THE REFRACTIVE THINKER:
An Anthology of Higher Learning
Volume 5: Strategy in Innovation
Edited by
Dr. Cheryl A. Lentz
Smashwords Edition
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Published on Smashwords by:
The Refractive Thinker® Press
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Contents
Chapter 1: Innovation Out of Turbulence: Scenario and Survival Plans that Utilizes Groups and the Wisdom of Crowds, Dr. Elmer B. Hall
Appendix A: Group Collaboration Using Wikipedia
Chapter 2: Tools to Forecast Technological Innovations and Strategies, Dr. Lois D. Wiley Anderson
Chapter 3: The Next Big Disruptive Innovation: Can You Imagine a World Without Intel?, Dr. Edgar Jordan
Chapter 4: Leadership Strategies for Embedding Innovation in Organizational Culture, Dr. Olivia Herriford
Chapter 5: The Three Ps of Leadership: Pulling, Pushing, and Patting, Dr. Sheila Embry
Chapter 6: Innovation and Gender Equality Through the Lens of Competition, Dr. Jane Dennehy
Chapter 7: Assessing an Innovation: Student Outcomes from Master’s Degree Programs in Organizational Leadership, Dr. Joseph W. T. Pugh
Chapter 8: Change Models and 21st Century Organizations: An Epistemic Journey to Creative Innovation, Dr. Beverly D. Carter & Dr. Beverly Hernandez
Chapter 9: Innovative Recommendations for Assisting Homeless Students, Dr. Denise Thomas
Epilogue: The Refractive Thinker®: The Concept—Where Do We Go from Here?, Dr. Cheryl A. Lentz
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The important thing is not to stop questioning.
Curiosity has its own reason for existing.
One cannot help but be in awe when he contemplates
the mysteries of eternity, of life,
of the marvelous structure of reality.
It is enough if one tries merely to
comprehend a little of this mystery every day.
Never lose a holy curiosity.
—Albert Einstein (1879–1955)
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Rapidly evolving technology has created a chaotic business environment, challenging every business on its journey to success. Chaos is not simply a theory, but a ubiquitous, necessary and rapidly changing element in navigating today’s business world. During periods of market turbulence, this disorder has proven to be the arbiter of success. Those who can deal with change flourish. Those that cannot adapt become extinct.
Refractive thinking will help you mollify market turmoil by helping you strike a balance between the need for order and the imperative to change. Refractive thinking is a key to surviving in a chaotic environment, enabling you to establish an innovative comfort zone within its extremes. A business is functioning at its optimum capability when it can generate and apply enough innovation to keep its operating systems vibrant, yet keep it from collapsing into anarchy.
Finding and maintaining this zone in a complex, competitive business system is a delicate matter. If uncontrolled momentum carries people too far from its center, they risk falling into inconsistency and dissolution. And if the system moves too far in an opposite direction the entrepreneur faces rigidity. A business can survive in a constantly changing environment by becoming the driving force of controlled change, applying refractive thinking to extend the corporate life cycle, preparing the business to compete successfully during the current technological explosion.
Change is not prompted by companies, but by the people in them. And because every business is made up of people, the corporate comfort zone is comprised of the collective beliefs of its individual decision makers. Unfortunately, many business people find that thinking for themselves can be an uncomfortable process. Most simply repeat what they have been told and become upset if they are exposed to a different view.
Conversely, significant benefits accrue to the astute refractive thinkers who can change their focus, acclimatize to change and grow their businesses. The bottom line is an improved bottom line, since these benefits translate into greater profitability for your business. Refractive thinking in itself is not a source of change. But applied refractive thinking is a compelling element of productive growth. The power of an idea—properly developed and implemented—can liberate you and your business to greatness.
Beliefs guide behavior, which has evolutionary importance among business people. Behavior can be planned, but not directed. Personal performance happens spontaneously, but can also be self-organizing. People, and subsequently their companies, must apply refractive thinking, adapt an innovative behavior or be swept aside.
By definition, innovation implies risk. Refractive thinking is an unknown ally that leads us willingly into unknown territory. Refractive thinking is the sounding buoy that guides us through the future fog. And therein lies the inherent opportunity of refractive thinking. As we move into the future, we can see more clearly about us, gain our bearings and advance, one creative step at a time. Those who proceed without forethought and care may end up on the rocks.
