innovation playground Idris Mootee

The Hardest Part Of Any Innovation Process Is Sensemaking. And Sensemaking Is Closely Linked To Insights.

The hardest part of any innovation process is where data and insights come together and trying to make sesen of them. Sensemaking is about using visual mappings and narrative techniques to mine the non-quantitative data. This except is taken from a piece in the current issue of M/I/S/C magazine on Insights and Sensemaking co-written by me and Richard Thomas.

Customer inishgts can be inspiring but insights are only useful when they prompt action and self-reflection. Ideally, the best insights inspire even more insights and them more insights, but vast amounts of insights or the lack of context gives way to a different difficulty – the loss of both inherit and intended meaning leaves insights appearing senseless. For this reason sensemaking and insights are closely related. These pictures are from our M/I/S/C Insight Issue launc party. This is a thick issue and flying off the selves fast.

Sensemaking helps to illustrate unthought-of rules-of-order and insights are the direct experience of these perceived rules. Often they are under pressure and cue toward the yet-to-be but insights, by nature, are descriptive and reflective – retrospective of lived experiences. Insights are the past. They have been separated from life. To exist as unpredictable patterns they may or may not fully characterize the ‘real world’ or persist as perceived. The list of problems and challenges organizations face in managing and applying relevant consumer insights continue to grow. Here are a few:

Insight Speed & Complexity: Organizations believe they are working from a complex abundance of insights at an increasing rate – that they are diverse, independent and conflicting – but at times their insights are not insights at all. The pressure to categorize, prioritize and validate dominates the conversation as opposed to getting at the heart of the matter. How does ‘what is going on,’ effect what you desire to be?

Old Insights: Organizations often work form the same cues, and the same insights from the same reports. Managers facing time restraints carry over insights from project to project and create a self-reinforcing false reality and homogenous actionable intelligence at the organizational level, and a lameness that is visible from the shelf.

Biased Insights: Often projects, products and categories come equipped with bias toward the past and dominant insights that reinforce the known and the safe. They are often out of context, separated from their original time, expired but treated anew.

Insight Translation and Application: Drawing value from out of scope, irrelevant or intangible ‘inactionable’ insights is resource heavy. If they do not fit with the current mental model of the market or consumer, and they are cast aside.

Navigating Misinformation: Mistaking repetition and self-similarity as truth or validation. Aging Insights have resulted in a loss of their meaning – and relevancy over time.

Insight Disbelief and Disregard: The insights and processes are becoming contradictory, trust and belief is bleeding out. The inaccuracy of the processes in the real world occupies our emotional intelligence when it should be ‘feeling opportunity’ – sensing valuable cues for action. People want insights to be singular in their validity but as a reflection of the real world, insights could and should complicate and contradict each other to accurately describe reality and texture.

These problems are symptomatic of more than the solutions they seek. The imperative to describe and validate the past, present and future has engaged tension between hesitations and over eagerness about change, insecurity and confusion associated with ambiguity. These problems stem from an over objectification of ‘the insight’ where we wish to be accurate. Insights have become ‘processed’ from perspectives of existing evaluation techniques to control, predict and guide the outcomes of their application in order to ‘de-risk’.

Overly fetishized instrumentation, metrics and measures have become the source of confidence in decision-making. It is hard to put the "sense" back into our everday managerial settings increase the signal-to-noise ration.

Sensemaking is where we sense of complexity and masstive conflicting information is being sorted through and relationships are mapped out and the emerging themes and weak signals are identified and clarified. I have been training senior managers and executives of applied sensemaking in strategy, marketing, product development, operations and technology planning. It is the most important skill managers need to master today.

Design Thinking Is A Cognitive And Intellectual Process That Balances The Rational And Emotional. Not Included With Your MBA.

What is Design Thinking? Because of the word “design” and many automatically associate it with the craft of design or design as a profession. Actually it is less to do with “design” and more with “system”. There are many ways to define "design thinking" and this list is not exhaustive:

• A way to instill customer-centricity and empathy
• A framework for exploration and experimentation
• An approach to sense-making and problem solving
• A methodology to foster exploration and experimentation
• A design buzzword to tell you a designer can do more than design
• A management buzzword sold as the “next” strategic tool
• A marketing slogan or tag line
• A self-gratifying term for those who think they are creative

The term “design thinkers” implies that designers are craftsmen and not thinkers, which is NOT always the case. It is also a stretch for traditional industrial or brand/graphic design firms to claim to be able to use "design thinking" to solve complex strategic issues. These firms need to go through a radical transformation and close a big capability gap before they can even attempt to implement it for others.

Today, "design thinking" is frequently compared and contrasted to business. This is often an over simplification that forces us into predetermined roles along with their associated rules, conventions, behaviors and formal expectations. It Is important to recognize that "design thinking" is NOT exclusive to designers or unattainable to those in another discipline. Design thinking is natural and inherent in all of us who are smart and creative.

"Design thinking" is a cognitive and intellectual process that balances the rational and emotional – in effect combining left brain and right brain thinking. When applied, it harmonizes with other modes of thinking and closes knowledge and information gaps, creating order and refining meaning. Because "design thinking" is a dynamic, constructive process that is iterative in nature, developing ideas requires ongoing definition, redefinition, representation and assessment.

To achieve those tangible outcomes, you need to open the process to multiple participants and socialize the process and outcomes, visualization is a very critical part of the process, not an outcome. Even the Department of Defence recognizes the needs to train "design thinkers" that are capable of critical and creative thinking to plan operations in dynamic environments with fast-changing uncertainties in extremely complex conditions.

