White paper The Thinking-Feeling Organization

THE THINKING-FEELING
ORGANIZATION
A New Paradigm for Strategic Innovation

By Larry Schmitt, Ph.D.
December 2013

Copyright
©
2013
by
The
Inovo
Group,
LLC

All
rights
reserved.

www.TheInovoGroup.com

THE THINKING-FEELING ORGANIZATION
A New Paradigm for Strategic Innovation

G

ather
any
group
of
innovators
and
ask
what
one
of
the
hardest
parts
of
their
job
is,
and

they
are
likely
to
tell
you
it's
convincing
the
rest
of
the
organization
the
opportunity
is
a

good
idea
to
pursue.
Those
within
organizations
who
are
directly
involved
in
the
front-‐
end
of
the
innovation
process
face
two
daunting
challenges:
understanding
ambiguous
signs
of

future
demand
and
rationalizing
future
designs
to
meet
it
and,
perhaps
even
more
difficult,

convincing
the
rest
of
the
organization
why
this
innovation
will
be
good
for
the
company.

New
offerings
and
business
models
are
unfamiliar
–

by
definition
they
are
different,
even
radical
or

disruptive
–
not
just
for
the
ultimate
customer
but
for

the
organization
creating
them,
too.
This
prospect
of

change
makes
the
organization
"uncomfortable,"
and

discomfort
can
manifest
in
many
ways.
Most
of
these,

as
you
might
imagine,
are
detrimental
to
good
decision

making.

Strategic
opportunities
present
a

conundrum.
They,
and
all
the

uneasiness,
fear
and
challenges

they
generate,
are
critical
if
an

organization
is
to
not
only

survive
but
thrive.

Discomfort
is
exacerbated
when
the
opportunities

under
consideration
are
strategic,
that
is,
of
such
complexity
and
impact
as
to
require
the

organization
to
change
in
meaningful
ways.
Strategic
opportunities
present
a
conundrum:
They,

and
all
the
uneasiness,
fear
and
challenges
they
generate,
are
critical
if
an
organization
not
only

is
to
survive
but
thrive.
Incremental,
sustaining
innovations
also
contribute
to
an
organization's

survival
–
but
only
for
so
long.

Especially
critical
to
strategic
innovation
is
the
need
to
acknowledge
and
productively

channel
the
strong
emotional
reactions
strategic
opportunities
generate
within
an
organization.

Although
most
companies
have
systems
and
processes
in
place
for
"thinking"
about
new

opportunities,
few
if
any
have
a
systematic
way
to
"feel"
about
them.
On
an
individual
level,
we

know
this
magic
combination
of
thinking
and
feeling
as
intuition,
and
leaders
of
the
Amazons,

Apples
and
Googles
of
the
world
demonstrate
extraordinary
intuition
that
accelerates
strategic

innovation.
But
not
all
organizations
have
such
a
singular
presence
and
so,
for
these

organizations,
a
structured
system
that
lets
both
reason
and
emotion
interact
in
productive
and

effective
ways
is
a
necessity.

The Thinking-Feeling Organization: A New Paradigm for Strategic Innovation | 1

The
Case
for
Thinking
and
Feeling

Half
our
mistakes
in
life
arise
from
feeling
where
we
ought
to
think,

and
thinking
where
we
ought
to
feel.

–
John
Churton
Collins

We
as
individuals
are
bound
by
internal
constraints,
even
as
we
actively
seek
the
new.
Our

experience
and
perspectives
limit
our
mental
models,
thoughts
and
decisions
in
ways
we
do
not

necessarily
realize
or
control.
If
we
do
realize
the
constraints,
we
likely
seek
ways
to
unfetter
our

capacity
for
learning
and
creativity
in
search
of
the
new
thing
that
will
transform
us
and
the

organizations
we
work
with
–
we
purposefully
explore
new
realms,
acquire
knowledge
and
seek

new
experiences.
Done
well,
these
activities
challenge
our
existing
world
views.i
But
we
are

human.
We
are
bound
by
both
rationality
and
emotionality.
We
crave
change
but
are
wary
of
the

new.
We
say
we
love
creativity,
but
we
avoid
uncertainty. ii
We
demand
statistics
and

spreadsheets,
but
we
are
suspicious
of
their
conclusions.
We
have
numerous
cognitive

deficiencies,iii
we
naturally
tend
to
believe
that
which
reinforces
our
own
existing
perspectivesiv

and
we
want
to
express
our
individualism
and
be
a
member
of
a
communityv.

One
of
the
most
powerful
communities,
when
it
comes
to
instilling
norms
of
behavior
and

thought
(i.e.,
a
culture),
is
the
corporation.
The
things
corporations
love
and
that
create
their

distinct
cultures
–
missions,
visions,
strategy,
processes,
accountability,
etc.
–
also
create

constraints,
those
explicit
and
implicit
rules
that
individuals
within
organizations
live
by.
These

constraints
are
necessary
for
immediate
performance
but
are
usually
antithetical
to

transformational
growth.
Enlightened
organizations,
and
the
innovators
who
work
in
them,

continually
challenge
orthodoxy
and
aspects
of
embedded
culture
that
constrain
the

organization.
They
understand
this
is
a
must
in
order
to
find
new
opportunities
to
transform
and

evolve.
The
alternative,
these
innovators
realize,
is
to
shrink
and,
eventually,
die.

What
It
Means
for
an
Organization
to
Think
and
Feel

Academics,
business
leaders
and
other
thought
leaders
have
written
a
lot
over
the
past
two

decades
about
the
learning
organization
and
knowledge-‐creating
companies.vi
Now,
it
is
time
to

go
further.
In
the
face
of
the
inherent
complexity,
ambiguity
and
uncertainty
strategic
innovation

brings,
organizations
must
not
only
learn
but
also
"think"
about
what
has
been
learned
and

created
and,
here
is
the
radical
new
idea:
to
"feel"
about
what
has
been
learned
and
created.

All
organizations,
but
especially
companies
needing
to
innovate,
must
develop
the
means
to

think
about
new
opportunities
–
with
all
of
their
requisite
spreadsheets
and
predictive
analysis
–

and
also
to
feel
about
new
opportunities,
including
the
emotions
they
elicit.
We
as
individuals


know
what
it
means
to
think
and
feel,
although
often
we
are
not
consciously
aware
of
the

interaction.
And
what
determines
how
an
organization
as
a
whole
behaves
toward
new
strategic

opportunities
is
the
collective
effect
of
individuals,
acting
on
behalf
of
the
organization
and
in

accordance
with
its
culture
and
mission.

