## Minhea on Business Problem Solving

Warning: before you read that post, you should read his book Diaminds .

When you talk about big problems, how do I find a right job, how can I increase the revenue of my business, and the problem is “now” the process which you define from the ill defined problem to well defined is the understanding that it is an ill defined algorithm and measure of the time complexity of the problem.

Modeling about how you think:

When you walk, when you talk, when you think there is a common pattern that you follow and you do it unconsciously. And you don’t know that you are doing it unconsciously, furthermore you don’t know that you don’t know it. That is the most desperate situation a person can be. For the same reason, game theory does not work. Because it is one shot. You know that what your opponent is going to do, and you know that your component know what you are going to do, so game theory stops there. Instead, you should know what your opponent will do when he/she knows that what you will do when he/she will do it. And actually if you stop there and your opponent is thinking one step further that you do, you will lose the competition.

Management is actually adaptive complexity management. You don’t need to be expert in one area but have an algorithm on problem solving. Think about CEO their aim is optimization, which means maximizing the firm value under given constraints.

Let’s apply it to a complex problem. Think of an organization as a network of activities instead of humans. Such as Vanguard Insurance where to fill a complain. Think of the operations in a complex mesh network. If the average number of edges per node in this network is greater than 2 , then it is an intractable problem. That is actually not intractable problem. Instead one can create a three dimensional measure of competitive advantage where dimensions are Accuracy of solution, Probability of Convergence, and the Speed of convergence. Accuracy of solution is how accurate can I get there under the given constraints of probability of converge and the speed of convergence.

Now consider the problem of finding the minimum distance of paths in between 3500+cities in Canada. Same problem can be applied to a company where the information flows, such as creating a rumor and the time it takes that the initial information is shared among all participants of company. The problem is how do you solve those intractable problems? Well I am going to pick a path that seems reasonable to me, and then I am going to change it slightly a bit and compare the old one to a new one. This is a local search algorithm. The approach to that problem is heuristics.

However not the same simple heuristics may not work for more complex problem. such as finding your key in a football stadium with the help of five people versus finding the shortest path that will cover the whole Canadian cities with the help of five sales person. Dividing the map into five and solving the local best solutions may not give you the global optimum when you sum the shortest path.

Same applies to CEO’s. Such as in a meeting blowing up the whole meeting, then flipping the motion in a second, ability to drive down the emotionality heightened tensions and bring them to the solution that they want. If you can flip you emotions from one state to another instantaneously you can drive the meeting into a solution you want to bring. How to drive tensions is the skill of a manager.

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