Analysis is a process of looking at something; information. Generally analysis involves, or is defined by, breaking things down, and then looking at them in relation to the whole — or vice-versa. In business, we analyze financial statements — looking at the separate pieces (revenue, sales, expenses, taxes, etc.) that comprise the whole; and the whole as comprised of the separate pieces.
A business is largely a closed system. To a certain degree anyways — as the analysis of an individual business still requires analysis of the surrounding market, competitors, and so on. The more “closed” one keeps the system — the easier the analysis.
As many businesses learned over the last year or two — sometimes things in the larger system are completely unaccounted for and unforeseen. Say for example, someone heavily involved in providing services or supplies to Iceland. When the Icelandic economy imploded — many people were left holding an empty bag. Or folks that realized they were holding investments that were largely sub-prime mortgages or other air-pie investments.
The problem with analysis is that it only really works in closed systems. However, how many systems are truly “closed”? And, where does one draw the line.
Edward de Bono in his early 90s book I am Right – You are Wrong: From this to the New Renaissance: from rock logic to water logic talks about analysis and its limits.
There is a story about a supermarket operator in New Jersey who found that his wastage (losses from theft) amounted to a staggering twenty per cent. He set about a thorough programme of investigation. All the figures were examined carefully. Each check-out operator was watched intently to see that all purchases were correctly recorded. Detectives mingled with shoppers to observe any large-scale shoplifting. Nothing could be found. The system was operating without any fraud. But the losses continued.
One day the owner visited the supermarket. He had an uneasy feeling that things were not quite right. But he could not put his finger on what was wrong — just a general sense of unease. Suddenly it hit him. He had installed just four check out points but now there were five. The staff had got together and installed a fifth check out point from which they took all proceeds. So at every point the system was working perfectly — but it was not the same system.
As de Bono points out — it’s easy in hindsight to say that the analysis of the supermarket fraud should have checked the number of check-out points — everything is easy in hindsight. “In our tradition of analysis we behave in much the same way. Draw the line to enclose what is relevant: how much of the world are we going to include in our system? Then we analyze the factors and inter-relationships.”
The question is: do we really have a closed system? And: where do we draw the line to get a closed system? “Obviously the answers to these questions depend very heavily on perception. We may include things we perceive might be relevant — but we need perception first.”
Analysis is a traditional and potentially powerful tool for thinking for many valuable reasons. For example, we may not recognize a complex whole, so we break it down into recognizable patterns and then we may know what to do. In order to understand the system involved we analyze something into the parts and their relationships. This the essence of applied mathematics. “If we seek to understand a phenomenon, we analyze the situation to get our explanation.”
A growing objection to this traditional process of analysis is that, in a complex system, when you have the parts you no longer have the whole. And the whole cannot be reconstituted from the parts… an even more serious defect is that we have grown up with the tradition that if you want to know what is happening and if you want new ideas you should analyze the data available, or collect more data through experiments or surveys. Computers have enabled us to collect and sort data in a remarkably efficient way. So we have been able to pursue this data analysis tradition with much greater effectiveness. We believe, or many believe, that the analysis of data is enough and is the basis of rational behavior. There is, unfortunately, a serious flaw in this tradition.”
The flaw is that we can never really analyze data. We have all sorts of tools for the analysis: mathematics, logical analysis, computer modeling, etc. Unfortunately, “at best we can check out a hypothesis we have or see whether any of our limited repertoire of relationships can be found in the data… data analysis will confirm or reject a hypothesis but will not itself generate new concepts… If data analysis could have directly given new ideas they would have become visible a long time ago… we can see only what we are prepared to see.”
de Bono explains how:
We have been obsessed with analysis but paid very little attention to design. To be sure we have designed temples, textiles, furniture, and space rockets, but design has always been considered a part of craftsman’s activity compared to the intellectual excellence of analysis. Partly this is the result of our search for truth, which (possibly mistakenly) we believe to be more likely to come from analysis than from design. Possibly it is another aspect of the influence of theological reasoning on our education.
Mainly it is the result of our erroneous belief that if analysis lays bare the components and systems then design is a very simply matter of putting these elements together in order to achieve some purpose.
The traditional concept is that “knowledge is all” and, once you have knowledge, things like taking action and design are minor intellectual operations.
Aristotle said that all new knowledge comes from existing knowledge. There may be some truth in this if we accept that we cannot see new knowledge except through existing perceptions. It might, however, be equally true to say that much new knowledge is prevented by old knowledge. This is because existing perceptions must be unpicked in order that we may see things differently.
The Cohen Commission website lays out the two phase approach that will be taken to investigate the decline of Sockeye Salmon in the Fraser River. “During the first phase, the Commissioner will review and assess any previous examinations, investigations or reports that he deems relevant to the inquiry and the Government’s responses to those examinations, investigations and reports.”
Phase two will investigate and make independent findings of fact regarding:
- “the causes for the decline of Fraser River sockeye salmon…”;
- “the current state of Fraser River sockeye salmon stocks…”; and
- “develop recommendations for improving the future sustainability of the sockeye salmon fishery in the Fraser River…”
This means a whole lot more analysis… breaking down the pieces… looking for all the check-out counters… and so on. However, wild salmon do not exist in a closed-system — about as far from it as it comes. That’s part of the problem… folks have tried to manage salmon as if they exist in a closed system – as if they were migrating from our toilet to our bathtub back to our toilet; in our bathroom where we know all the factors…
The irony in this whole situation is that the “whereas’s” of the Commission state that: “the Government of Canada wishes to take all feasible steps to identify the reasons for decline and the long term prospects for Fraser River sockeye salmon stocks and to determine whether changes need to be made…”
But, hasn’t the federal Department of Fisheries and Oceans been specifically tasked with this as one of its modus operandi for somewhere near one hundred years?
So, if Fisheries and Oceans – with it’s $1.8 billion annual budget, and over 10,000 employees – can’t do the job properly — then how is a legal investigative team and about $20 million going to do it? Especially after several other Commissions, federal government Plans, and Auditor General reports were unable to do it?
Well… several of those identified some issues; it’s just that no one enforced the recommendations.
Maybe less analysis and more design.
More creative thinking.
…Explanation looks backwards and design looks forward.