Several
years
ago,
the
innovation
team
of
a
Fortune
50
company
initiated
a
project
to
focus

specifically
on
business
model
innovations
in
the
domain
of
heating
and
cooling,
which
held
a

great
deal
of
interest
and
promise.
The
ground
rules
for
this
opportunity
discovery
project

stipulated
that
no
new
technology
could
be
considered;

any
opportunity
had
to
utilize
existing
and
proven

technology.
One
of
the
opportunities
the
team

During
the
genesis
of
a
strategic

discovered
and
developed
at
the
conceptual
level

opportunity,
there
are
too
many

involved
increasing
the
adoption
of
ground
source

places
where
the
journey
can
be

heat
pump
solutions
for
certain
types
of
buildings.
The

derailed
by
decisions
based

technology
was
well
developed.
A
supply
and
service

primarily
on
emotional
factors,

and
likewise,
by
decisions
based

infrastructure
existed.
The
benefits
of
the
technology

solely
on
reason.

had
been
well
established
and
recognized.
Still,
the

market
had
yet
to
take
off.
The
team
discovered
the

systemic
reasons
for
this
and
developed
solutions
to

overcome
the
barriers,
but
the
solutions
involved
significant
changes
to
the
existing
value

network.
At
this
stage
of
opportunity
development,
the
analysis
clearly
indicated
a
next
step
was

warranted.
This
meant
further
study
and
experimentation
but
not
a
large
financial
investment.

When
the
team
presented
this
opportunity,
the
executives
in
the
room
listened
attentively,

asked
probing
questions,
acknowledged
the
value
equations
and
agreed
on
the
potential.
They

were
complimentary
in
their
assessment
of
the
work
done.
Then
one
executive
added,
"But
this

is
just
not
us."
And
that
was
the
end
of
that.

"But
this
is
just
not
us"
was
an
emotional
response,
and
it
trumped
all
of
the
reasoning,
logic

and
analysis
that
went
into
determining
that
the
opportunity
was
worth
a
minor
investment
to

test
some
assumptions.
The
opportunity
made
the
executives
uncomfortable.
It
didn’t
fit
with

their
model
of
what
they
felt
the
company
should
be
or
do.
There
was
too
much
uncertainty,
and

they
responded
in
a
way
that
in
retrospect
was
not
surprising.
In
the
absence
of
a
paradigm
that

addresses
both
the
rational
and
emotional
dynamics
within
an
organization,
a
company
doesn’t

have
the
proper
means
to
both
think
and
feel
and
to
integrate
these
perfectly
valid
ways
of

assessing
an
opportunity.
During
the
genesis
of
a
strategic
opportunity,
there
are
too
many

places
where
the
journey
can
be
derailed
by
decisions
based
primarily
on
emotional
factors
like

this
one
was,
and
likewise,
by
decisions
based
solely
on
reason.


By
contrast,
it’s
instructive
to
look
at
three
technology

giants
widely
admired
for
innovativeness
–
Apple,
Google

and
Amazon
–
to
see
how
both
thinking
and
feeling
play

into
their
ability
to
innovate.

Jobs'
decision
was
not
based

on
massive
amounts
of
data

about
consumer
preferences.

In
fact,
such
data
surely

would
have
pointed
to
the

opposite
conclusion,
that

there
must
be
a
keyboard.

In
truth,
Apple
under
Steve
Jobs
was
a
company
ruled

by
intuition.
Myriad
stories
exist
about
the
way
Jobs
made

decisions
"instinctively."
One
of
the
most
telling
is
about

the
decision
not
to
have
a
physical
keyboard
on
the
iPhone.

From
the
Walter
Isaacson
biography
of
Jobs,vii
here’s
what

Steve
said
at
the
time:
“A
hardware
keyboard
seems
like
an
easy
solution,
but
it’s
constraining.

Think
of
all
the
innovations
we’d
be
able
to
adapt
if
we
did
the
keyboard
onscreen
with
software.

Let’s
bet
on
it,
and
then
we’ll
find
a
way
to
make
it
work.” What
is
interesting
is
that
Jobs'

decision
was
not
based
on
massive
amounts
of
data
about
consumer
preferences.
In
fact,
such

data
surely
would
have
pointed
to
the
opposite
conclusion,
that
there
must
be
a
keyboard.

The
birth
of
AdSense,
one
of
the
reasons
Google
is
so
successful,
is
another
example
of
the

equal
role
of
the
"feeling"
part
of
the
equation.
In
an
accounting
by
Steven
Levy
in
In
the
Plex,viii

Sergey
Brin’s
decision
to
purchase
Applied
Semantics,
the
company
that
developed
the
AdSense

technology,
was
based
on
his
belief
that
"this
could
be
a
two-‐billion-‐dollar
business,"
after
a

single
presentation
from
Applied
Semantics
executives.
When
AdSense
launched,
it
was
Google

that
purchased
the
ad
space
and
gave
it
away
to
its
existing
AdWords
advertisers
to
get
them
to

try
it.
The
decision
was
based
on
Brin’s
intuition,
the
subconscious
interplay
between
thinking

and
feeling,
which
told
him
it
would
work,
rather
than
solely
on
market
data
or
reasoned
analysis

of
advertiser
behavior.

Amazon’s
decision
to
develop
the
technology
behind
its
Elastic
Compute
Cloud
(EC2)
web

service
grew
out
of
necessity,
to
support
its
online
retail
business.
The
decision
to
open
this

service
to
the
world
was,
however,
anything
but
a
foregone
conclusion.
Early
on
(in
2003),
Jeff

Bezos
became
interested
in
this
idea
and
requested
a
write-‐up
describing
it.
Based
on
the

information
he
received,
he
pushed
for
making
the
service
available,
not
just
to
Amazon,
but
also

to
anyone
in
the
B2B
space,
turning
it
into
a
business.
According
to
one
of
the
developers,ix
well

before
the
service
was
available
"…
we
produced
a
‘press
release’
and
a
FAQ
to
further
detail
the

how
and
why
of
what
would
become
EC2.”
Bezos
(and
others
at
Amazon)
not
only
thought

through
the
EC2
opportunity;
they
realized
the
company
needed
to
communicate
with
its
future

internal
and
external
customers
in
ways
that
let
them
feel
what
EC2
was,
how
it
fit
Amazon,
and

how
it
could
transform
the
company.


