In a world where many things do not work optimally, there is constant pressure to adopt new approaches. While innovation can create many positive benefits, the urge to innovate can overlook the often-great hidden value of things that already exist. Additionally, innovation-driven solution biases can lead to situations where the resources expended to find solutions vastly outweigh innovation gains. This article, part 7 of a series on Making Better Decisions, discusses the Japanese approach of shu-ha-ri, which is the art of mastery. This art can be used to improve decision-making by balancing the desire to innovate with a respect for tradition.
Innovation Upsides
A great strength of humankind is its ability to create new things. Rather than remain trapped by surroundings created by the past, we have the ability to study the world around us, imagine something completely new, and bring that vision to life. In many ways, the story of history is the story of continuously reimagining the future.
In many ways, the story of history is the story of reimagining the future.
One place where the transformative power of innovation is constantly at work is in business. The business world can be divided into things that do not work well or could work better, and this means that there are never-ending innovation opportunities. Apart from the long line of problems constantly waiting for solutions, the ability to create something new remains one of the most powerful magnets in financial markets for attracting capital. Continuing financial support for trial and error on the path to potential breakthrough causes many people to continuously experiment with new approaches, even if the risks of failure are high.
Innovation Downsides
Despite its positive potential benefits, innovation can also have several downsides.
Overlooking existing solutions. The very first potential downside of innovation is that the fascination with looking forward may overlook a solution that already exists. Many answers escape discovery simply because of the way we are looking at a problem. For example, assume that a tennis player is losing the majority of their matches. To improve their game, they might believe that they need to buy a new racket or even invent a whole new style of playing tennis. While this might help some tennis players, it is likely that in the great majority of cases, the player’s game would improve, and they would win more matches, if they simply practiced basic shots more diligently. As the tennis coach Nick Bollettieri once said, you can win the majority of tennis matches if you simply hit the ball over the net down the center of the court.
Over-innovating. A second potential innovation downside is the risk of over-innovating, which means solving a problem but also disrupting things connected with the problem that work well. This can lead to a net result for individuals or companies that is significantly less than the innovation gain.
To look at an example of this in the M&A context, assume that an investor takes over a company that is not performing well and immediately fires the management team. While the company may not have the right strategy or other types of organizational challenges, some of the members of the management team may be excellent. Firing these people and replacing them with new manager who are not familiar with the company’s business may cause the firm to further lose value rather than create it.
Inefficiency benefit disruption. While it may be counterintuitive, complete inefficiency is as hard to achieve as perfection. Many inefficiencies and other types of problems generate benefits for someone. This explains why many things that plainly do not work from one perspective are allowed to exist for so long.
Assume that a firm has meetings every Friday to discuss business planning. While the meetings may not lead to a great deal of business planning progress, they may provide an opportunity for employees to meet, strengthen their work relationships and share ideas. This might increase employee satisfaction, create organizational cohesiveness and set the groundwork for increased teamwork. These positive outcomes may outweigh the negative aspects of less-than-ideal business planning progress.
Resource churn. A fourth potential innovation downside is that it can deplete scarce resources that could have been used for other value-creating purposes. The cost of innovation includes:
- time spent researching and developing innovative approaches
- cost of purchasing products, materials, and/or technologies that are part of the innovation solution
- time involved in implementing the solution and any iterations required
- cost of benefit disruptions; and
- opportunity costs.
Further, innovation implementation can lead to a number of loss-generating scenarios. One scenario is that the costs of the innovation are quickly seen as outweighing the benefits and there is a return to the previous situation. However, in some circumstances, innovation can lead to being stuck in a new type of problematic situation where both going backward and forward are organizationally and financially difficult. This type of situation can create a long-term value drain.
The Japanese Concept of Shu-Ha-Ri
One model for trying to balance innovation with a respect for tradition is in the Japanese concept of shu-ha-ri. Japan is a country where one can find, at times on the same street, traditions that have existed for more than 1,000 years alongside cutting-edge technology.
