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Power of Observation: What
Purchasers Can Learn From
Darwin

Track 2-Strategic Cost Analysis and Management

The 63rd Annu...
The Power of A Theory and Darwin’s
Observations
Power of a theory
=
That which it
explains

÷
That which it needs to
assum...
Darwin and the Power of Observation


Here was a man who applied his powers of
observation and rigorous testing to everyt...
Darwin and the Power of Observation
What Darwin did
for most of his
career was
observe.
 Only later on did
he come up wit...
Darwin and Survival of the Fittest


It is so simple that in the guise of “survival of
the fittest” (the renaming that Da...
The Power of Observation







Charles Kettering, the famous inventor, once said: “A
problem well stated is a problem...
Tips for Making Observations







Use all of your senses (sight, hearing,
touch, and smell) to make qualitative
obse...
What Do You Observe?
A
Woman
at a
Vanity
or a
Skull?
Observation and “Thin-Slicing”






Activate your powers of
observation.
Writer Malcolm Gladwell refers
to this proces...
Colin Powell on the Use of Limited

Information to Come to Conclusions
“When I am faced with a decision…I dredge up
every ...
Powell on P40 to 70: Thin-Slicing
“I have a timing formula, P-40 to 70, in which P
stands for probability of success and t...
“Thin-Slicing” and the Power of
Observation
Both "thin-slicing" and using the power of
observation, are concerned with the...
Marcus Aurelius on Observation
“Observe

constantly that all
things take place by change, and
accustom thyself to consider...
Observation in the Land of the Blind


“In the land of the blind
the one eyed man is
king.”



The thing is, the saying
...
Observation in the Land of the Blind:
Wake Up and Take Notice






So the ability to be blind to
most of what we see a...
Practice Observation In the
Land of the Blind




Observation is
probably the most
succinct description
there is of the ...
Observation and Seeing
What’s Invisible


As Jonathan Swift said: vision is
the art of seeing things invisible
to others....
Techniques to Become
Truly Observant







Become hyper-observant of the more discreet
elements of your everyday en...
Have You Become Truly Observant?:
How Many Human Faces Do You See?
Creativity and Innovation







In any organization today, sooner or later the
words "innovation" and "creativity" wi...
The Practice of Innovation
In most companIes today,
In most companIes today,
the “practIce” of
the “practIce” of
InnovatIo...
Sawyer’s “Group Genius”


The heart of this book Group
Genius is Sawyer’s proposal
that “collaboration is the secret
to b...
Sawyer’s “Group Genius”


Sawyer discovered that innovation truly emerged
from “small sparks gathering together over time...
Sawyer’s “Aha” Moment


The idea of small sparks, which are small
moments of creativity that, when added together,
provid...
Four Step Creative Process
1.
2.

3.

4.

Preparation: To train
your mind.
Incubation: To set
back from the
problem.
Illum...
Four Step Creative Process—Step 1
Preparation: To train your mind.








Concentration and attention play a great ...
Four Step Creative Process—Step 2
Incubation: To set back from the
problem.





Incubation is a contingency phase
It m...
Four Step Creative Process—Step 3
Illumination: The idea arises in
the mind like a sudden flash.




Brainstorming
Mind...
Four Step Creative Process—Step 4
Validation: You have to check the
validity of the idea.





All of the previous ste...
Definition of Critical Thinking
A process by which we use our
knowledge and intelligence to
effectively arrive at the most...
Critical Thinking


Critical thinking is more than
thinking logically or analytically;
it also means thinking rationally
...
Critical Thinking: Five Step Process









Step 1: Adopt the Attitude of a Critical
Thinker
Step 2: Recognize and ...
Adopt the Attitude of a Critical
Thinker: Step 1


The first step to becoming a proficient critical
thinker is developing...
Recognize and Avoid Critical
Thinking Hindrances: Step 2




Each day of our lives we become exposed
to things that hind...
Identify and Characterize
Arguments: Step 3




At the heart of critical thinking is the ability
to recognize, construct...
Evaluate Information Sources: Step 4








Most arguments reference facts to support
conclusions.
A critical thinker...
Evaluate Information Sources : Step 4


In order to assess credibility, truth, and exactness, the
critical thinker must s...
Evaluate Arguments : Step 5


The last step to critical thinking, evaluating
arguments, is itself a three-step process to...
Evaluate Arguments: Einstein on
Knowledge and Experience


Albert Einstein once said, “The only source
of knowledge is ex...
Evaluate Arguments : Step 5






The second step to evaluating arguments is to
assess the relevance and sufficiency of...
H.G. Wells on Inductive Thinking:
Seeing Things Before They Happen


H.G. Wells argues that inductive thinking allows one...
Peter L. Bernstein on Risk: Seeing
Things Before They Happen




The objective is not to control things you
can’t contro...
Peter L. Bernstein on Risk: Seeing
Things Before They Happen


