A Business Guide to Compression Thinking

Ours is a time of great uncertainty, of life and of business. Future cash flows are at risk from many sources, the fickleness of markets being but one. Regulatory changes re-sow old minefields. Complex financing may spring surprises. Environmental impacts seem to be only one of a huge array of issues. Questioning exactly what we are doing and why makes sense, but we don’t know where to start, so just keep plugging. When confidence in status quo systems is shaky, we must stop thinking in terms of the world we know and ride toward a different destiny.  

Business needs a new concept of itself. Perhaps we can call it Compression Thinking.

The big emerging issues relate to the global environment. It keeps wedging forward, displacing politics, money, wars, and entertainment. To cope, leadership has to change. To start, can you sense that you are part of Earth, and it part of you? For example, trillions of microbes compose 90% of your body, closer kin than your mother. Literally seeing them requires microscopes, but can you imagine 90% of you being tiny beings that you can’t live without? Now expanding that idea. Envision all humanity fused into one big ecological system, too complex and too fast changing to be fully understood.

We Are Responsible for Ecology’s Wellbeing

Since we utterly depend on it, you, me – all of us – we are responsible for that ecology’s wellbeing. If we do not serve it, it is not obliged to serve us. Look and this relationship is obvious, but blinded by our cash flow concerns, we seldom look. Were we alone on a small spaceship, it should be glaringly obvious that constant, careful attention to our on-board biological support systems is all that separates us from eternal oblivion.

But Earth is big. Problems with its ecology – our biological support system – seem remote, and they are piling up so fast that one can monitor them full time and still not keep up. Science reports one debacle at a time. Integrating a picture is confusing.

The Chaotic Uncertainty of Digital Disruption

If you are in business, stir in the chaotic uncertainty of digital disruption. In 5 years will every little community have 3D technology to print items locally? Will Big Distribution (Amazon) win out over Big Box retailing, or will they both lose to something else? Will we still have anything resembling a middle class? Will we have nimble niches for small business? Or will the wheels come off the whole system?

We are inclined to box such issues into the framework of our business. We assume that change is manageable, that somehow we can update existing business models. Only the inefficient will lose because a version of the existing system will remain recognizable. But suppose it doesn’t. What if “ahead” or “behind” no longer meant anything in a non-linear, whack-a-mole world? Nothing any longer makes sense.

Compression Thinking Helps to Make Sense of the Topsy-Turvy World

In such a topsy-turvy world, perhaps Compression Thinking will help make sense. To start Compression Thinking, try to consciously make all decisions considering Customers, Suppliers, Employees, Community, and yes, Earth – all our Mutual Stakeholders in the ongoing drama of life. The Compression Institute wants to share the simple concepts of Vigorous Learning Organizations and Compression Thinking to make more informed, comprehensive business decisions. They are simple once we start thinking differently.

  1. Vigorous Learning Organizations is a guide to organizing ourselves for work.
  2. Compression Thinking is a guide to thinking about matters external to the company.

Both of these are open-ended systems concepts, so they overlap.

Taken together, these constitute a pragmatic approach to revolution: staying ahead of fast changing complications in a global world beset by both natural and man-made disasters. Wake up, stay alert, and learn to adapt to rapidly changing conditions.

The Business Revolution Shift

This Business Revolution is a shift in ambition from maximizing consumption (and revenue) to a more realistic and practical worldview: nothing can grow forever. Just reducing total consumption will not regenerate all nature, but it shrinks all other problems, like proliferating toxic substances and carelessly disposing of waste. Then keep going toward tight circular economies that promise of to regenerate all life.

Compression Thinking is a different business pathway. Adopt new visions of success. Invent new economic models. Learn to thrive in circular economies with small circles. Find a new role in a resilient future, and share your innovative solutions with others.

Compression Thinking vs. Commercial Thinking

Compression Thinking conflicts with today’s commercial thinking, as shown by a few contrasts in Figure 1. However, we all live in today’s world, not tomorrow’s world. Doing almost anything in today’s money dependent society violates some concepts of Compression Thinking. We have to learn, test, and practice ideas that seem strange at first, all while navigating conflicts with conventional business.

The stark comparisons in Figure 1 may make you gasp. But please go on. This Guide is intended to help business managers reflect deeply on how to adapt to a world in chaotic change. Weave Compression Thinking into your own evolving worldview.

Making Time to Pause and Deeply Reflect is a Proven Strategy

Making time to pause and deeply reflect is a proven strategy for leaders of dramatic change. It yields significant benefits, especially when learning with others wresting similar dilemmas. Learning together refreshes your approach to nearly every aspect of your business.

