Fifty years later

The book that blew my mind in 1977
and still explains why companies break.

In 1977, the first Bateson book fell into my hands while I was studying Chemistry at the School of Exact Sciences of the University of Buenos Aires. It wasn't a management book — and yet thirty-five years of running companies across several continents kept bringing me back to those pages.

Frameworks crossed: double bind · schismogenesis · Balinese steady state · flexibility as a resource — Gregory Bateson

The origin

An anthropologist, a biologist, and a therapist who turned out to be the same person.

Bateson had studied tribes in New Guinea, filmed otters playing at a zoo, and treated families with a schizophrenic child — and could explain all three worlds with the same handful of ideas. It blew my mind. This year I finally did something I'd been putting off for far too long: I reread his two central books cover to cover, Steps to an Ecology of Mind (1972) and Mind and Nature: A Necessary Unity (1979). A good part of what we today call strategic thinking — Porter, Taleb, Kotter, Collins, Kelly — is, at bottom, a late application of ideas Bateson had already worked out decades earlier, just applied to dolphins and schizophrenics instead of to companies.

Crossover 1 — Communication and negotiation

The message that matters is never the message, and no fight has its own ceiling.

Two findings from the 1930s and 1950s, born out of tribes in New Guinea and families with a schizophrenic child, explain why internal communication breaks down and why a negotiation escalates without anyone deciding it should.

From the therapist's office and the tribe to the boardroom

Double bind — what turns a contradiction between official policy and rewarded behavior toxic is never the contradiction itself. It's the impossibility of naming it out loud without paying a price for saying it. This crosses directly with the organizational-communication framework I use to diagnose why strategy fails to cascade down.

Symmetrical and complementary schismogenesis — an escalation in pricing, in raised voices, or in concessions has no brake of its own; left to its own momentum, it ends in the collapse of the whole system. What stops it is real reciprocity, a shared interest bigger than the fight, or a limit agreed in advance. This crosses with the structured-negotiation framework I use to identify which type of escalation I'm looking at before sitting down at the table.

Crossover 2 — Risk and resource allocation

The society that refused to have a climax, and flexibility that isn't saved, it's spent.

Two more findings — one from an island, one from a New York City commission — changed how I check a company's fragility and how I size any budget bet.

From Bali and New York to the fragility check

Balinese steady state — Bateson turns to cybernetician Ross Ashby: a stable system isn't one that maximizes a variable, it's one that never lets any single variable be fully maximized, while letting others fluctuate freely. The most common mistake in companies that look healthy: they maximized a single variable — market share, margin, growth — and left another axis completely uncovered. This crosses with the fragility check I use to ask which variable is being maximized without meaning to.

Flexibility as a finite resource — his image is a tightrope walker: to stay on the wire he needs near-total freedom in his arms. Every time an organization commits all its available flexibility to a single advantage, it stops having free arms for the next unforeseen problem. This crosses with the bet-sizing criterion I use to define how much to commit without exhausting the capacity to react.

Apply it to your business

Three questions, fifty years ahead of their time.

Can you name out loud, today, the contradiction between what the handbook says and what rewarded behavior actually says?

If you can't without paying a price for saying it, that's the symptom — not the contradiction itself.

Which variable are you maximizing without meaning to, and which axis was left completely uncovered?

Clean numbers on a single variable won't warn you about the axis no one is watching.

How much flexibility do you have left if an unforeseen problem shows up tomorrow?

Committing all available flexibility to a single advantage leaves no free arms for the unexpected.

Frequently asked questions

About these frameworks.

What is Gregory Bateson's double bind, and why does it matter for a company?

It's a communication situation where two contradictory messages arrive at different levels — what is said explicitly, and what is communicated implicitly about that same relationship — with no safe place to point out the contradiction. Bateson formulated it studying families with a schizophrenic child in the 1950s. In a company, it shows up when official policy says one thing and rewarded behavior says another, and no one can name that gap without paying a price for saying it.

What is the Balinese steady state, and what does it have to do with a business's fragility?

Bateson studied Balinese culture and found a society that had deliberately built mechanisms to prevent any interaction from reaching a climax. Drawing on cybernetician Ross Ashby, he described a stable system not as one that maximizes a variable, but as one that prevents any single variable from being fully maximized, while letting others fluctuate freely. Applied to a company, it's the same question a fragility check asks: not how good the numbers look, but which variable is being maximized without meaning to, and which axis was left uncovered in the process.

Back to the process

Which variable is your company maximizing without noticing which axis it left uncovered?

Bateson, Taleb, Kelly, and Collins are among the more than 15 frameworks we connect in every diagnosis. Let's talk about yours.

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The book that blew my mind in 1977and still explains why companies break.