These
three
examples
illustrate
how
even
the
most
innovative,
hi-‐tech,
data-‐driven

companies
respond
to
new
opportunities
both
rationally
and
emotionally,
how
they
think
and

feel.
All
three
have
intuitive,
charismatic
leaders,
who
have
internalized
their
ability
–
in
an

instinctual
way
–
to
combine
reason
and
emotion.
We
as
individuals
know
this
as
intuition.
These

three
leaders
have
honed
deep
intuition
about
their
customers
that
transcends
existing
industry

or
market
segments
and
they
have
the
authority
and
the
will
to
transform
their
organizations
as

necessary.

Intuition,
that
delicate
balance
of
thinking
and

An
organization
not
only

feeling,
plays
a
major
role
in
how
organizational

creates
and
shapes
new

decisions
are
made,
especially
those
that
involve
an

opportunities
but
also,

uncertain
future.
In
the
hands
of
a
Jobs,
Bezos
or
Brin,
it

particularly
in
the
case
of

can
be
a
powerful
force.
But
not
all
organizations
have

strategic
opportunities,
is

a
leader
with
such
intuition
or
who
is
involved
in
such
a

shaped
by
the
opportunity.

direct
way
in
the
details
of
the
offering
design
and

It
goes
both
ways.
It
is
not

experience.
For
these
organizations,
a
structured

comfortable.
Yet
it
is
exactly

system
that
lets
both
reason
and
emotion
interact
in

what
organizations
must

productive
and
effective
ways
throughout
the
strategic

do
if
they
are
to
be

innovation
process
is
essential.
That's
because
an

successful
in
the
future.

organization
not
only
creates
and
shapes
new

opportunities
but
also,
particularly
in
the
case
of

strategic
opportunities,
is
shaped
by
the
opportunity.
It
goes
both
ways.
It
is
not
comfortable.
Yet

it
is
exactly
what
organizations
must
do
if
they
are
to
be
successful
in
the
future.

Strategic
Innovations
–
Pushing
Boundaries
and
Creating
Discomfort

Wicked
problems
resist
mere
cleverness.

–
Andrew
Zolli

Strategic
innovation
is
the
means
of
creating
transformational
change
and
growth
of
an

organization,
and
strategic
opportunities
are
the
means
of
achieving
it.
The
nature
of
strategic

innovation
and
strategic
opportunities
has
been
discussed
extensively
elsewhere, x,xi
and
the

following
diagram
shows
the
strategic
innovation
canvas
that
can
be
used
to
assess
the

opportunities
a
company
chooses
to
pursue.
The
Constant
Risk
Boundary
represents
the

combination
of
new-‐to-‐the-‐world
and
new-‐to-‐the-‐company
that
the
organization
can
tolerate.


Figure
1
–
The
Strategic
Innovation
Canvas
and
the
Strategic
Boundary

By
their
nature,
strategic
opportunities
push
the
organization’s
strategic
boundary
into
new

territory
(figure
1).
While
sustaining
innovations
are
critically
important
to
a
company’s
current

health
(and
the
functioning
of
its
performance
engine),
they
need
to
be
augmented
by

innovations
that
transform
both
the
world
and
the
company
in
significant
ways.
To
succeed
at

strategic
innovation
and
the
transformational
growth
it
brings,
a
company
needs
constantly
to

push
its
strategic
boundary
outwards.
But
herein
lies
the
conundrum:
Precisely
because
strategic

opportunities
do
push
the
boundary,
they
are
inherently
unfamiliar
and
create
tremendous

uncertainty
and
discomfort.

The
essence
of
a
strategic
opportunity
can
be
antithetical
to
the
way
in
which
a
company’s

performance
engine
runs.
Characteristics
that
can
make
a
strategic
opportunity
especially

uncomfortable
for
a
performance-‐oriented
company
include
the
following:

1. Complex
opportunities
–
The
opportunities
may
involve
a
number
of
"moving
parts"
that

require
detailed
interaction
among
multiple
parties,
not
all
of
whom
are
necessarily
within

the
organization
that
pursues
and
realizes
the
opportunity.

2. New
experiences
–
There
often
is
a
high
degree
of
ontological
uncertainty
regarding
the

opportunity.
In
other
words,
the
opportunity
creates
new
categories
or
dimensions
of

experience,
both
for
the
customer
and
for
the
organization,
that
don’t
fit
neatly
into
existing

mental
or
operational
models.

3. Weak
evidence
–
The
evidence
for
a
strategic
opportunity
may
come
in
the
form
of
weak

signals.
Often,
traditional
forms
of
market
research
–
voice
of
the
customer,
focus
groups,

surveys,
even
ethnography
–
do
not
reveal
what
does
and
does
not
motivate
a
future


customer.
Weak
signals
are
notoriously
difficult
to
distinguish
from
noise,
and
so
the

evidence
to
support
decisions
to
move
forward
and
invest
in
strategic
opportunities
is
often,

and
unavoidably,
ambiguous.

4. Qualitative
decisions
–
The
decisions
that
must
be
made
during
the
genesis
of
a
new

strategic
opportunity
are
usually
based
on
qualitative,
not
quantitative,
factors.
As
a
matter

of
fact,
innovators
should
view
detailed
quantitative
"evidence"
with
suspicion.
Also,
these

qualitative
decisions
are
usually
made
with
little
expertise
or
experience
because,
by

definition,
the
opportunities
should
be
pushing
the
boundaries
of
existing
organizational

culture
and
competencies.

Learning
how
to
deal
effectively
and
systematically
with
the
uncertainty
and
discomfort

inherent
in
a
strategic
opportunity
is
a
must.
The
organization
needs
to
evolve
and
adapt
in
ways

that
allow
it
to
transform
itself
and
push
boundaries
while
not
affecting
the
existing
performance

engine,
the
source
of
its
current
health.

How
Organizations
View
the
World
and
Make
Decisions

All
of
our
reasoning
ends
in
surrender
to
feeling.

–
Blaise
Pascal

Decisions
are
made
emotionally
as
much
as
they
are
made
rationally. xii
This
is
true
of

customers
as
well
as
executives,
managers
and
individual
contributors
within
organizations.

Emotion
(or
feeling)
most
certainly
enters
into
the
decisions
an
organization
makes.
In
fact,
this
is

the
problem.
The
emotions
that
are
natural
in
any
process
of
examining
something
new
and

uncertain
too
often
go
unacknowledged,
and
they
therefore
manifest
themselves
in
ad
hoc
and

unstructured
ways,
to
the
detriment
of
sound
decision
making.

To
use
the
model
presented
by
Kahneman, xiii
organizations
have
both
"System
1"
and

"System
2"
parts
to
their
"mind."
System
1
acts
instinctively
–
the
initial
emotions
that
emerge

when
presented
with
an
unfamiliar,
strategic
opportunity
are
immediate
but
often
wrong.

