Gustavo Ballvé on February 10th, 2011
Food for thought, Home, Investment Themes, Mental models, Portfolio Management, Quotes, Science

Booz & Co.’s Strategy+Business magazine published a very interesting article back in November of last year, called “How Aha! Really Happens“. In a nutshell, the author argues that the notion of the brain’s two hemispheres being extremely specialized – “left” being rational/ analytical, “right” creative/ intuitive – has been proven inadequate since 1998, which means that companies focusing on “right-side brainstorming” exercises to foster innovation are not doing themselves many favors. The main point is this: “(…) our most-accepted approach to problem solving is grounded in an incorrect premise about the source of creativity in the brain.” The implications are very interesting.

First of all, it’s humbling that such a commonsensical notion about the brain has been at least in dispute for almost 15 years, while we still get everyday stories of “right side vs. left side”. Good reminder to keep one’s preconceived notions in check – including the assumption that the current line of thinking is definitive.

The author then goes into the “modern” theory and highlights some alternative approaches to try to stimulate insights, the “Aha!” moments. Here are a few quotes that caught our attention:

– “The shelves of the brain are stocked with what you’ve seen or heard or read about what others have done before. This process takes place naturally in every human brain, but active study can accelerate and improve it (…)” – indeed. Compare it to two quotes by Charlie Munger: “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero.” and “Spend each day trying to be a little wiser than you were when you woke up.”

Another quote from the article:

– “The presence of mind Clausewitz describes is akin to the calm state that precedes a flash of insight, (…) when your brain is relaxed and wandering, instead of focused on a particular problem.” – Again we turn to Charlie Munger, who has said: “We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.”

Finally, the author describes GE in the 1990’s. Then-CEO Jack Welch and his Chief Learning Officer Steve Kerr had a method for problem-solving that the author considers very clever. Describing the method he calls “the GE matrix” he says:

– “(…) Then ask the most important question you can ever ask to solve any problem of any kind: Has anyone else in the world ever made progress on any piece of this puzzle?” – Or, as we’ve written in a 2009 post: “(…) But we can greatly improve where and how we get our “building blocks” by looking abroad. We joke that it’s the “crystal ball that works” – we wish it was that good, but we find more and more over the years that we gain valuable insights. (…) In some cases, NOT doing it may blind you to risk factors not previously seen.”

We’d like to add another dimension to the first and third quotes we’ve highlighted above: networking. Part of the active, relentless effort to acquire mental models, knowledge, facts and other building blocks involves getting to know the right people and foster these relationships.

Other references at Buysiders.com:

Creative problem-solving – Dec. 20th, 2010.

Multidiscplinary approach and communication – Feb. 17th, 2010.

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