Two kinds of logic: Implications for lawyer-client communication, goal-setting, and mediation

Do lawyers and entrepreneurs have different ways of thinking? Entrepreneurs and MBA students do have different ways of thinking, at least according to Dr. Saras D. Sarasvathy. Let's look at her theory and see where lawyers might fit.

Sarasvathy posed to a group of successful, experienced entrepreneurs a set of problems for them to solve about a new product idea. She gave the same problems to MBA students. She then observed that each group used different logic in approaching the problems. The students typically used causal logic, the way they had been taught. They started with a goal and then ascertained the best way to get to the goal. Entrepreneurs, on the other hand, predominately used effectual logic. They did not start with a goal but instead looked at a given set of means and lets the goals emerge from the imaginations and aspirations of the particular team involved and the people with whom they interacted.

She says in this paper "What Makes Entrepreneurs Entrepreneurial?" that causal thinkers are like conquerors setting out to conquer fertile land (think Genghis Khan) whereas effectual thinkers are like explorers setting out on uncharted waters (think Christopher Columbus).

She also explains the difference in another way that I found most helpful in understanding. From "New Book Reveals Entrepreneurial Thought Process" (Research News - University of Virginia):

A cook using causal logic would start with a menu or a specific recipe while a cook using effectual logic would look in the cupboards to see what ingredients might be available to create an entirely new dish.  In the business world, causal managers seek high-potential opportunities within existing markets while entrepreneurs create new opportunities and even new markets by bringing together an expanding network of stakeholder relationships. “With effectual logic you are much more likely to get something new—to come up with an innovation,” says Sarasvathy.  “That’s the payoff.”

You can see where people using the two different logics might have some communication difficulty. For example, imagine a causal-thinking lawyer advising an effectual entrepreneur.

As a profession, do you think lawyers are causal or effectual?

Of course, entrepreneurs can and do use both but their default logic is effectual. From "What Makes Entrepreneurs Entrepreneurial" (linked to above):

In fact, the best entrepreneurs are capable of both and do use both modes well. But they prefer effectual reasoning over causal reasoning in the early stages of a new venture, and arguably, most entrepreneurs do not transition well into latter stages requiring more causal reasoning.

Which do you prefer? Which have you been taught? Which has worked best for you in the past?

For more about causal and effectual logic, read Effectuation: Elements of Entrepreneurial Expertise.

Note: These differences have implications for goal-setting. I believe that problems are created when

goal-setting is presented as one-size-fits-all. It most definitely is not. Many, many factors make it necessary for people to set goals in their own unique and individual ways if their goals are to be achieved. This research adds another factor that should be considered.

Here is a quote from "Effectual  Entrepreneurial Expertise: Existence and Bounds" [pdf] about the difference between causal and effectual. Read it and imagine how people using each kind of logic will set goals in different ways.

In this [effectual] model, the decision maker does not start with a pre-determined effect or a pre-defined market to be created. Instead the process begins with identifying a set of possible causes as given (who the decision maker is, what he/she knows and whom he/she knows), and proceeds to choose between several possible effects in a contingent manner, taking advantage of new opportunities as they arise. The evidence shows effectuation is intrinsically path-dependent and contingent rather than goal-driven and planned.

I am wondering if the reason some people have difficulty setting goals using the traditionally-taught methods of goal-setting is because they naturally use effectual logic but are thinking they should be "goal-driven and planned."

Another note: What would happen if a causal-thinking lawyer brings that way of thinking to mediation, an arguably effectual-logic process?

Hat tip to Jeff Lipshaw. Read his post for more about causal/effectual and lawyers.

Note (added December 8, 2012): An article in yesterday's Wall Street Journal mentions Dr. Sarasvathy's work. From "The Power of Negative Thinking":

Research by Saras Sarasvathy, an associate professor of business administration at the University of Virginia, suggests that learning to accommodate feelings of uncertainty is not just the key to a more balanced life but often leads to prosperity as well. For one project, she interviewed 45 successful entrepreneurs, all of whom had taken at least one business public. Almost none embraced the idea of writing comprehensive business plans or conducting extensive market research.

They practiced instead what Prof. Sarasvathy calls "effectuation." Rather than choosing a goal and then making a plan to achieve it, they took stock of the means and materials at their disposal, then imagined the possible ends. Effectuation also includes what she calls the "affordable loss principle." Instead of focusing on the possibility of spectacular rewards from a venture, ask how great the loss would be if it failed. If the potential loss seems tolerable, take the next step.

Comments

[Victoria Pynchon]

As a lawyer, I've always written my way to the answer, which has always seemed inefficient. I cannot get the answer without analyzing it and I can't analyze anything in a rational manner without taking the problem step by step. Of COURSE there's a general answer I want as a litigator (I win). But I don't back out of the "I win" and back into the analysis. At least, that's how I THINK I think. Do we actually know?