System
2,
the
thinking
function,
is
difficult
and
slow.
The
key
is
to
let
the
instinctual
System
1

feeling
part
of
the
organizational
mind
catch
up
with
the
System
2
thinking
part,
and
to
have
the

two
parts
complement
each
other.
Adopters
often
initially
react
negatively
or
ambivalently
to

things
they
ultimately
come
to
accept
and
even
value
greatly.xiv
This
is
true
for
organizations
as

well.
Emotional
reactions
are
usually
immediate,
but
they
can
slowly
evolve
in
more
nuanced

ways
with
sufficient
time
and
exposure
to
the
new
concepts.
This
should
be
one
key
objective
of

any
system
that
aids
decision
making
about
new,
unfamiliar
and
uncomfortable
future
options.

An
organization
needs
ways
to
explicitly
acknowledge
and
guide
thoughts
and
feelings
that

don’t
leave
emotion
to
chance.
Internal
adopters
must
come
to
understand
and
"feel"
what
the


opportunity
can
be
for
the
company
so
the
opportunity
can
get
a
fair
hearing
within
the

organization.
Executives
and
managers
not
only
must
think
a
decision
is
correct
based
on
a

reasoned
analysis
of
facts
and
evidence;
they
also
must
feel
the
decision
is
correct
within
the

context
of
their
own,
and
the
company’s,
experience.
Otherwise,
they
won't
support
the

opportunity
going
forward.

To
accomplish
this,
we
need
a
new
paradigm
to
acknowledge
and
integrate
the
thoughts
and

feelings
of
internal
and
external
adopters.
The
paradigm
must
include
several
key
thinking
and

feeling
categories
and
functions
that
apply
internally,
externally
and,
most
importantly,
at
the

boundary
between
them
(figure
2).
Many
tools
and
techniques
exist
to
address
the
rationality

and
irrationality
of
future
customers
(e.g.,
voice
of
the
customer,
ethnography,
personas).

Companies
are
less
versed
in
how
to
address
the
rational
and
emotional
aspects
internally,
or,
to

be
more
accurate,
it
is
the
emotional
or
feeling
aspects
of
an
opportunity
that
tend
to
be
the

most
problematic
within
organizations.

Figure
2
–
The
Thinking-‐Feeling
Cycle
of
an
Innovation
Paradigm

The
four
quadrants
of
figure
2
define
distinct
and
complementary
actions
and
behaviors
that

the
team
undertaking
an
innovation
initiative,
and
by
implication
the
organization
the
team

belongs
to,
must
do.
All
four
are
necessary
to
be
successful
at
strategic
innovations:

• External
–
Thinking:
Extraction
and
synthesis
of
new
knowledge
as
the
foundation

for
identifying
and
creating
new
opportunities.
The
purposeful,
structured
and

thoughtful
searching
for,
discovery
and
use
of
new
knowledge
is
critical
to
all
aspects
of

opportunity
genesis.

•

Internal
–
Thinking:
The
creation
of
models,
often
complex
systems
models

of
plausible
futures
and
likely
outcomes,
requires
a
reasoned
and
thoughtful


•

•

construction
to
capture
the
relevant
dynamics
of
the
opportunity's
most

important
attributes.

Internal
–
Feeling:
The
need
to
have
the
organization
"feel
good"
about
a

new
opportunity
is
accomplished
not
just
with
analysis
but
with
stories
that

let
others
within
the
organization
understand
what
the
opportunity
truly

means
to
both
the
external
adopter
and
to
the
organization
itself.
A
good

story
reveals
the
knowledge
and
empathy
behind
the
new
opportunity
and

lets
internal
stakeholders
define
their
role.

External
–
Feeling:
Understanding
experiences
and
motivations
at
a
visceral

level
is
key
to
empathizing
with
potential
and
eventual
adopters
and

influencers
and
to
seeing
the
world
through
their
eyes,
including
the

emotions
they
might
feel
and
the
thoughts
they
might
have.

The
actions
and
behaviors
associated
with
each
of
the
four
quadrants
occur
with
any
type
of

innovation
(sustaining,
strategic
or
speculative).
When
undertaken
using
a
system
of
Learn-‐
Create-‐Evaluate-‐Select
activities
defined
below,
the
four
quadrants
create
a
comprehensive

framework
for
the
tools
that
an
innovation
team
should
use
when tasked
with
strategic

innovation.

With
sustaining
innovations,
the
"thinking"

Executives
and
managers
not
only

quadrants
typically
get
the
most
attention

must
think
a
decision
is
correct

because
the
"feeling"
quadrants
are
a
given.
These

based
on
a
reasoned
analysis
of

innovations
likely
"feel
right"
–
they
fit
nicely
with

facts
and
evidence;
they
also
must

the
organization,
even
if
they
use
technology
or

feel
the
decision
is
correct
within

design
that
pushes
the
envelope.
For
sustaining

the
context
of
their
own,
and
the

opportunities
implemented
by
the
performance

company’s,
experience.
Other-‐
engine
of
the
organization,
these
four
quadrants

wise,
they
won't
support
the

are
well
travelled
and
familiar.
The
system
models

opportunity
going
forward.

and
analysis
are
well
known,
the
stories
of
the

sustaining
innovations
have
been
told
many
times

before,
with
only
slight
variation.
Even
the
external
experiences
and
knowledge
are
not
too
far

afield
from
what
the
organization
already
knows
and
does.

Speculative
innovations,
on
the
other
hand,
are
ruled
by
feeling.
These,
by
definition,
are
a

leap
of
faith
where
reason
would
say
to
tread
carefully
but
emotion
says
to
jump.
This
is
not
to

say
that
an
organization
should
never
attempt
such
opportunities.
Indeed,
some
companies
such

as
Google
have
an
explicit
charter
to
pursue
opportunities
that
significantly
stretch
or
even
break

the
strategic
boundary.
It
is
up
to
the
organization
(and
its
culture)
to
determine
if
this
is

something
it
is
willing
to
do.


The
picture
gets
complicated
with
a
strategic
opportunity.
System
models
and
analyses
are

likely
new
and
different.
Stories
about
the
future
are
unfamiliar
and
possibly
off-‐putting.
Adopter

experiences
are
unlike
what
has
been
seen
before,
and
the
knowledge
being
acquired
doesn’t

readily
fit
into
existing
mental
models.
All
four
quadrants
are
equally
important
to
determining

the
success
of
a
new
strategic
opportunity.
It
is
in
these
situations
that
an
organization
needs
to

have
the
right
paradigm,
the
right
framework,
and
the
right
means
to
balance
the
four
quadrants

so
it
can
manage
the
uncomfortable.

