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MDEI 625 The Innovation Course

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Glen Drummond

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Transcript of MDEI 625 The Innovation Course

MDEI 625 The Innovation Course
Week 2
Glen Drummond
e-mail: gdrummond@quarry.com
Phone: 519-664-2999 ex 2226
linkedin: ca.linkedin.com/in/glendrummond/
Course Overview
Learning Objectives
Reliability and Validity
Roger Martin
Advice on addressing the imbalance between reliability and validity in a business context Starts at 6.5 min in
Week x
Organizational Barriers to Innovation
Mind Map Questions
Week 8
Week 7
Innovation and Cognitive Biases
Cognitive Bias
How we decide
Week 10
Innovation and
Collective Process
Edward DeBono
Week 11
Innovation and Thinking
For next week
Mihalyi Csikszentmihalyi ('chick-sent-me-high-yee').
Week 12
"Domain, Actor, Field"
the Domain
(mis)Understanding Creative People
Wrap up
On Innovation and Keeping It Human
1. Become literate with ideas about "innovation" that have influenced contemporary business culture and society.
2. Develop your own mental model of the relationship between innovation, creativity, insight, strategy and customer experience.
3. Learn to diagnose constraints and barriers that could impair or prevent innovation

4. Develop an inventory of techniques to overcome constraints and barriers to innovation
Scheduling Short Seminars
You should have a scheduling e-mail now.

• If you have a conflict with the date, please advise by email.

• If for health or other reasons you need to postpone, we will reschedule you to the end of the series - there's time.

The Innovation Class Agenda: Jan 15 (class 2)
1 Orientation (and housekeeping)

2. Organizational Barriers To Innovation
- Video Roger Martin
- Discussion of Martin reading
- Some "Barrier" Stories

3. What can be done?

4. Orientation for class #3
Brief Introduction
Stories of Organizational Barriers to Innovation
"Toner Heads"
"Channel Conflict"
Thin Client Computing
"The "Task-based Worker"
Source-Visible Food
"Accounting Challenge"
For Discussion
"how will that help us sell more toner?"
What if people use this service instead of our package delivery service?
Are each of these unique and distinctive issues, or do they share characteristics or root causes?
Viewed in retrospect - would the potential solutions be unique, or
would they have common elements?
Strategic Barriers to Innovation
Syllabus: on LEARN
For Next Week

Reading for Deep Dives
-Clay Christensen: Marketing Malpractice
"Disruption" and

A case on "experience-based innovation"
Things we'll talk about:
Fort Dunangus
Blog Highlights
Short Seminar Schedule
Week 3
Segmentation and Innovation
Reading for Next Week
"Borges Map"

Week 5
Innovation and "Disruption"
Jason Landry
Bernice Ma
Rute Ojigbo
Anurag Rai

Stories of Organizational Barriers to Innovation
"Toner Heads"
"Channel Conflict"
Thin Client Computing
"The "Task-based Worker"
Source-Visible Food
"Accounting Challenge"
For Discussion
"how will that help us sell more toner?"
What if people use this service instead of our package delivery service?
Are each of these unique and distinctive issues, or do they share characteristics or root causes?
Viewed in retrospect - would the potential solutions be unique, or
would they have common elements?
Fort Dunangus
Preview on Reading
Week 6
Innovation and Complex Environments
A leader's framework for decision-making
Your Deep Dive reading for next week
On Amazon, or a bookseller of your choice
Jumping the Curve:
Innovation and Strategic Choice in an Age of Transition,
Nicholas Imparato and Oren Harari. 1994

Shifting Your Strategy from Products to Customers .
Niraj Dawar. 2013

The Medici Effect:
What You Can Learn from Elephants and Epidemics
Johansson, Frans. 2006

Serious Play: How the World's Best Companies Simulate to Innovate
Michael Schrage. 1999

Seizing the White Space:
Business Model Innovation for Growth and Renewal
Mark W. Johnson. 2010

Blue Ocean Strategy:
How To Create Uncontested Market Space And Make The Competition Irrelevant
W. Chan Kim;Renee Mauborgne. 2005

The Power of Pull:
How Small Moves, Smartly Made, Can Set Big Things in Motion Brown,
John Seely; Davison, Lang; Hagel III, John. 2010

The Innovator’s Dilemma:
When New Technologies Cause Great Firms to Fail
Clayton M. Christensen. 2013

The Myths of Innovation
Scott Berkun 2010

Ten Types of Innovation
Larry Keeley. 2013

20 second book reviews Deep Deep Dives
What does ideology have to do with innovation?
What do instrumental relations
have to do with ideology?
What's the antidote?
Foolishness, Provocation, and Abduction



Want Self/ Should Self Conflict
Short-term versus Long-term Incentives
Group Think
"Fast Thinking"
As we navigate our lives, we normally allow ourselves to be guided by impressions and feelings, and the confidence we have in our intuitive beliefs and preferences is usually justified. But not always. We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are.

Kahneman, Daniel (2011-11-01). Thinking, Fast and Slow (Kindle Locations 180-182). Doubleday Canada. Kindle Edition.
Are Innovators Immoral?
He was tried by the Holy Office, then found "vehemently suspect of heresy", was forced to recant, and spent the rest of his life under house arrest.[
Stories of Organizational Barriers to Innovation
"Toner Heads"
"Channel Conflict"
Thin Client Computing
"The "Task-based Worker"
Source-Visible Food
"Accounting Challenge"
For Discussion
"how will that help us sell more toner?"
What if people use this service instead of our package delivery service?
Are each of these unique and distinctive issues, or do they share characteristics or root causes?
Viewed in retrospect - would the potential solutions be unique, or
would they have common elements?
Fort Dunangus

Digital Photography

"Experiential Competitors"
For next week
Thinking about Thinking in Groups
Edward De bono Serious Creativity, pg 24-42
Stone Soup


"Flow" and creativity

When you can't solve the problem directly, solve a different problem
Or...What's Wrong with Just Try Harder?
Kinds of thinking
"A General Grammar" of Thinking
Assuming the propositions are sound, the rather stern logic of deductive reasoning can give you absolutely certain conclusions. However, deductive reasoning cannot really increase human knowledge (it is nonampliative) because the conclusions yielded by deductive reasoning are tautologies-statements that are contained within the premises and virtually self-evident. Therefore, while with deductive reasoning we can make observations and expand implications, we cannot make predictions about future or otherwise non-observed phenomena.
All men are mortal.
Socrates is a man.
Therefore Socrates is mortal.

