Chapter 1: The Illusion of Simple Solutions

Life often presents us with humorous coincidences. Just last Friday, I was engrossed in the insightful book May Contain Lies by Alex Edmans. Within its pages, Edmans discusses a report published by the London Business School on July 20, 2021, which asserts that diversity in the boardroom enhances company performance.

Later that evening, I came across an article in The Wall Street Journal titled "Diversity Was Supposed to Make Us Rich. Not So Much." This piece references an earlier McKinsey report from 2015, which claimed a correlation between profitability and executive diversity in terms of race and gender. While this was hailed as a significant discovery, the WSJ article concludes that "unfortunately, the research doesn't show what everyone thought it showed."

In May Contain Lies, Edmans argues that the LBS report also fails to deliver on its promises. Both of these so-called "breakthroughs" were arrived at without adhering to the principles of the 'scientific method.' While promoting diversity is essential, we should not assume that it will inherently drive financial success.

This isn't the first, nor will it be the last, endeavor to uncover a universal solution—a method or a collection of strategies—guaranteeing a company's success. Jim Collins's Built To Last is another case that Edmans critiques in his work.

This discussion, however, is not centered on the scientific method. Instead, it highlights two cognitive biases stemming from our simplistic belief in straightforward answers to intricate problems.

The Complexity Bias leads us to believe that multifaceted issues might have easy fixes, while the False Causality Bias compels us to identify causal relationships where only correlations exist.

In my upcoming book, Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism, I conceptualize a business as a complex ecosystem that exists within two broader ecosystems: the market and society. The success of a company hinges on the intricate relationships within itself and with these external ecosystems. These relationships are far too intricate to be resolved with a singular solution.

We would be better served by avoiding oversimplified advice found in titles like “7 Steps to Success” or “5 Principles Everyone Should Know.”

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Section 1.1: Exploring the Impact of Diversity

Diversity is a crucial topic that requires thoughtful consideration. The idea that simply increasing diversity will automatically lead to better outcomes is misleading.

Chapter 2: Rethinking Strategic Frameworks

In the pursuit of understanding successful strategies, we often overlook the complexities involved.

The first video, Color-Changing Harry Potter Potions: From Clear to Colored - Science to Sort Into "Houses," illustrates how scientific principles can be both magical and complex, challenging our perceptions of straightforward answers.

The second video, Maximize Your Metabolism: Lifelong Solutions to… by Noel Maclaren · Audiobook preview - YouTube, delves into the intricate relationship between health and strategy, emphasizing that simple solutions often fail to consider underlying complexities.