Armchair Strategising, Marx and Entrepreneurship

BBC has a documentary series about the leading thinkers of the Modern World (available on Netflix). The first episode is about Marx. I found it to be very intellectually stimulating, especially as it reminded me of something that I (and many other knowledge workers too) usually fall for. Something that I call “armchair strategising”: felling in love with my own thoughts and  starting to believe that my grand theory of the world is somehow an accurate representation of it. Rather than the distorted, myopic interpretation that it really is.  

That is the method I feel Marx used to get to his theories. You would think that the protector of the “abused” workers had strong “in the field” interactions with people in factories, a strong understanding of the economics of business models from detailed conversations with capitalists …. Yeah, he didn’t do any of that: 

  • He grew up in a wealthy Prussian family and he never gave up on the life style he grew up accustomed to. His first contact with the exploited workers was facilitated by Engles long after he put fwd his socialist ideas. While never rich, he spent most of his life as a middle class intellectual. 
  • He developed his ideas as a purely cerebral hobby, hanging out with a group of fans of Hegel. Long nights of alcohol infused political debates served as his intellectual awakening. Not hanging out with the factory workers, whose interests he so feverously defended. 
  • The Communist Manifesto was written in 2 weeks, the focus being on literary beauty, not practicality. Das Kapital, his magnum opus, was also a purely rationalistic exercise, written by Marx in the solitude of his London apartment. Honest discussions with either the capitalists he preached against or the exploited factory worker were replaced by motivated research, statistical facts being used to punctuate his grand theory.  
  • He seemed to have been conditioned to favour a revolutionary world view. His father suffered discrimination because of his admiration of the French revolution. Marx himself suffered for a skin disease that leads to a feeling of self-loathing. These facts acts as alarm bells to me is that self-hate does not (usually) lead to love for others. Most usually low self esteem is associated with fear and anxiousness towards people not with deep trust-based social interactions.

His work is surely very mentally stimulating (no wonder that his ideas change the world), but resembles utopian fiction, more than true economic theory. I am not here to criticise his theory but his way of thinking. This matters because there is a Marx looming inside each of us. As the work we do moves more and more into the abstract, the more we use mental models, and systems thinking we risk of falling victim to armchair strategizing. 

The power of Ideas

Marx was definitely in love with his own ideas. Not that that is something terribly peculiar. Most philosophers, from giants like Plato to Descartes being just as guilty of this as the great socialist revolutionary. But unlike Marx, their ideas never got momentum with the people in charge. They wrote mostly to explain the world. Not Marx:

The philosophers have only interpreted the world, in various ways. The point, however, is to change it.
— Karl Marx

Like Marx, there is a large group of workers who are very susceptible to be caught in this narrative fallacy. I am part of this group: Entrepreneurs, product managers, executives. Knowledge workers in general, people working with abstract concepts and shipping equally abstract outputs: plans, strategies, models etc. Like Marx the theories we put forward are not just a hedonistic compressions that we use to entertain ourselves during otherwise boring cocktail parties. Our beliefs are tools in our daily work:

  • We use our theories to bring new products or services to market
  • We structure and restructure companies based on the stories we tell ourselves 
  • We communicate in certain way because of these thoughts

Compared to his predecessors, Marx was much more action oriented. But so are we. We may not want to overthrow governments and start revolutions but we too see ideas as agents of change. In a knowledge-based economy, our thoughts and ideas are all we have. And unlike our socialist intellectual, our ideas get battle tested quite rapidly, as the market (the great systemic evil in marxism) has the tendency to brutally correct our irrationality. A beautifully created story about how the world works will rarely save a ill-conceived product … and that’s a great thing.

Intellectual knowledge is not knowing

The world is moving faster. New products are born everyday and old products die. Companies come and go at a rate that’s unprecedented in our history. Success nowadays seems to be more tied to correct understanding of reality, not the emotional attachment to a beautifully constructed interpretation

We humans are so complex, and the societies we build are so mind-blowingly complicated that we seem to be naturally attracted to simplifying theories. Unifying theories are indeed beautiful but they are rarely true. In the market and in the political sphere. I for one, catch myself felling into this trap and it seems to be the modus operandi in a lot of startups and big companies alike. We fell into this trap : 

  • When we make up stories to explain a phenomena without any “on-the ground” investigation
  • When we design products based on user personas, but have trouble naming one person that would fit into our beautifully crafted boxes
  • When we spend a disproportionate amount of time polishing the executive presentation compared to testing the hypothesis we put forward. 
  • When we ask the higher-ups if “the plan makes sense” and optimise for social appeal rather than putting it to test. 
  • When we practice “vision selling” in front of the our customers or investors.
  • When the chart we use to make predictions that justify ambitious plans are done by drawing the Excel formula to right. Look mom, BILLIONS!

Breaking out of Heads

There are lots of antidotes to this way of narrative driven modus operandi: 

  • Steve Blank famously advice us to “Get out of the building”. To face the world you are trying to change. 
  • Eric Ries proposes to test your ideas with the minimum amount of work, with something that is now called an MVP

We barely understand ourselves. Our close ones, our family, our friends are probably even less transparent to us. When we look at groups of consumers, large ecosystems of equally complicated humans, being right on very few small items is worth more than having a very beautifully constructed grand explanation. I try to remember that. 

I think history is one of the great ways to learn anything and I sometime like to make parallels between history and the business world.  I also use my blog to review books or write about innovation and entrepreneurship. Wanna stay in touch? You can follow me on Twitter or subscribe to this RSS feed