This book by strategy consultant Christian Madsbjerg argues that humanities aren’t a luxury - they are your competitive advantage in the algorithmic age.
Based on his work at companies such as Ford, Adidas, and Chanel, strategy consultant Christian Madsbjerg shows how it is not just algorithms that will drive future success, but a renewed focus on the contribution of the humanities. His book, Sensemaking: What Makes Human Intelligence Essential in the Age of the Algorithm argues that organisations should use approaches based not only on hard data and natural science but also art, music, theatre, dance, languages, and politics.
Perspectives derived from liberal arts degrees help via critical thinking, creative foundations, wide imagination, deep intuition, and persuasive communication. While technology and entrepreneurship have their contributions, blind number-crunching is risky.
Liberal arts-based skills are important in “sensemaking” activities, or cultivating insights for exploring new worlds. “Quant” thinking should not come at the cost of a deeper engagement with culture, anthropology and history.
The book draws on philosophy as well as business case studies, but could do more in suggesting how people from a liberal arts background can get involved in STEM companies, or how people from either a STEM or liberal arts degrees can fill their complementary gaps, i.e. re-design of education, pro-active cross-skilling.
Christian shows how many business leaders have humanities degrees, such as Sam Palmisano (IBM), Ken Chenault (American Express), Carly Fiorina (HP), and Michael Eisner (Disney). STEM degrees help get good-paying jobs immediately after college, but the highest earners in the long term generally have a liberal arts degree, according to a PayScale study in the US (it would be interesting to see how this plays out in other countries).
“People running the show, breaking through glass ceilings, and changing the world tend to have liberal arts degrees,” says Christian. A multi-disciplinary background gives mental dexterity and conceptual, creative and critical thinking skills, according to AG Lafley, former CEO of P&G. Recognising new patterns and developing fresh perspectives are important in a rapidly changing and unpredictable world.
While the precision, rigour and consistency of algorithms do assist in tasks where human error is evident, sensemaking is vital in areas where framing, perspective and strategy are key for success. Christian explains his approach through five principles of sensemaking, which I have summarised in Table 1.
Global businesses need to understand the foundational and emerging cultural nuances of their new target markets. “Great art connects us across the ages,” says Christian. Conversations and symbols change across boundaries and ages.
For example, even elements of perfume have different connotations in different cultures. The US has five conditions of cooked meat (from rare to well-done), whereas the French have nine.
While spreadsheets give an atomised understanding of the world, humanities give a more holistic perspective. Prioritising “chains of meaning” among customers calls for inspired and courageous leadership.
For example, Ford is repositioning and restructuring itself by conducting research on “vehicle ecologies” to understand the aspiration of drivers in emerging markets like China and India. It focuses on style symbols, personal expression, and productivity services, and not just on the technological features of the car. Ford is re-casting itself from automaker to hybrid technology and transportation services company.
True mastery in such domains requires reaching a state of being in intuitive flow rather than a self-aware computational process. The five-stage journey covers the following stages: novice (following formulas), advanced beginner (building on early experience), competent (hierarchical procedures), proficient (ability to see the situation in totality) and expert (intuitive flow).
2. Thick data
Thin data is about facts, thick data is about the context and cultural frameworks around those facts. Thick data is organic, and is drawn from ethnographic studies, stories, anecdotes, and social behaviour; it may have multiple meanings and even ambiguities as compared to thin data.
Big data is not necessarily better data; it offers reductionist views of ourselves. For example, trends based on Google search patterns may not always be accurate in terms of understanding deeper phenomena and the causation links.
Fields like global financial trading require deeper understanding of politics, news narratives, conversations, turf wars and even bruised egos of leaders – not just monetary policies and treaties. George Soros is a notable example in this regard.
Sensemaking draws on all four kinds of knowledge: objective (scientific realism, management science), subjective (personal opinions, feelings), shared knowledge (situational and contextual; not universal), and sensory (‘sixth sense,’ stream of consciousness).
While big data may unearth unforeseen correlations, a deeper approach is needed to explain causation based on context and empathy. For example, mere demographic profiling won’t reveal the behavioural differences between quick shopping after work and leisurely shopping on weekends. This goes far beyond quicker approaches like design thinking.
3. The Savannah
Broader insights about customers come not just from pain points and needs but the customs and heritage of the culture. Fields like phenomenology help unearth relationships between people, objects and experiences in cultural contexts, and can offer real explanatory power across the ages.
Discourse analysis can help unearth clues about how customers view products like insurance policies at different stages in their lives. This can help insurance companies frame conversations in more pro-active and empathetic ways, eg. use digital tools to interact with youth, and meetings for elders.