conclusion guaranteed
conclusion only probable
CO2 creates a greenhouse effect. Human activity has increased C02 concentration in the atmosphere. Therefore human activity is producing global warming.
It is an important difference from deductive reasoning that, while inductive reasoning cannot yield an absolutely certain conclusion, it can actually increase human knowledge (it is ampliative). It can make predictions about future events or as-yet unobserved phenomena.
What if, we're doing it wrong?
While cogent inductive reasoning requires that the evidence that might shed light on the subject be fairly complete, whether positive or negative, abductive reasoning is characterized by lack of completeness, either in the evidence, or in the explanation, or both.
New problem discovery
Innovation and Creativity
The Concerto
The Portrait
High Culture
The Blues
Momo Guan
Chloe Luo
Khairunnissa Virani
This is Innovative!
Another consequence of limited attention is that creative individuals are often considered odd—or even arrogant, selfish, and ruthless. It is important to keep in mind that these are not traits of creative people, but traits that the rest of us attribute to them on the basis of our perceptions. When we meet a person who focuses all of his attention on physics or music and ignores us and forgets our names, we call that person “arrogant” even though he may be extremely humble and friendly if he could only spare attention from his pursuit. If that person is so taken with his domain that he fails to take our wishes into account we call him “insensitive” or “selfish” even though such attitudes are far from his mind. Similarly, if he pursues his work regardless of other people’s plans, we call him “ruthless.”

Csikszentmihalyi, Mihaly (2009-10-13). Creativity: Flow and the Psychology of Discovery and Invention (p. 10). HarperCollins. Kindle Edition.
Here’s a fun art story about the Romanian sculptor Constantin Brâncuși and Pablo “Art is theft” Picasso, from John Richardson’s A Life of Picasso: The Triumphant Years, 1917-1932 (Vol 3).

Brancusi, who’d had several of his sculptural ideas ripped off from Pablo, “was anything but an admirer of Picasso or his work”:

[He] disapproved of [one of] of Picasso’s fundamental characteristics—one that was all too familiar to the latter’s fellow artists and friends—his habit of making off not so much with their ideas as with their energy. “Picass is a cannibal,” Brancusi said. He had a point. After a pleasurable day in Picasso’s company, those present were apt to end up suffering from collective nervous exhaustion. Picasso had made off with their energy and would go off to his studio and spend all night living off it. Brancusi hailed from vampire country and knew about such things, and he was not going to have his energy or the fruits of his energy appropriated by Picasso. (From Austin Kleon) http://tumblr.austinkleon.com/post/23804706480
If I had to express in one word what makes their personalities different from others, it's complexity. They show tendencies of thought and action that in most people are segregated. They contain contradictory extremes; instead of being an "individual," each ofthem is a "multitude."

Rejection of "Either Or" thinking
or... Why "keep it simple stupid" may not be great advice for would be innovators
Energy and Repose
They consider the rhythm of activity followed by idleness or
reflection very important for the success of their work. This is not a
bio-rhythm inherited with their genes; it was learned by trial and
error as a strategy for achieving their goals.
2. Wisdom and Childishness
a certain immaturity,both emotional and mental, can go hand in hand with deepest insights. Mozart comes immediately to mind.
3. Playfulness and Discipline
Despite the carefree air that many creative people affect, most of
them work late into the night and persist when less driven individuals
would not.
4. Imaginative and Realistic
Great art and great science involve a leap of imagination into a world that is different from the present. What makes a novel idea creative is that once we see it, sooner or later we recognize that, strange as it is, it is true.
6. Humbleness and Pride
Their respect for the area in which they
work makes them aware of the long line of previous contributions to
it, putting their own in perspective. They're also aware of the role
that luck played in their own achievements. And they're usually so
focused on future projects and current challenges that past
accomplishments, no matter how outstanding, are no longer very
interesting to them. At the same time, they know that in comparison
with others, they have accomplished a great deal. And this
knowledge provides a sense of security, even pride

5. Extroversion and Introversion
In psychological research, extroversion and introversion are considered the most stable personality traits that differentiate people from each other and that can be reliably measured. Creative individuals, on the other hand, seem to exhibit both traits simultaneously.

7. Masculine and Feminine

When tests of masculinity/femininity are given to young people, over
and over one finds that creative and talented girls are more
dominant and tough than other girls, and creative boys are more
sensitive and less aggressive than their male peers.
This tendency toward androgyny is sometimes understood in purely
sexual terms, and therefore it gets confused with homosexuality. But
psychological androgyny is a much wider concept referring to a
person's ability to be at the same time aggressive and nurturant,
sensitive and rigid, dominant and submissive, regardless of gender.
A psychologically androgynous person in effect doubles his or her
repertoire of responses. Creative individuals are more likely to have
not only the strengths of their own gender but those of the other one,

8. Rebellious and Conservative
It is impossible to be creative without having first internalized an area of
culture. So it's difficult to see how a person can be creative without
being both traditional and conservative and at the same time
rebellious and iconoclastic.

But the willingness to take risks, to break with the safety of tradition,
is also necessary. The economist George Stigler is very emphatic in
this regard: "I'd say one of the most common failures of able people
is a lack of nerve. They'll play safe games. In innovation, you have
to play a less safe game, if it's going to be interesting. It's not
predictable that it'll go well."

9. Passionate and Objective
And a good creative person is well trained. So he has first of all an enormous amount of knowledge in that field. Secondly, he tries to combine ideas, because he enjoys writing music or enjoys inventing. And finally, he has the judgment to say, “This is good, I’ll pursue this further.”

Csikszentmihalyi, Mihaly (2009-10-13). Creativity: Flow and the Psychology of Discovery and Invention (p. 50). HarperCollins. Kindle Edition.

10. Work as Pain and Pleasure
"But unless I also enjoy the task, my mind is not fully concentrated. My attention keeps shifting to the clock, to daydreams of better things to do, to resenting the job and wishing it was over. This kind of split attention, of halfhearted involvement, is incompatible with creativity. And creative people usually enjoy not only their work but also the many other activities in their lives.

