Archive for 'Design thinking.'

Risk Perceptions Influence How Risk Will Be Managed

July 3rd, 2015. Published under Design thinking., Due Diligence and Risk Assessments. No Comments.

Michael D. Moberly     July 4, 2015    ‘A long form blog where attention span really matters’!

It should come as no surprise that the way one perceives risk in general, and business risk in particular, influence how, why, and when decisions about managing (business) risk are made.

To be sure, identifying, measuring, and assessing risk are collectively important, as is meaningfulness, specificity, and perhaps most importantly in my view, commonality of (risk) understanding that fosters consensus necessary for decision makers to actually undertake appropriate (risk prevention, mitigation, or management) initiatives.

Again, to no readers’ surprise, an important aspect of recognizing (business) risk today is that it (risk) evolves over time, particularly in terms of how it is characterized, its drivers, and its potential criticality. Countless experiences of my own however, suggest there remain a significant percentage of business decision makers who ‘react’ to risk. That is, their recognition of business risk tends to be either relatively dismissive or, doing (only) what’s necessary to try to favorably restructure the odds that risk will materialize, i.e., vulnerability, probability, and criticality but, absent characterization of risk in a continuum context.

In other words, numerous business decision makers I have met perceive risk through rather fatalistic lens, i.e., assumption and acceptance that adversity (business risk) is generally present or permanent fixtures, conveying little confidence in prevention, mitigation, or management initiatives. Preferably there is change on the horizon though, as more sophisticated risk or its unfortunate counterpart ‘threat’ calculations include more meaningful and relevant probabilities (vulnerabilities, criticalities) which in turn elevate business decision makers’ understanding and fiscal comfort to address risk accordingly.

I envision with greater recognition of the irreversible prevalence – dominance of intangible asset intensive and dependant businesses and markets and the more unique and stealthy risks associated with intangibles will influence business decision makers’ to re-think risk management initiatives and necessities.

Fate and divine providence…

For long periods of time however, events and activities perceived as carrying a probability for adverse consequences, i.e., risk, were often attributed to divine providence or to the supernatural.

During the early periods, prayer and sacrifice were the prevalent means for mitigating a broad range of risks, as was the acceptance of whatever fate that followed. Sacrifice particularly was presumed to appease the spirits (gods) that could impose – bring about adverse outcomes. If however, there was no supernatural spirit or ‘god’ intervention, a business owner could anticipate incurring some level of suffering to their business or person. Presumably, if the ‘gods’ did intervene, a business owner could expect a favorable outcome.

Consequently, it was deemed unnecessary to measure risk in a conventional context due to peoples’ strong beliefs that all events, activities, and outcomes were pre-destined, i.e., they were driven by super natural forces beyond one’s control. ( The above was heavily adapted by Mr. Moberly from Dr. Aswath Damodaran’s ‘Risk Management: A Corporate Governance Manual’, Chapter 4, Stern School of Business, NYU)

Difficult to differentiate risk…

Why do people or businesses engage in risk, and why are significant percentages of people – business decision makers relatively ineffective at assessing risks which they elect to engage?

For one, I suspect there are numerous readers of this blog who have experienced challenges insofar as articulating risk to c-suite colleagues in a manner they understand which allows them to differentiate the act of engaging in circumstances and/or transactions laden with risk relative to any presumed (projected) benefits of engaging in those risks.

Their rationale may, at least in part, be characterized as an anticipated emotional – psychological ‘buzz’ by engaging in behaviors and activities in which risks are obvious and known. For example, one may experience a ‘sense of affirmative relief’ after engaging in certain high risk behaviors, i.e., seeing one’s parachute canopy being fully deployed, or successfully negotiating highway curves while driving at a high rate of speed in a new automobile, or achieving – surpassing projected returns from a risky investment or transaction.