Iterative
Deepening
as
a
Paradigm
for
Collectively
Thinking
and
Feeling

You
never
know
the
truth.
You
can
only
approach
it
and
hope
to
get
a
bit
nearer

to
it
each
time.
You
iterate
towards
the
truth.
You
don't
know
it.

–
James
Lovelock

Acknowledging
the
need
for
an
organization
to
collectively
think
and
feel
about
a
new

innovation
or
a
portfolio
of
innovations
raises
the
question
of
means.
How
does
a
company
do

this?
How
can
collective
thinking
and
feeling
about
a
new
opportunity
take
place?

The
answer
is
iterative
deepening.

The
term
"iterative
deepening"
(ID)
is
adopted
from
the
world
of
computer
science.
A

technique
to
search
impossibly
large
spaces
with
limited
resources,
ID
was
originally
introduced

by
early
developers
of
chess-‐playing
computers,
where
the
space
of
possible
moves
is
so
large

that
a
computer
cannot
practically
examine
every
potential
move
in
any
reasonable
time
period

(i.e.,
the
limited
resource
is
computer
cycles
and
memory).
Instead,
ID
enabled
the
computer
to

efficiently
search
the
large
space
of
possible
moves
using
both
iteration
(a
search
is
run

repeatedly)
and
deepening
(the
search
goes
deeper
with
each
iteration).

The
term
ID
is
used
in
our
context
as
a
metaphor.
As
such,
it
illustrates
several
key
attributes

of
a
paradigm
that
guides
a
thinking-‐feeling
organization
through
the
exploration
of
a
strategic

opportunity:

•
•
•
•

An
iterative
process,
i.e.,
repeated
looks
at
a
specific
concept

A
deepening
process,
i.e.,
getting
more
nuanced
and
informed

A
specific
charter,
i.e.,
a
purpose-‐built
project
with
tangible
deliverables
and

measurable
outcomes

Limited
resources,
i.e.,
a
purpose-‐built
team
with
a
defined
schedule
and

endpoint

Iterative
deepening
allows
an
organization
both
to
think
deeply
about
opportunities
in
order

to
understand
how
they
can
be
created
and
adopted
and
to
feel
deeply
about
opportunities
in


order
to
understand
how
they
will
"fit"
the
organization.
A
specific
implementation
of
the
ID

paradigm
is
described
elsewhere.xv

A
system
of
ID
can
serve
as
the
paradigm
by
which
an
organization
can
develop
effective

mechanisms
for
thinking
and
feeling
about
the
future
when
that
future
makes
the
organization

uncomfortable.
And
the
ID
paradigm
applies
all
along
the
journey,
from
initial
discovery
through

the
stages
of
development
and
execution
(using
hypothesis-‐driven,
test-‐and-‐learn
approaches),

deployment
and
post-‐launch
adaptation
by
both
the
customers
and
the
organization
itself.

Because
the
ID
paradigm
deals
with
the
challenges
strategic
opportunities
present,
it
needs

to
work
differently
than
the
system
an
organization
uses
for
its
performance
engine.
This

includes
business
divisions
focused
on
new
product
development
systems.
Systems
based
on

stage-‐gate
or
phase-‐gate
paradigms
make
sense
for
sustaining
innovations
but
do
not
work
well

for
strategic
innovations.

Four
fundamental
activities
support
a
system
of
ID:

1. Learning,
which
entails

o

Gathering
information,
knowledge
and
insights,
no
matter
how
ambiguous
and

qualitative,
from
both
obvious
and
non-‐obvious
sources.

o

Letting
early
learning
influence
later
learning
–
the
questions
get
better
(more

focused
and
nuanced),
and
the
answers
get
better.

o

Synthesizing
and
sharing
new
information
so
the
collective
understanding
is

greater
than
the
sum
of
individual
perspectives.

The
thinking
aspect
of
learning
is
exemplified
by
the
purposeful
searching
and

extraction
of
information
from
a
variety
of
sources.
The
feeling
aspect
of
learning
is

exemplified
by
conversation
and
observation
to
develop
understanding
of
and
empathy

with
others'
situations
and
motivations.

2. Creating,
which
entails

o

Using
imagination
and
what
has
been
called
"deductive
tinkering"
to
create
a

wide
portfolio
of
potential
options,
be
they
future
scenarios,
new
opportunities,

designs
of
new
offerings
and
business
models
or
paths
to
market
and

deployment.

o

Being
inventive
in
dealing
with
constraints
and
in
the
exploration
and
discovery

of
knowledge.

The
thinking
aspect
of
creativity
is
exemplified
by
the
use
of
tools
such
as
TRIZxvi
or

simply
purposeful
and
structured
thought
experiments.


The
feeling
aspect
of
creativity
is
exemplified
by
brainstorming
and
ideation
events

that
use
group
energy
and
emotion
to
unlock
the
sub-‐conscious.

3. Evaluating,
which
entails

o

Finding
qualitative
and
quantitative
means
to
assess
ambiguous,
incomplete

and
sometimes
contradictory
information
(and
beliefs,
opinions,
perspectives).

o

Identifying
internal
and
external
weak
signals,
such
as
the
"voice
of
the

dissenter"
that
needs
to
be
heard
or
the
person
with
proprietary
knowledge
the

team
is
missing.

o

Constantly
identifying
and
testing
assumptions.

o

Comparing
multiple
options
at
different
stages
in
the
genesis
of
an
opportunity.

o

Confidence
that
the
space
of
alternatives
has
been
covered.

o

Shaping
the
options
based
on
new
learning,
evidence
and
creative
energy.

The
thinking
aspect
of
evaluating
is
exemplified
by
the
purposeful
examination
of

demand
and
design
assumptions
and
the
subsequent
shaping
of
opportunities.

The
feeling
aspect
of
evaluating
is
exemplified
by
intense,
structured
debates
between
pro

and
con
sides
to
pressure-‐test
both
facts
and
feelings
about
the
opportunity.

4. Selecting,
which
entails

o

Making
decisions
about
the
new
options
that
push
boundaries
and
make
the

organization
uncomfortable.

o

Creating
a
decision
balance
between
the
collected
wisdom
within
the
company

and
the
inevitable
constraints
(blinders)
that
come
with
such
collected
wisdom.

o

Determining
the
next
step
in
the
opportunity’s
genesis
and
the
appropriate

allocation
of
resources.