People who are capable of using "design thinking" to identify and develop different military response options within the context of a big strategy are crucial to successful military operations. The development of such skills requires a shift in their focus from the operational and tactical environments to the strategic environment. This is an extremely challenging undertaking given that many military officers spend the majority of their career starting at lower levels and their advancement depends upon how well they perform tactically. This is very much like managers in large organizations who were promoted based on their ability to execute tactically.

To develop senior commanding officers with "design thinking" capabilities require DOF to train them new skills including analysis as well as synthesis. "Design thinkers" possess the ability to think critically on a "system" level; break concepts into simpler parts and mapping out their relationship and system impact before rearranging the elements into a new whole; in other words, to produce something through imaginative skills and quick experiments. And yes, imagination is always needed.

Success For Organizations Comes From The Ability To Drive The Strategic Transformation At The Most Critical Points. “Business As Usual” Is A Very Dangerous Expression These Days.

What is "Strategic Transformation?" For some, it is the framework and process of altering the way in which an organisation does business using new technologies and processes. For others, it is the effort to develop a measured, goal-orientated response to marketplace events, or to improve performance by becoming more customer-centricity. But the most stratgic reason is the design and execution of an integrated, future-oriented, enterprise-wide program aimed at moving to an improved future and achieve stretch goals.

In the multitude of voices and noises, strategic and organizational paradoxes, CEOs and their executive team need to learn to navigate, transition and lead their organizations into a new future. Companies that failed to transform their organizations because they put too much emphasis on tools and technology and not enough on foresights, mental mindsets and leadership behaviors. Their leaders failed to develop the shared visions, values and beliefs that serve as foundation for dynamic culture and to engage all employees to co-create the new culture and to provide opportunities for them to initiate and participate in a shared destiny.

They need to start by identifying the specific beliefs and practices that need to be changed, challenge them to create new “experiences” that form those new belief. Convincing someone to change is hard and trying to convince and mobilize a large organization to change is an almost impossible task. But it is still possible. You just need to know where to start and where to push and pull.

There are many reasons why transformation efforts failed, because they over emphasis on the business processes redesign and not enough attention on the underlying human behavior. Strategic transformation is not just about helping people to rethink and reflect on the past and the present; it is also a way to prepare people for future unknowns.

The heart of any transformation lies in finding and embedding the “purpose” of the business and what they individually must do to accomplish that purpose, how to build trust, create networks and innovate. In the course of Idea Couture six years journey of helping large companies to transform, we determined that to create a new level of performance or jump back into a growth mode, a few things matter most. Most transformation will include building a culture of purposeful innovation and high performance. They consist of the following core components: mental mindsets, purpose and meanings, innovation practices, co-creation and measureable results.

When mental mindsets are anchored on a perspective of the future and the executives, board of directors, managers and employees are all aligned, they generate managerial actions that, in turn, lead to superior business performance. An exciting future state and here executives can leverage this to create the cultural momentum that is critical to ongoing innovation success. This cultural capital can help companies to deal with the ambiguities of technological disruptions and external market uncertainties and to direct their energy to adapt to fast changing competitive conditions. Facing increasing complexity applying a single-dimensional focus is absolutely fatal. And any attempt to emulate a successful strategy of your largest competitor is also fatal.

Transformation leaders understand the importance of using “strategic foresights” to help their companies maintain relevancy to the future and it is an ongoing attempt rather than a one-off exercise. Transformation leaders also understand the need to invest a disproportionate amount of time in bringing the organization together and function as one, not as departments or business units that ended-up sub-optimizing the business performance.

Executives in lower-performing organizations complain that they don't have time for the "soft stuff" and needed all the attention for a real business strategy. Yes we need a strategy on where and how we compete and what part of the value chain we can leverage and how to leverage from the economics of scale and scope. Executives are sometimes confused about managing conflicting strategies and they think they have to make difficult trade-offs. It is 100% possible to manage two conflicting strategies without keeping them apart. But to do so first required to develop a strong culture of trust and the ability to accommodate a new management mindset. That's why trasnformation is needed.

There Is An Inherent Conflict Between Logic, Emotion And Creativity. So How Should We Deal With It?

When peope ask the quesion "Do you know the correct answer?" I don't like that question at all. It is not a smart question as a start. The biggest problem with our formal education systems is our over-emphasis on finding the correct answer to a particular problem. While the quest for correct answers helps us to function at work, it also impedes us when it comes to making the bigger, more important decisions, largely because many bigger, real-life business issues are ambiguous, complex and dynamic. If you have been around for over 50 years and have travelled to more than 20 countries and speak a few languages and have a few degrees under your belt, you probably know there is no right answer, may be a lot of wrong answers.

Creativity is not a license to be wrong (you have been reading too much Fast Company), strategy is not a license to be boring or lack of imagination (Reading too much HBR). A PhD degree is not a license to overintellectualize and being irrelevant to the real world and use words that you need to explain what you mean. And an MBA is not an automatic license to make key business decision, you need to earn it.

However an MBA does teach you a few important concepts if only if you understand how to apply them. You should know how to re-org your in-laws into a 'team-based family.' You learn to refer having babies as pilot market testing. You should understand the cost structure and sytem implications of starting a family. You know the cost of capital when your spouse decided to purchase a Hermes Birkin. And most of all, you know how to talk about your past relationships as ‘sunk costs.’

