Binding: Hardcover
Dewey Decimal Number: 658.4063
EAN: 9781422177808
Feature: ISBN13: 9781422177808
ISBN: 1422177807
Label: Harvard Business School Press
Languages: Array
Manufacturer: Harvard Business School Press
Number Of Items: 1
Number Of Pages: 256
Publication Date: 2009-11-09
Publisher: Harvard Business School Press
Studio: Harvard Business School Press

• ISBN13: 9781422177808
• Condition: New
• Notes: BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed

Most companies today have innovation envy. They yearn to come up with a game-changing innovation like Apple's iPod, or create an entirely new category like Facebook. Many make genuine efforts to be innovative-they spend on R&D, bring in creative designers, hire innovation consultants. But they get disappointing results.


Why? In The Design of Business, Roger Martin offers a compelling and provocative answer: we rely far too exclusively on analytical thinking, which merely refines current knowledge, producing small improvements to the status quo.

To innovate and win, companies need design thinking. This form of thinking is rooted in how knowledge advances from one stage to another-from mystery (something we can't explain) to heuristic (a rule of thumb that guides us toward solution) to algorithm (a predictable formula for producing an answer) to code (when the formula becomes so predictable it can be fully automated). As knowledge advances across the stages, productivity grows and costs drop-creating massive value for companies.

Martin shows how leading companies such as Procter & Gamble, Cirque du Soleil, RIM, and others use design thinking to push knowledge through the stages in ways that produce breakthrough innovations and competitive advantage.

Filled with deep insights and fresh perspectives, The Design of Business reveals the true foundation of successful, profitable innovation.

Customer Rating:
Summary: Better written than `The Opposable Mind by the same author
Comment: 'The Design of Business' will give you a good basic overview on why design thinking is the next competitive advantage. It covers the fine balancing act between validity and reliability, or combining intuitive thinking with analytical thinking to get design thinking.

The concept 'design thinking' is not a new concept actually but it is here nicely introduced with all its benefits together with powerful business cases to illustrate the importance: P&G's "Connect + Develop", Herman Miller, Target, IDEO, RIM, Cirque du Soleil, and many others.

For the moment analytical thinking still runs the corporations so there is indeed some window for improvement on the level of business thinking, innovation, decision making and strategy. In this respect the author is convincing towards the reader to stimulate his/her thinking skills towards design thinking.

There is a little bit of focus on recruiting Masters of Fine Arts graduates into the business, although it has been overlooked by the author that there are already many design thinkers in business.

'The Design of Business' is a great and easy read with an important message towards all industries and a very important message for innovative approaches.

The Design of Business
Contents
1 The Knowledge Funnel - How discovery takes shape
2 The Reliability Bias - Why advancing knowledge is so hard
3 Design Thinking - How thinking like a designer can create sustainable advantage
4 Transforming the corporation - The design of Procter & Gamble
5 The Balancing Act - How design-thinking organizations embrace reliability and validity
6 World-Class Explorers - Leading the design-thinking organization
7 Getting personal - Developing yourself as a design thinker

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Customer Rating:
Summary: An important book for business developers and business model innovators
Comment: The Design of Business: Why design thinking is the next competitive advantage, by Roger Martin was a positive surprise as it was a quick read, well structured, delivered several interesting concepts and some in depth cases on business model innovation. Even though several of the cases are familiar for many readers (such as P&G, Apple, Cirque du Soleil, McDonalds and RIM) Roger, who is dean of the Rotman School of Management at the University of Toronto, professor of strategic management, and author of the book The Opposable Mind, adds interesting perspectives and sometimes information from behind the scenes working as a consultant and advisor. The book is an extension of Roger's popular article (free download via [...]) from 2004 with the same name.

The book in three bullet points:

* It introduces and explores the concept of the "Knowledge Funnel" describing how knowledge advances from mystery to heuristic, to algorithm for businesses to gain efficiency and lower costs, and the activities of moving across the knowledge stages (exploration) and operating within each knowledge stage (exploitation).

* To accelerate the pace at which knowledge advances through the Knowledge Funnel, it presents the concept of design thinking as the necessary balance between analytical thinking using deductive and inductive reasoning (with the need for reliability and the ability to produce consistent and predictable outcomes), and intuitive thinking (with the need for validity and to produce outcomes that meet a desired objective).

* It discusses challenges (primarily the results of proof-based analytical thinking) faced by organizations, CEOs and individuals within organizations, to build structures and processes that foster, support and reward a culture of design thinking, and how different CEOs have used different approaches to generate successful outcomes.


