Monday, 23 January 2012

Business design for the visionary within

Roger Martin almost beats a fine idea into submission in this thought-provoking look at the importance of “design thinking” in business. But, as the recent travails of his own client case-studies shows, in large organisations, appeals to visionary thinking tend to fall upon deaf ears.

This is a short book with some big, and very good, ideas. It could have been yet shorter: I felt I’d got the concept from the first chapter, and thereafter Roger Martin does very little with it. This is partly because the idea is self-explanatory, and it’s something you’ll either take to instinctively (if you’re disposed to “design thinking”), or won’t, if youre not.

Martin’s thesis, broadly stated, is that there are three main “phases” any business proposition:
  • Mystery: when an intuition nags at an inventor: the germ of a problem (and, more to the point, its solution) suggests itself and there is no orthodox means for solving it - here is the maximum opportunity for those who can (think of a young Ray Kroc thinking “how do I build scale in my hamburger joint?”);
  • Heuristic: when you’ve figured out a potential solution that does the job, but you don’t necessarily understand the full implications, possibilities and boundaries of your solution; and
  • Algorithm: where you fully understand both the problem/opportunity and its solution, and you are able to commoditise and automate it and the only remaining question is efficiency. 
Roger Martin’s presentation is a convincing as far as it goes: I dare say the boundaries between the three phases are porous, and Martin is convincing that there is a reflexive quality to the propositions: the more they are solved, and the more the richness of an offering is stripped to its essential superstructure, the lower the barriers to competition, the slimmer the margins, and the more compelling is an entrepreneur’s need to look for some more mysteries to solve.

It won’t do, in other words, to solve your mystery, drive it down the “design funnel” as hard and fast as you can, and relentlessly and mindlessly tweak the algorithm to make it run faster. Your own behaviour, if successful enough, itself will present opportunities for others: witness MacDonald’s versus, say, Subway or Starbucks. 

MacDonald’s algorithm stripped away “extraneous” considerations like healthiness, “coolness”, freshness and so on. So Subway was able to differentiate itself on food quality, and Starbucks on the delightful hipness of actually visiting the store (it seems extraordinary in hindsight, doesn’t it!) MacDonald’s was forced by its competitors to reverse back up the funnel to consider other offerings.

The idea is intuitive and makes a lot of sense. Particularly in large organisations there is a tendency towards “backward looking” data, regression analyses and the tried and true: “no one ever got fired for buying IBM” was a truism when I was a youngster. But the passage of time illustrates the corollary of that truism as well: no-one revolutionised their business by buying IBM either. And that, says Roger Martin, is what design thinking makes possible.

“ ‘no one ever got fired for buying IBM’ was a truism when I was a youngster. But the passage of time illustrates its corollary: no-one revolutionised their business by buying IBM either.”

It is certainly my experience that large organisations tend to “reliability” rather than “validity” thinking, and are so keen on moving to algorithm stage that they are inclined to skip the “heuristic”.

So some gripes: Firstly for a short book with an attractive big idea, it was rather hard to keep focussed on it. Something about Roger’s writing style is disengaging. I’m not entirely sure what it is: partly I think he takes a simple idea and beats it to death with self-serving examples (there are extended case studies of Proctor & Gamble, Target, and Research In Motion, all of which he was closely involved with). RIM in particular seems a poor example: yes, they had a big idea and commoditised it (isn’t that what all successful businesses do?) but their subsequent performance has been underwhelming, as they’ve been unable to withstand the march of the smart phones, and while they’re still the dominant player in the business market, they seem to be slowly but surely withering on the vine in the consumer space. (Talk as I write is that RIM is all but a goner, simply awaiting takeover).

On the other hand, Roger’s take on the underlying philosophy of design and business development is polymath enough to take in pragmatists like Dewey and Charles Sanders Pierce. Being a fan of Richard Rorty and other post-modern philosophers this went down well with me: It is a solid basis for the common sense contained in the book: in a contingent, ironic and pragmatic universe, where priorities, economic conditions, consumer preferences and political orthodoxies change like the wind, big, fast, dumb, inflexible machinery seems like a poor suit to be long in. The relentless preference for algorithms (mechanical, reliable) over heuristics (logical, but requiring interpretation and judgment) seems so blindingly obvious that it’s a wonder so much of corporate enterprise is so blind to it. Then again, being a design thinker is not easy: translating your unorthodox point of view to an anally retentive business analyst requires powers of persuasion not all of us have (“use lots of analogies!” Martin cheerfully advises) and you wonder whether design thinking - utopian an idea though it might be - is one that will generally get nowhere near the beating heart of your average multi-national.


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