Most of us engage – face risk everyday…

Most of us recognize the reality that we engage – face risk each day, but we wish not to become paralyzed or unnecessarily encumbered, so we proceed. That said, large percentages of us remain inclined to couch – apply the term ‘risk’ in the context of activities – behaviors in which a risk or adversity can be the outcome, particularly when our elective decision to engage that risk is unresponsive to prevention, mitigation, or management strategies we may want to deploy, but materializes anyway.

Still, there are, to be sure, some business decision-makers who do not recognize there is generally some element of risk in most every action – inaction they take. Not infrequently, decision makers elect to dismiss – write off such realities because they assume a sufficient level of (risk) control and oversight can be sustained throughout the life – value cycle of the risk itself.

I am reminded though of the risk of becoming a victim to homicide in the U.S.  On the one hand should we consider only the numerical probability, i.e., x per 100,000 population, this may seem as acceptable odds particularly if we refrain from entering areas where the highest percentage of homicides are reported.  On the other hand, if we consider becoming a victim of homicide on the basis of whom our murderer is likely to be, i.e., spouse, relative, loved one, or close friend, such knowledge may influence us to re-frame our choices about engaging is certain risk producing behaviors with those individuals.

There are chronic risks and acute risks…

Examples of chronic risks include such things as consistent smoking of cigarettes or eating food with high levels of trans fats known to produce adverse health. As chronic risks, individuals so engaged, may not seem to give a great deal of consideration to the harm they are producing to their body. Such personal dismissiveness is frequently linked to their perception that continuing to engage in such risky food selection-consumption behaviors and the potential adverse affects those habits produce in their bodies and manifest as physical diseases may materialize over time – in the distant future, at which point the risk taker assumes they can be reversed by surgery or managed, mitigated, or controlled by ever sophisticated medical intervention. In the interim, acknowledged assumption – continuation of those risky behaviors are likely to continue.

Most are inclined to approach what they perceive as small risks, particularly risks which spread over a period of time before they begin to experience initial adverse reactions, i.e., the materialization a the flu attributed to not getting a flu vaccination.

Indeed, it would be interesting if we could construct a cigarette that would cause immediate adverse (physiological) reactions to smokers versus risks that manifest overtime and which many no doubt rationalize and assume they have some control over, i.e., can cease at will and reverse any previous adverse harm.

Examples of acute risks, on the other hand, include rather obvious high risk activities such as sport parachuting, scuba diving, running a marathon, or becoming a ‘wing suitor’ that jumps off high elevations. For each activity deemed acute risks, there is data that describes such risks in probabilities, e.g. one in one million probability if we engaged in one of these activities, we may experience serious injury or death. (BBC World Service, ‘The Why Factor’ hosted by Mike Williams program titled ‘why people take risks’, June, 23, 2015)

Risk media paradox…

We are in the midst of a risk – media paradox. For example, commercial air travel has become an increasingly safe mode of travel. However, as air travel safety increases, i.e., passenger air miles without crashes, there tends to be greater media coverage when a airplane catastrophe does occur. Thus, the more difficult it becomes to measure – assess human assessment of real risk

Understanding risk…

Ultimately, to effectively mitigate risk, one needs to genuinely understand the risk they or others are engaging. But risk understanding – assessment does not stop there. One also needs to understand (identify – assess) each component part to the risk, that is, the variables that can emerge once a risk activity or task is undertaken and should a risk materialize, will it alter the risks’ initial calculations, i.e., mitigation, prevention, management, etc.

Understanding risk also includes identifying and factoring any systemic risks present which could exacerbate the risk activity – behavior to the point it becomes multiples of the assessment of the initial vulnerabilities – probabilities of acceptable ranges of risk.

Receptivity for engaging in calculated risks…

Of course, there is a growing percentage of individuals who are receptive to engaging in what they perceive – assume to be ‘calculated risks’ an acceptable portion of which presumably can be controlled and mitigated through preparation, practice, and exceptional equipment.

