements of effectuation begin with entrepreneurs asking who they are, what they know, and whom they know. This corresponds to the idea of knowing the disposition of phase space or state space of a complex adaptive system. In complexity science, the ‘phase space'(or state space) is the representation of all possible instantaneous states that can occur in a physical system (Butkovskiy 1990, Sayama 2015). It can be thought of as the space within, around, or adjacent to which a complex adaptive system can self-organize and emerge. While we may not be able to know precisely how a system might change, we do know that it will be most likely within the phase space. A change in emergent phenomena within a phase space may be incremental. A radical change suggests a shift in phase space, a qualitative difference in the system (Byrne & Callaghan, 2014). According to Dave Snowden(2017a), in complex adaptive systems, “at a system level, we have no linear material cause but instead we have a dispositional state, a set of possibilities and plausibilities in which a future state cannot be predicted.” This is particularly important because, in a complex system, phase space disposition, is what decides on the evolutionary potential of the system, not any specific fixed goal. If a system is complex(no causality), “you can’t set outcome targets a priori, but you can define a vector target (direction and speed of change from the present against intensity of effort). You can’t manage to a desired future state but have to manage the evolutionary potential of the situated present. You can’t predict the future, but you can increase resilience in there the here and now which will allow you to manage that uncertainty” (Snowden, 2017b).
I argue that an effectual entrepreneur, by asking questions such as; who they are? what do they know? and whom they know? etc. effectively is trying to make sense of the dispositional propensities, so that they can utilize the evolutionary potential of the present to decide what to do.
4. Adjacent Possible.
From the understanding of disposition comes the “The bird-in-hand principle” which refers to a principle of means-driven(as opposed to goal-driven) action. The emphasis here is on creating something new with existing means rather than discovering new ways to achieve given goals. To effectuation, entrepreneurs focus on what they can do and do it, without worrying much about what they ought to do. This idea is similar to acting in the adjacent possible (Kauffman, 1996), i.e. a kind of zone of proximal development (Vygotsky, 1978), towards which change and evolution are more likely because of the current disposition of the system. The concept of “adjacent possible” was introduced by Stuart Kauffman (1996; 2000) in evolutionary biology and complex adaptive systems to explain how biological evolution can be seen as exploration and actualization of what is adjacent possible. It can be defined as “the set of possibilities available to individuals, communities, institutions, organisms, productive processes, etc., at a given point in time during their evolution” (Loreto 2015, p. 9). The concept of the “adjacent possible” is useful for understanding how entrepreneurial adjacent possibilities emerge, and how the new adjacent possible will lead to yet newer adjacent possibilities. In the case of effectual entrepreneurs, they will focus on the adjacent possible than worry about things they don’t possess. They will focus on what they can do and do it.
Any failure inside the zone of adjacent possible will not likely result in system destruction, but likely help the development of system resilience. The affordable-loss principle to me is a heuristics based on this idea. It prescribes committing in advance to what one is willing to lose rather than investing in calculations about expected returns to the project. If an effectual entrepreneur commits 6 months and 10000k, that commitment itself will shape the constraints of the adjacent possible.
4. Co-evolution and Co-adaptation
For a system to self-organize, its elements need to communicate: they need to “understand” what other elements, or mediators, “want” to tell them (Gershenson,2007). Thus, first of all, in a complex system, dynamics of self-organization are initiated and manifested by heterogeneous agents interacting with one another in a non-linear and continuous way. Even if specific agents may only interact with a few others, the impact of these interactions are propagated throughout the system. Accordingly, agents co-evolve with one another (Anderson, 1999). Through this interaction, agents strive to improve their fitness with the environment but the outcome of these attempts depends on the disposition and behaviors of other agents (Mitleton-Kelly, 2003). Thus, co-evolution is one of the key themes when it comes to viewing the system as a whole(the nested and entangled relationships with multiple complex adaptive systems), which refers to the simultaneous evolution of entities and their environments, whether these entities are organisms or organizations (Baum & Singh, 1994). It encompasses the twin notions of inter-dependency and mutual adaptation, with the idea that species or organizations evolve in relation to their environments, while at the same time these environments evolve in relation to them. In effectuation, this is parallel to initiated interaction and the crazy-quilt principle. This principle involves interacting and “negotiating with any and all stakeholders who are willing to make actual commitments to the project, without worrying about opportunity costs, or carrying out elaborate competitive analyses. Furthermore, who comes on board determines the goals of the enterprise. Not vice versa”. This involves the co-evolutionary potential of interacting agents constituted by the principles we have discussed till now but applied to the other side. They are; The Intention(attractor) of other agents, Phase space disposition of interacting agents, Adjacent-possible of interacting agents.
5, Acknowledging and appropriating Emergent property
Complex adaptive systems show emergent properties. Emergent properties refer to a characteristic that is found across the system but which individual parts of the system do not themselves hold. E.g. Human heart is made of heart cells. But heart cells on their own don’t have the property of pumping blood. You will need the whole heart to be able to pump blood. Thus, the pumping property of the heart is emergent. A complex system like entrepreneurship has emergent property. That means the emergent or emerging venture idea might be different from the ideas the entrepreneur has initially conceived. Thus initial idea may be to start HTML5 supported location-based service; The emergent outcome could be Instagram. The initial idea may be to develop an app to compare two people’s pictures and rate which one was more attractive; The emergent outcome could be Facebook. The lemonade principle of effectuation is based on adapting, using, and improvising according to emergent realities, whether it is perceived as negative or positive. It suggests acknowledging and appropriating contingency by leveraging surprises rather than trying to avoid them, overcome them, or adapt to them. This means accepting the emergent realities as it comes, adapting, acknowledging, and appropriating the contingencies as it unfolds.
The pilot-in-the-plane principle urges relying on and working with the human agency as the prime driver of opportunity rather than limiting entrepreneurial efforts to exploiting exogenous factors such as technological trajectories and socioeconomic trends. This is equivalent to elements of Lichtenstein’s(2016) concept of generative emergence that views entrepreneurial emergence as intentional, and agency, even if distributed, as the source of successful organizing. To the framework, intention is the primary attractor around which self-organisation takes place. In order for effective self-organization to take place, the agent must use agency, not to exert control that is driven by his/her own bounded rationality, or the rules of perceived local optima, but a kind of agency that is distributed (Garud and Karnøe, 2005)and embedded as well (Garud and Karnøe, 2003)
6. Effectual Self-organisation cycle
A complex system is always dispositional and I have discussed quoting Snowden that we can only know the system by knowing how it is disposed. “you can’t set outcome targets a priori, but you can define a vector target (direction and speed of change from the present against intensity of effort). You can’t manage to a desired future state but have to manage the evolutionary potential of the situated present”. Since the system is always changing, the bird in hand or disposition is also parallelly evolving. This warrants continuous reappraisal of the situated present. The effectual cycle suggests always looping back and cycling through five core principles in a non-linear manner(bird-in-hand, affordable-loss, crazy-quilt, lemonade, pilot-in-the-plane). More specifically there are two types of converging cycles mentioned; expanding means and converging goals. The expanding-means cycle looks for increases in resources, and the Converging goals cycle adapts the goals. “It accretes constraints on the venture that converge into specific goals that get embodied in an effectual artifact over time” (Sarasvathy et al, 2014; Sarasvathy & Dew, 2005, pp. 543–544). This is also a feedback about emergent realities that will lead to estimation of the new phase space disposition, new adjacent possible, new co-evolutionary potential, new action, etc.
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In my previous post, “Pragmatic Turn and Entrepreneurship: Part One,” I provided an overview of the recent development of the Pragmatic Turn in the domain of entrepreneurship. In this post, I will discuss some of my thoughts on the current status of the Pragmatic Turn project in entrepreneurship.
The pragmatic turn in entrepreneurship has begun with scholarly works like Sarasvathy(2009), Kraaijenbrink(2012), Rubleske and Berente(2017), Shepherd(2015), Taatila(2010), Watson(2013), Zellweger and Zenger(2021), Sergeeva et, al(2021), etc. All of these works used pragmatism to advance entrepreneurship scholarship by initiating insightful debates and also by introducing their own interpretations concepts and solutions. In an obvious case, anyone who looks at these myriads of solutions and interpretations will immediately get to feel total chaos or endorsement of some extreme versions of post-modernism. Most scholarly work in entrepreneurship in my view never started with a deep understanding of pragmatism, instead, is the result of an attempt to fit their preexisting ideas, tools, and conceptions with pragmatism. This partially answers the question, how can a single philosophical perspective produce this many variations, even those that take contradictory positions?
My issue with this is not that they all produced myriads of solutions and interpretations, but as a community collective, no one addressed this true nature of pragmatism. Instead, most scholars went on with using extreme levels of certainty statements about the nature of pragmatism. This might convey the wrong idea that pragmatism is a monolithic project.
What Pragmatism?
The “Pragmatic Turn Project” in entrepreneurship till now lacks a keystone work that genuinely discusses the true nature of pragmatism, its early influences, varied interpretations/misinterpretations, possible limitations, etc. If we look at the historical evolution of pragmatism, it will become evident that the evolution of pragmatism was never smooth and was marked by countless debates, disagreements, and conflicts between various scholars. There was not much of an agreement even between the two of the originators of pragmatism, Peirce, and James. As James’s popular version of pragmatism spread, Peirce was so outraged that he renamed his own doctrine of meaning “pragmaticism”, which according to Pierce is a name “ugly enough to be safe from kidnappers”, intended to be a jab at James. According to Bernstein(2006), “there is the famous quip that pragmatism is the movement that was founded on James’s misunderstanding of Peirce”.
