Imagine being a shoemaker in a small village at the turn of the 20th century. You would know a great deal about running a business– how to procure materials, use tools, build relationships, price products, negotiate, hire, fire, learn your customers’s tastes and make products they want to buy. But you’re not the usual shoemaker. You feel the zeal of ambition and decide to expand. What will you discover when you start selling shoes outside the small radius of your village?
First, you will find that much of what you think about is now outside of your immediate experience. Before, when you procured materials for your workshop, made the shoes and sold them to your neighbors, you were physically present at each step of every transaction. You could touch the leather, measure your neighbor’s feet, examine the finished shoe, and shake hands at the end of the exchange. Everything about your process was immediate and tactile.
But as you start selling shoes in multiple villages, you will need to transition to working with abstractions. You won’t be able to meet all your customers or be present at every store. If you are really successful, eventually you may not know all your employees by name. You will have to start thinking in terms of market segments, demographics, store locations, cash flow and income statements. You will no longer be able to run large parts of your business through direct experience– you will have to think in abstract concepts and fly by instruments.
Second, your decisions will no longer be subject to immediate feedback. Before expanding, your could learn from your actions immediately (or at least very quickly). When you made a shoe you found out in a few days whether it sold. When you hired an assistant, you learned in a few weeks if they are a good employee.
When you make a shoe in your larger operation, it will take weeks before you find out if it sells. If you increase the size of your staff, it will be months before everyone is hired and trained. It may be even longer before you learn whether hiring more employees improved your organization. At almost every step the feedback loop is now much longer– and so it takes much longer to ascertain the outcome of your decisions. And it takes proportionally longer to learn and adapt.
Third, many of your outcomes will now be probabilistic rather than deterministic. For example, before the expansion the color brown either sold or it did not. But in the expanded world you are subject to the whims of forces you cannot predict or control. Maybe a new competitor flooded the market with cheap brown shoes; maybe brown is out of fashion this season in big cities where consumers are much more trend-conscious; maybe people just got sick of brown.
When you sold shoes in a small village your decisions either worked or they did not. In the expanded world of selling to a bigger, more complex market, a decision that worked yesterday may be a disaster today, and may work again tomorrow. You can no longer rely on determinism– you have to adapt to the new fact that many of the outcomes are now unpredictable, and that the way to model them is through random variables rather than first order logic.
Craftsman mode is the set of skills and patterns of work adapted to immediate experience, instantaneous feedback loops, and deterministic outcomes. Executive mode is the set of skills and patterns of work adapted to operating with abstractions, delayed feedback loops, and mostly probabilistic outcomes.
Many people are good at operating in craftsman mode as it’s been the default mode for most of human history. Fewer are good at operating in executive mode. It’s difficult to learn by osmosis as the density of good role models is still low, and we haven’t yet developed a systematic way of teaching it. And of course very few are good at what’s likely the most prized ability of all– switching between the two modes at will.