The concept of shu-ha-ri is comprised of three separate Japanese characters.
- The first character, shu, means “protect” or “obey”
- The second character, ha, means “detach” or “digress”
- The third character, ri, means “separation.”
Shu-ha-ri is meant to describe the path to mastery. Let’s look at these concepts one by one.
In the stage of shu, the focus is simply on not only learning something superficially but on internalizing it. In the martial arts, for example, this can involve repeating a stance or a movement over and over again until it becomes second nature.
In the stage of ha, the student is able to see the principles behind the practice. Once the student has grasped these principles, they can apply them to new situations. In this stage, the student also begins to add to new ideas to what has been learned.
In the stage of ri, the student is able is to transcend both technique and principles and do something completely new. However, even when the student has created something new they do not forget what they originally learned.
The Elevator of Perspective
For people who do not live in Japan or who are not familiar with Japanese culture, the process of shu-ha-ri can seem extremely long and ill-suited to a world where decisions need to be constantly made. However, it can dramatically increase decision-making perspective and making better decisions that lead to more positive results in the long term.
Shu-ha-ri helps overcome the limit of situational perspective.
To begin with, shu-ha-ri helps overcome the limit of situational perspective. Suppose you are in an elevator in a mall that stops at each floor. Imagine that before it stopped at a particular floor, you were asked, “What is the mall like?” You would likely answer based on what you had seen of the mall so far. But once the door opened and you saw a different floor, your perception of what the mall is would change. This process of forming a perspective and then changing it would continue each time the elevator stopped at a new floor and new information about the mall was received and processed.
To broaden your perspective further, suppose that you not only stopped at each floor but also took the time to walk around, look at the products in the mall, and speak to workers and clients. All of this experience would increase your understanding. Extending this process even further, in addition to studying the mall today you could also consider its history and role in the community. Each step would gradually deepen your knowledge and allow you to make decisions regarding the mall from a wider set of viewpoints.
This process, of gradually building your understanding, is central to shu-ha-ri. It tries to ensure that you do not make a decision when you are at the first floor of a mall but after you have become familiar with it from the inside out.
Application to Decision-Making
There are several ways to apply shu-ha-ri to decision-making and balance the benefits of tradition with the benefits of innovation. Decision-making often involves choosing between applying a traditional solution or creating a new one.
The first way to apply shu-ha-ri is, before changing a practice, really ask oneself how deeply one understands it. Often, what we sense to be the whole of something is in reality a very small part. Applying shu-ha-ri means committing to understand a problem or situation as deeply as possible. As one’s perspective is always limited, this involves not only thinking about the situation oneself but to seek at the opinions of other people who are familiar the situation and ideally have different viewpoints about it.
A second way to apply shu-ha-ri is to live with the situation to try to not only have an intellectual understanding of a particular practice but also internalize it so you really understand what its advantages and disadvantages are. This means gaining an appreciation not only of the immediate advantages and disadvantages of a particular situation but also of the connection of the particular issue to things around it. This provides the basis for making modifications to a practice or problem which ideally improve it by incorporating the strengths of the context where the solution will be applied or the people who will apply it.
A third way to apply shu-ha-ri is to create innovative solutions. By keeping the principles of shu-ha-ri in mind, one can design solutions that deeply reflect the positive points of the practice to be improved or replaced and deeply avoid the points that are negative. This leads to innovation that is not merely novel, but that a true step forward.
Conclusion
Decision-making often requires us to choose between the seemingly divergent paths of tradition and innovation. The Japanese concept of shu-ha-ri can help individuals and companies balance these concepts when making choices.
For further study, a video on shu-ha-ri can found here. An article on applying shu-ha-ri to coaching is found here.
The image for this article is the Hokusai’s painting called “The Great Wave off Kanagawa.” It juxtaposes the great power of change represented by the wave and the power of tradition represented by the eternal Mt. Fuji in the background.