Csikszentmihalyi, Mihaly (2009-10-13). Creativity: Flow and the Psychology of Discovery and Invention (p. 76). HarperCollins. Kindle Edition.

1. Institutional barriers to innovation lurk in organizational culture
2. Received mental models of the customer, segmentation models, and the integrated framework of business model assumptions can thwart innovation.
3. The main way we are taught to think - emphasizing deduction, convergence, reliability and proof is insufficient preparation for the work of innovation.
4. Our collective practices around collaboration often amplify rather than correct for the biases in cognition and training that prevent innovation.
5. The existence of different creative problem-solving styles can be a barrier to creative collaboration, absent a process to harness the value of these contrasts.
7. The people among us who have the greatest capacity to bring about innovation also have characteristics that are easily misunderstood.
10. Work hard, but always playfully - it's more fun, and you'll accomplish more.
6. Notable innovation happens when a creative person makes a contribution that changes a domain, and is recognized by a field.
creativity results from the interaction of a system composed of three elements: a culture that contains symbolic rules, a person who brings novelty into the symbolic domain, and a field of experts who recognize and validate the innovation. All three are necessary for a creative idea, product, or discovery to take place.

Csikszentmihalyi, Mihaly (2009-10-13). Creativity: Flow and the Psychology of Discovery and Invention (p. 6). HarperCollins. Kindle Edition.
9.Questions have a longer half-life than answers
8. In considering the potential success and impact of a innovation, the important questions are less often technical, and more often human
(or ten lessons I took away from our conversations together )
The ultimate sweet tooth?


1. Christensen
2. Segmentation and innovation

Reading for Next Week
James March
The Disruption Machine
What the gospel of innovation gets wrong.
Borges Map
David Snowden
People with good intentions usually have few qualms about pursuing their goals. As a result, incompetence that would otherwise have remained harmless often becomes dangerous, especially as incompetent people with good intentions rarely suffer the qualms of conscience that sometimes inhibit the doings of competent people with bad intentions. The conviction that our intentions are unquestionably good may sanctify the most questionable means.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 135-137). Kindle Edition.
Moral Certainty
People desire security. This is one of the (half) truths of psychology (for people sometimes desire insecurity too). And this desire prevents them from fully accepting the possibility that their assumptions may be wrong or incomplete.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 445-446). Kindle Edition.
Clinging to Assumptions
Acting in a ritualized way has its advantages: we don't have to start from scratch in each situation to find what the best course of action might be. This is probably why we tend to follow ritual, and it is often a reasonable choice. On the other hand, "methodism," as Carl von Clausewitz (1780-1831) 1831) called this tendency, can impose a crippling conservatism on our activity. Many psychological experiments have demonstrated how people's range of action is limited by their tendency to act in accordance with preestablished patterns. To be successful, a planner must know when to follow established practice and when to strike out in a new direction.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 478-484). Kindle Edition.
This distinction between positive and negative goals may sound academic, demic, but it is important. With a positive goal we want to achieve some definite condition. With a negative goal we want some condition not to exist. With a negative goal what it is I actually want is less clearly defined than with a positive goal. Negative goals (intentions to avoid something) are therefore often defined in quite vague, general terms: things have to change "somehow"; the present state of affairs, at any rate, is intolerable. Positive goals can be defined generally, too: "I need something to eat," for example. But it is inherent in the logic of "not" that negative goals are more likely to be vaguely defined. A "nonstove" or "nonchair" is more difficult to define than a "stove" or "chair" (though no less easy to recognize-thus a negative goal is not necessarily unclear).

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 507-512). Kindle Edition.
Negative Goals
Thinking by analogy may seem, after the fact, a rather primitive and obvious step, but many of our participants never make use of it and therefore bog down hopelessly in concrete situations. The prerequisite for making connections between watch production and rolling cigarettes and therefore for thinking of useful questions to ask-is an abstract understanding of watch manufacturing as a production process. For reflection of this kind it is essential to understand the relationships between broad and narrow concepts, between the abstract and the concrete. These relationships suggest to us how we can apply knowledge from one field in another.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 816-819). Kindle Edition.
The fact that reductive hypotheses provide simplistic explanations for what goes on in the world accounts not only for their popularity but also for their persistence. Once we know what the glue is that really holds the world together, we are reluctant to abandon that knowledge and fall back on an unsurveyable system made up of interacting variables linked together in no immediately obvious hierarchy. Unsurveyability produces uncertainty; uncertainty produces fear. That is probably one reason people cling to reductive hypotheses. People use many dodges to defend their pet hypotheses against logical argument or the evidence of experience.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 973-976). Kindle Edition.
Reductive Hypotheses
To the ignorant, the world looks simple. If we pretty much dispense with gathering information, it is easy for us to form a clear picture of reality and come to clear decisions based on that picture.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 1057-1058). Kindle Edition.
For every complex problem, there is an answer that is clear, simple, and wrong.
(H.L. Mencken)
We may resort to "horizontal flight," pulling back into a small, cozy corner of reality where we feel at home, like the Greenvale mayor trained in social work who finally focused all her attention on one troubled bled child. Or we may resort to "vertical flight," kicking ourselves free of recalcitrant reality altogether and constructing a more cooperative image of that reality. Operating solely within our own minds, we no longer have to deal with reality but only with what we happen to think about it. We are free to concoct plans and strategies any way we like. The only thing we have to avoid at all costs is reestablishing contact with reality.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 1110-1113). Kindle Edition.
Flight from Reality
What can we learn from such training? We can learn that it is essential to state goals clearly. We all know we should do that, but we rarely encounter the necessity. We can learn that we cannot always realize all our goals at once, because different goals may contradict one another. We must often compromise between different goals. We can learn that we have to establish priorities but that we cannot cling to the same priorities forever. We may have to change them. We can learn that in dealing with a given configuration we should form a model of the system. We must anticipate side effects and long-term term repercussions and not just let them roll over us. We can learn how to adapt information gathering to the needs of the task at hand, neither going into excessive detail nor stopping too short. We can learn the consequences of excessive abstraction. We can learn the consequences of hastily ascribing all events in a certain field to one central cause. We can learn when to continue gathering information and when to stop. We can learn that we tend toward "horizontal" or "vertical" evasion and that the tendency can be controlled. We can learn that we sometimes act simply because we want to prove to ourselves that we can act. We can learn the dangers of knee-jerk "methodism." We can learn that it is essential to analyze our errors and draw conclusions clusions from them for reorganizing our thinking and behavior.