William James himself articulates the chaos in the following way; There never was such confusion. The tower of Babel was monotony in comparison. …Dewey is obscure; Schiller bumptious and hasty; James’s doctrine of radical empiricism … has been confounded with pragmatism; pragmatism itself covers two or three distinct theories … the upshot has made one despair of man’s intelligence. But little by little the mud will settle to the bottom…. James (1907, As cited by Haack, 2004)
Philosopher of science, Ian Hacking(1983) who was hugely influenced by Dewey, writes a review of pragmatism in the following way; “There is, however, in James and Dewey, an indifference to the Peircian vision of inquiry. They did not care what beliefs we settle on in the long run. The final human fixation of belief seemed to them a chimaera. That is partly why James’s rewriting of pragmatism was resisted by Peirce. This same disagreement is enacted at the very moment”.
With this short take, Hacking(1983) brings his attention to neo-pragmatists. According to him, “Hilary Putnam is today’s Peircian. Richard Rorty, in his book Philosophy and the Mirror of Nature(1979) plays some of the parts acted by James and Dewey. He explicitly says that recent history of American philosophy has got its emphases wrong. Where Peirce has been praised, it has been only for small things. Dewey and James are the true teachers, and Dewey ranks with Heidegger and Wittgenstein as the three greats of the twentieth century. However Rorty does not write only to admire. He has no Peirce/Putnam interest in the long run nor in growing canons of rationality. Nothing is more reasonable than anything else, in the long run. James was right. Reason is whatever goes in the conversation of our days, and that is good enough. It may be sublime, because of what it inspires within us and among us. There is nothing that makes one conversation intrinsically more rational than another. Rationality is extrinsic: it is whatever we agree on. If there is less persistence among fashionable literary theories than among fashionable chemical theories, that is a matter of sociology. It is not a sign that chemistry has a better method, nor that it is nearer to the truth”.
Hacking(1983) then goes on to make some categorical statements. He adds, “Thus pragmatism branches: there are Peirce and Putnam on the one hand, and James, Dewey and Rorty on the other. Both are antirealist, but in somewhat different ways. Peirce and Putnam optimistically hope that there is something that sooner or later, information and reasoning would finally result in. That, for them, is the real and the true. It is interesting for Peirce and Putnam both to define the real and to know what, within our scheme of things, will pan out as real. This is not of much interest to the other sort of pragmatism. How to live and talk is what matters, in those quarters. There is not only no external truth, but there are no external or even evolving canons of rationality. Rorty’s version of pragmatism is yet another language-based philosophy, which regards all our life as a matter of conversation. Dewey rightly despised the spectator theory of knowledge. What might he have thought of science as conversation? In my opinion, the right track in Dewey is the attempt to destroy the conception of knowledge and reality as a matter of thought and of representation. He should have turned the minds of philosophers to experimental science, but instead his new followerspraise talk” .
Here Hacking clearly considers Putnam as a neo-Peirceian pragmatist and Rorty as aligned with James and Dewey. But complication comes when we consult huge number of works that demonstrates this is not the case at all. For example Vincent Colapietro(2011) see Richard Rorty as Peircean Pragmatist, a position that goes totally against that of Hacking. According to Pihlström(2004), “as soon as Richard Rorty started to wave the flag of pragmatism in the late 1970s and early 1980s and saw his own work as a continuation of William James’s and John Dewey’s philosophy, he began to receive critical comments from dedicated James and Dewey scholars who wanted to show that he had got these classics of pragmatism completely wrong”. Pihlström(2004) further argues that, “For Putnam, James is clearly the central classical pragmatist (although Dewey is highly important for him, too, and Peirce should not be forgotten, either), whereas for Rorty Dewey is clearly number one and Peirce is relatively unimportant, simply the one who gave the tradition its name and made the further developments of the tradition possible by stimulating James”. He adds, “both Putnam and Rorty reject Peircean pragmati(ci)sm (which, they seem to agree, amounts to metaphysical realism in the end) and turn to James and Dewey instead”.
But, if we consider a philosopher a Dewean pragmatist the complication is still not ending. According to Alven Neiman(1996), “We need to ask which Dewey we ought to appropriate. Should it be Cornel West’s vision of Dewey as prophetic pragmatist (West, 1989) or Nancy Fraser’s feminist pragmatist (Fraser, 1990) or Robert Westbrook’s communitarian Dewey (Westbrook, 1991) or the neo-Aristotelian Dewey postulated and praised by Father Richard John Neuhaus (Neuhaus, 1992) or Stephen Rockefeller’s quasi-Buddhist, ecologically-minded Dewey (Rockefeller, 1991)? For all their disagreements, these writers(above) share an antipathy toward Richard Rorty’s Dewey”.
In her paper, “Pragmatism, Old and New”, Susan Haack(2004) quotes a variety of philosophers who understood and articulated this point in the following way; “Long ago, A. O. Lovejoy complained that there were thirteen pragmatisms; Ralph Barton Perry suggested that pragmatism was the result of James’s misunderstanding of Peirce; and British pragmatist F. C. S. Schiller cheerfully acknowledged that there are as many pragmatisms as pragmatists. More recently, Rorty writes that “‘pragmatism’ is a vague, ambiguous and overworked word,” while H. O. Mounce argues that there are two pragmatisms: the honorable, descending from Peirce, and the dishonorable, descending from James and Dewey to Rorty et al. Each of them has a point; but it’s really more complicated, and more interesting, than any of them allows — more like the old joke about soldiers passing a message down the line: first man to second, “send reinforcements, we’re going to advance”; next-to-last man to last, “send three and fourpence, we’re going to a dance.’”
As we have observed, the true nature of pragmatism is not monolithic, but pluralistic. Most scholars who endorsed and used it, used it for various purposes in their own unique way. This is also empirically observable in the pragmatic turn in entrepreneurship as a domain. Though this might be interpreted as a bad thing, leading contemporary pragmatists were very well aware of this key feature. They never shied away from acknowledging it, and they often celebrated this as a good thing. Discussing the origins of American pragmatism, Richard Bernstein(2015) argues that, “the philosophers that inspired these thinkers were very different. Peirce claimed to know Kant’s Critique of Pure Reason practically by heart. James always felt a closer affinity with the British empiricists and dedicated his book on Pragmatism to J.S. Mill. And Dewey started as a Hegelian. Consequently, there was a diversity of philosophical orientations woven into classical pragmatism”. Hilary Putnam(1995) is another neo-pragmatist who pointed out this aspect. He states, “What I find attractive in pragmatism is not a systematic theory in the usual sense at all. It is rather a certain group of theses, theses which can be and indeed were argued very differently by different philosophers with different concerns, and which became the basis of the philosophies of Peirce, and above all of James and Dewey”.
Bernstein endorsed this claim by Putnam. He believed that pragmatism has always been a contested notion, which accounts for the richness, diversity, and ongoing vitality. The primary reason for this richness is the variety of perspectives and narratives that constitute it, even when these are strongly dissenting from the dominant narratives of the time.
This does not mean that we adopt an anything goes approach to pragmatism that might come closer to extreme relativism. Bernstein(1995) clarifies his position in this way:
“I am not suggesting that it is inappropriate to try to specify—as James, Peirce, Dewey, Rorty, Putnam, and even I have done—what one takes to be the primary characteristics of a pragmatic orientation. This is essential for our “argumentative retellings.” Rather I am calling for a more self-reflective attitude about this endeavor—an awareness that in doing so “we” are making a claim about what “we” think is (or ought to be) taken as most central and important in pragmatism. We should be wary of anyone who claims that there are fixed criteria by which we can decide who is and who is not a pragmatist. Such boundary setting is not only unpragmatic, it is frequently used as a power play to legitimize unexamined prejudices. And those of us who identify ourselves with the pragmatic tradition should be especially alert to the abuse of such boundary fixing—for it has been used to marginalize pragmatism. . . . The only point on which we should insist is that the pragmatist’s concern should be with continuing the argument—to continue our argumentative retellings of the pragmatic legacy which will be in conflict with other argumentative retellings” Whitehead(2016).
With the humility derived from the above analysis, I would, first of all, like to withdraw the Tweet I made. Following the lead of Bernstein, I will instead try to challenge ZZ and SBD with my own arguments; not by making judgments about what constitutes pragmatism.
Pragmatism in Entrepreneurship
Entrepreneurship is a naturally pragmatic domain. Every action made by an entrepreneur is made with practical consequences in mind. Since I have completed my agenda to highlight the heterogeneous nature of pragmatism, and the lack of entrepreneurship works that address it, in this part I will list down some of the key dimensions of pragmatism applied in entrepreneurship. As Bernstein has suggested even while we accept the diverse ways to understand and use pragmatism, it is important to clarify “what one takes to be the primary characteristics of a pragmatic orientation“. “Even I have done” it, says Bernstein because it is “essential for our ‘argumentative retellings”. I will do this with reference to the recent debates that I have touched on in Part one of this blog post. While I will use several key themes that Bernstein and others touched on, I will add several of my own ideas.
1) Consequences: Whose Pragmatism and pragmatism for what?
In the big chunk of the previous part, I have attempted to address the question of “what pragmatism” are we talking about? There, I was trying to draw some light on the multifarious understandings and interpretations of pragmatism. Here I would like to highlight one of the primary concepts in pragmatism. The “consequences”. An emphasis on consequences can be seen as the starting point for almost any pragmatic analysis. This can be traced to Peirce’s pragmatic maxim itself. Peirce introduced pragmatism in 1878 with this famous pragmatic maxim, i.e. “Consider what effects, which might conceivably have practical bearings, we conceive the object of our conception to have. Then our conception of these effects is the whole of our conception of the object” (Peirce, [1878].
