How to drive profits by creating distinctions

“The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function,” wrote the novelist F. Scott Fitzgerald.

A smart person only believes half of what they hear, a wise individual knows which half is true.

Continual success, being able to constantly reinvent and adapt — in a fast-changing environment — is the holy grail of business today in East Africa. The idea of Kenyan start-ups being an Amazon, Facebook, Airbnb, Uber-like success is a seduction plot played out on the public stage, by an array of actors, some with deep pockets, jingling with cash.

Is this a myth of success? Or, can the feat be realised? Let us take it one step at a time. In the pilgrim’s progress-like journey, the first step is to be able to create distinctions.

Creating a shopping bag full of distinctions is a way to improve your ability to think about a management problem. A distinction is simply a difference or contrast between similar things.

“Intelligence is the ability to make finer distinctions,” said Rich Dad, Poor Dad author Robert Kiyosaki.

Tony Robbins believes “intelligence is the measure of the number and the quality of the distinctions you have in a given situation.”

Edwards Deming, one of the thinkers behind the total quality movement, that transformed manufacturing first in Japan, then globally, called it “profound knowledge”, that ability to see connections and the distinctions within a system.

Generate distinctions

So how do you create distinctions? You create distinctions by creating new (think different) categories. You see what everyone else does, but you create clusters, categories, and distinctions that the competition did not see.

In the domain of tertiary education, Strathmore University has become for many, the ‘Harvard of Kenya’. Thanks to the insights of the Opus Dei founders they created the distinction of — a secular, financially sustainable university, not reliant on government funding, that delivers world-class knowledge and skills, in demand by employers and society.

Fascinating that Strathmore’s leadership has been able to translate their values into a learning organisation that others strive to emulate.

Opus Dei adherents have, for example, had a profound influence in guiding the Kenyan economy, for instance, Prof Terry Ryan, and more recently the ninth Central Bank governor, Patrick Njoroge, who believe that in doing the smallest daily things, a tiny task, one is doing God’s work. What could be a more powerful motivation: Why?

How to do it

Operationalising the understanding of distinctions means realising that they are boundaries, not things. In creating a distinction, one is not so much isolating some element.

It is more that the distinction is actually a relationship — a boundary — between the thing and all the stuff it isn’t. Distinctions are everywhere in business, for instance: value — cost, strategy — plan, disruptive innovation — convention.

At the end of this sentence do you see, the question mark? But you also see the white space, that is the ‘not question mark’.

In systems theory, every system has a boundary with its environment, the interface, where the action happens, based on the inputs and outputs.

What is critical is the feedback mechanism, if any system lacks feedback, it eventually becomes dysfunctional, not responding to what is happening in the wider environment.

Fundamental distinctions managers make are targeted at addressing the problems they are trying to understand and solve.

These initial distinctions we make often decide the way an issue gets framed. Initial distinctions are in many ways the raw material of our thinking: the stuff that gets broken down, or organised into systems, based on the perspective taken.

Inevitably, the initial distinctions we make contain our biases and often unconscious prejudices, these risk dooming our systems’ thinking before it even gets started.

Aristotle said, if “well begun is half done” then the distinctions we make, or don’t make, at the start of our thinking, makes all the difference. So, make that peculiarity: distinction. Retain the ability to function, hang in there, just keep playing, bouncing around that management problem.

In the words of Albert Einstein: “It’s not that I’m so smart, it’s just that I stay with problems longer.”

David (email protected) is a director at aCatalyst Consulting.