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Microreactors are small nuclear reactors that can operate as part of the electric grid, independently from the electric grid, or as part of a microgrid to generate up to 20 megawatts thermal energy that can be used to generate electricity and provide heat for industrial applications. Most of these small reactors are designed to be portable – many could be hauled by a semi-trailer. Microreactors are 100 to 1,000 times smaller than conventional nuclear reactors, while small modular reactors (SMRs) range from 20 to 300 megawatts.

Microreactors offer a combination of reliability and operational flexibility that no other small generating system can match. They are expected to operate for years without refueling. Renewed interest in these very small reactors is driven by a number of factors, including the need to generate power on a small scale in remote locations. The failure of wind and solar power generation to live up to expectations is opening the debate on other viable alternatives. MNRs can operate either off-grid or on grid.

MNR manufacturers can now ‘right size’ manufacture these units for use in factories, hospital, utilities, and even small remote towns. Technology advancements over the last few years have improved MNR safety. MNRs can produce between 1-20 megawatts of power, depending upon size and can last a few years before cores need any replacement. MNRs are a zero-carbon energy source that can replace fossil fuels across many sectors within any geo-economy.

NMRs originated in the United States Navy‘s nuclear submarine project, which was first proposed by Ross Gunn of United States Naval Research Laboratory in 1939. The concept was adapted by Admiral Hyman Rickover to start the American nuclear submarine program in the 1950s. The first US nuclear submarine to be constructed was the USS Nautilus, which was launched in 1955. It was installed with Westinghouse‘s S2W reactor - a pressurized water type reactor which gave out 10 megawatts output. Thus, MNRs are not a new technology. While modularizing them for commercial use is the current challenge.

USS Nautilus military technology spin-off

MNRs use nuclear fission to generate heat, which is then used to produce electricity through a steam turbine. The reactor core is surrounded by a thick shield to protect humans and the environment from radiation. The core also contains fuel rods made of uranium or other fissile materials. As the fuel undergoes fission, it releases energy in the form of heat, which is then transferred to a coolant that circulates through the reactor. The new generation of MNRs utilize helium, which absorbs the heat and transfers it to a heat exchanger. The heat exchanger then transfers the heat to a secondary coolant, which is used to generate steam and produce electricity.

In terms of costs, MNRs can compete with technologies of similar size and application, such as diesel generators in small networks and renewable energies. The greatest advantage is that MNRs can be manufactured in factories and transported to where they are needed. Many MNRs have been built to be portable.

There are now a number of companies producing prototype MNRs for industry use. These are expected to come on the market for civilian use over the next couple of years. There is an expectation that the first units will be commercially available by 2030. However, prices for SMRs are estimated to cost between USD 50-100 million for the larger size Small Nuclear Reactors. MNRs should be much cheaper. Several companies are working on home and factory units. China and Russia are very advanced in MNR development.

Its expected there will some breakthroughs in MNR technology and modular design over the next couple of years, which will totally change the debate on net-zero energy generation into the next decade.

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The MCMC first blocked Murray Hunter Substack in April 2023. It has been blocked ever since. I am now fighting a civil action in Malaysia and a criminal case in Thailand both initiated by the MCMC. The future of Murray Hunter Substack is uncertain. You help is needed to assist the fight against the repression of freedom of the press. I am unable to write about Malaysian politics by order of the Thai police at this point. Please help:

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Management students in “B” schools over the last 60 years have been taught that ‘people-centric’ management brings out the best in corporate performance. Many of the management classics have been based upon people-centric management theories and philosophies. These include the works of Max Weber, Elton Mayo, Henry Murray, Abraham Maslow, Rensis Likert, William Reddin, Warren Bennis, Peter Drucker, Kenneth Boulding, Henry Fayol, Mary Parker Follet, Fred Emery and Eric Twist, Douglas McGregor, Paul Lawrence and Jay Lorsch, Joan Woodward, Charles Perrow, Ralph Kilmann, Edgar Schein, William Ouchi, Henry Mintzberg, Tom Peters and Robert Waterman Jr, Roseabeth Moss Kanter, and of course more contemporary authors like Steven Covey and Peter Senge.

The advent of the ‘soulless’ corporation has not only thrown a Century of management thought in the bin, but lit a fire and burned all the books. Many corporations today have no resemblance to what is taught in ‘B’ schools today.

What is the ‘soulless’ corporation?

A ‘soulless’ corporation is one that has lost its heart. It has no moral, ethical, intellectual, creative, or even spiritual substance. People are not valued as human beings. The corporation is rule-based with no decision making discretion left to those who work within it, as many corporations just open and maintain repetitive shop fronts in shopping centres. Creativity and innovation are viewed as being subversive to the corporation’s ends. Employees are penalized rather than rewarded for being creative. Corporations with remote management are just workplaces governed by computerised systems and procedures designed to control and maximize profits.

Personal conformity is the trait valued today in ‘soulless’ corporations. Mission statements are empty of spiritual, passion, and meaning. They are repetitive just slogans which resemble the preambles of other corporations. This is the age of the ESG playbook.

These are some of the traits of the ‘soulless’ corporation that brings widespread technology alienation to their respective workforces. People are seen as necessary human cogs in corporate wheels just like Charlie Chaplin in his 1936 movie Modern Times. The outsourcing of call centres in the 2000s to places like India are now being replaced by AI.

Employees motivations are now left to external mechanisms. Employees work for salaries in order to dine out, and take holidays. The extent of their intrinsic motivation is now left to planning for these events. This the new form of motivation. Thus, the intrinsic traits of loyalty, goodwill, working for personal self-achievement, and being part of a team within a corporation are leaving work scenes of today.

Work that is alienating is the norm today.

How did ‘soulless’ corporations develop?

The ‘soulless’ corporation did not just create itself overnight. ‘Soulless’ corporations have developed through the culmination and fusion of megatrends that changed the whole notion of what a corporation really is.

Large conglomerates now dominate production, supply chains, retail and service industries that make up whole economies today. These corporations are often transnational and bigger than many national economies. The space that family proprietorships, businesses, and even nationally owned public companies occupied have been squeezed out of the business-scape.

Most people today interact with conglomerates, rather than small businesses, even down to purchasing their morning coffees. Family traditions and craftmanship that made the best products and brands have been swallowed up by conglomerates. Its very hard to find family businesses and family brands anyone. ‘Soulless’ corporations have taken over most of these icons today.

Another factor that aided the development of ‘soulless’ corporations is Diversity, Equity and Inclusion (DEI) which replaced affirmative action programs over the last decade. DEI is a core component of Environmental, Social and Governance (ESG) frameworks which have become crucial in funds management over the decade. DEI has replaced to concept of meritocracy, which has become redundant with the help of AI management systems.

The best and brightest are no longer required in highly rigid management system-based organizations. DEI and the automation of management systems has grown in tandem.

The work from home trend was accelerated by the Covid era. Corporations soon found that work from home saved millions of Dollars in rent and other fixed costs. Initially, employees enjoyed this freedom. However, the work from home trend has broken down team cohesiveness and diluted the bonds of corporate cultures built up over decades in traditional office and other work settings. Corporations now look more like nodes of employees (or contractors) working from off-site locations than a team strongly bonded by a corporate culture that gave meaning to the nature of their work.

Finally, a new generation of employees have been ‘dumbed down’ by a post-secondary education system which no longer teaches critical thinking. Graduates have lost their abilities to solve complex problems, do mental arithmetic, socialize in work groups, and be intrinsically motivated by the mission of their employers. Graduates have become the fodder of corporations who want employees who don’t question things.

Out of the above, totalitarian like corporations have emerged where local managers have no leeway in the decisions they make. This we are seeing in the banking industry, where local managers and whole branches are being removed and replaced with AI. Systems have taken over jobs, discretion, and social connections with customers. Even if a customer can find a bank, mobile phone and internet provider shop, any queries from the public will be met with referral to apps. No human based decisions enter into customer interactions. Education is heading this way, as even medicine is.

This is what the ‘soulless’ corporation looks like.

The new ‘soulless’ management

Today’s management style bares no resemblance to what is taught at “B” schools. This could best be described as Taylor’s scientific management on steroids. Stop-watches have been replaced with AI. Such an example would be Amazon’s “Pick-Path 2.0”. Progress in management though has reverted back to Douglas McGregor’s Theory X, where Theory Z has been thrown out the window. Management now resembles Kurt Lewin’s 1939 autocratic leadership, only this time by faceless managers. KPIs rule, don’t reach them and your out. The workplace now has a stress that hasn’t been seen for generations. The workplace is now a major source of health disorders.

With cameras observing workplaces and disguised social credit systems, ‘old school’ has been replaced by the ‘Orwell-school’. Under such conditions the corporation can be nothing but ‘soulless’.

There are some aware of this and fighting back. That’s another story.

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This is a great short summary of my theory of opportunity published back in 2012.

The MCMC first blocked Murray Hunter Substack in April 2023. It has been blocked ever since. I am now fighting a civil action in Malaysia and a criminal case in Thailand both initiated by the MCMC. The future of Murray Hunter Substack is uncertain. You help is needed to assist the fight against the repression of freedom of the press. I am unable to write about Malaysian politics by order of the Thai police at this point. Please help:

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Opportunities are not uniformly perceived or exploited but are deeply intertwined with an individual’s perception, environment, and cognitive processes. His meta-theory, particularly detailed in works like Opportunity, Strategy & Entrepreneurship: A Meta-Theory and journal articles, frames entrepreneurial opportunity as a dynamic, situational phenomenon that emerges from the interaction of environmental factors and personal attributes.

Below is a summary of his theory, focusing on its core components:

1. Nature of Entrepreneurial Opportunity

Hunter views entrepreneurial opportunities as a nexus between the external environment (social, economic, technological, and regulatory factors) and an individual’s personal disposition, including their knowledge, experience, and biases. Opportunities are not static or universally accessible; they depend on how individuals perceive and interpret the world, shaped by their mental models and prior knowledge. This perspective aligns with the idea that opportunity recognition is not uniform across individuals due to differences in perception and cognitive processing.

2. Four Typologies of Entrepreneurial Opportunity

Hunter categorizes entrepreneurial opportunities into four distinct types, each with unique characteristics:

Imitative Opportunities: Copying existing products, services, or business models with slight modifications, often leveraging established markets or technologies. This is common in developing markets where entrepreneurs observe and replicate successful innovations from other regions.

Allocative Opportunities: Identifying inefficiencies in supply and demand, such as market shortages or demographic shifts. These opportunities arise from observing market gaps or unserved needs, often requiring strong networks and market knowledge to exploit.

Discovery Opportunities: Recognizing latent or overlooked opportunities in the environment, often driven by intuition or insight. This involves identifying patterns or possibilities that others miss, such as new applications of existing technologies.

Constructed Opportunities: Creating entirely new opportunities through innovation or reconfiguring resources in novel ways. This is the most creative and disruptive type, often associated with groundbreaking products or business models.

Each typology reflects different sources of opportunity and requires distinct strategies and capabilities for exploitation.

3. Role of Perception and Creativity

Hunter emphasizes that the ability to identify opportunities hinges on an entrepreneur’s perception, which is influenced by their prior knowledge, emotional sensitivity, and cognitive biases. Creativity is central to his theory, as it enables entrepreneurs to make connections between environmental cues and their own experiences, forming ideas that can be evaluated as opportunities. He argues that creativity and the ability to connect disparate concepts are more critical than raw intelligence in spotting opportunities.

4. Environmental Embeddedness

Opportunities are embedded within the environment, shaped by socio-economic, technological, and regulatory changes. For example, shifts in resource costs (e.g., rising petroleum prices) or regulatory frameworks can create new opportunities by altering market dynamics or consumer preferences. Hunter stresses that entrepreneurs must scan the environment actively, using tools like market observation or trend analysis to identify potential opportunities.

5. Opportunity Evaluation and the Entrepreneurial Process

Hunter proposes a modified SWOT analysis to evaluate opportunities, acknowledging the limitations of traditional SWOT due to its subjective nature and potential for misuse. He views the entrepreneurial process as a learning journey, where opportunities are tested and refined through action, feedback, and adaptation. The feasibility of an opportunity becomes clear only during implementation, as entrepreneurs select strategies tailored to their unique context.

6. Sources of Opportunity

Drawing from Peter Drucker’s work, Hunter identifies several sources of opportunities:

Market voids: Gaps or unserved market segments, such as incongruities between current offerings and customer needs.

Technological changes: New technologies or applications of existing ones that create new products or processes.

Regulatory changes: Policies that alter market entry, pricing, or competition, creating barriers or openings.

Demographic or perceptual shifts: Changes in population or consumer preferences that open new markets.

7. Interdisciplinary Approach

Hunter’s meta-theory integrates insights from microeconomics, psychology, cognitive science, and strategic management. He argues that opportunity cannot be explained by environmental or individual factors alone; it requires a synthesis of these disciplines to understand how ideas form and evolve into actionable opportunities. This interdisciplinary approach underscores the complexity of opportunity recognition and exploitation.

8. Practical Implications

Hunter’s theory suggests that entrepreneurs must develop a “strategic view” that combines intuition, environmental scanning, and creative problem-solving. Firms and individuals with limited resources may focus on imitation or allocative opportunities, while those with greater expertise and networks can pursue discovery or construction opportunities. The theory also highlights the importance of learning from mistakes and adapting strategies based on real-world feedback.

Critical Perspective

While Hunter’s framework is comprehensive, it acknowledges that no single theory can fully predict opportunity creation due to its situational and subjective nature. Theories are better at explaining opportunities post hoc than forecasting them. Additionally, his reliance on creativity and perception may undervalue structural constraints in certain markets, particularly in less developed economies where regulatory or resource barriers can limit opportunity exploitation.

In summary, Murray Hunter’s theory of entrepreneurial opportunity portrays opportunities as dynamic, context-dependent phenomena that emerge from the interplay of environmental factors, individual perception, and creative cognition. His four typologies—imitation, allocative, discovery, and construction—provide a structured way to understand opportunity sources, while his emphasis on creativity and learning highlights the entrepreneurial process as an adaptive, iterative journey.

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“It was an entrepreneur who created human made global warming and it will be an entrepreneur who will solve this problem”

- Professor Howard Frederick

Back in 2021 Billionaire Bill Gates warned the world of a climate disaster due to the phenomenon of “climate Change”. At an online book talk on climate change Bill Gates said that “Zero is the number the planet needs to reach by the year 2050 to avoid worldwide climate catastrophe”. Gates elaborated saying by 2050, the corals will die off and never come back, while an acidic ocean will kill off aqua-ecosystems as the acid levels keep rising. Forests will dry out and be subject to both fires and infestations that kill the trees. Sea levels will rise and beaches will be lost. Temperatures will rise along the equator causing more extreme heat events, where people won’t be able to go outside or farm. The world will live in an age of climate refugees.

Gates in 2021 said that “Avoiding a climate disaster will be one of the greatest challenges humans have ever taken one”.

Forward to 2025, Gates in an interview on CNBC and through an essay called “Three Tough Truths About Climate” said that “Climate change is a serious problem, but it will not be the end of civilization.” Gates now takes a walk back on the “doomsday doctrine of climate change”.

Gates now postulates that the ‘doomsday outlook” is causing much of the climate community to focus too much on near-term emission goals, and its diverting resources from the most effective things we should be doing to improve life in a warming world. Gates continues saying “This is a chance to refocus on the metric that should count even more than emissions and temperature change: improving lives. Our chief goal should be to prevent suffering, particularly for those in the toughest conditions who live in the world’s poorest countries”.

“…Although climate change will hurt poor people more than anyone else, for the vast majority of them it will not be the only or even biggest threat to their lives and welfare. The biggest problems are poverty and disease, just as they always have been..”

Gates argues that it is important to change the current world views about “climate change” at next month’s Climate Change Summit COP30 in Brazil. The metrics must be changed. Existing temperature estimates may not be correct. World policies must focus on living with “climate change” with low-carbon cement and steel, EVs, changes in farming techniques that don’t generate emissions, and develop power grids that deliver clean and reliable electricity that bring energy costs down.

Gates’ biggest take in his essay is that innovation will curb climate change. Its already doing that. This requires a complete change in mindset. In addition, there are other metrics to consider other than temperature, when looking at “climate change”.

Most of us have seen Al Gore’s “An Inconvenient Truth” and realized many predictions have not emerged as truth. We have already passed so many so-called ‘tipping points’ without anything happening. Greta Thunberg’s “How dare you” was at the height of the “doomsday cult” which stifled thinking of sensible solutions. COP30 is now an opportunity to change perspectives on Climate change.

The November 17 court case is not just about me but press freedom in Thailand and the ability of journalists to report on the region. I am fighting to restore my ability to report to you on Malaysian political affairs at the court hearing at the South Bangkok Criminal Court on November 17.

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If Max Weber were alive today, I’m pretty sure he’d be less worried about bureaucrats in grey suits and more about engineers writing code in Silicon Valley or Shenzhen. That’s because the “iron cage” of rationality—the term Weber coined over a century ago to describe how modern life gets trapped in systems designed for efficiency, predictability, and control—has found its most advanced form in artificial intelligence. AI isn’t just the next wave of technology; it’s the sleek, digital façade of a deeper logic that’s been unfolding since the industrial revolution. And now it’s going global—with chips as the bricks, and algorithms as the mortar.

Weber warned us about a world where human decisions would be increasingly dictated not by values or moral reasoning, but by cold, impersonal systems. At the time, that system was the bureaucracy: faceless clerks, rigid procedures, and mindless rules. Today, that cage has been upgraded and cloud-integrated. The new system runs on machine learning models, optimized recommendation engines, and data pipelines so efficient they can predict your desires before you even have them. Welcome to the 21st-century version of rational domination: it doesn’t knock on your door—it slides into your DMs.

What we’re witnessing with AI is not just the rise of smarter tools—it’s the codification of instrumental reason. These systems don’t ask why, they ask how fast. They don’t judge right or wrong; they judge optimal or inefficient. And unlike the bureaucracies of Weber’s day, today’s AI systems are scalable, borderless, and relentlessly hungry for data. They can assign credit scores, screen job applicants, recommend bail conditions, and flag threats—all before a human has even looked up from their desk. The iron cage has gone wireless.

But here’s the twist: the new iron cage needs a power source, and it’s not just electricity. It’s chips—semiconductors. Tiny pieces of silicon that make all this rationality run. And that’s where the U.S.-China tech rivalry kicks in, because the battle over semiconductors is really a battle over who gets to build, run, and profit from the global architecture of AI.

Let’s break it down. AI needs chips—specifically, high-end GPUs and AI accelerators. These are the workhorses that train massive models like GPT and run complex systems in everything from finance to warfare. The U.S. has the design edge with companies like NVIDIA, AMD, and Intel. Taiwan’s TSMC and Korea’s Samsung dominate the fabrication game. China? Despite pouring billions into its domestic champions like SMIC, it’s still catching up—especially in advanced nodes under 7nm. And Washington wants to keep it that way.

That’s why the Trump administration went all in with export controls—banning the sale of cutting-edge chips and chip-making tools to Chinese firms. This isn’t just about economics. It’s a strategic chokehold. The administration knew that if China catches up in semiconductors, it can close the loop on its AI-industrial complex. Not just to run better e-commerce apps, but to power surveillance systems, military AI, and its broader ambition of technological self-reliance. The cage, once built, would be made in China—and exported to anyone willing to buy it.

But let’s not get too smug. America, too, is building its own version of the digital iron cage. Just ask the people whose lives are now shaped by black-box algorithms on parole boards, hiring platforms, or border control systems. AI in the West may wear the suit of liberal democracy, but its core logic is just as Weberian: make it faster, make it scalable, and let the system decide.

What’s fascinating—and frankly chilling—is how AI has become both a façade and a frontier. It’s a façade because it gives the illusion of progress, neutrality, and objectivity, even as it bakes in the biases of those who build it. It’s a frontier because it’s the new site of global power competition. The Cold War had nukes and ideology. This one has chips and neural nets. And unlike past empires built on territory, this one is built on bandwidth and backend infrastructure.

Malaysia at the Crossroads: Custodian or Client in a Digitized World?

So where does a country like Malaysia fit in all this? Right now, we’re not designing the chips, and we’re not building the biggest AI models—but we’re standing right at the crossroads of this new digital arms race. Malaysia’s Penang and Kulim are already critical nodes in the semiconductor value chain. We test, assemble, and package the chips that make the world’s AI systems hum. In many ways, we are the quiet custodians of the motherboard supply chain.

And it’s not just hardware. Malaysia is also positioning itself as a neutral, rules-based digital economy hub in a polarized tech world. The question is whether we can stay strategically non-aligned in an increasingly bipolar AI landscape. Will we simply be a workshop for the world’s AI ambitions, or can we move up the value chain and start shaping the algorithms themselves?

Because make no mistake: in this new era, sovereignty is being redefined—not by borders, but by bandwidth. Not just by who governs your people, but by who governs your data. And the nations that remain passive in this transformation risk becoming clients in someone else’s system—users of a cage they didn’t design.

So yes, Max Weber saw it coming—just not like this. The iron cage didn’t disappear. It evolved. And now it runs on GPUs, predictive analytics—and maybe someday, even quantum chips. The only question left is: who holds the keys?

And for Malaysia, the choice is urgent. We can either be part of the architecture of this new rational order—or be optimized out of it.

————————————————————

Economist Samirul Ariff Othman is an adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and a senior consultant with Global Asia Consulting. The views in this OpEd piece are entirely his own.

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I wrote this piece back in 2008. I believe if you want to really understand creativity, start here. Psychosociological Issues in Human Resource Management (2013), 1 (2), 7-51

Introduction

Creativity is an extremely important aspect of opportunity, strategy and entrepreneurship. Without creativity, very little would develop, function and contribute to the wellbeing of the enterprise. Creativity is especially important in;

· Generating new ideas,

· Developing sources of opportunities from new technological developments, competencies, resources and networks, etc.

· Combining resources, skills, competencies, networks, and strategies to create new ventures,

· Developing ideas along a vision and path of implementation (strategy),

· Managing competitive strategy,

· Developing flexibility within an enterprise,

· Managing growth, and

· Solving routine and non-routine enterprise problems.

The concept of creativity is elusive, cannot be observed directly, measured or even acknowledged until sometime after the creative act has taken place[1]. Relatively little research has been undertaken on creativity until the 1960s (Sternberg and Lubart 1996). However within the last three decades there has been a massive serge in research, new theories and the development of many creative tools.

Many creative ideas, products or processes are the result of a lifetime of work for any individual. Some may be extraordinary and rare like a painted masterpiece or theory about the cosmos. Some creations may answer perplexing questions and have far reaching influences, beyond the expectations of their creators. Consequently people assume that the way these creations come and the people that create them must in some ways also be extraordinary about the intellectual and cognitive capacities they possess. However the intellect required for creativity is not outside the norm and everybody is capable of exercising the same cognitive processes. Our thought processes are ordinary and utilize past knowledge with new information (Weisberg 1993). Within the process of creativity, there are no leaps or illuminations that come from nowhere. The Wright Brothers’ invention of the airplane, Thomas Edison’s invention of the light globe and Picasso’s development of a new style of painting were all the result of incremental advances built upon previous work. Creativity is not mysterious and can mostly be explained by computational concepts in artificial intelligence (Boden 1990).

Probably the greatest difference between highly creative and average people is that highly creative people are experts in their domain. They are also highly motivated which takes them along various paths of inquiry into matters of interest that others ignore. Highly creative people take intellectual risks and have immense perseverance that others don’t have (Sternberg and Lobart 1996). Complete immersion into a subject could be an important factor in gaining creative insights, especially in fields where there is an abundance of prior knowledge and experience (Proctor 1999).

It is creativity that allows us to see things differently and this is one of the main reasons behind our continued evolution. Creativity is a natural activity and probably depends upon our ability to be imaginative, open minded, curious, intuitive, insightful and able to tolerate ambiguity (Piirto 1998). The creative person needs to be flexible to react effectively to technological, economic, social and regulatory changes, under new circumstances, where new opportunity exists.

Creativity is an ever developing ability rather than a static attribute that someone is endowed with at birth (Simonton 2000). Creativity is not the result of a comfortable environment, but rather the broad life experiences a person has lived through which can enable a person to take fresh perspectives. The ability to be creative is probably enhanced more from the experiences of challenging life experiences than a stable and secure life, which may help develop the quality of perseverance (Simonton 1994). Perseverance is vital to creativity and problem solving, which is usually associated with barriers, obstacles and difficulties before the problem can be solved.

Creativity can be viewed as a process where the cognitive system utilizes attention to draw upon relevant knowledge, restructure problem information and look for analogies, new connections or associations within prior knowledge to solve a problem (Smith 2003, Smith et. al. 1994). Creativity can also be viewed as a product or outcome, where the result is recognized as being creative by others. The creative end may be a new product, new process, a piece of art, a new business model or a new strategy.

There is lack of consensus about what constitutes creativity and whether emphasis should be placed on the process, or the ends, and whether it is an individual or group phenomenon. From the point of view of this book creativity is generally defined as the production of novel, useful ideas or the production of solutions to problems. Creativity thus refers to both, the generation of new ideas, problem solving, as well as the actual idea or solution (Amabile 1983, Sternberg 1988, Weisberg 1988). Creativity is also about firm innovation, which is closely related to creativity and the implementation of new ideas (Amabile et. al. 1996, Politis 2005) as strategy.

Creativity has a rich cultural context, as ideas and solutions take place within a cultural environment that embodies a sense of meaning to those living within it. Culture immerses individual within language, numbers and scripts, music and entertainment, a national sense of humor, a culinary style, its own rituals and taboos, laws, heroes and villains, myths and legends, values and sense of success, etc. Creativity over time changes the way things are done which affects symbols, traditions and meaning within a culture. Creativity is the means by which a culture evolves (Csikszentmihalyi 1996, P. 9). Creativity and culture cannot be separated.

Creativity is selective and not necessarily a general trait. Creativity also tends to be domain specific rather than a trait that can be applied across other domains, i.e., a person may be a creative chef but not a creative painter or artist. Creativity can occur within a selective discipline when a person develops knowledge of the domain and its symbols. The person must also develop a cluster of skills that are unique and relevant to the domain, i.e., for painting, sight, strokes, spatial, etc. In addition to specific knowledge and skills, a person must have sensibility, interest, imagination, curiosity and being willing to experiment within the domain to be creative (see Figure 4.1.).

Figure 4.1. Creativity is Domain Specific: The elements of creativity for a perfumer.

As creativity can be seen as both a process and product, it becomes a concept very close to innovation. If innovation can be seen as the introduction of new things, ideas or ways of doing things[1], then innovation can be seen as the product or application of creativity. Somehow creativity occurs out of the interaction between an individual (or group) and the environment where it may be possible to identify something that can be acted upon (an opportunity). The conclusion or decisions made are the result of complex interactions within the environment by actors, inventions and events. For example, it is decisively difficult to identify who created commercial aviation, the post office, the communications industry or the entertainment industry. Was it one person, one event or a collection of many complex interactions, inventions and innovations that created a stage for potential new opportunities to be discovered?

Who are the people that perceive and exploit opportunities? Are they people with lots of ideas or others with more experience and creative insight into how to develop successful implementation strategies? The answer to this may be seen in the time it takes many Fortune 500 companies to turn an innovation into something that has value and provides an above industry average return (Wadhwa et. al. 2008). It is not an overnight occurrence. Many people may have the same idea but not all people have the same ability to implement and exploit it successfully. Creativity is a definite element in the exploitation of profitable opportunities (Shane and Venkataraman 2000).

The importance of creativity in enterprise lays in opportunity recognition, discovery and construction. Creativity is further required to develop realizable strategies by coupling resources, capabilities and networks together, and implement them and solve problems along the way. Creativity is also a path to flexibility which is needed in a dynamic environment. The ability to be flexible is also the ability to develop a competitive edge in the marketplace. Flexibility is also needed where problems have very little or no precedent (Proctor 1999), where one can break out of existing patterns and see new perspectives that may provide insight into solutions.

Certain characteristics must be present in a person and the situation must be conducive for a person to be creative. Creative thinking must be merged with logical thinking and reasoning, to solve many problems, as we will see in various problem solving processes. Our future is tied to creativity. This chapter will now look at all these issues in more detail.

The Cognitive Aspect of Creativity

As mentioned in chapter three, new methods available to monitor brain functions have greatly improved our understanding of how the brain operates in leaps and bounds. The frontal lobes, located in the front of the temples are very important to the function of creativity. This is the most recently developed part of the brain in our evolution and makes up approximately 30% of the cortex’s total surface.

The frontal lobes are larger in humans than any other primate and posses a large number of complex and reciprocal connections with the rest of the brain (Stuss and Benson 1986). It is believed that the frontal lobes fulfill an executive function within the brain to aid complex behavior that requires simultaneous integration with information flow. The frontal lobes help us maintain attention to tasks and manage the switching over to other tasks as required (Koechlin et. al. 1999). The frontal lobes are where thought and action is initiated in response to non-routine challenges. They also integrate cognition and emotion through the recall process, retrieving the memory of specific past events and the emotion attached to them. This emotion is used in imagination about similar events in the future. The frontal lobes allow us to move through time in a virtual manner and manipulate objects, people and events. This is important in the construction of opportunities and contemplation of implementation strategies. The Frontal lobes appear to be the key to our self awareness where cognition is integrated with affect and emotion (Wheeler et. al. 1997). The frontal lobes are also important to humor which as we will see uses some of the same processes that creativity uses. The frontal lobes are the source of our intuition or ‘gut feel’.

The neural circuits that process information for non-creative activities are the same circuits utilized for creative activities in the frontal lobes (Dietrich 2004). Novel combinations of information are created from information possessed in other parts of the brain. Creativity also requires control over short term memory, sustained attention, cognitive flexibility and judgment, which are also functions of the frontal lobes.

The right brain hemisphere also plays some role in problems that require insight and spatial perspectives and where re-arrangements are of information are required (Bowden and Beeman 1998). The functions of the left and right brain hemispheres are discussed in more detail later.

How we see the Environment through Mental Models

The environment is so rich and complex that we need methods to simplify what we see to give it meaning (O’Connor and Seymour 1995). We make these simplifications, general sense and meaning about the environment through the mental models we develop. These mental models can be defined as deeply ingrained assumptions, generalizations, and even pictures or images that influence how we see and understand the world and how we take action (Senge 2006, P. 8). Mental models are the brain processes we use to make sense of our world. They mould the thoughts we have, develop our sets of heuristics, and contain our biases, ethics and philosophies. Our mental models decide how we perceive the external environment, where our attention will be focused, and how we will respond to particular situations. Our mental models affect all aspects of our lives including, our views of the world, our career, relationships, dreams, ambitions, opinions and quality of life. Mental models exist in a hierarchy from a general overall mental model (the total set of our schemata), to our philosophical and ethical models, personal belief mental models (individual or clustered schemata), to specific task mental models (or scripts).

Our mental models begin developing at birth. Infants begin to make sense of the world from genetically inherited instructions, incoming stimuli and early experiences. The infant recognizes their mother early on as a source of food and nurturing, and their father and siblings over the first few months of their life. The infant’s comprehension, and consequently ability to develop a deeper relationship with their immediate family, depends upon the development of their mental models. This continues to develop into adulthood and throughout the rest of his or her life.

As the infant continues to grow into a toddler and child, she builds upon her mental model by adding more and more information to create deeper meaning. Mental models allow a person to learn through the creation of a holistic picture of the environment, complete with feelings and emotions. Without a mental model there is no ability to learn. During the early learning periods an infant’s curiosity and attitudes to learning develop. This is why infants marvel and get excited over sensing, touching and seeing new things that we take for granted.

The mind creates an internal world of its own, parallel to our external world. Our internal world is consistent and complete, unlike the external world that is complex and not totally comprehensible. Most of what we absorb through our senses about the external world is discarded, as external information is blended with relevant internal information for us to make sense and meaning of the external world (Wind and Crook 2006, P. 9). As we saw in chapter three, perception is not a linear process of information reception, processing, storage and recall, but a very complex, interactive, subjective and evocative process. Therefore how we make sense of the world is through our mind relying only on stimuli from the external world to a small extent. We believe what we see, which primarily comes from our internal world.

Our mental model is a configuration of who we are, our identity, which is drawn from our experiences, stories, images, relationships and learning. In this way our identity is socially constructed and immersed within our mental model. Thus our mental model controls how we react to situations and how we behave. Thus through the structure of our mental model we are trapped into the perceptions, views and behaviour that are embedded and associated with our ways of thinking and interrelationships with others and the environment.

Our views and actions are shaped by our models that govern how we act. For example, if we believe people are basically lazy and untrustworthy, we would manage a work situation under strict controls. If we believe growth is fundamental to a business, we may pursue a path of growth which would have the predictable elements of developing new products and new markets within a competitive environment. Other potential creative strategies will not be seen or be dismissed without consideration, as the views formed by our mental model would prevail, preventing learning and change. If we managed an airline, under a rigid mental model we would tend to seek growth through standard industry practices, not considering alternatives. Being an innovator and seeking entry into the developing the low cost market segment would not be an acceptable strategy, until our mental model changes and we see the benefit of doing so, through realization and learning instigated by competitive shock.

Mental models affect how we see. Two people looking at the same object or situation may see something different depending upon their mental models. This is very obvious in the political arena where different commentators based on their own political biases may interpret the same event in different ways. For example a ‘left’ leaning politician may extol the need for social benefits for unemployed people, while a ‘right’ leaning politician may dismiss the need for benefits for the unemployed because they are seen as being unemployed by choice and labeled as lazy. Essentially elections are fought on different sets of policies or mental maps. Thus vision is bounded and structured within a particular set of beliefs, focusing on different issues and policies that are important for each candidate and party. This bounding and structure prevents an individual seeing other views.

As we have seen in chapter three, it is very easy for cognitive traps and psychosis to become part of a mental model which will distort a person’s perception of the environment and their reasoning.

When a person looks at the environment there is a complex number of factors that need to be perceived and understood for meaning to occur. Each individual factor has a meaning and together with other objects creates complex field of inter-meanings. Any environment has the following factors;

· A field,

· Objects within the field,

· Relationships between objects,

· Actors,

· Relationships between actors,

· Events,

· Relationships between events,

· Relationships between actors and events,

· Relationships between actors and objects,

· Relationships between actors, objects and the field,

· Relationships (or no relationships) between everything,

· The situation,

· Movements and stillness,

· motives,

· relationship between self and the actors, objects and the field, and

· Interpretations of the above.