I definitely school needs to teach more creativity. Not the crazy useless exercises but applied creativity and design thinking in everyday life from science to economics. Today (and I should say it has always been) creative thinking is critical to business strategy and innovation; however, If you look at the top 20 MBA programs around the world, you will be challenged to find any courses, core or elective, which teach, train or even inspire students to be truly creative. Instead, most MBA programs and courses focus on numbers, analysis and the logic of deductive reasoning.

There is an inherent conflict between this kind of logic and creativity, and in most business settings, logic is usually quick to get in the way of creativity. Creative ideas can run into the walls of business logic because 1/ it does not quickly, clearly or at all connect to 2/ business strategists often operate within the boundaries of defined roles, and decisions are made based on those boundaries – they draw on what they know and what they have learned including formulaic behaviors, processes and the “best practices” that have evolved through mass consensus – to shape how they think and act.

That explains how many MBA students had Adam Smith on their reading list. The 18th Century idea that people – given their limited time, information, resources and budgets – act purposefully to maximize their own satisfaction is epistemologically central to business thinking. In Smith’s view, all human behavior is rationally self-interested and we are innately selfish. Thanks to this model convinces many how “easy” it is to predict individual or organizational behavior. It is not quite that simple.

When it comes to human behavior, this is where many economic principles, particularly Smith’s, break down. I am not rational (ask those people who work wiht me) and many of us are not. The economist's notion that people act rationally only implies that they try to act in ways that are consistent with their own personal objectives, even if those objectives seem absurd to outsiders. That's the beauty of being human. Read more about creativity in this coming issue of M/I/S/C - The Creativity Issue.

Why Traditional Apporach To Business Transformation Don't Work Anymore?

Over 60% of companies out there are operating on a dated buisness model and 20% operating with a mental model that had expired for more than 5 years. There are little reasons for those 20% of companies to survie another 5 years or even 3 and for the other 60% they have a short window of opportunity to design and orchestrate their transformation.

Rapid changes in external environment, consumer behavior, global economics and disruptive technologies are throwing off the most rigor business strategies and the best trained managers. Although everyone expect to see big changes ahead but people reacts differently to change.

Many people become accustomed to the status quo and don't want to alter the way things are being done -- regardless of the potential benefits or the disruptive threats from emerging competition. For many, fear of the unknowns and the concerned about the ramifications on their careers are barriers to acknowlege the need for change. People don't like change. And winning belongs to those who thrive with change.

Success for operating in a neck-breaking speed and unknown environment often comes from the ability to drive the proper (or mulitple) transformation at different critical points -- for industry breakpoints. “Business as usual” simply means "end of a business or an industry." Being able to reimainge and reinvent offerings and models are critical to addressing economic volatility and staying on top of the market.

Business transformation traditionally takes the form of unfreezing to refreezing and briding the gaps in capabilities, mindset and performance. And these changes which can take the form of business strategy, management style, culture, organization design and business processes.  One most popular model is the classic model proposed by Lewin which argues that the process of change involves three stages 1/ unfreezing, 2/ change and 3/ refreezing. This model was valuable in recognizing the importance of not only new learning, but also “unlearning” old attitudes, habits and behavior patterns. Today many question the practicality of this model suggesting that a “refreeze” implies a resistance to future change and partucular the future is uncertain.

The Idea Couture Brand-Driven Transformation Model has a strong future oritentation and focused on bringing strategic foresights and organization insights to reimage futures. It uses a lot of Design Thinking principles and makes the process very tangible and collaborative. It is a process of organzation co-creation which people put their stake on what shared destinies they wanted to particiapte in creating and thus releasing energy in the process. It will take 80 Power Point slides to illustrate the process, a high-level view of this model is captured by the following formula: Successful Brand-Driven Business Transformation = P+N+C+M+I+F

• P = Develop a perspective of the future(s) informed by strategic foresights (both customer and technology contexts) and deep organizational insights;
• N = Develop a co-created brand narrative that inspired people of possibilities and put purpsoe at the core of the story;
• C = Develop a compelling case for the need for change developed and shared by all executives, investors, employees and B2B business partners;
• M = Develop a practical means to tie innovation (roadmap) and projects to the desired future(s);
• I = Design an incentive systems that are aligned to identify and encourage appropriate behaviors compatible with the desired future;
• F = Develop feedback mechanism for each stage of the process to monitor progress and provide input for continuous improvement.

Any Business Transformation process is painful. The way many organisations manage change or transformation using existing model is facing the challenge of speed. They are too slow and by the time they refreeze, the market has shifted and they need another transformation. The other important issue is key decisions are made in isolation and the change piece comes later which I argue often is too late. The future of Business Transformation is a co-created one.

On Building The Creative Culture And Learning How To "Forget" Creatively.

We had our Idea Couture Christmas staff part last week. Looking back there were a lot being accomplished and a lot more to do. What started as a little experiment bringing multi-disciplinary design thinkers together and now becoming a key driving force and intellectual engine advancing the practice of design thinking in innovation and business applications. Idea Couture is where multidisciplinary thinkers come together with shared purpose and where creativity flourishes. I am looking forward to have our London and Mexico City offices running in 3-6 months. I feel I have the right people in place and that's a great start.

At Idea Couture, creativity means more than just novelty ideas. It means new ways to frame problem, using new lenses and developing new perspectives. I am so happy when I see happy people in the company doing great things. I am happy to see people growing and that's gives me tremendous satisfaction.