When one does incur an adverse outcome as a result of engaging in a particular risky activity where reliance on the proper functioning of equipment, machines, or processes to achieve a successful (non-injurious) outcome, but there are equipment – process failures, i.e., parachute canopy not deploying, one’s concerns for their safety are likely to heighten substantially. No ‘rocket science’ here!

But, at what point do risk probabilities actually rise to the level of getting decision maker’s ‘go – no go’ attention? Generally, it’s very challenging for people to grasp risks when they are couched in say 4 chances per million contexts.

But, when risk-probability calculations lie in the 1 or 2 per one hundred thousand or lest, at this point, decision makers – risk takers often start to take more notice and may even back away from an activity or transaction that carries such success – failure calculations. Thus, for people engaging in acute categories of risk, there are brief periods of time when the risk taker – business decision maker retains the ‘go – no go’ option.

People tend to perceive – characterize risk on very emotional scales…

It’s probably far too much to assume people should assess each and every risk they engage. But, many argue that humans are inclined to approach most risk on very emotional levels, e.g., citizen willingness to engage in commercial flying following the U.S. terrorist attacks of 911 reduced significantly

So, as people act emotionally and perhaps quite rationally to such events when they sense too much risk to fly commercially, they revert to alternative modes of travel, i.e., driving their cars. Very respectfully, while the U.S. lost 3500+ citizens to the 911 terrorist attacks, the U.S. lost an additional 1500+ above what was forecasted to automobile accidents in the year following 911, but with no comparative, emotional or otherwise, adverse reaction. (The above was heavily adapted by Michael D. Moberly from BBC’s ‘The Why Factor’, Dr Mike Aitken, Lecturer, Experimental Psychology, Institute of Psychiatry. Psychology and Neuroscience. King’s College London. Professor David Spiegelhalter, Professor of the Understanding of Risk Statistical Laboratory, Centre for Mathematical Sciences, Cambridge University worked with BBC Lab UK to create the Big Risk Test, a mass participation survey into why some people are risk-takers and other are risk averse.)

Are Creative’s Conformist’s?

April 24th, 2015. Published under Analysis and commentary, Design thinking.. No Comments.

Michael D. Moberly    April 24, 2015   ‘A blog where attention span is important’!

Let’s digress.  For IP, the government or PTO (U.S. Patent and Trademark Office) issues a certificate to the holder-owner that says ‘this is your patent, trademark, or copyright’.  Deservedly and proudly those certificates are frequently displayed in areas which the recipient deems sufficiently prominent as a testament to their creative diligence.

Perhaps most importantly however, the certificate itself positions the holder to utter an affirmative response to the proverbially incessant question ‘what’s your IP position’, implying IP is the preeminent requisite. In this admittedly narrow context, the tangible – physical features of the PTO certificate serves as a creative’s conforming starting point to receive a modicum of affirmation from the likes of television’s ‘shark tank’ panelists.

A notably remarkable aspect to the patent seeking – securing phenomena is that ‘creatives’, by their nature, are seldom considered to be conformists. In fact, a quite strong argument could be made that creatives’ seemingly innate penchant for non-conformity serves as very strong underliers to sustaining their personal diligence toward a specific (strategic) end.

But yet, for the creatives’ who are diligently engaged in an arena in which their work product falls into a potentially patentable field, routinely defer to presumed experienced practitioners of the ‘shark tank’ ilk who unabashedly premise – link their flirtatious counsel to whether one’s work product has received a patent. Today such unrequited deference warrants discussion, don’t you think?

Investing In Company Culture Is An Investment In Intangible Assets!

January 10th, 2014. Published under Company culture and reputation., Design thinking., Intangible asset focused company culture.. No Comments.

Michael D. Moberly    January 10, 2014    A blog where attention span really matters!

David Lapin projects the next big wave of growth in business will come from businesses whose leaders and management team members know how to convert this low-cost intangible asset, i.e., company culture, into high bottom-line value!