In his book Against the Gods
he states, "The essence of
ri...
As Henry Mintzberg Explains It:
Seeing Things Before They Happen
Why? Because good planning requires a view of the
future,...
Mintzberg on Extracting the
Significance from the Noise

“There is no phenomena unless
it is an observed phenomena.”
John ...
(There Is No Alternative) Shell Scenario
Planning: Seeing Things Before They Happen
The present may be murky; the future
m...
Go to The Source for Better Decisions:
Seeing Things Before They Happen


Make it routine to go to many individuals
direc...
Observation and the Periphery:
Seeing Things Before They Happen


Valuing the periphery requires a seismic shift in organ...
Being Fit to Ride the Waves of Change:
Seeing Things Before They Happen
Thank You !
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Power of Observation-What Purchasers Can Learn From Darwin

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This year 2009 marks the 200th anniversary of Charles Darwin’s birth and the 150th anniversary of his seminal work, “On The Origin Of The Species”. His theory is now associated with business as “Darwinian Economics”—which claims that organizations that are best able to adapt are the ones most likely to survive, particularly in a recessionary climate.

Many purchasers are so busy making decisions, analyzing problems and seeking answers that they pay no attention to simply observing. Darwin, on the other hand, spent much of his career observing. That is to use the power of observation. Observation leads to critical thinking and critical thinking leads to creativity and innovation.

A survey by the American Management Association had 500 CEOs answer the question, "What must one do to survive in the 21st century?" "Practice creativity and innovation" was the top answer across the board, but only 6 percent felt their organizations were doing a "great job" of it. This creativity deficit may be the single most dangerous gap in American business today. It leaves employees frustrated and disgruntled, and can easily send a Fortune 500 company into Chapter 11.

“Today, more than ever before, your ability to capture information and then leverage it to work smarter empowers you to produce cash for the bottom line …and create value for your companies. Mere ‘purchasing agents’ won’t survive this revolution …To survive it, let alone exploit it, you’ve got to be an agent of change, a master of intelligence,...” Volney Taylor, former Chairman and CEO, Dun & Bradstreet Corporation

This presentation will help you answer the following questions. How much time do you spend on the front-line observing your team or your suppliers rather than analyzing second or third-hand data? What are your powers of observation? Do you employ critical thinking or critical inquiry? Are you apt to investigate problems, ask questions, pose new answers that challenge the status quo, discover new information that can be used for good or ill, question “experts” and “best practices”, and challenge accepted norms? What is your organization's capacity for creativity, innovation and successful renewal?

This presentation focuses on how you can increase your understanding of:
 The Power of Observation
 Observation and Awareness
 Interpretation, Brainstorming, and Hypothesizing
 The Attitude of Critical Thinking
 Creativity and Innovation

