Monthly Archives: January 2010

Book Review and Innovation Summary – “The Design of Business”

The Design of BusinessA few weeks ago I received “The Design of Business” by Roger Martin in the mail. “The Design of Business” is a relatively short, easy, and pleasant read.

The main premise of the book is that our organizations, and the business schools that fill out their top leadership ranks, are too focused on analytical thinking at the expense of intuitive thinking. This focus creates too much emphasis on reliability at the expense of validity.

“The most successful businesses in the years to come will balance analytical mastery and intuitive originality in a dynamic interplay that I call design thinking.” – Roger Martin

One of the key concepts of the book is the introduction of the Knowledge Funnel – a visual element that shows how knowledge progresses from mysteries to heuristics to algorithms. It all begins with a question at the top of the funnel, and at each stage transition, knowledge and execution can typically be transferred to lower cost labor (and possibly handled by a computer when they reach the algorithm level).

The Knowledge FunnelAt the same time, there are other tensions in our organizations that managers in the era of the creative economy will have to become attuned to, and these include managing an appropriate balance between exploitation and exploration and not falling victim to the false certainty of the past when making business development decisions.

Ultimately, the exploration of the mysteries at the top of the knowledge funnel and exploitation of the algrithms at the bottom of the funnel are equally important. Companies that focus too much on one, at the expense of the other, risk their very future.

Creating a design thinking organization is not easy, and several pages are devoted to describing the struggles of A.G. Lafley and Claudia Kotchka in transforming P&G;’s organizational culture to be more design-centric.

In addition to other examples of organizations pushing themselves more towards design thinking, there is also a great deal of focus in the book on the transformation of mysteries into heuristics and heuristics into algorithms.

Overall, the book is another way of looking at the challenge facing innovators everywhere who are looking to embed design or innovation (or both) into their organization.

So, are you ready to tackle the challenge of achieving a balance of analytical thinking with intuitive thinking in your organization?

My interview with “The Design of Business” author Roger Martin can be found here.

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Balancing Intuition with Analysis

Interview – Roger Martin of “The Design of Business”

Balancing Intuition with Analysis - Roger MartinI had the opportunity to interview Roger Martin, the author of “The Design of Business” about the challenges companies face when they fail to balance analytical thinking with intuitive thinking. We also discuss a variety of other innovation topics including: barriers to innovation, education, and risk taking.

Roger Martin has served as Dean of the Rotman School of Management since 1998. He is an advisor on strategy to the CEO’s of several major global corporations. He writes extensively on design and is a regular columnist for BusinessWeek.com’s Innovation and Design Channel. He is also a regular contributor to Washington Post’s On Leadership blog and to Financial Times’ Judgment Call column. He has published several books, including: “The Design of Business” and “The Opposable Mind”.

Here is the text from the interview:

1. When it comes to innovation, what is the biggest challenge that you see organizations facing?

It is the dominance of analytical thinking which holds that unless something can be proven by way of deductive or inductive logic, it is not worthy of consideration or investment. No new idea in the world has been proven before being tried. So as long as analytical thinking is allowed to dominate, innovation is deeply and profoundly challenged.

2. Why is it so important that organizations teach their leaders to be design thinkers?

Design thinkers are capable of balancing the inductive and deductive logic of analytical thinking with the abductive logic of intuitive thinking. So they are capable of both honing and refining the past and inventing the future. Thus they can overcome the innovation challenge. Without design thinking leaders, an organization is likely to slowly but surely stultify – like most large corporations over time.

3. Why is it so hard for hard for managers to take valid risks?

Two main reasons. First, they live in cultures that value only analytical thinking. And second, they get Stockholm syndrome and begin to believe that is right. First they get dissuaded from innovating by others, then they dissuade themselves.

4. What most impedes the risk-taking necessary for innovation?

The problem is processes that imbed requirements for proof through inductive or deductive logic. And then the culture that this breeds.

5. Since the book was published, have you come across other leaders that have transformed their organizations to take more of a design approach?

Leaders from two of the world’s largest companies read the book and both have asked me to help them transform their organizations to take a design thinking approach. So far, so good. They are very committed.