At the end of the day, we're in the business of producing the non-conforming super smart and creative thinkers and doers. I am pushing the envelope everyday and so far no one is complaining. Heartiest thanks to my management team who did a great job of putting togther the first Idea Couture Award.  You guys rock!

On the road this week and spending time with people hearing them talk about their innovation challenges and how they apply design thinking. Lots of great meetings. We're aware of the big changes coming ahead. Every business, government and instirutions will be impacted. Change does not creep up on us every 10 or 20 years, it is an ever-present business and organization phenomenon that is disrupting industries and causing firms and industries to disappear. Although the degree and velocity of change is unprecedented.

Everyday we’re dealing with more and more unknown and unknowable, but decisions still need to be made. Many of the challenges today are unique and have few or no precedents, so textbook solutions (and no guru don’t waste time buying whatever best sellers) or trying to find aHarvard Business School case study. Past solutions do not necessarily apply today. The external environment is constantly absorbing shocks from technological advancement, cultural change and systems failure.

Creativity is needed everywhere to rethink and reimagine products, experiences, companies, processes and even industries. Top executives are looking everywhere for new thinking and solutions that are outside the routine of orthodox strategies and old paradigms. So where can you look for new ideas? And how can you design an environment in which creative people can survive, thrive and flourish? We can begin by asking, how can you make people creatively forget what they know in order to reinvent the future? This is where sensemaking comes into play.

A big part of sensemaking is creative “forgetting” and it is first thing you must do. We all create our own environments and then constrained by them. Being able to aware and realize the impact of our own behavior in creating the environment in which we’re in is a very important first step. Forget who we are is something worth practicing. There may not be any scientific evidence to suggest that those who know what to forget can think more creatively about the future, but in the formulation of business strategy, creativity can be seriously constrained if it is burdened by the past. The problem lies in the notion of “core competencies,” which suggest that companies should stick to what they know best. If that’s the case, then why many of those once great companies should still be around.

Thank You Steve! Let's Type This On Our Touchscreens "We Will Miss You Steve Jobs."

It is a very very day with the news that Steve Jobs, who has died aged 56 following a long battle with pancreatic cancer. The world has lost a visionary, not only he made an unprecedented impact not only on the world of computing and consumer electronics with insanely great products that inspired a generation of people to dream big and be different, he has also reinvented management by building and rebuilding one of the greatest companies on earth. His creative and innovative spirit and remarkable accomplishments will forever be remembered by all of us.

Steve was the most creative person on earth in business I’ve known of. His creative spirit will inspire many for decades to come. You wonder what’s makes Steve so creative? And what is creativity anway? How creativity happens? How do we prepare ourselves for creativity? Do you have to be a whole-brain thinker? Or you only need to be a rightbrainer? Are there many more young Steve Jobs out there?

Creative individuals have a few distinctive features that distinguish them from their peers: They have a rich body of domain-relevant knowledge and well-developed skills, also they find their work intrinsically motivating (Simonton 2000; Amabile 1988). They tend to be independent, unconventional, and more risk-taking, and to have wide interests and a greater openness to new experiences (Simonton 2000). Steve met all those criteria and was a perfect archetype of a super creative person.

Creative individuals also tend to have a strong “discovery” orientation, which leads them to look at situations from different perspectives at the same time, to frame problems differently, and to ask novel questions. Some academics and creative managers like to describe creativity as a process, I belong to the school of Vinacke that believes creative thinking in the arts does not follow a model or any models. Ask any top creative talent, see if they follow a process. I never like the idea to reduce creativity to a five staged process. It is simply not creative to do so.

The best creativity comes from managed chaos and applied fuzzy logic. It is never about careful calculations and you simply cannot engineer lucky accidents. It is also about committment to make change, it is a powerful motivator for creative people. Design Thinking helps organization to improve its creative and imagination capability, but it is not a creative process. Creativity has no process. Don’t waste your money on any books. Just read Steve Jobs’ story.

Steven Paul Jobs, management guru, creative visionary, businessman, born 24 February 1955; died 5 October 2011.

'Purpose' Can Consciously And Authentically Infuse Workplace With Positive Emotive Energy Beyond Money Can Buy. There Is No Strategy Wihout 'Purpose'.

Teaching and practicing strategy is what I love. Strategy or strategic innovation is like a chess game except the chessboard keeps morphing into different shapes and there are always players entering and leaving the game. My experience is that it is subject that is undertaught in business schools and least understood in the business world. It seems like my students at CEDIM Master of Innovation Program are all having a good time. And I got a bottle of Tequila from Carolos and Michael. You need that to teach innovation I supposed.

First you cannot separate strategy from strategic innovation, competitive strategy can sustain you but cannot leapfrog others. Second strategy has a soft side, such as the putting ‘Purpose’ into the strategy equation. You cannot differentiate around something that you don’t have a heart for it.

Finding differentiation is hard enough, making sure it is relevant and sustainable is even more difficult. Putting ‘Purpose’ into it is the most difficult, you simply can’t fake it. When it comes to strategy implementation, purpose is even more important. Often you will have to make very difficult economic trade offs, without that, you will simply make those decisions based on short term economic benefits.