The
thinking
aspect
of
selecting
is
exemplified
by
the
use
of
analytic
tools
to
assess

numerous
aspects
of
an
opportunity
and
produce
ratings
of
multiple
opportunities
along

several
dimensions.
The
feeling
aspects
of
an
opportunity
are
exemplified
by
wisdom-‐of-‐
crowd
tools
that
aggregate
the
perspectives
and
identify
how
the
organization
as
a
whole

feels
about
the
opportunities
before
them.

Of
course
these
activities
don't
occur
in
a
vacuum.
It
is
necessary
to
continuously
socialize

new
opportunities
within
the
organization.
This
is
known
as
diffusion,
and
it
helps
the

organization,
collectively,
understand
what
the
opportunities
are
all
about.
Diffusion
also
serves

to
align
the
organization,
in
the
face
of
differing
perspectives
and
opinions,
with
the
commitment

needed
to
further
develop
and
realize
the
opportunity.
The
process
of
diffusion
does
two
things:


It
starts
to
shape
the
opportunity,
and
it
also
begins
to
shape
the
organization
itself
in
ways
that

are
necessary
to
realize
the
opportunity's
potential.

An
Organizational
Locus
for
Thinking
and
Feeling
about
Strategic
Opportunities

For
strategic
innovation
to
happen,
there
must
be
a
locus
within
the
company
to
guide
the

organization,
including
the
performance
engine
parts,
to
think
and
feel.

Figure
3
–
The
Thinking
–
Feeling
Organization

The
locus
should
be
the
innovation
team,
the
group
of
individuals
charged
with
acting
as
the

liaison
or
channel
between
internal
adopters
and
external
adopters.
Internal
adopters
include

sponsors
and
stakeholders,
who
allocate
resources
within
the
organization;
external
adopters

include
customers,
partners
and
influencers,
who
determine
if
and
how
a
new
innovation
gets

adopted.
The
team's
work
requires
both
reasoned
thinking
and
emotional
feeling
in
equal

measure
(figure
3).
The
ID
paradigm
ensures
this
will
happen.
Lacking
such
a
paradigm,
the
team

is
usually
left
with
an
ad
hoc
process
based
upon
serendipity
and
personal
influence.

The
team
learns
in
unfamiliar,
complex
and
ambiguous
contexts
and
creates
new
strategic

opportunities.
It
diffuses
productive
thinking
and
feeling
throughout
the
organization
and

thereby
brings
the
company
along
on
its
journey
in
a
way
that
helps
the
company
"see"
and

support
a
new
opportunity,
despite
the
inherent
discomfort.
The
team
becomes,
for
a
time,
the

way
a
company
“wraps
its
head
around”
a
portfolio
of
possible
opportunities.

The
team
is
built
to
counteract
groupthink
and
the
collective
constraints
built
into
any

performance-‐oriented
organization.
For
this
reason,
the
team
must
function
as
a
"society
of

mind."
It
should
have
many
centers
of
expertise,
each
with
its
own
view
of
the
world,
behavior,

cognitive
style
and
decision
processes.
As
the
old
cliché
says,
the
best
teams
become
more
than

the
sum
of
their
individual
parts;
they
become
the
way
in
which
the
organization
processes
and

responds
to
uncomfortable
new
opportunities.
It
is
the
team’s
purpose
to
harness
its
collective

understanding,
insight
and
wisdom
on
behalf
of
the
organization.
It
is
the
team's
purpose
to


become
the
buffer,
the
interface
and
the
impedance
match
between
the
organization
and

potentially
disruptive
opportunities
as
well
as
between
internal
and
external
adopters.

As
the
transformational
thinking-‐feeling
mind
of
the
organization,
the
innovation
team
needs

to
be
purpose-‐built
–
in
other
words,
laser-‐focused
on
a
specific
journey
with
a
defined
charter

and
tangible
end-‐product
(such
as
the
selection
of
one
particular
strategic
opportunity
to
be

pursued).
It
is
not
enough
to
say,
"Just
go
investigate
and
see
what
you
find."
This
is
why
many

so-‐called
tech-‐scouting
efforts
are,
at
best,
only

marginally
effective.

The
innovation
team
–
which
is

But
assembling
a
purpose-‐built
team
that
can

like
an
elite
movie
production

focus
its
attention
is,
of
necessity,
time
and

crew
–
enables
the
company
to

resource
limited.
Getting
something
of
signifi-‐
wrap
its
head
around
a
portfolio

cance
identified
quickly
and
developed
and

of
possible
opportunities.

launched
in
a
timely
manner
needs
to
happen

with
less
time
and
fewer
people
than
are
available

to
the
performance-‐engine
side
of
the
business.

The
team
must
spend
a
sufficient
amount
of
time
on
the
internal
and
external
thinking
and

feeling,
but
not
so
much
as
to
let
the
essence
and
excitement
of
an
opportunity
wither
from

protracted
debates,
partial
decisions,
extended
analyses
or
infighting.

To
envision
how
the
team
should
function,
picture
an
elite
movie
production
crew.
The
right

people
come
together
with
a
defined
mission.
Within
a
limited
period
of
time,
they
focus
intently

on
a
specific
outcome
and,
the
idea
is,
craft
something
compelling.
This
way
of
working
is
a

natural
response
to
the
demands
of
strategic
innovation
and
will
itself
transform
the

organization.

A
Team
in
Action

In
2012,
a
diverse
team
of
10
people
undertook
an
initiative
to
help
a
major
health
insurance

and
services
company
discover
and
develop
new
strategic
opportunities
in
healthcare.
The
team

was
chartered
to
identify
opportunities
that
addressed
the
needs
and
desires
of
the
future

healthcare
provider.
This
was
broadly
defined
to
include
not
only
doctors
and
nurses
but
also

other
professional
and
non-‐professional
providers
–
patients’
family
members,
online

communities,
dietitians,
emergency
department
managers,
etc.
–
who,
on
a
regular
basis,

influence
Americans’
health
and
wellness.
This
expanded
definition
of
"provider"
reflects
the

changing
nature
of
the
ecosystem
and
will
be
the
source
of
future
value.
The
team's
objective

was
to
identify
10
to
12
new,
strategic
opportunities
that
would
become
major
pillars
of
the

company’s
growth
initiatives
over
the
coming
decade.

During
the
five-‐month
initiative,
the
team
generated
more
than
100
opportunity
hypotheses.

It
synthesized
a
tremendous
amount
of
information
and
knowledge,
gained
from
many
sources


through
in-‐depth
interviews
(65,
with
individuals
in
20-‐plus
different
roles
throughout
the

healthcare
ecosystem)
and
ethnographic
field
trips
(six,
to
over
20
sites).