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  • By the way, Darwin had plenty of other good ideas, for example his ingenious and largely correct theory of how coral reefs form
    Darwin raises our consciousness to the sinewy power of science to explain the large and complex in terms of the small and simple.
  • Conducting a Supplier Site visit.
  • Well, what do you see?
    Different views or observations for different people
  • He says that by thinking without thinking (too much), sizing up situations and determining how we feel about someone or something based not on voluminous new information, but rather on our accumulated experiences, is a good thing.
    We do that by "thin-slicing," using limited information to come to our conclusion. In what Gladwell contends is an age of information overload, he finds that experts often make better decisions with snap judgments than they do with volumes of analysis.
    The book argues that intuitive judgment is developed by experience, training, and knowledge. For example, Gladwell claims that prejudice can operate at an intuitive unconscious level, even in individuals whose conscious attitudes are not prejudiced.
  • Instinct or Gut versus Analytics
    This was driven by some recent (separate) research by Accenture and Forrester to examine how business managers are using analytics as opposed to intuition or gut feel. I think they left out one category, though; that many decisions are simply avoided or hidden because people really don't know what to rely on, but that's a different topic.
    First of all, I would hope that 100% (not 40%) of execs trust their gut, but I think the proper phrasing of this question is, do they rely on it to the exclusion of fact-based reasoning? I don't think you can separate gut from analytics, because all analytics can do is inform your decision and at some point you have to apply your gut to the analytics.
  • Whenever we have to make sense of complicated situations or deal with lots of information quickly, we bring to bear all of our beliefs, attitudes, values, experiences, education and more on the situation. Then, we thin-slice the situation to comprehend it quickly. The implications of this concept have astonishing significance for our personal reactions to most situations.
    Any decisions that we make based on our thin-slicing must be accompanied by the recognition that we do make important decisions using this process---unconsciously. Take the time to gather a larger pool of data before going with your initial gut reaction.
    Gladwell tells us not to endlessly develop more and more information. Sometimes, we need to trust the "blink", the thin-slice decisions that we make.
  • Gladwell was quoted in an interview as saying: "We live in a world that assumes that the quality of a decision is directly related to the time and effort that went into making it," he writes. "And what do we tell our children? Haste makes waste. Look before you leap. Stop and think. Don't judge a book by its cover."The power of observation does not give you the ability to judge a book by its cover; however, it does give you a very strong indication as to what the book is about.Through the observation of people and their surroundings, you will be able to pick up on key messages about who they are, what they think, what they value, and how they really feel, all without you ever having to ask a question ---if you pay attention to the clues and the cues.
  • The fallacy is the idea that you can predict radical change or disaster risk by looking at the bumps and wiggles in current results. Although history has a way of repeating itself.
    What happened to the Hindenburg that night was not a surprisingly large bump. It was a design flaw.!
    To see the disaster coming, you had to have looked beyond the data about flight bumpiness—beyond the professionalism of the staff—and really think, “Does it make any sense to have people riding in a gondola, strapped to a giant sack of flammable hydrogen gas?”
    There’s just not an analytic data series that lets you think about that. But it’s not that hard to think about.
  • It's one of those sayings that seems universally acknowledged for its truth, and equally universally ignored.
    After all, haven't most people got two good eyes?
  • So in this particular land of the blind we may well be with the blind.
    Those that have taken the time to properly look about them have a tremendous advantage over us.
    But isn't all this talk of observation a bit creepy, you may ask. If what we mean by observation is spying, I'd agree.
    However, every day observation skills need not be even remotely underhand. That's because the amazing and powerful things you are likely to notice are already plainly in view.
  • We had the feeling,” said Pierre Wack, “of hunting in a pack of wolves, being the eyes of the pack, and sending signals back to the rest. Now if you see something serious, and the pack doesn’t notice it, you’d better find out — are you in front?”
    He and his Shell colleagues rigorously trained themselves to see the world more clearly and foster clarity in the thinking of others to anticipate dramatic changes in the world.
  • Building the observation habit is surprisingly easy. It takes little more than choosing a focus for your budding observation skills, and the willingness to practice
    Once you get into the swing of being more observant you'll probably find an interesting by-product--- it's actually great fun. In fact you can enjoy it so much that your observation habit can seem more like a hobby.
  • How many faces can you see?
    Most observe 5 or 6.
    Good is 7 or 8.
    Very Good is 9 or 10.
    Excellent is 11.
  • But for many, these terms are simply buzzwords.
  • Even stories of innovation that have traditionally been associated with a single individual or team truly emerged over time by little sparks.
  • The first idea often isn’t all that good, but thanks to collaboration it later sparks another idea, or it’s reinterpreted in an unexpected way.
  • You must think at it when you wake up. You must think at it in having lunch. You must think at it in playing tennis or golf. You must think at it before sleeping. To think constantly about the same thing is a good method for having innovative ideas about it.
    Keep a log, Richard Branson was known for keeping volumes and volumes of lists.
    Reading constantly improves creativity because when you are reading a book, you always form a mental image of what is happening. As we shall see, mental imagery plays once again a great role in the creativity process.
    Meet people: Talk with friends and relatives and look at all sources of good ideas. You can get sometimes a word or an idea that could help you in starting the creative process.
    Choose a motivating environment: The first thing is to choose an environment connected to your vision. For this purpose you have just to imagine it:
    Increase your intellectual capacities: Top class swimmers imagine that their hands are twice as big as they actually are and that their feet are webbed. This vision helps swimmers go really faster.
    See yourself like this and you will gain in confidence in your intellectual capacities. Thanks to this new confidence, your capacities will really increase.
  • Brainstorming implies a group of persons. In your case, as you are using creativity to get a new idea.