Dietrich Dorner. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations (Kindle Locations 2038-2047). Kindle Edition.
The Logic of Failure
The optimism bias is, by definition, our tendency to overestimate the probability of positive events and underestimate the probability of negative ones. That’s not all. Optimistic people imagine positive future events with greater vividness and detail than negative events and imagine them occurring nearer in time. So the more optimistic you are, the more likely you are to imagine positive events as nearer in time, with greater detail, and with higher probability than negative events.14 Optimism thus modulates the same factors that influence the value of anticipation: predicted pleasure, vividness, the expected time of the event, and its probability.

Sharot, Tali (2011-06-21). The Optimism Bias: A Tour of the Irrationally Positive Brain (Kindle Locations 1948-1953). Knopf Canada. Kindle Edition.
Burying Your Head in the Sand Consider the following short list of events. Try to estimate your probability of encountering these events in your lifetime (if you have already experienced some of them, assess your likelihood of experiencing them again). How likely are you to: have cancer? get a divorce? lose your job? Let’s consider the first question. What probability did you assign it? In the United States, cancer, in its different forms, accounts for approximately a quarter of all deaths.7 The likelihood of having cancer in your lifetime is, of course, larger—roughly 33 percent. Was your estimate higher or lower? Just as the Russians underestimated the likelihood of a German invasion, most of us tend to underestimate the probability of negative outcomes in our lives. For the first question (the likelihood of having cancer), most of us would assign a probability lower than 33 percent, and for the second question (the likelihood of getting a divorce), most of us would assign a probability lower than 50 percent (yes, in Western culture, about 50 percent of all marriages end in divorce). In a series of studies, Neil Weinstein (who coined the term optimism bias) showed that people believe they are less likely than average to suffer misfortunes (such as being fired from a job, being diagnosed with lung cancer, developing a drinking problem). Simple math will show that if most people claim their chances of experiencing a negative life event are less than average, then clearly they are wrong. We can’t all do better than the average Joe. Maybe not, but deep down we believe we can.

Sharot, Tali (2011-06-21). The Optimism Bias: A Tour of the Irrationally Positive Brain (Kindle Locations 2979-2994). Knopf Canada. Kindle Edition.
What explains these findings? It seems that people are subject to “bounded
ethicality”; that is, our morality is constrained in systematic ways that favor self-serving
perceptions, which in turn can result in behaviors that contradict our intended ethical
standards (Banaji, Bazerman & Chugh, 2003). We introduce a temporal dimension to
help explain why people are ethically bounded. In doing so, we argue that the temporal
inconsistency between forecasts, present behavior, and memories masks our true
(un)ethical self and thus prevents us from being as ethical as we imagine ourselves to be.
The Paradox of Choice
So it seems that neither our predictions about how we will feel after an experience nor our memories of how we did feel during the experience are very accurate reflections of how we actually do feel while the experience is occurring. And yet it is memories of the past and expectations for the future that govern our choices. In a world of expanding, confusing, and conflicting options, we can see that this difficulty in targeting our goals accurately—step one on the path to a wise decision—sets us up for disappointment with the choices we actually make.

Schwartz, Barry (2009-10-13). The Paradox of Choice (p. 52). HarperCollins. Kindle Edition.
Ethics & Morals
this: We have an automatic system that “inspects” action plans and sounds the alarm whenever it detects a harmful event in an action plan (e.g., running someone over with a trolley). But (drumroll, please . . . ) this action-plan inspector is a relatively simple, “single-channel” system that doesn’t keep track of multiple causal chains. That is, it can’t keep track of branching action plans. Instead, when it’s presented with an action plan for inspection, it only sees what’s on the primary causal chain. Why would it be like that? Think about how you remember song lyrics: What’s the third sentence of “I’ve Been Working on the Railroad”? Even if you know the answer, you probably can’t pop right out with it. You have to start from the beginning and work your way forward: I’ve been working on the railroad all the live-long day. I’ve been working on the railroad just to pass the time away. Can’t you hear the whistle blowing? . . . Instead of processing the entire song at once, you work your way through the song, counting on the fact that each segment pulls along the one behind it.

Greene, Joshua (2013-10-31). Moral Tribes: Emotion, Reason, and the Gap Between Us and Them (pp. 234-235). Penguin Group US. Kindle Edition.
Logical Fallacy

Group Think

Availability Bias
A bat and ball cost $ 1.10. The bat costs one dollar more than the ball. How much does the ball cost?

Kahneman, Daniel (2011-11-01). Thinking, Fast and Slow (Kindle Locations 822-824). Doubleday Canada. Kindle Edition.
The bat-and-ball problem is our first encounter with an observation that will be a recurrent theme of this book: many people are overconfident, prone to place too much faith in their intuitions. They apparently find cognitive effort at least mildly unpleasant and avoid it as much as possible.

Kahneman, Daniel (2011-11-01). Thinking, Fast and Slow (Kindle Locations 838-840). Doubleday Canada. Kindle Edition.
A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact. But it was psychologists who discovered that you do not have to repeat the entire statement of a fact or idea to make it appear true. People who were repeatedly exposed to the phrase “the body temperature of a chicken” were more likely to accept as true the statement that “the body temperature of a chicken is 144 °” (or any other arbitrary number). The familiarity of one phrase in the statement sufficed to make the whole statement feel familiar, and therefore true. If you cannot remember the source of a statement, and have no way to relate it to other things you know, you have no option but to go with the sense of cognitive ease.

Kahneman, Daniel (2011-11-01). Thinking, Fast and Slow (Kindle Locations 1145-1151). Doubleday Canada. Kindle Edition.
SUBSTITUTING QUESTIONS I propose a simple account of how we generate intuitive opinions on complex matters. If a satisfactory answer to a hard question is not found quickly, System 1 will find a related question that is easier and will answer it.

