Sunday, April 6, 2008

Cautious Pragmatism

Whether they know it or not, most business people belong to a school of philosophy known as cautious pragmatism.

No grand, sweeping social visions for these folks. Their lives and actions are a process of cautious trial and error in search of something that works.

They are cautious because they have money and reputation at risk. But business risk is not the same thing as gambling risk. Business risk is a search for a win-win result. Gambling risk is strictly the search for a win-lose. Business people try to build something of value. Gamblers try to take something of value from another party, i.e., to beat the house.

Business people are pragmatists because they search for something that works. They try something new -- a new product, a new strategy, a new organizational structure -- and measure the results. If it works well, they continue it -- hopefully, though not always. Business errors include discontinuing a successful innovation as well as heavily investing in an unsuccessful one. There is an old joke in business that makes light of the first kind of mistake: "Find what works. Then change it.".

Of course, any successful business wants to "beat" its competition. The competition between businesses is a form of win-lose competition. But more importantly, it is a form of information feedback that tells each business what it is doing right, and what it is doing wrong. Continue to do things wrong, and you lose, not because of some external risk (i.e., the house beat you), but because you did not deliver a superior win-win opportunity to the most important player in the drama: the customer.

To put it another way, business failure is nature's way of telling us it is time to try something else.

Cautious pragmatism is a humble philosophy. It does not claim to have enough knowledge or vision or skill to run the world, but it can run a hardware store, a software company, or any of the millions of businesses in the world. Such humility is a very good thing, because no one really knows how to run a world, despite the claims of political candidates running for high office.

Humanity is better served by the kind of people who run hardware stores than by the kind of people who run for office. Cautious pragmatism is better for humanity than reckless action.

As the Chinese philosopher Zhuangzi wrote in the fourth century BC, "I have heard of letting the world be, and exercising forbearance; I have not heard of governing the world."

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