Product Description
Most companies currently have creation envy. They crave to come up with a game-changing creation similar to Apple’s iPod, or emanate an wholly brand new difficulty similar to Facebook. Many have genuine efforts to be innovative-they outlay upon R&D, move in beautiful designers, sinecure creation consultants. But they get unsatisfactory results.
Why? In The Design of Business, Roger Martin offers a constrained as well as provocative answer: you rest distant as well to one side upon methodical thinki… More >>
The Design of Business: Why Design Thinking is a Next Competitive Advantage
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First off, what got me to buy this book does not appear in the book at all–the author on record as saying that Wall Street was not designed to make money for its investors, only for its mandarins–the same is true of how universities are designed, businesses, etc. but that one observation really got my attention. I bought the book before BusinessWeek featured it as one of four in the October 5th edition (Europe version), and after looking the others over, chose this one.
In the larger context of changes to the Earth that now take three years instead of ten thousand years, as an entire literature flourishes on The Philosophy of Sustainable Design, Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage and Natural Capitalism: Creating the Next Industrial Revolution, the book is a four for narrow-casting and lack of context, but you can use Phi Beta Iota, the Public Intelligence Blog, to search and sort among my other 1,400 reviews, so no penalty is warranted, This book will be scored Beyond 6 Stars at PBI/PIB for the simple reason that it addresses the core need of all eight tribes of intelligence (academia, civil society, commerce, government, law enforcement, media, military, and non-governmental organizations), to re-design away from the Industrial Era waste (where Six Sigma stops), and to instead envision how the world could and should be, and set out to achieve that–a prosperous world at peace.
I am eagerly awaiting Redesigning Society (Stanford Business Books) and consider its author, Russell Ackoff, to be the equal of Buckminster Fuller. The author of this book, Roger Martin, in my judgment, not only equal Dean Gartner and his seminal work, The Politics of Fortune: A New Agenda For Business Leaders but moves to another higher plane with all that this book sets forth. I funded the Earth Intelligence Network (EIN), a 501c3 Public Charity, after twenty years to trying to get secret intelligence communities to redesign, and this book has not only articulated all that I could not, but it is written simply enough for any bureaucrat to understand. In that sense, it joins Orbiting the Giant Hairball: A Corporate Fool’s Guide to Surviving with Grace as a primer and an inspiration.
Here are my fly-leaf notes. I hope that someone close to the Director of National Intelligence (DNI) will flag this for his attention, because I believe that this book not only can save the $75 billion a year tar-pit that the DNI is nominally in charge of, but that the national intelligence community, if it were led properly, could be the seed crystal for the redesign of the US Government and of the United States of America, to the lasting benefit of all humanity.
Here are my fly-leaf notes that seek to summarize this extraordinary work in terms applicable to creating a Smart Nation such as Congressman Rob Simmons (R-CT-02) and I sought to lay out in THE SMART NATION ACT: Public Intelligence in the Public Interest
+ Design thinking is abductive thinking, neither deductive (from general to specific) nor inductive (from specific to general, the academics call this ethnocentric studies now). It seeks to employ observation and imagination to explore, to intuit, and to create “new ways.”
+ Design thinking is NOT an unaffordable flight of fancy. CEOs must keep their designers connected to the triangle of envisioned needs for which no poll or survey exists; technology on the bleeding edge of innovation, AND business bottom-line common sense. The author takes great care to stress the need for blending. Design thinking is NOT an either-or proposition, but rather a HYBRID that takes best of the best to a new level.
+ The author credits James March and the knowledge funnel as being the information operations (IO) aspect of design in that writ large, design moves knowledge from mystery (climate change is an example) to heuristics (weather forecasting) to algorithms (barometers) to computer code (not there, but HAARP, High Frequency Active Auroral Research Program appears to be a nasty example). Design, in other words, is the embodiment of strategy, of IO, and ultimately of how one plans, programs, and budgets the enterprise. Heavy stuff in the most positive way!
+ Alvin Toffler called me and open source intelligence (OSINT) “the rival store” to the secret intelligence community in 1993 (in the chapter on “The Future of the Spy” in War and Anti-War: Making Sense of Today’s Global Chaos and I honestly did not understand the implications until I read this book and appreciated the author’s emphasis on transformation having to address structures (switch rewards and focus from legacy systems to new projects); processes (solve wicked new problems rather than repeating the same old analysis again); and cultural norms (get away from current secrets for the president and instead focus on providing decision support to every action officer in every domain at every level of government).
+ To emphasize this point: the secret intelligence community spends $75 billion a year on legacy systems that provide “at best” 4% of what a very small consumer group (no more than 100 individuals) needs–for that amount of money, I could create the World Brain with embedded EarthGame, provide free education and decision-support to every person on the planet, and in passing end poverty, assure clean water for all, and eliminate most infectious diseases. Secret sources and methods no longer yield innovation–the innovation is to be had at the other end of the telescope, the open end….and at very low cost reaching billions of end-users. THIS is the “aha experience” that this book provided to me personally.
+ The book, the author, and the concept of design thinking are HUGE on embracing the customer or user as a source of inspiration and innovation.