If Zappos did that, they would not have offered one year return policy or have their call center in India instead of Las Vegas. These all add up to the happiness indexes of Zappos which is the core of its strategy. Strategy implementation is also iterative, a process inducing various forms of individual and organizational learning, because both external threats and strategic responses are shaping these decisions on an everyday basis.

What every organization needs to achieve enduring success and power up true differentiation is ‘Purpose’. It is critical and can break the most robust strategy if there is a lack of one. It is not a mission statement or something that hangs on the wall. It is core reason for people to come to work and to mobilize all managers and employees to act consistently, responsibly and decisively. It triggers innovative thinking and trustful working relationships.

‘Purpose’ can consciously and authentically infuse workplace with positive emotive energy can impact every aspect of performance. It is the heart and soul of strategy.

Strategic Innovation And The Quest For Breakthrough Ideas

Innovation is now a very hot topic at the C-Suites. I have speaking a lot on the subect the last 5 years. The funny part is I am talking about Strategic Innovation and many still talk about Technology Innovation as if it was the sole source of innovation. People are very interested in my interpretation of Build-to-Last and the idea of Build-to-Fail-Fast. (Photos by Anddres Ahues)

Every large companies is thinking about it and most have little idea how to integrate that with the organization’s strategic intent; how to make it work within certain organizational structure; how to decide which project to fund; how to create a balance between reenergizing the core and attaching white space; what types of people to staff the innovation function; or simply what capabilities gap are needed to fill.

We just finished a comprehensive study of 42 top companies across 5 industries to understand what challenges and barriers that exist as well as little success stories. Generally speaking there are less success stories as we dig deeper but it is fine since they are at the early stage of the learning curve. We codified the knowledge in lessons learned as well design and implementation options as well as capabilities gap and how to fill them. It is not a 50,000 ft view but a very pragmatic understand of the situations and every company can learn from it.

The most common mistakes fell within the following:

• Focus too much on break-though ideas or staying too close to the core
• Not focus enough on creating break-through ideas and results in only incremental ideas
• Using existing (advertising and market research) vendors and infrastructures as well as toolkits that are not designed for innovation but apply them anyway and not getting the results desired.
• Fail to articulate the core purpose of innovation and how it is driven by the strategic intent and value creation
• Totally don’t understand the concept of ‘whitespace mapping’ let along the sense-making process behind it, and just called it ‘brainstorming’
• Fail to create a space that allow people to play and experiment and fail safely. A physical space that people with shared interest to play with ideas.

The idea of an innovation space is a good one. Even Microsoft has a space called Garage, a place opened last week that gives their staff access to tools such as a soldering bench, a laser cutter and a 3D printer to make prototypes and connect people with shared interest.

The Garage is in one of the oldest Microsoft buildings in campus but lots of windows. They filled the building with new "pods," basically temporary work spaces where teams of 2-6 employees can set up shop to collaborate on projects for a couple of weeks.

It is an attempt to create a safe place to fail. Fail as much as you like that and you wont get demerit points. Like all large companies, any good idea can get lost quickly because the initial market size is too small or it is threat to the core. Every company should explore having a space like this. Or they can house them in one of our offices that are even better.

The New Game Of Strategy: Applied Design Thinking In Business Innovation And Transformation

Just when I thought I can have 2 days in an office then I realized I have to be In NYC tomorrow for a few days. I am writing this post on a flight after missing my connection in Houston, and just finished teaching a three days Strategy graduate course with a focus on strategic innovation and design thinking. What I did was bringing the Harvard Business School case study method of teaching and apply it to design thinking and innovation, it is really interesting and probably an innovation itself because innovation means going against the conventional analytical thinking.

The shift from teaching competitive strategy to strategic innovation changes how the case studies were originally written for. I am using the same teaching material but instead applying atotally different pedagogical focus – which is how to avoid the very obvious and how to develop and apply ‘New Game’ in strategy making. It was intense for the students but they were liking it. I theorize, practice and teach these concepts and so for me, it is not academic, it is real.

Strategy is never that simple as picking the right competitive positioning, segments or competing on different dimensions. It is often complicated because it involves changing of mindset and mental models – mindsets that inspire individuals and teams to think imaginatively, to take risks, to seek out, and to expand the boundaries of a business or redefining customer value. It is hard.

Then there are structural, systems and processes for sharing of ideas, sense-making of data and working together. This includes developing new perspectives and collaborate on ‘white space mapping’ which was never taught at business schools. The very nature of competitive advantaged has changed and I challenged anyone who tell me if they really have a real and relevant competitive advantage that they thought they have.

The information revolution continues and is enabling companies to easily (and sometimes cheaply) match current competitive differentiators and rapidly create new ones. The result is that competitive advantage is evolving from simply focusing on differentiation, low cost or focus. The idea is to do all, the stuck in the middle can be a desirable position if you understand the underlying economic forces. Most business school students and even professors hardly understand how to apply the Five-Forces properly and let alone adapting it to a very different business environment where speed, empathy and community become key strategic elements in addition to bargaining powers and competitive dynamics. We need a new framework that takes into consideration the use of community in business strategy development. I’ve used cases including Method, Microsoft X-Box, Loco Motor and a few others to illustrate the concepts.

I think I should start developing teaching notes based on the original case study but with a different teaching emphasis. Classic views on strategy include Joseph Schumpeter focuses attention on innovation and entrepreneurialism. He suggested that bigger the company the more resources and diversification one can bring to R&D and as a result get better return on innovation. Michael Porter, following Alfred Chandler, focuses attention on business organization and competitive strategy and introduces the concept of cluster to explain competitiveness.

