The Value Creators Podcast: Episode #12. Mark McGrath On Adaptive Entrepreneurial Management

Mark McGrath of AGLX has developed a management approach he calls The Adaptive Entrepreneurial Method. He combines the insights of John Boyd and the entrepreneurial principles of Austrian economics. 

Boyd was a prolific writer on strategy, particularly famous for his development of the OODA Loop model of decision-making under uncertainty, feedback, and responsive re-orientation, as well as the author of a vast body of work on strategy. 

Austrian economics overlaps in the area of entrepreneurial judgment, which is purposeful action under uncertainty, and dynamic responsiveness to the resultant marketplace signals (ie. feedback loops) that action generates.

He joined The Value Creators podcast to explore the intersection of John Boyd and Austrian economics.

Resources: 

AGLX

Mark’s podcast: No Way Out

Mark’s Substack: The Whirl Of Reorientation

Knowledge Capsule:

1. Austrian entrepreneurship is a Human-Centered Approach:

• Boyd’s theories emphasize prioritizing people in decision-making.
• Human-centered approach over technology-centric focus.
• Recognizing the role of consumers, employees, and stakeholders.

John Boyd’s insights underscore the significance of placing human understanding and interaction at the heart of decision-making processes. Rather than fixating on technological advancements, his theories advocate for acknowledging the central role of people within any system. This approach emphasizes the vital connections between consumers, employees, stakeholders, and their collective impact on the overall success of an endeavor. The equivalent space in Austrian economics is subjective value.

Action: Always place human values at the center of all business strategizing and decision-making.

2. Continuous Learning and Adaptation:

• Adaptation and flexibility in ever-changing environments.
• Shaping strategies based on evolving circumstances.
• Emphasis on continuous learning to respond to changes.

A core tenet of John Boyd’s philosophy is the value of perpetual learning and adaptability within dynamic environments. His approach encourages a constant re-evaluation and adjustment of strategies in response to evolving circumstances. Instead of adhering to rigid plans, Boyd’s philosophy advocates for organizations to actively engage in continuous learning, enabling them to proactively address shifts and remain relevant. This is perfectly consistent with Austrian principles of continuous change and dynamic efficiency (as opposed to the static equilibrium approach of conventional economics).

Action: Your firm’s knowledge accumulation plan – i.e. learning – is its first priority.

3. Interaction and Isolation Dynamics:

• Balance between interaction with allies and isolating competitors.
• Drawing allies through effective engagement.
• Isolating competitors to disrupt cohesion and effectiveness.

One of John Boyd’s pivotal concepts revolves around the interplay of interaction and isolation. The strategy for success involves effectively engaging allies while simultaneously isolating competitors to weaken their cohesion. This dynamic equilibrium plays a critical role in influencing outcomes and securing advantages within competitive environments.

Action: Choose the right partners as allies and isolate your competitors from these relationships.

4. Strategy as a Mental Tapestry:

• Strategy as a dynamic mental tapestry of changing intentions.
• Emphasis on self-awareness and situational awareness.
• Continuous evolution of strategies based on circumstances.

John Boyd’s approach to strategy departs from conventional thinking by framing it as a dynamic mental tapestry of evolving intentions. He underscores the importance of self-awareness and situational awareness, advocating for strategies that continuously evolve in response to changing contexts. Unlike static planning, Boyd’s philosophy aligns with the adaptive nature of complex systems.

Action: Don’t plan – adapt.

5. Embracing Complexity and Distributed Leadership:

• Embracing complexity over linear solutions.
• Acknowledging distributed leadership in multifaceted challenges.
• Orchestrating interactions to adapt to evolving contexts.

Boyd’s theories encourage a departure from linear problem-solving towards embracing the intricacies of complexity. By recognizing the multifaceted nature of challenges, Boyd’s philosophy promotes distributed leadership. This approach involves orchestrating interactions and collaboration among diverse elements, enabling organizations to respond nimbly to evolving contexts and foster innovation. Austrian economics, in the same way, is complexity-aware and orchestrates through value creation.

Action: Use value as the attractor in a complex business world.