The
team
simultaneously
undertook
a
number
of
other
activities
that
spanned
the
four

quadrants
listed
in
figure
2.
No
one
of
these
techniques,
methods
or
tools
is,
by
itself,
radical
or

transformative,
but
combined
in
a
structured
way,
as
a
framework
and
a
system
for
thinking
and

feeling
about
the
new,
they
comprise
a
powerful
paradigm
for
strategic
innovation.
Iterative

deepening
ensures
rigor,
volume,
depth,
specificity
and
alignment
of
opportunities.
Like
the
film

production
crew,
the
team
works
together
to
let
the
lead
actors,
in
our
case
the
strategic

opportunities,
be
the
best
they
can
be.

As
part
of
its
work,
the
team:

•
•
•

•
•
•

•

•

•
•

Held
weekly
opportunity
review
meetings
where
new
opportunities
were

presented,
questions
asked
and
voting
decisions
were
made.

Produced
a
weekly
newsletter
with
information
and
links
to
the
most

interesting
and
relevant
information
being
discovered
as
it
did
its
research.

Included
a
large
and
diverse
collection
of
participants
throughout
the

organization
in
regular
updates
about
the
opportunities
being
considered

and
provided
the
chance
for
participants
to
voice
opinions
on
the
relative

merit
of
all
opportunities.

Conducted
a
series
of
structured
ideation
session
with
team
members
and
a

diverse
collection
of
other
participants
throughout
the
organization.

Took
groups
on
field
trips
to
observe
and
interact
with
a
variety
of
people
in

organizations
throughout
the
healthcare
ecosystem.

Held
intensive
debates
on
the
opportunities
under
consideration
with

sponsors
and
influencers
throughout
the
organization,
during
which

everyone
contributed
to
shaping
the
opportunity.

Conducted
a
series
of
participatory
futuring
events
where
all
participants

(from
the
team
and
the
rest
of
the
company)
could
build
scenarios
of

plausible
futures
that
could
inform
the
new
opportunities.

Created
a
should-‐could
canvas, xvii
among
others,
that
showed
how
the

opportunities
compared
with
each
other
along
the
dimensions
of
"should"

the
opportunity
be
done
and
"could"
the
organization
do
it.

Developed
visual
storyboards
that
depicted
the
future
experiences
that

would
be
created
if
the
opportunities
were
to
be
realized.

Conducted
an
interactive
"reveal"
of
the
top
opportunities
with
key

executives
who
had
the
authority
(and
the
expectation)
to
commit
to
funding

the
next
stage
of
opportunity
development.


These
activities
all
were
designed
to
exercise
both
the
thinking
and
feeling
muscles
of
the

team
and
organization.
Through
repeated
exposure
and
interaction,
the
organization
came
to

understand
the
opportunity
concepts
while
they
were
being
formed,
which
allowed
individuals

to
weigh
in
on
what
they
felt
were
important
considerations.

In
the
end,
the
project
team
designed
a
set
of
14
strategic
opportunities
and
a
set
of
six

future
scenarios.
Six
of
the
opportunities
were
presented
in-‐depth
to
the
client’s
Innovation

Council
(I-‐Council),
a
group
of
senior
executives
who
sponsor
innovation
initiatives,
in
an

interactive,
multimedia
session.
The
team
had
hoped
to
win
approval
for
just
one
or
two

opportunities;
the
I-‐Council
approved
four
for
immediate
funding.
One
of
the
senior
executives

told
the
team,
“I
haven't
seen
the
I-‐Council
as
excited
about
a
group
of
well-‐formed
concepts...

ever.
We
literally
couldn't
sit
down
when
we
were
deliberating”
about
which
ones
to
green
light.

Currently,
the
opportunities
and
insights
from
this
initiative
are
working
their
way
through

the
organization’s
innovation
pipeline
and
are
expected
to
help
the
company
grow
its
business

for
years
to
come.

From
Opportunity
to
Organization
and
Back
–
A
Virtuous
Cycle

If
you
don't
like
change,
you're
going
to
like
irrelevance
even
less.

–
General
Eric
Shinseki

Innovation
is
a
complex
system
of
individuals
and
organizations
acting
as
agents
of
creation

(e.g.,
companies)
and
agents
of
adoption
(e.g.,
customers).
When
organizations
are
considering

sustaining
opportunities,
the
processes,
methods
and
tools
used
by
the
performance
engine
can

be
adapted
and
used
to
great
effect.
This
is
the
situation
where
stage-‐gate
systems
can
be

effectively
adapted
for
front-‐end
activities.

But
when
the
objective
of
the
organization
is
to
push
its
strategic
boundary,
and
the

opportunities
of
interest
are
strategic,
the
processes
and
tools
of
the
performance
engine
break

down.
In
the
early
stages,
these
new
ideas
are
alien
and
uncomfortable;
in
the
later
stages,

corporate
"antibodies"
come
out
to
attack
because
it
becomes
increasingly
clear
the
organization

will
need
to
change.
Organizational
discomfort
becomes
prominent
unless
there
is
a
system
in

place
to
acknowledge
the
emotional
reactions
and
direct
them
in
constructive
ways.
This
is
when

innovators
must
employ
a
new
paradigm,
iterative
deepening.

Any
organization
can
implement
ID
in
order
to
purposefully
address
the
complexities
and

ambiguities
it
faces.
Instead
of
approaching
these
issues
in
an
ad
hoc
manner
or
with
a

"performance
engine"
mindset,
an
organization
can
explicitly
put
in
place
the
people,
processes,

strategies
and
governance
structures
to
constantly
push
their
strategic
boundaries
outward.


The
ID
paradigm
lets
an
organization
think
and
feel
in
the
face
of
complexity,
ambiguity
and

uncertainty.
But
the
ID
paradigm,
in
order
to
be
used
by
an
organization,
needs
the
means
to
be

implemented.
In
particular,
the
following
components
need
to
be
present:

•

A
purpose-‐built
team

•

A
focused
project

•

The
process,
methods
and
tools
to
learn,
create,
evaluate
and
select

•

A
framework
for
bringing
all
the
pieces
together

Together,
these
four
prerequisites
help
the
organization
deal
with
the
inherent
discomfort

strategic
opportunities
generate.

The
complex
dynamics
of
strategic
innovation
can
be
summarized
in
this
way:

1. In
order
to
thrive
in
the
future,
it
is
imperative
that
organizations
push
their

strategic
innovation
boundary
outward.

2. Organizations
create
strategic
opportunities
to
push
the
boundary,
and
this
creates

discomfort.

3. An
organization
needs
to
have
mechanisms
to
both
think
and
feel
to
deal
with
this

natural
discomfort.