I’ve reached Amazon’s word limit. More at PBI/PIB.
See also:
The Knowledge Executive
Building a Knowledge-Driven Organization
Rating: 5 / 5
The world moves so fast today that thinking in the present means you’re thinking too slow. “The Design of Business: Why Design Thinking is the Next Competitive Advantage” is a business book discussing that in order to be on the top of the game in the modern business world, one must focus on the future instead of the present, the world as it could be instead of how it is. With plenty of sage advice and ideas for the future of business, “The Design Business” is well worth considering for any business which dreams of being ahead of the cutting edge.
Rating: 5 / 5
Roger Martin, Dean of the Rotman School Of Management, University of Toronto, recently released his new book titled, “The Design Of Business – Why Design Thinking Is The Next Competitive Advantage.” This book does an excellent job of articulating why innovation in corporations seems to be incredibly difficult and how Design Thinking must co-exist with analytical thinking to lead a business into new opportunities and business growth.
Businesses are organized to be a factory, whether they are product or service- focused. Their objective is to maximize efficiencies and produce the highest profits possible on existing creations. Nearly all of the people hired to join an existing organization have been done so to increase the reliability and consistency of the organization.
Martin writes that the main reason companies find it difficult to realize innovations is that most people in corporations are trained in analytical thinking and focused on reliability and consistency. They are focused on making the “factory” and related processes better, faster, and cheaper to produce existing offerings. Based on this approach, culture and processes become the biggest killers of innovation.
The opposite of reliability is a focus on validity. Martin defines validity as seeking to find the “correct” answer to a complex problem, not the most reliable or predictable, and to find new knowledge that will lead to the development of new markets, new business models, new products, etc. Seeking valid answers to mysteries is the crux of Design Thinking according to the author.
The author’s basic proposition is that a “knowledge funnel” exists in all companies which takes a complex problem (a mystery) and drives it down to an algorithm (i..e. a process or formula) that allows the company to maximize profit on existing products or services. The issue that evolves is the people in the company then work to protect the existing, known set of processes and suborn or discontinue the search for new knowledge and finding new customer needs that could be met with new solutions.
The book describes abductive reasoning (i.e. intuitive thinking) and how it needs to balance against inductive and deductive reasoning (i.e. analytical thinking). In order to be a Design Thinking organization, a company needs to balance exploitation of existing offerings and processes against exploration of unmet customer needs in order to both profit from existing intellectual property but also to find new problems to solve that lead to solutions that create new business value.
The goal of reliability is to produce consistent, predictable outcomes by eliminating subjectivity, judgment, and bias. Conversely, the goal of validity is to produce outcomes that meet desired objectives. Over time validity will show that a resulting outcome is correct versus what is consistent.
With a persistent view of the past, business managers look backward to prove something is true or false. Daily work is a series of permanent, continuous tasks to ensure tomorrow is the same as today. The overriding organizational goal is to manage to the highest possible reliability. The key management skills that are built and rewarded are those that achieve reliable outcomes. Finally, rewards and status flow to managers who analyze past results and refine the processes, and senior managers who provide reliable return on investment, revenue and profit.
The author writes that in the long term, a reliability focus fails because of increased risk to cataclysmic events that occur when the future no longer looks like the past and the reliability factors are no longer relevant.
The opposing focus to reliability and decision-making based on past evidence is a future-oriented view. The future is based on “what could possibly be true” and a different set of intuitive and abductive reasoning skill will be needed to make sense of an observation, inferences to the best explanation of unknowns, and wondering why something is occurring. This view is beyond the reach of data from the past.
As managers build their skills and oversee larger and larger operating groups, they will see any move to the future as a threat to their turf.. Their loyalty is to the status quo.
In order to transform the organization to be more future oriented, the author writes that leaders need to think differently about their company’s structures, processes, and cultural norms. One key organizational change to be considered is to move the knowledge discovery effort into a project-based structure. Permanent jobs discourage all but most senior people from seeing “big picture” and keep people task-focused on today’s issues, with little or no time to focus on the future.
The author defines a set of processes that will give innovation a chance to succeed. These process changes include the way to perceive innovation through new financial planning and reward systems. New processes will need to accommodate exploration and iteration, and reward systems are most meaningful when they are tied directly to company strategy.
At the end of the book, Martin provides guidance on how individuals can develop themselves as design thinkers. In addition to developing a better understanding of one’s own personality and working styles, people need a set of tools and experiences to help envision possible future states. The average person finds it very difficult to envision something that does not yet exist.
Tools that are discussed include observation, imagination and configuration. These tools will help a person recognize patterns that others do not see; deal with data that is inconsistent with and does not fit current models; iteration and prototyping; and translating ideas into activity systems that will produce the desired business outcome.
Finally, Martin offers suggestions for working effectively with analytical thinkers. He states there are five key elements to working with analytically focused, historically oriented people:
1. Reframe extreme views as a creative challenge (find creative ways to help others see your valid approach).
2. Empathize with colleagues on the extremes (respect them as a user, their hopes, wishes, worries, drivers).
3. Speak the language of reliability and validity (for reliability, use analogies and use the past as proof. This approach is less threatening, less risky. For validity people, encourage sharing of data and reasoning but not conclusions. They don’t want to feel hemmed-in by preconceived notions).