Many specifics to dramatically cut consumption and pollution are known, at least in principle. Some environmentally aware companies practice them, but they are not widespread. (Think “We are going to stop making ourselves sick and make both ourselves and all other life healthy.”) To live healthily while consuming less, poor but vigorous individuals do more for themselves. Every little bit helps, but individual action is not enough. Willing individuals need support from systemic change. Business leaders can collectively muster systemic change using Compression Thinking. Some learning is hands-on skills; some is by doing; and some is maintaining broad global awareness.

Compression Thinking is Learning How to Learn

First, Compression Thinking is learning how to learn, individually and collectively, deep down to basic values. The deepest learning is examining our values from which we derive criteria for judging what is “better.” Stimulate both our powers of direct observation and our ability to seek and interpret abstract knowledge: data, charts, studies, and evidence acquired by others.  

Two steps are essential. The first is criteria for accepting any observation or statement as a fact that total strangers can agree on. Experimental design and epistemology has long been the core of scientific methodology. Science has flaws like narrow, fragmented attention. Despite this, in the main scientists have forged bonds of trust that presentations of methods, raw observations, or data are honest attempts to represent reality. Authentic peer review makes evidence trustworthy. The reason science works at all is an ethic of skepticism, curiosity, transparency, and reproducible results.

Compression Thinking is Acceptance of Evidence Even When It Hurts

The second step is crucial: acceptance of evidence even when it hurts. Everyone, including scientists, interprets evidence within a conceptual worldview. If evidence contradicts a well-established worldview (or paradigm) an old scientific adage summarizes the difficulty, “Extraordinary claims demand extraordinary evidence.” Science purports to learn what is heretofore unknown, but changing deeply held beliefs is often a long struggle of doubt and persuasion, not a flash of brilliant insight. For example, a few Flat Earth societies still seriously argue a case for it.

Organizing for Learning

Organizing for learning assumes that people and organizations truly want to further knowledge and deepen understanding. Pretenders only seek to further their status, look smart, make money, or muddy up the learning. Dislodging firmly held beliefs is more a matter of behavior than logic.

Figure 2 diagrams levels of learning in a business context. Incidentally, financial statements are an abstract, narrow perspective of a company. Without a story that explains their context, they mislead without anyone intentionally “cooking the books.”

Type 1 Problems – In The Box  

In a functioning business, most daily problems are Type 1, “in the box,” low in abstraction. Given a box, organizations standardize processes inside that framework. The more they standardize, the more efficient they become. We don’t question that they should be efficient. We question from what stakeholder’s perspective they should be efficient; therefore how to measure efficiency – quality, cost, customer service, labor productivity, ROI, revenue growth rate, and so on. Once this perspective frames the box, inside it most problem solving is “tame.”

However, “political” organizations fumble even tame problems. They lack a framework like Plan-Do-Study-Act and the discipline to use it. People attack each other instead of problems and processes. When human “politics” override learning, players fog problem situations with cover stories. Skillfully deflecting responsibility not only avoids disrepute, it boosts recognition and reward from “political leadership, “ who may insist that this “creative tension” even sharpens problem solving.

Figure 3 idealizes the clarity of being structurally organized for group problem solving, versus paying little heed to it. Just promoting techniques for structured problem solving starts to shift behavior, but it’s not enough. Leaders must also dispel fear and the fog, and become more open. This is the place to start, but keep going.

Type 2 Problems – Out Of The Box

Type 2 problem domains migrate “out of the box” and abstraction increases. This is the game-changer innovation arena. Unknowns, contradictions, and “fog factors” multiply. Data driven logic helps, but is seldom sufficient. For example, whether a new avant guarde movie will be a blockbuster or a bust remains largely a gut-feel gamble. But our basic values system remains intact.

Type 3 Problems – Extreme

Type 3 “extreme” problem solving breaks the confines of pre-conceived boxes. We reconceive our values, and with it, our scaffolding for problem solving. Genuinely adopt the Compression objective of preserving all life over an indefinite future, and no problem even appears the same again. A problem originates from the difference between how things are and how we’d like them to be. Change what you think is important, and old problems drop away and new ones appear.

How We Know What We Know is So?

Values systems are pretty abstract, gut level concepts. They may be illustrated by specifics.