Today’s the nature of strategy and competitive advantage is drastically shaped by strategic innovation -- powered by customer co-creation; desire of consumer to change the status quo and powerful social innovation networks; integrates customer deep into business organization; demand chain into supply chain and contrasts inter-firm relations in terms of market, and closed or semi-closed and open-networks.

The attempt to develop competitive advantage is only the first step. It is sustaining the advantage that is far more challenging. How often companies invested millions and millions of dollars to create barriers for entry only to find out they lasted only for a short a few months. Waking up one morning seeing that your industry value chain was being reconfigured and the expiry date of your business model was last week is not exactly a fun thing. If you find that every six months you have to innovate on something the market will embrace is too exhausting, it is time to embrace design thinking.

Random Thoughts On Muggles, Magic And Design Thinking.

For those of you who are not familiar with Muggles, they are people who are incapable of magic, and who are usually unaware of the wizarding world. Design Thinking is sort of like wizardries, it takes certain type of people with the certain type of training, Hogwarts or Harvard.

When Muggles think Design Thinking, they see nothing new there and they believe it has been around for a long time, it basically means they still don’t get it and may never will. They hardly see the real challenge, it is simply not to invent a better mouse traps. We care capable of doing more and being more innovative. The power of our imagaination is what it is.

"It is our choices that show what we truly are, far more than our abilities."  ~J.K. Rowling, Harry Potter and the Chamber of Secrets, 1999, spoken by the character Albus Dumbledore

Design Thinkin is alot more than lateral thinking and creativity de Bono style or ad agency style brainstorming. Design Thinking fills the gap created by management theories and business schools which analytical thinking and data-driven decision making override intuition where empathy is never part of the equation.

Companies have been battered by system level economic failure, extreme uncertainties, and the failure of traditional forms of strategic making, leadership styles and management model. These wounds have left businesses gazing hopefully towards Design Thinking. Design Thinking is bringing a refreshed, revitalized, and rejuvenated approach to management and strategic thinking- however, design thinking is far from a cure-all. It takes a certain type of people who are comfortable with different thinking styles. I’ve read so much poorly written papers about design thinking and many of them don’t even grab the basic principles and its true transformational power.

Often people talk narrowly about design and prototyping, but Design Thinking is not just bringing the power of empathetic creative problem-solving to bear on a human needs, it is an organization culture, a mindset, a framework and a toolkit to solve complex wicked problems that we created. It provides a balance between the needs to create customer value, shareholder return and social value. Design Thinking is strategic.

Everyone comes to me hoping to join Idea Couture claims they are creative, they have great ideas and can turn ideas into great products and create new markets. Go deeper and I ask the how… there comes the sound of silence. Great Idea, great products, great business is a tagline, not a strategy. Design Thinking can be applied to fill the gaps of traditional strategic thinking. The increasingly complex needs of the business need a new toolkit and Design Thinking is exactly what is needed. It helps to uncover new needs, creatively redefine value, reconfiguration of value-chain activities, develop compelling brand narratives and create markets that are yet to exist. When my friend Roger Martin advocates Design Thinking, he is not talking about ethnography or prototyping; he is talking about a whole new management paradigm.

Everything is designed—from behavior, systems, organizations to public policies. Design is universal. The dirty secrets of why how big corporations destroy shareholder value are actually no secrets. Everyone from the board of directors to the frontline employees knows 'why' a company is 'stuck.' Because their structures and management systems are so rigid and can’t adapt to changing market shifts or respond to any disruptions; their over focus on core competencies and optimization that prevent them to see beyond the core and; fail to see and anticipate the future and even if they see it they fail to act on it. This is where Design Thinking comes into play.

Everyone understands the need to make money and everyone hope they can do magic. And everyday many moguls are trying to create magic with cute packaging and fancy taglines and hoping to make a lot of money, off course it won’t work. The real magic lies in understanding deep human desire and unmet needs and anticipate emerging behavior, not every company truly understands how to do it. They teach those at the Ministry of Design Thinking.

Design Thinking, Business Transformation And The Creative Enterprise.

It is time to take a look at the report card of our design for business organization, management and strategy. After half a century of quality movement, brand management, marketing and catefory management, globalization, customer service automation and organizational design fine-tuning, we should have a pretty good of idea of what is working and what is not. As a result of all suboptimization efforts over past decades, we begin to see the impact on the whole system.

The idea is that optimizing the outcome for a subsystem will in general not optimize the outcome for the system as a whole. Some porodcts, brands, businesses are better at the expense of other things. This intrinsic difficulty may degenerate into the "tragedy of the commons": the exhaustion of shared resources because of competition between the subsystems. This is exactly what had been happening in different business units and functions including product design, marketing, operations and sales/channel management. The principle of suboptimization states that suboptimization in general does not lead to global optimization, and as whole businesses and societies are far worse. Here comes Design Thiking.

Finally, this is the Design Thinking Workbook for the Harvard Design Thinking Seminar. It ook us a week to put this together. Coming together nicely. Design Thinking allows us to to rethink, reimagaine and reset the game. I am not saying every company needs to make radical changes in its core business itself, and a lot of instances the case for change becomes desperately obvious – as in the case of Blockbuster, it came too late.

Business model redesign is driven by of strategic innovation (to play a new game). This means complete or partial transformation—of the organization, its core offerings, structure, systems, culture and capabilities—to create, deliver and capture value at the new way not in a sub-systems level.