Investing in building and nurturing a company’s culture is the wisest investment any business leader or management team can make!  Financially, it is a low-cost investment with a high probability of economic – competitive advantage returns.

A company’s culture is somewhat akin to a garden, that is, a culture will develop whether or not business leaders or management teams put forth the time and effort to actually design it.

So, like the garden analogy above, if a company’s culture is ignored or neglected, that is, absent regular management, oversight, and nurturing, it’s very likely it will continue to grow regardless, but probably not as intended or preferred and in ways which are not particularly helpful to the company and its mission.  Adverse examples of this include inhibiting innovation or manifesting as employee under-performance. Company cultures that evolve in this manner are said to be akin to an ‘invisible force’ that can not only undermine company – employee productivity but sap leader’s energy.

Cultivating a positive company culture…

Let there be no question, developing, cultivating, and sustaining a desired company culture requires thought, wisdom, time, and some intellectual curiosity and emotional investment to understand what motivates employees to perform consistently well, even beyond expectations.   I am respectfully confident there is no specific, one-size-fits-all methodology or strategy to achieve this, but there is ample anecdotal evidence and examples that ‘good to great’ leaders do pay attention to it.

As David Lapin pointed out in his research, an authentic (company) culture is something competitors will find challenging if not impossible to imitate.  And yes readers, company culture is an intangible asset which, in most instances, can be commoditized and converted to real value. In fact, David Lapin projects the next big wave of growth in business will come from businesses whose leaders and management team members know how to convert this low-cost intangible asset, i.e., company culture, into high bottom-line value.

The knowledge-based global economy has allowed many leaders and managers to acquire a better understanding and appreciation for ‘home grown’ intangible assets like intellectual, structural, and relationship capital and their potential for conversion as specialized commodities into value, revenue, reputation, and goodwill, etc.

Many would agree with the view that Southwest Airlines (headquartered in Phoenix, Arizona) is a prime example of a leaders’ ability to not only create a very open and transparent company culture, but also turn the intangibles emanating from this culture into commodities with substantial monetary value.

Southwest Airlines has long been a dominant player, particularly upon airline deregulation occurred in the U.S. and now in the ever shrinking (merging) U.S.-based airline industry. For SWA’s their growth was in part due to its operating culture built upon genuine efficiencies, e.g., flying only one model of aircraft, creating a no-frill travel experience, no food service or pre-assigned seating.  Ultimately SWA stripped most of these ‘tangible commodities’ associated with conventional airline travel.  In return, SWA’s customers received something of relatively equal value in return, at least in the eyes of their growing number of customers that is, a good flying experience underwritten by a culture embedded with intangible assets, i.e., joke telling entertainment from flight attendants coupled with a felt sense of care that apparently compensated for any loss of those ‘tangible commodities’, i.e., complimentary food and beverage service for one.

There are three well known secrets that underlie SWA’s travel experience and its overall financial success since its inception, i.e., (1.) the company and its leader, ala Herb Kelleher built a culture that incorporated the properties of fun, entertainment, and felt care became embedded in the company’s core, (2.) the culture had to feel authentic and genuine by passengers, and (3.)  SWA had to be able to convert its now intangible asset based company culture into tangible benefits, including market share growth which, as we know, it did.

Numerous business schools today use SWA and its founder Herb Kelleher as a case study of commoditizing a company culture and its intangible competitive advantages balanced with tangible operational efficiencies.

While SWA was investing in and building its intangible asset based company culture, numerous competitors were cutting financial corners that indeed reduced costs that frequently eroded their own culture. Kelleher and SWA, on the other hand, only cut those (financial) corners which the y presumably believed would have little or no impact on the culture they were building and a passengers’ overall travel experience. In fact, SWA continued to invest more in its culture even during periods when the airline industry, as a whole, was struggling. Kelleher and SWA management teams obviously recognized safe and on-time flights for passengers were, in essence, common commodities that competitors also provided to their passengers.

