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.

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