The variables back in the opportunity gap (see figure 3.32.) can be seen in terms of the above factors to better understand their dynamics and inertia. There is the potential to discover connections between the various field elements. Where one can see interrelationships and trends, where movements and opportunities can be discovered and constructed. However when we are immersed within the system itself, it is hard to see the dynamism of the elements of the field and we act in a similar manner to others as we cannot see any change (Senge 2006, P. 42).

Our existing knowledge can constrain and keep us within our existing bounds of thought. It is only when a person can be aware of their own mental model that they can see and think beyond it. When one is free of their mental model, new connections between unrelated actors, objects, events and the field can be seen. Through imagination new potential realities can be formed internally leading to change in the existing mental models. This is the point where creativity flows and innovation may occur.

An opportunity is thus a person’s unique perspective, scenario, future reality, which the person feels can be created. Potential changes that can occur like the shifting from a production to consumer perspective, going from a top down to a bottom up approach taking up internet journalism and self publishing, changing a diet, etc., are all examples of changing the arrangements between actors, objects, events and the field. As the environment continually evolves individuals seek change and others accept or reject it. Changing mental models is thus necessary for survival. Mental models both help to create and limit opportunities.

Somehow perceived opportunities must influence our sense of identity for action to occur. Without this influence any perceptions will just be passing thoughts. When we are aware of the restrictions of our mental models, imagination becomes an instrument of virtual reality. Imagination is a way to see the consequences of potential future actions, and take action upon them.

Changing mental models has been an important theme in management literature over the last three decades. Mitroff and Linstone (1993) espoused the need to challenge key assumptions and move from old thinking to unbounded systems thinking. Peter Senge (2006) places importance on mental models for personal and organizational learning. Russell Ackoff (1981) espouses the importance of challenging fundamental models, starting with a desired end, working backwards to the goals and objectives to reach it.

Motivational Trigger

When an individual has some form of vision, tension begins to build up within his or her psych. The gap can create positive or negative feelings. When positive, a person will feel ambitious, energetic and ready for a challenge. When negative, a person will feel powerless, distraught, think negatively and may lack self esteem. A positive effect of the gap between a person’s reality and vision is the creation of a source of psychic energy that will drive an individual’s creative curiosity. This is the tension needed to help drive the creative process.

A gap based on delusion or fantasy about something that cannot be realistically achieved will usually result in a person having to self justify their personal failings. This may manifest itself in external blame or feelings of low self esteem and self efficacy. A person with no gap between their reality and vision will not have any feeling of need to be curious about anything and will have very little urge to think about new possibilities as they accept the way they are.

Tension built up in a person because of the gap between their personal reality and vision can be released in two ways. The first way is to achieve the vision thus closing the gap being the most desired solution. This release will take a period of time to bring reality in line with vision, providing a wide range of emotions during the journey which include a sense of challenge, excitement, and passion on one side and frustration, impatience and contemplation on the other side. The second way to reduce the tension is by lowering the vision, which leads to disappointment, low self esteem, anxiety, and a feeling of powerlessness. The vision may incrementally decline to repeated poor achievement within a domain that a person has a vision. This may result in the individual slowly lowering the expectation and explaining the failing away, i.e., coming 4th was good enough.

Tension created by the gap can create positive energy. The vision acts as a motivator, something that creates a frame of positive feelings which creates a good environment for creativity. However, deep within our psych, people have self doubts about being able to achieve their visions. There is a dormant belief that we are unable to fulfill our desires because as children we learn our self limitations[2]. This is important to our self preservation and ultimate survival that continues into our adult life (Fritz 1989). Thus this leads to another deep unconscious assumption that we cannot always have what we want, which can create a deep inner feeling of worthlessness. So vision on one hand creating a feeling of challenge and excitement and a deep feeling of worthlessness on the other creates a paradox where our personal energies can be channeled in a number of ways. This paradox can lead to a loss of psychic energy where we decide to let the vision erode. Alternatively we may question whether we really want the vision and psychically manipulate ourselves into greater efforts to pursue it. Finally we may find (or sub-consciously create) obstacles as an excuse for our failure to meet the vision. Our deep assumption of self limitation may lead to a fear of failure, which in the extreme could lead to the avoidance of challenges. Alternatively this paradox may lead to total focus and dedication, where all obstacles can be overcome. Focus and lots of reserves of psychic energy can in the extreme lead to compulsive behavior, which may be good for achieving visions but have secondary costs associated with success like a neglected and failed personal life[3].

When there is a strong belief that a vision can be achieved, psychic energy will increase as clarity and success reinforces the belief in successfully achieving the vision. The strength of the belief in success has more “gravity” than the person’s deeply held assumptions of worthlessness. However when things don’t go well and there is personal doubt about achieving the vision, psychic energy greatly decreases and the “gravity” of the deep assumption of worthlessness is stronger than that of the vision and pulls the person towards giving up. This is depicted in Figure 4.2.

Figure 4.2. The Forces of the Motivational Trigger

Creative Sensitivity

The environment is full of a complexity of consistencies and inconsistencies, discontinuities and disparities concerning objects, people and events in life. Our association with the environment is also a complex one. The relationship between our self and the environment is full of peculiarities and subtleties of meaning, if we are sensitive enough to pick them up. Creative sensitivity is related to our ability to perceive and understand the complex situations we observe and are involved in. High creative sensitivity therefore implies that we are more observant and aware of the things around us and feel comfortable with the complexity rather than trying to simplify meaning according to the perceptions we have (Hicks 2004, P. 45).

People who can perceive the richness of the environment have higher levels of creative sensitivity and should therefore be able to pick up the relevance of seemingly random facts and information. They will be better placed to make connections between them than someone who is less sensitive to the environment. Creative sensitivity is an important precondition to creativity.

In order to solve problems it is necessary to be able to perceive them. This is not a uniform characteristic across the population and some people are more endowed than others. Creative sensitivity is believed to be something people are born with (Eikleberry 2007). Creativity partly relies on external stimuli to act as cues to assist in long term memory recall. Creative sensitivity coupled with defocused or general attention to the environment will pick out subtle cues which will aid in the recall of prior knowledge, experience and information deeply locked away in the long term memory (Dewing and Battye 1971, Dykes and McGhie 1976, Mendelsohn 1976, Martingdale 1977), aiding the associative process and imagination. Therefore people with low creative sensitivity would not pick up as much stimuli from the environment as someone with high creative sensitivity, which will result in a lower number of cues to stimulate recall from the long term memory.

The characteristic of creative sensitivity gives a person some heightened sensitivity to some aspect of their life. Creative sensitivity is usually restricted to limited areas, such as, colour, pictures, sounds, music, values and ethics, human behavior, empathy, spiritual and spatial dimensions, etc[1]. People’s sensitivity also ebbs and wanes during the day, month and different times in a person’s life[2]. At mean levels of creative sensitivity, a person will tend to perceive more in their area of sensitivity endowment and experience subtle satisfactions or disappointments concerning certain pieces of art, music, performance, etc. Pleasant appreciations can lead to increased vigor and energy in a person’s area of sensitivity. This leads a person to have good intuition in their particular areas of sensitivity. However, one may become bored or impatient with ordinary and mediocre things within their area of sensitivity. Too much creative sensitivity on the other hand can lead a person to suffer pain due to empathy, as nothing will satisfy their expectations. This can lead to deep emotions, i.e., feeling pain for the poor, and in the extreme, feelings of depression and lethargic states.

Creative sensitivity assists a person develop a deeper understanding of their area of sensitivity than what the average individual would. Consequently a sensitive person becomes aware and concerned about what is wrong within their area of sensitivity. This is where creativity begins, with the finding of a problem. Only after sensing that there is a problem can a person put their attention to solving the problem. Creative people focus on what is wrong, out of place, missing, not complete, lacking something, knowing that something needs to be changed for the better. Problem solving is not the centre of creativity and not the process that actually creates the opportunity. It is the finding of the problem and the way a person mentally structures it that creates the birth of a potential opportunity.

Focus and Attention

Another important prerequisite to creativity is focus and attention. Focus is important for the selection of what information coming in from our senses we concentrate on, i.e., what cues we select for attention. Attention determines our concentration on what information we decide to put our mental effort upon to process and understand. We are continually bombarded with so many different kinds of perceptual stimuli, where we must decide what to take notice of and what to ignore. Our attention to selective information is the way we allocate our cognitive processing effort to information we perceive. Focus and concentration are very important characteristics to prevent the overloading of our limited cognitive processes.

A key characteristic of attention is that it is limited and we are simply unable to process all incoming information at once. In chapter three we discussed the bottleneck where only some stimuli/information is allowed through into our conscious awareness at a time. To recall this, take for example looking at a street scene. You will see the whole picture, but not be focused everywhere at once. Our mode of sight is like at spotlight on the middle of the picture (Posner 1980) and anything we see around the periphery gets much less attention. This is termed spatial attention. If we are looking at the scene and a neon light starts flashing, it will involuntarily capture our attention. This is called attentional capture, where a person’s attention is involuntarily drawn by some stimulus. This is perhaps a leftover from our primal programming to ensure that we can spot any immediate danger quickly. As we look at a general scene our head may remain stationary but our eyes will move more and focus on different objects for short periods of time (<1/10 sec.). This is called object-based attention (Cave and Bichot 1999). We can give attention to objects in either of these attentional modes (Soto and Blanco 2004).

Attention is also important with auditory stimuli where we are only able to focus upon one message at a time. There will be little awareness of the content of any other messages, however we will be aware of some of the message characteristics such as pitch, but not content (Moray 1959). This phenomenon can be experienced at a party where many conversations are going on at the same time, but an individual has trouble focusing on anymore than one conversation at a time, just hearing pitching and droning in the background. This is an example of selective attention, as the other conversations are not processed for meaning.

However some studies mid last century showed that individuals can be distracted by cues that divert their attention from one piece of information to another. Treisman’s (1960) research supports this postulation, where subjects were asked to wear a headphone where two separate mixed up messages were spoken through each side of the headphone. Many subjects switched their attention halfway through the messages from one ear to the other and were able to recite a meaningful message, made up of the two mixed messages. This infers that our attention is also influenced by cues, which can displace attention.

Attention is also the device through which we commit our mental effort necessary to initiate cognitive processing. Attention is manipulated to assist us consider, examine, and respond to outside stimuli in an appropriate manner necessary for a person to carry out daily activities. Attention allows us to allocate our short term working memory time between the various tasks we undertake. We have a certain amount of choice in this matter through deciding on what we want to perceive. This partly regulates what we identify and interpret for given meaning to through cognitive processing.

In daily life we are engaged in multiple tasks like walking, talking, reading, eating, writing, playing, and watching TV, etc. Doing some of these tasks concurrently requires giving them divided attention. This requires multiple focuses which will lead to the decline in individual task performance. Research into multitasking activities such as driving a car and talking on a mobile phone at the same time, shows that driving response times are substantially longer than if a person was just driving a car (Beede and kass 2006). This occurs due to the bottleneck theory and limited short term memory capacity, discussed in the section on cognition in part II.

As we have a limited attention capacity and use it to undertake all the various tasks we need to do, there will be no surplus capacity left for undertaking other cognitive tasks. Creativity relies on having surplus attention available. People occupied with busy jobs would tend to have less capacity than those with idle cognitive time that can be utilized for creative tasks. However, when tasks become automatically processed, i.e., without the need for conscious awareness, the mental effort required to undertake these tasks diminishes (Borgh and Chartrand 1999). This frees up cognitive resources and allows concentration for other tasks. This can be understood best through the example of learning to ride a bicycle. When learning to ride, initially a person’s full concentration is required. However once one has practiced, has some experience and developed riding skills, less concentration is needed. Under such conditions mental effort can be put into other tasks like the incubation of ideas, where insights can occur, discussed later on in the creativity process.

Attention is an important mechanism in the creativity process and is influenced by situational and other factors. Our existing patterning processes and routines tend to control our attention and thus suppress potential insights into new ideas. The patterns we use become polarized and therefore self perpetuating, where other stimuli is ignored, as our attention is focused on existing patterns.

Generally speaking the capacity for attention, particularly multitasking declines with age (Hartley 1992, Kramer and Larish 1996). However older adults who have strong skills and experience in a particular area will be still able to multitask, regardless of their age (Jennings and Jacoby 1993). For example older people tend to perform better than younger less experienced drivers in talking and driving simultaneously (Strayer and Drews 2004).

In regards to environment, rigid, tradition based, authoritarian and collective cultural environments tend to suppress the development of insightful ideas, as these types of societies do not welcome them. This leaves little incentive for people to give attention to new connections and ways of doing things. Thus creativity within oppressive cultural situations requires enormous amounts of attention to be able to break out of traditional patterns and develop new insights (Csikszentmihalyi 1996, P. 9). This also occurs in organizations that are bureaucratic and follow rigid procedures (Leonard 1998).

Attenuation

Treisman (1960) postulated that unattended acoustic information is not completely blocked from our filtering and patterning during the attention phase. These stimuli are weak, but nevertheless make it into our cognitive system, where it is enough to trigger recognition and maybe stored in the long term memory. Other theories like Deutsch and Deutsch’s (1963) late-selection theory postulates that all incoming information is identified, but only the selected piece of information emerges into phenomenal consciousness.

Although these theories are related to acoustic attention, it could be surmised that more information than we realize flows into our long term memory, which can potentially be utilized in the sub-conscious incubation process discussed later within the creativity process.

Imagination

Imagination is the ability to form a mental image of something that is not perceived through our senses. As we examined in chapter three, imagination is the ability of the mind to build mental scenes, objects, or events that do not exist, or are not present or happened in the past. As we have seen, memory is a manifestation of imagination and we use imagination in almost everything we do. Imagination is a useful planning tool where we envisage the conduct of future meetings and events. Although imagination builds upon our knowledge, knowledge alone cannot create imagination. Imagination is a product of our creative intelligence, and as such, a powerful tool to visualize and understand potential scenarios that we may plan for the future. In this way visualization or mental imagery is something similar to intuition or insight and is vital to the creativity process.

Imagination is also a tool for the development of determination and courage to follow through on visions through repeated mental rehearsal in our minds. As mentioned again in chapter three, an athlete will go over a race time and time again to mentally prepare him or herself for the mental and physical effort they need to put in and predetermine all the potential dangers that may prevent him or her from achieving their goal. Imagination enables the athlete to recognize difficulties and develop enough resourcefulness to solve any potential and expected problems before they occur. Imagination also boosts a person’s desire by helping a person experience what it would feel like to succeed.

Any consideration a person makes about something requiring a solution requires imagination to manipulate memory. Imagination is a process that can combine past experiences, knowledge and feeling into new images and concepts. In this way new connections made between bits of knowledge and past experience create novel concepts. Imagination is not totally a conscious process. It may also incubate sub-consciously when a person has surplus attention to focus on recombining memory and external stimuli into new mental images. Imagination plays a major role in the creation of new ideas.

Imagination is not only a contributor to the process of creativity it is also a manifestation of creativity. We use imagination whenever we are designing something like a dress or a building, developing a new product or landscaping a front yard of a house. Imagination links with many other creative aspects such as humor, metaphor and analogy, vision, memory, developing understanding, learning and empathy. Imagination is the tool we use to extrapolate concepts into ideas and opportunities into strategies.

Imagination does not generate completely novel and new to the world concepts. As Einstein once said, “the secret of creativity is knowing how to hide your sources”. Anything novel we come up with through our imagination and insight is based upon our prior knowledge and past experiences. Thus inadvertently much of the novelty we create in anything is likely to be based upon something that existed previously, be it in another domain or field that an individual has exposure to. This is what Marsh and bower (1993) call inadvertent plagiarism. Therefore it’s likely in most cases that novel creations are inspired by something in the past, although through imagery, the concepts may have been given new types of manifestations. However through the imagery of analogies, many breakthroughs in science have been achieved (Shepard 1988). For example, Einstein developed his insight for the theory of relativity through imagining what would happen if he travelled at the speed of light, Faraday claimed to have visualized force lines from electric and magnetic fields giving insight into the theory of electromagnetic fields and kekulé reported that he discovered the concept of the molecule after he imagined a snake coiled up in a circle.

Curiosity

Curiosity is an emotion we share with many animals. Curiosity sparks inquisitive behavior and is another important aspect of the creativity process and is also an important part of our learning. Curiosity is a trigger and a drive that leads to the development of an interest, love or passion for doing, investigating or exploring something.

Curiosity begins at the moment of birth where we start to explore the world as we know it. Our curiosity fuels our ability to learn and develop as human beings in a social environment. Curiosity continues through our infancy, adolescence, teenage and into our adulthood driving us to seek new knowledge and understanding about our surroundings, and relationships, etc. In our early life we begin to understand basic concepts through our exploration and discovery, where we begin to find domains that we have interest in. For example as children we play with insects, dig tunnels, fly kites and build model planes, where one or more of these interests may continue into our adult life. Many things we learn such as the lifecycle of insects and through analogy, enables individuals to understand that all living things have limited lifecycles. Through continuous discovery during our early years individuals learn about life, science and society.

Certain activities we undertake will create a certain level of excitement and an individual will spend more time within the domains they are excited about. Strong curiosity leads the development of new skills in the domain of interest. Through repeated use of these skills an individual begins to develop mastery within a domain, a common trait among many notable public figures who have made breakthroughs in their domains of interest (Gardner 1993). It is mastery that develops potential in individuals. Mastery separates great individuals from the rest, where those who have mastered their domain have the potential to make great insights about their field of interest. Personal mastery usually contains personal vision, a much stronger dedication than others in their field of interest, a passion for more knowledge and a deep love for what they are doing (Senge 1990). Mastery brings spiritual development to a person where they become self assured, confident, secure, with a deep sense of purpose about themselves. This is all driven by a person’s passion for the domain.

Figure 4.3. True personal mastery is rare in people.

Curiosity consists of two separate elements which are paradoxical. On one side curiosity brings openness and willingness to learn, but on the other side it brings obsessive persistence. Both these elements are important if we want to master a domain, to question things and develop new ideas. The elements of curiosity promote an active cognitive system which through this paradox is able to look for connections of different information within the domain. Curiosity maintains an active cognitive system which becomes more proficient in seeking connections through learning as time and dedication goes on. The ability to gain insight takes time as it is not a short term or immediate activity. Mastery is a necessary ingredient which takes time to develop. The cycle that curiosity sparks in creativity is depicted in figure 4.4.

Figure 4.4. The Process of exploration, discovery, mastery and insight that curiosity ignites.

Without curiosity people will lack the passion needed to engage domains, seek further knowledge and wisdom. They will become apathetic and settle for an incomplete understanding of things. Lack of curiosity will lead us to missing information in the environment which will hinder our ability to develop new ideas, i.e., suppress our ability to be imaginative.

When curiosity develops a high spiritual level within us, we will start pondering upon the complex questions of our existence such as; ‘Where do we come from?’ ‘Is there life after death?’ ‘Is there a supreme-being, force or god?’ and ‘What exists in the universe besides us?’ This role that curiosity plays in our spiritual life through our imagination and fantasy leads us to new possibilities, excitements and sense of spiritual purpose.

Prior Knowledge

As we saw in chapter three, prior knowledge is knowledge that accumulates in our memory from previous experiences. As our memory builds up this knowledge our capacity to learn and generate new ideas increases. Prior knowledge influences our modes of perception[1], focus of attention, modes of reasoning and beliefs about knowledge. Much of these influences are socially or culturally biased within the domain and field we operate within (Latour 1987, Knorr 1981). We think in the metaphors and analogies that are based in our socially impregnated prior knowledge (Einstein 1950). Most of our ideas are based on everyday knowledge of our domains and fields that we are surrounded in (Wertheimer 1982, Miller 1986).

We construct our ideas and meanings from incoming perceptions and the images and metaphors of our prior knowledge (Lightman 1989, Miller 1986). Piaget’s theory postulates that new knowledge is the result of combining of new experiences with our prior schemata (Inhelder and Piaget 1958). In this way new knowledge doesn’t replace prior knowledge, it reuses and refines it, restructuring it into something different[2]. Conceptual change only occurs slowly where prior knowledge is restructured to encompass new ideas (Toulmin 1972), that are really variations upon an interrelated system of knowledge. Our schemata start developing from childhood and continue to develop throughout life, slowly developing conceptual change to the ideas we have (Piaget 1970). As we mature our ability to make sense of the knowledge we have improves with the enhanced reasoning tools and capacities we develop (Corsini 1994). Thus prior knowledge is paramount in how we make sense of our interactive experiences. So our knowledge grows with the assimilation of new perceptions with prior knowledge in our existing schemata.

For the reasons above, prior knowledge is important in problem solving as it influences our search procedures and heuristics to guide the search (Newell and Simon 1972), as we look for analogies and similarities with what we already know. Prior knowledge also assists in comprehending a story through construction with information and ideas we already have. Prior knowledge thus acts as a filter as to how we see things, interpreting our perceptions according to what we tend to believe. Research has shown that jurors’ decisions are often based on how information is presented to them. When information tends to be consistent to what they believe through their prior knowledge, they will tend to make their judgments on prior knowledge rather than new facts (Carlson and Russo 2001). Prior knowledge will influence people to stereotype objects, people and events. For example, African Americans tend to believe in stories of police misconduct and bigotry, because of their backgrounds, than White Americans (Hastie and Pennington 2000). In fact our prior knowledge is made up of both fact and belief.

Figure 4.5. Our Prior knowledge is made up of both truth and beliefs

We develop two forms of knowledge that are important for the creativity process. The first is domain knowledge, which relates to a discipline like mathematics, astronomy, cooking, music or poetry, etc. Each domain is clearly defined with its unique sets of rules, syntax and symbols. It is domain knowledge that helps an individual develop mastery within a discipline. Without in-depth domain knowledge it is very difficult for a person to develop insights in that particular discipline. Mastery of one domain enables an individual to extend into adjacent domains. For example, a scientist with knowledge in pharmacy may be able to make contributions in the domain of biochemistry or biotechnology. Creative insights can come from emerging from one domain to another. Experts within domains have a larger knowledge base from which to work that enhances their chances of being creative, relative to novices in the domain. However, although domain knowledge is very important to creativity, narrow focus within a single domain can create tunnel vision and hinder creativity. The second area of knowledge is the field, which can be as large as society itself, or as small as a few people or corporations[1]. The field requires a certain amount of social capital to be accepted and recognized within[2]. The sum of domain knowledge determines what can or cannot be done in the field, as innovation within the field will come from a specific domain. Fields have profound effect upon creativity. A field may be reactive or proactive in the pursuit of new knowledge and differ in attitude towards novelty.

Through prior knowledge we tend to be a product of the various influences upon our lives. Our thoughts tend to reflect this in some way, where ideas, information and knowledge from the society we are immersed within has a strong influence upon us. From this point of view prior knowledge is culturally and domain biased. Our ideas are based on familiar knowledge that through syntheses creates something unfamiliar and seen as novel by our society. Margaret Boden (2004) in her book The Creative Mind describes how even the most creative people have adapted ideas from the works of others through some form of syntheses[3].

Prior knowledge is very important in the creativity process, although it may have a positive or negative impact. Specialized domain knowledge is very important in both the creativity and the opportunity discovery process. It enhances the chances of finding new associations and connections. However the rigid patterning that develops from prior knowledge can restrict both the way we perceive the environment and way we look at information and problems, thus restricting our capability to make associations between unrelated pieces of information.

Emotion, Affect and Creativity

Our emotions and feelings to some extent influence our thinking and behavior. For example if we are excited about undertaking a new course of study, we will look forward to going to class, undertake our study and do our assignments with enthusiasm because we may believe that this course of action is good for us. Likewise many of us fear going to the dentist and will be inclined to try to put visits off unless it is absolutely necessary. Our emotions and feelings play a role in our decisions and subsequent behaviors. In fact a great deal of our behavior is based on irrationality such as getting into fights, bad moods, getting angry with people, stereotyping people and disliking certain events and things. These behaviors can make us inconsistent, ignore relevant information, deceive ourselves and jump to conclusions, etc. This influence is stronger when we are not aware of our emotions. When emotions exist sub-consciously, they may exert much greater influence and even rule our decisions and behaviors (this issue is discussed in more detail in the section on psychotic states in chapter three. Our emotions and how we feel about things affect decisions we make, our ability to recognize opportunities and our energy levels to commit and do things.

Emotion influences how we rate the importance or intensity of various events in our life. This is terms affect intensity. People with high affect intensity see events more intensely than those people with low affect intensity. For example, where an event is rated as moderately good by an average person, a person with high affect intensity would rate the event as extremely good. Likewise where an event would be rated as moderately bad by an average person, a person with high affect intensity would rate the event as extremely bad. Individuals with high affect intensity are more reactive to emotion producing events in their lives, whether they are good or bad.

Although mood change is a normal aspect in life, high affect intensity individuals would tend to exhibit more mood variation than other people (Larsen 1987). Mood change influences personality, sociability and arousal to environmental stimuli. High affect intensity individuals tend to have vigorous and energetic lives, tend to be more outgoing and sociable and tend to seek out more stimulating and arousing things around their lives. They shun boredom and will look for things to do even if what they do is antisocial (Larsen and Buss 2005, P. 441). Extreme affect intensity can be seen as neurotic extraversion (Cooper and McConville 1993).

The relationship between affect intensity and creativity is inconsistent and probably depends upon the type of emotions and situation. However in general positive affective states can enhance creativity where negative affective states can inhibit creativity. There is much anecdotal evidence to show that positive emotions do assist in the creativity process. The mathematician Henri Poincare is reported to have experienced creative breakthroughs while on vacations and Mozart claimed that pleasant moods were the most conductive to his creativity (Vernon 1970).

Affect-laden thoughts may enhance the ability of the cognitive retrieval processes to recall affect-laden information from the long term memory. This may emerge during our thought process, fantasy or imagination (Russ 1993, P. 12). Affect may assist in focusing an individual to affect states, i.e., areas that are intensely important to the individual (Russ P. 13). Affect may also manifest pleasure to the individual engaged in the challenge of discovering problems, working on solutions, gaining insights and seeing them develop into opportunities in their domains and fields of expertise. This intense pleasure could be described as passion. Fredrickson (1998, 2001) postulated that positive emotions such as joy and love broaden a person’s repertoire of behavioral scripts, enabling them to pursue novel and creative paths of action. This is supported by empirical evidence of a number of studies that show that positive affect can induce changes in cognitive processing that facilitate creative processes in individuals (Amabile et. al. 2005).

Other studies have shown that negative affect can also lead to greater creativity in some areas. Ludwig (1992) found in a study of 1,000 prominent individuals from almost 50 different professions that there was some evidence of a correlation between depression and the level of creative achievement. Other studies have shown that many highly creative individuals had affective disorders, primarily bipolar illness and depression (Feist 1998)[4]. Negative affect can also be a signal that something is amiss and motivate an individual to work hard to find a solution (George and Zhou 2002)[5].

Another possible outcome from high affect, either positive or negative, is that these strong emotions take control of attention and absorb available psychic energy. People in a high affect state may tend to be controlled by this state. People become preoccupied with their emotions and their behavior will be aimed at dealing with their emotion (Weiss and Cropanzano 1996). Excessive emotions, positive or negative can distract from creativity and task performance.

From the cognitive point of view Martindale (1999) suggests that attention becomes focused on arousal inducing situations when strong arousal states exist, leaving no cognitive capacity to focus on making associative connections necessary for novel ideas. However the simultaneous experiencing of positive and negative emotions may stimulate creativity by increasing the breath of cognitive information available, where a given complex mood may active numerous memory modes. Mixed emotions may develop crossovers of memory modes which bring new associations and novel ideas (Rothenberg 1990, Richards 1994). Other studies found it was not the moods, but the mood swings that gave contrasts where contradictory moods gave rise to different perceptions and observations of the environment (Jamison 1993), thus increasing the variety and breath of potential associations as input for the creative process.

Positive Affect and creativity may also co-exist as positive experiences may be associated with the task of creativity itself. Creative behavior according to Csikszentmihalyi (1975, 1996) is actually a “flow state”, a merging of individual and the creative process into the one activity, which creates feelings of enjoyment and enthusiasm. Affect in itself may be a form of intrinsic motivation for creativity (Amabile 1996).

The Role of the Ego Concept in Creativity

If we combine the concepts of Jung’s ego/consciousness, Freud’s ego, id and superego with Bourdieu’s concept of habitus, we have a central ‘mind sponge’ that absorbs external stimuli and blends them with our internal knowledge, beliefs, feelings and emotions to form a singular spatial concept/image we call our self[6]. The structure of our ego concept has influence over our thoughts, feelings and emotions that govern our sense of reality, view of the world, inner drives, motivation and attention. As a consequence, our ego concept also has a great bearing upon our cognitive functioning and behavior. Although the ego concept is not directly involved in the creativity process, it exerts many indirect influences that are of an important nature.

The ego concept both makes up many personality traits and is also influenced by personality traits. Likewise both the ego concept and personality is influenced by our situational conditioning and life experience as well as our inheritance. The ego concept is the frame of reference that comprises both our personal possibilities as well as our personal constraints. The ego concept is the bridge between the external and internal, acting as both a gatekeeper and the creator and interpreter of our personal meaning. At one extreme our ego concept protects our self image by interpreting the world in a way that provides for security, but at the other extreme our ego concept seeks challenge and adventure. These interpretations and constructions made by the ego concept act as a driver for the individual. The intervention of the ego concept into our cognition is necessary for a person to carry out a normal life.

The role of the ego concept in everyday life is to provide enough motivation, ambition, self confidence, attention, dedication and morality to undertake important tasks. Without the attention and drive from the ego, a person will not look after their own survival and that of their family. The ego concept contains the inner programming to survive and provides strategies for achieving this. The ego concept provides an aggressive-destructive or a sensitive-appreciative drive to a person when facing challenging life situations. It also determines whether a person will attempt to dominate others or be dominated by others as a means to providing oneself with what they need to survive. The ego concept will determine whether a person is ego-centric or altruistic towards others. These may not be absolute and rigid strategies, maintaining fluidity for various situational encounters a person experiences.

Through these embedded assumptions and beliefs within the ego concept, incoming information is judged as to its significance to survival and self image. The ego concept defends against any threatening realities manifesting themselves through panic, rage, anger, hate, or guilt, etc, in response to any situation that is challenging and cannot master (Hart 1950). Within the realms of normality, threats will lead to thoughts, feelings and emotions and then judgments, but if the ego concept overwhelms the psych with emotion, then there are risks that the ego concept becomes unbalanced and dysfunctional leading to psychosis, as discussed back in part II of this book. Balance of the ego concept is important to a person’s libidinal love for what is outside. Psychotic unbalance will turn a person inward into their internal world, taking over all the limited attention a person has for other activities. This may lead to a decline in curiosity because of the attention to selfish goals (Csikszentmihalyi 1997, P. 345).

The functions of the ego concept are very important in providing some of the positive psychic positions needed for creativity. The ego concept provides strong motivation and sense of achievement that enables people to undertake challenges where creativity is needed (Aguilar-Alonso 1996). This allows a person to challenge existing realities, where they are not satisfied with ‘what is’. From Bourdieu’s point of view, entrepreneurs are not in a state of doxa, and consequently don’t accept the realities of the field, thus the habitus and the field are out of alignment. This unstable subject-object relationship requires some form of creativity and innovation to bring some new form of alignment. This motivates or drives a person to desire and seek new realities, rejecting the status quo of today.

From the point of view of psychoanalysis, the insight needed in creativity is intuitive perception that is the result of unconscious synthesis (Hart 1950, P. 14). We are inclined to overestimate the conscious aspects of creativity. Therefore much of the creativity process occurs within the unconscious and what we perceive unconsciously vastly outweighs what we perceive consciously. Through the interchange of conscious and unconscious perception we develop either original creation or psychosis depending upon the balance of our ego.

An unbalanced ego concept can destroy the potential for creativity and insight in a number of ways. Our basic aggressive-destructive programming leaves little room for creativity, if this is a dominant instinctual way of thinking. A person who is submissive to others for survival will usually suffer from the repression of any creativity, as he or she must accept the will of others (Paul and Elder 2002, P. 177)[7]. Although a certain amount of Ego-centricity leads to confidence, it also creates a belief that ‘one is the centre of life’ and ‘they know how things really are’. This lowers curiosity where one follows their own intuition without ever challenging it. Ego-centricity filters information in a way that is stereotyped and ‘self justifying’. It leads to self centered interests and objectives leaving little room for open mindedness. Ego-centricity leads to lack of empathy and an inability to see other viewpoints. This destroys any potential for insightful thinking, where in extreme cases the destructive forces of social prejudice, conflict, anger, anger and depression may occur. Extreme social ego-centricity prevented humankind understanding the universe for many centuries, insisting that the Earth was the centre of the universe.

Figure 4.6. The ego concept

Humour and Creativity

The cognitive processes behind humor are very similar to those behind creativity. Therefore having a brief look at the concept of humor will help us understand more about how we build up tension, make associations and develop insight, all ingredients necessary for creativity. Humor is both cognitive and emotive. Humor is created from an incongruency between what a person expects and what actually happens, which creates an element of shock and surprise, i.e., an emotional response.

Take for example the situation where a migrant just arriving in a city who doesn’t speak English well, asks for a job at a fruit stall. He gets the job and asks the owner what to say if somebody comes and asks for some fruit. The owner responds by telling him if the person asks “how much are the oranges?” to tell them “60 cents”. The owner continues and says if the person asks “are they good or bad?” to tell them “some are good and some are bad”. Then the owner said if the customer asks “do you think I buy them?” to answer “if you don’t somebody else will”.

On the migrant’s first day on the job, a lady walks up and asks “how much are the oranges?” The migrant answers “60 cents”. The lady asks “are they good or bad?” and the migrant replies “some are good and some are bad”. The lady asks “do you think I should buy them?” and the migrant answers “if you don’t somebody else will?”

A little later a man walks up and asks “how much are the oranges?” The migrant answers “60 cents”. The man asks “are they good or bad?” and the migrant replies “some are good and some are bad”. The man asks “do you think I should buy them?” and the migrant answers “if you don’t somebody else will?”

Then another lady comes and asks “how much are the oranges?” The migrant answers “60 cents”. The lady asks “are they good or bad?” and the migrant replies “some are good and some are bad”. The lady asks “do you think I should buy them?” and the migrant answers “if you don’t somebody else will?”

At 6 o’clock that night just as the migrant was closing the store a man walked up and asked “what is the time please?” The migrant answered “60 cents”. The man replied “stop joking will you” and the migrant replied “some are good and some are bad”. Then the man getting a little angry said “do you want a punch in the nose?” and the migrant replied “if you don’t somebody else will?”