So, for SWA to be competitive in a deregulated environment, Kelleher and his management team purposefully built a company culture that would offer ‘intangibles’ that competitors couldn’t or wouldn’t.

The intangibles SWA’s culture began offering became well publicized differentiators that were embedded in the company’s values rather than directly in its products, processes, or structures. Products, processes, and structure, it’s said, Kelleher recognized could and would be copied, but intangible assets such as an authentic company culture cannot be readily copied providing it is genuinely embedded in company and employee values.

Any company can build its own culture; one that is unique and innate to its people and strategic objectives. But when a company tries to copy another company’s culture they quickly find it difficult, if not impossible to replicate.  Numerous SWA competitors have tried, over the years, to imitate those SWA, but, most all fell short, generally it’s assumed, because they were unable, for whatever reason, to embed it in company – employee values.

Admittedly, I never had the opportunity or pleasure of making Mr. Kellehers’ acquaintance. I did however regularly fly on SWA in it earliest days, not for its’, at the time, emerging culture, rather because (a.) it was less expensive, and (b.) I didn’t mind its business model of securing gates at first generation airports, which in many instances were actually closer to city centers’.

Professionally speaking, I’m unclear whether SWA’s company culture, which in my recollection became obvious and noticeable, from a passenger perspective, beginning in the mid-1980’s and continuing through much of the 1990’s.  Was this culture a well thought through component of Kelleher’s ‘grand plan’, or was it like most other company cultures which appear and grow by accident or merely good luck?  Frankly, what makes me slightly skeptical is the now common relationship between intangible assets and company culture only slowly acquired traction in business operations following the publication of the Brookings Institute’s report (study) on intangibles in late 1990’s.

There is absolutely no question that Kelleher was the ‘dynamic’ driving SWA’s rapid growth and passenger satisfaction, which in part was due to the company culture that evolved.

This post was inspired by David Lapin’s book ‘Lead by Greatness, Character, Success’ published by Avoda Books, 2012.

Comments regarding my blog posts are encouraged and respected.  Should a reader elect to utilize all or a portion of my posts, full attribution is expected and appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com.

Managerial Arrogance Intangible Asset Negative…

December 17th, 2013. Published under Design thinking., Intangible asset training for management teams., Uncategorized. No Comments.

 Michael D. Moberly    December 17, 2013    ‘A blog where attention span matters’!

Arrogance is a ‘negative’ intangible asset’!  For many, that statement is certainly not ‘rocket science’, and obviously it conveys I am no fan of arrogance regardless where, how, or why it manifests in a company, organization, and among its leaders and management teams members. 

Arrogance however, is not a characteristic that resides solely with the higher echelons, that is, in some instances, it can be quite company culture pervasive and exists at most every employee level.

Through my not-so-inexperienced lens, I, probably like many readers of this blog, see managerial centered arrogance as being destructive and unconstructive to a company’s bottom line, that is, this negative intangible asset can manifest itself adversely in any company through expressions of its intellectual, structural, and relationship capital.

In my research for this post, I found an interesting piece, published in a December, 2010 issue of Business Week, titled “Twelve Signs Arrogance Is Running Your Company”.  I have taken the liberty of adapting and re-prioritizing the piece…

  • through my lens as an intangible asset strategist and risk specialists.
  • as being emblematic of what I, and numerous colleagues routinely experience when articulating the relevance, contributory value to company management teams of the business necessity to utilize and exploit intangible assets.