In light of the consequences, here I would like to highlight the fact that, when an entrepreneurship scholar works on academic pragmatism, there are conflicting levels of interest that he/she might encounter. All of them will have different consequences. There might be;
The pragmatism of the scholar; Here the stress is in the individual outcome or success.
The pragmatism of a tool/instrument; Here the stress might be on the successful application of a particular idea, tool, or instrument.
The pragmatism of the academic group/project; Here the stress is on the individuals who form part/dependent on a particular academic project.
The pragmatism of the academic community: Here the stress might be to make a particular project interesting for the academic community.
The pragmatism of the academic publication; Here the stress might be to make it suitable for the journal’s official goals and criteria. Or/and make it suitable for politics, if any.
The pragmatism of the end user(entrepreneur); Here the stress is on the entrepreneurial action or success.
The pragmatism of the society; Here the goal is the positive social outcome.
Note that, here, I’m not implying anything against the existing scholarly works, but just highlighting an important perspective that might need some scholarly reflection. It is possible that pragmatism of personal success can come into conflict with pragmatism of the end user/entrepreneur or society. It is possible that someone sells their own parochial version of a solution that might go against the end-user good or collective good William James(1890) responds that such a person is, “Merely insisting on an aspect of the thing which suits his own petty purpose, that of naming the thing; or else on an aspect which suits the manufacturer’s purposes, that of producing an article for which there is a vulgar demand. Meanwhile the reality overflows these purposes at every pore”. So, even though I endorse the spirit of Bernstein’s “argumentative retellings”, I think pragmatism at least in entrepreneurship must not just be about winning arguments, but about supporting entrepreneurial action and its social consequences. I think he himself will agree with that as an ideal goal for the domain of entrepreneurship(Nor did he say anything against that).
2) Engaged Fallibilistic Pluralism
Engaged Fallibilistic Pluralism is an idea developed by Richard Bernstein combining 4 key ideas that can be traced in the pragmatic mainstream; Engagement, Fallibilism, Anti-foundationalism, and Pluralism. According to Bernstein(2015),“Pragmatic pluralism is not to be confused or identified with a self-defeating relativism. It is engaged fallibilistic pluralism. Such a pluralistic ethos places new responsibilities upon each of us. For it means taking our fallibility and finitude seriously—and resolving that, however much we are committed to our own biases and styles of thinking, we are willing to listen to others without denying or suppressing the otherness of the other”.
In the frame of Engaged Fallibilistic Pluralism, “to be engaged demands actively seeking to understand what initially strikes us as strange and different. And whether we are talking about different philosophic orientations, traditions, cultures or ethnic groups, this takes hard work. It requires learning how to listen—to really listen and hear what the other is saying”Bernstein(2014).
Fallibilism is the idea that no beliefs, theories, or perspectives(or any) can ever be considered totally rational or justified conclusively. There always remains a possible doubt as to the truth of the belief. This idea is very much connected to the critique of foundationalism(or anti-foundationalism).
Bernstein(2015) argues, “If inquiry is a self-corrective activity that can put any claim into jeopardy, then this means that all knowledge claims—indeed all validity claims—are fallible, in the sense that we can never claim that we know anything with a type of certainty that cannot in principle be questioned”. This position should not be mistaken for some sort of extreme relativism. Bernstein(2015) argues for example that, “Peirce never doubted that we can and do know a reality that is independent of us, but we are never in a position to claim that we know this with absolute certainty”. In this regard, Bernstein embraces a statement made by Wilfrid Sellars when he wrote, “For empirical knowledge, like its sophisticated extension, science, is rational, not because it has a foundation but because it is a self-correcting enterprise which can put any claim in jeopardy, though not all at once” DeVries (2011).
Pluralism is mostly influenced by William James who argued for a radical pluralism of perspectives. We human beings can never achieve a God’s-eye perspective. In A Pluralistic Universe, James(1977) wrote, “It is curious how little countenance radical pluralism has ever had from philosophers. Whether materialistically or spiritualistically minded, philosophers have always aimed at cleaning up the litter with which the world is apparently filled. They have substituted economical and orderly conceptions for the first sensible tangle; and whether these were morally elevated or only intellectually neat, they were aesthetically pure and definite, and aimed at ascribing to the world something clean and intellectual in the way of inner structure. As compared with all these rationalizing pictures, the pluralistic empiricism which I profess offers but a sorry appearance. It is a turbid, muddled, gothic sort of affair without a sweeping outline and with little pictorial nobility”.
I argue that both Zellweger and Zenger(ZZ)and Sergeeva, et al.(SBD) never emphasized any of these ideas with necessary importance. ZZ made their scientific approach(act like scientists) the absolute foundation of their pragmatic philosophy. The fallibility of the framework is not discussed. While SBD discussed fallibility, they imported and appropriated/adapted a lot of conceptual models from various areas, like Analogical abduction, Searle’s philosophy of language, Single-Double-Triple loop learning, etc. It is not clear if they consider these ideas as foundational to their pragmatic philosophy, Or consider it just provisional. This needs some more clarity.
3) Organism-environment system(Indivisible process Vs Spectator Theory)
American pragmatists believed that the organism-environment relationship was key to understanding human behavior and development. This was “the outgrowth of a rich conversation between late nineteenth century philosophers, biologists and social scientists”. It was primarily concerning the inseparable bond between organisms and their environments, including humans and their social environments (Pearce, 2020). They embraced naturalism’s ecological emphasis on the interactive and interdependent relationship between individual organisms and their environments. This contradicts the dominant contemporary representational cognitive paradigm.
They argued that individuals cannot be understood in isolation, but rather as part of an interconnected system of relationships with their environment, which is constantly changing. They viewed all knowledge to be a product of the purely historical relationship between organisms and the environment. Dewey for example held the position that the unit of explanation is not the biological individual, the body by itself, or the brain, but the entangled organism-environment system. Organism and environment are not two self-sufficient or easily distinguishable items. Instead, they are always found together in a dynamic transactional relationship. They are, in effect, coupled in a way such that to pull them apart is to destroy them or to treat them as theoretical abstractions. An organism can never exist apart from some environment; an environment is what it is only in conjunction with a particular organism that defines it (Gallagher, 2014).
Indivisible process Vs Spectator Theory: We are part of the organism-environment system which is a dynamic process than a static concept or object. Spectator theory insists that the world is observed from a single fixed point of reference. We human beings are not spectators. We move and act in the world. The organism-environment system is an inseparable unity system or part of a single process; the organism cannot exist without the environment, and the environment has no descriptive properties without being connected to the organism. This was very well articulated by Ian Hacking(1983) as part of his Deweyan analysis. According to him, “Dewey despised all dualism- mind/matter, theory/practice, thought/action, fact/value. He made fun of the ‘spectator theory of knowledge’. He said it resulted from the existence of a leisure class, who thought and wrote philosophy, as opposed to a class of entrepreneurs and workers who had not the time for just looking“. The spectator theory of knowledge thus can be interpreted as the result of the quest for certainty that deflects the powers of intelligence toward problems that cannot possibly be solved. By viewing knowledge as a passive reception rather than a unified process, spectator theory treats acting, making, and valuing as external to knowing and as the source of the problem. According to Antonio and Kellner(1992),through the use of spectator theories, “a feeling of certainty is produced by the belief that a stable reality lies beyond the instrumental realm of appearances”. On the other hand “Because of their existential uncertainty, instability, and dependence on human practices, social phenomena are treated as inferior objects of knowledge or are put completely outside the reach of inquiry”.
ZZ’s key argument is that entrepreneurs are scientists. They, “depict entrepreneurs as engaging in causally inferential action by forming beliefs, testing these beliefs, and responding to the feedback received”. In response, SBD argues that “entrepreneurs are more than scientists”. They do not “merely seek to describe (predict), but are, in addition, engineers, designers, and artists, who seek to shape the future to “fit” their mind via their actions”.
To me, using categories like scientists, engineers, designers, artists, etc. are symptoms of spectator theory that Dewey warned us about. What this suggests is that you have to first become something else to become the real thing. You have to learn to be like scientists, learn the scientific method, then use that method to become entrepreneurs. Or you learn engineering to learn engineering techniques, and then use them to become an entrepreneur. The same goes for the case of the analogy of artists or designers. If this is what ZZ and SBD meant by these analogies I will call that the epitome of decontextualization. This to me is the product of an “industry of inadequacy“, a term I coined while thinking about this issue. Andrew Yang made a similar criticism about modern entrepreneurship education. Quoting him, “Young people have told me that entrepreneurship classes actually discourage them… because then they feel like there’s this massive checklist of things that they have to like have done or figure out to start a business; whereas in the old days someone would just start selling….t-shirts or tires, ‘whatever’ and then they’d have a business before too long. There will be like ,no….market sizing, and….business plan writing, and the rest of it”.
I argue that Yang here is targeting the “industry of inadequacy” and I think one of the most important uses of the pragmatic approach is the inherently powerful tools suited to fight against the “industry of inadequacy“. If we take a pragmatic perspective, an entrepreneurial agent is an entrepreneurial agent and the analysis should primarily be grounded in the unique and dynamic agent-environment context. I also prefer neutral languages like Organism-environment, agent-environment, etc., to reduce the impact of a priori conceptual models impacting contextual sense-making.
I conclude here with a quote from Dewey (1938), “It is more or less a commonplace that it is possible to carry on observations that amass facts tirelessly and yet the observed “facts” lead nowhere. On the other hand, it is possible to have the work of observation so controlled by a conceptual framework fixed in advance that the very things which are genuinely decisive in the problem in hand and its solution, are completely overlooked. Everything is forced into the predetermined conceptual and theoretical scheme. The way, and the only way, to escape these two evils, is sensitivity to the quality of a situation as a whole. In ordinary language, a problem must be felt before it can be stated”.