A joke sets up a situation which has some imaginative scenario within it that enables us to create a certain set of images and vision within our mind. We have expectations that the story should play out in a certain way, but tension builds up. The story is heading towards an incongruency, something that is going to shock and surprise us. The rhythm and tension of the story builds up, as this is important to the shock, surprise and emotions generated. This is important to the humorous element as we are waiting for something, in the case of a joke the incongruence to manifest itself. The punch line is where the listener should develop insight followed by an emotive moment, just like in the process of creativity.

It is difficult without telling the whole joke to understand why it is humorous. The joke must be explained in full detail. We cannot point out exactly why it was funny. For a joke like the one above to be humorous to the individual, they must see the association between the punch line and their expectations. The incongruent transformation must transvaluate our values in a certain way or else it won’t be humorous. It is this transvaluation that the incongruence taking an unexpected path away from our expected outcome that made the humor. We recognize the incongruence, the link between the story and the punch line, which are unrelated until we make the association. A humorous story or event challenges our expectations in the way things are (our patterns), turning expectations upside down, where we make new connections, enabling us to see the funny side. This is the same way we make creative connections. Like creativity, humor uses knowledge through creating different patterns to create new meanings.

Without the tension building up about what we expect to happen and what may shock us there can be no humor. Just like creativity we also need to perceive and understand the situation from both the cultural and experiential aspects (prior knowledge), otherwise we will not understand the various elements of the joke (Clouse 1993).

The Creativity Process

There are vast differences in the way people reach a creative solution, develop a new idea, conceptual process or product which reflects the various differences in creative sensitivity, focus and attention, energy, imagination, curiosity, ego, empathy, confidence, discipline, experience, patience, persistence, prior knowledge, level of comfort and the environment they are surrounded in. There are also just as many theories about the process of creativity, which was pioneered by Graham Wallas (1926) in his book the Art of Thought. Wallas outlined a four staged sequential model of the creativity, depicting it as an evolutionary process of thinking. Since Wallas’s model many enhancements, modifications and variations have been proposed along this evolutionary theme. The general steps as mentioned in several theories of the evolutionary creativity model are outlined as follows.

The Engagement Period

The creative process begins with some form of puzzling situation, curiosity, questioning of something given or problem. With the correct motivation our attention and psychic energy is deployed towards contemplation of this issue. This must be triggered by some sort of personal experience, interaction with another person, feel of a need to be satisfied or some form of challenge or conflict between a personal and perceived reality. A combination of the factors discussed earlier in this part of the book influence whether or not the person will engage upon a quest for clarity and understanding and pursue a solution to the issue, down the path or process which we call creativity.

Engagement is the first step. Not all people are looking to engage in all quests and pursuits for answers to puzzles, problems and issues due to lack of need or low levels of curiosity. Not all people for the reasons that we have discussed can see the same things in the environment. Not all people can see an issue or problem to be curious about. People have different levels of sensitivity to the environment and different motivations to engage. Busy people with hectic schedules will be less likely to pick up stimulus from the environment than those with more time on their hands and greater creative sensitivity. No engagement, no creativity process.

The Preparation Period

Before a problem can be solved a certain amount of cognitive preparation must be undertaken. The preparation stage is where a person has made the realization that something is not right, does not fit, can be done better, or can be done differently. In this stage the scope, direction and depth of the problem is more or less defined in a preliminary form, for later refinement. Potential methods of solution or patterns are selected as ways to solve the problem. Potentially relevant prior knowledge and experience is also selected for recall along with the collection of new information for cognitive matching.

Once a person becomes focused and curious about the particular problem they have identified, the creativity process begins in earnest. Different types of problems take different lengths of time to solve, ranging from a very short time to many years. Different problems also require different thinking strategies and styles to solve them. Thinking about what to whip up for lunch from leftovers in the refrigerator takes up a different time frame and thinking style to a person constructing a scientific hypothesis. Some problems may be very rigid with only a limited number of potential solutions while other problems maybe open ended requiring the construction of something novel and unique to the field it concerns, such as a new product concept.

The preparation process is a period of discovery about what the problem really is, possible ways in how it can be solved and what information is relevant to the solution.

The Frustration Period

Sometimes a period during the creative process occurs where all exploration leads to dead-ends and frustration. This may especially be the case when a few attempts have been made to solve the problem. The problem may not be as simple as it first appeared and deeper implications may emerge making the solution much more complex. This is often the case in very complex problems like hypothesis building by a scientist or developing a conceptual case for a new product. Frustration may lead to a person ‘back to the drawing board’ because of the utilization of thinking strategies that did not make any headway in solving the problem. Alternately a person may abandon the problem metaphorically putting it into the ‘too hard basket’ because ‘they bit off more than they can chew’. However abandonment of the problem may not necessarily mean an end to the creativity process. Mentally retreating from the problem for either the purpose of finding another way to solve it or the wish to abandon it, leads onto another process that acts within our sub-conscious levels, the process of incubation.

The Incubation or Sub-Conscious Contemplation Period

When one has become frustrated and/or feels the problem is not worth pursuing any further, the person stops putting in his or her psychic energy into the problem thereby releasing the mental tension they have been putting themselves under. Taking a rest allows the creativity process to become sublimed within the sub-conscious. During the process of sublimation all the bits of information are digested in the mind within a set of processes that appraise, rearrange and seek to reorganize connections between the pieces of information and the problem. The sublimation of the mental processes may allow the mind some freedom from the patterning of our conscious thinking. This may be the case that some misleading information we rely upon during our conscious reckoning of the problem is dropped (Smith and Blankenship 1991)[1], some form of block is removed (Smith 1995), pieces of other information are applied to the problem which were not consciously considered, or some untried thinking strategies are utilized. This process will not begin until the conscious process stops.

The incubation or sub-conscious contemplation period is perhaps the most significant aspect of the creation process where different thought strategies occur without the explicit awareness of the person. We are not sure exactly what these processes are but we know the brain is very active during this period and strong anecdotal evidence exists where many scientists, engineers, artists, and writers often arrive at some form of realization after this process of incubation or subconscious contemplation (Wallas 1926)[2]. For this reason these processes remain somewhat mysterious to us. There may be a process of combining random or seemingly unrelated strings of information that may assimilate to some forms of connections found in prior knowledge[3]. For example, folklore states that Isaac Newton only developed an insight about the force of gravity after witnessing an apple fall from a tree he was sitting under. Incubation may allow dominant left hemisphere serial thinking to give way to right hemisphere holistic thinking processes thus allowing the problem to be seen differently. Conceptual generations from holistic thinking may ordinarily be rejected during conscious thinking because we are trying to think in a rational and logic manner. The incubation process seems to work best when a person is immersed in a different environment than usual (Smith 1995). The environment should be relaxed, out of routine and without outside stimulation like meetings, radio or television in order to allow the mind to give attention to sub-conscious processing. One situation is sleep where the brain is still very active and empirical evidence seems to support anecdotal evidence that sleep assists the creativity process (Wagner et. al. 2004). This long relaxed period may allow information situated deep in the long term memory be recalled and applied to the problem. The incubation or sub-conscious contemplation period can go on from a couple of hours to a period of months or even longer in some cases.

One way to demonstrate frustration and incubation is to look at a gestalt illustration. Figure 4.7. depicts an ambiguous picture. You may be able to see at once a young woman in the left three-quarter view. However you may be the one person in five that can see an old woman facing to the left. You may be blocked from seeing one of the figures, as you need to re-arrange and use the parts the picture to make a new picture. By sitting and looking at the picture forcing yourself to see the other perspective, you may start to become impatient and frustrated. This frustration will tend to take-over from your curiosity and if you cannot see the other perspective, stress may even be evoked within you. If you do not see the picture at this sitting, put the book down and return to the picture at a later time and the other perspective may come to you when you look at it afresh.

Figure 4.7. An Ambiguous Gestalt Picture

Recent research has shown when individuals are left undisturbed the brain is not idle, where there is actually increased activity, localized in the pre-frontal cortex (Ingvar 1974). The brain during any resting period is actually quite vigorous, where without any stimulation the mind freely wanders through past recollections, envisioning future plans, and other thoughts and experiences (Andreasen et. al. 1995, Buckner & Carroll 2007). This phenomenon was termed the ‘default network’ to describe the brain activity at rest (Gusnard et. al. 2001, Gusnard & Raichle 2001). The significance of the ‘default network’ to creativity is that continued underlying processes still occur that are unrelated to conscious thought occur, something described in the incubation process mode of the creativity process (Buckner et. al. 2008). Research has shown that mindfulness can activate the ‘default network’ (Jang et. al. 2011). The ‘default network’ deactivates is active when an individual is at rest and shuts down when an individual becomes active and is focused on the outside world.

The Creative Insight

When a sub-conscious connection between two bits of information fit a problem, a realization that brings a feeling of insight occurs. This illumination is often described as the ‘aha’ or the ‘eureka’ moment. This insight may not bring the whole solution of the problem but perhaps provide a key piece of information that enables the problem to be restructured, reorganized, reframed, reconstructed or reconsidered in some now light, where a solution comes forward with relative ease.

In hindsight the solution will normally be a simplistic and logical one, ironic given the difficulty in arriving at the insight. A simple block or misplaced assumption that was removed during the incubation and sub-conscious contemplation process made way for the insight to occur (Robertson-Riegler and Robertson-Riegler 2008, pp. 472-3). Accepted prior knowledge of a domain and field can sometimes block an insight, especially where knowledge is accepted as a given and not previously questioned.

Acceptance of the IATA[1] regime that regulates airlines within the airline industry could be seen as an example of a block of innovative insight, if it was taken as a field given that could not be challenged. IATA develops and governs voluntary codes of in-flight service, fare regimes, and baggage allowances, etc. Breaking out of these industry assumptions allowed Singapore Airlines in the late 1970s provide a superior quality of in-flight service with lots of complementary items like free drinks that helped to propel the airline into one of the best in the world at the time. Similarly, the advent of low cost airline services beginning with Laker Airways in the 1970s developing low-cost charter services utilizing novel flight practices and secondary airports at the time created a new concept of airline. Around the same time Southwest Airlines began in Texas, which has been followed by Virgin and more recently Air Asia, among many others utilizing this low cost business model.

Insight is the example of a product produced through our brain’s self organizing system which begins to associate external information from the environment, our domain and field knowledge and our prior experience held in the long term memory. This may operate in a similar manner to the way we combine words into phrases, phrases into sentences and sentences into ideas and stories to create meaning. Imagination may also play some role in creating vision and imagery and assisting in drawing analogies during this process. The insight is the product of the connection between these bits of information in some sort of semantic, conceptual or visual form, which assists the advancement of the problem solving process. Any meaningful connection of ideas will immediately flash into our conscious memory as an insight previously not considered in regards to the problem. The mind as a self organizing system during the incubation and insight processes is illustrated below in Figure 4.8.

[1] The International Air Transport Association (IATA) is an international airline industry group of airlines with the objective of representing the interests of the airline industry. One of IATA’s main functions is to set international airfares through bilateral government agreements rather than market mechanisms. This was a powerful mechanism until the deregulation of the airline industry around the world began in the early 1990s. This has brought many criticisms of IATA as a cartel and as a consequence many airlines, especially low-cost airlines have opted to stay outside the IATA framework.

Figure 4.8. The mind as a self organizing system during the incubation and insight processes.

One way to demonstrate insight is to show an illustrative visual example taken from Gestalt psychology. Figure 4.9. shows a figure-ground phenomenon which can be seen as a black chalice on a white background. If however you change perspective and look at the white figures on a black background you will see two heads in profile silhouette. When the perspective is changed, there is some surprise when a completely different perspective is seen. This is insight, the ‘aha’, the ‘eureka’ moment of discovering something new.

Figure 4.9. The Gestalt figure-ground phenomenon.

The Verification Period

When an insight occurs, the person who had the insight must verify that the illumination can solve the problem, become a key in solving the problem or highlight a concept that has potential as an idea and opportunity. The product of the new insight in the form of a solution or concept must be compatible with the domain and field it will be applied to. It doesn’t matter if the solution or concept shifts paradigms or challenges existing knowledge, what counts is viability. If the insight is found to be flawed, then the person will return to the preparation, frustration or incubation stage. Too much frustration may even return the person to the pre-engagement stage again, as there may be a re-contemplation of continual engagement. If the insight is found to be flawless, then the routine work of elaborating on the concept may begin to turn the insight solution or concept into an idea and eventually a potential opportunity.

The Elaboration Period

A concept that has emerged through insight must be elaborated upon to turn it into an idea and a plausible opportunity that is capable of being exploited. This process needs to be undertaken with an open mind or logic and rationality may destroy it before it can be sketched out into a full idea. The process begins with generating as many characteristics about the concept as possible until a full idea emerges (Parnes 1972). This requires developing narrative and imagery about the concept so that detail emerges, giving it fullness. This process may require further creative association to develop the conceptual characteristics of product, manufacturing, marketing and how it relates to the supply and value chains. This will involve asking and seeking solutions to questions like, How will the product work? How will the product look? How will the product be manufactured? What materials need to go into the product? Where can these materials be sourced and acquired? How will the product reach consumers? etc. Answering these types of questions requires the creativity process to develop a series of innovations that go behind the future product strategy and make the whole idea work.

A full concept is an idea which can be evaluated in terms of opportunity potential. First the idea must be consistent with the goals and aspirations of the person who developed it. The idea must also meet the person’s moral, financial, competency, resource, technical and business acumen criteria. Then if the idea is still suitable, it can be analyzed, evaluated, and further refined until a working opportunity scenario exists. The elaborative process therefore requires both creative thinking to fill out the concept into a full idea, create the innovations that will enable the idea to be considered an opportunity, and an analytical or reasoning process to evaluative the concept and determine whether a potential opportunity exists. The whole creativity process is shown in Figure 4.10.

Many experienced people in specific domains and fields may appear to see opportunity in an instantaneous manner, as if creativity is instantly intuitive. People with vast knowledge and experience may be able to survey the environment and pass through the engagement, preparation and frustration stages, directly into a very brief period of incubation before gaining some form of insight. This type of intuitive insight is sometime called ‘gut feeling’ and is very common in many entrepreneurs. This however does not mean that these intuitive insights do not need verification and elaboration. It just means that some people may be skilled at seeing gaps in the market where potential opportunities may exist quickly, based on their long experience within a domain and field.

The creativity process requires hard and sometimes painstaking work. Many concepts and problems may require months or even years of careful trial and error before a hypothesis is developed or something works. This can occur throughout the preparation, frustration, verification and elaboration processes. Thomas A. Edison, the inventor of the telegraph, phonograph, the light-bulb and motion pictures was quoted as saying “Genius is one percent inspiration and ninety-nine percent perspiration”, inferring that creativity is not about insight but dedicated work and perseverance. Oscar Wilde describes the tedious part of creativity by saying “I was working on the proof of one of my poems all the morning, and took out a comma. In the afternoon I put it in again.” Great authors like Ernest Hemingway and James Michener wrote as many as 25 drafts of the books they produced. A scientist may undertake the same experiment changing a single parameter hundreds of times before achieving any success. Creativity requires total emersion, patience, persistence and finally enjoyment.

Figure 4.10. The Creativity Process.

Approaches to Creativity

Whole Brain Thinking

There are many different types of thinking that aid the creativity and problem solving processes. Intuition, imagination and transformation are important methods of developing new ideas, while logic and reasoning may be important methods of thinking for certain types of solving problems and decision making. Strategy development tends to come from abductive rather than deductive thinking.

Bowden et. al. (2005) found that insightful problem solving stimulated parts of the right side of the brain[1], while non insightful problem solving did not. This tends to confirm some of the different operations of the left and right sides of the brain. The Nobel laureate Roger Wolcott Sperry in his split brain research found that the left half of the brain tends to function by processing information in an analytical, sequential and logical manner, which has been labeled by others as serial or convergent thinking and the right hand half of the brain tends to function through recognizing relationships and synthesizing information, which has been labeled by others as divergent, lateral or holistic thinking (Evarts 1990). Although we label the left hand side of the brain as serial and the right hand side of the brain as holistic, this is an over simplification (Robertson-Riegler and Robertson-Riegler 2008, P. 481). The general functions and approaches used by the left and right side of the brain are shown in figure 4.11.

Figure 4.11. The general functions and approaches used by the left and right side of the brain

Consequently, left hand hemisphere thinking is selective and goes through logical steps to derive a definite answer or logical conclusion. Serial thinking will discard irrelevant information and utilize fixed classifications or categories when using information. Right hand hemisphere thinking looks for associations with all information at hand and make up new categories and classifications, if necessary. Holistic thinking will restructure information to create new concepts or alternatives. Within the concept of creative thinking, holistic thinking will develop new alternatives while serial thinking screens the generated alternatives, makes judgments, develops concepts towards the objectives of the problem, or creates detail to an idea (Isaksen and Treffinger 1985). Creativity requires both serial and holistic thinking to develop and complete the detail for useable concepts.

Michael Kirton (1994) postulated that individuals adopt a particular cognitive style of creativity and problem solving. Kirton believed that an individual’s thinking style will be somewhere along an adaptor-innovator continuum, depending upon how much structure they prefer when solving problems (Kirton 1994a). Adaptors have a preference for doing things better, while innovators trade immediate efficiency in pursuit of doing something conceptually better (Kirton 1994b). The characteristics of adaptors and innovators are listed in Table 4.1.

Table 4.1. Some characteristics of adaptors and innovators

Kitron (1994a, P. 28) found that adaptors are more left brain dominated, being reflective and sequential, whereas innovators are more holistic thinking, active and hands on in their approach.

The two approaches to problem solving can lead to different types of innovation. Adaptors employ a disciplined methodological approach to problem solving which tends to be orientated within the existing technology, business and product models, upon the existing industry plain. This results in incremental improvement moving along the industry innovation curves, shown in figure 4.12. This may be an improvement of technology or a way of doing things within an existing industry better. An innovator on the other hand looks at problems from unique or novel angles and discovers new solutions, bypassing existing industry assumptions. The innovator’s approach is ends rather than process based that the adaptor employs, and bypasses existing industry knowledge, products and business models, leading to something completely new, as a new technology, a new to the world product or a new business model. The innovation has used ideas from outside the industry that bring breakthroughs, rather than the incremental improvements that the adaptor usually develops[1].

Figure 4.12. Adaptor/Innovator innovation affect on an industry

Kirton (1994a, P. 28) provides us with some indication of habitual adaptor and innovator characteristics which may give some clue to their entrepreneurial style and preferred business strategies. Habitual adaptors may tend to have a low self esteem and sense of self efficacy. They tend to be introverts, conscientious, controlled, subdued, process orientated and emotionally naive. The habitual innovator is almost the opposite, tending to be unstructured, non-conforming, self confident, somewhat ostentatious, risk taking, and task orientated person. However Isaksen and Puccio (1988) state that the relationship between a person’s characteristics according to their creative style are not as straight forward as Kirton suggests, as there are numerous creative styles and characteristics as creativity is a complex issue. The rest of part three looks at different creative styles and strategies.

Multiple Intelligence and the Metaphorical Concept of “Creative Intelligence”

In chapter three we looked at the concept of multiple intelligences. As we saw, Gardner’s work widened the narrow concept of a general intelligence to the broader concept where individuals can exhibit different types of intelligent behavior. Gardner initially listed seven types of intelligence, body-kinesthetic, verbal-linguistic, logical-mathematical, visual-spatial, musical, interpersonal and intrapersonal intelligence. Gardner also affirmed that our separate types of intelligences may not just be limited to the seven above and that others may also exist. The multiple intelligences theory recognizes that broad mental abilities are needed in society and that every person has a unique blend of different intelligences. There is no agreement on whether the theory of multiple intelligences is valid, however metaphorically this is a very good way to look at an individual’s cognitive abilities.

Therefore, our creative style has little to do with our general intelligence (Kirton 1994). Our creativity has more to do with particular characteristics, thinking styles and processes than the nature of intelligence. A couple of other intelligence theories may assist in developing our understanding of some of the characteristics of creativity and place it in a social context. Expanding upon Gardner’s concept of interpersonal intelligence is the concept of emotional intelligence (EQ), which has become very popular over the last two decades. Emotional intelligence places emphasis on a number of characteristics that are important for creativity within a group or social setting. Some of these characteristics include;

· Knowing oneself in terms of emotions and the ability to recognize emerging feelings,

· Being able to handle these emerging feelings when appropriate,

· Being self motivated and being able to delay self gratification,

· Having empathy with others,

· Being able to handle relationships and social settings,

· Being open minded, able to speak one’s own mind, and an attentive listener, and

· Having a personal style to manage stress, take responsibility and be in self control (Dulewicz and Higgs 1998).

Consequently emotional intelligence emphasizes the social domain of creativity, which is important in some of the group creativity tools discussed later on.

Gardner also speculated at the possibility of spiritual intelligence. Zohar and Marshall (2000) postulated that we have a spiritual intelligence which has a moral base enabling us to question the issues of ‘what’ and ‘why’ about things, and whether we should or shouldn’t be involved in particular things. Unlike general intelligence which is logical and rational, spiritual intelligence enables us to question, which is central to the concept of creativity.

Therefore to be creative in the social arena, a person should have a high level of emotional and spiritual intelligence (Hicks 2004, P. 337), of which the characteristics are important aspects related to the development of creative thinking. Sternberg (2002) mentioned the concept of practical intelligence which is necessary for a person to adapt, shape and make selections in everyday life in order to be successful. Practical intelligence is thus a measure of tacit knowledge, where tacit knowledge is what is needed to be successful in a given environment[1].

In the same article Sternberg mentions the concept of creative intelligence. The concept of creative intelligence is also mentioned by a number of authors, although the term is used broadly and there is little consensus upon what it really constitutes. Creative intelligence is a term grouping together the cognitive and non-cognitive aspects of creative generation like intense interest, motivation and other social influences (Cropley 1994), or a term that refers more to styles of creative thinking (Khandwalla 2004, Rowe 2004).

So both concepts of creative intelligence widen the concept of creativity by placing importance on the contextual and environmental variables on one hand and on thinking processes, applications, or styles on the other. Rowe (2004, P. 3) outlines four styles of creative intelligence;

· Intuition which is based on past experience to guide action,

· Innovation which concentrates on systematic and data orientated problem solving,

· Imagination which uses visualization to create opportunities, and

· Inspiration, which emotionally focuses on the changing of something.

Khandwalla (2004, P. 213) focuses on a number of personal characteristics like sensitivity, problem restructuring ability, fluency, flexibility, guessing ability, originality and elaboration and the uses of various thinking processes that support them, e.g., convergent thinking, problem restructuring, and elaboration, etc. These approaches show that creativity is both influenced by the environment and thinking processes employed.

In such a context creativity can be broadly considered an ability or intelligence in itself. A metaphorical construct of creative intelligence would look something like Figure 4.13. A person is surrounded by their social environment. The social environment stimulates an individual’s perceptions, socializes beliefs and makes judgments upon creative efforts. The family, domicile outlook, generational influence, age, education, work and life experiences, etc, all have some influence, discussed in detail back in chapter three. Also within the environment is the domain the person is interested in and passionate about, e.g. art, teaching, engineering, science, home duties, sports, etc. The environment is completed by the field which ultimately makes social decisions about what is creative and what is not. For example the art community decides what art is outstanding and what art is mediocre. These judgments may only occur years after the object of art was created, as it may take an artist years to become recognized. Likewise, peers in each science through journals and conferences decide what new information to the domain is acceptable or unacceptable. A new fad product may be considered something creative during ‘the fad period’, where afterwards the product’s creative edge disappears.

Figure 4.13. A Metaphoric Construct of “Creative Intelligence”

Four types of situations require creative intelligence. These are the quest for new ideas, the search for as yet unknown opportunities, the development of strategies to exploit potential opportunities and solving a multitude of problems that face individuals through life. Our perception of the outside world is greatly dependent upon our patterning, heuristics, other biases, and prior knowledge. What we notice or don’t notice depends upon our creative sensitivity, focus and attention. What we are interested in, have passion for and confidence in, all influence our perception of people, objects and events. Our perception and reaction to external stimuli and how our cognitive system will process incoming data depends upon the existing tension within our motivational trigger. If there is tension between ‘where we are’ and ‘what we envisage, desire or aspire’, attention and energy will be drawn into the following cognitive processes.

Our thinking processes will normally follow our existing patterning. Patterned thinking is usually controlled through heuristics that are based upon our beliefs and experience stored within our prior knowledge. Tacit knowledge also exists and can assist in opportunity discovery and problem solving. Imagination and fantasy can emerge and manifest as visions, ideas, new connections, or potential solutions to problems.

Emotion is another factor that influences our cognitive processing. When emotion is dominant or within our sub-conscious, it will to some extent control our thinking patterns, particularly if we are unaware of the emotion.

Our thinking processes are extremely complex. We still do not completely understand how these processes occur today in much detail. Our cognitive operations are independent from the external environment and our consciousness. All cognitive processes are the result of changing neural and receptor interactions that occur within different parts of the brain. Our perceptions, reasoning, concept of self are not concentrated on one part of the brain as they are distributed. There is no centre of convergence and connections between the different parts of the brain functions. Cognitive processes are not serial, but operate in parallel, reciprocal and distributed interaction (Singer 2009). For example when we see an object and touch it, our sight and tactile preceptors make independent contributions to the identification of the object. There is thus no single locus or point for the identification of objects. The representations of objects are made up of spatial-temporal patterns of distributed neural activity (Singer 2009, P. 325).

From the information processing point of view, the brain is highly distributed rather than centralized, which relies upon a self organizing system to coordinate and function as there is no single convergence centre. Therefore the brain is a decentralized system that utilizes information in different locations to produce our perceptions, thoughts, reasoning and intuition. Information within the brain is distributed in a decentralized configuration, functioning as a whole through a strategy called assembly coding (Singer 2009, P. 326). This is a very flexible coding strategy as it can reorganize and recombine information in a numerous number of ways. Through this mechanism we are able to continually make perceptions in an ever changing world[1].

The way information is organized is of paramount importance to how we see things and in solving a problem. As the brain processes in parallel and can recombine information in numerous ways, this assists an individual develop new thoughts, new ideas and to solve problems. Making analogies is a matter of comparing two different concepts that share some similarity in parallel. The creative process goes through a number of steps, which relies on the mind as a self organizing system to make new associations and enable problems to be solved. This usually occurs during a period of incubation which because of the need to reorganize information could be one of the most important aspects of seeing new associations and finding solutions to problems.

Rather than rely on our raw natural thinking processes, we can utilize disciplined and controlled thinking styles and tools that change our thinking patterns for enhancing creative thought. These are discussed later on in this part of the book. These tools can assist us to look at situations and problems in different ways so we can see new associations and linkages which may lead to new ideas or solutions to problems. Special applied tools of thinking can also be utilized for applied business tasks, like reengineering and radical transactiveness.

There are a number of factors that are conducive to or hinder creativity. The environment can either be inspiring and conducive to creativity or hinder creativity. Emotions like fear, complacency, organizational politics or a conservative society that frowns on novelty can stifle creativity of both individuals and groups. These will be discussed in much more detail at the end of part III.

So broadly speaking a metaphoric concept of creative intelligence is made up of our environment, the factors and variables that influence our perceptions and cognitive thinking processes, a motivational trigger, our prior knowledge, our thinking styles, tools that we can employ to enhance creativity, and the product of the process itself, which will be accepted or rejected as being something creative. If this model is representative of what creative intelligence is, then by manipulating the environmental parameters, being aware of our emotions and other influences upon our perception and thinking, and by developing new thinking styles through the use of thinking tools we can enhance our creative ability.

Creative Problem Solving Processes (CPS)

Finding novel connections and solving problems often requires new ways of looking at things, which often has to be forced through, breaking away from logical and serial thinking to holistic or lateral thinking. Many creative problem solving (CPS) techniques have been developed which are generally based and extended upon Alex Osborne’s Brainstorming processes, discussed in this section, William Gordon’s Synectics techniques, discussed under metaphors and analogies or Edward De Bono’s creativity tools discussed under frames of thinking. Brainstorming originated from a marketing environment, Synectics from a research and development environment and De Bono’s techniques from a psychology background.

Each method has its similarities and differences and strengths and weaknesses. Brainstorming and some of De Bono’s methods are very good for generating very quick new ideas, while the more sophisticated Synectics is much more focused on provoking idea generation through specific techniques. De Bono’s ‘Six thinking hats’ is very good for making selections and weighing up various issues.

The problem solving process goes through a number of stages. All models in existence acknowledge this and have specific and particular steps. The model presented in Figure 4.14. is a generic schematic of the problem solving process, showing all the common steps that would be undertaken in solving common problems.

Figure 4.14. The Generic Steps of the Problem Solving Process.

The Environment

Within the general environment that we are personally emerged within, there will always be issues, problems and unknown opportunities in existence. The general environment also consists of smaller but just as complex sub-environments that can be defined in numerous ways[1]. The environment is not always as we would wish and there is sometimes an urge to change things. Within pockets of sub-environments there will be ‘a mess’ that a person or group may become concerned about, begin give attention to and focus as an issue, problem, or potential opportunity[2]. It takes tension and motivation to focus upon and think about any particular aspect of the environment.

The wish to impose some future condition upon the environment means that an issue or problem must be solved or an opportunity observed, discovered or constructed from the perceived ‘mess’. Real world situations may appear extremely complex at the beginning with the feeling of ‘where do I start ?” Through just casual observation it is very difficult to see changes in demographics, industry changes, emerging technologies that will have impact upon industries, regulatory changes, the effects of the economy and incongruities. But through consistent observation and some historical understanding, one will begin to notice “patterns” and “relationships” existing. We need methods that simplify what we see, so some meaning can be extracted from the environment, in order to progress. We must also be aware of the effects our emotions and other cognitive biases have on our perceptions. Figure 4.15. shows a simplified diagram of an environment.

Figure 4.15. A Simplified View of an Environment

In the divergent phase of looking at the ‘mess’, the use of a simple systems diagrams, mind maps, or other forms of illustration that can portray some order, may be helpful. This assists in isolating factors and relationships from the ‘mess’ so some sense can be made. Convergent thinking can be used to prioritize the factors, issues and relationships through guided questions like ‘how do things work here?’, ‘what is the flow of things?’, ‘what are the stages things go through?’, ‘what influences what?’, and ‘what changes are taking place?’, etc. One can then look at the diagrams, maps or illustrations ask ‘where are the areas that they have influence over?’, ‘How much influence can be exerted?’, ‘who else has influence?’, and ‘what other things influence the things we want to influence?’ Imagination can then be utilized to visualize potential desired futures and compare them with the power to act[1].

Data Gathering

What type of data should be collected will depend upon the type of the problem being considered and the type of approach being used. It is very important to know precisely what questions are intended to be answered and what data and information will assist in answering these predetermined questions.

Interviews and observations can provide views on what people actually do, and perhaps give some indications as to why. Questionnaires can provide statistical data that shows the percentages of people or things that are in common and different. Different types of information collected, different methods of collection, and different people collecting the information will greatly influence the data collected. Hard data is very important in looking at cyclic, automated and machine type problems. Soft data is useful more at human related issues[2]. The types of information that can be collected are listed in Table 4.2.

Table 4.2. Types of Information that can be collected.

One must be aware of the different types of information and its usefulness. There are many sources of information that will vary in validity. Information comes in a continuum beginning from third party opinions and media reports, which may or may not be informed, across to one’s own wisdom in perceiving and reading the situation. Figure 4.16. shows the ‘trade off’ between the availability of information and its usefulness (Hunter 2009, P. 216).

Figure 4.16. The Continuum of information based on availability and usefulness.

Using the above sources of information one can take stock of the situation by determining what is really known and what is not known. Looking at the system and asking the above questions can assist in breaking out of patterned or habitual thinking and look beyond stereotyping. One should now be able to break away pieces of the ‘mess’ that were obscured, overlooked, or gone unnoticed and find hidden patterns and interrelationships among parts of the environment.

Now, one should be able to see ‘who has special strengths, resources and networks that make them able to solve the problem situation?’, ‘how are they solving the problem situation?’, and ‘what influence can I have over people, resources, networks, places, channels and the problem situation?’

The data gathering process should begin to challenge our previous ideas, where attention now wonders to questions and areas of concern. This process should have already brought our thinking beyond the usual contemplations, where learning is occurring. Focus on these areas may have brought some insight into what the problem really is or already generated some ideas[1].

Problem Identification

The process of reaching the problem identification stage and making and articulate definition and description of the problem is central to the problem solving process. Rushing to define a problem can often lead to the loss of great time, energy and resources in going in the wrong direction. In many cases, the correct identification of the problem is half way to solving the problem, as there is often an easy solution. Getting to the point of understanding the real problem, rather than the symptoms within the ‘mess’ within the environment is a real achievement, as there is a glut of information often leading to confusion.

Although it is not possible to list down all cause and effect relationships, attempts should be made to begin isolating and identifying these factors. So in defining any problem it is necessary to understand the subsystems and the probable cause and effect dynamics. There are numerous CPS techniques in use to assist in defining problems. One method to define the problem is to use an Ishikawa (fishbone) diagram to list down the cause and effect. Figure 4.17. shows a diagram intending to list the factors influencing essential oil yield and quality (Hunter 2009, P. 319).

Figure 4.17. Factors Influencing Essential Oil Yield and Constituents on an Ishikawa (fishbone) Diagram

A pre-step or an alternative method to the Ishikawa (fishbone) diagram may be utilizing a cognitive (or mind) map where all the issues that would appear to be associated with the problem can be listed and connected. This may assist in ordering and organizing thinking. Sets of questions can be asked to assist such as ‘What is the purpose of the object, process or function?’ ‘What is necessary to perform the function?’ and ‘What are the side effects of the function?’ etc. These conceptual problem definition and description processes will be influenced by our beliefs, attitudes, own hypothesis, prejudices, expectations, values and objectives. A cognitive (or mind) map showing the major issues causing changes in essential oil yield and constituents and another map breaking down the climate factor is illustrated in figure 4.18. below.

Figure 4.18. A cognitive (or mind) map showing the major causes of essential oil yield and chemical constituent variances (left) and another map breaking down the climate variable (right).

Many people believe that taking time to define and map the problem is a retrograde step and wasting time. One of the major mistakes made in problem solving is jumping to conclusions and assuming we know what the problem is and the underlying causes. This step allows a person to step outside their own frames of thinking and get new perspectives on the problem.

Ideation

The ideation stage is similar to the ideation stage in the new product development process (Hunter 2009, P. 560). In this stage it is necessary to be able to look at the problem from different vantage points. In this stage, each idea should be accepted without judgment, or criticism, just noted for later evaluation.

If a problem has a number of known potential solutions, then logical and convergent thinking processes like evaluating the strengths and weaknesses, benefits and undesirable side effects can be utilized to determine the acceptability of each option. The problem can be solved through direct evaluation and the divergent ideation process is not required.