From the above cited article, the following represent ‘signs that arrogance is actually running a company’, that is, when

  1. innovative ideas, coming from outside the company, are deemed to hold little, if any value, and thus, are seldom given consideration, assuming the company holds a monopoly on all great ideas, thus the ‘not invented here’ attitude is a prominent and permanent fixture throughout the company’s conference and board rooms.
  2. it rationalizes mistakes and miscues instead of learning from them.
  3. it puts forth little or no effort to become a genuine partner to a merger, but instead, has designs of dominance, thereby losing the value of the culture and intellectual and structural capital (intangible assets) the other company possessed and would have otherwise delivered.
  4. management team members are observed patting themselves on their back when the company succeeds financially, when in fact, their success really derived from market forces, rather than the performance of its human, intellectual, structural, and relationship capital, each of which are intangible assets.
  5. it focuses almost exclusively on financial success with little regard for legacy and social impact, in other words, company responsibility and sustainability are given short shrift.
  6. management team members dictate far more than they listen.
  7. it hires and develops intelligent professionals, but then ‘turns a closed ear and blind eye’ to their input if it appears as nonconformist thinking, i.e., contrary to existing – past practice.
  8. it lobbies against sound regulatory reforms because of the assumption that if passed, will add complexity to the company’s currently operations.
  9. company leaders and management team members believe the company can’t fail.
  10. it underestimates, minimizes, or does not recognize today’s globally competitive, aggressive, and predatorial business transaction environment
  11. accessing top company leaders requires maneuvering through multiple layers of gate keepers, ‘chains of command’, and bureaucracy.
  12. it is observed that management teams’ focus is on amassing accouterments symbolic of success.

Arrogance, of the types noted above, by business leaders and management team members alike, can drain the bottom line, in part, because these individuals are frequently purported to be poor performers themselves, who endeavor to cover up their insecurities by disparaging subordinates, a by-product of which can produce organizational dysfunction and employee (intellectual, relationship, and structural capital) turnover.

To at least partially address this, what I am referring to here as an ‘intangible asset dilemma’, the industrial and organizational psychologist and professor Stanley Silverman developed The Workplace Arrogance Scale (WARS) which will be the subject of an upcoming post.

This blog post has been researched and written by me with the genuine intent it serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   My blog posts focus on a wide range of issues related to intangible assets and intellectual property.   Respectfully, each post is not intended to be quick bites of  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected.  Should any reader elect to utilize all or a portion of my posts, attribution is expected. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com.

Intangible Assets: A Product Of Collaborations

September 24th, 2012. Published under Design thinking., Managing intangible assets. No Comments.

Michael D. Moberly    September 24, 2012

Collaboration across functional lines in which such things as, intellectual capital, ‘what works, what doesn’t work’ and structural/process capital, etc., are shared in order to arrive at a solution or achieve a particular objective, will produce new and/or enhance existing intangible assets.  For me, that’s generally a good thing, particularly in the steadily rising numbers of intangible asset intensive companies globally!

Simply put, collaboration is a process in which two or more people and/or organizations work together to achieve or realize a shared goal.  Collaboration is, to be sure, more than the mere intersection of common goals perhaps evolving from a co-operative venture or strategic alliance, etc., rather it’s a collective determination to reach an (identical) objective, that’s usually creative in nature and which experience, knowledge, and learning are shared to the point consensus is achieved.

Substantially reduced costs of communicating, globalization, and the increasing specialization, complexity, and cross-functional knowledge (intangible asset) based work have collectively make collaboration both essential and integral, i.e., anytime, anyplace, anyhow!

It would certainly be naive to assume all collaboration is successful or beneficial.  Again, speaking from experience, in some collaborative environments, rigid adversarial positions surface – emerge that are not receptive to quick or easy amelioration.    Thus, for most of us who have engaged in some type of collaborative undertaking, we recognize that collaboration requires some manner and/or level of leadership that best fits the circumstance, collaborators, and objective.  But, recognizing the latter is what McKinsey describes as a problematic blindspot!

This underscores the need to develop – employ better techniques to manage this expanding, irreversible, and globally collaborative (business, transaction) environment.  In a 2005 study, nearly 80 percent of the senior executives surveyed stated that effective coordination – collaboration across product, functional, and geographic lines was essential for company growth and sustainability. Yet, a mere 25 percent of the respondents characterized their organization as engaging in effective knowledge sharing (collaboration) across those boundaries.