    The principle of any brainstorming session is that participants have to stimulate and inspire each other to create ideas. The purpose is to tap the subconscious mind of the members: One idea will suggest another idea trough the mechanism of association.
    Mind mapping has been invented by Tony Busan. In some way, it's like a brainstorming but with only one person: Yourself.
    You take a paper and you write the subject of your research in the center. Then, you start to think in at random in an inhibited style and you write all the ideas that come around the main subject. Then, for each specific idea you do the same and you write around all the ideas connected with. Mind mapping relies, like brainstorming, on the mechanism of association of ideas.
    Mind revolution. Going to the extremes: Facing a challenge, you have always to deal with six questions: Who, Why, What, Where, When and how. Dealing with these questions, try to see what would happen if things where going to the extremes. Establish relations between things that don’t have any:
    The inventions of Archimedes, Leonardo de Vinci or Einstein were often based on connections that no one else would have thought of.
  • At the organizational level, sources for positive turbulence include developing cross-functional teams or inviting outside experts, whose specialty does not exist inside the company, to speak to employees on a matter of interest.
    On the individual level, such structures include conferences, training experiences, travel, museum visits and gallery openings, and reading outside periodicals. All of these sources offer a glimpse into what will become mainstream, and help prime people and their organizations for change.
    On the organizational level, companies should look to joint ventures, alliances and networks to provide alternative methods of competing today. Whether undertaken for strategic advantage or financial gain, these events offer opportunities for cross-fertilization of ideas and perspective. What is important is that the companies come together to help create positive turbulence for their partner organization.
  • This is an important distinction.
    These latter two areas address the complex effects of human behavior on our thinking processes.
  • The following slides will discuss this in depth.
  • The critical thinker must be willing to investigate viewpoints different from his or her own,
    Being both open-minded and skeptical means seeking out the facts, information sources, and reasoning to support issues we intend to judge; examining issues from as many sides as possible; rationally looking for the good and bad points of the various sides examined; accepting the fact that we may be in error ourselves; and maintaining the goal of getting at the truth (or as close to the truth as possible), rather than trying to please others or find fault with their views.
    Having intellectual humility means adhering tentatively to recently acquired opinions; being prepared to examine new evidence and arguments even if such examination leads one to discover flaws in one’s own cherished beliefs.
    Finally, a critical thinker must have a natural curiosity to further one’s understanding and be highly motivated to put in the necessary work sufficient to evaluate the multiple sides of issues.
  • Basic Human Limitations applies to everyone, including the most proficient critical thinkers. These limitations remind us that we are not perfect and that our understanding of facts, perceptions, memories, built-in biases, etc., precludes us from ever seeing or understanding the world with total objectivity and clarity. The best we can do is to acquire a sufficient or adequate understanding depending on the issue at hand.
    The Use of Language) is highly relevant to critical thinking. The choice of words themselves can conceal the truth, mislead, confuse, or deceive us. A critical thinker must learn to recognize when words are not intended to communicate ideas or feelings, but rather to control thought and behavior.
    Misconceptions due to Faulty Logic or Perception or Psychological and Sociological Pitfalls can also lead one to erroneous conclusions. A critical thinker must understand how numbers can be used to mislead; perceptions can be misinterpreted due to psychological and sociological influences; and reasoning can be twisted to gain influence and power.
  • A critical thinker must learn to pick out arguments from verbal or written communication. Sometimes arguments will have indicators such as ‘since’, ‘because’, ‘for’, ‘for the reason that’, and ‘as indicated by’ to separate the conclusion statement(s) from the reason statement(s) that follows (see above example). At other times, arguments will have indicators such as ‘therefore’, ‘thus’, ‘so’, ‘hence’, and ‘it follows that’ to separate the reason statement(s) from the conclusion statement(s) that follows.
    Formal logic divides arguments into inductive and deductive arguments.
    If one thing follows necessarily from another, this implies a deductive argument. In other words, a deductive argument exists when ‘B’ may be logically and necessarily inferred from ‘A.’ For example, if one makes the statement “All bachelors are unmarried (‘A’)” and “John is a bachelor (‘B’)”, then one can deductively reach the conclusion that John must be unmarried.
    However, most arguments that one encounters in daily life are inductive. Unlike deductive arguments, inductive arguments are not ‘black and white’, because they do not prove their conclusions with necessity. Instead, they are based on reasonable grounds for their conclusion.
    A critical thinker should understand that no matter how strong the evidence in support of an inductive argument, it will never prove its conclusion by following with necessity or with absolute certainty. Instead, an inductive argument provides only proof to a degree of probability or certainty.
  • While there is no simple answer, a critical thinker should look for information sources which are credible, unbiased, and accurate.
    This will depend on such things as the source’s qualifications, integrity and reputation.
  • Assumptions are essentially reasons implied in an argument that are taken for granted to be true.
    A warranted assumption is one that is either:
    Known to be true; or
    Is reasonable to accept without requiring another argument to support it.
    When you make an inference about observations you have made, you are logically explaining what your observations may mean.
    An inference is an explanation of what has been observed.
    You can make many inferences about the same set of observations.
    The key is that any inference must be reasonable and logical.
    Inferences must be checked through investigations to find out if they are correct.
    Decide what new information you need to have so that you can prove your inferences are true. If necessary, gather more information.
    Base your inference on accurate qualitative or quantitative observations.
    Combine your observations with knowledge or experience to make an inference.
    Try to make more than one logical inference from the same observation.
    Evaluate the inferences. Be prepared to change, reject, or revise your inferences.
