Section 3: Opportunity Recognition
In this section you will learn about the search process of discovery and formulation through experts in ethnography, design thinking, and design strategy. This section is focused on the process of navigating through ambiguity, with tools and tactics for probing the VUCA (volatile, uncertain, complex, and ambiguous) world in search of new opportunity. We begin with Chapter 7, “Leveraging Ethnography to Predict Shifting Cultural Norms,” an introduction to the use of social sciences to uncover opportunity through greater understanding of human behavior. This is followed by Chapter 8, “Design Process and Opportunity Development,” which delves into applications for design and design thinking in discovery and formulation of new opportunities. The final chapter in this section, Chapter 9, “Navigating Spaces—Tools for Discovery,” is an extensive inventory of various tools and tactics for probing for new opportunity.
To add additional perspective, we spoke with Rich Radka, founder of Barcelona-based Claro Partners, a unique strategy consulting firm focused on “navigating disruptive change” for their clients. Rich, a longtime consultant, was previously Director of User Experience for Sapient. In his extensive experience operating as an innovation consultant to large corporations, he found the gaps between and among social science research firms that offer insights through ethnographic research, design strategy consulting firms that offer design research-based observations, and management consulting firms that offer analytic frameworks to help firms determine what to do. From these gaps, Rich and his partners, all veterans from innovation consulting firms, founded Claro Partners to help companies both find opportunity and develop strategies to determine how to capitalize on them. They bring together diverse teams of analytical and synthetic thinkers to understand people’s actual experiences, service design to envision the desired experience, and business modeling to create real, sustainable opportunities. We spoke with Rich about his experiences in helping companies navigate disruptive change in the search for new opportunities.
Design Thinking, Innovation, and Creativity as an Economic Driver
Innovation has become inextricably linked to design or, rather, design thinking—the term for using tools from design to create “an improved future state.” The design thinking approach focuses on the user and the user’s needs as the primary driver, and prototypes and iterates potential solutions to better understand the root problem or opportunity. Although the term was coined in the late 1960s, it took a couple of decades to gain broader traction as a viable approach. Today, design thinking is a bit of a buzzword and is seen by some as a magic-bullet solution to complex challenges or “wicked problems.” We believe that there is a great deal of merit to the application of both the social sciences and design to understand and solve complex challenges. Designers or those with educational background or experience in design author a great deal of this book, and the three chapters in this section on opportunity recognition are authored from the design and social science perspectives. Rich commented on the current interest in design thinking and what it really means from his global view: “I think design thinking is incredibly important but it is not the be-all and end-all. Unfortunately, corporate culture has a curse of grabbing onto new things and stripping them of their deeper meaning. Corporations are filled with left-brain, analytical people as businesses, in general, are designed to operate most effectively when they mitigate risk and maximize efficiency. But businesses also need to navigate disruptive change and continually generate new ways of providing value. Innovation cannot be managed through the same system or measured by the same metrics. It requires a balance of both analytic and synthetic thinkers. For example, when you look at a set of LEGOs, an analytic thinker can break down a constructed LEGO structure and explain how it was made, but you need a synthetic thinker to look at the pieces and imagine what we can build next. Until we stumble upon an invention for the ‘innovation bot,’ we will need humans to increasingly be creative; we will need synthetic thinkers. We know creativity and innovation are at the core of our economy for at least the next couple of decades, so we will need to establish better methods of integrating synthetic and analytic thinkers.” Tod Corlett’s chapter on opportunity development describes the difference between entrepreneurial thinking and managerial thinking to delineate the distinction between managing business operations and leading disruptive innovation and transformational change.
Frameworks and Tools
Throughout the book, we offer frameworks from which to consider your organization, notably where you are, your capabilities, and where you are going. In this section we offer tools and tactics for discovery—the search for the future improved state. Both are very valuable but often conflated, especially when a tool is treated as an algorithm of certainty rather than a guiding compass. Rich said, “To me a framework is something that illustrates something real but difficult to see—it brings in what people do and how they make decisions. It’s descriptive but not necessarily prescriptive. On the other hand, a tool is something you can run things through. From a tool you should be able to get some sort of results or insights. A tool should be adapted to the situation. In most situations I would prefer people use tools even if they adhere to them too tightly, but it’s best if the tool comes with guidance. It’s ideal when tools are adapted to the situation. I am both pro framework and pro tool. In short, if use of a tool or discussion around a framework helps them have multidisciplinary conversations, then it’s valuable.” In Sarah Rottenberg’s chapter on ethnography, she describes the importance of tools and fieldwork to bridge cross-disciplinary boundaries. Dr. Natalie Nixon’s chapter on tools offers several tools designed specifically to bring together diverse perspectives and leverage the creative abrasion to unlock new opportunity.
Innovation Traps
As most businesses grapple with how to simultaneously develop and optimize products, services, and business models based on their current core competencies and customers while also creating new offerings, traps and missteps are inevitable. As an innovation consultant to large multinationals, Rich offers insight that is a broad longitudinal view crossing industries, cultures, and economies. He noted, “The three most common errors we see are (1) the propensity for businesses to convince themselves that they are doing innovative work when they are not discovering but rather just validating, (2) convincing themselves they are taking a user-centric view when they are really just rewording their business impetrative, and (3) framing things in the wrong way. There is a relatively recent propensity to develop leadership positions for innovation—vice presidents of innovation and the like—but often these positions are heads of offices that are unfunded or underfunded. Innovation is creating something new, like a young plant—it is difficult to nurture and grow it in a rainforest like a larger, more mature plant. It needs shelter, nurturing, and a more sensitive environment. Management of innovation teams needs similar shelter and protection to nurture and grow. Perhaps creation of the leadership role in innovation is the first step, but until that innovation is given adequate resources and structure to be effective, it is in danger of being crushed for not hewing to ‘how we do things around here.’ Discovery, or white space work, cannot be managed and measured in the same way you develop and optimize products and services around current known competencies.”
User Experience First, Business Model Second
Perhaps the only term hotter than design thinking is business model innovation. We structured this book to build toward the formation of the business model. We begin with an assessment of the organization’s capabilities, talent, and team structures, and then focus on discovery and formulation to probe new opportunity spaces with a focus on the user. We then build into opportunity shaping and business model formation. Rich commented that corporations often do this in reverse:
“At Claro we focus first on the user. We believe the best opportunity lies in the intersection of three key understandings about the user: (1) What do they do, as in what are their current activities? (2) What do they use, which really means what are their tools, routines, and self-made solutions? (3) What do they think, which means what drives them, how do they envision outcomes, what are their biases, perceptions, or mental models?
“Understanding those three things creates better experiences. Once you understand them from these perspectives, you can propose the optimal experience from which the business model can be formed. It is always much, much easier to identify and align a business model to support a real human need than it is to try to get people en masse to change their perceptions and behaviors to match your business model.”
The three chapters that follow offer frameworks, tools, and tactics to understand the user, the user’s needs, and how to craft solutions.