Chapter 8 Flashcards
Black Swan moment
Random event that is inappropriately believed to be more frequent than it is.
Known knowns
Obvious context. With these things, you know what the situation is and you know what to do. Ex. Machine learning is costly
Known unknowns
Things that exist but we don’t have information. Ex. Bias in risk, we are unaware of where and how much
Unknown unknowns
Things we don’t even know that need to find out. We know nothing and so we don’t know the right questions to ask
Unknown knowns
These are moments where you just know intuitively know the right thing to do, result of years of experience. Ex. We don’t know how this would benefit a company, but we know it will.
How to sell in the face of uncertainty
Fear selling - pain avoidance
Reward selling - reward achievement
Sell to a client - fear selling is very powerful
Sell to your boss - reward selling. Trick is not to oversell
Innovation management
Trying to convert uncertainty to a calculated risk
Animal spirits (John Maynard Keynes)
People can be persuaded to take a risk by convincing argument, expressions of energy or passion, or by hooking into powerful emotions like fear.
Innovation funnel
Outline concept (many possibiities)
Detailed Design
Testing
Launch (most specific)
5 stages of stage gate process
Idea Formulation Concept Formulation Product Development Test Marketing International Marketing
High involvement systems
A large proportion of the workforce becomes engaged in innovation
Policy deployment
Devolving the top level innovation strategy to lower levels in the organization
Benefits of a business model
Provides a roadmap for creating value out of innovation
Provides a way to share the idea/vision with others
Offers a checklist to make sure the idea is creating value
Lean start up and agile development
Concept that innovation is a series of experimental learning cycles that gradually collect information
Think, Play, Do (Gann, Salter, Dodgson)
Innovation process: extended play phase and postpone final commitent until late in the process
Impacts from poor portfolio management
No limit to projects taken on Reluctance to kill-off or deselect projets Lack of strategic focus in project mix Weak or ambiguous selection criteria Weak decision criteria
cognitive dissonance
Organizations often selectively perceive and interpret the new situation to match or fit their established world views
Bounded rationality (Herbert Simon)
When reasons and decision rules are clear, but decisions are always taken from “inside the box”
Generic business model innovation strategies
User driven not supplier led
Servitization- manufacturing operations are reframed as service offerings
Rent not own