There are hundreds of different techniques used by consultants for idea generation in the problem solving process. However most methods can be classified within seven basic categories listed below (Van Gundy 1988);

Attribute Listing

Attribute listing is a tool that can be used for breaking down an object, system or problem into its many parts or attributes. This would include problems such as identifying the attributes of a system i.e., the factors causing variance in the yield and quality of an essential oil, finding alternative uses for products, breaking a product into its individual parts to evaluate where they can be improved, or breaking down the emotional state of a person into attributes, etc. This allows a group to concentrate on a single attribute at a time in understanding the issues and coming up with a solution or ideas for improvement. This technique may include simple brainstorming to come up with the attributes and systematically looking for improvements in each attributes.

Attribute listing has many applications including the areas of engineering, quality, marketing and systems analysis. For example, in engineering a product can be conceptually decomposed to learn how it was manufactured (see reengineering). A machine can be broken down into parts to examine issues like fatigue and wear. In quality a product, service or process can be broken down to find out which aspects are poor or undesirable, needing improvement, etc. This could be used to analyze a product, a customer service program, or a production process. In marketing, attribute listing can be used to discover what necessary attributes are desirable to develop product specifications. The method can also be used to develop the marketing and promotional mixes for products and promotional campaigns, etc. In systems analysis, attribute listing can be used to develop the needed characteristics of a new computer program or application or the analysis of attributes of employee satisfaction/dissatisfaction in the workplace.

Absurd solutions (Wishful thinking)

Coming up with absurd solutions is a way of creating divergent thinking in coming up with any idea, however extreme to find a new vector in solving a problem. Van Gundy (1988) called this wishful thinking where anything is possible as a potential solution to a problem. Once an absurd solution has been identified, the gist or essence of the idea may have some merit. For example, ‘eliminate the opposition’, can be worked back through stages until a practical solution is found (Proctor 1999, P. 164), such as ‘inviting the opposition to sit on the committee’ or ‘make some contribution to the processes’ where they cannot later dissent from what they agreed upon. In this way an extreme and apparently irrelevant solution can form the basis for a practical solution. Absurd solutions are more common in our thinking processes than we realize. For example, as a solution to the problem of Indian students being bashed and robbed in Melbourne, Victoria, Australia, Simon Overland, the Victorian Police Commissioner suggested that “Indians should not look rich to avoid being targeted”, which was considered absurd by many commentators[1].

Brainstorming

Brainstorming was developed by Alex Osborn in the early 1950’s as a tool in advertising for groups to generate a large number of ideas without consideration for their merits. Osborn describes brainstorming as the brain storming over creative problems in a commando fashion which each ‘stormer’ attacking the same objective through their imagination (Osborn 1953). To develop maximum creativity from the group, four rules must be strictly enforced and followed by all;

1. Critical judgment is not allowed,

2. Complete freedom is welcomed,

3. Quantity over quality is wanted, and

4. Combination and improvement are sought.

Other specific aspects that will enhance effectiveness are a) sessions should be limited to around one hour, b) the problem shouldn’t be revealed before the session, c) the problem should be clearly stated and not too broad, and d) if a product is being discussed actual samples should be present (Whiting 1955). Brainstorming assists decision makers think of unexpected and potentially useful strategies for settling a problem. Brainstorming relies on unaided thinking and can consequently produce a number of shallow ideas, but it can also increase the overall creativity of a group. Brainstorming is used as part of almost every other problem solving technique.

As mentioned, Brainstorming spread from advertising to all types of management decision making, however it is extremely limited for specific technical problems (Adams 1986), and best for finding new markets for existing products, i.e., ‘are there any opportunities that are being missed?’, new uses for products, ‘what are the potential other uses for this product?’, product names or just to encourage creativity within a group.

There are many enhancements and variations upon brainstorming. The use of checklists can add direction to a session and as a regenerative method to move along stalling groups. Brainwriting requires the group to put their ideas in writing, rather than verbally, where ideas can be circulated anonymously for enhancement. Recently brainstorming software has been developed(Gaynier 1999) to assist groups and some companies like Australia Post have developed brainstorming labs where employees can hold sessions using the walls to scribble upon.

Forced Relationships (or Analogies)

Forced relationships or analogies are another way of generating ideas by comparing two unrelated object and looking for things they have in common for new insights. Relationships can be forced between almost any two objects. This is usually done through giving a group a random word or a card with a word or image on it, to commence idea generation. An example of a relationship between seemingly two unrelated objects is a bicycle wheel and a theme park. Walt Disney designed Disneyland with a meeting place in the middle with various theme radiating out from the meeting place, i.e., Fantasyland, Tomorrowland, Frontierland and Adventureland, etc.

This type of problem solving process would begin with the question ‘how is this problem like a (inserted word)?’ Brainstorming or brainwriting techniques can be used to generate analogies. Then the group would go on and consider ‘how could this problem be solved with a (inserted word)?’ This can be supplemented with questions like ‘If our organization was like (inserted word), what would it be like?’ Similarities between the two objects can be considered and characteristics from one object superimposed on the other. For example, a leopard is quick and aggressive like a company marketing campaign, etc. This technique can bring new vectors of thought into a group and assist in developing product and branding attributes and strategy development, etc.

Checklists

Another technique to generate new ideas and solve problems is through checklists. Framed checklists contain many questions to prompt ideas, stimulate imagination, and evaluate ideas. Checklists assist people look at problems from different perspectives. Specific checklists can be developed for particular applications such as developing a new product, finding a new use for a material, how to deal with waste products, how improve customer services and evaluate competition, etc. A concept generation checklist for consumer products is shown in Table 4.3. (Hunter 2009, P. 581).

Table 4.3. A concept generation checklist for consumer products.

Excursions

An excursion is a method used to find new possibilities through imagination, analogies and metaphor. It is used as part of the synectics framework, which is discussed in the next section on metaphors and the use of analogies in creativity.

Morphological Analysis

Morphological analysis (MA) is a method used to undertake the systematic analysis of complex systems. It is useful in the search for new products, making national policies, stakeholder analysis, developing new types of systems, and other types of non-quantified modeling. Morphological systems are useful where there are a large set of factors to consider which cannot be easily quantified, are in uncertain conditions, and the situation cannot be causally modeled.

Morphological analysis was developed to work at the level of ‘messes’ where variables are unstructured and not easily defined. Morphological analysis puts structure into the problem. As the different aspects of the ‘mess’ interrelate to each other in yet unknown ways, one of the mistakes that can be made in solving these types of problems is to break them up into smaller parts (Pidd 2003). This mistake is regularly made as humans find it difficult to work in high levels of complexity. Morphological analysis examines the whole mess first, establishing the boundaries so that internal relationships can be analyzed before going on to generate alternative solutions and solve the problem like a puzzle.

Morphological analysis uses grids to facilitate a systematic and logical search for ideas. The simplest of typologies[1] is a two-dimensional table allows two variables or attributes to be examined. Using a third attribute turns the model into three dimensions. This will create a grid or matrix or grid with clearly defined cells (see Figure 4.19.). Through this grid one can hypothesize relationships and generate theory. Morphological analysis can go up to around a four-dimensional limit before it becomes too hard to handle graphically, but many more attributes can be handled using specialized computer programs.

Figure 4.19. Two-dimension and three-dimension grids or matrixes.

A morphological analysis goes through a number of steps where a group undertakes an analysis-synthesis cycle. The time needed to undertake an analysis depends upon the complexity of the mess, the number of attributes used, and the depth of each attribute variation. It is not possible in any study to cover all variables, so decisions have to initially be made during the first step as to which attributes to include in the analysis. The more variables selected, the more comprehensive will be the analysis. For example in developing a new shampoo, we may decide that the main attributes will be a single shampoo for all hair conditions, different variants for different hair conditions and a shampoo/conditioner (2 in 1) configuration. This attribute will assist in selecting the market segment that the company desires to compete within.

The second step is then to provide a spectrum of value or conditions for each attribute. In the case of the shampoo, this may be something to do with formulations, such as low active concentration, medium active concentration, and high active concentration. This attributes indirectly selects the level of the market, i.e., lower, middle, or upper, that the company wishes to compete within.

The third step would be to decide up the third set of attributes which may include, organically produced, or highly fragranced. This attribute represents the basic product/market strategy the company desires to implement.

The totality of the parameters and their respective values is the morphological field. This represents the decision making universe. In this example there are 3 X 3 X 2 attributes = 18 potential configurations, as shown in Figure 4.20. below.

Figure 4.20. A Tri-axis Morphological Model Showing the Potential Field for a Conceptual Shampoo

Out of the 18 possible configurations, these can be reduced through eliminating any illogical or unviable options until a feasible set is left to make decisions upon. The morphological analysis can assist in determining the attributes of a new product and the potential elements of strategy for the product under consideration. In the shampoo example, one product for all hair conditions, or a specialized product for each specific hair condition, or a shampoo/conditioner (2 in 1) configuration could be developed for one of those market segments. This decision can be made on the basis of the market segment size, or the level of competition, etc. Secondly the company can produce a low active, medium active or high active concentration product. There are now nine potential combinations of product attribute/strategy scenarios and some will be more feasible than others. The selections will be based on factors such as competition in each segment, potential volume/profitability, etc. Finally there is a decision concerning positioning the shampoo as an organic or highly fragranced product, that would leave a fragrance residual all day[1].

This analytical tool can be made more complex through increasing the number of attributes for consideration. Alternatively a conceptual project can be analyzed a number of times looking at different aspects of a product, such as product attributes, strategies, promotional concepts, etc, through a number of sequential analyses. This method is able to generate numerous combinations of variable for consideration. However care must be made in the initial stages of analysis to select the most relevant attributes for analysis to make the data generated applicable to the problem. Adaptations of morphological analysis have been used in the areas of marketing and corporate strategy disciplines for many decades[2].

Problem Resolution

The problem resolution stage is where generated ideas are evaluated and those that show a good fit in solving the defined problem are developed, so as to become a possible solution. This can range from, a very straight forward process of deciding which is the best solution, to the necessity to undertake an analysis of each idea by using a set of criteria to select the best fitting ideas as problem solutions.

If set criteria for selection of a problem are already known, then a rational decision making technique like Kepner-Tregoe’s Decision-Making Analysis can be used to determine the best ideas as the solution. If the decision making criteria is very ‘vague’ or not yet known then more work must be undertaken to select the solution. A third alternative exists to utilize components of various ideas generated into some form of composite solution to the problem.

Good rational decisions depend upon a precise definition of the specific factors (criteria/objectives) that need to be met by the chosen solution, the relative evaluations of the other alternatives, and our understanding of the consequences of these alternatives (Kepner-Tregoe 1981). Before decisions are made on a day to day basis, options are subjectively evaluated to develop a number of options and select the best solution. What constitutes the best option in each case is not easy to define as each individual will weigh up the criteria they make selections on, according to their own set of circumstances. The Kepner-Tregoe Decision-Making Analysis assumes the most rational decision based on the cumulated benefits of the criteria considered in each decision made. The way decisions are made within this process is very similar to additive strategies discussed in Problem Solving and Decision Making in chapter 3.

The decision analysis process involves four basic steps of which two can be considered problem solving stages. These steps may not necessarily be undertaken in sequence but are nevertheless required in effective decision making.

1. A decision statement is an intention about what action is wanted and what result is hoped for. For example, this could be about the naming of a new brand, deciding about entry into a new market, or whether a new retail outlet should be opened. Some limitations should be imposed upon the extent of potential alternatives in regards to budgets and resources required, etc.

2. The selection and classification of objectives involves selecting the criteria that will be used to compare and evaluate alternatives. The criteria should be classified into MUSTS and WANTS, where those alternatives not satisfying musts will be immediately rejected and WANTS are criteria we would like for each alternative. The relative importance of the WANTS can be prioritized and weighted in the evaluation.

3. Evaluating alternatives can begin once all assessment criteria have been finalized. Each alternative is compared against MUSTS and WANTS, rejected if they don’t meet with a MUST and scored against the WANTS. Any score for a WANT is multiplied by the weight that it has been given. After this process all scores are tallied.

It is important to be aware of scores that are either too high or too low. This may indicate that unrealistic expectations exist and for low scores, the criteria of measurement selected are not appropriate.

4. Comparing and choosing the best alternative involves putting each alternative under scrutiny for potential risks and potential negative or adverse occurrences. The probability of these occurrences happening should be estimated. Kepner and Tregoe (1981, P. 100) recommend asking the following questions for each alternative;

· What is required to succeed?

· What factors could hinder implementation?

· What kind of environmental or organizational changes could harm long-term success? and

· What issues may cause problems in implementing this kind of decision?

There are a number of arguments that groups tend to make inferior decisions to individuals because of the need to find compromise and agree on a consensus solution (Hicks 2004, P. 179). However William Ouchi (1981) in his seminal book Theory Z argues that it is better to make a poor decision and everybody support it, than to make a good decision and nobody support it.

Some other methods used to evaluate ideas and decisions, especially where there is little objective or quantifiable data to work on, includes the use of checklists, comparisons, and grids. Checklists can consist of generic type questions relating to costs, resources required, acceptability, time, space and usefulness. Each criterion can be equal or weighted according to priority and importance. The Paired Comparison Analysis enables the ranking of ideas and options according to their usefulness, according to predetermined criterion. This method is useful when selections have to be made between resource competing proposals that may not be similar. Reverse Brainstorming is a method where each option is considered through ‘a devil’s advocate’ frame to find options with the least wrong with them. The grid evaluation method allows the rating of ideas as very good, good, average and poor, as a means to make a final selection. Criteria used for specific problems should be relevant, concise, consistent, and clear (Isaksen and Treffinger 1985).

There are basically two types of decisions that need to be taken during the problem resolution process. The first type is a problem that has a number of potential solutions and it is a matter of selecting the best decision according to the criteria selected. The final selection of any option will depend upon the decision criteria. Thus the selection of the relevant criteria is crucial to the ability of the process to generate the optimal and rational solution, according to the initial desired outcomes[3]. The second type of problem is where there is only one solution that requires deep consideration concerning the characteristics of the solution. The process here is more about refinement through the selection of what solution characteristics are needed and desired, which may require selection through developing MUSTS and WANTS criteria and prioritizing, etc.

Elaboration and Extension

The elaboration and extension stage in the problem solving process is very similar to the elaboration period in the creativity process. Like the elaboration period in the creativity process, problem elaboration involves completing the details of the solution until a fully viable concept is developed, that can be considered ready for implementation. Every solution to a problem has a set of characteristics or attributes, which are essentially the strategy module that encases the solution. A solution without a set of characteristics cannot be implemented, be used to exploit an opportunity, or repair a deficient situation requiring remedy. Figure 4.21. shows the previous shampoo example developed in the morphological analysis, into a strategy that can be implemented.

Figure 4.21. Developing a Central Theme into an Implementable Strategy.

The elaboration and extension process begins with the process of generating as many potential characteristics about the solution as possible through techniques like Brainstorming. The desired characteristics must then be selected, refined and integrated with the solution theme under development until it is considered feasible for implementation. This process may require a return to the ideation and problem resolution processes to generate and evaluate potential solution characteristics. Selected characteristics must match and integrate with the primary solution theme, match the organization’s objectives, goals, processes and flow, or the organization must change to integrate, transform or evolve itself to match the envisaged solution.

Once the characteristics have been developed elaborate and extend the solution into a potential strategy, the solution with its characteristics can once again be reappraised through the problem appraisal process to reaffirm its viability.

Implementation and Strategy

Although the problem solving process may have generated an optimal and rational solution, whether it can be successfully implemented will depend upon the cultural beliefs and values of the organization and stakeholders. Is the solution culturally acceptable and are all stakeholder going to agree with the solution? One can see conflict generated in organizations and societies because company or government decisions are not compatible with underlying cultural norms and values and against sectional stakeholder interests.

Another barrier to implementing solutions is the inertia groups and organizations have towards change, opting in preference to the unambiguous and stable status quo. Most often change is feared due to the ambiguity and uncertainty it brings to people both on an individual and group basis. The fear generated by change is often resisted through our defence mechanisms externalizing the anxiety through either overt or covert group resistance. The stresses and emotions change brings to the individual and group will eventually create a number of symptoms within the organization that will hinder any potential change. In solving problems and developing creative strategies within organizations, these issues must be considered in the implementation stage. A schematic showing the causes of covert and overt resistance to change and the manifesting symptoms is illustrated in Figure 4.22.

Figure 4.22. The causes of covert and overt resistance to change and the corresponding symptoms.

Putting the above issues aside, any solution being implemented can go wrong. There are potential barriers and foreseeable events which may block its execution and lead to failure. These could involve matters of planning, internal causes or external events as listed in Table 4.4. below

Table 4.4. Things that can go wrong during problem implementation.

Before going into the implementation stage, it is important to look for what potential mishaps could occur and influence the implementation of the solution. Kepner and Tregoe (1981) advocate a process called Potential Problem Analysis (PPA) that involves trying to determine what might go conceivably go wrong, what can be done to prevent the mishap occurring and what type of contingency can be put in place in case the mishap occurs. This process can be broken up into four stages.

1. Identify the vulnerable areas.

This requires identifying any potential weak and vulnerable areas, using experience and knowledge from past similar situations and commonsense. This process can be undertaken through Brainstorming. A second method is to go through each step of the plan carefully in chronological order and assessing the weak areas, where contingencies may be needed.

2. Identify specific problems which are serious enough to require action now.

Each identified problem can then be prioritized as to the potential of the mishap occurring, ranking at the top what is most likely to occur, down to what is least likely to occur.

3. Identify the likely causes of each potential problem and any preventative action that can be taken.

The likely causes of each potential event should be identified and then a group can make decisions about what can be done about them.

4. Identify any contingent actions that can be taken as preventative action or as a contingency action, in case the predicted mishap occurs.

Preventative and contingency strategies can be developed for each identified potential mishap. Trivial problems may be ignored for the more critical ones identified. Action may also be taken for those that can easily be prevented. If a potential problem cannot be prevented, then a contingency should be drawn up to counter its effects should it occur.

The Potential Problem Analysis should result in an action plan to improve the strategy implementation phase and make ready any potential contingencies required for what are perceived critical potential problems. An alternative method to evaluate an implementation plan for potential mishaps is to use a checklist to go through each part of the plan. Unfortunately many people and organizations fail to undertake a Potential Problem Analysis or check their plan off against a checklist and are either less effective or fail due to not anticipating potential problems before they act.

Metaphor and the Use of Analogies in Creativity

In essence this book is essentially a group of meta-metaphors attempting to provide a vector of understanding of the issues that the author is trying to put across to the reader. Metaphors are primarily a conceptual construction linking our meaning with something familiar so that we can perceive some of the qualities of the familiar into the conceptual meaning of the unfamiliar. These are usually abstract meanings from familiar things which we implant into the person, object or event we are describing, in the abstract but not literal sense. For example “He has a heart of gold”, “Time is money”, “Shooting from the hip” and “running on borrowed time”, etc. Consequently metaphors evolve from our collective (social) imagination that is required to make the associations[1]. Metaphorization sometimes carries over emotions with the abstractions it creates. For example “I’m so hungry I can eat a horse”, “I am dazzled by the lights”, or “He was drinking like a camel”. Metaphors pervade all aspects of our lives and can be verbal, non-verbal, body language or grunts and sighs, physical things or symbolistic and imaginative (Lawley and Tompkins 2000).

Metaphors assist us develop our conceptual thought and ideas. According to Lakoff and Johnson (1980), the conceptual system of how we think is primarily metaphorical in nature. It is very hard to avoid metaphorical thinking and communication. For example, most management, marketing and strategic theory is metaphorical in nature, e.g., “Blue Ocean Strategy”, “Guerilla Marketing”, “Scientific Management”, “Quality Circles”, “Just in Time”, “Market Penetration”, “Strategic Thrusts”, “Defensive Strategies” and “Six Thinking Hats”, etc. Metaphors help to structure what we see through symbolic models which make our understanding easier. Metaphors show how we reason and go about conducting inquiry into solving problems, how we evaluate issues, how we should act, and provide some understanding of ourselves and others in society (Lakoff and Johnson 1980). Therefore if our cognitive conceptual development is largely symbolic, and we also perceive things through symbolism, then the concept of metaphor is a very important to creativity.

Metaphors assist a person carry over knowledge from one domain to another to help improve perception and understanding. This can assist in making new associations and creating new constructs of knowledge. For example, to explain how a hydrogen atom might be structured, Lord Rutherford used the solar system as a metaphor to represent its structure. Almost all our mental construction is abstract and relies on developing and explaining concepts in terms of other familiar concepts. We use spatial relationships to explain abstract topics such as science, warfare, economics, business, sports, economics or morality, etc. This has entered into our everyday language where spatial relationships figure in our expressions, i.e., ‘you blasted him away with your argument’, ‘your argument is indefensible’, and ‘we were just wiped out’, etc. Our cognitive system cannot process information unless it symbolized and metaphor creates most of our symbols we need to think. Our reasoning depends upon our bodily sensations, environment and what we sense to symbolize as meaning, so reasoning is mostly unconscious, metaphorical, imaginative, and emotionally engaged (Lakoff and Johnson 1999).

The use of analogies is an important technique used in stimulating imaginative and creative thinking, especially in the solving of problems. An analogy is a relationship, parallel or similarity between two situations, problems or concepts. It relates an unfamiliar task to a familiar task that can be useful in solving many types of problems. Analogies require holistic or divergent thinking to find similarities with other situations. Narrative about the similar situation can be developed and then reapplied back to the original situation. For example, Alfred Wagner saw the ice breaking off the glaziers in Iceland and postulated the concept of continental drift. Understanding an analogy helps to put two situations into the same conceptual alignment so the analogized situation can be understood better.

The objective of using an analogy is to get some leverage to solve a problem at hand. However sometimes it is difficult to spontaneously find any analogies that link with the problem (Gick and Holyoak 1980). But it is not always important that the analogy fits completely, providing it can illuminate a new way of looking at a problem (De Bono 1970, P. 149). Seeing both the similarities and differences can play a role in better understanding of a problem (Genter and Markman 1997). For example, an analogy between undoing knots and traffic snarls shows some insight, but doesn’t show how to solve the traffic snarls. The analogy just provides a way to look at the situation.

Synectics

William Gordon utilized analogies and metaphors into a creativity problem solving (CPS) tool that assists in the idea generation process, called Synectics. Synectics is based on the assumption that creativity can be both described and taught to individuals and groups (Gordon 1961). The aim of Synectics is to get the mind away from the problem, thus enabling a person to make new connections and generate new ideas. Synectics forces a conscious effort to look at the problem from a completely different viewpoint. This is achieved through excursions, which aim to make the group forget the immediate problem, so they can generate some irrelevant material to relate back to the problem, in order to generate new ideas.

The basic Synectics process is shown in figure 4.23. The Synectics process begins by laying out the problem statement to the group. This may be from the problem owner’s point of view or may be presented from a number of points of view. In the analysis stage, background information is presented about the problem, not from the point of view of understanding it but to trigger potential directions, thoughts and reactions to the issues.

Figure 4.23. The Basic Synectics Process

The goal orientation stage is where the group tries to see the problem in a number of ways, so as to look for potential directions to go. Speculation and wishing for desirable outcomes is encouraged as a method to set goals. Through suggesting unrelated words or phrases to the group, the prompting they may give can act as springboards to assist the group develop alternative angles or frames about the problem. Brainstorming is also used to develop new ideas about the problem. The outcome of the goal orientation stage is to select a defined problem with a desirable wished outcome in mind. The goal orientation process is a safe way of airing differences in opinion between group members, as disagreements can be redefined as potential directions for possible solutions.

Now the group moves into the ideation stage where excursions are used to generate and explore new ideas. The method selected will depend upon the novel needed in the new idea. Four types of analogy are used to stimulate creativity: personal, direct, symbolic and fantasy. With personal analogy we imagine what it would be like to ‘be’ the object of our interest and use the experience to help resolve the problem. With direct analogy a straightforward analogy between the object and something similar from a different environment is made. In symbolic analogy, the essence of the problem is summed up in some metaphorical way. In fantasy analogy, the problem is projected into some form of fantasy. These are considered the tools to initiate and sustain the creative processes. Very many different formats for excursions are used, such as relying on word lists, the development of mental images by the group, line and picture drawing, sculpturing, and story writing as springboards into new ideas. An example of the effectiveness of this method is the solution found for underwater construction by drawing analogies to shipworms, where they tunnel into wood and create a watertight compartment for themselves.

The problem owner is asked after the abstract solution stage which possible solutions he or she likes and then they are paraphrased. At this stage is important to look at the positive and practical aspects of ideas, rather than any negativity. These concepts are then extended into full ideas by the group, from where they can be appraised for feasibility in solving the defined problem.

Synectics is more suitable in looking at complex problems than Brainstorming (Newman et. al. 1972), although Brainstorming is used throughout the Synectics process. Synectics is not as well known as brainstorming but it has potentially greater application in decision making, especially where risk and uncertainty exists.

Metaphors and analogies are useful heuristics for solving problems and developing insights in a large number of situations. Many important scientific ideas, breakthroughs and solutions have come from metaphors and analogies, i.e., neural-transmitters fit into neural receptors like a key fits into a lock (Genter and Markman 1997). However, the usefulness of analogical reasoning in problem solving will depend upon; 1. Problem similarity, where there must be a reasonable degree of similarity between the already understood situation and the metaphor or analogy, 2. There must be a parallel structure between the source and target problems, so that elements and relationships can be translated to the problem, and, 3. The goals of the target and source problems must be the same (Holyoak and Thagard 1997).

Frames of Thinking

Our view of the objective environment is very subjective. We are socially conditioned to think rationally and logically and accept existing social structures and processes. Our view of the world is also biased by our patterning and emotions, so we have little chance of seeing anything truly objectively. This implies that our perceptions and interpretations are limited and consequently we miss much detail and meaning that exists in the environment. From the opportunity point of view, this suggests that the majority of people see similar meaning in the environment and subjected to a singular sense of meaning. This hinders our ability to see new perspectives and make new connections to form new meanings.

We generally see through a single perspective which can be illusionary and if we change our perspective perception of an object[1], a whole new meaning can be discovered. Therefore we are most often unaware of the multiple perspectives and meanings that can be sensed in our environment as we are locked into a single frame of thinking. For everything we see there are alternative views and meaning. The ability to see the environment’s multiple perspectives and meaning should have some advantage in opportunity discovery.

We usually have blocks that prevent us from seeing other perspectives as we have habitually looked at things from a single frame. Cognitively this assists in cutting down on the high amount of environmental information so we are able to manage our cognitive processes without overloading them. However this also prevents us from reorganizing information and hinders the creativity process. Our preference for logic and rationality blocks our ability to arrive at new insights (De Bono 1969).

To be creative we must break out of the singular frame thinking we are used to. Through our education, professions and professional experiences we are often restricted in the use of creativity because of the tendency to conform to the accepted ways of domain thinking and how things are done (De Bono 1976). We must develop skills that allow us to look at an object from different frames or perspectives without allowing our emotions and existing thought patterns interfere with what we are seeing. This requires changing our thinking processes so we can look through new patterns that allows us to go beyond domain rules and use intuition, utilize our sub-conscious thought processes and break free of the semantic logics that we are used too (Koestler 1975). Figure 4.24. shows a metaphorical diagram of this objective.

A number of thinking tools have been created for assisting people change their patterns or frames of thinking. Mezirow (1981) developed a model which inserted reflective thinking as a means to gain insights. Kolb’s (1984) model of experimental learning and Gibbs (1988) model of reflective thinking also utilized reflection as a means of insight and learning. Johns (1994, 1995) looked at the nursing profession and developed specific frames to assist as cues from which nurses can use to reflect upon different perspectives within occupational situations nurses experience[2]. However Johns frames were perceived as complex and difficult to use due to the number of cues that need to be worked through (Kenny 2003).

A number of conceptual and structured models have been developed to assist in sorting and categorizing information so problems can be looked at from different perspectives. One tool uses hexagons as a flexible mapping tool to rearrange thoughts into models and classifying issues into different frames via the use of colour coding (Hodgson 1992). De Bono (1986) developed the six thinking hats game to assist people think across patterns and look at an issue from multiple perspectives in a structured way.

Figure 4.24. A metaphorical diagram showing single and multiple perspectives of an object.

De Bono’s Six Thinking Hats creative tool colors each hat to represent a different way of thinking. De Bono suggests that the six hats represent the main basic types or domains of thinking (De Bono 1995). The thinking domain that each hat represents and value in looking at problems are summarized as follows;

· The white hat: is concerned about information and takes the metaphorical white colour of paper. The white hat is concerned about what information a person has and what information is missing to make informed decisions. As facts are not opinions, information cannot be challenged. However opinions that are not based on fact can be easily exposed. The white hat thinking domain is useful for challenging assumptions and separating the truth from fiction.

· The red hat: is metaphoric for fire or warmth and is concerned with emotions, feelings and intuition. It allows a person to explore their own feelings and the feelings of others. The red hat domain helps a person acknowledge difficult feelings that may block or prevent paths of action or things from happening.

· The black hat: is suggestive of judicial robes and represents caution, danger, legality, codes of conduct and ethics. It is the basis of critical thinking and tends to look at things along our existing patterns of doing things highlighting something different from what we are used to. The black hat domain is useful for looking at risk, danger, legality, process and ethical aspects of a problem or situation.

· The yellow hat: represents sunshine and optimism. It is also logical and practical. It seeks out the advantages and benefits of things. By seeking the constructive and positive aspects of something its potential benefits to the problem or situation can be determined. The yellow hat is useful in opportunity seeking.

· The green hat: metaphorically resembles vegetation and is associated with growth, energy, vitality and life. The green hat is directly concerned with creativity. It looks for new beginnings, alternatives, change and going beyond existing situations. The aim of the green hat is to take a person out of their existing patterns of thinking.

· The blue hat: is about reflection and reflexivity to assess what has been achieved so far. The blue hat can set goals and objectives and guide the rest of the hats in a focused direction. Blue hat thinking is responsible for summarizing the process and keeping it going. It can be used for interjections and challenging the other hats.

The six hats process facilitates parallel thinking where a person is able to understand each perspective of a situation. This according to De Bono (De Bono 1986, P. 4) allows a subject to be explored thoroughly, getting out of the bounds of restriction that adversarial and confrontational thinking brings.

De Bono’s thinking tools have been used for a number of years by educational, business and governmental groups to develop creative thinking skills. There have been criticisms of these ‘pragmatic’ approaches to creative thinking on the basis of these tools not being scientifically developed upon our understanding of the thinking processes and therefore may lack validity and efficacy (Sternberg and Lubart 1999, Moseley et. al. 2005).

Empathy

Empathy is a capacity we have to connect to others and feel what they are feeling. Empathy helps a person know emotionally what others are experiencing from that person’s frame of reference (Berger 1987). Empathy allows our mind ‘to detach itself from one’s self’ and see the reality of the world from someone else’s, feelings, emotions, pain and reasoning (Lampert 2005). Empathy is an imaginative process. It is primarily an intrinsic trait many people have, but the sensitivity needed to be empathetic can be learned. Through our sensitivity we pick up other people’s body movements, facial expressions, tone of voice and narrative, as a means to sense their feelings, emotions and beliefs (Meltzoff and Decety 2003). In this way we reduce interpersonal ambiguity.

However we must be very careful to the differences within the various signs we read and pick up from others. For example a parent may have an aspiration about further education for their children, but what are the sub-conscious reasons behind their aspirations? This is not necessarily easy (even for trained psychologists) to determine without time to compare narratives and other signs given at other time by the parents. The potential motivations for a parent’s aspiration for their child’s higher education are shown in Figure 4.25. The reality could be any one or combination of these reasons.

Figure 4.25. Possible reasons why a parent has aspirations for their child to undertake further education.

Empathy is an emotion that is very different from the emotions of pity, sympathy and compassion, although empathy can on some occasions lead to those emotions in the observer. In the context of this section, empathy is a means of directly experiencing the emotions of others, even though the observer may not necessarily agree with the other person’s point of view. Consequently empathic understanding is an important characteristic in psychoanalysis where a client-centered therapist attempts to understand the feelings of others as if they their own (Rogers 1975)[1]. Through client-centered therapy, the therapist uses empathy to feel the patient’s feelings and emotions. Through introspection, the client’s thoughts and feelings are mirrored back to the client to seek confirmation that the therapist understands his or her point of view (Kohut 1959). Through what the therapist learns through empathy enables him or her to intervene into the client’s view of reality.

There is empirical evidence of a correlation between empathy and creativity (Parson 1993, Carlozzi et. al. 1995). Creativity is especially important in interpersonal and inter-social interactions (Legrenzi 2005), which is a prerequisite for group creativity in organizations. Empathy enables insight into other ideas and points of view. Openness and tolerance to new ideas is extremely important to the ability to be creative. Research has shown that the more tolerant a society is to diversity, the more creative and innovative is that society (Florida 2002). Societies that are intolerant to the differences of others and have strict adherence to existing social customs and manners, tend not to be receptive to new ideas[2]. At the opposite of the continuum to creativity is intellectual self centeredness. This is a barrier to creativity. When we think from a self centered perspective, we are unable to understand other peoples thoughts, emotions and feelings and thus unable to see other points of view to their own. Intellectual self centeredness focuses attention[3] inward towards our own ideas, our own problems and our own pain (Paul and Elder 2002). We are unable to consider the problems and viewpoints of others that differ from our own.

Within a group perspective, empathy is very important in preventing conflicts. Creativity in organizations is very much a group process and empathy contributes to building the trust that is needed so members of the group feel safe to contribute new ideas. Without empathy, the group could very quickly develop mistrust between members and behave according to organizational hierarchical rigidity[4] which would prevent constructive discussion, exchange of views, decision making and problem solving (Leonard and Swap 1999).

Empathy is used as a creative tool in everyday life. Creativity is very much a social phenomenon and we are dependent upon creativity to develop our relationships. For example, if we lose somebody in a crowded place, we begin to try and imagine where that person may be, based on their past habits. We try to predict the person’s movements so that we can find them. If we want to give someone a gift, we try to think of what they would like and be surprised with. In preparing for presentations at meetings we try and anticipate what questions and objections people would come up with. Likewise a lawyer defending a client in a courtroom will try and understand what the members of the jury are feeling, in order to try to influence them. Empathy is also important in games like chess, where an opponent will try to anticipate the other person’s next move and strategy[5].

