Intuition and Deliberation for Better Decision-Making

We live in an age of change and uncertainty. For businesses, this means that only the most versatile survive —innovate or die. Simply adapting to the digital age is not enough: company survival requires explorative business strategies, to find new opportunities to improve and renew products and services. To attain explorative success you need a combination of both deliberate thinking and intuitive thinking. This article explores how you can balance the two.

In this article we bridge theory and practice on organizing imagination and innovation by extracting key implications and offering new insights to innovation practitioners. This article builds on The Role of Intuition and Deliberation for Exploitation and Exploration Success by Kurt Matzler, Borislav Uzelac, and Florian Bauer and explains why intuition and deliberation jointly make for better decision-making.
Rapid developments in computing have led to an ever-increasing digitization, causing unprecedented rates of change to society. We live in an age of change and uncertainty.
 The Role of Intuition and Deliberation for Exploitation and Exploration Success, examines the link between explorative and exploitative business strategies on the one hand, and intuitive and analytical deliberate thinking on the other. Its authors, Kurt Matzler, Borislav Uzelac and Florian Bauer find that:

• Intuitive and deliberate thinking are not two opposing poles of a continuum, but two intertwined modes of information processing.
• Both intuitive and deliberate decision-making are positively associated with explorative success.
  

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Sound Judgment and Strategic Partnerships

Business alliances remain a tricky thing. On the one hand, alliances allow companies to tap into new markets and growth platforms. At the same time, forming alliances is risky, as it demands trust building and deep knowledge sharing with external parties. This article provides a pathway for successfully managing business alliance formation.

Business alliances remain a tricky thing. On the one hand, alliances allow companies to tap into new markets and growth platforms. At the same time, forming alliances is risky, as it demands trust building and deep knowledge sharing with external parties. In an uncertain business environment, today’s friend may be tomorrow’s enemy.

Nonetheless, the rise of open innovation has led many to believe that collaboration has become a key way of securing future innovation management and creativity —blurring the traditional lines between corporations and institutions within and across sectors. This provides new incentives to turn outwards and form business alliances.

“Always consider new alliances carefully, without basing your judgment on past experiences only. ”

A real skill

The first step is to realize that business alliance formation is a real skill to be built and developed. Alliance building is similar to M&A –mergers and acquisitions. There are a lot of statistics about the rate of success of this type of business development. Most research indicates that M&A activity has an overall success rate of about 50%.

Purpose, people and prenups

Many consultants and business schools stress the importance of diligent post-deal execution of alliance, and integration of acquisitions. This is crucial in cases of very clear cost synergies, however, in cases of entrepreneurial endeavors this can be unnecessary limiting.

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Risks in Innovation Leadership Talent

You don’t need to look far to see risk in innovation leadership. Yet many entrepreneurs lack a sufficient understanding of how to judge and deal with risks. In this article we introduce a model for classifying risks in innovation leadership. In turn, we discuss how some of these risks can be reduced or averted, and in some cases even embraced and reframed to mean something positive.

According to some statisticians, more than half of all startups fail within their first five years of existence; figures on innovative startups are even bleaker. A first round of investment is no guarantee for success, either-  the generally accepted figure is that roughly three-quarters of venture-backed firms won’t ever return their money.

“One of the inherent virtues of innovation leadership is that the excitement of the opportunity outweighs the perceived risks of loss and failure. ”

Low probability – low impact risks: to be ignored

Risks that have a low likeliness to occur and low potential impact are not worth spending much, if any, time on. 

Low probability – high impact risks: to be insured

Risks that have a high potential impact but a low probability can often be averted through insurance. This is desirable when the benefits of insurance are likely to outweigh the costs.

High probability – low impact risks: to be averted

These risks, due to their low severity, are as inconvenient as they are avertable. Examples of risk in this category are: a key team member becomes ill just before an important deadline; a computer crashes with all the customer data information.

High probability – high impact: to adapt to

The risks in Quadrant 4 are of key concern for innovation leadership (and any existing business), as they are too costly to insure and cannot simply be ignored or averted due to their severity.These risks are the real company killers, often tapping into the core beliefs and (informed or non-informed) assumptions that businesses have built their product or services on. All elements of the enterprise (market, competition, leadership, operations, legal, finance) are exposed to such risks.

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Are You Focusing on the Right Pilot?

Piloting in business innovation means testing an idea effectively. This is not a straightforward process and requires addressing the right questions: What idea should we test? Which aspect of it? How should we go about testing? How should we measure the results? What do we allow these results to mean and what do we do afterwards?

Forget selection – Test all your ideas

“I think there is a world market for maybe five computers.” – Thomas Watson, chairman of IBM, 1943

“We don’t like their sound, and guitar music is on the way out.” – Decca Recording Company on declining to sign the Beatles, 1962

“There is no reason for any individual to have a computer in his home.” – Ken Olson, president of Digital Equipment Corporation, 1977

When you do need to choose

Testing everything won’t work when you have too many concepts. We are constantly choosing between ideas, so it helps to become aware of what should and should not influence choices. A legitimate approach is to strive for a multitude of concepts. In her book Creative Conspiracy, Leigh Thompson argues that “striving for quality results in less creativity than when striving for quantity.” The approach that we call “producing for waste” means you will end up with a whole batch of ideas from which to choose.

