Wednesday, August 01, 2007

The innovation/design and business-as-usual paradox

Excellent article, this. On a topic I ponder over often. I started off by extracting whatever appealed to me most in the article and looks like I’ve ended up reproducing most of the article here! :) The emphasis of phrases is by me.


Many businesspeople have long regarded designers as mere stylists. More than a few designers see businesspeople as Neanderthals all too willing to forfeit quality for the sake of profit. Their mutual pique springs from a fundamental difference in the way each side thinks about creating value: Corporate types, by and large, seek to fuel growth by building from bulletproof, reproducible systems; designers generally attempt to do so by imagining something new, different, better. That difference can be seen as a trust in reliability on the one hand and in validity on the other.

A valid process…….flows from designers' deep understanding of both user and context, and leads them to ideas they believe in but can't prove. Valid thinking demands an inspired leap of faith.

Perhaps the most glaring difference between the worlds of business-as-usual and business-by-design is the way each side actually thinks. In traditional organizations, the dominant forms of logic are inductive (demonstrating through observation that something actually works) and deductive (reasoning from a set of existing principles to prove that something must be). Designers use inductive and deductive reasoning as well, but they also rely on a third type: abductive reasoning, the logic of what might be.

If that sounds like a schizophrenic way to run an organization--where one-half functions like an accounting firm and the other collaborates like a design shop--well, perhaps it is. But that's the way Google does it. Call it schizophrenic, but the challenge for CEOs like Schmidt is to manage the paradox of freewheeling innovation and buttoned-down operational discipline.

In traditional firms, status--the protein that nourishes the ambitious as they claw their way up the corporate org chart--is conferred on those who run brawny organizations with big-time budgets. The relationship between size and status is pretty straightforward: The larger the revenue and the bigger the staff, the higher one's station and the greater the reward. That's why most executives prefer the known to the unknown. It's a lot easier and safer to run a billion-dollar business than it is to invent one. Among designers, however, the tinder that fuels the creative fire comes from solving wicked problems. The best designers are not necessarily known for the revenues they've generated, but for the challenges they've cracked.

The biggest challenge for all of us, designers and businesspeople alike, is to become equally adept at quantifying the now and intuiting what's next. There's simply no other way to win.


Inspired by this article, it just struck me that I love leaps of faith as compared to balanced and measured steps of reason. And this is what gives me fuel for many an argument. What is your style and why? Do enlighten me.


Alok said...

One of the most used phrase by me is "thinking out of the box ..."

well at one point of time i used to imagine that finance personnels have nothing more to imagine than understanding the trend and acknowleding the trend that ought to be .... but in my 3 yrs of professional life wht i have realised is it is extremely important to have in ur words "leaps of faith" otherwise wht we r leading to is stagnancy in both forms of life - professional and personal ....

it is important (irrespective of the genre of the field of working) to constantly think beyond the realms of obvious for wht is obvious needs no enterprising effort

and for no enterprising effort what u can achieve is normal profit ... irrespective of having a tremendous book value, the long term value of a business can only be attained thru constant innovation for if u r earning profit as expected wht u r earning is normal profit (though that might be higher compared to ur competitors) ... but if u have to sustain and add to that value u have to constantly ensure that ur ideas, product and process and different and better than the rest ... long term profit accrues from being the first rather than being the follower ....

huh! there i go again .... (too long a comment i guess .. not checking for typos ... forgive me if there were any :))

take care


Nimmy said...

interesting thoughts, alok. able to relate to your perception very well....and forget the typos! :)