Dewey distinguished his philosophy from earlier philosophical pragmatists by calling it instrumentalism, which indicated that knowledge, things, artifacts, tools, language, cognition, etc. are instruments that we use to act in the world. His instrumentalism was primarily inspired by evolutionary theory. According to Dewey, “The entire significance of the evolutionary method in biology and social history is that every distinct organ, structure, or formation, every grouping of cells or elements, has to be treated as an instrument of adjustment or adaptation to a particular environing situation. Its meaning, its character, its value, is known when, and only when, it is considered as an arrangement for meeting the conditions involved in some specific situation” Dewey(1903. p.15).
In his work “The Development of American Pragmatism, Dewey maintains that a central difference between instrumentalism(or pragmatism) and traditional approaches is that the former is forward-looking i.e. looking at “consequent” rather than backward-looking at an unchanging antecedent. This consequences-based thinking leads us to take the future into consideration where exists a universe whose evolution is not finished, of a universe which is still, in William James’s term, “in the making”. For this conception, tools like language for e.g. arise from the interaction of organism and environment and, especially, from the capacity to make instrumental adjustments towards the consequences of actions. Dewey’s instrumentalism was also extended to his view of science. He believed that science should be used to solve practical problems. According to his instrumentalist view of science, scientific theories, laws, and methods are tools or calculating devices for acting in the world, organizing descriptions of phenomena, and drawing inferences from the past to the future. Theories and laws themselves have no truth in themselves; they are merely instruments, not to be understood as literal assertions. Further, Dewey’s instrumentalism was not proposed as a top-down authoritarian and imposing model of pragmatism. Instead, it is an active, plural, historical, and participatory way of living and acting in the world that contradicts the spectator theory of knowledge. His instrumentalism is inherently based on democratic ideals. This is why I prefer to view this instrumentalism as co-evolutionary and co-adaptive instrumentalism stressing the lack of imposing top-down order.
I argue that both ZZ and SBD came to embrace pragmatism as a philosophy with their own previously developed instruments. ZZ developed the “entrepreneur-as-scientist” perspective through many different works including Camuffo et al(2020), Felin et, al(2020). SBD developed their key idea of Analogical Abduction previously in Sergeeva and Bhardwaj (2020). This suggests a clear preference for one instrument over many instruments or instrumentalism.
Although this might go against the spirit of instrumentalism, both ZZ and SBD displayed clear openness to other instruments. ZZ(1) in their response to Ehrig and Foss (2022) suggested that they “refrain from suggesting that the scientific method is the only way to create value in entrepreneurship”. SBD on the other hand shows openness by suggesting that they provided “a conceptual tool inspired by the pragmatist conception of imagination and introduce analogical abduction as a – but not the only – mechanism through which entrepreneurs arrive at their conjectures about opportunities”. Problem is that it is not clear if they are using their own a priori instrument for a particular functional aspect or consider the instrument-function relation as part of open an emergent question, as I would conceive it.
5. Enactive Sense Making
At the fundamental level, the organism makes sense of the environment to act in that environment. I consider enactive sense-making as a key pragmatic idea, which is in the essence of Deweyan common sense(Gallagher, 2014). Dewey made the relationship between organism and the environment the foundation of his new theories of ethics, education, and scientific inquiry. His idea of commonsense is a direct extension of this idea of an organism being embedded in the environment, and the organism making sense(common sense) of the world to act in it. I differentiate sense-making with abduction and scientific-approach.
I consider Abduction as a specific type of sense-making ( or common sense) as developed by Pearce, which can be understood as an inference to the best explanation derived only using incomplete information. According to Pearce, “Abduction is the process of forming an explanatory hypothesis. It is the only logical operation which introduces any new idea; for induction does nothing but determine a value, and deduction merely evolves the necessary consequences of a pure hypothesis. Deduction proves that something must be; Induction shows that something actually is operative; Abduction merely suggests that something may be“(Pearce 1958: 5.171). In another place, he states that “The abductive suggestion comes to us like a flash. It is an act of insight, although extremely fallible insight. It is true that the different elements of the hypothesis were in our minds before; but it is the idea of putting together what we had never before dreamed of putting together which flashes the new suggestion before our contemplation” (Pearce 1988: 227). While the Scientific approach also involves sensemaking or its much more defined version, “abduction”, it primarily involves a systematic search for truth and socially validating it via protocol methods like publication, peer-review, replication, etc.
Dewey preferred common sense(sense-making) and he saw his work as a response to a crisis in modern culture, which is the result of disintegrating influence of modern science on everyday life (Biesta and Burbules, 2003). Dewey states, “I shall designate the environment in which human beings are directly involved the common sense environment or “world,” and inquiries that take place in making the required adjustments in behavior common sense inquiries. As is brought out later, the problems that arise in such situations of interaction may be reduced to problems of the use and enjoyment of the objects, activities and products, material and ideological, (or “ideal”) of the world in which individuals live. Such inquiries are, accordingly, different from those which have knowledge as their goal. The attainment of knowledge of some things is necessarily involved in common sense inquiries, but it occurs for the sake of settlement of some issue of use and enjoyment, and not, as in scientific inquiry, for its own sake” Dewey(1936).
Dewey further pointed out that, Modern science has completely changed our understanding of the world in which we live. To him, science, “has stripped the world of the qualities which made it beautiful and congenial to men ; has deprived nature of all aspiration towards ends, all preference for accomplishing the good, and presented nature to us as a scene of indifferent physical particles acting according to mathematical and mechanical laws” Dewey(1929). Here I have shown that sense-making or common sense is more fundamental than abduction, which is a more specific logic developed by CS Pearce. The scientific approach is more specific, in that, even though the real idea might be the result of sense-making or abductive sensemaking, it has more constraints and requires protocol processes and social validation. Hence, abduction must be followed by deduction or induction.
Here I must mention ZZ’s response to SBD’s critical response by quoting Dewey from his book Logic-The Theory Of Inquiry in the following way, “Consequently, any difference between real scientists and any other category of individual lies solely in the problems with which they are directly concerned, not in their respective logics”(Dewey, 1938, p. 81). The problem is that Dewey dedicated Chapter 4 of the book “Common Sense and Scientific Inquiry” to highlight the importance of common sense over science. The quote above, in my understanding, was meant to be a defense of common sense over science, instead, ZZ used it with an upside-down meaning. Dewey instead was suggesting that scientific discovery is also about commonsense. This is evident even from Pearce’s comment on abduction i.e.“Abduction….is the only logical operation which introduces any new idea; for induction does nothing but determine a value, and deduction merely evolves the necessary consequences of a pure hypothesis”.
Note that I have no issue if ZZ can defend abduction as the foundation of their pragmatic analysis. ZZ in fact does exactly that by arguing that “pragmatist epistemology suggests that the entrepreneur’s mode of inquiry leads from abduction to deduction to induction, thereby combining cognitive, agentic and reflective inference, or belief formation, testing, and updating“. While this is a worthy position to take, I argue that abduction doesn’t equal to Deweyan common sense as suggested by ZZ in the argument they made against SBD’s criticism. Further for an entrepreneur operating in an emergent environment where ground realities change dynamically, induction and deduction are not useful in usual contexts. It will be counterproductive and ornamental.
I also find an issue with Analogical abduction as proposed by SBD. This concept assumes that common sense or abduction doesn’t have an analogical component in it. I argue that both common sense and abduction have analogical thinking implicit in them. I believe that it is unnecessary to discuss analogy, but if we are using analogical thinking along with abduction, why not ask the counterfactual question? Why can’t we use abductive pattern recognition, abductive memory, abductive mental simulation, abductive mindset, abductive inquiry, etc.? Secondly, I also consider analogy and abduction as fundamental to living systems, especially lower animals. In that, analogical thinking can be easily understood as an extension of exaptation or Darwinian pre-adaptation, instead of a trained human faculty that is developed by classroom teaching. Thus I do not consider analogical thinking and abduction as human alone faculty. Analogical thinking has been observed widely in animals, particularly in comparative human-animal cultural studies, e.g. (Brand, 2021). Abductive thinking was also studied and understood in animals(Magnani, 2007).
Like Dewey, I further argue for the celebration of common sense/sense-making over more intelligent-sounding ideas and concepts. I argue that common sense is the real foundational human intelligence that cannot be replicated by machines or decontextualized models. This makes it superior. I argue that academia should get out of its efforts to make people feel inadequate and thereby support the “inadequacy industry”. I believe that this is also one of pragmatism’s key messages. As Dewey commented in his Democracy and Education; “if it gets in the way of the individual’s own common sense (as it will surely do if imposed from without or accepted on authority) it does harm”.
I conclude with a Deweyen quote; “Science takes its departure from common sense, but the return road into common sense is devious and blocked by existing social conditions”(Dewey, 1936)
Citation
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The concept of “constraints” is built into the construct of creativity itself
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Constraints in a general sense may be taken as restrictive. But in a complexity perspective constraints have a different understanding. Here, it is important to understand constraints are enabling too. They create opportunities for action, thoughts, and creation. Order in human life is primarily created through constraints. “It is not something which merely limits possibilities, constraints are also enabling. By eliminating certain possibilities, others are introduced” (Paul Cilliers, 1998). For example, take the case of road traffic. Without conventions that shape how we drive(left or right), as well as our expectations of other drivers, smooth road transport will not be possible. Take the example of HTML, a constrained protocol that allows us to use the web. A cricket game works as a game because of various constraints like cricket ground, various constrained roles like a bowler, batsman, fielder, keeper, etc, and various associated rules that govern the game. Without this, we wouldn’t have cricket as a game. Therefore, constraints not only remove or limit options but also create or enable order and new possibilities.