Empathy is a very important tool in competitive strategy. Strategy crafting is often based on what we think our competitors will do, how our competitors will react to our moves, and what do our competitors think we will do, etc. Managers who have a deep understanding of their competitors are in a good position to anticipate their potential moves, and consequently will be able to sense potential opportunities and gain competitive advantage with the right decisions. This is a key quality many entrepreneurs exhibit in the marketplace by being able to develop niche positioning without direct competition.

Empathy in this application is a form of insight and very important in marketing and competitive strategy. Branding is also another form of empathy. Brands are developed in a manner to try to capture empathy with potential customers, by appealing to their self views and aspirations.

Empathy is an important element in moving creativity from an individual pursuit to a group process. The collective mind of a group with empathy present should be able to generate more connections and ideas than any individual. This requires developing an environment where ideas from outside can move into a group without being filtered by the ‘group boundary’ which may prevent external concepts being accepted. This requires a highly developed empathy that is stronger than forces within the ego that may suppress empathy. When this highly developed empathy can operate freely, creativity can become infused with outside ideas and also diffuse innovative concepts[6].

It is generally believed that females tend to be more empathetic than males, as empathy is often classified as a right hemisphere female trait. However many studies indicate that empathy tends to be equally divided between males and females. One of the keys to empathy is motivational differences (Ickes 1997, Klein and Hodges 2001).

Competitive Imagination

Competitive imagination is concerned about gaining insights into problems that a firm has previously not known to have existed prior to looking at the fringes of their stakeholder environments. The term was first used by Stuart Hart and Sanjay Sharma (2004) in their article Engaging fringe Stakeholders for Competitive Imagination. Hart and Sharma foresaw that competitive imagination can occur through two processes that can challenge existing business models and frames of reference, leading to new bases of competitive advantage.

The first process called radical transactiveness involves systematically identifying, exploring and integrating the views of fringe stakeholders to the firm to devise strategies that would create disruptive change or creative destruction by developing imagination about a future novel and competitive business model (Hart and Sharma 2004, P. 7). Radical transactiveness seeks to look at the periphery of the fringe poor, weak, isolated or disadvantaged people and acquire and combine knowledge gained from these groups to develop new opportunities and business models. These are the segments where future competitive advantage and even survival will come from (Hamel and Prahalad 1994, Hart and Milstein 1999). Radical transactiveness seeks to engage management in a two-way dialogue with fringe stakeholders so that each is influenced and influences the other. This is where learning is believed to exist and the example of Hindustan Lever Limited in India, requiring their managers spend six weeks a year in the villages to learn consumer needs and habits is espoused by Hart and Co. It is believed in this way, yet unmet needs and yet to be served markets can be identified and understood. Great emphasis is put on the skill of empathy as a means of understanding different perspectives, needs and thereby being able to see future opportunities.

Many examples of success from companies which have expanded their boundaries into the fringes of the market are given as evidence of the potential of using radical transactiveness as a tool for insight. The examples of Hindustan Lever providing product sizes that can be purchased and consumed on a daily basis through ‘moms and pops’ stores within these fringe communities, the CEMEX ‘Patrimonio Hoy’ program where savings clubs were encouraged to help poor Mexican families buy materials to build home extensions and Grameen Bank’s micro-credit scheme in Bangladesh are cited as success stories. Hart and Sharma used the example of Nike to show that failure to use radical transactiveness can lead to disappointing results within potential fringe stakeholder markets. Nike’s low priced ‘World Shoe’ was cited as a failure because of the company overlooking the need for a dialogue with the fringe groups that they sought to reach and using their existing sales channels in China alongside their premium products, rather than build new channels that can better reach them.

The second process is radical transparency which means going further than statutory disclosure requirements in the full and open disclosure of all the firm’s activities, strategies and impacts (Hart and Sharma 2004, P. 17). Radical transparency targets core stakeholder who can directly affect the business. Radical transparency promotes the concept of a firm operating by the mandate of its stakeholders, especially to avoid stakeholder rage which can challenge the power, legitimacy and survival of the company. The Shell UK experience with their Brent Spar North Sea oil storage and tanker loading bouy in the Brent oilfield demonstrates the concept of radical transparency. In the Brent Spar case, the building of an oil pipeline from Sullom Voe in Shetland led to the redundancy of the facility as an oil storage depot. Shell planned to dump Brent Spar in deep Atlantic waters with British Government support. However this led to a worldwide media campaign against Shell and where Greenpeace occupied the Brent Spar for a number of weeks. In the face of public opposition and a consumer boycott in Europe, Shell abandoned its plans. Shell’s Brent Spar experience shows how much damage can be done when a company loses sight of what their stakeholders want. Shell’s behavior showed lack of empathy with its stakeholders as it was dominated by its engineering culture and did not back down initially as they could not understand the symbolic effects of dumping the Brent Spar in deep water. The effects of the Brent Spar issue have driven home many corporate lessons about the need for gaining different perspectives and reputation management (Fombrun and Rindova 2000, Hooghiemstra 2004).

The steps recommended by Hart and Sharma (2004) within a transnational corporate context to generate competitive imagination are described in table 4.5. below.

Table 4.5. The steps involved in implementing competitive imagination within a transnational corporate context.

Radical transactiveness helps a firm widen its possibilities by including fringe stakeholders in the lower socio-economic groups as a means of generating competitive imagination to come up with potential future products, services, markets and business models. It drives approaches to marketing, management, production and research and development. Ideas about escaping direct competition by reconstructing market boundaries to gain new market space like those espoused in Blue Ocean Strategy (Chan Kim and Mauborgne 2005) and the tools presented like the four actions framework and strategy canvas require a form of competitive imagination to make the framework work successfully. Blue Ocean Strategy appears very insightful in retrospect but requires competitive imagination to use it into the future. Competitive imagination is still a relatively new concept which will in the near future be expanded as a concept with a much broader definition and supported with more elaborate working models that will be based on further research into the area of future modeling.

Visualization of the Future – Looking at trends

The overall desire of an individual or enterprise is to be in a position to understand how the future will be shaped and determine how they can benefit. Stating this in a slightly more confident manner could be rephrased as ‘how can the individual or enterprise through its plans and actions influence and shape the future (market) where they can benefit?’ Success in enterprise depends on thinking and acting upon a ‘more or less’ correctly imagined future situation.

Predicting the future accurately is impossibility. This is because future events have not yet happened. Therefore we cannot know for sure that any event will happen. However what we do know is the present and we also know the past from our own personal perspectives, so that we have some idea about the probability of something occurring like a scheduled meeting or TV program, etc. More generally what we know from the immediate past and the present gives us a strong indication about what is most likely to happen in the immediate future, excepting unexpected events and disasters. Through our constructs we basically make predictions from observing the development and momentum of trends in the past and present and assume that they will continue into the future Kelly (1955).

This is how John Naisbitt (1982) wrote “Megatrends” through astutely picking up on emerging trends and extrapolating them until they have a futuristic major effect upon our lives. Insignificant events can build to a critical mass, from where something new emerges in a significant way (Gladwell 2000). Most management theories are developed from past events and history where the theory fits the facts and is able to explain the past very well. However when orientating these theories towards the future they become less than accurate. This may be partly explained by the ever changing factors (social, economic, technological or regulatory), either subtly or significantly thereby creating new conditions which the original theories were not designed to account for.

The popularized Nostradamus himself also seemed to rely on the past to predict the future when writing the quatrains of Les Propheties. Nostradamus assumed that many central historical themes would always repeat themselves from century to century regardless of our learning and considered advancement. Moreover it strongly appears that Nostradamus was influenced by and borrowed from the work of past and contemporary writers of his time (Lemesurier 2003). This should not be of any great shock to anyone, as the bulk of ideas and new products appearing onto a market, usually bare great resemblance to other ideas and products already existing in the market. Pure originality and novel innovation is actually a rare commodity[1].

With inside industry and market knowledge a person develops an understanding about how a field operates in terms of; who are the players?, how do consumers behave?, are they generally satisfied with what is on offer to them?, who are the suppliers?, how important are they?, which stakeholders seem to have strong influence?, what important skills and capabilities are necessary to succeed?, who is strong and weak in them?, what resources are needed?, where can these resources be obtained?, who do you need to now in this field to get things done?, where does the research and innovation come from?, and very importantly, what direction is the industry going? A person with industry and market knowledge will understand the implications of and relationships between these questions. An insider has opinions, intuition, ideas, and hypotheses about how things work and why they might influence the future. When a person makes predictions and they are validated through becoming reality, a person’s confidence in their own ‘hypotheses’ can make a person feel confident[2], maybe confident enough to do something that may have some impact on shaping the future.

A person ‘emotionally embedded’ within the industry will feel how things work, how the supply chain is interrelated, where it is strong and where it is weak. He or she knows the players, their competencies, their weaknesses, their triumphs and their failures. He or she will know how reactive multinationals are to the local market and how local companies are experts of developing small niches that maintain their place in the market. Knowing how reactive or proactive a multinational company is in the marketplace is one of the bits of information that may have great significance in the concept of opportunity. This may go completely unnoticed to an industry outsider.

When a person sees the industry evolving and the small steps of incremental evolution within it, they will normally be in a good position to anticipate the future of the industry based on their own specific prior knowledge. This is the potential platform for insight that only insiders have. One can see product evolution like one sees a family tree emerge over a few generations. The products in the market have profound meaning to the insider, who knows what has been and is excited about what will be. This is the point where an insider can visualize the future. To the outsider, ‘raw information’ without rich background knowledge is nothing without knowing the background. Background knowledge is necessary to make order out of the chaos that others see.

Figure 4.26. The Evolution (Family Tree) of Laundry Detergent over the last 100 years (Hunter 2009, P. 563)

Through experiencing the industry and being aware of change, a person develops their unique mental map or ‘self hypothesis’ of meaning about what, how, why and where the industry is going. A sensitive person will see changes in the factors that influence the industry over time; one day about consumer sentiments, another day about technology, yet another about government intervention and regulation, another about competitor actions, and emerging technologies and their significance. This all digests, is simplified as it incubates, cooks up, is twisted and turned until, ‘bingo’, an opportunity lies there starring the person in the face, which no one else or not many people have seen. This is the moment when you have put all your money on the number 16 on the roulette table and the number comes up. Excitement and passion emerges. It is not about the money but about doing something successful that no one else has done, climbing the Mount Everest of the field.

Through being exposed to the field day in, day out, our cognitive processes can create associations that we don’t normally consider, think of consciously or connect together. This may happen when we drive to work, drive home from work, have dinner, go for a walk, or have a shower. Everything from the environment we experience is felt with emotion. These complex factors spanning the group of factors that cause opportunity gaps are simplified into new concepts. This happens when we are away from the work environment that allows repressed material to emerge and be reorganized into new associations. All the information about the environment has worked itself up from the basic into new insights and concepts.

Table 4.6. The factors that make up the opportunity gap and stimulate associations.

The insights about new ideas, potential opportunities and strategies are not the product of any rational thought processes or CPS tools. They are totally intuitive, or ‘gut feel’, which through retrospective logic cay be rationalized as a ‘good idea’, ‘something sensible’ and ‘something worth going after’. The many potential combinations of the four major opportunity gap drivers (social, economic, technology and government), mixed with market themes, market channels, and competition, with something random or unexpected lead to an infinite number of potential combinations, of which only a few are sound opportunities. What is important is whether the identified, discovered or constructed opportunity can influence the future, even if at the time of contemplating the opportunity, we are not sure what the actual future will be. This is the foresight that some people have that can change the direction of the future?

Through connecting a trend to a current product, one can see potential new value, if consumers also perceive it. If the innovation is radical and new to the world, a breakthrough may occur, and once again if accepted by the consumer, a new industry may be born. Seeing social trends into the future will help one imagine new ideas about products and new products as well. Changing economic conditions can quickly change consumer habits and reading this correctly can lead to new forms of existing products and new products where incongruities exist. Modified, borrowed or new technology can change the way things are done and lead to leaps and bounds in product and market evolution. Government regulation can end a product and give birth to a new product, and dictate where and how things can be sold. Constantly evolving market themes and channels, and the effects of competition change the vector of the metaphorical line we travel along. Without change, this line extends the past and present into the future without deviation. However with any change of the opportunity gap drivers, the line will deviate upwards or downwards depending upon the scope of the change. Incremental changes will develop new market segments like new types of shampoo like 2 in 1 or sugarless carbonated drinks. A major technological breakthrough may create a totally new industry like the home computer industry in the 1970s or the mobile phone industry in the 1980s. Where we can go from the present to the future is pictorially portrayed is a matter of how we construct the new opportunity and its leveraging in the field as shown in Figure 4.27.

Figure 4.27. Where we can go in the future with changes in the opportunity gap factors.

The opportunity actualization process requires sub-conscious incubation something similar to the process of meditation that Shapiro describes (1984). During meditation a person sees the whole field through ‘wide-angle-lens” with attention focusing on a broad range of ideas and elements of the environment. This allows various elements to be opened up for further observation and sub-conscious contemplation. Then the mind switches to a ‘zoom lens’ attention on certain aspects of the field in a concentrative way. There is a shift between these two strategies until some elements can be seen both through concentration and holistic mindfulness, which takes a person above the patterning their mind is used to (Abdullah and Schuchman 1976). A person starts to recognize recurrent themes and repetitions that can be extended into the future. This enables a person to extend their own existing constructions to see things in new ways where their construct or own view of reality is altered, through making new associations of knowledge to create a new construct or hypothesis about the future (Kelly 1955). As each person constructs the world differently, a person’s observations and hypothesis about the future is likely to be relatively unique[1].

To see opportunities within an industry requires domain knowledge. However domain knowledge through the rigid patterning it can create can also ‘lock’ a person into the way the domain thinks. The person has to be able to break out of these patterns to be able to see things in fresh ways. In hindsight new ideas and concepts that have changed a market or changed an industry will appear very simple and extremely logical. However the process of discovering these opportunities is far from a logical process. It has required novel and divergent thinking away from the existing industry patterns. In essence a new opportunity is in fact a new construct about the realities they experience in the field.

This process of foresight that assists in discovering new opportunities within an industry is based on a mix of insight, imagination, analysis and action. This is a four stage creativity process where a person through environmental data, clarifies the problems, and then develops his or her own ideas. These are developed and refined until a stage comes for taking action upon them. According to Puccio (2002) some people at better than others at each stage of this process. Puccio (2002) has developed a creativity style assessment tool to determine people’s strengths and weaknesses in this process by giving four individual scores. Basically ‘clarifiers’ are focused, orderly, serious, methodical and deliberate, ‘ideators’ are playful, social, flexible, independent, imaginative, adaptable and adventurous, ‘developers’ are reflective, pragmatic, cautious and structured, and ‘implementers’ are persistent, determined, action orientated, decisive and assertive (Puccio 2002, P. 8-11). Some people may be a high ‘clarifier’, while others may be a high ‘developer’, ‘implementer’ and ‘finisher’.

Another way of developing new product and market combinations is through the use of morphological diagrams discussed previously in this chapter. One can plot potential new combinations along the axis and look for new combinations of a product and how new strategic directions could be taken for the product could be put together. This can develop quite a large number of potential new product and strategy ideas. The key to this exercise is to find new degrees of freedom for a product and strategy that hasn’t been used in the marketplace where competitive differentiation can be achieved. As mentioned previously anything new in the world is usually made up of known elements recombined in different ways, which leads onto the next method of reengineering.

Reengineering

Michael Hammer published an article in the Harvard Business Review in 1990 proposing a radical rethink and redesign of business processes to achieve radical improvements in performance, cost, quality, service and speed. Hammer expanded upon this philosophy with James Champy in 1993 with their seminal book Reengineering the Corporation, advocating the complete analysis of all business processes in a company and redesigning them in the most efficient way possible to eliminate all wastage. This was based on the premise that when companies grow, they develop processes in ad hoc ways which develop complacency and inefficiency as the firm becomes set in the ways it does things. Moreover the processes and company goals are based on assumptions about technologies, people and processes that are no longer valid. The tool that Hammer and Champy (1993) proposed to radically change the nature of the enterprise was business process reengineering (BPR).

Rohit Talwar (1993) defined reengineering in a much broader sense. Talwar, like Hammer and Champy proposed starting from a clean slate, where the company would be completely redefined with long terms goals, its competencies and competitive strategy to create maximum value to customers and shareholders. Cross et. al. (1994) saw that traditional business models were being challenged and there was a need for companies to go beyond continuous improvement and quality programs where old assumptions about technology, people and organizations goals could be changed in favor of relevant ones. They quoted the cases of the US Post office ignoring the growth of Federal Express, US car manufacturers ignoring the advent of Japanese luxury cars, Sears building a tower, while Wal-Mart opened new outlets, the decline of research libraries as electronic journals came online, CNN using one person crews reporting through the internet, while other networks saw this as insignificant, IBM’s malaise about Apple in the 1980s and Microsoft in the 1990s, and the decline of Wang Computer and Digital Equipment due to failure to see market shifts, as examples where irrelevancy set in. Reengineering has facilitated the rise of new business models to deliver products and services like Dell and Amazon books, online auctions at eBay, the way the Toyota Scion is at Gen Y consumers, through custom design and ordering, and low cost airlines, etc.

Certainly creativity has not been associated with reengineering. However reengineering as a broad conceptual approach has the potential to realign and reorganize a firm so that it aligned to new and emerging opportunities, thus leaving declining or closing opportunity windows the firm has been servicing. In the light that firms have limited lifecycles, reengineering is the tool that maintains a firm’s relevance to the opportunity environment. It is the major creativity tool a firm could use to maintain its survival. Reengineering is important for a firm in the growth and maturity stages, where processes developed soon after start-up, are found not to be as efficient as they could be. Efficiency is important to competitiveness and profitability. Without an overhaul of the business, there is risk that newer companies will become more competitive, leaving the original firm at disadvantage.

A firm must reengineer itself[2], every time it reassesses its opportunities and aligns its objectives and strategies towards the shifting opportunity landscape. The business model must be reconstructed to maximize the effectiveness and efficiency of the planned strategies. The pursuit of new opportunities requires a complete reassessment of goals, objectives, strategies, processes, structure, competencies, resources, and networks to succeed. Today the difference between survival and success is little. To survive a firm must be successful, anything less will be unsustainable in some aspect. Therefore the change in pursuit of opportunities must also bring transformation within the organization; otherwise any new opportunity will not be exploited effectively. Reengineering is the tool of organizational realignment.

Reengineering is not a new tool; it is what an organization needs to do to survive. As Foster and Kaplan (2001) showed in their study, the turnover rate of S&P companies is nearly 10% where a firm may survive in the S&P 500 list for no more than 10 years. Therefore by 2020 around 75% of companies on the S&P list will consist of companies we don’t know today. These will be new companies that have aligned themselves with newly discovered opportunities. Thus competitive advantage in an industry will depend upon how well a company’s goals, strategies, networks, organization and business models, skills, competencies and technologies and resources are aligned with the identified opportunity. Older companies formed around an opportunity identified in the past will tend to be aligned with that past opportunity. But the opportunity itself slowly drifts as consumer tastes evolve, demographics change, and technologies evolve, etc. From the competitive side, disruptive innovation, creative destruction and competitive imagination move opportunity (March 1991, Hamel 2000).

This is why sometimes a new company can create a value chain that is more aligned with the opportunity at hand, with great advantages over existing companies that are aligned against opportunities that were identified in the past. The new company is more up to date with its goals, networks, strategies, skills, competencies and technologies, and resources than existing companies in the industry that have not realigned their companies with the new characteristics of shifting opportunity. The newcomer to the market isn’t burdened by the need to adapt and realign itself to the shifting opportunity and is freer to be creative and innovate. This is why some new firms quickly disrupt markets and take the initiative away from the incumbent companies in the market. Figure 4.28. shows how a firm must be continually reengineered to maintain its relevance to the opportunity landscape.

Figure 4.28. How a firm must be continually reengineered to maintain its relevance to the opportunity landscape.

The position of opportunity[1] and the theoretically best corresponding value chain configuration to exploit it is made up of how a firm sets goals, crafts strategies, supports strategy with a an organizational structure and business model, skills, competences and technologies utilized allocated resources and supporting networks of stakeholders. This configuration must be continually monitored to maintain the maximum configuration effectiveness as the opportunity landscape is continually changing. The configuration is manifested by the level of competitiveness it generates relative to any competitors.

Reengineering became a new ‘buzzword’ in the mid 1990s. However many critics saw reengineering as a return to the days of Taylorism and Scientific Management[2], while others criticized it as a lean excuse for redundancies, which were being forced upon many corporations due to the advent of information technology that was reducing the need for employees. One of the greatest problems with the philosophy was that executives were only too willing to cut down aspects of the organization that didn’t personally affect them, but were loathed to do anything that would affect their own livelihoods. As Hammer himself said that executives were the ones themselves that undermined the very structure of their rebuilt enterprises (Champy 1995). Consequently reengineering became another management “catch cry” bringing in large revenues for CSC Management Consultancy, which James Champy was principal[3]. Companies like Hallmark Cards and Kodak in the US successfully applied reengineering with very positive results, BPR became so much associated with redundancies, and it forced a change of name to Business Process Improvement (BPI).

Although Reengineering became a ‘distrusted’ word in business, the dogmatic ‘self proclaimed manifesto’ Reengineering the Corporation highlighted that corporations need to change and transform themselves to survive. For change and transformation to occur people need to support it. One would expect that in the near future broader and more subtle concepts or reengineering, under a different name will emerge.

A second common form of reengineering is product reengineering. Product reengineering involves the examination, inspection and breaking down the physical parts of an existing product in the market to determine what it is made of and how it was manufactured. In reality, the majority of new to the world products[4] launched into the marketplace each year is only about 10% of the total number new products. Therefore 90% of all products launched into the marketplace resemble existing products already in existence (Kleinschmidt and Cooper 1991)[5]. Therefore in some form or another, the majority of new product development is benchmarked on existing products in the marketplace. A firm will work backwards to learn how to produce a variation of that product, with or without enhancements. Through product reengineering, post World War II Japanese industry learnt how to manufacture numerous different types of products, which they eventually enhanced into products of superior quality to their Western competitors (Kotler et. al. 1985).

The product reengineering process begins with a full examination of existing products in the market. The functions and benefits to consumers are fully appraised. Products are also tested for their efficacy, performance and durability in product trials while other samples are slowly deconstructed to determine the materials used in their production and how they were manufactured. All characteristics of the products including what consumer benefits are used to develop a set of specifications for the new product to be developed. At this point, the most probable production methods are appraised and deductions made on probable processes from initial product examinations, as guidelines.

The full product technical and market specifications developed act as a roadmap for the following product development task[6]. Based on examination of existing products, the development team will have some fairly good ideas about what types of materials to use, how to develop the manufacturing processes and what marketing features they want. At this stage the team may or may not decide to develop an enhanced product by adding new features or design improvements over what already exists in the marketplace. An example of the market and technical specifications required for the product development process is listed in a concept generation checklist in shown back in Table 4.3. (Hunter 2009). Patents and other intellectual property issues are also examined both as a guide to the development process[7] and a check to ensure the company does not breach any ‘intellectual rights’ attributable to any other companies.

Once the concept generation list is completed, trial formulations, trial production processes and prototype products can be developed, tested and reassessed. Prototype products can be trialed in real conditions either by company staff or through consumer focus group tests. This is a period of trial and error where learning comes from results, providing some insights so modifications to be made to materials and production processes. Product issues that require further improvement will undergo further formulation and/or process development. Eventually when all the faults are eliminated from product prototypes and production processes are effective and efficient, the product will be ready for a launch into the market. This whole product reengineering process is shown in Figure 4.29.

Figure 4.29. The whole product reengineering process

Another creativity tool related to reengineering is W. Kim Chan and Renée Mauborgne’s (2005) strategy canvass. The strategy canvass acts as a means to examine competitors product attributes or principals (as the authors call them), such as price, image, consumer awareness[1], etc, so that a new product’s attributes and product strategy can be developed. The product attributes make up the total product proposition that are points of competition across the market. A line drawn across the product attributes becomes what is known as the value curve, a graphic depiction of a product’s value position. Once this benchmark is determined, it can be analyzed using a framework of questions (four actions framework) to create other important attributes that a new product will make its proposed value proposition upon. As the strategy canvass technique breaks up products into their individual product attributes to facilitate the building of a product with a new set of attributes as a benchmark, this technique can also be considered a form of product reengineering based on breaking down the product value components.

Concepts can be extracted and synergized from unrelated locations, objects and other business models. For example, a person may secure a particular location and wish to create some form of business model that would serve potential customers within that location. Potential young customers around the precinct of a university like to gather at near campus restaurants or coffee lounges for snacks and social gatherings. The general characteristics of a generic fast-food business is that it is cheap, has a good standard of hygiene, good service, fast and efficient, specializing in a particular food, people know what to expect and a meeting place for people. After study of the situation some of the characteristics of a generic fast-food business can be extracted according to what the potential entrepreneur feels are most important to the potential clientele of the potential location and a new concept constructed. A hypothetical result might be a charcoal BBQ Burger Grill which is conveniently located, cheap and affordable, has good service, a unique and tasty charcoal grill, and is a convenient meeting place with WiFi, etc. This is called concept extraction where the potentially successful elements of a concept are synergized together to create a new idea. This is shown pictorially in Figure 4.30.

Figure 4.30. A constructed conceptual concept of a charcoal BBQ Burger Grill.

The Barriers to Creativity

As we have seen, creativity comprises of a combination of expertise, motivation and our creative thinking skills. Expertise includes all our knowledge and experience, including technical, practical, and tacit knowledge. There are various forms of motivation, but it is the implicit forms that are most influential in driving our will to be creative. Our creative skills and ways we think are important tools to produce a new idea or solution to a problem. Our creativity also depends upon our sensitivity, focus, attention, curiosity, imagination, energy and our ego.

However just as some factors promote the ability to be creative, creativity can be blocked and a person prevented from seeing new associations and solutions to problems. This can happen both to the individual, and at the social and organizational levels. This rest of this section will outline some of the individual and organizational blocks to creativity.

Early Creativity and Social Blocks

During our early years we tend to be uninhibited in what we do. Our drawings, acting (or mimicking) and views of the world may be naive, but uninhibited. We are imaginative and fantasize much more easily than when we are adults. In the pre-computer, TV and multi-media world, it was often our own imagination that kept us entertained building sandcastles, mud houses, cubby houses, doll enactments and plays, etc, imitating the world we know[1]. Our creative tools also helped us to make sense of the world we were growing up in through wishing, rearranging, structuring, and imagining. These tools are vital parts of the learning process.

As we get older and go to school we learn our logical sides and slowly drop the artistic and creative sides in favour of ‘life skills’. The memory retention orientation of our early education systems (and those still in Asia and Africa today) very quickly diminish our creative tendencies. Parent and society expectation put high value on professions like law, medicine, engineering, science and business. Art, acting, sculpturing, painting, writing and dramatic careers tend to be gauged as fantasy occupations that are not for the rational to pursue. The steering of career orientation and rejections, criticisms and humiliations during the early stages of our learning affect our views and can dampen any natural creative tendencies (Prince et. al. 2000). We are very sensitive to criticism, rejection and humiliation and in most cases usually willing to change our behaviour to maintain acceptance from others. We start to lose our creative skills like fantasy, imagination, wishing, transforming and comparing, replacing them with psychological blocks that in extreme form resemble various forms of psychosis.

Mental Models and Mental Blocks

Mental models are articulated concepts of how we manage our relationships, our interactions with the environment and our general view of the world. Our mental model is the sum of all our schemata and scripts, our total knowledge. Mental models act as templates to provide meaning to what we see in the world.

But just as mental models guide us, mental models tend to be relatively rigid and can also blind us to other potential possibilities. Our psych has a vested interest in rigidity because if our mental models are challenged by what we see, they can break down and lead to uncertainty and ambiguity where stress and anxiety will develop.

Conceptual blocks stop thinking processes through unconscious mental blocks. Mental blocks affect us in different ways, where various filters or patterning upon our perceptions or prevent us from letting ideas emerge from our sub-conscious (Prince 1998). Our senses are optimized for our everyday survival. For example, if we live in an area well known for snakes running across housing estates, we will tend to be alert for this type of danger. Many dangers to us are more subtle than that and our mind utilizes various strategies to protect the person.

James Adams (1979) compiled a list of conceptual blocks, classifying them as perceptual blocks, which confuse data coming from our senses and disrupt the way our mind manages that data, emotional blocks where our emotions and desires interfere with our ability to form thoughts, cultural blocks that place acceptability limitations on what we think and do, environmental blocks where we incur physical distractions, and intellectual and expressive blocks which deal with problem solving strategies. Many blocks also have undesirable side effects because we utilize them as long term strategies rather than short term tactics when prehistoric humankind had to utilize fight/flight responses to mortal dangers. A summary of some of the different types of conceptual blocks are listed in table 4.7.

Table 4.7. List of Some Different types of Conceptual Blocks[2].

Some of the heuristics listed above assist an individual on an everyday basis to solve problems. They are short cuts in judgments that are convenient and save time by cutting down on the complexity. However the above listed heuristics can also prove to be great flaws in our perception and reasoning as they produce misconceptions[1].

Limited Domain Knowledge

Quite often our mental models are flawed, which often lead to individuals using the wrong analogies and therefore missing meaning (Kempton 1986). We often misunderstand how things really work and make decisions based on our misconceptions. Limited domain knowledge can handicap a person in being able to frame a problem (Proffitt et. al. 1990). Even if a problem can be framed, we may use the appropriate information, may use it inappropriately or fail to use the information at all to solve the problem. Instruction, training and knowledge in a domain assists our ability to reason within it. However that training within a discipline may not always eliminate misbeliefs (Kozhevnikov and Hegarty 2001).

As technology becomes more advanced and problems require a multi-disciplined view to develop a comprehensive understanding, any single individual may lack the knowledge required to deal with the issues involved. Therefore greater reliance on teams that can look at issues from multiple disciplines is desirable. Professionals entering the workforce in the future are likely to have some background in more than one discipline. An example where multiple disciplines are needed is in the case of the analysis of essential oils from plants. Essential oils are natural aromatic substances derived from plants through distillation that exhibit a usually complex odour. To be able to analyze an essential oil, a person needs to understand the domains of chemistry, biochemistry, botany, thermodynamics, and analytical chemistry (Hunter 1994). The analytical equipment used in the analysis of the essential oil, a Gas Chromatograph Mass-Spectrometer may identify compound X as present. However our botany and biochemistry knowledge enables us to understand whether it is possible for compound X to exist, due to the way the plant synthesizes its metabolites. Consequently another compound with a similar structure may be present in compound X’s place, leading to the identification of a different compound (Hunter 2009, P. 160). Figure 4.31. shows the merging of domains that is required to analyze essential oils within plants. Many tasks are now extremely complex and require synergized views of problems to solve them.

Figure 4.31. The merging of domains required to carry out an essential oil analysis

Organizational Barriers

About half of new companies close their doors within the first five years of operations. Out of the five remaining, four will survive into their tenth year and three into their fifteenth year of operation (Birch 1987). Among the large corporations listed in the Fortune 500 between 1970 and 1986, almost one third vanished completely (de Geus 1988). Historically company excellence only lasts a short time, where the average life-cycle of a company is around 40 years (Collins 2001). Peter Drucker espoused that companies are only entrepreneurial in the early stages of their life, where after establishment they slip into the guise of being an ordinarily managed company (Drucker 1986).

A company’s decline does not usually occur from the lack of resources, information, knowledge or finance. The company’s decline occurs because of a changing environment that is not detected. To sustain a company new ideas are needed to exploit evolving and transforming opportunities, as well as develop the strategies required to achieve successful exploitation. This requires creativity.

Any opportunity has a limited lifecycle. As the opportunity drifts, companies require new technologies, new products and/or new ways in delivering products and services to maintain their relevance in the market. A company can only survive as long as an opportunity remains viable and the company is aligned with it. This may mean that new ideas and strategies based on new technologies, the development of products (and the cessation of old products), the entry into new markets or the development of new ways of doing business is needed to maintain that alignment.

Companies over time can become rigid and develop an egocentric manner. The management sees the company as the centre of the field, the market or industry leader where nothing can harm them. A number of conditions develop within organizations that make management within them lose their sense of adventure, entrepreneurship, and creativity. These conditions will be discussed in the following sections.

Compartmentalized Thinking

One of the characteristics of a maturing company is its division into compartments or departments which tend to influence how people within the organization look at the environment. People tend to take the points of view of their specialized departments. The fun that was shared through formation and early growth is switched for the more formal functional processes of production, procurement, administration, sales, marketing and finance, etc. Departmentalization discourages an environmental wide view of things, in favour of narrower departmental and disciplinary approaches.

Although specialization has always been assumed to bring efficiency, this is sometimes questionable from the organizational point of view. The potential efficiencies that can be gained from increased specialization can lead to the loss of interdisciplinary thinking within the organization, as people tend to look only from their departmental points of view. The disadvantages of departmentalization can be seen in the example of cars built in Detroit during the 1960’s and 1970’s where different sized bolts where used in different parts of the car, leading to increased costs and the need for more inventory items, just because the car was designed from different functional perspectives. This was in stark contrast to the Japanese cars that were manufactured with common bolts to streamline the production and procurement processes. Departmentalization can hinder company integration where departments become egocentrically concerned with their ‘turf’ and position, often leading to conflicts and power struggles within interdepartmental relationships. This diverts energy, focus and attention away from creativity towards maintaining the interdepartmental status quo within the organization.

Hierarchy

Hierarchy automatically builds in assumptions about how information flows, the nature of connections between the different components of the organization and outside stakeholders, and how power and influence operates. Organizations will also have a desired level of diversity within it, either by deliberate design, policy, or through the influence informal conformity to norms by those responsible for selecting new personnel[1]. An organization will also tend to have entropy towards the maintaining the status quo or being amicable towards continuous change.

According to Stacey (1996) how organizations tackle these organizational dimensions will have enormous influence over the level of creativity and innovation. Information flows within a traditional hierarchy where authority is important will be on a strictly need to know basis. Information will be a protected commodity accessed only by those in authority. Ideas will flow from the top down the hierarchy, where the lower levels are only responsible for implementation under supervision. There will be no room within an authoritative hierarchy where power-distance is high for ideas to flow from the bottom up. In those types of organizations people are not expected to think outside established rules and processes. In fact thinking outside established rules and procedures would land a person into trouble.

In highly controlled organizations, communication up and down the various tiers is controlled and rigid. It is the prerogative of superiors to make any decisions that established rules and procedures do not settle. There is no room for alternative ideas or perspectives and anybody exhibiting alternative opinions would go against the norms of the prevailing conservative culture within the organization. Those with actual power are cautious in their decision making and people would be fearful of expressing alternative ideas in public. Consequently such organizations would create high levels of stress and anxiety for those employed within it. Such organizations would be very rigid and not know how to handle information that differs from what those within the organization are used to. This would just add to stress and anxiety rather than a cue for needed analysis and change. Subsequently any forms of creativity, except for dysfunctional behaviour would not occur within these types of organizations.