Supermarkets can better service customers by viewing them not just as shoppers but as people with specific tasks, like cooking. Stores can become a “stage setting for the theatre of food,” eg., watching a chef create samples, changing the lighting and smells in the store.
There are three types of empathy in this regard: first level (eg. language, dress code), second level (when something is amiss), and third level (analytical, drawing on theories and frameworks).
Christian shows how this can help understand different interpretations of success in life (eg. work-life balance, high fashion), consumption of beverages (eg. meditative experience of tea in East Asia), home spaces (eg. open plan designs), and museum membership (eg. investment in a larger cause and not just a transaction).
Three kinds of reasoning are used to solve problems: deductive (top-down, in constrained problems with set boundaries), inductive (bottom-up, with set knowns and unknowns), and abductive (non-linear, generating new ideas).
Abductive reasoning has elements of uncertainty, messiness and doubt, and involves more creativity in dealing with twists, turns, dead ends, and breakthroughs. Sensemaking is crucial in situations where there are no clear knowns or unknowns, and there are no coherent hypotheses.
Times of change are cause for optimism as well as pessimism, as seen in the work of Henry Ford (dawn of the automobile era in the US) and TS Eliot (poems on new ways of being in Europe). The rise of new eras creates new moods, and success requires staying open to new insights.
This sensitivity requires a combination of grace and will, according to Christian. It is a desire to immerse in another world and be receptive to new and even confusing or disturbing experiences.
Creativity comes through us, and not just from us – in the “bus, bath, and bed,” in the words of Wolfgang Kohler. Creativity comes from the stream of the sub-conscious, a “middle voice” that is neither entirely active nor entirely passive.
There is much more to creativity than design thinking, which Christian dismisses as “the bullshit tornado.” Many designers unfortunately think they do not need perspectives from anthropology, economics or political science, Christian laments. He dismisses the approach of design thinking companies like IDEO as “drive-by” anthropology, where designers never fully immerse themselves in the world of their subjects.
Immersion into the client’s history and context gives renowned architect Bjarke Ingels the “marinade in which to simmer,” so as to draw out new impressions rather than stamp older impressions from previous work. His designs for housing projects in Copenhagen take into account not just government regulations on spacing but also historical and environmental considerations. Other approaches are based on a “managed forest” design, as in his design for a Budapest museum.
5. The North Star
Leadership in an era of big data is about selecting the appropriate context for data collection, and connecting the data to create a textured view of the world for better interpretation. Sensemaking in this regard helps determine origin and direction by using all data, human as well as technical.
Interestingly, the US Naval Academy did away with requirements of celestial navigation in the 1990s, and replaced it with GPS – only to bring it back in 2015. Effective navigation uses all available data for interpretation, according to Christian.
“Difficult conversations” in organisations require nimble and astute navigation across complex cues. Leaders need to gauge the social context of meetings and teams in real-time, along with their relationship with themselves.
The design of company culture rests a lot on navigating the balance between what can be said and what remains unspoken. For example, a willingness to try new things must also allow for people to own up to mistakes without getting defensive for fear of criticism.
Heads of organisations like the European Commission for Competition need to continually balance between generalities and specifics, so that laws are enforced but not in a rigid manner. Leaders need to be approachable and be out in the field so as to “take the temperature” of others and understand changes in the situation on the ground.
Deeper issues of empathy and cultural understanding have even been deployed in communication in the “theatre of the media,” with those who took journalist Jill Caroll hostage in Baghdad in 2006. This requires active listening and empathy, but not necessarily liking the other side or approving of their actions.
The wine industry in different parts of the world shows a mix of biology, chemistry, technology and even alchemy. “There was a wine inside of me that needed to get out,” in the words of California winemaker Carby Corison, explaining how new varieties of grapes drew her into making new wines based on her expertise and sense of commitment.
In sum, in a modern world where technology is almost treated as God, we should be careful not to let technology replace us. “Technology is the master of scale. But it need not be our master,” urges Christian. Technology can help us arrive at extraordinary places, but we still need to figure out what to do once we get there, he adds.
For long-term success, a spirit of caring serves better than a nihilistic leadership or even a high-precision algorithm. For example, healthcare needs artful hacks and not just quantitative measures; efficiency is not a substitute for empathy.
AI is forcing us to ask ourselves what humans are for. “People are for caring. People are for making and interpreting meaning,” answers Christian.
In that regard, disciplines like art should not be seen as a needless luxury, but as the source of crucial insights and skills for sensemaking. Art is not just about fun, but extending your analytical muscles. “The humanities aren’t a luxury; they are your competitive advantage,” Christian signs off.