The concept of "constraints" is built into the construct of creativity itself (Sternberg and Kaufman, 2010).
Also scholars have argued that without constraints, there can be no creativity(Dyer, Gregersen, and Christensen, 2009; Johnson-Laird, 1988). https://t.co/CPxYcf2dn6
The mentioning of constraints as enabling can also be found in mainstream entrepreneurship research, for e.g. The idea of entrepreneurial Bricolage (Baker and Nelson, 2005) shows how entrepreneurs exploit opportunities despite resource constraints. Further, constraints have found an important place in the research on creativity, in that the concept of “constraints” is built into the construct of creativity itself (Sternberg and Kaufman, 2010). Research also has consistently found that without constraints, there can be no creativity (Dyer, Gregersen, and Christensen, 2009; Johnson-Laird, 1988). Both theoretical and empirical contributions investigating the entwinement of creativity and constraints exemplify the dual role of constraints, as constraints can be both limiting and enabling in creative processes.
Introduction To EsoLoop Framework YouTube Playlist
Abstract
Entrepreneurship is a complex decision domain. It is essential that solutions designed for complex domains like entrepreneurship must consider dynamics of complexity like non-linearity, inter-relatedness, emergent property, etc. Regardless of this, most of the dominant entrepreneurship perspectives still assume that entrepreneurship is the same all over the world. The proposed solutions and methods are often developed without any consideration to many of the non-linear dynamics that are inherent to complex domains like entrepreneurship. They usually ignore the massive diversity and uniqueness of personal, historical, cultural, institutional, social, and spatial contexts. While entrepreneurship operates at the evolutionary edge of social emergence, most of the current thinkers and their models never truly acknowledged its massive uncertainty and complexity. Further, the need for appropriate methods is neglected in favor of reductionistic one size fits all prescriptive models, cliche advice, and incrementalism.
In the following part, I am introducing a complexity science-informed design solution to aid entrepreneurial actions. This is based on the scientific understanding that open complex adaptive systems like entrepreneurship have a tendency to self-organize under various constraints (Kauffman, 1995). Deriving from that, the framework is built on the premise that self-organization and design are complementary pairs (Kelso et al, 2016; Gershenson,2007 & 2020; Prokopenko, 2009). In the first part of the presentation, I will discuss complexity, the nature of entrepreneurial complexity, and the implication of complexity on human decision-making and expertise. Then I will discuss why existing entrepreneurship prescriptive models are inadequate for dealing with complexity. After that I will introduce three important components of the framework; The first is about setting the right complexity-based world view (Dent, 1999), for which an Ecological world view is adopted (Ulanowicz, 2009; Gibson, 2014; Capra, 1996). The second is about the idea of effectual self-organization, a primary enabling constraint (Simple rules or heuristics) for entrepreneurs to deliberately act like self-organizing systems. The third is about constraints and the role of constraints in shaping self-organization. Here I use Constraints-based design, an idea inspired from the Constraints-Led approach in sports coaching (Davids et al, 2007) to design and introduce various constraints that can shape entrepreneurial exploration and self-organization. Alicia Juarrero’s(1999) conception of Context-free and Context-sensitive constraints is used as a fundamental frame over which various constraints are introduced.
The right worldview is a necessary precondition for sustainable and effective design. If the world view is reductionist or simplistic, ignoring important unknowns, the design will reflect this weakness. As entrepreneurship is a naturally complex system, it is necessary to study entrepreneurial phenomena by applying the frame of complexity science. Despite this reality, most entrepreneurship models and perspectives are reductionist in their origin, prescription, or omission. To solve this weakness it is necessary to adopt an ecological worldview, i.e a complex, dynamic, connected, and evolving ecology.
In order to understand the ecological view, let’s first go through some of the possible world views or alternatives. After that, I will try to highlight how an ecological view is different from other world views.
1. Single Model world view:
This is the world view based on a single model, tool, or method which assumes superiority over all others. This can be equated to what Charlie Munger calls, “Man with a Hammer” syndrome, which is the idea that if an individual has only one tool or model(e.g. hammer), he’ll approach all of his problems with the same solution, i.e. a hammer. For a man with a hammer, everything around him will seem like a nail. Most models in entrepreneurship come under this category. They are proposed as solutions for the problems of the existing one and are pitched as better than the previous one. E.g. Lean startup Vs Business planning or any other model that is proposed as vastly superior to others.
2. Multiple-Model Ensembles:
This worldview suggests the complementary use of multiple models or methods. This is the same idea as suggested by Scott Page(2018) and the ensemble forecasting model (Leutbecher and Palmer, 2008) used in weather prediction. In entrepreneurship, multiple model worldview can be found in many scholarly works. For e.g. Sarasvathy(2001) stressed the importance of both effectuation and causation. Mansoori and Lackéus(2019) and Grichnik et al. 2017 suggested using multiple methods complementing each other. This worldview is by default inclusive of the previous one. A very commonplace in which multiple models are used in this way is the university curriculum.
3. Cognitive-Diversity world view:
This world view suggests using not only formal models or methods but all kinds of cognitive diversity. E.g. Models, methods, theories, heuristics, etc. Scott Page defines Cognitive Diversity as “Differences in information, knowledge, representations, mental models, and heuristic, to better outcomes on specific tasks such as problem-solving, predicting, and innovating (Page, 2017,14-15)“. To me, the weakness of this view is in its cognitive reductionism. Even though this world view is by default inclusive of all the previous ones, any cognitive alone worldview can be criticized for lack of ecological basis (Gibson, 1979; Varela et al., 1991; Clark, 1997).
4. Holistic Diversity worldview:
Apart from cognitive diversity, Page(2017) also talks about identity diversity, i.e. the differences in race, gender, age, physical capabilities, and sexual orientation. There are other frames to view diversities like; Biodiversity, which can be defined as variety in all forms of life—from genes to species to ecosystems; Cultural diversity, which can be defined as differences, such as in language, religion, dress and moral codes that exist between people according to race and ethnicity. Tool diversity suggesting for the use of multiple tools for the same task to increase output accuracy by reducing systematic errors. Artifact diversity refers to the number of different classes of artifacts and their relative proportions. In short, this world view suggests the existence of not only Cognitive-Diversity but also, all other kinds of diversity, i.e. diversity in people, biology, identity, networks, information sources, relational-expertise, institutions, culture, location, specialization, artifacts, tools, etc. This world view is by default inclusive of all the previous ones.
What is Ecological Worldview
Ecological View to me includes a continuous effort to capture the true ecological reality in its dynamics. In addition to the previously listed holistic diversity, this view is inclusive of realities like complexity, dynamics, evolution, connectedness, interaction, etc. Complexity involves features and interactive dynamics as in a complex adaptive system. The idea of evolution suggests that existing elements interact, evolve, co-evolve into new diversities, variations, etc. It must also involve cumulative cultural evolution(and intelligence) as proposed by human cultural evolution studies (Tennie et al, 2009; Mesoudi and Thornton, 2018). In addition, an ecology is connected, hence no clear local-global separation is possible. This is particularly significant in human social ecology. Finally, the ecological view involves the use of contextualized sense-making that suggests that every human context is an emergent property and hence each context has unique types of characters.
This ecological worldview is by default inclusive of all the previous ones.
Since entrepreneurship is a complex domain, proposed design solutions must recognize complexity as a core design challenge. It must also consider the disposition and bounded rationality of the decision-making agent in question.
I have recently read an article by Herbert A. Simon “Can there be a science of complex systems?” in which he listed 4 principles of complex system design. (Meanwhile, the article is freely available Here online). They are;
Homeostasis.
Membranes
Specialization
Near-Decomposibility.
Reading it inspired me to post an aggregate of ideas that I have assembled for an ongoing project. In my literature review, I have found the following features that might help in a sustainable complexity-friendly design.
They;
*Must begin with the right view: The right worldview (Dent, 1999) is a necessary precondition to effective design. If the world view is reductionist or simplistic, ignoring important unknowns, the design will reflect this weakness.
*Must acknowledge and promote self-organization: Self-organization (Heylighen, 2008) refers to the feature of systems that appear to organize themselves without external direction, manipulation, or control. This promotes ecologically grounded evolution and dynamics. A sustainable, complexity-friendly model must promote self-organization instead of one-size-fits-all models, rigid prescriptions, or top-down order.
*Must promote exploration: While self-organization may promote local optimization, the dispositional capability for exploration (Gupta et al, 2006) is necessary to facilitate the journey towards global optima. A sustainable complexity friendly model must have the capability for continuous multidimensional exploration.
*Must promote diversity (Page, 2010) integration (Martin, 2009), and inclusiveness (Pless and Maak, 2004): Decisions in a complex domain like entrepreneurship cannot be understood with linear thinking or binaries. Since it is impossible to know various emergent decision contexts beforehand, it is always ideal to design solutions for such variables and contingencies. That means a design must promote diversity and not exclude ideas, models, theories, etc., by prescription or omission.
*Must be contextually adaptive: Every context is unique, and thus we need solutions that are adaptable and usable for various contexts, as it emerges. Adaptive systems involve designing the elements of a system to find by themselves the solution of the problem. Like this, when the problem changes, the elements are able to dynamically find a new solution. We can say that such a system self-organizes (Gershenson, 2007).
*Must provide evolvability to the agent and must have evolvability of its own: Evolution and evolvability (Pigliucci, 2008; ScienceDaily, 2013) are a fundamental feature of nature, biology, and human social life. A sustainable entrepreneurship framework must have the evolutionary potential of its own, and also must enable evolvability to the entrepreneurial agents.