Creativity is best served by an organization that has unhindered flows of ordered information that can be accessed by all relevant people. Power is best based on knowledge and expertise rather than position or political positioning. Interdisciplinary groups of diverse people are encouraged to take a holistic view of problems and opportunities. Finally the organizational leadership would be open to new ideas from all parts of the organization and see change as a necessity for organizational survival.

However too much freedom at the other end of the continuum may allow too much unfocused creativity, where an organization would also be paralyzed through indecisiveness. In such an environment there would be information overload where it would be too confusing to determine what information is important and what should be disregarded. Alternative opinions are canvassed to the point that no decisions or commitments can be made. Groups within the organization may be so diverse that little common ground, that there may be little sense of common mission. Such an organization seeks change without having commitment and agreement about what change should occur. Although being a creative organization, none of its creativity results in any form of innovation because of lack of focus, discipline and formal decision making processes.

A graphical view of the continuum of hierarchy to anarchy within an organization is depicted in figure 4.32. On the left side formalized and authoritative hierarchies allow little room for creativity and innovation. These would include very production orientated organizations and companies that still subscribe to the concepts of scientific management. These may also include organizations dominated by a founder who wishes to make all decisions within the organization. At the other extreme is an organization in chaos where there may be great creative potential but no mechanisms to channel and focus creativity into innovation. Groups run into conflict over differing ideas where frustration develops. Many examples of this form of organization may be early start-ups made up of groups who find it difficult to make decisions. These organizations start moving once they are able to define how to channel and develop decision making procedures. The middle of the continuum is where organizations can be creative through allowing information flow, diverse groups to work on problems and authority based on knowledge and expertise. This is where innovation will be at the maximum because of focus and sense of mission within the organization. There will never be two organizations adopting exactly the same mix of organizational parameters. Each company will find from experience what works best for them.

Figure 4.32. Continuum of hierarchy to anarchy

Rigidity

Rigidity is a product of hierarchical organizations that are traditionally locked into operating through strict rules and procedures. Although rigidity has some advantages in sustaining individuals in times of stress and anxiety, rigidity is the true antithesis of creativity within an organization. Rigidity within an organization can come in many forms. Rigidity is caused from over-learning, where the same generalizations are applied to every problem facing the organization, with an intense attachment to rules, procedures and beliefs within an organization, especially conservative ones.

Organizations that don’t interact with the environment to protect themselves and rely on rules and procedures to operate regardless of what happens in the outside, tend to develop strong dogma as a unifying force (Rokeach 1960). Each member is expected to hold the shared set of beliefs that may be considered fanatical to outsiders. Only incoming information that supports the organizational dogma is acceptable where all other information is part of a conspiracy to undermine the organization or leadership. Within such an organization one would regularly hear comments like “this is the (name of the organization) way of doing things”, “around here we must do things like this”, or “outsiders don’t understand us and try to undermine what we stand for”. Organizations wrapped in dogma may border on the psychotic and there is some chance that members of the leadership are psychotic to some degree. Creativity within these organizations is seen as a threat to stability and is generally suppressed.

Rigid organizations may look at issues and people through stereotyped vision. Generalizations are made about the classes of people without evidence about their attributes or qualities. This leads to distorted views of the world like “all Muslims are terrorists”, “all Americans are anti Muslim”, “all Germans are Nazis”, and “all Australians are anti-Asian”, etc. Stereotyping helps to make the unfamiliar look familiar but suppresses our curiosity and ability to question about what we see. In the mild state, stereotyping is narrow mindedness, but in the extreme stereotyping is a symptom of psychotic behaviour. Adorno et. al. (1950) espoused that those harshly treated by someone in their childhood years may grow to adulthood with extreme hate for certain stereotyped groups of people. This can lead to the type of dogmatism discussed above.

Over-learning can cause functional fixedness, a state where a person can only see one conventional function or use for particular objects. Functional fixedness can often occur within professions where people will tend to rely on the training of their respective disciplines to solve problems. For example, a marketing person would look for a market solution, where a legal person may want to consider a legal solution. This form of rigidity prevents individuals from using objects and concepts in new ways, as he or she is locked into one specific use for the items or concepts in question. Thus individuals will respond to a problem in a fixed way rather than look at new possibilities. This prevents a person from seeing new connections and associations which blocks creativity. Functional fixedness is very common and requires a conscious attempt to break out of this type of thinking through CPS techniques discussed previously.

Fear and Conformity

If we sufficiently fear something, our capacity to be creative is greatly diminished. There are a number of sources of fear that take away our focus, energy and attention, dampening our curiosity.

One of our most common fears in organizations is that of uncertainty, the unknown and the ambiguous. Ambiguity, uncertainty and complexity discomforts most people who are unable to cope and develop stress and anxiety. Most people actually have a need for customs, procedures, rituals, routines, and traditions, etc., for security and stability. Even though this may cost many opportunities for personal growth the benefits of comfort and security are worth it in most people’s view. The roots of conformity go deep from the time of being reared as a child to what is socially right and wrong behaviour. Children are also taught the social severity of deviation. This is why conformity is difficult to let go easily where a person needs to question traditions, structures and be exposed to other dynamic cultures.

Fear is also a group phenomenon where the group develops beliefs, norms and values that bind people together. Breaking the group’s beliefs, norms and values will lead to sanctions from the rest of the group. Conformity is another form of organizational rigidity which hinders creativity (Parnes and Meadow 1963).

Another form of fear is the fear of failure. In a mild form the fear of failure is a strong motivation to maintain sharpness, focus on doing a better job that creates some competitiveness in a person or group. However in the extreme form it may prevent a person take any risks and play things safe by not taking on any activities that may appear risky to a person’s self image, should they fail at the activity. For example, a bad review for an artist may turn him or her off doing anymore works. Therefore people with a fear of failure will stick to undertaking tasks that avoid competition and there is certainty that they will win. People with a fear of failure will look for excuses of why they would fail and go into excessive fright and nervousness when there is some form of test situation. A fear of failure can retard divergent thinking and discourage people from undertaking new activities (Khandwalla 2004, P. 293).

People also fear criticism and humiliation. In the mild forms, some level of criticism can be motivational. Criticism or humiliation can have the effect of bringing groups into more cohesion (i.e., to defend against a common enemy). Other effects of criticism and humiliation create touchiness and resistance to innovative ideas. An organization that has an atmosphere of negative criticism will destroy employees’ intrinsic motivation to the point they will fear to present any new ideas (Amabile 1998, P. 83).

Defensive Routines

Defensive routines are actions or policies that protect us from fear or embarrassment of exposing our thinking to others. Defensive routines form a protective shell around a group or organization that shields any scrutiny or attack upon its general assumptions that may produce pain or anxiety. Defensive routines can prevent people in organizations from seeing things, solving problems and learning. For example, management may focus on making short term profits by cutting down on costs, even if this may threaten longer term profitability. The ‘O’-rings on the space shuttle Challenger were numerous times by the engineers who did nothing about them because it may threaten the program schedule, thus preventing any dealing with the matter before the tragedy occurred. When sales fall, managers responsible may jump in and develop a program of discounts and sales promotions, without looking for any reasons why sales are falling, thus failing to learn the fundamental reasons behind the sales downturn. All these events hide the reality and truth of the situation. Things are hidden because there is a fear that errors will be found by others.

Chris Argyris (1990) proposed that most behaviour in organizations is shaped by a set of ‘governing variables’. This means that people will strive to avoid embarrassment and threats by advocating views without encouraging inquiry, undertake actions that save face or are defensive, design and manage situations in order to maintain control, evaluate the thoughts and actions of others in ways that don’t encourage the testing of the validity of the evaluation itself, attribute causes for things without really validating them and encourage defensive actions like blaming, stereotyping, and intellectualizing to suppress anxieties.

These ‘governing variables’ don’t necessary match the values that people espouse, so there ends up being an espoused theory of action and an actual theory of action (Argyris and Schön 1974). The behaviour contradicts with what is espoused. The actions taken are based on stress and mistrust as an attempt to escape exposure for something wrong. This type of behaviour prevents learning, creativity and the development of innovative solutions to problems facing the organization.

Complacency

Complacency was discussed in part II in relation to the concept of opportunity. But complacency also has an effect on creativity. When a company is immersed within the same environment on an everyday basis, this brings familiarity, where familiarity brings insensitivity to detecting any small or modest change. This is very important to seeing new opportunities. One of the best examples of blindness caused by complacency was the US car industry which didn’t take much notice of the Japanese car makers when they came to the US in the 1960s. It was only when the Japanese car makers gained more than 20% market share in the 1980s, the US car makers woke up to the threat and changing opportunities. The US car makers were hesitant to move into the new market segments created by the Japanese car makers, and became unable to innovate. Blindness due to complacency develops a lethargic attitude towards the need to be creative and innovative. Complacency is a primary reason why companies decline and completely disappear from the market place.

Time and Resources

Organizations most often operate according to schedules. Work hours are scheduled, breaks are scheduled, projects run according to timetables and product launches are timed. Schedules have advantages in that they create some pressure on an individual’s performance, something like when swatting for an upcoming examination at school, where there is a deadline to be met. If there was no deadline, most probably there would be little pressure to study. The effect of competitive and time pressure was partly responsible for the breakthrough in World War II, the arms and space race between the US and USSR during the 1960s. However continuous tight deadlines can turn into mistrust, where employees feel over controlled and eventually burnout.

However creativity requires time and tight deadlines can kill creativity. Many problems are only solved after a period of intense work without making any progress, where insight will come after a person has stopped thinking about the problem. Unfortunately the timing of insight cannot be controlled to conform to schedules. For serious creativity to occur time is needed for exploration and incubation. The pressure to solve problems quickly is a major obstacle in solving problems as they require insight to solve them. Tight schedules also undermine technology or new product breakthroughs that need to occur from continuous experimentation and trial and error.

The correct resources are also needed to develop creativity. Work groups should have the right diversity and backgrounds within them with an interdisciplinary scattering so there can be a diversity of perspectives. Homogeneous teams may tend to reach compromise solutions avoiding intergroup conflict. There must also be the resources necessary, i.e., labs, office space, funding and time, etc. for the group to do their job. This includes the right physical space so work can be undertaken efficiently. However too many resources and facilities can also hinder creativity by developing an isolated comfort zone. Many breakthroughs have come from individual inventors with very limited resources, rather than large corporate R&D labs.

Organizational Culture and Management Style

The prevailing organizational culture and management style of a company has a major impact upon the creativity of the organization. The general beliefs and values within the organization are greatly influenced by the management style practiced within the organization. Management style may either encourage or hinder creativity. Teresa Amabile (1998) proposed that management style influences employees’ sense of challenge, freedom, availability of resources, work group composition, supervisory encouragement and organizational support for creativity.

Teresa Amabile believes that managers don’t always match the most suitable people to an assignment to optimize creativity. Often people with the wrong expertise and motivation are given jobs that are not suitable for them. Once people have been allocated a task they should be given the maximum freedom to undertake the job, i.e., authority and responsibility. This allows employees to work on the problem with their own expertise and creative skills and develop intrinsic motivation along the way, where they can gain a sense of ownership. Managers often fail to define clear objectives and give true autonomy to a job, thus hindering creativity.

The amount of resources allocated to a project can support or kill potential creativity. The assembly of problem solving or idea generating groups is very important where a diversity of views and perspectives can be gained. This requires putting people together that have different intellectual bases and creative styles. Amabile (1998, P. 83) considered it very important the group members share excitement, help their teammates during difficult periods and also recognize the unique knowledge and perspectives of the other members. To be able to assemble such groups managers must have a deep understanding of their employees. Selecting a homogenous group will tend not to be as creative as a diverse and motivated group, which can be very powerful if differences don’t turn into conflict. The best atmosphere to provide for this group is one of supervisory support that underlines to the group that their work is important to the organization. Managers will quickly kill creativity if they criticize new ideas, give across the attitude of skepticism, or take a long period of time to respond. Finally, creativity is enhanced when a whole organization is supportive of it. Organizations that make creative people the heroes will put a positive emphasis on creative behaviour. Very few organizations actually have this positive attitude towards creativity. This is particularly the case where many people see giving criticism to others is a way to look intelligent to the boss. Problems then start becoming considered in the light of political gamesmanship. These organizational dysfunctions take attention away from work and clutter up open communication with gossip and games, destroying the potential for positive collaboration.

Other Blocks to Organizational Creativity

There are a number of other potential blocks to organizational creativity, some of which were discussed at length during part II of this book. Leaps of abstraction are very quick generalizations made about situations. These generalizations impede an objective view of the environment and situations that may occur within it. Groupthink and collective thinking, especially within homogeneous groups often lead to the suppression of ideas and information people for particular reasons don’t want to hear. This leads to failure for the group to canvass the important issues and less than optimal decision making. The benefit of collective thinking in many cases may be a fallacy according to De Bono (2002), where a person working on their own may produce a lot more new ideas than those working in a group.

To build a creative organization actually requires an understanding of what management factors foster creativity and what impedes creativity. Creativity within an organization needs;

· Expertise and interdisciplinary knowledge – technical, procedural, formal, informal, practical experience, and intellectual thinking. There must be interaction with other professionals to develop interdisciplinary approaches to generating ideas and solving problems.

· Motivation – inner passion to find and solve problems, where this motivation should be intrinsic rather than extrinsic.

· Time to enable incubation of ideas or undertake exploration through trial and error, and

· Creative thinking skills to enable flexibility and various methods to look at and solve problems as well as generate new ideas.

To be creative in the organizational sense, the idea or solution must be appropriate, useful and achievable. It must influence the way business is done, improve productivity, or show a new way of doing something.

Conclusion

In this chapter, the author has argued that the process of creativity depends upon a number of elements. The raw material for idea generation and problem solving comes from knowledge. A person cannot move forward in a field unless they have knowledge. Knowledge comes from many sources, has various accuracies, reliabilities and truths. The different levels of knowledge were shown back in figure 4.16., which affects the quality of decision making.

Different forms of knowledge have different benefits to the creativity process. Expertise is the sum of all the other forms of knowledge and can be applied directly to problems and the creative process. Technical and intellectual knowledge are two forms of explicit knowledge which can be expressed in words, numbers, data and other forms of information. Practical knowledge and experience is tacit, based on personal knowledge, hunches, insights and intuitions. Tacit knowledge is deeply rooted in an individual’s modes of actions, ideals, values and emotion, a person embraces (Edvinsson and Malone 1997). All these forms of knowledge create a person’s cognitive dimension, consisting of beliefs, perceptions, ideals, values, emotions, and ingrained mental models, which gives a person a sense of personal mastery and wisdom in a particular domain. However it must be remembered that knowledge can both enhance and hinder creativity.

Intrinsic motivators are essential to creativity. There are both positive and negative intrinsic motivators, which are based upon our basic primal and social emotions under ego influence and control. The lower negative intrinsic emotions are usually overpowering on a person. This is related to our ‘leftover’ primitive survival instincts. Conversely, our higher positive intrinsic motivators tend to be related to our sense of social altruism and self actualization or spirituality. These various forms of motivators influence our creativity and decision making processes. For example, a person motivated by greed and anger will be driven by blame and retribution, whereas a person motivated by self actualization will be driven by their desire for spirituality. Different motivations will result in a person seeing the world very differently. The hierarchy of creativity motivations is shown in Figure 4.33.

Figure 4.33. The Hierarchy of Motivations for Creativity

According to Amabile (1983) people do not really undertake creative work within a field unless they truly love what they are doing and focus on the work rather than the potential rewards. This infers the optimal types of motivation for creativity are positive intrinsic motivators, self mastery, the power within and exploration and improvement.

It is also very important to have thinking styles that allow one to think in different ways. Different forms of creativity depend upon the style of thinking used. The various creative thinking tools discussed within this part utilize one or more forms of these thinking styles. Miller et. al. (1996) described four different styles of creative thinking as;

· Modifying where facts and figures are used to develop new actions that improve upon what already exists. This is a problem solving style of creativity where facts and figures are used in various methods of decision making that have worked in the past. This is a means of improving efficiency and making incremental improvements within a stable environment. Persons using this style tend to maintain their original assumptions and be comfortable with using facts and figures and dislike working within an ambiguous environment. This approach would be very useful for product, process and business improvement within the same product/market/industry set.

· Exploring uses insights, finding ways to perceive new connections and metaphors that yield new perspectives. This is achieved through amassing lots of information in the hope that it will lead to new insights. Exploring allows assumptions to be challenged. Through insight we can develop new ideas that tend to be novel approaches to what is already done. This approach would be very useful in finding new products and opportunities to develop. This approach is used in some parts of Synectics.

· Experimentation uses facts and observations to find new ways to develop a concept or solve an existing problem. Experimenting is based on a cyclic trial and error process that will expose problems with a variable that can tend be changed or modified. This approach is the most disciplined of all the styles and often requires great perseverance. Experimentation is very good for developing a new product or process, improving it, or refining a design, etc. This form of creativity style is excellent for refining concepts into ideas and exploitable opportunities. This style is sometimes used in reengineering.

· Visioning or imagining the future looks for foresight that will create a desired future situation to take action upon. Visioning is a very instinctive, intuitive or even fanciful style of creative thinking which can emerge with novel concepts, ideas and potential opportunities. This style is sometimes used in Brainstorming, Synectics and competitive imagination.

However these styles of creativity must be accompanied with intellectual skills, a) to see problems in new ways and escape the bounds of conventional thinking, b) the skill to recognize which ideas are worth pursuing, and c) to know how to persuade others as to the value of the idea (Sternberg 1985).

Another factor important to creativity is our perception of the environment. As we have seen, perception is subjective rather than objective, being heavily influenced by our mental models. Our sensitivity, curiosity and attention are all influenced by a complex group of factors which have been explained within their respective sections. Triggers act upon the interface of the environment and our sense of self, and influence our motivation, energy and curiosity. Finally our unconscious cognitive processes within our sub-conscious re-organize information in ways that may provide insights into new perspectives upon problems or potential opportunity concepts. This is especially evident during the incubation period of the creativity process. A overview of the factors that influence the creativity process is shown in Figure 4.34.

Figure 4.34. An overview of factors that influence the creativity process.

Stories of entrepreneurial successes show that the road to lucrative exploitation of opportunities has various routes and methods. The ways to success are as diverse as success itself. There are the stories of serendipity where things were discovered by accident. The game of rugby, x-rays, penicillin and Teflon were all discoveries made by accident. However it is not the discovery that makes success, it’s was the hard work afterwards. Some may explain Bill Gates success as knowing where there is a willing buyer and seller at the right time. Is this vision, hustling, shrewdness or ruthlessness? Ray Kroc saw a model, but it took action upon his part to make it happen. Did he discover opportunity or was he an opportunist? Tony Fernandes, the founder of Air Asia followed a business model clearly established by others in different continents. Is he a visionary or is he a copycat?

Forget about the semantics above, the important point here is that creativity and the corresponding innovation is easy to pass judgment upon in retrospect, but was no doubt a challenge to each of them before their respective successes, requiring both insight and foresight. Creativity is wide and varied and innovation is subjective. There are too many possible variables in the model to prescribe successful strategies. Each success in a way is unique, based on the various factors and situations. It is not always a case of incremental or radical innovation, as a new opportunity may require a number of innovations patched together in order to be exploited successfully, as we will see in chapter five.

Every individual has a different set of traits in relation to the factors that influence creativity. These include different levels and types of intelligence, energy, laziness, boredom, troubles at home, within society or work, etc. One will also be influenced by different emotions and aspirations. Thus creativity is not evenly distributed around individuals and to some degree creativity can be considered a scarce resource. In addition creativity is often latent and underdeveloped in people. Creativity is important in start-ups, when product lifecycles are coming to an end, industry structures and supply chains are changing, technologies are converging and being improved both incrementally and drastically, regulation is changing and global influence is strengthening. It is through creativity that firms compete with each other within and across industries. Behind the concept of entrepreneurial management and marketing lays the concept of creativity. Creativity is what assists in the opportunity identification process and strategy crafting, thus creativity is an intangible asset that differentiates companies. Creativity is what blends together resources, skills, capabilities, technologies, products and networks within some form of blend that is unique and may have advantage over others. Creativity is the tool that helps a firm respond to unfamiliar situations by modifying existing routines (Jones and Craven 2001).

Creativity is evolutionary and social. It is influenced and influences our social evolution, and it is a manifest of the human mind. This is supported by our growth of knowledge and the behavior of other people. Creativity is thus the generative part of our lives, the economy, and our social and cultural systems. The next part of this book will look at the sources of opportunity, resources, skills and capabilities, and networks as the ingredients that make up opportunities and strategies to generate the continued birth and rebirth of novelty, growth, prosperity and the future images of our society.

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Notes:

[1] For example a painting or piece of art may not be recognized by the art community as being creative until many years after it has been created. This leads to the situation where many pieces of art only accumulate value after the artist has passed away and the act of creativity is only realized as such long after the event.

[1] Oxford Dictionary definition.

[2] As a child we learn that we cannot jump off the roof and fly like a bird and cannot jump out of a moving car etc. The inner assumption of not being able to achieve our fantasies is a primal assumption designed to keep a person out of harm’s way.

[3] This is something common in many great achievers in public life.

[1] To find out what aspect your creative sensitivity exists, think about what issues your find repulsive, irritating and distressful.

[2] For example, a person may be spiritually sensitive and as a consequence become devoted to a particular religion or philosophy. One will have changing levels of commitment to their spirituality as life progresses and certain events happen.

[1] For example, when people try to explain the throwing of a ball straight up in the air, the motion may be described as the ball having an initial upwards force which slowly dies out until it is balanced by gravity at the top of trajectory. In contrast a physicist may explain the ball throw in terms of gravity exerting a single constant force, which gradually changes the momentum of the ball, i.e., going up with a declining positive momentum, at the top with a zero momentum and going down where the momentum is increasingly negative (DiSessa 1993).

[2] This is perhaps why innovation is only incremental on the whole. To develop completely new innovations, where paradigms are shifted requires thinking beyond the base of domain prior knowledge (Kuhn 1970). When an individual utilizes some unrelated prior knowledge to the domain that one is working within, then transformations rather than incremental changes can occur.

[1] For example the field for a consumer product manufacturer will be all of the consumers, competitors, suppliers and regulators regarding the markets the company serves. The field for a nuclear scientist will be limited to a few thousand scientists, selected institutions and regulatory bodies, etc.

[2] Refer to Pierre Bourdieu’s concepts of habitus, field and capital in chapter three.

[3] Margaret Boden gives the examples that Darwin’s grandfather had similar ideas of evolution, Shakespeare was influenced by plots from Plutarch, Bach was influenced by themes from Vivaldi and Picasso was influenced by pictures by Velasquez.

[4] Feist also pointed out that the relationship between affective illness and high levels of creative accomplishment applied mainly to artistic and not scientific creativity.

[5] This study also found that when there is positive affect may signal that the affected state is well, they may have achieved their creative goal and there is no need to do anything. As a consequence positive affect may dampen creativity.

[6] In this section the author uses the term ‘ego concept’ as a composite.

[7] This was seen in the hierarchy of totalitarian regimes over the centuries, and can be seen in marriages where one partner dominates the other.

[1] Misleading information cues can be forgotten as time elapses can also partly explain why a problem may be solved after a period of time.

[2] It must also be mentioned that there is skepticism about the effects of a sub-conscious incubation period (Dominowski and Jenrick (1972), Olton (1979), Olton and Johnson (1976).

[3] One must have sufficient domain and field knowledge to draw upon, even at the sub-conscious level. Sub-conscious processing must still remain within the bounded patterns of knowledge within the domain and the field. Knowledge is also necessary to be able to reject some parts of accepted domain knowledge in favor of new theorem and hypothesis, where new advances in knowledge are made.

[1] Anterior superior temporal gyres

[1] One must mention here that being an innovator does not necessary imply more success than an adaptor. Innovators have the challenge of convincing potential customers that their breakthrough has benefits and advantages over what is already available on the market. In contrast the adaptor is raising the level of the market to a new point of competitive advantage favoring the adaptor over other competitors.

[1] Tacit knowledge is generally acquired on one’s own, usually unspoken and implicit, procedural in natural, not readily articulated and directly related to practical goals that people value (Sternberg 2002, P. 11).

[1] An example of how assembly coding enables the identification of novel objects through flexible recombination can be understood by seeing how a small child may identify a cow for the first time, if they have no previous experience or understanding of what a cow is. The child upon seeing the cow at the zoo identifies the cow (a novel object) as a large version of the dog, he or she has at home. It is only after the parents explain that a cow is a different animal to a dog, that the child can refine his or her identification of the cow as a separate animal to a dog. Reading is another activity that shows how the brain can understand the recombination of letters making up different words, sentences and paragraphs into unique meaning.

[1] Sub-environments can be made up of a domain or field, an industry, a community, a region, an infrastructural service like education or the court system, a family, or an organization, etc.

[2] A ‘mess’ is a complex issue which does not have any well defined structure, making it difficult to define the actual problem. Complex issues usually have many factors involved, of which many cannot be quantified. In problem solving these problems must be considered as a whole because many factors are interrelated in ways we are not sure. In contrast, problems have much more defined structures, of which we have more understanding. There are usually a number of alternative solutions, depending upon resources at hand and the value systems used for decision making. See Ackoff (1974).

[1] The power to act will depend upon, skills, competencies and capabilities, resources, networks, an competition, etc.

[2] Hard data can be classified as any quantitative data, data collected from flows, organizational data from reporting channels, products and the organizational structure. Soft data would include hunches, guesses, intuitions, perceptions of the people involved I the problematic situation, judgments about skills, competencies, efficiencies perceived status, attitudes, motivated needs and individuals (Checkland 1981).

[1] However if early ideas or potential opportunities are already perceived, the process should not be stopped. Going through the other stages may help generate other alternatives which may also warrant consideration.

[1] See: Look poor to avoid attacks: Oz top cop to Indian students, NDTV, 7th February 2010, http://www.ndtv.com/news/world/look_poor_to_avoid_attacks_oz_top_cop_to_indian_students.php

[1] A typology is a simple model based on the possible combinations obtained between two or more variables with each variable containing a (finite) range of discrete values or conditions.

[1] This emulates the strategy of the Andrew Jergens (now called kao Brands) shampoo Gee Your Hair Smells Terrific in the mid 1970s. The product was boosted with a perfume that left a long residual odour on a person’s hair during the day. The advertising campaign used this benefit to highlight the product and it became a very successful product within the teenage category for a number of years during that period.

[2] The Boston Consulting Group matrix can be considered a simple morphological typology. Igor Ansoff (1965) also used adaptations of simple morphological typologies in his seminal book “Corporate Strategy”.

[3] However very often in complex problem solving the original objectives themselves may change during the process.

[1] Metaphors require a social imagination so that everyone understands the symbolism of the metaphoric suggestions.

[1] This can mean object, person or event.

[2] Johns (1994) included reflective practice cues like: Aesthetics, What was I trying to achieve? Why did I respond as I did? What are the consequences for others?, Personal, How did I feel in this situation? What internal factors were influencing me?, Ethics, How did my actions match with my beliefs? What factors made me act in incongruent ways? And Empirics, What knowledge did or should have informed me? How does this connect with previous experience? Could I handle this better in similar circumstances?

[1] Client-centered therapy developed by Carl Rogers in the 1940s and 50s is a non-directive method of therapy using the technique of active listening. Active listening involves reframing and rephrasing what the client said to confirm understanding. This technique is intended to be unobtrusive to the client.

[2] Richard Florida (2002) believes that the two major ingredients required for innovation are talent and tolerance. Therefore high-tech industries will develop in some regions faster than other regions because they are open to new ideas by not being judgmental upon other points of view. Consequently Florida said that the gay index is an excellent measure for potential innovation, not because innovative people are gay, but it is a revealing indicator of mental openness and tolerance, necessary in creativity.

[3] As we have limited cognitive attention available intellectual self centeredness tends to monopolize this resource leaving little, if none available for creative processes.

[4] Extreme cases of hierarchical rigidity can exist where those a hierarchy are expected to give absolute obedience to their superior without any question and those above have absolute authority over those below them.

[5] However one must remember in complex game theory many outcomes may end up relying on chance due to the multiplicity of factors involved.

[6] The research and development laboratory at 3M was trying to develop a more effective glue, but they were unsuccessful. The new material did not harden and always remained sticky. As the story goes one of the secretaries of another department learned about this material and started using it for sticking small memo notes to the surfaces of her workstation. All the other secretaries followed and the concept of the product Post-it emerged. So a use was found for a material that was first thought to be useless and a failure.

[1] The technology to develop the jet engine and some advanced aerodynamic designing came from Scientists in Nazi Germany who defected to Britain, the United States and Soviet Union after the war. The same goes for the rocket engine, where after being developed in Nazi Germany, technology and personnel continued their work in both the Soviet Union and the United States leading to the space race and development of the intercontinental ballistic missile.

[2] In contrast, an outsider unless having some specialized skill important in the field, may struggle to develop the intricate understanding that an insider has.

[1] A person’s construct depends upon their experience of events and people and their emotions about their experiences. A person’s construct will also depend upon their own motivations and situation.

[2] This term could just as easily be reconstruct, recombine, regenerate, or transform.

[1] The position of opportunity refers to the characteristics of an opportunity based on demographics, technologies, regulation, economic conditions, etc. Opportunity slowly changes where demand patterns very slowly or rapidly change depending upon the industry.

[2] At the turn of the 20th Century, the business community was primarily concerned with manufacturing and assembly. There were no guide books or management manuals to assist managers at the time and management thought had been guided by historical antidote. Frederick Taylor was an engineer who carried out time and motion experiments on the workforce at the two steel mills he worked at. Taylor came up with a set of principals in what became known as scientific management. Taylor believed that the principal objective of management was to secure the maximum output per worker, taking all thinking away from the shop-floor. He laid down a set of guidelines for managers to determine the single best way of doing things, eliminating all useless movements. Workers would be set targets and quotas with incentives and penalties. Management would walk around the shop-floor timing workers performance and measuring it against standards. Management would be able to find the best person to perform each action, thus leading to optimum efficiency.

The concept of scientific management sweep through corporate America. It was seen as a solution to poor worker motivation, which was considered a major problem at the time. Scientific management had its critics then and now, been seen as dehumanizing. It was also criticized for focusing on quantity and ignoring quality. However, scientific management was the first set of management principals that could be put into effect by managers at the time. In fact, there are still thousands upon thousands of factories around the world today that utilize this philosophy, without managers even knowing it is scientific management. Ninety years later elements of Taylor’s principals have re-emerged in Hammer and Champy’s concept of re-engineering.

[3] Reengineering as practiced relied on outside consultants who diagnosed the problems and specified remedies with little involvement of internal employees. This approach tended to ignore the ‘cultural’ and ‘historical’ aspects of a company, which are very important to meaning for those within the organization. Meaning implies motivation for a person to be in the organization and support its goals and objectives. When this aspect is ignored, employee motivation is likely to drop dramatically. This has occurred in many organizations utilizing reengineering.

[4] Here we mean ‘new to the world products’ as the first of their kind in the market. They are usually something invented or enhanced by a significant change or advance in technology, such as a new discovery or different method utilizing modified processes, materials or methods in producing a product. These products would revolutionize the market segment or even create a new market, which may require significant consumer learning to become familiar with the new product. Examples of this would include the progression from land line based telephones to mobile phones and now hand phones, the progression from typewriters to electric typewriters to word processors and personal computers, the change from wood, to gas to electric and microwave cooking and the advent of the Sony walkman and Ipods. New to the world products make up only a small proportion of new products and they are perceived as the riskiest types of new products to launch as manufacturers have to deal with consumers inexperience with the new concepts and incompatibilities with their prior consuming experiences, which act as barriers to consumer adoption.

[5] About 10% of new products launched are new to the world products, which increases to around 18% in moderate to high tech industries. New product lines (which are new products for a firm) are about 26% of new products, but much higher at 37.6% in moderate to high tech industries. Additions to existing product lines are around 26%, but dropping to 18% in high tech industries. Product changes and improvements are around 26% of new products, 19.8% in moderate to high tech industries and product re-positioning are 7%, but almost non existent in moderate to high tech industries. Thus, the majority of new products are developments and variations based on existing products.

[6] In the case of new to the world products, the technical and market specifications would have to be developed without direct referral to other products, completely through expanding upon a new idea.

[7] Examining patents can provide a deep understanding of how a product is manufactured. Skilled professionals can ‘work around’ intellectual property, i.e., find new chemical synthesis routes, assembly processes or utilize alternative materials to those mentioned in existing patents.

[1] It is necessary to select which product attributes (or principals) are important in the product mapping stage.

[1] The children of the Millennial generation are now going to school. They are much more impatient than previous generation and don’t have the same discipline, although they are experts with new technologies. They have been brought up with more gadgets and money than previous generations and their play has been almost entirely with today’s technology. Millennials have a strong desire to succeed and do things their own way (Carlson 2005), but how creative this generation is still up to debate.

[2] Most of these are discussed in detail in Chapter three.

[1] For example a pilot in night flight may have great difficulty in judging the distances of objects from the aircraft and personal orientation to the horizon. In this situation the pilot’s senses are confused and therefore must rely upon flight instruments rather than senses for information.

[1] For example, domineering leaders may tend to select people who will follow passively and are of the same social background, while high-tech start-up companies in Silicon Valley may select people based on knowledge and ability, regardless of social background.

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The sustainability of enterprises has been an important issue in business management for decades. It was talked about by management giants like Peter Drucker, where sustainability was seen in a company where there was long-term revenue over costs and depreciation. This defined the difference between entrepreneurship and business, where an entrepreneur moved into business mode when that happened.

The works of Steven Covey and Peter Senge enriched the research from the Tavistock Institute, bringing in issues of ethics, personal fulfilment, organisational learning, and wisdom into corporations in practical ways.

Environment, social, and governance (ESG) has encapsulated all of the above upon a platform concerned with climate change/global warming and politically correct or DEI based business. Thus, ESG espouses sustainability, while encapsulating the values within the ESG framework.

However, the reality is that such organisations rarely exist, and those that do aren’t sustainable.

Going back to ‘bread and butter’ management

The bottom-line for any business, be it an enterprise, company, or corporation is the stable of products and services it has, and revenue they can generate.

However, all products and services have finite lifecycles, where product and service lifecycles today are becoming shorter than ever.

