Reinvention in spite of trade-offs

Constraints have always been a basic fact of life for managers and engineers. Managerial constraints are of financial, legal, administrative, ethical or biological nature and they limit what the manager can set out to accomplish. Some constraints exist simply due to our biological limitations or imperfections. However, here I would like to discuss a more devious type of constraints, namely those involving trade-offs.

Trade-offs are situations in which one cannot have it both ways: either a choice or a compromise must result. Unless of course, we can find an innovative solution that makes the entire dilemma obsolete. Developing new products is inevitably connected with creating new, previously unknown, technological dilemmas, e. g. battery life limiting the clock speed of computer processors. The constraints encountered in product development involve the properties of the materials used (their cost, availability, elasticity, malleability, conductivity, energy use), conditions in which the product will be used (density of the medium, temperature, humidity, toxicity), or the types of users (teenagers, graphic artists, scientists).

How to make a product that is both thin and rigid, or large and light, or delicate and durable? One of the approaches is comprehensive, sophisticated experimentation. Genrikh Altshuller undertook an alternative path. He analyzed hundreds of thousands of patents, searching for patterns of innovative thinking in the ways in which inventors claimed to have solved these dilemmas (or, what he called, technical antinomies). His “invention algorithm” was a codification of all the tricks of the trade used by inventors in getting around the trade-offs*.

Similar dilemmas exist in the world of management. How to make a firm’s organizational structure both flat and specialized and reduce the span of control? How to reconcile empowering employees with an autocratic style of leadership? One of the most ubiquitous and vexing trade-offs are the simultaneous dilemmas of short- vs long-term managerial decisions. The manager must decide between short-term financial needs and long-term investment in research & development. It is the daily expenditures that keep the company alive, but long-term, visionary allocations of funds into innovations may keep the company from becoming extinct. Unfortunately, one cannot allocate more funds both to research & development and to all other functions combined, since the financial pie is finite.

But wait! The pie is finite, but it itself may grow! This can allow all needs and functions to be supported, just as a growing demand for a product allows all competitors to enjoy win-win situations. And how to maximize quality of a product, and minimize its cost? A modern view no longer sees it as a traditional trade-off, but rather an optimistic “trade-on” produced by total quality management and a revolutionary, niche-creating, innovative thinking.

A simple-minded pro-innovation attitude is not enough, though. A vital trade-off is responsible for Clayton Christensen’s “innovator’s dilemma” of allocating resources to, what he calls, sustaining vs. disruptive technologies. They are both innovations, but the former are too conservative and may not guarantee survival. So, reinvention requires guts!

 
Michal Jasienski (jasienski@post.harvard.edu), writing from the Center for Innovatics, Nowy Sacz Business School – National-Louis University, Poland

*This issue is discussed in a paper written by myself and Magdalena Rzeźnik (supported by the REINVENT project and available from our ResearchGate profiles): “Business models rethought: applying the heuristic methods of Altshuller and Osborn to improve an organization’s fitness in a variable environment.” In: “Organization in changing environment. Conditions, methods and management practices” (B. Domańska-Szaruga, T. Stefaniuk, eds.), pp. 100-109. Wydawnictwo Studio Emka, Warsaw, 2014. ISBN 978-83-64437-19-9.

The relentless generation of digital content

We can’t stop the creation of digital content. The Internet is full of content – and garbage. People do not read; they scan pictures. People are busy, pretending to consume more and more information. Along these lines, this post is short and includes a picture.

content

Image: Erik Fitzpatrick licensed CC BY 2.0

By creating good stories we can make our voice stronger and publish more content. Good storytelling has always been a valuable skill. Storytelling applies to everyone who interacts with other people: in business, research, education and in family life.

Digital storytelling brings together digital content, including images, sound and video, to create a short movie, including a strong emotional component.

Today, everyone is a storyteller. Everyone can create content using a smartphone or tablet. The vast number of non-professionals armed with their mobile devices, sharing pictures with friends; these people are not trying to make money.

In “the content noise” era, there is a significant growth in demand for high quality content.  For professionals it is  important to  provide  the  right  content,  to  the  right  people  in  the  right moment. And it is important to support users who are at the same time content creators and content consumers. We can’t stop the creation of digital content, but we can manage it. Undoubtedly content management is becoming a lucrative business opportunity.