  • The philosophical implications of the quantum theory are staggering. Quantum theory suggests that the very nature of an experiment will determine which state of reality is to be observed. The implications of this concept suggest that it is not possible to observe reality without changing it. Therefore, quantum logic assumes, in a certain sense, that we create our own reality by choosing which aspect we wish to observe.
    The concept of “observation” took on an entirely different meaning altogether. In classical physics, the error of observation and observed values was a major consideration. In quantum physics, this error of observation is unavoidable, and has probability functions associated with it.
    Observation plays a definite role in the result of quantum effects. The famous “light through two slits” experiment. Shining a light through a screen with two slits onto a photographic plate will develop interference patterns on the plate indicative of the representation of light as waves. According to the uncertainty principle, we can never know more than an approximate location and energy for any particle, so it is observed by us as a wave spread out over a small region of space and a variety of energy levels.
    Einstein proposed that the concepts of “observed” time and distance actually differ as the “observer” or the “observed” approach the speed of light. This is the concept of “time dilation.” That is, a moving clock appears to tick more slowly than a stationary one. However, each observer thinks that all clocks but his own have been slowed down because of motion, even if the observer himself is in motion.
  • It is helpful to think of “relevance” as the quality of the reasoning, and “sufficiency” as the quantity of the reasoning.
    Good arguments should have both quality (be relevant) and quantity (be sufficient).
  • H.G. Wells argues that inductive thinking allows one to build up an understanding of the broad outlines of future history in the same way that archaeologists slowly build up an understanding the history of previously unknown societies of the past---by “the comparison and criticism of suggestive facts”.
    This from a man in 1902 who had a futuristic predictive success rate of 60-80% for the probable sequence of events and developments over the 20th century.
    Wells rejects a logical divide between the past, present, and future as a mistaken product of our personal experience. For Wells, a futurist mind-set means having a mind that “thinks constantly and by preference of things to come, and of present things mainly in relation to the results which must arise from them.” The opposite way of thinking, says Wells, uses the past (rather than calculated future results) as a guide to future action. This mind-set tends to assume that conditions in the past will apply to the future rather than anticipating changes. Change cannot be ignored, cautions Wells, citing both the grand timescale of evolution and the pace of human change in his own time.
    The inductive thinking process is often referred to as “generalizing” because it essentially means that one begins with specific details or facts and progresses to a general principle as a conclusion.
    Therefore, induction functions as the opposite to deduction. Further, inductive generalizing is based on probability, not certainty. “An inductive argument claims that it’s likely (but not logically necessary) that if the premises are all true then so is the conclusion.”
    Thus, if inductive process is used accurately, the best that can be said is that its conclusion(s) is probably valid and accurate.
  • The fallacy is the idea that you can predict disaster risk by looking at the bumps and wiggles in current results.
    And that, in my mind, is the core of the lesson learned about how we have to manage.
    Very few people have taken that lesson to heart. It’s going to take years for it to percolate through the system.
  • Essentially risk is “we don’t know what is going to happen.”
    There is a range of outcomes and we don’t know what the outcomes are within that range and sometimes we don’t even know what that range is.
    We don’t know what the future holds and people agree, and yet they work as if they know.
    Risk management is about having a systematic way of dealing with things when things don’t go your way, but at the same time knowing that you can’t put a handle on things 100%.
  • Pierre Zack and Shell's scenario leaders have spent three decades honing their scenario-planning techniques.
    Here are tips on how to find your TINA:
    T: Tackle it yourself. Draw inspiration from the outside world, but don't ask someone else to give you the answers. "External facilitators have their uses, but only you know your business, and the more of the scenario work you do yourself, the more benefits you'll get back," says Ged Davis, the vice president of Global Business Environment (GBE), Shell's scenario unit.
    I: Isolate certainties. Form a team to determine the critical issues facing your business, says Davis. "What are the uncertainties? What are the predetermined elements? Then rank them from predetermined to least certain."
    N: Name it. "If you have a genuine insight, something that you think is very powerful, give it a name, an acronym, or an image," says Davis. "Find the simplest, most powerful way to communicate it."
    A: Act on it. "The whole point of scenarios is to trigger a debate about strategy," says Roger Rainbow, the now semiretired head of GBE. "Scenarios make no sense in the absence of a specific strategic problem."
  • Time spent with your internal customers and clients; your suppliers, vendors, and contractors; your allied functional colleagues and staff. And your carriers, forwarders, 3PLs and LSPs.
    Ask team members for their ‘histories of the future’: how things will look (say in five year’s time) and how we reached that point. Allow one or two days for people to develop scenarios based on existing information within the company. Use scenarios to stimulate debate, develop resilient strategies and test business plans against possible futures.
    Communicate scenarios graphically, for example, by imaginary newspapers written as if in the future, day-in-the-life stories, film or glossy booklets. To assess the likelihood of a scenario coming true, use early indicators—events that should be seen in the next year or so.
    Regularly read trade and business publications focusing on your industry, finance, business, politics and economics (for example, the Financial Times, The Economist, Fortune, BusinessWeek).
    Maintain and review information on economic, social, technological, governmental and regulatory trends.
    Deliver to your boss, peers and/or team members a presentation on the major changes--- PESTLE or SWOT---likely to affect your business.
    This could coincide with the annual planning cycle or contribute to a strategic plan. The presentation should:
    - Quantify the potential impact of potential changes.
    - Detail your actions to meet these changes.
    - Be prepared regularly (twice each year).
    Keep informed and up-to-date by joining a professional membership or trade association. These are especially valuable for networking and attending seminars. Also, find a relevant website and subscribe to their email alerts.
  • Transcript of "Power of Observation-What Purchasers Can Learn From Darwin"

