Keeping Innovation Flowing Through Design Thinking April 18, 2010
Posted by J. Santana in Uncategorized.trackback
Roger Martin does an excellent job of describing how CEOs and other corporate influentials can strive for a healthy balance of reliability- and validation-focused thinking, and why they should.
Martin describes this philosophy as “design thinking”, a term initially used by Tim Brown of IDEO. Martin illustrates the phases of a corporation as passing, or coagulating, in a “knowledge funnel”. Businesses begin this process by exploring a mystery at the wide end of the funnel – looking at problems from a new perspective, and searching for a heuristic to apply to the problem. Once a business settles on a heuristic, they pass through the heuristic phase of the funnel. At this stage, people become experts in addressing the problem. The company should then hone the heuristic into an algorithm, the final stage of the funnel.
http://www.business-strategy-innovation.com/uploaded_images/Knowledge-Funnel-762867.png
Many companies fail to continue the circular process of identifying a mystery to solve, applying a heuristic to it, turning that heuristic into an algorithm, and reconsidering the mystery from a new angle. Companies that focus on the mystery without growing efficient through the use of algorithms fail to grow their idea into a repeatable solution. Companies that do not promote the transition from heuristics to algorithm rely on key people with the knowledge and are unable to move that knowledge into a more efficient algorithm for lesser-skilled staff to use, and thus lose out on reinvesting key people into considering new heuristics. These companies fail to become efficient nor innovate at a high rate. Finally, other companies stagnate in algorithms – they identify and hone an algorithm that has proven reliable, but they fail to consider new approaches to the problem. These companies find themselves facing increasing risk from competitors who are able to reconsider the problem.
Martin describes the mystery exploration process as more validation-oriented: what could be, rather than what is or what was. On the other end of the spectrum, algorithms require a reliability-focused perspective. Martin argues that design thinkers – those who are able to balance reliability with validation – are required to ensure that the company moves fluidly through the mystery, heuristic, and algorithm stages and back to the mystery stage to reinitiate the cycle.
Despite Martin’s exemplification of companies with which he has worked (posing a potential conflict of interest), the framework is very appropriate for businesses of all ages to ensure that they are remaining competitive by incorporating design thinking. In contrast, most literature on competitive advantage focuses on established firms, most notably Christensen’s “Innovator’s Dilemma.” By combining Martin’s approach (redirecting former heuristic owners into a constant cycle of applying heuristics to new ideas and modeling algorithms from those heuristics) with Christensen’s (creating an investment/acquisition subsidiary where ideas and new markets can be considered) , we can recognize that a designated workforce of innovators and design thinkers is necessary to continue a company’s sustainable growth. As a design thinker, I appreciate Martin’s balance of value between reliability- and validation-oriented perspectives. While I recognize the domination of reliability-oriented perspectives on the business stage, it is important to emphasize the role of reliability for those who have traditionally favored validation.
Find Roger Martin’s “The Design of Business” at: http://www.amazon.com/Design-Business-Thinking-Competitive-Advantage/dp/1422177807.
Design Thinking @ Haas 
Your insight that a business needs to make things algorithmic to scale is absolutely true. The patterns that make things scaleable are often those that resist new solutions. A dilemma for most established successful companies. Success often gets in the way of more success.
Is Martin a big fan of scenario-based exercises? I think that scenarios are one of the best ways to get companies, especially big ones that might be stuck in their algorithms and heuristics, to delve into the mystery. Forum for the Future, a nonprofit in the UK that focuses on sustainable development, has partnered with leading companies on projects like Fashion Futures http://www.forumforthefuture.org/projects/fashion-futures that use scenarios to examine, as you note, “what could be.” Validation, if I understand Martin’s use of the term, comes from finding the potential in these alternative futures.
I just finished this and I really appreciated the balanced tone of Martin’s book. Most design+strategy books just hammer away about how essential design and design thinking are to the future of the corporation. Martin points out that routinized algorithms are actually essential to a business of any scale, and that there’s only so much room for creativity (which he wisely calls “validation” to avoid freaking out the suits) in business.
It really resonated when he talked about how threatening it is to classically trained business-people to introduce ambiguity or true innovation into an enterprise environment – the mantra is repeatability, measurability, “best practices” (meaning let the other guy try it first). And that makes sense if you are trying to get rewarded within the typical corporate structure. As both an MBA and a design consultant I have a foot in both worlds, I have renewed empathy for clients who are trying to do the right thing. This book can really help make the case.
I’m not sure you have to go all the way to full-blown scenario planning necessarily. Just being able to imagine different outcomes in simpler settings may well be a big step for many people and organizations. My sense is that scenario planning, while done by a number of companies, is really hard to make a part of the culture or organizational fabric of a company. It might be easier to get more people to understand and thus be able to questions assumptions?
To reinforce Sara’s point, sometimes business folks have an aversion to scenario planning. I ran a scenario planning exercise for our executive team a couple of years ago. One of the executives comments that we should not have looked at a range of possible outcomes – just picked the most likely – a clear example of looking for reliability over validity (to use Roger’s terminology).
One interesting design problem is how to appeal to those who have a high reliability mind-set.