This document discusses new models for decision making in a changing business environment. It outlines four big shifts: 1) externalization, 2) radical adjacency, 3) narrow innovation, and 4) options management replacing ROI. Social, creative, and iterative decision processes are suggested as better models. Creative decisions involve abundance of information and choices. Decision contexts are constantly changing, requiring new criteria like risk reduction, learning, and talent. Trust is also reshaping as emotions evolve. The key is for companies to change how they see, feel, and relate to capture available options.
2. “Rational” Decision Models
Action models : An
action is of the form "IF
<this> is true, THEN do
<that>"
Stage Gate: If innovation
x still promises Return
Y, at Gate Z, let it pass
3. MOST DECISION MODELS REST ON THE
ASSUMPTION OF OLIGOPOLY POWER –
THAT WE CAN BUY MARKETS
MY LAB MY
INVENTION,
MY START-
UP, MY
PRODUCT
MY MARKETING
BUDGET MY CUSTOMERS
THIS IS THE ECONOMY WE INHABITED FOR 200
YEARS
4. Two Decision Models. Rational and Social, VC v Crowdfunding
Crowd model – emotive capitalism
1.Project based, no growth
requirement
2.No assumption about failure
3.Self-imposed outcome burden,
supports entrepreneurism
4.Culture-friendly and ideal for
building emotional outcomes
5.Peer and social network based,
potentially with a positive loop for
resources
6.Emotional connections
VC Model – Surplus Capital
1.Company based, must scale
2.Assumption of high failure rate
3.High stress for proposers,
barrier to entrepreneurs
4.Antagonistic to cultural
production or lifestyle
5.Extractive, the money is taken
out
6.ROI
5. THREE BIG DRIVERS OF CHANGE
1. The loss of oligopoly power THROUGH,
global competition and convergence,
reconstructing trust
2. Throw in technological disruption too –
mobile, cloud, social, data, also impacts trust
3. And globally diverse markets with differing
needs and dynamics
FOUR BIG SHIFTS
8. THE BIG SHIFT 2 RADICAL ADJACENCY
THE REQUIREMENT TO GO OUT INTO
OTHER MARKETS WITH NEW
PRODUCTS, OR TO GO WHERE YOU
HAVE NO TRACK RECORD OR CORE
COMPETENCY.
How come Apple is the world’s top retailer?
9. RADICAL ADJACENCY
EXAMPLES
Apple into smartphones, and into retail
Microsoft into telephony and devices
Google into Mobile, Lending and Autos
Walmart trying to open a bank
Train makers into services
10. THE BIG SHIFT 3 – NARROW
INNOVATION
MULTIPLE SIMULTANEOUS
INNOVATIONS TO SERVE NEW,
NARROWER MARKETS FOR
THE GLOBAL MIDDLE CLASS.
Google
Glass will
launch with
2,000 apps
11. Narrow Innovation
Example: Samsung
Over 150 different types of phone in
the US alone
Makes every type of display – OLED, LCD, PLASMA
Make computers, phones, tablets, TVs, white
goods etc
12. In most corporations
decisions are being pushed
to the edge, old decision
hierarchies can’t cope
More decisions, faster
cycles, nearer the edge
14. OPTIONS MANAGEMENT – WHAT DO WE
MEAN?
Companies are faced by options that they can recognize and embrace
But in so doing they need to devise new-ROI CRITERIA. ROI is
EXAGGERATiON and at best impossible at the early stage
CRITERIA tend to be applied restrospecitively once ROI has failed
Proposed criteria:
•Does it provide risk reduction/anticipate competitor moves?
•Does it accelerate other processes or learning capabilities?
•Does it bring in or bring on key talent?
•Does it contribute to image/brand/marketing?
15. Companies need a strategic
options portfolio built from a
variety of criteria and capable
of being managed.
OPTION PORTFOLIOS SHOULD CONSIST OF
OPTIONS THAT ARE OUT THERE, NOT JUST THOSE YOU
GENERATE
DESIRED INNOVATION PROJECTS DECIDED WITH SOCIAL,
CREATIVE AND ITERATIVE DECISION MODELS
EXISTING INNOVATION PROJECTS (SHORT AND LONG
TERM)
KNOWN COMPETITOR PROJECTS
THE COMMON GO TO MARKET MODEL
A DECISION TOOL AND A
MANAGEMENT TOOL
16. SO WHAT ARE THE NEW
DECISION PROCESSES?
WHAT ARE THE NEW MODELS
FOR AN OPTIONS MANAGER?
SOCIAL
CREATIVE
ITERATIVE
18. WHO HAS DECIDED
YOUR IT DEVICE
POLICY?
YOUR DOCUMENT
SHARING
STRATEGY?
YOUR EMPLOYEES AND THEIR FRIENDS
THAT’S WHY AUTODESK HAS BOUGHT UP
COMMUNITIES TOTALLING 120 MILLION
MEMBERS OF THE PUBLIC
19.
20. “Normally when people think of
making music they think write,
record, mix. We don’t do that at all.
It is confusing and terrifying to
some artists but we do all three at
the same time. Write, mix, open
audio files, throw things onto the
phone….”
Mike Shinoda Linkin Park
Eclectic, knowledgeable, good decisions
A
Creative
Decision
Process
21. “He (producer Salaam Remi) started
going through his sample library and all
these different crazy drums. And there
were these loud, obnoxious, just
destructive drums, and I was like, Yeah! A
girl on fire is loud and obnoxious and
destructive and just, like, totally
unrelenting and she’s free….”
Alicia Keyes on writing Girl on Fire
And another
38. PUBLIC SEXUALITY SPARKED THE RESURGENCE OF
ROMANTIC LOVE AND THE SONGS THAT MAKE UP THE
SOUNDTRACKS OF OUR LIVES
Music is a major driver of the web, auto
innovation, domestic entertainment etc.
39. 1. WE CHANGE HOW WE SEE
2. WE CHANGE HOW WE FEEL
41. I trust:
Paypal
Google
Facebook
About 60% of my LinkedIn Connections
People who work for me whom I have never met
People I work with where my only connection is
an Electronically Signed contract
People who sell me apps
About 1,000 people on Twitter
42. IN SHORT –
WE ARE REFRAMING THE WORLD AROUND US
THAT’S WHAT WE WANT YOU TO DO NOW
1. WE CHANGE HOW WE SEE
2. WE CHANGE HOW WE FEEL
3. WE CHANGE HOW WE RELATE
43. Go with you’re your emotions –
your gut. Don’t play safe
Allow yourself options that you
might normally cut. Build don’t
burn
Look around you for decision
criteria. Ask for support