Kahneman, Daniel (2011-11-01). Thinking, Fast and Slow (Kindle Locations 1753-1755). Doubleday Canada. Kindle Edition.
Our Journey through ideas about innovation

Our Conversation this evening
Ideas about innovation -Business concepts

Ideas about barriers to innovation - Management Observations
Ideas about how we make sense of the world

Ideas about collective meaning-making - strategies and heuristics

Thoughts about thinking
Time Limit: 40 minutes to create: 20 to report, reflect & discuss
Basadur Challenge Mapping

PROBLEM Formulation

Step 1: Problem Finding literally consists of finding or anticipating problems and opportunities. The result is a continuous flow of new, present and future problems to solve, changes to deal with and capitalize on, and opportunities for improvement for the organization.

Step 2: Fact Finding consists of deferring convergence and actively gathering information potentially related to a fuzzy situation, and then evaluating and selecting those facts most likely to be helpful in developing a set of fruitful, advantageous problem definitions in the next step.

Step 3: Problem Definition consists of first using divergence to convert the key facts the group selected into a wide variety of creative “how might we?” challenges, and then selecting one (or a few) which seem most advantageous to solve. This step is about making sure the group is asking the right questions and that it comes up with the best definitions of the problem.

SOLUTION Formulation

Step 4: Idea Finding consists of deferring convergence while actively creating large number of potential solutions to the target problem definitions, and then converging smaller number of potentially good solutions for evaluation.

Step 5: Evaluation and Selection consists of open-mindedly generating a wide variety of criteria potentially useful for making an unbiased and accurate evaluation of the potential solutions, and then selecting and applying the most significant criteria to decide which possible solutions are the best to take forward towards implementation.

SOLUTION Implementation

This stage recognises that problem solving does not end with the development of a good solution. Unless the solution is skilfully prepared for implementation, and it implementation skilfully executed, the problem solving will not have been successful. How to gain support for risking change, how to build commitment to plunge into unknown waters, how to tailor a solution for adaptation to specific circumstance, and how to follow-up to ensure permanent installation of the new change, is a significant, creative venture of its own.

Step 6: Action Planning involves thinking up specific action steps which will lead to a successful installation of the new solution.

Step 7: Gaining acceptance recognises that the best laid plans can be scuttled by resistance to the new changes involved. This step looks at the ways ownership in the solution can be generated, people can be shown that the solution benefits them, and potential problems caused by the solution can be minimized.

Step 8: Action Taking action recognizes that the actual doing of an action step is an integral part of the decision making and problem solving process, and not to be taken for granted. No matter how carefully thought out the specific steps in a plan of action, it still remains to do the steps. This step recognizes the need to “get on with it” and learn from taking action.
• Instructor Evaluations
• Seminars
• Conference Day
• Creativity and Innovation
• Course Retrospective Wrap-up
1. Purpose

To ready our team to translate theory into practice.

2. Challenger Theory: Foundational Premises

a. The complexity of selling to consensus

i. 5.4 to 6.8

ii. Maximum conflict point

iii. Typical effect on sellers of buyer dysfunction


b. A Strategy that works in this context – “challenger selling”

i. The research, a seller typology, and the challenger

ii. The challenger’s method - the concept of the reframe

iii. Breaking down mental model A – leading to Mental model B

1. Reframe examples (from our own work and elsewhere)

c. The Challenger marketing problem

i. A problem of scaling challenger selling

ii. A response to the 57% problem

iii. The concept of mobilizing behavior

iv. Mobilizing triggers: business, professional and identity value

v. The concept of “commercial insight”

1. Leads to, not with the value proposition

2. An observation about how the customer sees the world

3. An experience through which the customer grows

3. Challenger Content Architecture

a. The process: Commercial insight, Referral, Architect Workshop, Briefs, challenger content creation, Implementation and measurement.

b. The SIC framework : Spark, Introduce Confront

i. SIC examples – CEB

ii. SIC example: Quarry – realsuite case

4. Workshop – Case

5. Wrap

"Challenger" Theory and Practice
The challenge of selling to consensus
"a metaphor"
An Irresponsible Sketch of The Consensus Buying Journey


Maximum Conflict
First Contact
"Challenger Selling" A strategy for the Consensus Purchase
A seller typology - some very different styles

A success factor - "you're doing it wrong"
(and by "doing," I mean looking at it the wrong way)

Learning as a driver of customer loyalty

The method: "Reframe" - Reset buyer's criteria and priorities

Demonstrable applications from our history:
Philips, Slipstream, BLJC, RealSuite, Proven Seed, Norton Lounge )

How it's done:
First - Break down mental model A,
Only then - build up Mental Model B

Challenger and the problem
of Sales-Marketing Alignment
•  The 57% problem

implication: It's too late to reframe if you leave it in the hands of sales
CEB's Response
Challenger Marketing Architecture
• Target "mobilization"
• Leverage triggers in business, professional and identity value
• Organize around a core "commercial insight"
• Parse in a sequence that fits with the available attention and involvement of the audience:
• Spark
• Introduce
• Confront
The difference between Thought Leadership and
Commercial Insight
One says "I'm smart too."
The other leads distinctively back to your offer.
Spark Content
• Was it frame-breaking?

• Did it hook the mobilizer into revisiting her mental model?

• Was the tactical expression easily consumable without undue time or prior topic involvement?

• Is the spark content type compatible with viral distribution?

• Did the content lead the mobilizer to learn more?

Evaluating Introduce Content
• Does it lay out the frame-breaking idea in more detail?
• Does it present the rational evidence pertinent to the reframe? (leveraging business value, professional value.)
• Does it make a powerful emotional appeal that breaks the customer's frame? (leveraging identity value?)
• Is the content type compatible with the needs of the "introduce" stage? (authority, credibility, cognitive style etc.)
• Does it lead to the question of how this issue applies in the mobilizer's particular case?
Confront Content
• Does it confront the mobilizer with the frame-breaking idea in the context of the negative aspects of her current experience?
• Does it cause her to pressure test her own assumptions - her current mental model?
• Does it motivate her to take action and lead others to do so?