4. Put unfamiliar concepts in familiar terms.
5. When it comes to proof, use size to your advantage (for reliability people, have them bite off small pieces of change. For validity people you need a piece big enough to show the innovation can succeed by developing the right-sized experiment).
In conclusion, this book does not talk about tools and methods of discovery, creativity or prototyping, but rather it defines the type of thinking required to support and balance the requirements of both exploration of future opportunities and exploitation of existing knowledge. This type of thinking, referred to as Design Thinking, is key to advancing new knowledge, new solutions, and increased business value.
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Rating: 5 / 5
Every few years I run into a book that I want to give out to many people. The most recent candidates for this have been Peter Drucker’s How to Manage Oneself and Cradle-to-Cradle Design by William McDonough and Michael Braungart. Roger Martin’s new book one is another. I plan to buy copies for all three of my children, for the CEOs of companies I have shares in, and additional copies to scatter amongst my staff at LeveragePoint. This book is that good. I also hope it will direct people to another of Roger Martin’s books, The Opposable Mind.
Why does this book matter? It provides a simple way of thinking through the flow of innovation from Mystery through Heuristics to Algorithms in an organization. It then looks at the role of understanding the why (validity) as well as the what (reliability). The stories from companies as varied as McDonalds and P&G to Hermann-Miller, Research in Motion and Cirque de Soleil are fascinating and informative and give a real business context to the general model. The lateral move to include Charles Sanders Pierce and abductive logic is a creative blend (and I use the term in the technical sense of Mark Turner) that is an important piece of design thinking in its own right.
I believe that Martin is correct, only companies that embrace design thinking as a core capability have any hope of long-term sustainability and competitive advantage. What he is proposing is an alternative and ultimately powerful solution to Clayton Christensen’s Innovator’s Dilemma.
Some will argue that the book is shallow and that it fails to uncover the essentials of design thinking. This is true, but the book is intended to motivate people to think more deeply about the role of design in business and not to be a primer on design thinking itself. In any case, design thinking is a nascent discipline and it is hard to point to anyone book that really unfolds its power. Candidates would be Bill Buxton’s Sketching User Experiences, John Maeda’s Simplicity and the book from Bruce Mau’s great exhibition Massive Change. People who need to go deeper, anyone engaged in design writ large, will need to read widely and engage in many passionate discussions. My own essential texts on design thinking include various works from the Adolf Loos, the Bauhaus crowd, Baldwin & Clark’s Design Rules, Stuart Kaufmann’s The Origins of Order, Christopher Alexander’s Pattern Language and of course Edward Tufte’s books beginning with The Visual Display of Quantitative Information. I am also working to broaden my thinking by bringing in other cultural traditions (Japan and Russia for example have deep design traditions) and disciplines (especially architecture, urban planning and software engineering). More important than reading books, though, is to develop the habit of observing how things are designed and used in the world and uncovering the choices (often unconscious) that the designers made. One way to do this is through conversations, and one place these conversations are taking place is on the Design Thinking group at LinkedIn.
Rating: 5 / 5
I start by declaring my conflict. Roger martin is a friend. I sit on the RIM board with him.
Dr. Martin is Dean of the Rotman School of Business. One of his previous books was Opposable Minds: Winning Through Integrative Thinking. The theory of that book was that the ability to hold 2 opposing thoughts in mind often lead to a third superior view. The Design of Business has some of this “opposable” view thinking.
From The Design of Business book:
“What is Design Thinking Anyway?
Design thinking, as a concept, has been slowly evolving and coalescing over the past decade. One popular definition is that design thinking means thinking as as designer would, which is about as circular as a definition can be. More concretely, Tim Brown of IDEO has written that design thinking is “a discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.” A person or organization instilled with that discipline is constantly seeking a fruitful balance between reliability and validity, between art and science, between intuition and analytics, and between exploration and exploitation. The design-thinking organization applies the designer’s most crucial tool to the problems of business. That tool is abuctive reasoning.”
Dr. Martin is a big advocate of strategy. I have found that good strategy in business can make successful business almost look easy. Of course you need good tacticians to execute but it is the strategy that takes a company to the next level.
Design of Business suggests that we do not use enough intuition in business. The book advocates using intuition combined with analytical thinking to devise strategy. (The opposable – intuition and analytics can co-exist to the better good)
My experience is that people are more comfortable with neat and tidy analytics but often the more messy intuitive strategy and design works better. Successful business is a bit messy.
Martin suggests that Design Thinking can be learned, fostered and developed which is indeed a hopeful thought.
I found the book interesting because it uses RIM as an example (among others) and I am close to that one so can see exactly where Martin is saying when he says Design Thinking yields competitive advantage.
Dr. Martin argues that time bias – short term thinking (often caused by the public markets) can kill good decision making. I heartily agree. Long term thinking is key.
Good book.
Rating: 5 / 5