Refractive thinking acts as a GPS, keeping us moving in the right direction on the path to success. Innovation in itself does not eliminate risk or lead us toward achievement. Success occurs with the application of creativity, within the confines of a chaotic environment, enabling us to create opportunities and manage risk. This volume in The Refractive Thinker® series will help you integrate refractive thinking into your core strategies to deliver strategic value under varying conditions. By so doing, you can drive revenue growth and secure long-term secure competitive advantage.
Brian Jud
Brian Jud is the author of How to Make Real Money Selling Books and Beyond the Bookstore.
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I think therefore I am.
—Renee Descartes
I critically think to be.
I refractively think to change the world.
Welcome to The Refractive Thinker®: Volume V: Strategy in Innovation.
Thank you for joining us for the Fall 2010 edition, Volume V, as we continue to celebrate the accomplishments of doctoral scholars affiliated with many phenomenal institutions of higher learning. The purpose of this offering in the anthology series is to share another glimpse into the scholarly works of these participating authors, specifically on the topic strategic thought in innovation.
In addition to exploring various aspects of innovation, the purpose of The Refractive Thinker® is to serve the tenets of leadership. Leadership is not simply a concept outside of the self, but comes from within, defining our very essence; where the search to define leadership becomes our personal journey not yet a finite destination.
The Refractive Thinker® is an intimate expression of who we are—the ability to think beyond the traditional boundaries of thinking and critical thinking. Instead of mere reflection and evaluation, one challenges the very boundaries of the constructs itself. If thinking is inside the box, and critical thinking is outside the box, we add the next step of refractive thinking, beyond the box. Perhaps the need exists to dissolve the box completely. As in our first four volumes, the authors within these pages are on a mission to change the world, never satisfied or quite content with what is or asking why, instead these authors intentionally strive to push and test the limits to ask why not.
Peter Senge (1994) in his book, The Fifth Discipline Fieldbook wrote:
Herein lies the strongest reason to look for tools based on important new theories: only such tools have the power to change how we think. Most tools introduced into management to solve problems, however innovative they may be, are based on conventional ways of thinking . . . To paraphrase Albert Einstein, our present problems cannot be solved at the level of thinking at which they were created. (Senge, 1994, p. 31)
This argument offers yet another perspective that supports that when “relying on our present ways of thinking, it is very difficult to develop tools that change the way of thinking. For this we must find or generate new theory” (Senge, 1994, p. 31). The goal of Volume V authors is to use refractive thinking to discover new ways of looking at current or old ideas, in new ways, and with new structure for learning and contemplation. The goals of this volume are to offer alternatives these authors choose to take and to share with you their reasons why, to translate this understanding into innovations in theory, in design, in infrastructure, in organizational culture, within competition, within academic programs, and concerning the area of homelessness.
We look forward to your interest in discussing future opportunities. Let this collection of authors continue our journey begun with volume I to which The Refractive Thinker® will serve as our guide to future volumes. Come join us in our quest to be refractive thinkers and add your wisdom to the collective. We look forward to your stories.
Please contact The Refractive Thinker® Press for further information regarding these authors and the works contained within these pages. Perhaps you or your organization may be looking for their expertise to incorporate as part of your annual corporate meetings as a key note or guest speaker(s), perhaps to offer individual, or group seminars or coaching, or require their expertise as consultants.
Join us on this next adventure of The Refractive Thinker® where Volume V continues the discussion specifically begun in Volume I with leadership, II with Research Methodology, III with Change Management, and IV with Ethics, Leadership, and Globalization, themed to explore the realm of strategic thought, creativity, and innovation.
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The foundation of leadership embraces the art of asking questions—to validate and affirm what we do and why. Leaders often challenge this status quo, to offer alternatives and new directions, to dare to try something that has not yet been done as again proved true in this case with Volume V. This publication required the continued leap of faith and belief in this new publishing model by those willing to continue forward on this voyage. As a result, please let me express my gratitude for the help of the many that made this project possible.
First, let me offer a special thank you to Trish Hladek for her unwavering support and belief that traversing unchartered waters is worthy of the journey. My gratitude extends to our Peer Review Board to include: Dr. Tom Woodruff, Dr. Laura Grandgenett, and Dr. Elmer Hall; and our Board of Directors to include: Dr. Elmer Hall, Dr. Edward Knab, Dr. Judy Blando, Dr. Lisa Kangas, Dr. Tom Woodruff, (and myself); as well as our production specialist, Gary Rosenberg; Refractive Thinker® logo designer, Joey Root; and our cover and companion website designer, Jacqueline Teng.
