Why Not?: New Thinking for an Emergent Networked World

Why Not?: New Thinking for an Emergent Networked World

DOI: 10.4018/978-1-4666-7369-4.ch009
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Abstract

In this chapter, the authors show how leading companies are introducing new business logics and how innovations are produced through new ways of design thinking. They show how the elimination of constraints triggers acceleration and how this must be dealt with through new paradigms. The authors show the migration from cause and effect thinking to emergent design, from the world of tangible assets to that of emergent dialogue in relational networks. They show that in a world of transformation being successful means managing both the matter-of-fact world that we have inherited and the visionary world as it emerges: one a world of things, the other a world of competences. The authors show why the question is no longer “Why?” five times over, but “Why not?”
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Introduction

In the process of migration from physical assets to intellectual capital (accounting liabilities), neither DOW, Procter and Gamble nor CEMEX have abandoned their legacy mechanistic worlds of value creation. They have, however, shifted the balance of value producing activities as they have evolved from products and services to relationships and a more interactive customer experience. This migration is accomplished in a significant way through business design, including designing and creating entirely new business models.

In his deeply insightful book, The Design of Business, Roger Martin (2009) has made an important contribution towards thinking about business sustainability and competitiveness by introducing the notions of reliability ‒based on analytical thinking‒ as opposed to design thinking ‒based on intuition‒, the latter based on a new kind of thinking required by a new kind of world. Martin makes reference to some of the “logical” distinctions introduced by the brilliant, although not well-known, American philosopher, Charles Sanders Peirce, specifically his introduction of abductive reasoning as opposed to the well-established and historically recognized concepts of deduction and induction.

Martin might have made the case that Conan Doyle’s Sherlock Holmes never solved a case through “brilliant deduction”. Each and every case was solved through the use of abductive reasoning. Martin introduces the knowledge funnel as a way of moving from the world of “mystery”, through heuristics to algorithms, seen by Martin as “performance guarantees”. Mihnea Moldoveanu, as Martin sites, sees hunches as “prelinguistic intuitions” and heuristics as “open-ended prompts” and “explicit” since they bring intuitions to language. These then lead to algorithms which are seen as “certified production processes.”

It may be clearer to the reader to view abductive reasoning as something more akin to “pattern recognition” and this might save us from the increasingly applied use of heuristics or “rules of thumb” in the wrong way, a way in which they turn into a two-edged sword. Rules of thumb can often be associated with established patterns (recognitions themselves) that instead of opening the way to pattern recognition serve rather to impose a pattern based on accumulated experience. Rules of thumb often represent a frozen common sense or pre-established pattern. Abduction, on the other hand, tries to make sense of things by entertaining and sorting out a vast array of associations, a kind of jigsaw puzzle for the five senses which invites playing around with the past, the present and possible futures, reducing little by little the degrees of separation in what is “observed” (smelt, felt, seen, heard, thought, and so on) until a pattern emerges: an “Aha!” moment, a moment in which things finally make sense. Recent studies in neuro-science disclose the networked associations of complex brain activity that make it clear that human survival owes more to the logical process of abduction than to those of deduction and induction.

The “balancing act” between reliability and design thinking that Martin insists upon, has hidden demons that we must bring to the surface and into the light since they cannot be dealt with unless they become better grounded in the historical evolution of the world, since the legacy that resides in the notion of “reliability” has deep roots as we have seen in other chapters. A broader understanding of the balancing act can be seen in the EvoDevo world ‒as portrayed by John Smart (2008)‒. As we migrate from one of these worlds to the next, logic may do a complete flip and we may find ourselves in an Amazon.com world, an eBay world, or a Patrimonio Hoy type world, entirely or in large part devoid of material processes, although networked with partners that do move “things” as well as bits and bytes. In the world where traditional “assets” create value, the “Devo” world, the balance may swing way to the left. This is a shrinking world as globalization and network integration eliminate boundaries and constraints. Balancing is more necessary in that middle world of both/and. There are worlds, however, increasing in number and magnitude, the “Evo” world, composed entirely of intellectual capital and networking, liabilities that, in the old world of traditional accounting, destroy capital. In this world, reliability is virtually non-existent and value is produced by net work. One thing is to mine ore efficiently, another thing is to understand the deposit and design the most profitable and sustainable extraction process, ensuring, at the same time, the most beneficial life of the mine, balancing the interests of all stakeholders. The latter is where greater magnitudes of value are added.

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