Business model transformation may include a strategic decisions to move up-market or down-market or sideways along the value chain or shift from products to services or solutions when the pace of commoditization continues to accelerate or the industry boundaries is opening up for new entrants. The idea is to apply visual sense making as part of the Design Thinking tool kit to reimagine new value ecosystem and value chain reconfigurations.

Vvisual thinking can play a very vital part in the business design process. The key to successfully design a capital-efficient business model is to visually identifying assets, risks, and cash flows by their distinct risk characteristics and then visually modeling them and retaining only those that are central to how a company creates value.

The Harvard Design Thinking for Business Creativity Seminar in NYC tomorrow, for the first time I will be introducing these applications to people outside Idea Couture and expecting a large group of very senior executives and looking forward to a great day of intensive discussions. Here’s the workbook as takeaway together with the 150 slides. Here’s a first glance at the workbook and workshop material. Planning to bring this seminar to Europe and Asia next.

Design Thinking Has Inspired Multi-disciplinary, Interdisciplinary and Trans-disciplinary Approaches To Problem Solving. This Is Just The Beginning Of A New Discipline.

Prague is mystical with a mix of medieval, Renaissance, and Art Nouveau architecture and the design scene is slowly taking shape. You still see traces of history of what communism had done to the city even after these buildings are completely restored. It is where Renaissance meets neo-Gothic and the baroque structures from the 18th centuries.

You can see shadow of cubist touches, which thrived in Bohemia more so in the neighborhood near Vysehrad Park. The public housing or “rabbit huts” as they called it, cheap but highly functional (the Walmart of architecture), provides a stark contrast to the Bohemia style. It is the featureless nature but with modern plumbing and heating were once considered the politically correct way to live. Or at that time, politically sustainable living as I would have called it.

I stayed at the Hotel Josef, a nine-year-old modern boutique hotel that was one of the first in Prague and still the most popular one. It is centrally located in the old Jewish quarter and right next to the Parizka Street. I don’t like the word boutique hotel, as it doesn’t mean much other than small and not part of a big chain. I rather use the word design hotel.

I was really impressed with the design and how it holds up over the years – now that’s design at its finest. There was not a thing to make you feel that it is getting out of fashion, in fact, the hotel design concept is to provide guests with a break from the fascinating baroque architectural surrounding the hotel and give them space to step back and relax in a soothing, and luminous environment. I enjoyed the hours and hours I spent sitting in the lobby lounge doing work with my Macbook while occasionally looking out the windows.

When you’re in Prague, you can’t avoid talking architecture. I’m not trained as an architect but always fascinated about the design process as well as the visual artifacts architect employs. Architects are considered designers and probably fair to say that they required the most rigor training both in art and art history compare to other design discipline such as graphic, fashion or industrial. They probably attracted a very different type of design mind than those of other design disciplines. I wonder what would happen if first year MBA students were required to spend 3 to 6 months studying the history of architecture and design, at the same time learning some basic drawing skills. I think that would drastically widen their perspectives as well as picking up some drawing skills that they can use for life.

Today, most MBAs can’t even draw simple diagrams. The pre-MBA studies are mainly statistics and accounting. There is plenty of time for accounting later in the program. The abilities to communicate using simple diagrams are extremely useful for business problem solving, strategic communications and visual sensemaking (strategic modeling and business model design). Architects use diagrams to explain their visions, elements and relationships between them. Business people can use abstract visuals to show business model options, new value chain design or customer interactions. Once business persons/design thinkers are supplied with visuals to making connections, they can see the relationships between different components better and in return easier to see something otherwise too complicated to express.

Visual sensemaking is quietly changing decision theory, it is also influencing design thinking and theories of design-oriented problem solving as a manifestation of pattern recognition. It is hard to say whether sensemaking is influencing design thinking or system thinking is influencing design thinking and in turn influencing sensemaking. It is a fact that design thinking has inspired multidisciplinary, interdisciplinary and trans-disciplinary approaches to problem solving. I will explore the application of this in my coming Design Thinking for Creativity and Business Innovation seminar organized by the Harvard Graduate School of Design in NYC this month. 25% discount for early registrations and affiliates of a list of design and business schools. Now hoping on a train to Wien.

Do You Practice Intuition? If So, Do You Know Where It Comes From? Do You Keep It Secret?

Do you trust your intuition? And if so why? Intuition is most practiced and least understood. And why some people are betting at it and some not? Can intuition be rational and strategic? Is there something called ‘strategic intuition?’ What makes your intuition strategic and mine not?

Most see an interesting connection between innovation, imagination and intuition. Often intuition may even exert a paranormal or even magical influence on everything new and unknown. What do we mean by intuition. In Educating Intuition Robin Hogarth describes various ways we can improve our intuition. He points out two notable impediments to the education of intuition. One is the presence of confusing or “wicked” environments where feedback is unreliable. The other is the limited scope or “domain specific” nature of intuition. Intuition can therefore inhibit innovation because such obstacles exist.