Let me also extend my sincere thanks to all participating authors within The Refractive Thinker® Project who continue to believe in this project as we continue to expand our program. We appreciate their commitment to leadership and to the concept of what it means to be a refractive thinker.
Dr. Cheryl A. Lentz
Managing Editor
Las Vegas, NV
November, 2010
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Chapter 1
Innovation Out of Turbulence: Scenario
and Survival Plans that Utilizes Groups and the Wisdom of Crowds
Dr. Elmer B. Hall
As the smoke in the Gulf of Mexico starts to clear and the economy slowly claws its way out of the Great Recession, companies are going back to the drawing board to plan for survival and to build strategies for innovation out of the destruction. One type of group planning, scenario planning, is considered to be more important during the recent recession according to the 2009 McKinsey study (Dye, Sibony, & Viguerie, 2009). All types of planning, including disaster planning, should be tied into the process of innovation. In addition, the wise use of teams, both groups and crowds, has to be part of that process. This article will address these topics: a) a disaster before if happened; b) strategic planning process; c) survival planning; d) the planning failures of BP, the oil industry and government; e) scenario and cross-functional team planning; f) non-sustainable issues and looming scenarios; g) innovation: using groups and experts; h) innovation: the wisdom of crowds, a missed opportunity; and, i) conclusions. Additionally, Appendix A analyzes group collaboration using Wikipedia.
This article uses BP PLC (BP) as the perfect case study of normal planning gone wrong. Not only should BP management have done better planning, but they also missed significant opportunities for collaboration and innovation.
Note that this article makes extensive use of Wikipedia, which is probably the world’s greatest collaboration success story (Alexander, 2008; Friedman, 2009; Gloor, 2005; Howe, 2009; Tapscott & Williams, 2006; Wikipedia Foundation, Inc. [WF], 2010). The sections of Wikipedia used for this article were current, fact-filled, and appeared to be accurately cited in most cases as discussed in Appendix A and illustrated in Table 1. Note the richness, depth and recentness of all the pages—called articles—in the table. Appropriately, this article about group innovation cites Wikipedia; and, in each case, the cited topics are article listings in Table 1 and cited in the text as WF, 2010, topic, including Wikipedia itself (WF, 2010, Wikipedia).
A Disaster Before It Happened
Scenario planning—and disaster recovery plan (DRP) development—seeks to identify possible outcomes of the future actions that will impact the organization (WF, 2010, scenario plan, DRP). Planners consider the likelihood and the impact of something happening. Managing the risks includes generating options to minimize, avoid, mitigate and develop contingency plans for possible outcomes (WF, 2010, BCP). Year 2000 (Y2K) planning is an excellent example of companies practicing scenario and contingency planning (Hall & Hinkelman, 2007).
Scenario-type planning would have helped with the great BP oil spill in the Gulf of Mexico that blew in April of 2010. Scenario planning should have identified and escalated the level of risk and the likelihood of failure of (deep-water) drilling in the Gulf, resulting in more caution and better preventative measures. Reviewing safety records in the Gulf showed that there were hundreds of oil spills since 2001 (WF, 2010, oil spills), especially those associated with the active hurricane seasons of 2004 and 2005. Part of the scenario planning process would have looked at minimizing the impact of a disaster. This would have and should have resulted in updates to the Disaster Recovery Plans of BP, its business partners, the industry, and the government. All of these DRPs appear to have been disasters in waiting (AP, 2010; BP, 2010; Snyder, 2010; WF, 2010, BCP, DRP, Horizon Deepwater oil spill).
Strategic Planning Process
First, how would strategic planning likely be done under ideal, normal conditions? In Perpetual Innovation: A Guide to Strategic Planning, Patent Commercialization, and Enduring Competitive Advantage, Hall and Hinkelman (2007) developed an organization-wide planning process that works backward from a key annual event faced by all organizations: end-of-year tax reporting. Most companies finalize a business plan, or at least a budget, in the last quarter of the fiscal year as shown in Figure 1 (Hall & Hinkelman, p. 20). Besides all the state and federal taxes that are due at the end of the fiscal year (or immediately thereafter), organizations need to develop annual report for their shareholders. Once the business plan and associated budget are finalized for the new year, everyone in the organization must go about the implementation of that plan for the upcoming year. Working backwards from the end-of-year plans, Figure 1 shows how the planning process could be done for a larger organization to culminate in the integrated corporate business plan. The third quarter is when all of the forecasting for the year and proposed budget for next year can be developed from each department. Backing up one more quarter to the second quarter, the spring is the best time to do brainstorming and longer-term planning.