    1. 1. Power of Observation: What Purchasers Can Learn From Darwin Track 2-Strategic Cost Analysis and Management The 63rd Annual Southwest Purchasing Conference By Thomas L. Tanel, C.P.M., CTL, CCA, CISCM , CATTAN Services Group, Inc. College Station, TX cattan@cattan.com Created by CATTAN Services Group, Inc. © 2009
    2. 2. The Power of A Theory and Darwin’s Observations Power of a theory = That which it explains ÷ That which it needs to assume in order to do the explaining
    3. 3. Darwin and the Power of Observation  Here was a man who applied his powers of observation and rigorous testing to everything he looked at in great detail, from the movements in plants and barnacles, to how pigeons navigate, to the importance of earthworms in soil health and ecology.  The essence of Darwinism is nothing more than, that simple-minded observation, as near as we can tell.
    4. 4. Darwin and the Power of Observation What Darwin did for most of his career was observe.  Only later on did he come up with a theory to explain his observations. 
    5. 5. Darwin and Survival of the Fittest  It is so simple that in the guise of “survival of the fittest” (the renaming that Darwin adopted from Herbert Spencer): the fittest are defined as those that survive, so the catchphrase amounts to “those that survive, survive.”  But Darwin didn’t define the fittest as those that survive. His “fittest” were those endowed with the best equipment to survive, and that makes all the difference.  As Darwin observed (and he himself was at pains to point out), natural selection is all about differential survival within species, not between them.
    6. 6. The Power of Observation     Charles Kettering, the famous inventor, once said: “A problem well stated is a problem half solved.” This implies that a good portion of problem solving should be devoted to a thorough understanding of what’s going on [observation] before any corrective action steps are taken. In many cases, too much time is spent on proposing various solutions before the problem has been correctly defined. Observation is a powerful technique that can be used to help understand problems. Often, clues about how to solve a problem can come from simply observing the process .
    7. 7. Tips for Making Observations     Use all of your senses (sight, hearing, touch, and smell) to make qualitative observations. Review your observations to be sure they are accurate and objective. Whenever possible, count or use measurement devices to make quantitative observations. Be sure to include units of measure with them. Check your observations to be sure that they are statements about information gained through your senses, not explanations of what you observed.
    8. 8. What Do You Observe? A Woman at a Vanity or a Skull?
    9. 9. Observation and “Thin-Slicing”    Activate your powers of observation. Writer Malcolm Gladwell refers to this process in his book Blink as "thin-slicing." Thin-slicing calls upon the use of limited information to come to conclusions.
    10. 10. Colin Powell on the Use of Limited Information to Come to Conclusions “When I am faced with a decision…I dredge up every scrap of knowledge I can…I use my intellect to inform my instinct. I then use my instinct to test all this data. Hey, instinct, does this sound right? Does it smell right, feel right, fit right? We do not have the luxury of collecting information indefinitely. At some point, before we can have every possible fact in hand, we have to decide.”
    11. 11. Powell on P40 to 70: Thin-Slicing “I have a timing formula, P-40 to 70, in which P stands for probability of success and the numbers indicate the percentage of information acquired. I don’t act if I have only enough information to give me less than a 40% chance of being right. And I don’t wait until I have enough facts to be 100% sure of being right, because by then it is almost always too late. I go with my gut feeling when I have acquired information somewhere in the range of 40-70 percent.”
    12. 12. “Thin-Slicing” and the Power of Observation Both "thin-slicing" and using the power of observation, are concerned with the challenge of identifying and focusing on only the most significant information.
    13. 13. Marcus Aurelius on Observation “Observe constantly that all things take place by change, and accustom thyself to consider that the nature of the Universe loves nothing so much as to change the things which are, and to make new things like them. “
    14. 14. Observation in the Land of the Blind  “In the land of the blind the one eyed man is king.”  The thing is, the saying isn't about how many eyes you've got, or how good they are, it's about how well you use them.
    15. 15. Observation in the Land of the Blind: Wake Up and Take Notice    So the ability to be blind to most of what we see and deaf to most of what we hear is quite useful. It helps us get by in life. Whatever our role we tend to be so busy just getting along that we rarely make the time to sit up and really take notice. We are in the habit of not looking, of not hearing, and of not noticing.
    16. 16. Practice Observation In the Land of the Blind   Observation is probably the most succinct description there is of the practice of scenario planning. Pierre Wack, the influential scenario planner used to refer to himself a “the eyes of the wolf at the front of the pack” at Royal/Dutch Shell. His view was that: "Scenarios help us to understand today better by imagining tomorrow, increasing the breadth of vision and enabling us to spot change earlier… Effective future thinking brings a reduction in the level of crisis management and improves management capability, particularly change management."