• A person who has a giant database of ideas and insights and supported by fast access to those information as the brain processes these knowledge in a non-linear way and as a result the person is more likely to guess correctly in a more educated than others who do not posses the data points and fast access. In another word, a large database, faster access like a SSD drive and better classification of data.
• A person who has a strong theoretical or philosophical understanding of why things happen through life experiences or as a scholar and therefore can quickly draw on those theories and associated metaphor and as a result can look at these very complex problems and not overwhelmed by its complexity. Getting right to the core and a possible decision pops out disguised as intuition. They perceive wholes and compress much into a flash. Philosophers and prophets are often intuitive. It is wisdom secretly disguised as intuition.
• A person who has a strong logical and deductive reasoning capabilities and it to eliminate the impossibilities and therefore left with the more realistic options and by probability the person is in a better position to conclude. This can be dangerous as the person can be very wrong if the answers lie outside conventional logic. But in 90% of the time, the guess is correct due to the narrow nature of the problems. It is fast logic disguised as intuition.

Intuition is a very general word, it is not taught in school (may be art school) and we don’t know what prompt some rely more on it more and some completely ignore it.  The value of intuition is not celebrated in the world of scientific management but commonly practice in the world of design thinking. Many CEOs made important decisions based on it but won't admit it. In the world of data-dominance, it is not easy to find a place for intuition, you can still use it discreetly. Or just call it innovation or sense-making.

Officially Launching The First And Only Design Thinking And Innovation Magazine - M/I/S/C. Available In 18 Countires. Now Reviewing Proposals For Foreign Language Editions.

Great lacunch party last night for M/I/S/C, second launch party in San Francisco in a few weeks..and then Shanghai. 200+ cool people showed up. Food is good..and the cupcakes too. Special thanks to the folks who pulled this off in such a short time..Ashely, Lucy, Marla, Sherry, Jessica, Christian, Brooke and a few others... great job! The food was great, food catered by Caplansky's Delicatessan, speciality bite-size cupcakes by Cutlepiecupcakes. Speical thanks to Umbra for hosting us. Let's do another one soon.

I was once a "magazine junkie"; now after rehabitation I am now a very selective reader or not having the luxury for not being one. I cut my magazine subscriptions from 105 periodicals a fewyears back to 10. I have to cut one if I want to add a new one (I learned this from someone...). So it will always be 10.

Last year we’ve seen the changing hands and closing of some of the most prestige and long established business magazines including Business Week and Newsweek and some new one such as Portfolio which I find the positioning odd. So people ask me if I am crazy or foolish publishing another new magazine.

I am kind of both I guess. I think there is a future in magazines, but it won’t be like the old one. I love Business Week, but it is not a sustainable business model. It is an educated-consumer read: venerable, timely, credible, respected, well packaged and produced. Which is another way to say, in new media: slow, old, closed and expensive to produce. And it is still based on an old publishing model.

Newsstand sales for the almost 500 consumer magazines in the US measured by the Audit Bureau of Circulations have been on a steady decline last three years between 8-12% for consumer magazines. Many publishers didn’t make it through the rapid decline in advertising dollars and struggling with integrating with the Internet thing. And the iPad thing turned the publishing upside down and changing the game quietly.

I have been having problems with mainstream publishing anyway so I don’t see this as an entirely bad thing. The whole thing about “culture of mass media” or “popular culture” is moving our society backward or at least stopping us from moving forward. Let's take the "mass" or "popular" out of "mass media" or "popular media". Just look at what magazines they are selling at Walmart and you understand what I am talking about.

To some extend it is the same case for TV. JTV and JP (Junk TV and Junk Publishing) are hurting us and thanks to the Internet, many of us can do without TV and same for these poorly produced magazines. Many don't worth the trees they killed.

What is M/I/S/C magazine? I came up with the idea one night flying redeye. I said to myself I am trying to pick up what Bruce Nussbaum left behind at Business Week. I really like that supplement when he was the editor-in-chief of that section. 

Inpsired by Nussbaum's vision, M/I/S/C will be a new global media brand designed to take over when he left unfinished at Business Week, the mission is make design thinking and innovation practices accessible to a broader readership; the magazine will be positioned on newsstands alongside the other cutting-edge cool titles such as Monocle and Fast Company. I can't name another cool magazine, there are a bunch of good design and architecture magazines and not much that gets me excited. Bring me back Industry Standard, not sure if anyone remember that short-lived one. 

M/I/S/C is basically organized around four key concepts: Movement / Intuition / Structure / Complexity, M/I/S/C blurs the boundaries between business, innovation, design, technology, art and culture. I want to show the world we can produce a world-class product in 30 days with limited resources. M/I/S/C will always be in Beta. I never promise you a finished product, there wont' be one.

Theodor Adorno said it right, "Standardization, moreover, means the strengthening of the lasting domination of the listening public and of their conditioned reflexes. They are expected to want that to which they have become accustomed and to become enraged whenever their expectations are disappointed and fulfillment, which they regard as the customer's inalienable right, is denied, and even if there were attempts to introduce anything really different into light music, they would be deceived from the start by virtue of economic concentration."

Actually Adorno's critique was not directed against popular culture per se, but the specific kind of mass culture produced under monopoly capitalism which our system is designed to encouoraged in order to get market power. Consolidation of industry that drives efficiencies also takes out the heart and soul of the culture business. Take a look around us and see how popular culutre media = junk.

Popular culture posses a threat to innovation by destroying niche and novelties and sensibility of micro-cultures, which are essential to innovation. Many of today’s mass culture was not ‘mass’, these mass culture was imposed from marketers and media owners rather than derived from the people. Is there something called "mass culture" or it is just the advertisers that liked us to believe that.

I need to get back to my day job and this weekend I will start looking at content for the next issue.  Now onto the next one – the Future issue. The future is exciting.