Innovation & Frameworks

SID 2105 Computer Applications

Innovation & Technology Putting it all together


The story so far

Algorithm Heuristics


Innovation Frameworks


The Design of Business

Premise: Martin poses the idea that there are currently two forms

of business thinking:

Analytical thinking is driven by a quantitative process (based on

inductive and deductive logic) and standardizing steps to eliminate

judgment, bias, and variation.

Intuitive thinking focuses more on an instinct to drive creativity

and innovation. It uses abductive reasoning to solve problems

Abductive reasoning, is a form of logical inference that goes from an

observation to a hypothesis, seeking to find the simplest and most

likely explanation. One can understand abductive reasoning as

"inference to the best explanation”.


Design Thinking Design Thinking is defined as combining empathy

for the context of a problem, creativity in the

generation of insights and solutions, and rationality

in analyzing and fitting various solutions to the

problem context.

Design thinking encourages divergent thinking to

ideate many solutions (possible or impossible) and

then uses convergent thinking to prefer and realize

the best resolution.

- Divergent thinking is the ability to offer different,

unique or variant ideas adherent to one theme

- Convergent thinking is the ability to find the

"correct" solution to the given problem.


Knowledge Funnel

Martin also introduces the idea of a knowledge funnel as the

process followed by leading businesses to innovate more

consistently and successfully.

The knowledge funnel has three different phases:

•The mystery stage comprises the exploration of the

problem,

•At the heuristic stage where a rule of thumb is generated

to narrow work to a manageable size.

• In the algorithm stage the general heuristic is converted

to a fixed formula, taking the problem from complexity to

simplicity.

SID 2105 Computer Applications SID 2105 Computer Applications

Knowledge Funnel


Knowledge Funnel

Mystery Heuristic Algorithm

Culture Design Thinking Design & Analytical Analytical Thinking

Bias Validity Validity & Reliability Reliability

Data Analysis Qualitative Quantify & Qualify Quantitative

Reasoning Abductive Inductive & Deductive Inductive & Deductive

Division Research Development Operations

Margins Loose $ Make $ Make $

Cycle Emerging Heuristic Optimized Heuristic Optimized Algorithm


Design Thinking Funnel


Organizational Bias

Martin finds a bias in the analytical and design thinking

process as a distinction between 'reliability' versus 'validity’

He argues that organizations are much more likely to favor

what is reliable, because their structures motivate analytical

thinking.

This means that organizations are often poor at achieving

valid solutions because they do not fully take advantage of all

three areas of the knowledge funnel, just the two latter stages

(heuristics and algorithms).


Activity 1

1. Watch the images on the screen

2. Pick the one you feel fits the question

3. Formulate an answer to the best of your ability

4. Be ready to discuss and explain your choice


Innovator’s Dilemma

Premise: is based on the idea that businesses or organizations

will reject innovations based on the fact that customers cannot

currently use them, thus allowing these ideas with great

potential to go to waste

Example: IBM dominated the market in computer memory

for large database systems, they did not see the need for

entering the PC storage market allowing companies like

Maxtor to emerge and eventually dominate the market.


Innovator’s Dilemma

A disruptive innovation is an innovation that

helps create a new market and value network, and

eventually disrupts an existing market and value

network (over a few years or decades), displacing

an earlier technology.

A sustaining innovation does not create new

markets or value networks but rather only evolves

existing ones with better value, allowing the firms

within to compete against each other's sustaining

improvement


Strategy Paradox

Premise: most strategies are built on specific beliefs about an

unpredictable future, but current strategic approaches force

leaders to commit to an inflexible strategy regardless of how

the future might unfold.

Example: in the 1980s Sony developed BETA tapes as an

optimal solution for home video recorder; the technology was

proprietary and expensive paving the way to VHS. The consumer

market tilted to VHS as the standard, but Sony was committed to

the BETA strategy from which it would not deviate.


Strategy Paradox

TIME Present Future

Uncertainty Cone


Merging the Models

Operations

Design & Development

Evaluation

Research

Algorithm Heuristics Mystery Mystery


Merging the Models Previous Heuristics Algorithms

Martin Mystery Heuristic Algorithm Mystery

Culture Design Thinking Design & Analytical Analytical Thinking Design & Analytical

Bias Validity Validity & Reliability Reliability Validity & Reliability

Data Analysis Qualitative Quantify & Qualify Quantitative Quantify & Qualify

Reasoning Abductive Inductive & Deductive Inductive & Deductive Abductive

Division Research Development Operations Evaluation

Margins Loose $ Make $ Make $ Loose $

Title Emerging Heuristic Optimized Heuristic Optimized Algorithm Declining Algorithm


Merging the Models

TIME Present Future

Uncertainty Cone

Knowledge Funnel

Uncertainty Cone

VHS

BETA


Merging the Models

TIME Present Future

Uncertainty Cone

Uncertainty Cone

GUI

W3

DOS

IBM

Microsoft Strategic Options


Innovation Cycles


Disrupting Innovation

Specifications Production Part Machining

Heuristics

Optimized Heuristic

Parametric Model

Emerging Heuristic

Digital Copy

Mystery

Design Intent


Sustaining Innovation

Concept Production Distribution

Algorithm

Optimized Algorithm

Compare to Spec Measurement Defective Parts

Mystery

Declining Algorithm


Efficient Innovation

distribution production

Algorithm

Optimized Algorithm

New Specs Trials Machining

Heuristics

Optimized Heuristic

New specs


Activity 2

1. Break into groups of 5-6

2. Pick an image from the google file

3. Apply one of the three frameworks to analyze it

4. Be ready to discuss and explain your choice

Innovation & Frameworks

Design

Transcript of Innovation & Frameworks