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Endnote - If You Stay Confused, You May Start Making Sense

Economist and applied mathematician W. Brian Arthur of the Santa Fe Institute says that to succeed in the new information-based economy, which offers increasing rather than diminishing returns on resources, it's not sufficient to think in terms of lowering your cost, improving your quality, keeping products moving out the door. "You have to allow that you are playing games where the winner can walk off with a great deal of the market and the losers are left with practically nothing, even if their products are technically brilliant and the cost is right."

In the new economy, if you start to lose advantage, you get in a worse position; if you gain advantage, you get into a better position. That's why America Online, Sun Microsystems and other companies, succeeded by giving product away to build their market share to a point at which they became unstoppable. Business is not a game like poker or roulette, where there are official rules and well-established strategies. In a digital-age business, the game is ill-defined, there is no "correct" answer, and the people who do well are not the managers but the visionaries, who can look ahead to take advantage of completely new circumstances, without resorting to stereotyped thinking.

And the best way to avoid stereotyped thinking is to stay confused: "Confusion means having no cognitive framework, and that is better than having a wrong cognitive framework, which is what happens if you prematurely close in on an understanding. There's no correct understanding, but there are very bad ones." Professor Arthur quotes John Seely Brown at Xerox PARC: "In the old economy, the challenge for management is to make product. Now the challenge for management is to make sense." (Joel Kurtzman, "An Interview With W. Brian Arthur," Strategy & Business 2nd Qtr 98)

 


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