A brief summary of the different chapters:

1. The knowledge funnel: How discovery takes shape
The introductory chapter starts with a story about McDonalds journey from mystery (how and what did Californians want to eat) to algorithm (stripping away uncertainty, ambiguity, and judgment from almost all processes). It briefly discusses analytical thinking, intuitive thinking and design thinking, to solve mysteries and advance knowledge, and the fine balance between exploring new knowledge and exploiting existing one.

It introduces and explores the concept of the "Knowledge Funnel" describing how knowledge advances from mystery to heuristic, to algorithm for businesses to gain efficiency and lower costs. This is explored also in later chapters: "Mysteries are expensive, time consuming, and risky; they are worth tackling only because of the potential benefits of discovering a path out of the mystery to a revenue-generating heuristic", "The algorithm generates savings by turning judgment... ...into a formula or set of rules that, if followed, will produce a desired solution" and "Computer code - the digital end point of the algorithm stage - is the most efficient expression of an algorithm".

It also addresses the need for organizations to re-explore solved mysteries, even the founding ideas behind the business, and not get too comfortable focusing on the "administration of business" running an existing algorithm.

In addition, the first chapter presents abductive logic, and some ideas originated by philosopher Charles Sanders Peirce; that it is not possible to prove a new thought concept, or idea in advance and that all new ideas can be validated only through the unfolding of future events. To advance knowledge we need to make a "logical leap of the mind" or an "inference to the best explanation" (or "Leaps of Faith" that John Mullins and Randy Komisar calls it in the book Getting to plan B see review/summary at[...]) to imaging a heuristic for understanding a mystery. Free preview of Chapter 1 (link at [...])

2. The reliability bias: Why advancing knowledge is so hard
The second chapter focus on the distinction between reliability (produce consistent, predictable outcomes by narrowing the scope of a test to what can be measured in a replicable, quantitative way) and validity (produce outcomes that meet a desired objective, that through the passage of time will be shown to be correct, often incorporating some aspects of subjectivity and judgment to be achieved). Roger's main point in the chapter (or even in the book) is that today's business world is focusing too much on reliability (due to three forces: demand for proof, an aversion to bias and the constraints of time), with algorithmic decision-making techniques using various systems (such as ERP, CRM, TQM, KM) to crunch data objectively and extrapolate from the past to make predictions about the future. "What organizations dedicated to running reliable algorithms often fail to realize is that while they reduce the risk of small variations in their businesses, they increase the risk of cataclysmic events that occur when the future no longer resembles the past and the algorithm is no longer relevant or useful" With the turbulent times we live in, where new mysteries constantly spring up that reliable systems won't address or even acknowledge, businesses risk being outflanked by new entrants solving old and new mysteries developing new heuristics and algorithms. "Without validity, an organization has little chance of moving knowledge across the funnel. Without reliability, an organization will struggle to exploit the rewards of its advances... the optimal approach... is to seek a balance of both"

3. Design thinking: How thinking like a designer can create sustainable advantage
Chapter three starts with an interesting case of Research In Motion (RIM) that leads into the discussion of what is really design thinking. Roger uses the quote by Tim Brown of IDEO, "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" and adds himself "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". That designers live in the world of abductive reasoning, actively look for new data points, challenge accepted explanations to posit what could possibly be true (in contrast to the two dominant forms of logic - deduction and induction, with the goal to declare a conclusion to be true or false).

The chapter ends with the first discussion on roadblocks to design thinking (many more to come), with one being the corporate tendency to settle at the current stage in the knowledge funnel, and another how "highly paid executives or specialists with knowledge, turf and paychecks to defend" has the company's heuristics in their heads with no interest in advancing to the algorithm stage, making the executives less important. This leads nicely into the forth chapter about the transformation of Procter & Gamble.

4. Transforming the corporation: The design of Procter & Gamble
A.G. Lafley's transformation of Procter & Gamble from an incumbent in crisis to an innovative and efficient organization in just a few years has been widely covered in the business literature. As a student some years back I made an internship in P&G's Connect & Develop (connect with innovators outside the company and develop their ideas for P&G products), and have since been reading up on everything I can find about the transition and why other companies have not been able to make the same transition. Roger adds interesting perspectives, from his work with the company and its first vice president of innovation strategy and design, Claudia Kotchka, to develop "a comprehensive program that would provide practical experience in design thinking to P&G leaders". One of the top-down efforts being to drive brand-building from heuristic (in the minds of scarce and costly senior executives) toward algorithm, providing less senior employees the tools needed to do much of the work previously done by high-cost elites who then could then focus on the next mystery in order to create the next brand experience. The chapter also covers the Connect & Develop initiative and how it bulked up P&G's supply of ideas in the mystery-heuristic transition where it was thin, enabling it to feed more opportunities into its well-developed heuristics and algorithms of development, branding, positioning, pricing and distribution.