Does the Content Architecture work as a System?
• What did you notice that was interesting, or unexpected?

• What new questions emerge in your mind about the use of the Challenger framework?
MDEI 625- 2018
What is Innovation?
For me, a feature of scholarship that is generally more significant than relevance is the beauty of the ideas. I care that ideas have some form of elegance or grace or surprise—all the things that beauty gives you.
High Dimensionality
Why we need more of it
Real Problems
Why you want to be good at it
A High-Dimensional Problem
An organizational context
A socio-economic context
An intellectual context
A cognitive context
It's a multi-dimensional
So how does this relate to the course?
Discussion, not didacticism


Curiosity driven

Conceptual skills development
Wald reasoned that those planes that were actually hit in the undamaged areas he observed would not have been able to return. Hence, those undamaged areas constituted key areas to protect. A plane damaged in said areas would not have survived and thus would not have even been observed in the sample. Therefore, it would be logical to place armor around the cockpit and engines, areas observed as sustaining less damage than a bullet-riddled fuselage.
Book the day: April 2 2018

Final Presentation - Conference Day
1. One of the most important things organizations can do to improve innovation, is to stop preventing it.
Three Macro Themes of DEI 625
Some barriers to innovation rest in the foundations of human cognition. To become better at innovation, we need to understand these barriers and work on them.

3. Innovation is a group practice - and so, to become effective at innovation, we need to become expert at collaborative creativity
“For every complex problem, there is an answer that is clear, simple and wrong.” H. L. Mencken
The perfect situation would be
characterized by high validity
and high reliability, so why does validity so often get traded away in favour of reliability?
"Systemic" versus "simple" causality
Week 4
Jan 29, 2018
Innovation and the Conceptual Infrastructure


Chao Yang
Xuanchen Zhang
Christabelle Baako
Jan 29th 2018

Deciphering Drucker


For next week:
Deciphering Drucker
scroll to 5:46
Joe Pine Multiverse 2010
Privacy by design

Innovation and Equilibrium
Deep Deep Dives
15%, due end of term, but this is "reading" week coming up
Angie Hodder,
Maria John,
Charen Koneti
Warren Kong
The KISS principle,
and the Dunning Kruger Effect
Best Practices
Expertise can indeed be the enemy of breakthrough thinking. The more you know about a particular topic, the more difficult it is for you to think about it in a different way. Your solutions will most likely be “been there, done that” ideas that are limited to your area of expertise. If you want breakthroughs, you need to bring together people from a wide range of disciplines, backgrounds, and experiences.

Shapiro, Stephen M. (2011-09-29). Best Practices Are Stupid: 40 Ways to Out-Innovate the Competition (Kindle Locations 347-350). Penguin Publishing Group. Kindle Edition.
Expertise and Diversity
What does brain surgery have to do with the green revolution?
Simple Contexts: Best practices (known knowns)

Complicated Contexts - Methodologies (known unknowns)

Complex Contexts - Emergent processes (unknown unknowns)

Chaotic Contexts - Parallel processes ( let 1000 flowers bloom)

Let's play a game:
I'll share a bias,
you share an example

Rule: All the beans from this bag are white.
Case: These beans are from this bag.
Result: These beans are white.

Case: These beans are from this bag.
Result: These beans are white.
Rule: All the beans from this bag are white.

Rule: All the beans from this bag are white.
Result: These beans are white.
Case: These beans are from this bag
Three forms of Reasoning: Definitions from CS Peirce
David Huron, Semiotics, Music, Emotion
Abductive Arguments
2.2.1 Abduction
Compare the reasoning in (17a) and (17b):
(17) a. Whenever it rains, the streets get wet. It was raining last night. Therefore, the streets
must have got wet.
b. Whenever it rains, the streets get wet. The streets are wet now. Therefore it must have
(17a) is an example of the familiar Modus Ponens. Given that (i) rain causes wetness of the
streets, and (ii) rain (the cause) is observed, we conclude that wetness of the streets (the effect)
must have happened. In other words, we infer the effect from the cause in (17a).
In contrast, we are inferring the cause from the effect in (17b), reversing the direction of
inference. It was philosopher Charles Sanders Peirce who, noticing the use of this form of
reasoning in everyday life and academic knowledge, called it abduction (to distinguish this
mode of reasoning from deduction.)
Abductive reasoning is common in the justification of interpretations, in almost all academic
fields outside of mathematics and logic. The form of reasoning that doctors use in diagnosing
diseases from symptoms, for instance, is abductive. Take the following example:
(18) When someone has a heart attack, (s)he tends to have a feeling of strangulation, pain in the
chest radiating to the left shoulder and arm, abnormal perspiration, shortness of breath, and
Fanny Jenkins has just experienced a feeling of strangulation, pain in the chest radiating to
the left shoulder and arm, abnormal perspiration, shortness of breath, and nausea.
Therefore it is reasonable to conclude that Fanny Jenkins had a heart attack.
To see why (17b) and (18) are examples of good reasoning while (19a) and (19b) are not, it is
necessary to spell out the rule of abduction:
Given that: P is the best available explanation for Q
and Q is true
it is reasonable to conclude that: P is true
in the absence of (i) evidence to the contrary, and
(ii) a better or equally good alternative explanation for Q.
The crucial ingredient here is: in the absence of evidence to the contrary and a better or equally
good alternative explanation for Q. This specification is absent in Modus Ponens.
Abduction is the process of forming an explanatory hypothesis. It is the only logical operation which introduces any new idea; for induction does nothing but determine a value, and deduction merely evolves the necessary consequences of a pure hypothesis.
Deduction proves that something must be; Induction shows that something actually is operative; Abduction merely suggests that something may be.
[Abduction's] only justification is that from its suggestion deduction can draw a prediction which can be tested by induction, and that, if we are ever to learn anything or to understand phenomena at all, it must be by abduction that this is to be brought about.
No reason whatsoever can be given for it, as far as I can discover; and it needs no reason, since it merely offers suggestions.

–C.S. Peirce. Collected Papers. V.171

Abduction, Deduction, Induction

Diverge,Converge, Repeat

The refinement loop What also happens often within this situation is that rather than one simple decision, the final action is a result of a refining sequence of creating alternatives (divergence) and selecting the best course of action (convergence). For example as Fig. 9.5 shows, in a creative situation, typically the problem is first considered, then the idea is refined into a usable solution.