The challenge to the problem of limited product and service lifecycle is creating new products, and/or diversifying. Look at what happened to DVD rental shops and photo developing outlets. For those owning these types of businesses, there are not always new products or services available that can be developed, or new areas of diversification to keep these businesses going. They must exit and close down their businesses.

Likewise, diversification is not always a clearcut matter. Just look at the current turmoil in the automobile industry. No one for sure can predict, which direction the industry may proceed over the next decade. Technology, political narratives, consumer preferences, and brave boardroom decisions will eventually decide the industry’s fate and future directions.

Through creative destruction, an industry dies and a completely new industry arises, most often with new companies and brands. Remember Singer, Nokia, IBM, and Blockbuster Video. New innovations and their sponsoring companies recentralise a new industry, and usually turn it into one with high barriers to entry for any new comers without massive capital and market/industry connections.

The only way to enter is to either change the nature of an industry through innovation, or create a completely new one. Sustainability doesn’t survive in such an environment. From these perspectives, sustainability is a myth.

Long established sustainable industries are a rarity

There are very few Coca Colas or Pepsis in the world. The death of the aviation transport giant Pan Am in the late 1990s was a shock. This was soon followed by a surge in low-cost No-Frills airline business models, which turned around the industry. Household names in the finance industry like Lehman Brothers in 2008, showed that size is no protector of sustainability.

The brands we know today are most probably not around a generation ago. Just look at the new EV company manufacturers, who are taking over the automobile industry, that was considered stable. Singer could not diversify enough to remain as relevant to consumers and households today, than it did a century ago, and IBM is struggling to stay afloat in a crowded industry. Household cleaning brands that dominated global markets a generation ago like SC Johnsons, Kiwi, and Reckitt & Colman have drastically declined in their visibility.

The suburban dream of owning a sundry shop, hardware store, or bakery, are challenged and crowded out by chains owned by super-conglomerates. Today, access to massive amounts of capital both creates and dominates any identified market opportunities around communities.

Nothing can be sustainable

The most likely scenario for nascent entrepreneurs today is like the following example. A person may obtain a contract to lay fibre-optic cables for a telco, and build a medium sized business fulfilling the contract. After all the cable has been laid, they newly developed company runs out of revenue and just disappears. The company borrows to buy vehicles, hires workpeople, and the owners enjoy the good times, adjusting their lifestyles around theit success. When it collapses, they must look for a completely new business opportunity.

An individual today must train up with skills for something, and then be retrained two, three, or even four times in their lives to survive. The hope that when their market opportunities evaporate, they are not in too much debt and can quickly exit the industry and find a new one to enter.

Markets open, grow, and quickly collapse, and the process is ongoing

This changes the whole concept of small to medium business, as well as the requirements for business education. People must be taught how to enter and exit industries rapidly, a number of times during their lives. They must be willing and able to take on new technologies, quick learning, the nature of new industries, and advance a new enterprise within this environment.

The key to this ability is possessing an entrepreneurial mindset. Maybe this should just be called being ‘street smart’. Education is not designed to develop ‘street smart’ graduates, who can take on quickly emerging opportunities. They must also be prepared for these same opportunities to disappear just as quickly as they emerged.

This doesn’t allow for sustainability.

The key here is developing the ability to learn how to acquire skills (both business and technical), being able to acquire the right set of capabilities to run the business, acquire the resources on a shoestring to do so, and find and develop stakeholders and business networks of influence that make things happen.

People have to quickly learn how to solve the industry-centric, as well as business-centric issues, the problems they will face. That’s what people need today, not an ESG framework that won’t solve these problems. Successful businesses must be driven by entrepreneurial intelligence, coupled with ‘street smartness’.

Shrewdness is probably one of the most important attributes within the paradigm of entrepreneurial intelligence.

Future markets and business

Markets are changing rapidly in their basic nature. Traditional sales and supply channels are primarily moving online. Very soon businesses in many countries could be hit with decrees and demands forcing companies to conform with ESG guidelines. These channels are under the control of governments working with Big Tech. They decide who can and can’t participate.

Artificial intelligence (AI) is already destroying the careers of people and changing the nature of how work is being done. The ability of MSMEs to use AI in marketing and administration may yet be outside the bounds of use. Governments may not assist MSMEs, thus this sector may not get enough assistance from government to adapt and could fall further behind large corporations in competitiveness. Bureaucrats in policy making may fail to understand needs here.

This could further squeeze MSMEs and their abilities to set-up to conduct business in the first place.

Unlike the past, proprietors cannot afford the luxury of being emotionally attached to their own businesses. Lifestyle type businesses may become a thing of the past. Proprietors will have to be continually in entrepreneurial mode, where sustainability will take a back seat, as people try to make their businesses viable.

Its one thing for the investment groups talking about ESG, and another to get the MSME sector to take ESG onboard.

Originally published in Eurasia Review 27th December 2024

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An opportunity is a gap in the market where there is the potential to do something different and create value (Wickham 2004). This represents a potential to serve customers better than they are already being served through a product or service that offers consumers more utility in terms of satisfying human needs than existing products or services. An opportunity must solve a problem, fulfil a need or want, create a fad or trend for any exploitation of it to have a chance of succeeding. New opportunities continually emerge but don’t necessarily present themselves openly. They must be seen, discovered and identified, which is the task of entrepreneurs and managers of firms. Not every idea is worthy enough to take action upon. The potential return on the investment of time and effort must be large enough to offset the opportunity cost of exploiting another idea or doing something else (Kirzner 1973).

All opportunities have a basis or rationale of being. If the opportunity is to be considered entrepreneurial, it must originate from a source of innovation, as entrepreneurial market activity is novel by definition (Kuratko & Hodgetts 2004). An innovation can be seen as the source that enables the successful exploitation of ideas into new products, services, processes or business models. Innovation is critical to enable a firm to grow and remain profitable. Innovation combines knowledge and the needs and wants of consumers that are the base of opportunities. Innovation is not just about the improvement of technology but covers all aspects of a business and the way it organizes itself and operates. Innovation is an ingredient needed to construct most opportunities that seek to exploit changes within the environment. Innovation combines knowledge, resources, capabilities and competencies with social networks to create new means of creating value.

Innovation can create new sources of competitive advantage for a firm when it enables incremental changes in the market. Revolutionary innovation can create new industries with new breakthroughs in technology and methods of organization. However there must be a reason for innovation, not just something done for the sake of doing it like what occurred with the launch of New Coke, replacing the well accepted Classic Coke during the 1980s. Likewise technology alone does not automatically yield innovation, imagination, development and marketing skills are needed. Innovation must provide the basis or source of opportunity that is intended to exploit a gap within the marketplace.

However not all sources of opportunity need be innovative and most ventures usually start with non-innovative ideas. In fact very few enterprises have neither, the time, resources, technology or expertise to research and develop new business ideas and innovations (Johnson & Tilley 1999).

A business begins with an idea that has been deemed an opportunity through some form of analysis and a person is motivated enough to act upon it. The majority of ideas are derived from the following categories;

1. An old type of business that can be given a new twist or professionalism, i.e., McDonalds or herbal products,

2. A standard product or service that can be customised, i.e., recording birthdays on customer records so that congratulatory messages can be individually sent to customers by a company,

3. New technology that can be adapted to manufacture old products, i.e., desktop publishing, compact disks, faxes and email, etc.

4. Imported products that can be replaced with domestic products, i.e., the basis of many domestic automobile industries,

5. The changing of business models, i.e., sourcing products from a third party rather than manufacturing them,

6. Developing the same business identity in another geographical location, i.e., The opening up of Coca Cola, KFC and Pizza Hut franchises in other states and countries, and

7. Replicating another business and competing against the original business, i.e., the opening up of a bakery, milk bar, convenience store near another one.

Although entrepreneurship has been associated with opportunity, there has been very little written about the sources of opportunity. Attention has been focused upon the sources of innovation, rather than the sources of opportunity, which can be innovative or non-innovative.

Business development is concerned about the art of seeing and exploiting opportunity for the creation of value, which may contribute to the firm’s profitability, growth and/or survival. This process goes through four basic phases;

1. The discovery, identification or construction of ideas about opportunities through the creative process,

2. The screening of these ideas to determine whether an opportunity exists that has potential to be exploited,

3. The crafting of a useful strategy that is able to exploit the identified opportunity, and

4. The implementation of the strategy in a way that adds value to the firm.

There is an abundance of management theory about the identification and exploitation of opportunities from various points of view. Andrews (1965), Ansoff (1965) and Porter (1980, 1985, 1990) take the point of view that opportunity identification and strategy development is rational and analytical through convergent thinking process. Ohmae (1982), Mintzberg (1994) and Stacy (1993) see opportunity identification and strategy development as more intuitive and a creative process through divergent thinking. Others like Wilson (1994, 1998), Raimond (1996), Liedtka (1998a, 1998b) and Heracleous (1998) see opportunity identification and strategy development as a mixture of art and science. What seems to be important is a firm’s ability to recognise what information is important in opportunity recognition and subsequent innovative processes, its prior and related knowledge and experience (Cohen & Levinthal 1990), and its alertness, self efficacy, creativity, social networks and the type of opportunity itself (Ardichvili et. al. 2003). Previous entrepreneurial experience may assist in developing an ‘opportunity intellect’ that aids the identification of opportunities and provides a framework that allows informed and experienced based decisions about how to exploit an identified opportunity (Kaish & Gilad 1991).

The process of opportunity identification would appear to be an emergent rather than a deductive process, requiring divergent rather than convergent thinking. Innovation is generated through social interaction where data cannot be analyzed in logical ways. For example quantitative market research may be very limited in the information it can provide a person who foresees the possibility of opening a sandwich bar next to a commuter train station or a courthouse. Understanding consumer behaviour, their wants and needs will be more important in making any decision to exploit the perceived opportunity. Therefore seeing opportunity is more related to the ability to imagine and associated emotions. New ideas are constructed, not analyzed. The future cannot be forecast, it can only be explored (Schumacher 1974, P. 200).

In order to see the potential sources of opportunity one must be able to take a strategic view of the firm and the environment. A strategic view is one that can pick up subtle changes in the environment through a degree of sensitivity and alertness and be able to extrapolate any linkages and connections discovered into idea scenarios that can be evaluated. An individual will tend to be more sensitive and alert in domains that he or she already has knowledge and experience.

To see opportunity there must be motivation or intent. Hamel and Prahalad (1989) conceptualized the concept of strategic intent where there is an intuitive vision of the future direction of the firm. This helps to provide focus on the domain and selective parts of the environment that are considered important to the firm’s future. Therefore as well as being a motivator, strategic intent concerns itself with the immediate domain and the firm’s perceived capabilities and prior learning linked through prior knowledge. Strategic intent also gives a sense of destiny and direction (Hamel & Prahalad 1994, pp. 129-130).

The discovery of useful sources of opportunity in the construct of opportunities is tied to observation of environment changes over time. Changes in the environment usually occur in an evolutionary manner which the average person will not be aware and think about. Connectiveness of the past and present to the future must be incubated by the individuals who make up the firm over reflection and time.

Alternatively sources of opportunity may be driven by new technologies, either as an incremental step or breakthrough. New technologies incorporated into products, services or improve production processes can potentially add value to a firm. With novel breakthrough technologies a firm may be able to create a new market segment, i.e., P&Gs development of Pert/Rejoice 2 in 1 shampoo, or even a new industry, i.e., the advent of cellular phones created a new industry separate to existing landline phone networks.

The firm will operate according to a ‘self hypothesis’ which is influenced by learning and prior knowledge. A ‘self hypothesis’ is a shared mental model of the environment and the firm’s place within it. The firm’s ‘self hypothesis’ is where the firm perceives its own strengths and weaknesses, those of its competitors, the potential reactions of competitors to an aggressive stance taken by the firm, weak spots and barriers within the field and areas where the firm should not enter or is safe to enter. The ‘self hypothesis’ is the firm’s view of the world, generating a perception of its own self efficacy. The ‘self hypothesis’ can be a barrier to seeing opportunities if one is not aware of the assumptions behind it.

Most influence of prior knowledge is manifested through the firm’s ‘self hypothesis’. Prior knowledge contains learning about what can and cannot be done within the market by the firm. One important role prior knowledge plays is in technical and tacit knowledge about products, business models, technology, consumers, and competitors, etc. Through incubation prior knowledge assists the cognitive system make linkages and connections which identify new sources of opportunity for the firm. The huge majority of ideas already exist in one form or another within the existing or another domain, another geographical location or in another time. We remember different ideas from past experience or observation of the environment. Past knowledge may assist in creating unique insights into the consequences of change occurring within the environment.

Alertness and sensitivity are qualities needed to see and pick up subtle changes in the environment. Our focus also plays a role in assisting to narrow down our attention to what is relevant to potential new opportunities. Finally it is important to know what to look for in finding new opportunities. Our opportunity intellect is a specialised knowledge which guides us through the discovery, evaluation and scenario building process of a potential opportunity. It is a strong entrepreneurial intuitive ability. The components influencing the strategic view are shown in Figure 1.

Figure 1. The components of the strategic view.

Therefore new sources of opportunity can be pushed out by a firm as a new product or service into the marketplace or be pulled by unsatisfied customer needs. Some innovations go on to be successful as the product or service is what customers are looking for, while others miss fulfilling any latent customer need and fail. In the case of failure mistakes can be felt very quickly with a product, service, or even business failure, which may prove very expensive.

The sources of opportunity

Peter Drucker (1985, P. 34) remarked that we cannot develop a full and complete theory of the sources of opportunity, yet we can understand where opportunities may come from. The overwhelming majority of successful innovations exploit social, economic and regulatory change or new and improved technologies. New to the world breakthrough inventions may provoke change as did the aeroplane to commercial aviation, the telephone to communication and the television to entertainment, etc. New technologies often make great changes to the way we live our lives as we are beginning to see through new advances in biotechnology and genomics.

Innovation requires a systematic and disciplined way of work based upon what the innovator sees and learns from the environment, particularly in his or her own domain. All sources of opportunity must be based on purchasing power which is the ultimate driver of innovation. For example, very few people in Malaysia could afford to purchase a new Proton Saga car when it was launched in Malaysia during 1984, if it was not for the innovative leasing packages attached to purchases of the vehicles. Finance packages made the Proton Saga car available to many new potential car buyers through its easy access to lower middle income groups. This was the innovative part of the proton business model that enabled the company to gain over a 70% market share in Malaysia during the late 1980s and throughout the 1990s. Finance changed the Malaysian car market from a supply driven to a demand driven market. These forms of social innovation often have much more impact than technical innovation.

The author has divided the sources of opportunity into six main categories, market void, technology infusion, structural changes, resource monopoly, regulation and non-innovative. Each main category has a number of sub-categories (see Figure 2). Further, each source of opportunity will have a different impact upon the environment. It may;

   - Increase efficiency with small intensely focused productivity improvements by improving what already exists through minimal investment. These types of sources of opportunity can be seen in many quality programs that manufacturing and service industries engage upon.

   - Make evolutionary changes incremental to the market place focused on improving existing products and services like bank ATMs, Dell Computer’s mass customization of home computers as per customer preferences and Toyota’s development of specialized distribution channels for the Scion brand targeted at Gen Y, etc., and

   - Make revolutionary changes through radical new additions to the market place that change the way people think about and do things, which may lead to changes in existing structure of the industry and/or marketplace, like the invention of the motor vehicle at the beginning of the 20th century and Henry Ford’s development of the mass production line around 1914 which brought the product from something only the elite could afford to something affordable to the middle classes of the United States (Dent 1994).

Figure 2. The potential sources of opportunity (Opportunity anchors) for a firm.

The result of utilizing a source of opportunity will be;

1. The development of new products which may exploit established technology, simply an improvement of what is already available or may offer a new radical way of doing something.

2. New services,

3. New production technologies,

4. New operating practices,

5. New ways of delivering the product to the customer,

6. New means of informing the customer about the product, or

7. New ways of managing relationships between entities.

Sources of opportunities are also viewed from different perspectives depending upon who is looking at the environment. Individuals with limited ideas, capital, experience, expertise and networks may look for an opportunity that returns them a wage rather than a profit. An entrepreneur with good domain knowledge and experience within an industry may have his or her own theory of ‘how things can be done better’ believing they have a personal theory of success and be very focused upon specific types of opportunities. A corporation will take a strategic view and analyse potential opportunity space looking at how to minimize or eliminate risks and uncertainty before moving into any form of action. Therefore each individual will look at different levels of return and profitability and approach the environment with different levels of capital, resources, skills and capabilities and networks.

A brief description of each source of opportunity is described below.


Market Void

Market void opportunities are those potential opportunities that may exist due to an unnoticed gap or un-serviced portion of the market. They include incongruities, demographic, and perceptual changes.

Incongruities: Peter Drucker in his book Innovation & Entrepreneurship identifies incongruities as a source of innovation. He defines an incongruity ‘as a discrepancy, a dissonance, between what is and what ‘ought’ to be’ (Drucker 1985, P. 57). An incongruity is a symptom of an opportunity to innovate. Consumers are aware of them, but not in an overtly conscious way that leads to the expression of their unmet needs. It may be a latent need, a yearning for some improvement or a want that there was something that could solve their problem. However these incongruities may only be visible to people with experience of the industry, being very difficult to detect by those outside the industry. Alternatively they may be visible to people who have that need. If incongruities are detected and exploited, they can be very powerful sources of opportunities that can lead to substantial growth for a firm.

Demographic Changes: Demographics represent differences in population distribution, age structure, ethnic and racial composition, employment levels, education status, and income distribution, etc. The proportion and number of women in the population, ratio of blue to white collar workers, unemployed to self employed, births, deaths, and immigration influences both the types and magnitude of opportunities available in a society. What people want, need, and purchase in aggregate can be correlated to specific demographic groups.

Perceptual Changes: Opportunities are created when a sizable proportion of a population change perception. A change in perception does not alter the facts, but the understanding and identity of a population alters to the point where meanings change. Changing perception is about changing attitudes, which lead to changing habits.

Technology Infusion: Technology infusion is an extremely important source of opportunity. The infusion of new technology into a field brings change and that change usually exposes further sets of opportunities. This can be clearly seen with the introduction of the internet in the 1990s, where over the last decade and a half the way people interact with each other and the rest of the community has drastically changed. Email has replaced letter writing, chat groups and other social media link individuals to the general community and special interest groups. People now seek news and information from conventional and alternative news sites and various sites that contain product information. People purchase products, airline tickets, make concert bookings and use commercial services like eBay, Amazon, Alibaba, etc.

Invention: An invention is a new product that may be a device, a composition or a process based on new knowledge which may be a breakthrough in technology, but not necessarily. an invention is the creation of something as the result of articulated and tacit knowledge, opportunity recognition or construction ability, entrepreneurial capacity and the use of techniques that aid in the process of creation.

Incremental Improvement: The technological evolution of an industry is usually characterized with a breakthrough product, followed by periods of incremental product change. The initial breakthrough product or radical innovation that commences the cycle of innovation is usually a form of product that utilizes a substantially different core technology to what is already in the market. The product also provides substantially higher customer benefits relative to established products within the industry (Chandry & Tellis 1998). During the subsequent evolutionary cycle of product improvement, firms alter the attributes and benefits the products they sell (Abernathy & Clark 1978, Anderson & Tushman 1990) while maintaining a specific core technology and form (Dosi 1982, Georghiou et. al. 1986, Henderson & Clark 1990) until another breakthrough of radial innovation disrupts the mark

Adaptation: Opportunities may be created by adapting some form of technology from one domain and applying it to another in new ways that create or enhance a product, service or process. The key aspect of adaptation is the ability to see other potential applications for existing technology and create or modify products, services or processes. Adaptation may utilize either fundamental or applied technology for the development of other unrelated purposes, or simply analogize an existing technology into another use. Some very good examples of adapting technology into other applications are the spin-offs of NASA technology developed during the space program.

New Processes: Where opportunities are based on new technical processes, many people within that domain will know that a need exists for process improvement, but are not sure of how to do this. New process improvement is usually sharply focused. There is a specific objective and a disciplined undertaking in trying to develop a better way of doing something. Opportunities for new process development are usually found systematically, often the result and follow on from the discovery of a new material, discussed in the next section. New processes often intertwine and overlap with new business process change discussed under the section of structural change. A new technical process often brings about a new business process. For example, the computerization of the banking industry and the development of the ATM, the process of undertaking electronic bank transactions have revolutionized the way people undertake their banking practices.

New Materials: New materials are usually the product of a disciplined development process, or sometimes occur by accident. New material development may also be motivated by regulatory change that bans or restricts the use of an existing substance or material. New materials exploit incongruities where a better product, if available would be appreciated and desired by users and consumers. New materials can bring a breakthrough or incremental innovation to an industry. An example of the influence of new materials on society can be seen through the development of industrial rubber. Rubber made a big impact on the manufacture of many products in a wide number of fields.

Structural Changes

Structural changes are important sources of opportunities and can occur through changing external factors or through the firm constructing them through strategy. These are discussed in the next three sections.

Changes in Industry Structure: Industry structure will usually change when shifts in costs, relationships alter, potential profits and emerging customer needs from economic, sociological, regulatory, or technological forces as detected and exploited. This presents itself in the conceptual elevation of a new product or service that may emerge to the level of being a potential and viable opportunity (Porter 1980, P. 215). This is often very difficult to see from within the industry as existing firms accept the tacit rules of the industry, have developed their capabilities and competencies according to the existing structure of the industry and become complacent. This was seen in the U.S. automobile and retail industry in the 1960s and the airline industry in the 1970s, where many incumbent firms did not detect industry changes (or ignored them) and made no changes to their strategy. New entrants came into these industries without much resistance from the incumbents and eventually took over market leadership.

New Processes: Another source of opportunity that alters structure are new processes. A new process within a business/or industry improves efficiency, enhances a service or product delivery and provides extra features and benefits to users and consumers, thus giving the innovative firm some form of competitive advantage over its rivals. New processes take advantage of incongruities, changing demographics, new target consumer groups, or regulatory changes, etc. New processes create business that didn’t exist before, either through creating new customers or winning over customers from rivals. A process change usually occurs through either the development of new technology or curiosity that creates the following types of questions:

- How can this be done better?

- How can this process be changed to solve our existing problems?

- How can the process change to meet the needs of consumers better?

- How can this process be simplified?

- How can this process create extra benefits to consumers?

A process change strengthens something that is operating less than optimal.

Adaptation, Combination and Integration: A firm’s success and also its survival are dependent upon the ability to adapt to the changing environment. Failure to do so will leave the market open to other competitors that have more relevant strategies and capabilities to exploit standing opportunities. The optimal position of the firm in relation to presenting opportunities is when its strategies, resources, capabilities, skills and networks are aligned to the target opportunity. However this alignment is not a permanent position as opportunity is continually shifting. Therefore a firm must be able to adapt its strategy structure, deployment of resources and relevant capabilities to the shifting opportunity. Alignment must match opportunity and the firm must adapt to it’s continually shift to maintain alignment.

Resource Monopoly

Very few industries actually operate according to perfect competition. Firms develop and exercise some form of insulation from other firms by means of real or fancied product differences from their rivals (Stigler 1968, P. 308). There are numerous products in the market but demand for them is far from being a random action. This applies to housing, automobiles, electrical appliances, travel and holidays, utilities (electricity, water and gas), food, and toothpaste. Products in each category do not necessarily compete directly, yet there is rivalry (Stigler 1968, P. 310). Every firm has some degree of latitude in setting prices before customers will start looking for substitutes. In this way firms have some degree of monopoly.

A resource monopoly is a general term referring to a situation where a firm controls all the resources necessary to produce a product, perform a service, or generally undertake business in a defined area. It is an economic term but also describes a source of opportunity when a firm has a monopoly advantage over a specific resource. In general the less competition from other goods and services and availability of substitutes, the stronger will be the monopoly position. Monopolies occur for different reasons, physical location, access to a particular raw material, control over a capability, a legal concession and restriction on other firms to compete, or a form of monopoly through powerful branding. These forms of monopoly will be examined in more detail in this section.

Physical Resource: A unique barrier to entry to other firms in a market is the procession of some form of unique physical resource. The mining industry is a good example of firms that can exercise market power over the exclusive access to a particular precious material or mineral. MMC Norilsk Nickel of Russia controls over 90% of the world’s nickel and the world’s leading producer of palladium. The De Beers group of companies controlled almost all diamond mining and trading in Southern Africa and Canada until the late 1990s through various methods of restricting the market (Kretschmer 1998). Companies that hold strategic claims for minerals that have, or are likely to have strong demand in the future will be in a position to make massive profits. For example, a mineral like lithium may have a large future as a material needed in batteries for hybrid cars. Mining companies that hold these resources will be in a good position to grow exponentially in the near future, if battery technologies require the use of lithium.

Capacity Resource: A capacity resource is an exclusive capability of an individual or firm to carry out a particular activity. This can usually be achieved in three ways; the need of specified qualifications or licensing to carry out a function, through specific skills and capabilities a person or firms have at their disposal, or through shear dominance and strength. Professional occupations like doctors, lawyers, architects, engineers, pilots, veterinarians and psychologists, etc., require a formal degree recognisable by a governing association of the profession and license to practice.

Legal Resource: Governments usually grant a restricted number of operating licenses to firms in the banking, finance, petrol distribution, communications and broadcasting industries. This creates an oligopoly situation where firms have some degree of pricing power, especially if they can combine another source of monopoly like branding and product differentiation. Governments may also limit the granting of licenses to gambling concessions and casinos forming legal monopolies where revenue above costs are shared between the government and concessionaire as taxes and profits respectively. Non-government organizations like sports federations also restrict membership of sports clubs like football which have some of the characteristics of a monopoly.

Brand Resource: Products and services produced by companies differ in terms of quality, reputation, location convenience, and so on. These factors influence the desirability of a product to various buyers. Each product or service has some form of uniqueness (monopoly power), and yet has many rivals. Porter (1980) defined two forms of competitive strategy that can build some degree of product uniqueness through product differentiation and focus upon specific niche markets. Porter postulated that through differentiation and focus a firm can develop some form of competitive advantage over its rivals. De Bono (1993) outlined the criteria through which a firm can develop a value monopoly, listing physical uniqueness, technological uniqueness, name recognition, dominance, cost of entry, brand image, and segmentation, as factors that contribute to creating a brand name that is desired by consumers over other brands. Chan Kim and Mauborgne (2005) took the concept of differentiation and creating product uniqueness further in their book Blue Ocean Strategy.

Scarcity Power: Certain types of businesses like retail providers located within a tourist, historical or sports precinct, entertainment, food and beverage in shopping malls and food vending in restricted places like airports, train stations, and the aircraft and trains themselves, etc, can exercise some degree of scarcity power. Scarcity power is a term used by Time Hardford (2006) in his book The Undercover Economist to describe a situation where a business can charge a price above the standard or going price in a particular location because of the unique location of the business away from other potential competitors at a crowd drawing location. This is why a cup of coffee is relatively expensive in many tourist locations, airports, and historical sites around the world.

Changes in the Cost or Value of Resources: Changing resource costs or values create new opportunities by changing industry and product cost structures. A change in the cost of a resource will make it either more or less attractive to consumers of that resource. For example the rise in the cost of petroleum makes the use of petroleum as an energy source less attractive. Due to short term inelastic demand, consumption will not necessarily decline, but will encourage serious consideration of alternative energy sources. From the demand perspective, an increased interest in ‘green technologies’ will increase the value of renewable resources, perhaps making them viable alternatives to conventional energy sources. This is the rationale behind the development of alternative energies and their relative economic feasibility to conventional fuels. As petroleum prices increase the viability of alternative fuels increase.

Regulation

Regulation determines who is able to enter a market/industry, how many, how firms must behave, and what other legal requirements they must satisfy. Regulation in some form covers most aspects of our society and influences the opportunities available to the population within it, be it the general population at large or a small select qualified group within it, with the barriers to entry it creates. Regulation determines what is legitimate and legal in society and what is illegitimate and illegal. Regulation determines what customers should expect, how protected they are in the decisions they make, and institutionalizes these expectations and protections. Regulation can define the product cost and pricing structures of an industry, determining its attractiveness to investors.

Effect on Process: Regulation concerning process determines which firms can enter a market through licensing, the ‘rules of the game’, how easy or difficult it is to start up a firm, environmental compliance, occupational health and safety, ethics, corporate governance and social responsibility, consumer protection and the raising of capital.

Effect on Product: Regulation concerning product specifies standards, what products are forbidden, and specific restrictions on the use of certain materials in the manufacture of nominated products.

Non-Innovative

Non-innovative opportunities are those which are not based on breakthroughs, incremental improvements in technology, or in utilizing novel business models to gain competitive advantage. Non-innovative opportunities include personal services and consulting, duplication of other businesses, extension of other business concepts, or copy and imitation of other products. Non-innovative businesses are risky, rely on hard and continuous work to succeed and survive.

Personal Service & Consultancy: Personal services and consultancy includes a wide range of activities including investment advising, personnel recruitment, real estate sales, tax advising, legal services, house conveyance, managerial consultancy, interior decorating, fortune telling, and any other personal service or consultancy that requires the provision of personal advice or any other service to clients. This type of business depends upon an individual having personal knowledge and experience in a discipline that people are willing to pay for, good personal reputations, personal selling skills, and contacts and deal making skills (Bhide 1999). These businesses are totally orientated towards exploiting short term consulting opportunities and success depends upon the ability to design and develop a good product (service) and the ability to deliver it well to solve the client’s problems. The industries that these businesses operate within are usually fragmented and sometimes localized. Little innovation can be utilized in developing products in this industry as it will be duplicated almost immediately by competitors. Flexibility is the key in being able to tailor solutions directly to the client’s needs. Customer loyalty can only be created by solving client’s direct problems with an excellent level of personal service and that he or she is satisfied in the value for money of the service. Developing a business plan to start up these types of businesses is of not much use because it is hard to gauge what business will come from where and for how long it will last.

Duplication: The concept of duplication is about a firm replicating its business model within a different business location, whether locally, regionally, nationally, or internationally. Duplication is a widely utilized source of opportunity (even by the most innovative forms) by many types of businesses involved in retailing, distribution, manufacturing, and service industries as a basis of their growth strategies. The aim of duplication is to replicate something successful in one place into another place. Where factors are similar, e.g. location variables, market size, demographics, consumer profiles, and the like, this process is relatively straight forward. Duplication is the central concept behind the opening of a new Wal-Mart, Costco or Carrefour store, a McDonald’s or KFC outlet, the Body Shop, a 7-Eleven, a Starbucks or Gloria Jean’s coffee shop, or a Kinokuniya bookstore. The duplicated businesses are controlled and coordinated through various forms of organization and control, including centralized management, centralized accounting and data capturing systems, decentralized management with highly formal procedural systems, or franchise agreements, etc.

Extension: Extension covers a number of sources of opportunity that resemble three of Ansoff’s strategy typologies, being pursuing growth through launching existing products into new markets or market development, launching new products into existing markets or product development, and in some cases launching new (modified) products into existing markets or diversification. Through such a gamut, extension is one of the most commonly utilized sources of opportunity exploited.

Launching existing products into new markets extends the boundaries of a firm’s existing scope of business and is thus termed market development. This is where a firm opens up a new market for its existing product or range of products. In order to succeed, the firm must extend its ability to market, promote, sell and distribute its products in the new market. The firm may simply duplicate what it is already doing in its existing markets into the new market scenario. If environmental or market variables are different then the firm may have to adapt its strategies to the different environment.

Copy/Imitation: The majority of businesses in the world are copies of other businesses somewhere else. They are basically a copy of a business or the proprietor has copied some of the elements of other businesses and incorporated them into his or her own. This is unavoidable as there is demand for products and services almost everywhere. Therefore there is a need for convenience stores, supermarkets, newspaper vendors, shoe stores, shoe repair stalls, coffee lounges and kiosks, fast and take-away food vendors, sandwich bars, boutiques, discount stores, second-hand stores, electrical stores, computer stores, accounting services, lawn mowing services, home repair services, mobile phone stores, etc. in more than one location, and consequently there is always an opportunity to copy a successful business model and place it somewhere else.

Relating sources of opportunity to strategy

After identifying and explaining each source of opportunity individually, it must be said that a firm rarely utilizes only one source of opportunity within its working business model. The lines between each source of opportunity are also blurred and entrepreneurial ventures may utilize two or even three different sources of opportunity within their working business models.

Opportunities can originate externally from the environment or internally through innovation within the organization. Common to both sources of opportunity is that creativity constructed the strategy to exploit the discovered opportunity. Consequently there are various sources of opportunity available to exploit and make a profit. This includes the creation of tangible products like automobiles, aircraft, soap and processed foods, intangible products like computer games and software, the use of physical distribution channels like supermarkets and discount stores, or through the internet by creating or utilizing a high traffic website. Some new products emerge through discovery or by using materials for different applications than what they were designed for. Other opportunities are created through the development of new production processes, or the creation of new business models.

Sources of opportunity are found through discovering new information that complements what a person already knows. New information that brings new perspectives changes a person’s meaning. This process of discovery may occur through a change in social demographics or attitudes, economic changes, technology changes, or regulatory changes. This could be a gradual process or be triggered by something drastic like a disaster of some kind, or an unexpected success or failure (Drucker 1986, P. 37). For example the development of strong anti-trust legislation in the United States created many opportunities in trucking, railroads, banking, airlines, and natural gas (Winston 1998). As we have seen in chapter two, opportunities occur according to a time, place, and stage of economic development and as we will see in chapter nine, opportunities are also the result of a particular competitive situation. In some situations chance plays a role in developing opportunities. Ventures may produce dis-continualties that allow shifts in competitive positions that may nullify the advantages of existing competitors and can result from the strategic decisions firms make. For example the apparel industry developed in Singapore during the 1980s as European countries placed quotas on apparel imports from Japan (Porter 1990, P. 124). Some opportunities may require a prior domain research, while others may not (Klevorick et. al. 1995). The best conditions for opportunities to emerge are when a market grows faster than production capacity, thereby creating more opportunities to add more production capacity. Growing markets will eventually segment (Christenesen & Bower 1996), allowing firms to specialize in particular niches (Geroski 2001).

Opportunity conditions tend to be more favourable for exploitation where there may be barriers of entry to prevent others from exploiting the same opportunity. For example in sources of opportunity based on technology infusion, the intellectual property framework provides for innovating firms to protect their inventions or innovations through patents. Methods of protection of innovations will vary from industry to industry, where company proprietary knowledge maybe a better way to protect information than through the formal intellectual property protection system (Levin et. al. 1987), particularly where technology changes rapidly or innovations are unable to be patented.