Joanna Bubala, writing from i3D, inspired by NEM SUMMIT 2016

NEM (New European Media) nem-initiative.org is an initiative to support Europe’s activities on the Future Internet and Future Media Internet as major innovation area.

A good business model should make your organization antifragile

Just like a living organism must be able to cope with external stresses, such as extreme temperatures, attacking microbes, annoying neighbors, and mindless politicians, an organization faces its challenges too and it must cope with them. We can easily guess what they are: extreme macro-economic conditions, attacking competitors, annoying union officials, and… mindless politicians.

In his phenomenally insightful and deservedly bestselling 2012 book “Antifragile. Things that gain from disorder” Nassim Nicholas Taleb argues that coping by being totally rigid and unresponsive to shocks is not the right strategy. It is much better to be resistant by virtue of being flexible and adaptable. But the ability to tolerate stress is not enough. The true power lies in being able to thrive and capitalize on stresses, using them as stimuli for our own improvement. This is what Taleb means by “antifragile”.

While antifragility as the concept introduced to our current management language may be new for managers and management theorists, this way of thinking about the entities that exist in the world is familiar to biologists. When exposed to microbes in childhood, the immune system of the adult organism works better; allergies are becoming widespread because children grow up in overly germ-free environments. Similarly, when facing competition, companies work better. Without such stimulation, they become lazy, then sluggish, and may easily slip into oblivion.

Since business model describes the entire “metabolism” of the organization, it is sensible to explore the relationships between the business model’s structure and the organization’s fragility and antifragility. Importantly, antifragility should reside in each and every building block of the business model, from the financial aspects to relationships with partners, customers, and employees.

Business model reinvention should be the process through which organizations become antifragile. Only after we have managed to rethink and reshape our business model, does the old adage from Friedrich Nietzsche “if it does not kill you, it will make you stronger” become true. In the context of business and management, “stronger” means more innovative, more competitive and more profitable.

Michal Jasienski (jasienski@post.harvard.edu), writing from the Center for Innovatics, Nowy Sacz Business School – National-Louis University, Poland

Virtual reality and the future

The VR European Congress 2016 was held at the Copernicus Science Centre in Warsaw on 3-4 November. This was the first event of this scale organised in Poland, dedicated to the rapidly developing virtual reality (VR) technology. For more information about the congress, see here: http://vrcongress.pl/o-kongresie/?lang=en.

Among the presenters was Marcin Wisniewski, Director of Sales at the Reinvent partner i3D. In his presentation he emphasized that VR is more than games and entertainment. VR makes it possible to realistically represent places that are difficult to access or unsafe, e.g. for employee training. Businesses are increasingly using VR for training, sales, simulations and prototyping. Marcin presented some interesting case studies including from the oil industry, education and heavy industry.

 

Joanna Bubala, writing from i3D, Gliwice, Poland

 

 

Reinventing place – The story of one city’s transformation

Horsens is a small city (pop. 55000) tucked away in a less-travelled corner of Jutland in Denmark. The city has an inauspicious history – a grim legacy created by the prison that used to be the city’s main landmark. The result was a predictably poor self-image:

If there was a town that couldn’t do anything, it was Horsens. The big, the strong, the spectacular – we left that to other towns.

Henning Nörbæk

Unlike most other Danish cities, Horsens has a few hills, and the old prison sits atop the highest of these, casting it’s menacing eye over its surrounding environment.

How then can Horsens have become the city that attracts the most people moving to or within Jutland? There is an inspiring story of transformation here; the story of Horsens’ transformation from being a prison city to being an experience city. And every Horsensite knows this and is proud of it.

The prison is still there – having been transformed into a museum – and houses a rich collection of stories and myths. One of the most famous stories is the story of Carl August Lorentzen, who escaped from the prison in 1949 by digging a tunnel. Over the tunnel’s entry, he wrote these words „hvor der er en vilje, er der også en vej” (where there’s a will, there is a way). This echoes the „can do“ attitude that has become part of Horsens’ DNA.