6. People often talk about not having time to innovate. How can people find the time for themselves or their employees?

That is a lame argument. People have time to do anything for which they are passionate. People blame lack of time for every single thing that they think they would like to do but lack the sufficient passion for. Innovators innovate regardless of their environment. Some get fired for it and go somewhere else and start over again. A leader can make it harder or easier for employees to innovate. But the innovators innovate regardless and the non-innovators complain about the difficulty finding the time to innovate – regardless.

7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?

They need to nurture their originality. Very few people in life are good at anything without practice. If you practice mastery all your life, you will be masterful. If you practice originality, you will get good at innovation. Most managers spend their time deepening their mastery and not nurturing their originality. Over time, they become fearful of innovation.

8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?

Make art a required subject for as long as we make math a required subject. We send a powerful signal to students that analytics are important and artistry is not. Artistry is the foundation of innovation. Most technologists will never innovate a single thing because their training drove out any artistry from them.

My book review of “The Design of Business” can be found here.

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Innovation Perspectives – Cash, Plastic or Free?

This is the first of several ‘Innovation Perspectives‘ articles we will publish this week from multiple authors to get different perspectives on ‘What product or sector is in desperate need of innovation?‘. So to kick it off, here is my perspective:

Innovation Perspectives - Cash, Plastic or Free?There are lots of industries that are desperate for innovation, especially in this recession, but my choice is the publishing industry. First let me say that far too often the publishing industry is too narrowly defined as relating to the publishing of books. Or, if it is thought of in a more holistic manner, then it is still spoken about in terms of its isolated silos – books, magazines, newspapers, music, software, etc.

Yet what is the publishing industry but a group of businesses that make their living distributing the work of “artists” to the masses. And no matter which of these silos you choose to read about, you’ll come across stories of their pending demise (even software). Taken at face value, the publishing industries are facing an apocalypse and should be desperate for innovation – and they are…

Recently I came across an article talking about how now instead of paying 99 cents a song as on iTunes, users will be able to download and listen to the music they want for free after watching a 15- to 30-second advertisement at sites like FreeAllMusic.com. As a concept, advertising-supported music you can share is not new. It used to be done with the radio and a cassette recorder, but now it is possible for downloads and sharing and social media to all be combined together. For a music industry struggling against piracy, it needs to innovate further in areas like this.

The magazine industry is shrinking at an accelerating rate with magazines like Business 2.0 (one of my favorites) closing up shop, and rumors swirling about Newsweek possibly disappearing as well. Two newspaper towns are becoming one newspaper towns and the art of the newspaper business (feature stories and investigative journalism) is quickly being replaced in the dailies by more stories off the wire.

Both newspapers and magazines are hoping that devices like the Amazon Kindle, Barnes and Noble’s Nook, and their own e-reader creations will save them. Some magazines are getting a little more creative. National Geographic is offering their entire archive on a portable hard disk, and Sports Illustrated is preparing for the new generation of rumored slate computers with a new interactive format.

The book industry is coping with the fact that on Christmas Day, for the first time in history, Amazon sold more digital books than paper books, and also with Google’s designs on digitizing every book they legally can. So, as you can see all of the silos in the publishing industry are desperate for innovation.

But what does the future hold for the publishing industry?

If you watch the embedded video in my Apple Tablet Sneak Preview article, or if you watch the embedded video of Coursesmart’s offering in my Microsoft-Apple-Google in Tablet Battle article, I think you’ll get a sense of where things are going and the kinds of innovation that the publishing industry silos will need to consider.

The bottom line is that when people start carrying around high-definition multimedia devices with them that are always connected to the Internet, then the boundaries between different media types are going to feel artificial. Customers will flock to more integrated content.

This will require companies delivering information or entertainment solutions to customers to innovate new partnerships and deal structures, new business models, and new product and service offerings to better meet customers’ quickly evolving entertainment and education expectations. Industry structures and silos are about to be transformed.

So, what kind of publishing industry innovations can you imagine in this new world?

You can check out all of the ‘Innovation Perspectives‘ articles from the different contributing authors on ‘What product or sector is in desperate need of innovation?‘ by clicking the link in this sentence.

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