Rawlinson, Graham; Straker, David (2011-05-10). How to Invent (Almost) Anything (Kindle Locations 2048-2051). . Kindle Edition.

Personas & Abduction

Innovation Skills:
Abduction, Divergence and Synthesis

Week 9
George Land's Longitudinal Study of Creativity
Sample: 1600 Participants
We don't learn creativity, we unlearn it
You've got to Diverge before you Converge
Rule #1
Divergent Thinking
Deduction proves that something must be; Induction shows that something
actually is operative; Abduction merely suggests that something may be.
Abduction - is the domain of thought experiments, hypothetical questions, and ideas subjected to the test of "plausibility" rather than fact or probability.
The most important phrase in innovation: "What if"
"I am driving my car at the speed of light and I turn on my headlights. What do I see?"
“The important thing is not to stop questioning; curiosity has its own reason for existing."
Thinking tools and "Intuition Pumps" (Daniel Dennett)

You can’t do much carpentry with your bare hands and you can’t do much thinking with your bare brain. —BO DAHLBOM

1. Labels. Sometimes just creating a vivid name for something helps you keep track of it while you turn it around in your mind trying to understand it.

2. Examples. Sometimes, working from the particular case to the general helps. (Aesop's fables, for instance)

Analogies and Metaphors. Mapping the features of one complex thing onto the features of another complex thing that you already (think you) understand.

4. Intuition Pumps: Hypothetical situations and thought experiment: The prisoner's dilemma, Twin-Earth scenarios.
Divergent Techniques
substitute, combine, adapt, modify, put to other uses, eliminate, rearrange.

Method: for each word, ask questions to spur thinking. For example: What can you substitute for it? What can be combined with it? What can you subtract? What can you add?
Defer judgement
"Yes, and"
"How might we?"

"Why?" "What's stopping?"
Provocations: "How would a pirate solve it?"
Go too far: "What's the worst idea?"
Integrating heuristics in a non-linear process

Personas, Concept Models, Experience Attributes
"Design is about everything all at once"
"Making Digital Experience Pay"

• Marim

• Leanne



Creative thinking & design

A critical issue in creativity: The
of ideas is a function of
of ideas.
Workshop: Part 1
Break into groups of 3-4-5 people
Devote the first 15 minutes to designing a sequence of hats that feels well suited to the problem.

Prepare to share your findings with the class.
The problem is: The "Democratic Deficit" in Canada
The Democratic Deficit
Democratic Engagement means being involved in
advancing democracy through political institutions,
organizations, and activities.

A society that enjoys a high degree of democratic engagement is one where citizens participate in
political activities, express political views, and foster political knowledge; where governments build
relationships, trust, shared responsibility, and participation opportunities with citizens; and where
citizens, governments, and civil society uphold democratic values at local, provincial, and national
levels. A healthy democracy needs citizens who feel their votes count, are informed, participate,
debate, and advocate. It needs governments at all levels to be transparent, inclusive, consultative,
and trustworthy. In essence, political leadership, citizen participation, and communication
demonstrate the level of democratic engagement.

Workshop Part 2
The challenge:
Getting corn growers to adopt a machine that tunes seed varieties to field conditions.
Step 1 - sequence your hats
Step 2:
Prepare to discuss order
Start walking through the hats.
Step 3: Prepare to report your process, how it went, what you experienced.
metaperception, metacomprehension, metamemory metareasoning, etc.
Complexity calls for Diversity of Perspective
Diversity of Perspective puts more "up for grabs" in the process
Possible outcomes: Paralysis, conflict, "settling," group-think and....
Is it even possible that the people with the most innovative thinking are seen as morally inferior - and put themselves in an "outgroup" just by thinking innovatively?
My point is this: Without self-evident premises, pure reasoning doesn’t answer our questions.....

...Morality begins with a huge number of interconnected assumptions, largely unquestioned, all of which sound reasonable to the assumption maker and precious few of which are truly self-evident. (In other words, moral epistemology is coherentist rather than foundationalist.)

Greene, Joshua (2013-10-31). Moral Tribes: Emotion, Reason, and the Gap Between Us and Them (p. 185). Penguin Publishing Group. Kindle Edition.

Stories of Organizational Barriers to Innovation
"Toner Heads"
"Channel Conflict"
Thin Client Computing
"The "Task-based Worker"
Source-Visible Food
"Accounting Challenge"
"how will that help us sell more toner?"
What if people use this service instead of our package delivery service?
Fort Dunangus

Digital Photography

"Experiential Competitors"
DISRUPTION= "Management Failure"

"The business changed, the theory of the business didn't"

"Paralysis" = the state of management decision-making
in disrupted businesses
Week 11 Workshop Thinking Creatively Together
Thinking Profiles


Part one

Workshop Part 2
In game theory, the Nash equilibrium is a solution concept of a non-cooperative game involving two or more players in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his or her own strategy.
Thinking in Groups is Hard
Fact finding:


"what are some facts about this situation?" "what's interesting?"
"what's something we don't know about this situation?"


"How will we get people to ride the ION?"

Challenge Mapping

What's Stopping?

Build a map of the problem

Then, Converge (with dots) on the most salient idea or path in your problem map
CEB "Challenger"
College students do hone some kinds of reasoning that are specific to their major. One ambitious study at the University of Michigan tested natural-science, humanities, and psychology and other social-science majors on verbal reasoning, statistical reasoning, and conditional reasoning during the first semester of their first year. When the same students were retested the second semester of their fourth year, each group had sharply improved in precisely one area. Psychology and other social-science majors had become much better at statistical reasoning. Natural-science and humanities majors had become much better at conditional reasoning—analyzing “if … then” and “if and only if” problems. In the remaining areas, however, gains after three and a half years of college were modest or nonexistent. The takeaway: Psychology students use statistics, so they improve in statistics; chemistry students rarely encounter statistics, so they don’t improve in statistics. If all goes well, students learn what they study and practice.
Aswath Damodaran vs Bill Gurley
What can be done?
4. Maintain robustness in a changing environment. One of the most important challenges in managing a large, complex business is making it robust in the face of shocks. In a complex adaptive system such as a business, which evolves constantly along with the environment, it is impossible to enumerate all possible sources of risk. Instead of addressing each individual risk, then, managers must instill heterogeneity, redundancy, and modularity—properties that enable systems to withstand and adapt to shocks.
5. Avoid unfavorable basins of attraction. Complex systems often have configurations or situations toward which they move naturally. These so-called basins of attraction can be favorable or unfavorable, but they have a reinforcing feedback cycle, so they cannot be escaped through small perturbations. CASs are therefore at risk of stagnation and collapse when they fall into an unfavorable basin.

