Chris Meyer has a wonderful knack for detecting what's new versus what is merely fashionable. He furthers that instinct by bringing new ideas together, often in the form of people meeting, to see what further new idea this collision will breed. He then has the rare good sense to pick out the few great new ideas that have immediate practical application. I wish I could do that.
– KEVIN KELLY, Founding Executive Editor, Wired, Author, Out of Control
FOCUS ON DYNAMICS
Much of business economics—and many business decisions—are framed in terms of “comparative statics”—how much will market share shift if I change my price 5%? Will raising minimum wage increase or decrease profits?
These questions are important, but assume everything around them remains the same. Understanding what is changing-- the broader technological, sociological, political or economic forces that are continually changing the rules of the game and the players in it—should occupy more of management’s attention.
Biological metaphors became a fad in the 1990s, and the lexicon now includes “organizational DNA,” “innovation ecology,” and of course, “next generation.” Though some find these concepts to be tired, three important features of evolution help structure an effective approach to business change:
Diverse Inputs — bring enough kinds of people together (physically or virtually) to contribute a range of perspectives on the question at hand.
Rapid Recombination — new ideas are created out of old ideas, as children are. Structure discussions so that people are continually learning from other points of view.
Selection Pressure — most new ideas are bad ideas. After each recombination, evaluate the new generation, select the best, and breed a new generation. Continue until the group has found the best solution.
These principles can be designed into conversations large and small, and can help generate fresh perspectives on difficult business problems.
VALUE CREATION BEFORE VALUE CAPTURE
Many powerful ideas are abandoned prematurely because the path to profitability is unclear. Suggest something insanely great to most U.S. health care executives and likely you’ll be interrupted by the question “who’s going to pay for that?” Most operating executives are so aware of current constraints they find it difficult to imagine any structural change to their worlds. Identify value and beneficiaries first, construct the business model later.
THE WORLD EMERGES FROM THE BOTTOM UP
The economics I studied in the 20th Century used tools borrowed from physics and chemistry—statistics and differential equations, which deal in averages and aggregates. But social systems take their shape from the choices and interactions of decision makers—individuals and institutions. Behavioral economics, agent-based simulation, and gamification are the tools that will make social science as useful for guiding business decisions and as the physical sciences have been for engineering.