4. Iterative
deepening
serves
as
the
paradigm
by
which
an
organization
can

collectively
think
and
feel.

The
beauty
of
establishing
a
system
based
on
the
ID
paradigm
is
that
even
while
an

organization
is
discovering,
creating,
shaping
and
designing
its
new
strategic
opportunities,
these

very
same
opportunities
are
shaping
the
organization
for
the
future.
With
a
structured
system
of

thinking
and
feeling,
the
organization
cannot
help
but
examine
and
change
its
internal

constraints,
thereby
enhancing
its
culture
and
capabilities
as
it
moves
forward.
A
virtuous
cycle
is

established:
The
organization
creates
and
shapes
new
opportunities,
and
the
new
opportunities

(re)create
and
shape
the
organization.

The
final
test
of
any
innovation
system
is
whether
an
organization
can
expand
its
strategic

boundary
in
the
face
of
the
constant
forces
at
work.
If
a
company
does
not
do
this,
it
will
be

squeezed
into
a
corner
where
it
will
be
difficult
to
thrive.
The
ability
to
create
new
opportunities

that
expand
the
strategic
boundary
is
the
measure
of
success,
and
the
capability
of
an
organi-‐
zation
to
both
think
and
feel
using
a
system
of
iterative
deepening
is
the
means
to
get
there.


Notes
i

iii

iv

Done
improperly,
it
confirms
our
biases
and
reinforces
untrue
knowledge.

Mueller,
Jennifer,
et.al.;
The
Bias
Against
Creativity:
Why
People
Desire
but
Reject
Creative
Ideas;
Cornell
IRL;
2011

Kahneman,
Daniel;
Thinking
Fast
and
Slow;
Farrar,
Straus
and
Giroux;
October
25,
2011
This
is
the
established
fact
of
confirmation
bias,
that
we
filter
new
information
through
a
lens
of
what
we
currently

believe.
v

Wilson,
E.
O.;
The
Social
Conquest
of
Earth;
Liveright;
April
2,
2012

vi

There
are
many
books
and
articles
on
the
topics
of
the
learning
organization
and
knowledge
creating
companies.
A

couple
classics
are
Peter
Senge’s
The
Fifth
Discipline
and
Ikujiro
Nonaka
and
Hirotaka
Takeuchi’s
The
Knowledge

Creating
Company.
Various
overviews
and
bibliographies
of
books
and
articles
on
these
subjects
can
be
found
at

the
Overseas
Development
Institute,

William
King
at
the
University
of
Pittsburgh,
and
Martin
Ryder
at
University

Colorado.

vii

Isaacson,
Walter;
Steve
Jobs;
Simon
&
Schuster;
2011

viii

Levy,
Steven;
In
The
Plex:
How
Google
Thinks,
Works,
and
Shapes
Our
Lives;
Simon
&
Schuster;
2011

ix

Black,
Benjamin;
EC2
Origins;
Blog
post;
Jan.
2009

x

Schmitt,
Larry;
Strategic
Innovation:
If
it
Feels
Comfortable,
You’re
Not
Doing
it
Right;
2012

xi

Christian,
Brian;
The
Demand-‐Design
Tango:
Getting
from
Concept
to
Market
Launch;
2013

xii

Ariely,
Dan;
Predictably
Irrational;
HarperCollins;
June
23,
2009

xiii

Kahneman,
Daniel;
Thinking
Fast
and
Slow;
Farrar,
Straus
and
Giroux;
October
25,
2011

xiv

This
is
most
striking
in
the
arts
where
examples
like
Picasso
and
his
Les
Demoiselles
d'Avignon,
Stravinsky
and
his

Rite
of
Spring,
even
Maya
Lin’s
Vietnam
Veterans
Memorial
all
were
met
with
near
universal
initial
condemnation.

In
the
business
world
it
is
a
well-‐researched
phenomenon
of
adoption,
exemplified
by
the
S-‐curve
adoption
model,

that
it
can
often
take
a
long
time
to
get
to
1-‐2%
penetration
before
even
the
most
popular
products
(e.g.,
TVs,

VCRs,
the
iPod,
etc.)
take
off.

xv

The
specific
details
of
a
system
of
Iterative
Deepening
that
lets
an
organization
collectively
think
and
feel
about
an

opportunity
are
described
in
detail
in
a
soon-‐to-‐be-‐published)companion
paper:
Schmitt,
Larry;
The
Iterative

Deepening
Paradigm:
A
Path
to
Strategic
Innovation;
2013.

xvi

See
definition
of
TRIZ.

xvii

The
Should-‐Could
canvas,
and
the
methodology
for
creating
it,
are
part
of
the
ADOPTS™
innovation
framework

developed
and
implemented
by
Inovo.
The
canvas
lets
an
organization
evaluate
an
opportunity
along
the
two

dimensions
of
“Should
the
opportunity
be
pursued
(by
anyone)?”
and
“Could
this
organization
do
it?”
Just
because

an
organization
could
do
something
doesn't
mean
it
should
do
it.
The
Should-‐Could
tool,
along
with
other
Inovo-‐
developed
tools,
has
been
has
been
disseminated
by
the
Corporate
Executive
Board
(CEB)
as
an
illustration
of
an

innovation
best
practice.

ii


About
The
Inovo
Group

Founded
in
2001,
Inovo
is
an
innovation
consulting
firm
based
in
Ann
Arbor,
MI,

that
helps
the
world’s
top
organizations
succeed
at
strategic
innovation.

About
the
Author

LARRY
SCHMITT,
PH.D.
is
Co-‐Founder
and
CEO
of
The

Inovo
Group.
He
is
the
lead
architect
of
Inovo’s
theory-‐
based
framework
and
tools,
which
Inovo
uses
with
its

Global
1000
clients
to
identify
significant
unmet
needs
and

develop
compelling
new-‐to-‐the-‐world
products,
services,

and
business
models.

Larry
has
taught
innovation
at
the
University
of
Michigan’s
Medical
Innovation

Center
and
has
served
as
an
invited
guest
speaker
on
innovation
in
the
U.S.
and

India.
In
addition,
he
serves
as
a
subject
matter
expert
for
the
Industrial

Research
Institute
(IRI)’s
Research-‐on-‐Research
Working
Group
on
Business

Model
Innovation.

Larry
previously
served
in
technical
roles
at
General
Electric
and
Unisys,
as
well

as
in
executive
roles
at
two
successful
tech
start-‐ups,
Applied
Intelligent

Systems
(acquired
by
Electro-‐Scientific
Industries)
and
Intelligent
Reasoning

Systems
(acquired
by
Photon
Dynamics).

White paper The Thinking-Feeling Organization

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