At all three levels of problem abstraction, a key question is how we know that what we think we know is so? Meaning, does our framework of our world correspond with reality, as best we can ascertain it, or are we confusing symbols with the real thing? What does it mean to be “grounded in reality?” All direct sensing by humans, animals, or instruments is limited, so how do we know that we are close to reality?

Scientific Validation

There are various ways. One is “scientific validation.” Experiments test an idea against reality. Does the data closely correspond with the idea we had, and can this be replicated? That’s the classic approach, but when dealing with big, complex system, nifty lab experiments are not possible. The approach shifts to determining whether observations from many different sources fit into a consistent pattern. (Yes, despite attempts of some to fuzz the picture, both photos and direct observation of polar ice show that it is melting – so much so that oil companies contemplate drilling there.)

Close, Careful, Systemic Observation of Nature

A more ancient methodology still has merit – close, careful, systemic observation of nature. The ability of indigenous people to directly sense changes and integrate information is amazing to us more abstract-thinking beings. (See the book review of Ilarion Merculieff, Elder at Large of the Tribes of Alaska.)

Drawing on Intuition

But one must be careful of the interpretations given by those who cannot augment what they observe with information beyond their direct perception. They had all kinds of myths about how things work, and how the world began. Drawing on our own intuition may lead to brilliant insight – or to another back-of-a-giant-turtle story.

Fog Factors

Truly complex situations are laden with fog factors. Destructive human competitiveness Is one. Nature adds more complex fog; its systems have subsystems full of always-changing unknowns, loop backs, and surprises. To cope with this complexity, we must learn to grasp it as a whole, as best we can, not one fragment of it at a time. Look for relationships among systems.

That’s deeper than commercial man usually wants to dig. Human conflict? Ignore it, subdue it, or manipulate it to one’s own ends.

Nature? Ignore it, invade it, or “improve” it. Try to standardize it. It’s there for the exploiting, or it’s an obstacle to “success.” Business models and economic development externalize many “costs” of altering nature. If nature is not in a business model, it’s not in the mind. Most business models are abstract from nature’s reality.

And so Type 3 problem solving asks us to absorb as much as we can, and extend logic to its limit, but after that to intuit the future interactions of a complex system. We can never know as much as we would like when making a decision to intervene in a complex system, but we can usually learn enough to avoid making a decision that is obviously terrible in the long run. Just follow the principles in Figure 5.

Emotion plays a big role in how we interpret observations and data. Interpretation is biased by our prior beliefs. Questioning those is as much an act of psychological courage as intellectual insight. And we do not dare become emotionless robots, totally confident in abstract models or simulations. Emotion is what guides us to care for other people and the care for all other life. It guides our empathy for others; therefore our intuition.

A progression of complexity in problem solving is roughly depicted in Figure 4.

The Need for a Vigorous Learning Organization

The need for a Vigorous Learning Organization becomes more apparent after realizing that the commercially bounded rationality of 20th century business has to expand if we are to cope with the consequences of economic and physical expansion encroaching on an increasingly precarious ecosphere.

Eight Elements of Different Thinking

Appreciating this intellectually is the first step to actually doing differently. Practicing differently is where vigorous learning begins, and it’s a big leap. Eight elements of different thinking are suggested in Figure 5. Although somewhat arbitrary, they begin to light “the fog” toward thinking outside the boxes that we create for ourselves. The big challenge is doing differently in a world dominated by conventional economic thinking.

Individuals can practice the Principles of Compression Thinking, but effective action depends on organizations practicing them to create different systems. To do that, individuals can work together as Vigorous Learning Organizations, or VLOs.

The term “vigorous” implies action, of course. Vigorous learners systemically learn as they go from experience and observation, while not neglecting passive learning from other practitioners and other sources, some of which may be very abstract. Concepts for a VLO came from observing real companies having outstanding operations. Real people can form a VLO. Real people have practiced elements of Compression Thinking too, but so far as is known, not integrated into a “philosophy.”

The eight elements in Figure 5 are for your reflection. They overlap, and they are incomplete. You can add to each of them and think of more elements.

Seeing into the Future and Staying Ahead of the Curve

The future will be radically different. Too many forces signal the end of expansionary economic models, but projecting specifics is like science fiction 100-year scenarios. They range from transhuman space travelers to a remnant of humanity living in brutal squalor. Try imagining your own scenarios. Small differences in assumptions tip into very different projections. Certainty is impossible.

So if you seek an overarching theme of Compression Thinking, it is learning to sense that you are part of Earth, and it part of you. In societies using far fewer resources and much less complex technology, indigenous people survived for millennia on that core belief.