*Must protect agency from hijack: Prescriptive models have agency of their own, and are designed to hijack entrepreneurial agency by providing a model-centric view of the world. Commitment to one-size-fits-all models may result in the agent’s evolutionary, learning, adaptive potential being seriously compromised. Thus, a sustainable complexity-friendly model must protect and promote appropriate levels of entrepreneurial agency (Garud and Karnøe, 2003) and autonomy.
*Must acknowledge the dispositional state, including ignorance and weaknesses: Most of the existing entrepreneurship models reinforce and augment bounded rationality. A sustainable complexity-friendly model must acknowledge the possibility for bounded rationality, ignorance, and weaknesses. It must have inbuilt dispositional capabilities like distributed sense-making (Weick, 2005; Fisher, 2012) and descriptive self-awareness (Snowden, 2002), etc. to continually scan inwards and outwards for issues like ignorance, weakness, or bounded rationality.
*Must encapsulate various complexity-friendly functional dispositions: A complexity-friendly model must also be designed with a usability perspective in mind. It must encapsulate various complexity-friendly functional dispositions(above listed) into a single framework so that an ecology of ideas, in its dynamics, will transfer to the users, not just one or two ideas.
*Must acknowledge provisionally imperative nature of solutions, models and frameworks: This means no one-size-fits-all solutions can exist in complexity. According to Cillers(1998), In complexity, interpretations are contingent and provisional, pertaining to a certain context and a certain time frame(p. 121-122). This leads to the idea of Provisional imperative (Preiser and Cilliers, 2010; Woermann and Cilliers, 2012).
*Must strive forward as a continuous work in progress in a perpetual construction (Prigogine, 1997): Once proposed and written down, most models or prescriptive methods never change. This is a weakness when considering the speed of radical changes happening around us. Even with this vulnerability, most ideas and models in the entrepreneurship domain are designed to be self-aggrandizing and self-perpetuating. A sustainable complexity friendly model must have the capability to change itself according to challenges.
Dent, Eric B. “Complexity science: A worldview shift.” Emergence 1, no. 4 (1999): 5-19.
Heylighen, Francis. “Complexity and self-organization.” Encyclopedia of library and information sciences 3 (2008): 1215-1224.
Gupta, Anil K., Ken G. Smith, and Christina E. Shalley. “The interplay between exploration and exploitation.” Academy of management journal 49, no. 4 (2006): 693-706.
Page, Scott. On Diversity and Complexity. Princeton University Press, 2010.
Martin, Roger L. The opposable mind: How successful leaders win through integrative thinking. Harvard Business Press, 2009
Pless, Nicola, and Thomas Maak. “Building an inclusive diversity culture: Principles, processes and practice.” Journal of business ethics 54, no. 2 (2004): 129-147.
Gershenson, Carlos. Design and control of self-organizing systems. CopIt Arxives, 2007.
ScienceDaily. “Evolution Can Select for Evolvability, Biologists Find”(https://www.sciencedaily.com/releases/2013/11/131114193434.htm)ScienceDaily, 14 Nov.
Garud, Raghu, and Peter Karnøe. “Bricolage versus breakthrough: distributed and embedded agency in technology entrepreneurship.” Research policy 32, no. 2 (2003): 277-300.
Weick, Karl E. “5 Managing the unexpected: complexity as distributed sensemaking.” In Uncertainty and surprise in complex systems, pp. 51-65. Springer, Berlin, Heidelberg, 2005
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Snowden, David. “Complex acts of knowing: paradox and descriptive self-awareness.” Journal of knowledge management (2002).
Prigogine, Ilya, and Isabelle Stengers. The end of certainty. Simon and Schuster, 1997.
The empirical evidence for effectuation came from the study of expert entrepreneurs conducted by Saraswathy. She contrasts her study on entrepreneurial expertise with entrepreneurial performance which has been traditionally studied either (1) as a set of personality traits of the entrepreneur that explains the success or failure of the firms he or she creates (Llewellyn and Wilson, 2003), or (2) as a set of circumstances or attributes of the project and its environment that contains the seeds of its success or failure (Thornton, 1999). In that, she conducted a cognitive science-based study of entrepreneurial expertise using think-aloud verbal protocols. Included in that, was a 17-page problem set of 10 typical decisions in a startup firm and had a representative sample of 27 expert entrepreneurs.
I claim that this expertise framing of effectuation is flawed and counterproductive. I propose a much more scientific way of approaching or using effectuation, i.e. Effectuation as a praxis/logic/heuristics for self-organization in complex domains, not just as possessions of expert entrepreneurs.
Following are some reasons why I consider the expertise theory of effectuation flawed;
Firstly, entrepreneurship is a low validity domain (Kahneman and Klein, 2009) with extreme levels of complexity. To have genuine expertise to develop, the domains must be of high validity. i.e. “Skilled intuitions will only develop in an environment of sufficient regularity, which provides valid cues to the situation” (Kahneman and Klein, 2009). This was also previously spotted in a review by Shanteau(1992), in which he confirmed the importance of predictable environments and opportunities to learn them, in order to develop real expertise. To Kahneman and Klein(2009) prolonged practice and feedback that is both rapid and unequivocal are necessary conditions for expertise, provided by predictable environments. To be more specific about the contrast, Immediate Feedback, Repeatability & Regular environment are the fundamental conditions to develop expertise. Entrepreneurship is characterized by the opposite; Delayed feedback, Non-Repeatability, Irregular complex, and an emergent environment.
Secondly, the effectiveness of deliberate practice as claimed by effectuation will not work in complex domains like entrepreneurship. There is no scientific evidence of it. Saraswathy(2008) defines an expert as someone who has attained a high level of performance in a domain as a result of years of experience and deliberate practice (Ericsson et al, 1993). Against this, Baron (2009) raised the important problem, ie “In what tasks or activities do successful entrepreneurs demonstrate expert performance?”. Advancing that point, Baron and Henry (2010) argued that deliberate practice may not be possible in entrepreneurship and that entrepreneurs instead either learn vicariously or transfer skills learned through practice in other domains into their new ventures. Frankish et al(2013) specifically questioned the idea of learning from experience. They pointed to the lack of repetition opportunities (owing to task diversity) and the difficulty of interpreting the various causes of new venture survival, suggesting that entrepreneurs improve performance only partially based on their experience in running new ventures. Further, in recent scholarly works, it has been demonstrated that deliberate practice may not guarantee better performance in extremely complex domains. A 2014 meta-analysis (Macnamara et al, 2014) has shown that deliberate practice only explained 26% of the variance in performance for games, 21% for music, 18% for sports, 4% for education, and less than 1% for professions. This further demonstrates a low connection between deliberate practice and performance in complex unstructured domains.
Thirdly, expertise in complex social domains are distributed (Edwards, 2010). It is not necessary that an entrepreneur must be an expert in finance, accounting, programming, law, etc. Such expertise is distributed(and or extended) across various individuals(lawyer, doctor) institutions(law enforcement, companies) and artifacts(tools, software). etc. It is not even necessary that the entrepreneur has to know the entrepreneurial core activities. He or she can still win in case she or he is in the right high network place(e.g. Harvard, Stanford, etc.), get good people to mentor and work with (e.g. Facebook case of Sean Parker, Peter Thiel), get access to specialized institutions(e.g. YC in the case of Dropbox), have a rich family to support, etc. He can also fail despite all of this(see next).
Fourthly, complex domains like entrepreneurship are subjected to various complexity laws like power laws, Mathew effects, reputation effects, ecosystem-embedded-preferential-attachment, etc. This invalidates success as a metric of expertise. Core events in complex systems like entrepreneurship never repeat in originality(strange attractor effect), feedback is delayed, and since complex systems are governed by power laws, small things(e.g. Harvard dorm Facebook) can result in huge success, and resource-rich interventions can fail(google plus). A tangent is that the emergent property of a system may not be the result of the expertise of a particular agent or agents, but because of the dynamics of the whole system co-evolving with the ecosystem as a whole. This may prevent us from establishing any valid causal relationship between expertise and performance in a domain like entrepreneurship. Thus in complexity, high performance may not guarantee success, in that, the success of an individual does not depend uniquely on the quality of performance (Barabási, 2018).
Fifthly, I believe that, like the personality view of entrepreneurial achievement (McClelland,1951, 1961; Llewellyn and Wilson, 2003), the expertise view may also have some unintended counter-productive effects. It can legitimize the hubris among successful entrepreneurs, and at the same time make the aspiring entrepreneurs think that they may require deliberate practice to become a successful entrepreneur, while in-fact success could be the result of complexity-effects like Mathew effects, reputation effects, preferential attachment, etc.
Sixthly, A very important question to ask here is; Is it even desirable to start multiple ventures than make one single venture successful. Why do people start multiple ventures? Is it because they see it as playing chess or golf? Will they start another venture if they are incredibly successful in the first business? Will a few outlier cases like Elon Musk ethically suffice us to prescribe it as a standard scientific way of thinking about the world? Do multiple successful marriages make someone a marriage expert, or unlucky and bad at marriage?. The key point I am trying to make here is that in domains like chess, multiple success may be a sign of expertise. In many extremely complex questions of life, it may be undesirable.
Seventhly, as I have demonstrated, most effectuation principles correspond to the dynamics of self-organizing complex system. This means it must not be limited to entrepreneurs. Herbert Simon also hinted at this aspect and suggested that there might be a connection between effectuation and Near Decomposibility (Sarasvathy and Simon, 2000). According to him (Saraswathy, 2008), Near Decomposibility is an astonishingly ubiquitous principle in the architecture of rapidly evolving complex systems, and effectuation appears to be a preferred decision model with entrepreneurs who have created high-growth firms, we should be able to link Near Decomposibility to the processes these entrepreneurs use to create and grow enduring firms–whether in an experimental situation or in the real world (Saraswathy, 2008, p.163). But instead of trying out a more fundamental complexity science-based explanation of entrepreneurial behavior, Saraswathy used the expertise theory to build the theory of effectuation.