Another highly interesting topic covered in the chapter is the change of processes within P&G, including the strategy review, at P&G. Lafley recognized that the existing processes was a recipe for producing reliability, not validity, "so risky creative leaps were out of the question". A transition from annual reviews with category managers pitching, "with all the inductive and deductive proof needed to gain the approval of the CEO and senior management" to "forcing category managers to toss around ideas with senior management... to become comfortable with the logical leaps of mind needed to generate new ideas".

5. The balancing act: How design-thinking organizations embrace reliability and validity
The chapter focuses on the need to balance reliability and validity, and the challenges to do so (foremost all structures, processes and cultural norms tilted towards reliability). "Financial planning and reward systems are dramatically tilted toward running an existing heuristic or algorithm and must be modified in significant ways to create a balance between reliability and validity". Roger presents a rough rule of thumb "when the challenge is to seize an emerging opportunity, the solution is to perform like a design team: work iteratively, build a prototype, elicit feedback, refine it, rinse, repeat... On the other hand, running a supply chain, building a forecasting model, and compiling the financials are functions best left to people who work in fixed roles with permanent tasks". The chapter feels somewhat repetitive, in the uphill battle for validity, and more obstacles of change are presented:

* Preponderance of Training in Analytical Thinking
* Reliability orientation of key stakeholders
* Ease of defending reliability vs. validity

In this chapter, Roger also discusses how design-thinking companies have to develop new reward systems and norms, with an example of how to think about constraints. "In reliability-driven, analytical-thinking companies, the norm is to see constraints as the enemy", whereas when validity is the goal "constraints are opportunities" and "they frame the mystery that needs to be solved".

6. World-class explorers: Leading the design-thinking organization
In chapter six several interesting cases, and approaches of different CEOs, are presented, one being the widely covered case of Guy Laliberté, and his Cirque du Soleil. Again Roger adds to the existing body of knowledge with the twist of reliability vs. validity in creating a new market, and the knowledge funnel taking a one-off street festival into an unstoppable international $600 million-a-year business with four thousand employees. Laliberté has reinvented Cirque's creative and business models time and time again, "usually over protests that he was fixing what was not broken and that he could destroy the company". Other CEOs and cases covered in the chapter are James Hackett of Steelcase, Bob Ulrich of Target, and Steve Jobs of Apple.

The role of the CEO and different approaches to build design-friendly organizational processes and norms into companies are discussed referring to the different cases presented.

Again, Roger returns to the reliability vs validity battle, now from a CEO perspective with terms such as "resisting reliability", "those systems-whether they are for budgeting, capital appropriation, product development...", and "counter the internal and external pressures toward reliability".

7. Getting personal: Developing yourself as a design thinker
In the final chapter the focus is on how a non-CEO can function as a design thinker and develop skills to individually produce more valid outcomes even in reliability-oriented companies. Roger refers back to his previous book The Opposable Mind, and the concept of a personal knowledge system as a way of thinking about how we acquire knowledge and expertise. The knowledge system has three components:

* Stance: "Who am I in the world and what am I trying to accomplish?"
* Tools: "With what tools and models do I organize my thinking and understand the world?"
* Experiences: "With what experiences can I build my repertoire of sensitivities and skills.

Roger then presents the design thinker's stance, key tools (observation, imagination, and configuration), and how to obtain experiences by trying new things and test their boundaries.

Roger also presents five things that the design thinker needs to do to be more effective with colleagues at the extremes of the reliability and validity spectrum:

* Reframe extreme views as a creative challenge
* Empathize with your colleagues on the extremes
* Learn to speak the languages of both reliability and validity
* Put unfamiliar concepts in familiar terms
* When it comes to proof, use size to your advantage


This is a great book and I recommend business developers and business model innovators to buy it, as it is a quick read with several important concepts and interesting cases to learn from. I believe design thinking has the potential to help managers break out from the Matrix they live in and again realize the real world behind the existing algorithms.


Disclaimer:
I read the book at the beautiful cliffs of Vernazza in Italy, and was in a very good mood. I actually read the book twice.

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Customer Rating:
Summary: Overcoming Organization Constraints in Thinking
Comment: The great divide between the practical operational demands of business and the more "loose" work of creativity and innovation comes together in the well structured, and logical flow of thought in Design of Business. The book builds it's premise on the idea of thought stages that businesses go through - a knowledge funnel - that seeks to move the questions of what a business is trying to do down to an algorithm that has repeatable results. The challenge surrounds how individuals move back and forth in the funnel and keeping pace with a predictable structure, but always leaving room for the what could be.