In business, a prototypical unfavorable basin of attraction is the success trap, which successful companies can fall into when they focus on exploiting known, validated opportunities (their “success formula”) and lose the ability to take risks, explore, and create new growth opportunities.
Amazon, despite enormous size and success, continues to epitomize this approach. It starts from the top: Jeff Bezos, in his April 2016 letter to shareholders, declared that Amazon is “the best place in the world to fail.” He explained that a company should take bets that are 90% likely to fail, as long as the potential payoffs are high enough. For example, Amazon Marketplace was an outcome of persistence after two successive failures—Auctions and zShops.
Contact Info
Housekeeping Pt 1
Housekeeping Pt 2
Wald reasoned that those planes that were actually hit in the undamaged areas he observed would not have been able to return. Hence, those undamaged areas constituted key areas to protect. A plane damaged in said areas would not have survived and thus would not have even been observed in the sample. Therefore, it would be logical to place armor around the cockpit and engines, areas observed as sustaining less damage than a bullet-riddled fuselage.
“For every complex problem, there is an answer that is clear, simple and wrong.” H. L. Mencken
Christensen at Oxford 2013 - Disruption and Growth
Christensen Phoenix - Milkshakes and Jobs
Content Personalization & Segmentation for the Filter Bubble
Christensen at Google 2016, Where does growth come from?
Clay Christensen
debunks "innovation as a crapshoot"
(at 10 minutes) levels the charge that we teach marketing wrong
"characteristics or attributes versus jobs
Jan 21, 2018
Pattern versus Significance
Geoffrey Moore
B2B Technology Adoption
Jeff Bezos Interview 2017
11 minutes in - asymetric risk & reward
Davos 2017 Income Equality
David Snowden: The Cynafin Framework
Clip from Beautiful Mind: Nash Equilibrium

ICI's Tilt
virgin music
auto industry - "first tier"
McCartney vs Michael Jackson
Blue Ocean Strategy Canvas
Geoff Moore
Escape Velocity
Forest Fire detection via animal tracking devices
Company Value
Performance Value
Identity Value
The Boring Company
Christensen on theory
The Five Whys
The vehicle will not start. (the problem)
Why? - The battery is dead. (First why)
Why? - The alternator is not functioning. (Second why)
Why? - The alternator belt has broken. (Third why)
Why? - The alternator belt was well beyond its useful service life and not replaced. (Fourth why)
Why? - The vehicle was not maintained according to the recommended service schedule. (Fifth why, a root cause)[2]
Bill Chan
Alicia Chin
Elizaveta Cormier
Erica Dalphy
Everything is a Remix
James March
"Foolishness and agile"

"Foolishness and AI"

"Sensible Foolishness and Provocations"
"Consider, for example the difficulty of sustaining playfulness as a style within contemporary American society. Individuals who are good at consistent rationality are rewarded early and heavily. We define it as intelligence, and the educational rewards of society are associated strongly with it. Social norms press in the same direction, particularly for men. Many of the demand of modern organizational life reinforce the same abilities and style preferences.

The result is that many of the most influential, best-educated, and best-placed citizens have experienced a powerful over-learning with respect to rationality. They are exceptionally good at maintaining consistent pictures of themeselves, of relating action to purposes. They are exceptionally poor at a playful attitude towards their own beliefs, towards the logic of consistency, or towards the way they see things as being connected in the world. The dictates of manliness, forcefulness, independence, and intelligence are intolerant of playful urges if they arise. The playful urges that arise are weak ones."
Much of our educational system has taught us to look for the one right answer. This approach is fine for some situations, but many of us have a tendency to stop looking for alternative right answers after the first right answer has been found. This is unfortunate because often it’s the second, or third, or tenth right answer which is what we need to solve a problem in an innovative way. There are many ways to find the second right answer — asking “what if,” playing the fool, reversing the problem, breaking the rules, etc. Indeed, that’s what much of this book is about. The important thing, however, is to look for the second right answer, because unless you do, you won’t find it.

von Oech, Roger. A Whack on the Side of the Head: How You Can Be More Creative (Kindle Locations 439-444). Creative Think. Kindle Edition.

Scenario Planning
"Reason back from a target endgame"
panies should not choose strategies because of the immediate benefits that might come with them, or be tempted to follow theNapoleonic counsel, “On s’engage et puis on voit!” (“Jump in the fray, and find out what happens!”), which is so dear to theentrepreneurial spirit.
Instead, sensible companies think several steps ahead and work back from the endgame they want. The endgame is a plausible butspeculative guess about the new equilibrium the network participants will create in response to the innovator’s strategy. Afteridentifying the endgame it wants, the innovator should drop those strategies that will not generate the responses it wants from theother players. As


Pick one of these Waterloo Innovators
Delphx http://www.delphx.com/
Primal https://www.primal.com/
Thalmic https://www.thalmic.com/
Think about the application of the "New Rules"

1. Describe an audacious "end-game" equilibrium
2.  Identify "power-players"
3.  Identify strategies of "complementarity" with power players
4. Identify a set of "co-ordinated incentives" (addressing some combination of (a) partners that add to the innovation's benefits, (b) distributors, and (c) early adoptors

Prepare to present and discuss your findings
Workshop: What did You Notice?
• Did you find your group drifting towards converging ( yellow, or black) while you were in a divergent step (white, green?)
• Did you find it required discipline and reminders to keep everybody on the same hat at once?

• Did you find you felt you needed to formulate
your thoughts carefully by yourself before sharing with your group?
• Did you get a good reward for the extra trouble of deciding which sequence of hat to employ, or not?
Full transcript