February 11, 2013

Integrative thinking (guest speaker)
(an introduction)

What’s going on in the world of business last week? * Blackberry 10 came out * Michael Dell said he wanted to go private * If you buy all the shares, you can make all the decisions * Corporate debt is cheaper right now in any form of financing * UK: Mark Carney fit to become the new chair for the national bank of England

How do successful leaders think? * GE (Jack Walsh) * rate of return: $400 billion * first, tell your biz to be really big; second, tell your biz to be really small * too big: too many subsidiaries; can’t use money efficiently * entrepreneurs: more innovated, focus more on growths

Model: idealized representation of something; exists to explain something to us * we substitute our models for the original * our models become reality * models matter so much b/c we make our decisions on them; we act overly confidently on them * investors in a stock market think their decisions based on the model * ex: there were strong belief on mortgages, but most of mortgages were toxic * “ninja mortgages”: no income, not job/assets * models actually matter more with interpersonal relations * world naturally builds opposing models * an alternative approach: seek out opposing models; use it for the better

consumer goods lives and thrives on new products * P&G not doing a good job * Innovation problem * Invest at in R&D * Expenses eliminate their profits * Stock dropped in half * “how would I decrease costs and increase innovation?” * How does invention respond to money? * It doesn’t; at least not directly * Decided to start buying new ideas from outside; massively increased the amount of ideas; way less money spent * 50% of ideas come from outside * Bought the spinning lollipop technology and utilized it on their spinning toothbrush * Cheap motor bought; transformed to innovated product

“strategy diagram: how we make decisions” * Salience: am I free enough to have lunch with Jennifer? Would it be worth it? * Causality: Jennifer seems to be close to Khan; their offices are nearby. Maybe I should go have lunch with Jennifer and get to know her better

Conventional thinking process VS an integrative thinking process

What kinds of problems? * Wicked problems: messy, mysterious, many possible answers * Ex: end of oil

Alternative process: 1. Articulate opposing models a. Ex: blackberry -> sell yourself to Microsoft vs. figure out way to beat apple, Samsung yourself, get better 2. Examine the models b. Ex: what happens to customers, employees i. Look at from both sides 3. Explore the possibilities c. What can I keep from both models? 4. Access the prototypes d. Never done looking for answers; always a better answer e. Customize lower cost 5. ACT!

Dell company: very customizable (not only it’s advantage for the customers but also was cost advantage) but not anymore b/c people can copy and improved the dell model

Dr. David Eaglerman * Imagine possibilities rather than describing dogma * When the model works well, it embraces it * Ex: black shawls option theorem; we ignore the other models that has potential we limit ourselves to that specific model
Conventional stance: what we learn from school
Integrative stance: better models exist sometimes it’s hard, but our models get better