Finally, I believe that effectuation if developed as a self-organization logic can be applied in other domains. It has applications in complex domains like education, learning, economics, politics, etc. Framing effectuation as a science of action in social complexity will open up a lot of possibilities. This also will make the theory more robust and useful.
Barabási, Albert-László. The Formula: The science behind why people succeed or fail. Macmillan, 2018
Baron, Robert A. “Effectual versus predictive logics in entrepreneurial decision making: Differences between experts and novices: Does experience in starting new ventures change the way entrepreneurs think? Perhaps, but for now,“caution” is essential.” Journal of Business Venturing 24, no. 4 (2009): 310-315
Baron, Robert A., and Rebecca A. Henry. “How entrepreneurs acquire the capacity to excel: Insights from research on expert performance.” Strategic Entrepreneurship Journal 4, no. 1 (2010): 49-65.
Ericsson, K. Anders, Ralf T. Krampe, and Clemens Tesch-Römer. “The role of deliberate practice in the acquisition of expert performance.” Psychological review 100, no. 3 (1993): 363
Frankish, Julian S., Richard G. Roberts, Alex Coad, Taylor C. Spears, and David J. Storey. “Do entrepreneurs really learn? Or do they just tell us that they do?.” Industrial and Corporate Change22, no. 1 (2013): 73-106.
Kahneman, Daniel, and Gary Klein. “Conditions for intuitive expertise: a failure to disagree.”American psychologist 64, no. 6 (2009): 515.
Llewellyn, David J., and Kerry M. Wilson. “The controversial role of personality traits in entrepreneurial psychology.” Education+ Training (2003).
Macnamara, Brooke N., David Z. Hambrick, and Frederick L. Oswald. “Deliberate practice and performance in music, games, sports, education, and professions: A meta-analysis.” Psychological science 25, no. 8 (2014): 1608-1618. McClelland, David C. “N achievement and entrepreneurship: A longitudinal study.” Journal of personality and Social Psychology 1, no. 4 (1965): 389.
Sarasvathy, Saras D. Effectuation: Elements of entrepreneurial expertise. Edward Elgar Publishing, 2009.
Sarasvathy, Saras D., and Herbert A. Simon. “Effectuation, near-decomposability, and the creation and growth of entrepreneurial firms.” In First Annual Research Policy Technology Entrepreneurship Conference. 2000.
Shanteau, James. “Competence in experts: The role of task characteristics.” Organizational behavior and human decision processes 53, no. 2 (1992): 252-266.
I was watching a Rugby Try and thought about the player who did the Try. The player who did the try may get the credit, but the actual effort was cumulative and the opportunity was emergent. Without the cumulative skills, the synergy of the whole team, and the contingent emergent opportunity the Try would never be possible. This made me think about the idea of Possessive Individualism which is dominant in Entrepreneurship
FIRST EVER TRY IN SUPER RUGBY GOES TO SOLOMONE FUNAKI
Possessive Individualism in Entrepreneurship
Most entrepreneurship models, particularly the prescriptive models like the lean-startup, business plan, etc. are based on the idea of the sole entrepreneur making decisions. It is also visible in the expertise framing of effectuation by Saras Saraswathy. This relates to the conception of Possessive individualism, which is the assumption that capacities, beliefs, and desires, etc. are possessions of an individual (Macpherson, 2010).
In this approach, the individual is viewed atomistically as ‘essentially the proprietor of his own person or capacities; which include: intelligence; cognitive capacities such as memory; the ability to process information; and such personality characteristics as desires and wants, crucially ‘owing nothing to society for them’(MacPherson, 1962, p. 3; 2010).
Such Possessive individualism is convenient for reductionistic studies that ignore the difficulty of complexity and the context.
The problem is that the reality of entrepreneurship is far from the case. Realworld cognition, decisions, actions, expertise, etc are extended outside of the individual. Donald Trump can hire the best programmers in the world, and functionally perform far better than any single expert programmer. In the real actual world we are living in, Richard Branson who struggled with accounting doesn’t had to practice MCQ tests to become better at accounting before starting his venture. Instead, he can hire as many accountants as he wants. Thus functionally perform far better than any single expert accountant. Now think of sophisticated tools or software for the practice of accounting. Most of the tools currently available are far more intelligent than any single expert accountant.
According to Clark and Chalmers(1998), real-world cognition and decisions are extended outside of our brain. They present the idea of active externalism in which objects within the environment function as a part of the mind.
They argue that the separation between the mind, the body, and the environment is an unprincipled distinction. This suggests that entrepreneurial cognition and decisions are not simply happening inside the entrepreneur’s brain, but extended outside.
Another way to view it is the distributed nature of real-world decisions(Rapley, 2008; Schneeweiss,2012; Charles et al, 1997, 1999). In contexts like entrepreneurship, there are multiple stakeholders with diverse and conflicting beliefs, preferences, and goals. They all are part of entrepreneurial cognition and decisions.
This distributed nature of decisions in entrepreneurship is partially influenced by the distributed nature of expertise in complex social domains (Edwards, 2010).
Thus, It is not necessary that an entrepreneur must be an expert in finance, accounting, programming, law, etc. Such expertise is distributed(and or extended) across various individuals(lawyer, doctor) institutions(law enforcement, companies), artifacts(tools, software), etc.
It is not even necessary that the entrepreneur know the entrepreneurial core activities. He/She can still win in-case he/she is in the right high network place, get good people to mentor and work, get access to specialized institutions, have a rich family to support, etc.
Further, In a complex domain, decision-makers(entrepreneurs or managers) are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. These problems are labeled by Ackoff as messes (Ackoff 1978; Bennet et al, 2008).
Charles, Cathy, Amiram Gafni, and Tim Whelan. “Decision-making in the physician and patient encounter: revisiting the shared treatment decision-making model.” Social science & medicine 49, no. 5 (1999): 651-661.
Charles, Cathy, Amiram Gafni, and Tim Whelan. “Shared decision-making in the medical encounter: what does it mean?(or it takes at least two to tango).” Social science & medicine 44, no. 5 (1997): 681-692.
Edwards, Anne. Being an expert professional practitioner: The relational turn in expertise. Vol. 3. Springer science & business media, 2010
Ackoff, Russell Lincoln. “The Art of Problem Solving Accompanied by Ackoff’s Fables.” (1978)
Bennet, Alex, and David Bennet. “The decision-making process in a complex situation.” In Handbook on Decision Support Systems 1, pp. 3-20. Springer, Berlin, Heidelberg, 2008
Eric Ries(2011) introduced the concept of Actionable metric and Vanity metric by taking the example of a test preparation company called Grockit. This made me think about the formidable role Lean-startup played in the matricization of entrepreneurship culture.
According to Eric Ries, “When cause and effect is clearly understood, people are better able to learn from their actions. Human beings are innately talented learners when given a clear and objective assessment”.
As a combo, the lean-startup has introduced many other concepts like Validated learning, Innovation accounting, etc as part of their metricization drive.
Because of this, I thought it is more than appropriate to call the role played by the lean-startup in bringing measurement culture to the entrepreneurship domain as the “GRE’isation of entrepreneurship” (after the Graduate Record Examinations).
The problem here is the complete ignorance of the complexity of the real world. In complex domains, you can’t have the perfect objective answer or action. There is not even an objective goal. Everything is dynamic and co-evolving.
Secondly, In a complex domain like entrepreneurship, emergent property is a key feature. The idea you initially had can emerge into a radically new formation, an emergent property that you could have never imagined before. For E.g. Instagram was started as an HTML5 supported location-based service; Facebook was started as an app to compare two people’s pictures and the rate which one was more attractive.
When you introduce a metric to a radically changing, complex, dynamic, and emergent system like a startup, it will amount to the manifestation of Goodhart’s Law that suggests that “when a measure becomes a target, it ceases to be a good measure”. When people set an objective metric-driven goal, people will tend to optimize for that objective regardless of the consequences. It is extremely troublesome if the metric is introduced as a target in a domain that is dynamic and emergent like that in entrepreneurship. Here the measurement based on metric itself is not a problem, but the effect of such metric fixation(Muller, 2021) will stagnate the startup and uncouple the venture from ecological realities and opportunities.
In the last few posts, I have been developing the idea of effectuation as a self-organization principle against the idea of expertise acquired by entrepreneurs via experience and deliberate practice. Following are two blog posts in which I have elaborated my thoughts.
Self-Organization: Paul Cilliers and Saraswathy: Here I assess effectuation using Paul Cilliers’s attributes of self-organization. Arguing that effectuation simulates the action models of self-organizing systems.
I have demonstrated that the ideas proposed by effectuation fit perfectly with self-organization principles. Advancing that point, the following are some of the complexity principles associated with effectuation and its core principles(heuristics).
1. Self-Organization/Effectual dynamics
I argue that “effectual dynamics” is the dynamics of self-organization. Self-Organization refers to the feature of systems that appear to organize themselves without external direction or control. Self-organization has been used to describe swarms, flocks, traffic, and many other systems where the local interactions lead to a global pattern or behavior (Camazine et al, 2003; Gershenson, 2007). Intuitively, self-organization implies that a system increases its own organization. Self-organization of the effectual entrepreneur is initiated with an examination of the means available to an entrepreneur. The questions “Who am I?”, “What do I know?”, and “Whom do I know?” allow for an examination of the means available to an entrepreneur, which allows him or her to consider what he or she can do (Sarasvathy & Dew, 2005). Through interacting with others and engaging with stakeholders, the entrepreneur discovers new means and establishes new goals that allow for revaluation of means and possible courses of action (Fisher, 2012).