The "camps" of thought are well defined by those who cling to the comfort zones of proven algorithms and process (reliability) and those who focus on visualizing what could be and are less worried about the trifles it takes to get there (validity). Martin outlines the cultural norms within organizations and the constraints they apply to bridge the Yin and Yang of design thinking whether its financial structures (what do we track and why), reward systems (can failure be the intent and therefore the reward?) and other day-to-day key operations that focus purely on rational elements and squeeze out any variance.

The overlap between analytical and intuitive thinking is where design thinking lives. Martin proves the existence of such a "happy medium" with Proctor and Gamble's R&D approach which was an initiative that did things differently by using outside innovators to integrate in with existing design teams. It helped to shake things up, build a network of knowledge, and catapult earnings and new product designs.

Martin offers several methods to bring design thinking into organizations. Practically speaking, the techniques focus heavily on negotiation and clarifying potential outcomes that satisfy some of the reliability needs without crushing the validity orientation. As a guide to help cultures in organizations, Martin's guidance emphasizes the need for proof in endeavors - both from the perspective of taking a risk on something uncomfortable, but also the room to make calculated failures that don't completely disrupt the business. It's the classic tolerance scheme for trial and error and Martin's proposal helps this conversation.

While the battle of thinking and approach in the Design of Business may not be a new one, Martin weaves a well crafted narrative to how companies need to rethink their thinking and jumpstart legacies of the past so that organizations can ultimately leapfrog the competition. He backs his assertions with well researched interviews where the change has taken place. It's worth distributing this book to a mix of analytics and visionaries and having a dialogue - it will be worth the debate that ensues.

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Customer Rating:
Summary: Vital insights that took me years to learn--now in a book!
Comment: Let me start off by saying that "Design Thinking" was one of the BIG IDEAS that made its way through the executive ranks at my employer, Red Hat. Design thinking represented a new paradigm--always a challenge to any corporate environment--to a company that was already doing quite well effecting its own paradigm shift on the software industry from proprietary ownership of ideas to the free flow of ideas enabled by open source software. It would have been easy to argue, intellectually, culturally, or strategically, that we didn't need a new to adopt or even consider a new paradigm because, to paraphrase the French soldiers in Monty Python and the Holy Grail (Extraordinarily Deluxe Three-Disc Edition) "we've already got one". That we did, and that it was wickedly successful, speaks to the power of the paradigm of design thinking. I remain convinced that virtually any corporate strategy and virtually any corporate paradigm can be improved by adopting and incorporating design thinking--it's 5-stars good!

As teachers in the subject go, none is more qualified than Roger Martin. And it was a particular delight to me to have my knowledge of the subject expanded by reading details in this book that were previously unknown to me. It also made me aware of just how well trained were my mentors in the subject, as virtually every term used in the book matched the definition and usage I was taught in my training. For that reason alone, should you wish to learn and promote design thinking, read this book so that others will immediately know what you are talking about!

I wrestled with whether to give this book the 5 stars that the subject deserves vs. the 4 that I gave it. I decided to give it 4 stars because I believe the book falls short of being the kind of book you could hand off to somebody and say "read this book and it will change your life". It is missing the design beauty of Beautiful Evidence, the consistent dazzle of Outliers: The Story Of Success, and the paradigmatic reveal of The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization. But not by much. And perhaps had I read this book before my own design thinking epiphany, perhaps I would have credited the book, rather than its ideas, with the life-changing insights that I have received because of this author's work.

Perhaps my greatest quarrel with the book is that for all its goodness in explaining the paradigm and giving concrete examples (which are truly excellent), I felt that the advice given about how to bring them into a corporate environment was a bit too wordy for my taste. Perhaps that is because I have come to believe that "there is no try; there is only do or do not" and the advice was written for people who want to convince people to try. I felt that diluted an otherwise potent message. But again, not too much--just shy of five stars. The book is short, and if you believe in "Do!" then this book will give you the real story from one who knows it best.

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Customer Rating:
Summary: Disappointing Book
Comment: There are part of the book that I like, but generally, the examples are weak and much of the book seems to be filler.

For instance, the exploration vs. exploitation mindsets (looking forward to new business opportunities without huge amounts of proof vs. basing future business decisions based on data from an existing business) and how they affect companies is very interesting and useful. A seemingly endless section on how innovative RIM is when the author is on the RIM board seems like laziness and a wasted case study. If mobile phone case studies are what he's looking for , why not something more up to date such as Google (Apple is pretty overdone at this point... though not in this book).

Generally, this would have been best not as a book, but rather as a New York Times article or even something of New Yorker length.

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