A 2006 report produced by McKinsey Quarterly appropriately titled ‘Mapping the Value of Employee Collaboration’ leads us to believe a significant percentage of companies remain inexperienced about how to best manage, let alone, measure collaboration.  For me, the focal point of collaboration leadership – management is recognizing not just the end product, but the myriad of new – enhancing intangible assets that inevitably evolve when creatives interact and collaborate!

Activity-based costing, knowledge management, business process reengineering, and total quality management, etc., have been the conventional and variously effective tools used to measure collaborative experiences, i.e., efficiencies and task achievement, etc.  But, according to McKinsey, they do not do a particularly good job or shed much light on the largely invisible (intangible) networks that underlie the process and product of collaborations.  Perhaps even more so, when the collaborators work across functional, hierarchical, and business unit boundaries as they commonly do.

Comments regarding my blog posts are encouraged and respected.  Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated.  While visiting my blog I encourage you to browse other topics (posts) which may be relevant to your circumstance.  Either way,  I welcome your inquiry at  314-440-3593 or m.moberly@kpstrat.com

(A special thanks to McKinsey Quarterly’s fine report titled ”Mapping the Value of Employee Collaboration, Aubust. 2006)

 

 

Intangible Assets Produced Through Design Thinking…

September 17th, 2012. Published under Design thinking., Managing intangible assets. No Comments.

Michael D. Moberly   September 17, 2012

I believe design thinking, by its nature, will bring to light (produce) more intangible assets than conventional linear and/or milestone-based approaches.

Tim Brown, certainly a well-known and key ‘guru’ of design thinking, cites Thomas Edison’s creation of the electric light bulb as an example that remains a relevant analogy today.  As Brown describes it, Edison’s invention of the light bulb, served as one relatively small component of a greater industry which he (Edison) envisioned would come to frame an entire industry.  Edison’s genius, reports Brown, lay not merely in inventing a single, relatively discreet ‘parlor trick’ device (i.e., the electric light bulb) rather in his ability to conceive an eventual fully developed marketplace surrounding use of the electric light bulb. Another element of Edison’s genius evolved from his futuristic vision how people would come to want to possess and use the electric light bulb. A process, by the way, he plotted to achieve that insight!  The vision Edison espoused, and the approach he applied to achieve that vision, constituted an early example of ‘design thinking’ says Brown.  Edison’s visionary marketplace was a system of electric power, i.e., (a.) generation, and (b.) transmission that would render the ‘light bulb’ useful and relevant to people, homeowners, and businesses on a mass scale globally.

By all accounts, Edison was not a narrowly specialized (lone) scientist rather he was a generalist with a keen instinct for business.  It was not sufficient for Edison and his colleagues to merely validate a preconceived hypothesis because design thinking does not follow a pre-defined series of sequenced and/or orderly steps.  What new things one learns from those iterative steps, in my view, are various complimentary and contributory intangible assets.  Thus, the notion that creative ideas suddenly burst from one’s mind already fully formed is seldom the case.

It’s not difficult to see then, that design thinking differs markedly from conventional linear and milestone-based business activities.  Instead, design thinking is more often the product of considerable intellectual work whose core is a human-centered process of discovery coupled with iterative cycles of (a.) prototyping, (b.) testing, and (c.) refining.  Too, design thinking embodies a system of ‘spaces’ that distinguish various activities that ultimately come to form a ‘continuum of innovation’, i.e., (a.) inspiration, (b.) ideation, and (c.) implementation.

So whether it is referred to as design thinking, business thinking, or creative thinking, it’s a methodology that encompasses the gamut of activities related to innovation, but with a specific and very important twist; that is, it has a people centered (design) focus, influenced, Brown says, by direct observation of what people (presumably prospective consumers)…

  • want and need in their lives, and
  • what they like and/or dislike about the way particular products are made, packaged, sold, and supported.

More to come…

(Special thanks to Tim Brown’s fine article titled ‘Design Thinking’, Harvard Business Review, June 2008)