For larger companies, there could be many sub plans developed including plans for each division or line-of-business (LOB). Collectively, these various plans are likely integrated into a high-level strategic plan (StratPlan). Every company has its own planning process. Often they are not very formalized, especially for small companies. Many planning activities, like new product development including Intellectual Property (IP) protection with Research and Development (R&D) have to take a much longer view and must be prioritized in annual budgets over several years. That prioritization process needs to balance short-term and long-term goals of the organization. Hall and Hinkelman (2007) recommend scenario planning every 2 or 3 years to strengthen the business plan and to provide flexibility if one of the alternate scenarios of the future starts to form.
Scenario Planning
A McKinsey study in 2009 found that 81% of companies had changed their planning process with more than 50% adding or expanding scenario analysis to take on a more prominent role.
In a highly uncertain environment, the advantages of scenario planning are clear: since no one base case can be regarded as probable, it’s necessary to develop plans on the assumption that several different futures are possible and to focus attention on the underlying drivers of uncertainty. (Dye, Sibony, & Viguerie, 2009, p. 1)
Long-term planning, or horizon planning, is nothing new to capital-intensive companies such as manufacturers, utilities, and (some) urban planners. Hall and Hinkelman (2007) built a more robust horizon planning process that integrates scenario planning (2007, Chapter 10). This process draws out multiple possible futures, not just the official future that most companies use with straight-line trend projections (Schwartz, 1996; WF, 2010, scenario plan). The official view is almost always biased to the view of top executives who are usually the visionary forces in the organization. Therefore, scenario planning is an imperative for creating planned alternatives for major possible futures. Scenario planning looks at the various drivers that might lead to a future other than the official one. In so doing, early warning signs can be identified that an alternative scenario of the future is starting to become more likely, and to develop contingency plans for that eventuality. Royal Dutch/Shell Company, one of the earliest and most aggressive users of scenario planning, looked for the rise of a moderate, Mikhail Gorbachev, to power in Russia as the indication that the communist state would fall and that the vast oil/gas reserves of the Union of Soviet Socialist Republics (USSR) would consequently reach the world market (Schwartz, 1996). With Russian and other oil on the market, Shell correctly predicted the several decades of cheap oil in world markets (Schwartz, 1996).
“Scenarios are stories, they are creative writing, but they are not science fiction. The process or incremental steps to creating scenarios use facts and plausible outcomes” (Anderson, 2010, p. 49). As business plans for the year are finalized, these plans should be played against the various scenarios of the future. This means that more flexible alternatives will be chosen over the ones that would be most profitable in the official future but not in other scenarios. Another advantage of scenario planning is that DRPs and Business Contingency/Continuity Plans (BCPs) are based on the more visual depictions from the scenario story lines of what each scenario could bring. In the Year 2000 (Y2K) preparation, for example, contingency plans were integrated in many cases with existing DRPs associated with disaster planning that shut down buildings or interrupted suppliers.
Consequently, scenario plans need to be developed prior to a major or catastrophic event. Hall and Hinkelman (2007) addressed several scenario plans:
• Y2K. The Y2K event was a massive exercise in computer systems evaluations and upgrades. Y2K planning included the evaluation of business partner risks and focus on those issues that could be most catastrophic (p. 158).
• Socialized Healthcare. Based on runaway healthcare costs, Hall and Hinkelman developed The New Era in Healthcare is Upon Us! scenario (p. 169). Taking several geopolitical issues into consideration, this scenario anticipated the rise of Hillary Clinton to power based on a socialistic movement.
• Zero gravity in the housing market. The MIL Addition scenario looked at the supersonic growth in property values from a local government’s point of view. The property tax rate for most states is based on the milage rate (a mil is one thousandth or 0.01% of the assessed value of the property). The doubling of home values over a couple of years meant that the taxes doubled (for those properties without some type of homestead exemption). Several basic projections of rapid property growth demonstrated how unsustainable the property value appreciation was. The author’s chose just one possible manifestation of the problem (p. 171).