Profit seeking paradoxes in an oblique world

John Kay gave a stimulating talk at the London School of Economics last week, one of a series of appearances to showcase his long-awaited new book Obliquity. A large audience were treated to a deeply thoughtful and perceptive discussion of the nature of obliquity and how it affects our personal lives and the decisions and strategies taken by businesses and other organisations in a complex and uncertain world.

The profit-seeking paradox referred to in the title of this blog centres on the declared strategies of businesses around the world. John Kay’s central theme is that goals are often best achieved if pursued indirectly - using the canny, oblique, adpative approach rather than a unique, bold and inflexible approach beloved of companies wedded to a profit-driven mission statement.

Using examples drawn from architecture (contrasting modernistic buildings in Marseille with the Notre Dame), lessons from the collapse of profit-oriented companies such as Enron and Bear Stearns and drawing on many years of research on leading businesses in the pharmaceutical industry, John Kay focused on the complexity and incompatible nature of many goals.

Successful companies are flexible; they experiment, they give creative employees their head and successful businesses understand the power of innovation through a never-ending learning process. The evolutional process of adaptation and recognition of uncertainty invites businesses (and new governments?) to lean towards an oblique approach to problem-solving.

I took a lot from his talk - I will never again be able to look at a London Underground map without wondering whether it serves me well on a particular journey! And John’s discussion of the genius of David Beckham in taking vital free kicks under immense pressure was a wonderful way to illustrate the effects of expertise and knowledge acquired incrementally.

One argument struck a particular chord as I help to prepare students for their final microeconomics papers in a few weeks time. “Businesses plainly do not maximise profits, businesses do not maximise anything at all”.

John Kay’s web site is here and his regular columns in the Financial Times can be found here.
.