So how can we select an idea to pilot if we are famously flawed at predicting successes in our own domain? The answer is to be systematic. We have created a four-step checklist when selecting which concepts to pilot:

1. Check your innovation priorities
2. Check the origin of the idea
3. Check potential impact along important KPIs
4. Check that the path of implementation will fit your person or culture 

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Innovation is an essential and important thing which is required by any business organization to achieve the planned targeted goals. Now a days online learning Innovation help organizations in may ways starting from learning new skills, building creativity & enhancing leadership among employees which is the key factor to get success in this competitive environment.

The creative Destruction of Your Job

With the exponential growth in the internet, we have seen similar growth in internet based companies and services. Many of these companies and services exploit the internet’s connectivity to be able to reach people who were previously excluded from a typical business’ day-to-day affairs. These individuals are often willing to offer their “expertise” in return for money, recognition or simply because it is fun (Ipeirotis, 2010). More importantly they are often willing to offer their “expertise” at a much lower price than an expert carrying out the same work with innovation management processes.

Admittedly, professionals in the respective industry have the opportunity to jump boat into the new form of sharing economy. It is an option but a very uncertain one. The sharing economy is often based on one-off opportunities for its workers. Sure there is money to be earned but it is typically not a stable wage and one that is not as well paid as the original job done solely as a professional. Read more about the creative destruction of your job here

From “Premium” to “Good Enough”: Frugal Innovation in the Emerging Markets

 Frugal engineering means developing simple products for emerging markets and is becoming increasingly important for many companies. Frugal products are not cheap or inferior, they are simplified and yet qualitatively robust. But how can frugal products be developed successfully?

A company that wants to successfully enter the emerging markets normally has to adapt and customize its products to often completely new market conditions. The customers there are demanding and price-cautious at the same time. They require the high quality of industrialized countries, yet they are not ready to pay for this quality.

“Frugal is not cheap or inferior, but simplified and good enough.”

Frugal engineering does not mean slimming the complex Western products to make them cheaper. How can for example a high-end European fridge-freezer machine be simplified for the Indian market, if there is neither enough space nor sufficient power supply in the narrow Indian kitchens? A lot of high-end products are simply not implementable in the emerging markets.

But how to develop products tailored to the emerging markets? The word “frugal” means “simple, but good”. In the industry it means designing functionally reduced and thus lower-priced, but qualitatively robust products. Frugal is not cheap or inferior, but simplified and good enough.

Local knowledge as innovation management fundament

The strategy of frugal engineering is to innovate in the target market on the basis of the local knowledge. The most important aspect is to identify the basic conditions and local customer needs through monitoring and active on-site participation. To understand the utility of a product it is absolutely essential to have access to the field, to approach local customers systematically and to be constantly present on-site, and thus receive the necessary insights.

“Frugal: Functional, Robust, User-friendly, Growing, Affordable, Local.”

Fundamental requirements for frugal products

For the construction of frugal products one should keep in mind the acronym that displays six main requirements for the frugal products:

• Functional: The product has to come with high-graded functionality. It cannot include any unnecessary extras or superfluous knickknacks and has to satisfy all fundamental needs in its basic functions. Its functional scope can be considerably limited, but it has to be tailored exactly for the key demands of local customers.
• Robust: The product developed for the emerging markets has to be highly resistant, low-maintenance and robust against climate factors, dust and poor infrastructure.
• User-friendly: The product has to be comprehensible, uncomplicated and easy to operate in both its composition and functioning.

For full blog visit>>http://www.innovationmanagement.se/2015/06/23/from-premium-to-good-enough-frugal-innovation-in-the-emerging-markets/

Innovation Management - The Boom – Not Doom – from Market Failure

New Sources of value

While it might seem that the disruption du jour is all anybody is ordering these days, making innovation, growth and new value seem like insurmountable things, businesses should focus on where they can find value most quickly. So why not begin where others have ended in non-consumption, organizational friction or market failure? Such unexpected failures provide opportunities for solutions, and solutions are the source of explosive value.
What do these three common challenges mean in business terms? Simply that the economics are not valuable enough to get folks to focus on them. Often, it seems that the problems are too unwieldy to tackle, the transaction costs are too high or the friction is too great to internalize the costs within a firm. However, understanding these issues can help explain why a vast number of businesses are difficult to franchise or scale, or a segment of a market is perceived to be of insufficient value, and therefore of no benefit or interest.

Take any expanding company and ask: what underlies your growth? Across industries and time, explosive value has come from addressing market failure, organizational friction, and non-consumption head-on, through the development and deployment of new assets and capabilities. These issues create a white space or void – an opportunity – in which an innovative solution can provide businesses with the value and growth they seek.

“Across industries and time, explosive value has come from addressing market failure, organizational friction, and non-consumption head-on”

Taking on Market Friction

An excellent example of taking on market friction is Uber. The essential value proposition of Uber is ‘convenience’ – get a car when and where you want it and the payment for the service is transparent. Eliminate the frictions of inconvenience and payment transactions and what do you get? Explosive growth.



“Market breakdown can be seen in Google and Apple iTunes l with material implications on explosive value creation (for them) and value destruction (for others).”

Finding Solutions to Market Failure

The gap between the significant need for innovation in this arena and the meager returns to those who invest in this innovation management which represents a market failure. How so? The typical pharmaceuticals business model is based on price-times-volume equals revenue opportunity, meaning investment focus. However, anti-microbial resistance does not follow this model because the more the drugs are used, the lesser the efficacy of those drugs.
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