2. The attractor/ Intention
Self-organizing systems typically evolve towards a state of equilibrium, or an attractor state. Almost any dynamical system can be seen as self-organizing; if it has an attractor towards which the system dynamics will tend to move, thus increasing by itself its own organization. According to Kauffman(1995), “the trajectory converges onto a state-cycle attractor around which the system will cycle persistently thereafter. A variety of different trajectories may all converge on the same state cycle, like water draining into a lake. The state-cycle attractor is the lake, and the trajectories converging onto it constitute its basin of attraction”. So the question is, Who or what constitutes one of the key initial attractor according to effectuation. Is it the entrepreneur, or intention? Since effectuation has a lot of roots in the work of Herbert Simon, especially “The Sciences of the Artificial” (Simon, 1968), I prefer to take evidence from his work, quoted by Saraswathy herself; “For Simon, human intention and design were central to the social sciences, and the word ‘man-made’ was synonymous with artificial” (Sarasvathy, 2008). From that foundation, it is logical to assume recognition of “intention as the attractor (Juarrero, 2010)”. Intention is also a valid concept in entrepreneurship (Bird, 1989; Shapero and Sokol, 1982; Krueger and Carsrud, 1993). According to Juarrero(2004), “new intention reorganize the earlier state space into a more differentiated and complex set of qualitatively novel options. This means that once an agent formulates a prior intention, every possible behavioral alternative no longer requires consideration; only a partitioned subset does”.
3. Phase space disposition
According to Saraswathy, the process elements of effectuation begin with entrepreneurs asking who they are, what they know, and whom they know. This corresponds to the idea of knowing the disposition of phase space or state space of a complex adaptive system. In complexity science, the ‘phase space'(or state space) is the representation of all possible instantaneous states that can occur in a physical system (Butkovskiy 1990, Sayama 2015). It can be thought of as the space within, around, or adjacent to which a complex adaptive system can self-organize and emerge. While we may not be able to know precisely how a system might change, we do know that it will be most likely within the phase space. A change in emergent phenomena within a phase space may be incremental. A radical change suggests a shift in phase space, a qualitative difference in the system (Byrne & Callaghan, 2014). According to Dave Snowden(2017a), in complex adaptive systems, “at a system level, we have no linear material cause but instead we have a dispositional state, a set of possibilities and plausibilities in which a future state cannot be predicted.” This is particularly important because, in a complex system, phase space disposition, is what decides on the evolutionary potential of the system, not any specific fixed goal. If a system is complex(no causality), “you can’t set outcome targets a priori, but you can define a vector target (direction and speed of change from the present against intensity of effort). You can’t manage to a desired future state but have to manage the evolutionary potential of the situated present. You can’t predict the future, but you can increase resilience in there the here and now which will allow you to manage that uncertainty” (Snowden, 2017b).
This importance of disposition can also be found in the works of scholars who specialize in entrepreneurship complexity. According to Jeffrey Goldstein, Self-transcending Constructions (Goldstein, 2003), which involves the emergence of radically novel outcomes—-operate on already extant order and creatively transform it along the way into radically novel outcomes.
Following are some sources of this pre-existing order that are processed by Self-transcending Constructions (Goldstein, 2005); 1. The already present nascent order in a system, i.e., the way it is functioning right now; 2. The multifarious constraints currently in place, e.g., the geographical layout, the actual buildings, the already extant work groups, the constraints of money, time, goals, and so forth; 3. Operations of recombining and manipulating the above; 4. Supplemental means for introducing novelty such as randomization and negation, i.e., changing the rule.
I argue that an effectual entrepreneur, by asking questions such as; who they are? what do they know? and whom they know? etc. effectively is trying to make sense of the dispositional propensities, so that they can utilize the evolutionary potential of the present to decide what to do.
4. Adjacent Possible.
From the understanding of disposition comes the “The bird-in-hand principle” which refers to a principle of means-driven(as opposed to goal-driven) action. The emphasis here is on creating something new with existing means rather than discovering new ways to achieve given goals. To effectuation, entrepreneurs focus on what they can do and do it, without worrying much about what they ought to do. This idea is similar to acting in the adjacent possible (Kauffman, 1996), i.e. a kind of zone of proximal development (Vygotsky, 1978), towards which change and evolution are more likely because of the current disposition of the system. The concept of “adjacent possible” was introduced by Stuart Kauffman (1996; 2000) in evolutionary biology and complex adaptive systems to explain how biological evolution can be seen as exploration and actualization of what is adjacent possible. It can be defined as “the set of possibilities available to individuals, communities, institutions, organisms, productive processes, etc., at a given point in time during their evolution” (Loreto 2015, p. 9). The concept of the “adjacent possible” is useful for understanding how entrepreneurial adjacent possibilities emerge, and how the new adjacent possible will lead to yet newer adjacent possibilities. In the case of effectual entrepreneurs, they will focus on the adjacent possible than worry about things they don’t possess. They will focus on what they can do and do it.
Any failure inside the zone of adjacent possible will not likely result in system destruction, but likely help the development of system resilience. The affordable-loss principle to me is a heuristics based on this idea. It prescribes committing in advance to what one is willing to lose rather than investing in calculations about expected returns to the project. If an effectual entrepreneur commits 6 months and 10000k, that commitment itself will shape the constraints of the adjacent possible.
4. Co-evolution and Co-adaptation
For a system to self-organize, its elements need to communicate: they need to “understand” what other elements, or mediators, “want” to tell them (Gershenson,2007). Thus, first of all, in a complex system, dynamics of self-organization are initiated and manifested by heterogeneous agents interacting with one another in a non-linear and continuous way. Even if specific agents may only interact with a few others, the impact of these interactions are propagated throughout the system. Accordingly, agents co-evolve with one another (Anderson, 1999). Through this interaction, agents strive to improve their fitness with the environment but the outcome of these attempts depends on the disposition and behaviors of other agents (Mitleton-Kelly, 2003). Thus, co-evolution is one of the key themes when it comes to viewing the system as a whole(the nested and entangled relationships with multiple complex adaptive systems), which refers to the simultaneous evolution of entities and their environments, whether these entities are organisms or organizations (Baum & Singh, 1994). It encompasses the twin notions of inter-dependency and mutual adaptation, with the idea that species or organizations evolve in relation to their environments, while at the same time these environments evolve in relation to them. In effectuation, this is parallel to initiated interaction and the crazy-quilt principle. This principle involves interacting and “negotiating with any and all stakeholders who are willing to make actual commitments to the project, without worrying about opportunity costs, or carrying out elaborate competitive analyses. Furthermore, who comes on board determines the goals of the enterprise. Not vice versa”. This involves the co-evolutionary potential of interacting agents constituted by the principles we have discussed till now but applied to the other side. They are; The Intention(attractor) of other agents, Phase space disposition of interacting agents, Adjacent-possible of interacting agents.
5, Acknowledging and appropriating Emergent property
Complex adaptive systems show emergent properties. Emergent properties refer to a characteristic that is found across the system but which individual parts of the system do not themselves hold. E.g. Human heart is made of heart cells. But heart cells on their own don’t have the property of pumping blood. You will need the whole heart to be able to pump blood. Thus, the pumping property of the heart is emergent. A complex system like entrepreneurship has emergent property. That means the emergent or emerging venture idea might be different from the ideas the entrepreneur has initially conceived. Thus initial idea may be to start HTML5 supported location-based service; The emergent outcome could be Instagram. The initial idea may be to develop an app to compare two people’s pictures and rate which one was more attractive; The emergent outcome could be Facebook. The lemonade principle of effectuation is based on adapting, using, and improvising according to emergent realities, whether it is perceived as negative or positive. It suggests acknowledging and appropriating contingency by leveraging surprises rather than trying to avoid them, overcome them, or adapt to them. This means accepting the emergent realities as it comes, adapting, acknowledging, and appropriating the contingencies as it unfolds.
The pilot-in-the-plane principle urges relying on and working with the human agency as the prime driver of opportunity rather than limiting entrepreneurial efforts to exploiting exogenous factors such as technological trajectories and socioeconomic trends. This is equivalent to elements of Lichtenstein’s(2016) concept of generative emergence that views entrepreneurial emergence as intentional, and agency, even if distributed, as the source of successful organizing. To the framework, intention is the primary attractor around which self-organisation takes place. In order for effective self-organization to take place, the agent must use agency, not to exert control that is driven by his/her own bounded rationality, or the rules of perceived local optima, but a kind of agency that is distributed (Garud and Karnøe, 2005)and embedded as well (Garud and Karnøe, 2003)
6. Effectual Self-organisation cycle
A complex system is always dispositional and I have discussed quoting Snowden that we can only know the system by knowing how it is disposed. “you can’t set outcome targets a priori, but you can define a vector target (direction and speed of change from the present against intensity of effort). You can’t manage to a desired future state but have to manage the evolutionary potential of the situated present”. Since the system is always changing, the bird in hand or disposition is also parallelly evolving. This warrants continuous reappraisal of the situated present. The effectual cycle suggests always looping back and cycling through five core principles in a non-linear manner(bird-in-hand, affordable-loss, crazy-quilt, lemonade, pilot-in-the-plane). More specifically there are two types of converging cycles mentioned; expanding means and converging goals. The expanding-means cycle looks for increases in resources, and the Converging goals cycle adapts the goals. “It accretes constraints on the venture that converge into specific goals that get embodied in an effectual artifact over time” (Sarasvathy et al, 2014; Sarasvathy & Dew, 2005, pp. 543–544). This is also a feedback about emergent realities that will lead to estimation of the new phase space disposition, new adjacent possible, new co-evolutionary potential, new action, etc.
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