Today Horsens is an “up and coming”, vibrant, fun city, that still relies on its old industries centered around the Horsens harbour – but also new creative industries driven by entrepreneurial spirit.

How did this happen? It certainly wasn’t just luck. The following are some factors that we believe contributed to this reinvention of place:

  1. Shared history: Horsensites are Danish, quintessentially so – but not only are they Danish, they are also Horsensites. They know their country’s and their city’s history, and are proud of both.
  2. Politicians who put their money where their mouths are: The City Council has worked actively and tirelessly to reinvent Horsens as an experience city, including investing substantially in urban renewal.
  3. Football: This may sound strange and non-intuitive, but few things bring a community together like the local team. Swap in any popular sport – there is nothing magic about football per se. Horsens’ interest in their local football team led to the building of an impressive sports arena, which not only hosts sporting events, but also concerts, drawing crowds from all over.
  4. Clear vision: When Horsens decided to reinvent itself, the end goal was clearly defined. Horsens wasn’t just going to improve itself, Horsens was going to become an experience city. A place where locals and visitors could enjoy fantastic experiences, ranging from the staged experiences in the arena, to the semi-staged experiences in the glass cube strategically positioned in the center of Horsens’ pedestrian street, to the quiet friendly experiences of the renovated urban landscape.
  5. Marketing around one simple theme: The experience theme was defined 25 years ago; the results started to come about 10 years ago, and are still being realized.
  6. Population „buy-in“: Strike up a conversation with any Horsensite and the odds are they will tell you about Horsens and its impressive reinvention. Everyone knows the history and everyone knows the course on which the city is headed. One of the slogans Horsensites love is „at løfte i flok“, or „to pull together“. Horsens’ reinvention would never had happened without full commitment and tangible involvement by all major players in the community, such as businesses, the city council and other public organizations.

Did you notice? It’s not about attracting tourists – who would only come for a few days, leave a bit of money and then leave – it’s about attracting people to move to Horsens.

And it seems to be working.

 
Pia Schildknecht and Marina Candi, writing from Stormsalen in Horsens, Denmark

Reinvention of the IT infrastructure of a business model is like a reverse tablecloth trick

One of the most challenging forms of reinvention is that related to the organization’s information and communication infrastructure. It would be indeed silly to elaborate on the importance of an IT system in ensuring the viability of an organization’s metabolism. Imagine replacing with new ones all the blood vessels and nerve fibers in your entire body, while you work and play! This idea, as a metaphor for re-inventing all the functionalities of the IT system may be too preposterous, so let us take another one.

The well-known trick guaranteed to amuse the guests is to pull the tablecloth out from under your fully set dinner table, plates, silverware, glasses and all. It is not easy but can be done, as explained at the Wikihow website (http://www.wikihow.com/Pull-a-Tablecloth-from-Under-a-Place-Setting), with the humorous proviso that “the only hard part is cleaning up all the broken dishes on the floor”…

With an IT system, such as the intranet, “pulling the tablecloth” part is trivial – it is enough to switch off the servers. Unfortunately, it immediately cripples the organization. We need a trick that would simultaneously remove the old intranet and replace its functionalities with those provided by the new system. One can compare this to putting a new tablecloth on the table while the dinner is on. It would certainly not work without close collaboration with the dinner guests (read: users). This issue cannot be emphasized enough: the architects of the new IT system must never forget about collecting insights from the users of the previous IT system.

Talk to the users. Before it’s too late, i.e. before the system’s components solidify. Early stages are especially important, because the early decisions determine the overall logic of the entire project, about establishing connections between the components and deciding what data flow where.

Thinking about an educational institution *, like my own, it also has its business model which cries to be re-invented. The flow of the data between such modules as student registration data, student course plans, student schedules and class section assignments must be flawless and must ensure that all databases are synchronized, continually updatable, and, of course, mutually compatible.

Within-module functionalities may be polished later. For example, the structure of the template for thesis evaluation carried out by thesis advisers and reviewers, with specific criteria and scoring system, does not affect any other modules. The criteria and measurement scales may be modified at any stage. The only important data are outputs, i.e. the grades assigned to the evaluated thesis work, because they must become available for the “computation of the GPA” module or for automatically filling out the template for the diploma.