    17. 17. Observation and Seeing What’s Invisible  As Jonathan Swift said: vision is the art of seeing things invisible to others.  And why does so much of what's in front of us seem invisible?  Well, perhaps because people only see what they are prepared to see (Ralph Waldo Emerson), and because what we see depends mainly on what we look for (John Lubbock).
    18. 18. Techniques to Become Truly Observant       Become hyper-observant of the more discreet elements of your everyday environment Look for patterns amidst your everyday routines Regard anything out of ordinary patterns as possibly a risk or intentional distraction Focus on incongruent people, equipment, processes, methods, material flow, etc. Look beyond what you are shown or told, and Do not tune out familiar surroundings---look deeper for things that you may have missed
    19. 19. Have You Become Truly Observant?: How Many Human Faces Do You See?
    20. 20. Creativity and Innovation     In any organization today, sooner or later the words "innovation" and "creativity" will come up. Few leaders truly know how to foster creativity and innovation in their workplace. And even fewer actually do it!!! "The way forward is paradoxically not to look ahead, but to look around [observation]," explains John Sealy Brown, the director of the Palo Alto Research Center (PARC) for Xerox.
    21. 21. The Practice of Innovation In most companIes today, In most companIes today, the “practIce” of the “practIce” of InnovatIon InnovatIon can be lIkened to can be lIkened to the matIng of pandas: the matIng of pandas: Infrequent, clumsy and Infrequent, clumsy and often IneffectIve. often IneffectIve.
    22. 22. Sawyer’s “Group Genius”  The heart of this book Group Genius is Sawyer’s proposal that “collaboration is the secret to breakthrough creativity”  He has found that true creativity and innovation only comes through the open sharing of information between groups of individuals.
    23. 23. Sawyer’s “Group Genius”  Sawyer discovered that innovation truly emerged from “small sparks gathering together over time, multiple dead ends, and the reinterpretation of previous ideas”.  True organizational collaboration means letting go of preconceived notions for how to attain success.  When true sharing of ideas is fostered, then real innovation can occur.
    24. 24. Sawyer’s “Aha” Moment  The idea of small sparks, which are small moments of creativity that, when added together, provide the larger picture for the “Aha” moment.  This “collaboration over time” suggests that great inventions emerge from a long sequence of small sparks.  Collaboration brings small sparks together to generate breakthrough innovation.
    25. 25. Four Step Creative Process 1. 2. 3. 4. Preparation: To train your mind. Incubation: To set back from the problem. Illumination: The idea arises in the mind like a sudden flash. Validation: You have to check the validity of the idea.
    26. 26. Four Step Creative Process—Step 1 Preparation: To train your mind.       Concentration and attention play a great role in preparation Read everything and as much as you can Meet people Keep a log Choose a motivating environment Increase your intellectual capacity
    27. 27. Four Step Creative Process—Step 2 Incubation: To set back from the problem.    Incubation is a contingency phase It means that you have not solved your problem during the creative session Very often the solution you were looking for is easily found after a good sleep.
    28. 28. Four Step Creative Process—Step 3 Illumination: The idea arises in the mind like a sudden flash.    Brainstorming Mind Mapping Mind Revolution
    29. 29. Four Step Creative Process—Step 4 Validation: You have to check the validity of the idea.     All of the previous steps aim to produce new ideas. It does not mean that these ideas are worthy or useful. Organize a validation session and discuss with friends, colleagues, associates, etc. If you get interest and support, it means that your idea is innovative and that you can start the process of studying the project.
    30. 30. Definition of Critical Thinking A process by which we use our knowledge and intelligence to effectively arrive at the most reasonable and justifiable positions on issues, and which endeavors to identify and overcome the numerous hindrances to rational thinking.
    31. 31. Critical Thinking  Critical thinking is more than thinking logically or analytically; it also means thinking rationally or objectively.  Logic and analysis are essentially philosophical and mathematical concepts.  Whereas thinking rationally and objectively are broader concepts that also embody the fields of psychology and sociology.
    32. 32. Critical Thinking: Five Step Process      Step 1: Adopt the Attitude of a Critical Thinker Step 2: Recognize and Avoid Critical Thinking Hindrances Step 3: Identify and Characterize Arguments Step 4: Evaluate Information Sources Step 5: Evaluate Arguments
    33. 33. Adopt the Attitude of a Critical Thinker: Step 1  The first step to becoming a proficient critical thinker is developing the proper attitude.  Such an attitude embodies the following characteristics: Open-mindedness Healthy skepticism Intellectual humility Free thinking High motivation
    34. 34. Recognize and Avoid Critical Thinking Hindrances: Step 2   Each day of our lives we become exposed to things that hinder our ability to think clearly, accurately, and fairly. These hindrances can be divided into four categories:     Basic Human Limitations Use of Language Faulty Logic or Perception Psychological and Sociological Pitfalls