So, the modules must talk to each other, just like the IT people must talk to the users: school administrators, faculty members, and students. Importantly, the interests of none of the groups should be privileged.

Mike Jasienski, writing from the Center for Innovatics, WSB-NLU, Nowy Sacz, Poland.

* Other aspects of reinventing the IT tools in your organization are discussed in my paper (supported by the Reinvent project and available from my ResearchGate profile https://www.researchgate.net/publication/263051212_Features_of_an_e-learning_environment_which_promote_critical_and_creative_thinking_Choice_feedback_anonymity_and_assessment), published in the International Journal of Continuing Engineering Education and Life-Long Learning 24 (3/4): 237-251 (2014).

A place like Horsens

Some of the preliminary early findings of the Reinvent project indicate that Danish SMEs in creative sectors score higher than similar firms in other countries in terms of business model renewal. Business model renewal refers to radical changes to business models or entirely new business models.

Looking around the streets of a quiet “not-Copenhagen” city like Horsens this doesn’t seem particularly likely. But apparently there is a lot of ferment and innovation going on beneath the peaceful facade!

This reminds me of the phrase “still waters run deep”.

 

Marina Candi, writing from Horsens, Denmark.

We must cross the academia-industry barrier twice

Like Jane Goodall, the legendary researcher of chimpanzee behavior, entering her field research site in Africa, another academic researcher has just crossed the magical divide separating the safety of her academic life from the, so called, “real” life. Now, armed with a clipboard and a pen, she sits quietly in an office chair, surrounded by a local firm’s population of males and females. The employees.

They are busy with themselves. The researcher almost succeeded in blending with the group. They seem not to notice her presence, but still she reminds himself “No sudden movements!”, as not to interfere with the natural order of things and thus taint the project by what is known as “the observer effect”. To be subjected to reinvention, the employee organizational behavior, the usual menu of leadership styles and teamwork patterns, must be observed and described in its natural environment and its natural expression. Warts and all.

Several times during the day the individuals aggregate around the place where the water source is located. These random meetings provide opportunities for strengthening social interactions and, probably, help dominants maintain the status quo, for it always is in need of maintaining. For example, a young buck, a freshly matured male, tries to assert his social status by presenting to the rest of the population a new tool, the operation of which is not easily accessible to the older males. They watch his nimble fingers effortlessly moving the cursor on the screen during his presentation of a new and complicated software package. A new generation is clearly poised to take over.

During a ritualized ceremony, organized by another young individual on the occasion of her birthday, all other members of the pack were offered food items (clearly to reduce potential acts of aggression), but not until they all sang, in unison and a capella, a loud song. The functional significance of this social custom has yet to be ascertained, although one may speculate that such behavior evolved to deter predators (read: auditors) and ensure safety of the population.

Some behaviors, known as very effective agents for strengthening social bonds, are surprisingly rare in this population: mutual grooming and removal of skin parasites, or sharing regurgitated food, are virtually nonexistent. At least in the presence of the researcher. Sporadic bodily contacts through the proverbial and nonsexual “pat on the back” may occasionally be observed. In spite of this, or thanks to it, social capital seems to be healthy and all individuals seem to be genuinely happy to come to work.

However, it does not make the researcher’s work any less stressful. When distributing her surveys, the researcher assumes, a priori, a nonthreatening or even submissive pose and uses self-deprecating humor. This always works in reducing potential aggression or resentment and then the researcher is happy: special moments occur when she strikes brief but friendly conversations with some of the individuals. And so, hours turn into days, days into months, and finally an academic publication will see the light of day. And begins its march to academic oblivion…

It is, therefore, crucial that the culmination of the entire research process should be to traverse the academia-industry barrier for the second time, in the opposite direction, to bring the knowledge back to where the data originated. Any researcher should strive to make time for this last step. The researcher must explain to the company managers not only what the employees actually do in the workplace but why they do what they do. That is when the academic research becomes relevant and contributes to the process of business reinvention.

Michal Jasienski, writing from the Center for Innovatics, Nowy Sacz Business School – National-Louis University, Poland.