    35. 35. Identify and Characterize Arguments: Step 3   At the heart of critical thinking is the ability to recognize, construct, and evaluate arguments. In the context of critical thinking, an argument means the presentation of a reason(s) to support a conclusion(s), or: Argument = Reason + Conclusion
    36. 36. Evaluate Information Sources: Step 4     Most arguments reference facts to support conclusions. A critical thinker must have a sound approach for evaluating the validity of facts. Facts are usually acquired from information sources such as eyewitness testimony or people claiming to be experts. These sources are typically cited in the media or published in reference books.
    37. 37. Evaluate Information Sources : Step 4  In order to assess credibility, truth, and exactness, the critical thinker must seek answers to the following types of questions: 1. Does the information source have the necessary qualifications or level of understanding to make the claim (conclusion)? 2. Does the source have a reputation for accuracy? 3. Does the source have a motive for being inaccurate or overly biased? 4. Are there any reasons for questioning the honesty or integrity of the source?
    38. 38. Evaluate Arguments : Step 5  The last step to critical thinking, evaluating arguments, is itself a three-step process to assess whether:     Assumptions are warranted; Reasoning is relevant and sufficient, and Relevant information has been omitted. The first step to evaluating arguments is the use of assumptions or inferences which are essentially reasons implied in an argument that are taken for granted to be true.
    39. 39. Evaluate Arguments: Einstein on Knowledge and Experience  Albert Einstein once said, “The only source of knowledge is experience.”  Experience allows us to use both our education and our observations to gain a greater understanding and become a more valuable resource for others.
    40. 40. Evaluate Arguments : Step 5    The second step to evaluating arguments is to assess the relevance and sufficiency of the reasoning (or evidence) in support of the argument’s conclusion. A convincing argument is one that is complete, in that it presents all relevant reasoning (evidence), not just evidence that supports the argument. Thus, the final key to evaluating arguments is attempting to determine if important evidence has been omitted or suppressed.
    41. 41. H.G. Wells on Inductive Thinking: Seeing Things Before They Happen  H.G. Wells argues that inductive thinking allows one to build up an understanding of the broad outlines of future history by “the comparison and criticism of suggestive facts”.  Wells suggests using existing or researched information to infer a future state of affairs.  He proposes that such inferences can be reasonably accurate.
    42. 42. Peter L. Bernstein on Risk: Seeing Things Before They Happen   The objective is not to control things you can’t control but to enable you to be relatively better at delivering results and performance over time, no matter what the “weather” is. The ability to do that means we have to manage our companies and our divisions by understanding what they’re actually doing, not just by looking at their results.
    43. 43. Peter L. Bernstein on Risk: Seeing Things Before They Happen  In his book Against the Gods he states, "The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us."
    44. 44. As Henry Mintzberg Explains It: Seeing Things Before They Happen Why? Because good planning requires a view of the future, and since forecasts based on current trends or estimates of growth based on history will be dangerous to organizations if their environment is changing fast. And as we know, everything is changing fast. A major source of change in the world today is the adoption of information technology. The changes visible in the last few years, as the financial services industry reinvents itself, are expected to change the way we work, play, shop, are governed, bank, and the communities we belong to. In this environment, scenario planning is a must...
    45. 45. Mintzberg on Extracting the Significance from the Noise “There is no phenomena unless it is an observed phenomena.” John Wheeler Always keep in mind that the successful organizations are those which have found ways of looking for early warning signs---the significant through the noise.
    46. 46. (There Is No Alternative) Shell Scenario Planning: Seeing Things Before They Happen The present may be murky; the future may be up for grabs. But strategy that separates what's inevitable from what's unknowable is the essence of the game. There Is No Alternative (TINA) T: Tackle it yourself. I: Isolate certainties. N: Name it. A: Act on it.
    47. 47. Go to The Source for Better Decisions: Seeing Things Before They Happen  Make it routine to go to many individuals directly influenced by the issue so you can see firsthand and fully understand the subtle details, realties of a situation and their “histories of the future”.  Keep informed about the future and new trends.  Get out and visit your supply chain both internally and externally---observe.
    48. 48. Observation and the Periphery: Seeing Things Before They Happen  Valuing the periphery requires a seismic shift in organizational thinking.  Instead of considering any deviation from standard operating procedure to be irrelevant, excessive or unnecessarily expensive, organizations must begin to view such variances as portals to the future.  With wide eyes and an open mind, they must actively and systematically extend the range of observation outward, beyond the comfort of the known.  Those who do not pay attention to the periphery are soon overcome by the waves of change.
    49. 49. Being Fit to Ride the Waves of Change: Seeing Things Before They Happen
    50. 50. Thank You !
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