Different sources of opportunities require different levels of creativity ranging from no originality to radical innovation. Peoples’ capacity for execution differs as well. Revolutionary creativity will throw a stagnant market into turmoil and may attract violent retaliation from competitors. On the other hand creative ways of adding to markets can develop enterprises without the need of new technology or independent innovation such as is seen in the computer and mobile phone accessories market. Where there is no innovation involved, it is very important t understand the needs of customers to be successful. Innovation is an unnatural process in firms as we build up roadblocks against it (Crawford & di Benedetto 2002, P.15).

All new businesses have many factors in common; however an entrepreneurial business will have some form of intrinsic quality that will stand that business out from others. People with entrepreneurial and creative skills that try to do something different that result in the change of an industry are a minority in the population. Therefore most businesses start small and don’t last long. A large proportion of these businesses remain small without any significant growth because they don’t have the ideas or products necessary to differentiate themselves from their competitors. They fail to use strategy to develop some form of competitive advantage over their competitors.

Any strategy begins with identifying the sources of opportunity to exploit. These sources of opportunity should be relevant to the present scope of an existing firm or evoke a sense of purpose and passion from a person who is intending to engage upon a start-up venture (Dundon 2002, P. 147). A source of opportunity should be relevant to the firm and the market it will serve, the technology that the firm is accustomed to, and compatible with the people within the firm it interrelates with. The idea should be simple, must be able to be supported by an overall business strategy, must be distinctively new and better than what is already available, must be proven, profitable, implementable within the ability of the firm, and finally must be meaningful to consumers.

It is impossible to accurately foretell whether an exploited opportunity will end up being large and successful. There are too many internal and external variables that may get in the way of success. What’s necessary is that strategy be implemented effectively and the strategy itself aims to create leadership over competitors. This requires hard work rather than the ability to discover opportunities and strategic brilliance. Focus, determination, flexibility and ingenuity are the important qualities in strategy implementation. For this to successfully occur, the entrepreneur’s ability must be aligned with the needs of the opportunity and strategy components to be effective. It is important to understand the abilities and disabilities of the firm in relation to any opportunities and the change needed in strategy to pursue them, i.e., which type of strategies is a firm able to cope with and which types of strategies is the firm unable to perform? Therefore the set of core organizational competencies will need to change as new opportunities are pursued. This also requires the firm’s values that influence what type of competencies are valued to change as well over time. Certain values reflect the firm’s cost structures and control what an organization may or may not do. For example if a firm requires a margin of 40% on products, then any decisions will reflect that. Such a company would not be capable of going into low margin high volume businesses, even though that type of business may represent new channels and opportunities. Different companies exhibit different values and thus make different decisions on the situations they face.

Whether a firm is successful in exploiting any opportunity partly depends upon the firm’s strengths, competencies, networks, and resources. Strong competencies like good distribution networks lay down the infrastructure for a firm to launch successive products into a market. It is important that assets, competencies and capabilities the firm has at its disposal are suitable to support the strategy direction. In entrepreneurial start-ups where resources and competencies may be lacking, these must be compensated for through finding creative ways to cut corners or the use of charisma to assist in developing strategic relationships with potential customers, suppliers, and other resource providers.

Continually solving customer’s problems creates new opportunities for differentiation and erects new barriers to entry, perpetuating competitive advantage (Calvin 2002). Differentiation can be created by developing excellence in sales, marketing, customer relationships, cost, pricing, niche marketing, and operational procedures and efficiencies, etc. Proper differentiation creates a perceived competitive advantage in the minds of customers. However competitors can easily copy an innovative product. What they will have trouble emulating is the systems that incorporate many distinct and complementary capabilities that build the product. A business with attractive product lines, integrated manufacturing systems and logistics, close relationships with customers and suppliers, a culture of customer responsiveness, and the capabilities to continue producing a stream of innovative products is hard to copy (Bhide 2000, P. 15). Strategy must try to build up barriers to competitors and be executed well so it is difficult to copy.

Exploring new ideas in new and changing industries is much easier than making waves in mature industries. Product standards and the rules of competition have not yet been defined. Products that are too revolutionary may be difficult to educate consumers and not worth the investment. Companies in fast growth industries usually require a revolutionary idea with a leader that has an evangelistic ability in the implementation stage, i.e., Bill Gates, Steve Jobs and Richard Branson, to lure investors, customers, financiers, employees, suppliers, and build an organization. Founders who spend a long time in research, reflection and planning are no more likely to survive in their first three years than people who just seized the opportunity without any planning (Bhide 2000, P. 57). Entrepreneurs recognise their mistakes when they implement strategy and adjust it as they go along. However perseverance and tenacity can be both a strength and a weakness during the early days of a start-up firm.

Most firm strategy is about manipulating their current position rather than seeking wide differentiation and outright competitive advantage. Much strategy is reactionary, out of fear, rather than vision and thus tends to be short term and focused on risk minimization. Therefore most strategy follows primarily generic patterns which can be commonly seen in many types of product and service markets.

One of the most common strategies used by firms is to directly copy the competitor’s product or service just utilizing their own brand name or trademark. Other competitors may modify the product superficially in terms of colour, pack size, fragrance, taste, etc, within their own quality and branding paradigms, i.e., an economy version or a bonus size pack, etc. A third option is through creative imitation where the competitor adopts some common product configurations as the incumbent product (the imitation aspect), and develop their own twists or variations upon the product (the creative aspect).

A successful product or service is usually expanded in a number of ways. Firstly, a product can be launched in a new geographic market. Secondly, a product’s distribution can be expanded through new distribution channels. Thirdly, a product or service can be franchised or licensed to other companies in other markets, e.g. McDonalds, KFC, Pizza Hut, or Coca Cola, or a different type of product licensed with a well known brand name, e.g. Disney, Gucci. Finally, a spin-off firm can be developed utilizing the same brand and technology into another industry, e.g. consumer detergent and cleaning product manufacturers enter the institutional, industrial and commercial cleaning markets.

Firms will have to decide whether they should become early pioneers in a new market or make a delayed entry. Early market pioneers tend to be technically focused, proponents of radical change, visionary within the market context, project orientated, willing to take risks, willing to experiment, self-sufficient, and tend to communicate horizontally across disciplines (Geoghegan 1994). Although earlier entry may give the firm incumbency advantage, later entrants have time to look for product and strategy defects, pick up the incumbent’s blind spots, or launch a product with a superior form of technology, thereby outflanking the incumbent.

Opportunity models developed by strategy and marketing researchers may not fully apply to start-up venture opportunities. On more than one occasion, strongly embedded competitors like IBM have asked themselves how young upstarts have been so successful in pursuing opportunities that were not even on their radar screens.

The nature of opportunity pursued will define the strategies required and the type and shape of organization needed to support those selected strategies. The important question that needs to be answered is can the vision derived from the discovered or constructed opportunity be developed into a working strategy? (Walters 2002). The organization must be configured with the correct assets, structure, processes, values, leadership, resources, competencies, and networks to be able to creatively develop the capacity to execute strategies developed to exploit the identified opportunity, in order to be successful. Although this is very intangible, one must as Peters and Waterman (1981) put it “stick to the knitting” to enable an exceptional capacity for execution in order to tip the competitive balance into the firm’s favour. Many firms have struggled to exceptionally execute strategy in products closely aligned, but different from their core business. For example, as previously mentioned S.C. Johnsons sold off their personal care product arm to focus back on their core household products business and more recently Foster’s the Australian Brewer sold off their wine division to focus back on their core beer business (Fenner 2010).

Originally published in Orbus, July 2012

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E.F. Schumacher’s classic book Small is beautiful was a product of the times he lived in. The Club of Rome had been warning of the consequences of pursuing economic growth without limits. The measure of Gross Domestic Product (GDP) was being questioned for not counting externalities like the consumption of natural resources, and not factoring in wellbeing by some liberal economists. Likewise, there was growing criticism of the roles of trans-national corporations and questioning of the basic wisdom of foreign aid.

Schumacher questioned the wisdom of big government at a time the European Community was nurturing a mega-government that imposed regulation upon the smallest village. Schumacher was one of the early questioners of growing regulation, which was being accompanied by massive increases in bureaucracy to enforce the regulations bureaucrats thought up. Schumacher also incorporated the workplace and organizational values developed at the Tavistock Institute; at a time, they were considered radical.

Schumacher was ground-breaking in his concepts of scarcity, finite resources, and the need for environmental sustainability, a forerunner of the modern environmental movement today.

Most importantly, Schumacher challenged the basic notion of economic growth, pursued under the illusion that the Earth has infinite resources. He challenged the very core of the economic problem postulated within the logics of Keynesian economics.

Schumacher critiqued current habits of consumerism, which are based on wants rather than needs, postulating that the invisible hand is too important for society’s choices to be left to fate.  

Weaknesses in development economics

Schumacher was damming about economic development in the third world, and the West’s role in it. Standard development strategies have primarily emulated the Western industrial practices to create employment.

However, this led to the creation of mega-cities and a massive drain upon rural communities, as people flocked to cities for employment. This decimated rural communities and public infrastructure development became skewed towards cities. Crowded mega-cities created slums, industry created unabated pollution, while quality of life declined.

Foreign investment increased development, but at the cost of high environmental degradation. The technology multi-nationals transferred didn’t enhance workforce skills. Respective education systems focused on producing industrial fodder, rather than focus on creating a pool of skilled craftsmen, and an educated professional class. Education distinctly lacked any substance to develop critical thinking, creativity, and innovation. The local education system did little to nurture indigenous enterprises.

Foreign aid wasn’t crafted to develop the economies of recipient countries, tending to enhance the agendas of donors. This hasn’t been in the interests of recipient countries.

Rising prosperity and advertising encouraged mass-consumerism based on wants rather than needs. This time and time again created markets for imported luxuries, rather than local products.

Foreign investment brought inappropriate solutions for developing countries, where new solutions specific to the situational nature of the country was needed.

Even though the above observations about development economics were made back in 1974, almost 50 years ago, there are distinct analogies to development today. Many rural and even urban areas around the world today, including many within post-industrial societies urgently require revitalization. This is particularly the case after 40 years of globalization where low labour cost countries became the factories of the developed world.    

The Schumacher hypothesis

Schumacher saw that under the current economic system, the poor would get poorer and the rich would get richer, increasing the wealth divide.

Consequently, Schumacher published his alternative manifesto, calling for a new direction in development.

One of the biggest problems are mega-metropolises which soaked up national resources, became home to isolated conclaves, were unsustainable and generated the majority of a nation’s pollution. Schumacher believed cities over 500,000 people were undesirable and there should be progressive decentralization.

Focus could then be put back into revitalizing communities built upon sustainable numbers, according to the quality and sparsity of available hinterlands. These communities would engage in creating enterprises and food production that would sustainably serve their immediate communities. These enterprises could vary in the way they were owned, organized, and operated, based on empowering people and maximising members’ wellbeing. Appropriate technology that could be constructed locally, that was affordable, and connected people with their work and enterprises is the much more important than the established concept of economies of scale. Appropriate technology would create value and bring economic wellbeing to local communities.

Some legacies

Schumacher’s work brought a refocus back to sustainable and organic farming after the world became dominated by fertilizer production from the green revolution. This allowed for the formation of many boutique farming enterprises around the world, where there are now a host of organic food products on the market.

Companies like the Bodyshop and Ben & Jerry’s Ice Cream were formed and developed using Schumacher’s community principles, but were eventually bought-out by multinational corporations. Japan’s One Village One Product (OVOP) and later Thailand’s One Tambun One Product (OTOP) programs were based upon Schumacher’s principles and successful in their time.

Schumacher’s educational principles were taken up by academics like Peter Senge in the 1990s with his seminal book The Fifth Discipline: The art and practice of the learning organization. The ideas were incorporated directly into education in the 2000s with Schools that Learn: A Fifth Discipline Fieldbook for Educators, Parents and Everyone Who Care about Education.

Schumacher highlighted the illusion of economics as resources were infinite, leading to a movement towards utilizing renewable inputs in products. Schumacher also alluded to the tendency of humans to accumulate a perception of unlimited powers, and an assumption that humankind’s mastery over science, gave control over the environment.

Schumpeter and “The Great Reset”

Schumacher questions Keynesian economics, socialism, and conventional forms of ownership in society. He also questions the public benefit of trans-national corporations, and the dehumanizing aspects of displacement technologies. Large centralized governments don’t make the best decisions for communities, and we are now in a vacuum of virtue, wisdom, and morality within leadership and bureaucracy.

The World Economic Forum’s Great Reset is the anti-thesis of Schumacher’s Small is Beautiful concepts. Many critics of The Great reset claim it is being imposed upon societies by stealth, rather than after open discussion and debate.

The centralization of government, participation in government of corporations, science based upon forecasts rather than evidence-based research, the introduction of capital-intensive Industry 4.0 technologies that the poor cannot afford, and the rise of top down authoritarianism, are all against what Small is Beautiful argued for.

This is the brave new world Schumacher warned the world of.

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Confucius was born with the name K’ung Ch’iu in the Lũ Kingdom of China in 551 BC, and was in later life called K’ung Fu-Tzu (Master Kung) by his followers. He is probably the most famous Chinese moralist, intellectual, philosopher and educationalist known outside China and his teachings have had great influence on China’s social and political thought over the last 2500 years, as well as spreading to East and South-East Asia[i]. Confucius developed a system that saw man as a social being, interconnected to society through a system of moral and social ethics, concerned with perfecting human character to create a virtuous social order.

While the traditions of Confucianism have historical and regional variations, there are certain central ideas and values which are common. These values have constituted the key elements of the traditions of societies which have endured history and political upheavals. The basic Confucian concepts embraces a dynamic cosmological worldview for promoting harmony amidst change, where individuals exist in concentric circles of relationships with ethical responsibilities that place importance on the family, within a hierarchical social system, where loyalty to elders is paramount and a generational concept of gratitude and respect for earlier ancestors exists. Education is the mechanism where individuals are cultured and developed as a means to enrich society and create a social and political order. History is valued as continuality and a basis for moral reflection and learning.

The worldview purported by Confucius is characterized by four key elements;

1. an anthrop cosmic perspective of the great triad of heaven (a guiding force), earth and humans,

2. an organic holism where the universe is seen as unified, interconnected and interpenetrating, where everything interacts and affects everything else,

3. a dynamic vitalism of underlying units of reality which is constituted of the material energy force of the universe (chi), the natural force of the universe, which creates reciprocity between man and nature and is the substance of life responsible for continuing process of change in the universe and

4. ethics embracing man and nature.

Within this context, Confucian thought sees the person in relation to others and not as an isolated individual. Thus, in Confucian society, the common good is more important than individual good. In this view, self interest and altruism for a common cause is not always mutually exclusive.

Confucius was more concerned about the process of human development, rather than theological concepts and ends[ii]. He believed the principals of relationships could be extended from that of running a family to the governing of a kingdom or nation; “Those who want to be a leader or ruler have to have their own house in order”[iii]. Through education and rituals which signified respect, man would develop five inner virtues; integrity, righteousness, loyalty, reciprocity and human-heartedness, which once developed would radiate externally from the individual, so that society could be governed by man, rather than rules of law. To this end, Confucius defines five primary relationships that will achieve this; ruler and subject, parent and child, elder and younger brother, husband and wife, and friend and friend. As a child develops and learns, he or she will first learn to love and respect the parents, then brothers and sisters, then relatives, and later all of humanity. This piety is called Hsiao, which is considered the root of all humanity.

This philosophy was able to change the family in agrarian China from a unit of production to a collective moral dimension, with a social code for each rank of the family hierarchy, very different from the Western concept of individualism[iv]. This led to the concept of guanxi , much written about in Western literature, “a focus on relationships with a shared history, respect for the past, a value that many – not all – Chinese cherish”[v].

Two other concepts in Confucianism are Tao, the way of life and Te, potency and self-sacrificial generosity with humility, with the moral power of attraction and transformation, associated with these qualities. The humanistic attribute required to achieve the above is through Jen, which means love, kindness and goodness, qualities of the perfect individual. This is the essence of what makes humans different from other members of the animal kingdom. Failure to develop Jen would lead an individual to quickly develop forgone conclusions, dogmatism, obstinacy and egotism, which would block wisdom and prevent people from making new insights and discoveries, as one’s mind must remain open to become wiser. Li is the expression of Jen in a social context through norms, rites and rituals governing ceremonies according to one’s social position. Through Li, the individual expresses his respect and reverence for others[vi].

Confucius was not influential in government during his time, serving only in minor positions, and wondering around China giving advice to those few that listened. However, he attracted a number of followers, who later held office in government, advised by Confucius on matters of ethics and piety. However he became quickly disillusioned as they didn’t take his counsel. Confucius spent most of his last years working on his classics. 

After his death, Confucianism had to contend with other philosophies of Taoism and Buddhism during the 3rd to 7th Centuries, creating a blend of philosophies creating Neo-Confucianism, dominating philosophical thought in China during the Tsang Dynasty (618-906 AD), the Sung Dynasty (960-1279 AD) and later during the Ming Dynasty (1472-1529 AD). Confucian institutions in China slowly disintegrated after the overthrow of the Last Emperor in 1911, although it survived in practice in Taiwan, Hong Kong, Macao and parts of South-East Asia after that time.

Confucianism has been examined and debated about its significance to Asian Economic development by Western scholars, over the last few decades. Confucianism is often misunderstood, as to its real interpretations. Most have believed that Confucianism is completely worldly and humanistic, lacking any divinity. However Confucius last book The Annals of Spring and Autumn (chũnqĭu) is full of references to the divinity of heaven and its influence upon man and reason for existence. Some scholars have criticized Confucius works as being nothing more than a reaffirmation of earlier thoughts, with no originality[vii], although Confucius himself stated the need to look back to learn history as examples of models and acts of piety. Many misunderstand the concept of holism, not necessarily meaning holism of society, but holism of the worldview from a family perspective[viii].

During the 1980’s and 1990’s many academics became interested in the connections between Confucianism and the spectacular rise of the Asian Tigers. Some argued that Confucius was opposed to modernization as it didn’t advocate individualism, common to the Western characteristics of entrepreneurship, was too dependent on guidance, emphasized an all round development of personality to harmonise with the environment, which discouraged aggressiveness and encouraged traditionalism, rather than modernisation[ix]. However Tu suggested that individualism is a Western mode of capitalism and East Asian had developed another model based on relationships to develop change through consensus and networks, with a sense of personal discipline[x]. Confucianism was criticized for lack of profit motive, as his philosophies discouraged self-motivation and that merchants were not included in Confucius set of key relationships. However, through responsibility and obligation to family, other motives exist, such as their well-being[xi], and treatment of those inside and outside an individual’s universe of relationships will be different, i.e., treated with respect but caution, more adversarial, rather than brotherly relationship. Confucianism is also criticized for its lack of innovation, whereas the reality of Chinese business has been to seek ways to control an existing market, rather than create new value through innovation[xii].

It can also be argued that Confucianism actually has little influence on the way Chinese business is operated, at least in South-East Asian countries like Malaysia. Although Chinese business sustains and nurtures family members and maintains a paternalistic and hierarchical nature of authority within the enterprise[xiii], there is little evidence that Malaysian Chinese businesses rely on guanxi networks for growth and development, have little interest in long term sustainability and little adherence to the Chinese philosophies associated with Confucianism[xiv].  It is also unlikely that many contemporary Chinese have a thorough understanding of the Confucius philosophy or the will or want to fulfill the piety and wisdom defined by Confucius in everyday life, as one of Confucius followers Mèngzî  warned, Jen is a concept not easily achieved by man. However modern life and business may tend to be judged by old values, creating a complexity of behaviour that is often hard to understand[xv], especially by the older generation that is Chinese educated. Finally, John Naisbitt in his prophecy book Megatrends Asia predicted that the unique strengths of Chinese business networks, able to make speedy decisions and able to obtain resources through connecting people would make the Chinese business model the ideal flexible form of social organization for the globally connected world of the future[xvi]. However this would assume that harmony doesn’t exhibit restriction on individuals from criticism of strategy, even though it may be constructive, as the practice of authority in Chinese companies means obedience rather than careful questioning of the status quo[xvii].

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References

[i] Oh, T., K., (1991), ‘Understanding Managerial Values and Behaviour Among the Gang of Four: South Korea, Taiwan, Singapore and Hong Kong, Journal of management, 10, (2), pp. 46-56.

[ii] Meyer, M., W., (1994), China: A Concise History, 2nd Edition, Littlefield Adams.

[iii] Chen, M., J., (2001), Inside Chinese Business: A Guide for Managers Worldwide, Boston, Harvard Business School Press, P.89.

[iv] Chen, M., J., (2001), ibid., P. 21.

[v] Chen, M., J., (2001), ibid., P. 47.

[vi] Koller, J., M., (1984), Oriental Philosophies, New York, Macmillan.

[vii] Low, S., P., (2001), Asian Wisdom for Effective Management: From Lao Tzu to Miyamoto Musashi, Kuala Lumpur, Pelanduk Publications, P. 9.

[viii] Backman, M., (2001), Asian Eclipse: Exposing the Dark Side of Business in Asia (Revised Edition), Singapore, John Wiley & Sons.

[ix] Chen, M., J., (2001), Inside Chinese Business: A Guide for Managers Worldwide, Boston, Harvard Business School Press, P. 23.

[x] Tu, W., M., (1984), Confucian Ethics Today: The Singapore Challenge, Singapore, Federal Publications.

[xi] Tu, W., M., (1995), ‘Is Confucianism Part of the Capitalist Ethic?’, Stackhouse, M., C., (Ed.), On Moral Buwsiness, Grand Rapids, MI., William B. Eerdmans Publishing, pp. 409-411.

[xii] Fairbank, J., K. and Goldman, M., (1998), China: A New History, Cambridge, MA., Belknap Press of Harvard University.

[xiii] Weidenbaum, M. and Huges, S., (1997), The Bamboo Network: How Expatriate Chinese Entrepreneurs are Creating a New Economic Superpower in Asia, New York, Free Press.

[xiv] Gomez, E., T., (2004), ‘De-essentialising Capitalism: Chinese Networks and Family Businesses in Malaysia’, NIASyntt, No. 3., pp. 8-10.

[xv] Bede, H., (1992), Understanding the Asian Manager: Working with Movers of the Pacific Century, North Sydney, Allen and Unwin, P. 10.

[xvi] Naisbitt, J., (1996), Megatrends Asia: Eight Asian Megatrends that are Reshaping Our World, New York, Simon & Schuster, P. 24.

[xvii] Backman, M., (2001), op. cit., P. 18.

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Sun Tzu’s The Art of War was written 2,500 years ago and was most probably the first comprehensive book of military strategy ever written [47]. Sun Tzu saw strategy as a tool in warfare, primarily out of sight of the enemy, aimed at gaining advantage and defeating an adversary by fighting as few battles as possible [48]. Sun Tzu postulated achieving victory by out-thinking and out-fighting the enemy with the best tools at one’s disposal. The thirteen chapters of the book lay out an ideology of strategy as follows;

Chapter One: The proper planning of strategy. Chapter Two: How to avoid protracted campaigns. Chapter Three: How to defeat the enemy without going to battle. Chapter Four: Find the enemies weaknesses. Chapter Five: How to exploit opportunities. Chapter Six: How events and strategy are unpredictable. Chapter Seven: Relief of the enemy’s vigilance. Chapter Eight: The adaptation of strategy. Chapter Nine: Exploring the enemy’s position. Chapter Ten: The diligence of a commander. Chapter Eleven: The obedience and submission of subordinates. Chapter Twelve: Diligence and caution when undertaking tasks. Chapter Thirteen: The use of intelligence.

Within the above chapters are six basic applications of the principles outlined in each chapter of the book. These include;

Winning whole or succeeding with all one’s resources and objectives intact. Leading to advantage or how to prepare and position soldiers for victory. Deception or keeping one’s intentions secret from opponents and enemies. Energy or applying force effectively and efficiently. Capabilities or finding the best path to achieve an objective, and Initiative or how to take advantage and capitalize upon an emerging opportunity in a conflict.

Perhaps the most important aspect of Sun Tzu’s doctrines is wisdom. In ancient Chinese the character for wisdom was similar to the character for knowledge, thus wisdom and knowledge are interwoven. Sun Tzu believed that wisdom was an innate quality of a general and is made up of four qualities, the ability to plan, perceptibility, predictability, and adaptability. Therefore, in planning a good general must know what the fight is for and how to place his troops and weapons in the right place at the right time. Potential problems must be foreseen, so that solutions are available when and if they are encountered. In addition, a general must be free of emotion so that decisions can be made without undue influence and consistently. Finally the general must be able to adapt to unexpected changing circumstances that may arise in the course of the campaign.

In chapter five of The Art of War, military tactics are equated with the flow of water. “As flowing water runs away from high places and speeds downward, an army avoids strengths and seeks weaknesses. As water shapes its course according to the ground, an army works out its victory in relation to the enemy it faces. Therefore, as water retains no constant shape, there are no fixed conclusions in warfare. He can modify his tactics according to the enemy’s situation and thereby succeed in winning, may he be called divine” [49].

Always look for the path of least resistance

Military strategy has influenced business strategy as it has a similar objective of achieving a desired result and winning. Some of the important principals of Sun Tzu’s strategies that can be seen as relevant to business are summarized below:

·        Business is extremely important to the owner so thorough planning is necessary

·        Avoid if possible direct competition against competitors (i.e., find a market where there is no competition).

·        Emulate as much as possible the strengths of your competitors and build your strengths where your competitors are weak.

·        Ensure you have a planned exit strategy if necessary.

·        Know your competitors well, you will have a better chance of success

·        Good leadership is a powerful motivator of followers (wisdom, sincerity, benevolence, courage, strictness).

·        Show by example.

·        Develop shared values in your organization to gain commitment.

·        Develop competitive advantage and make full use of it in the marketplace.

·        A powerful and efficient leader is indispensable to the success of the firm.

·        Have a good technical background.

·        To be competitive, a company must be able to capitalize on various changes in the economy, business and social environments and develop strategies accordingly.

·        Must realistically understand what is in and outside of your control.

·        Position yourself close to the resources you need and markets.

·        Strength is a relative concept, no absolute superior or inferior strength, it is how you arrange your resources that can bring success.

·        Hide your strengths and weaknesses from your competitors so you have the element of surprise in the marketplace.

·        Seek out as much information about your competitors, markets and customers as possible.

·        Delegate subordinates with enough authority to get the job done.

·        Training is an important method of achieving efficiency.

·        A combination of benevolence and strictness is the key to guaranteeing loyalty of your staff, and,

·        Be transparent in your reward systems so employees know what they will receive.

An element that is beginning to be regarded as an important trait in entrepreneurship is courage [50]. Sun Tzu mentioned courage in chapter eight describing a general as a person who must be brave and courageous in battle, and his troops if cowardly will face capture by the enemy. In addition, a general must be prepared to be bold and take calculated risks when necessary, in order to seize opportunities without hesitation. Courage should also be attached to resourcefulness and decisiveness. Courage runs in two directions. If a situation becomes hopeless, a general must recognize this and immediately make a retreat. The courage to move forward blindly, i.e., making decisions based upon courage alone, is not genuine courage but a delusion, something equated to what we recognize as an overconfidence bias [51].

Courage is an important trait in entrepreneurship

Many authors writing about Asian business attribute Chinese business success to the following of the doctrines of Sun Tzu [52]. This may have some positive bearing in the business strategies of some businesses, which are quoted as examples in books [53], and Sun Tzu’s philosophies have certainly influenced writers[54]. But as other authors have commented in the Asian SME context, most businesses start out finding the correct business strategies by nothing more than trial and error until they find the winning set of strategies for their businesses [55]. Very few business entrepreneurs in Southeast Asia until recently have been educated past secondary school and although Sun Tzu is known to Western business scholars, it is highly doubtful whether many are familiar with his works on strategy. However, there is some evidence that the educated Chinese public service over the centuries did use these texts in forming the strategies of Chinese state [56]. It appears that the doctrines of Sun Tzu were studied by Western military scholars [57] and the early business schools took some interest in The Art of War in the 1950s and 60s when the concepts of business and corporate strategy was being pioneered. Strategy as a war paradigm became very popular in the United States with a number of ‘bestsellers’ like Barrie James ‘Business War Games’, and Al Ries and Jack Trout’s ‘Marketing Warfare’ [58] in the 1980s and has become part of contemporary marketing terminology [59].

The best strategies are really found through trial and error

Yet it is claimed that Sun Tzu’s doctrine influenced Admiral Yamamoto in planning the Japanese attack on Pearl Harbor, Mao Tse-Tung’s philosophies, the Vietnamese General Vö Nguyên Giáp’s strategies that led to victories over the French and American forces in Vietnam, Che Gueverra’s revolutionary and guerrilla tactics in South America, and the Gulf war campaigns and resulting insurgencies [60]. In addition, Sun Tzu has become part of popular culture influencing films like the Star Wars Trilogy, Wall Street, The Sopranos (HBO), The Art of War, and Die Another Day. The influence of Sun Tzu on Asian business has probably been through these western influences, rather than direct knowledge and education in the region itself.

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References

[47] Sun Tzu is believed to have been the author of The Art of War but accounts differ on the time he served as a general. Some accounts place him between 722-481 BCE, while others place him around 476-221 BCE. See Sawyer, R., D., & Sawyer, M-C., (2007), The Seven Military Classics of Ancient China, New York, basic Books, pp. 421-422.

[48] Sawyer, R. D., (1994), op. cit.

[49] Low, S., P., (2001), op. cit., P. 44.

[50] Hunter, M. (2012), Opportunity, Strategy, & Entrepreneurship: A Meta-Theory, Vol. 2, New York, Nova Scientific Publishers, P. 134.

[51] Hunter, M., (2012), ), Opportunity, Strategy, & Entrepreneurship: A Meta-Theory, Vol. 1, New York, Nova Scientific Publishers, P. 312

[52] Min Chen, (2004) Asian Management Systems, 2ndEdition, London, Thomson.

[53] Chen, M., J., (2001), op. cit.

[54] Ohmae, K., (1990), The Borderless World: Power and Strategy in the Interlinked Economy, London, Collins.

[55] Gomez, E., T., (2004), op. cit.

[56] Tung, R., L., (2001), Strategic management Thought in East Asia, In: Warner, M., Comparative Management: Critical perspectives on Business and Management, Vol. 3, London, Routledge,

[57] McNeilly, M., R., (2001), Sun Tzu and the Art of Modern Warfare, Oxford, Oxford University Press, pp. 6-7.

[58] James, B., G., (1986), Business Wargames, London, Penguin, and Ries, A., & Trout, J., (1986), Marketing Warfare, New York, Paperback,

[59] Terms such as offensive, defensive, flanking, and guerrilla marketing strategies have become very common in marketing expression.

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Oh Lord wont you buy me a Mercedes Benz
My friends all drive Porsches, I must make amends
Worked hard all my lifetime, no help from my friends
So oh lord wont you buy me a Mercedes Benz

              Janis Joplin

Our realities are about what we dream and would like it to be rather than what it is. Aspirational brand strategy is concerned with creating the dream and generating positive emotional reactions from emotional reactions from consumers (Hill 2010). An aspirational brand strategy tries to fit a product into consumers’ attitudes and emotions so they will identify with the product. Aspirational brand strategy is based on the premise that emotions play an important role in our purchase decision making and that rationality in purchase decision making is fallacy (Mckee 2007). And this cannot be seen more clearly through the Chanels, Yves Saint Laurents, L’Oréals, and Hugo boss’s of this world.

Aspirational brand strategy may appeal to a person’s psychological, social and/or economic aspirations, rather than their psychological, social and/or economic realities. Aspirational brand strategy positions a product or service through image, appealing to what they want to be. Customer loyalty is built up by creating stories about the product rather than relying on product features to see the product. The effect is to differentiate a product or service through emotions. No real claims are made through this strategy, as it aims to win hearts rather than minds and is used powerfully in the fragrance, cosmetic and personal care markets. In this way premium prices can be put on products as emotional value has been created. The strength of aspirational brand strategy in creating a source of competitive advantage is that a product feature can always be matched by a competitor and a claim can be imitated, but the same emotions are hard to create in consumers for similar products. For this reason, aspirational brands can occupy a defined market space by themselves.

Aspirational brand strategy has emerged out of a world where diversity is a marketplace phenomena and there is now an explosion of choice in contrast to the markets of half a century ago where the important consumer goods at the time were automobiles, refrigerators, televisions, etc. that were sold on features. This started changing in the 1970s when segmenting started to grow and every different type of product feature was used to develop market share over competitors. This grew to the stage in highly developed markets where primary product image builders (advertising, promotion, price and packaging) could not be used effectively to differentiate products and intangible attributes became the major means of achieving product differentiation (Hunter 1995). Now themes are the great product differentiators where a total product and company must become integrated to deliver a message to the consumer.

This theme approach to new product development is a useful tool to meet consumer paradigm shifts occurring in various markets. Several contemporary themes can be equated with a number of growing consumer segments.

Some contemporary Western consumers are losing their faith and trust in the established institutions of the Western culture, including the church, government and corporations. This loss of faith and trust is creating a spiritual vacuum where consumers are searching for something that is missing. There is a similar situation in China where growing middle-upper class have been brought up without religion and no longer feel affinity to the “old revolutionary culture” of China. This situation is leading consumers in a number of directions;

As society is becoming more ‘self centred’ in their aspirations, custom made goods and personal customer service is now very important. This can be seen in the rise of private banking, custom made computers and cars, tailor-made suits and fashions, and shopping for unique items in specialized shops rather than chains.

Consumers are looking for unique items that are hand-made, exclusive and come from an ethical background to fill the spiritual void. The rise of Fair-trade and establishment of farmers markets and eco-tourism is providing consumers with more fulfilling consumption experiences.

Consumer alternatism gives rise to alternative marketing and promotional strategies such as viral marketing and on-line buying through the internet. Shopping in this way provides the consumer with a story and feeling of control.

Seeking alternatives is leading to less consumer brand loyalty and more experimentation with new products and new brands, as well as quick changes, meaning shorter product lifecycles. The development of new brands and new images is more widely accepted than before. New brands and images give new experiences like the low-cost airline Air Asia has done in winning new customers in South East Asia. Likewise, adventure and eco-tourism is rapidly growing as consumers look for new experiences in their leisure time.

The new generation feels no guilt about ‘over the top’ luxury as the post war generation did. Top luxury is acceptable to both self-esteem and social exposure as this generation fulfils are role in a live for today in the white-collar professional job market. Luxury is about feeling good and looking good.

People are very concerned about health and the sector is growing rapidly with five-star private hospitals, health tourism and the rise of nutraceuticals and cosmoceuticals. Organic foods sold at premium prices are growing. Sportswear and sports equipment is about being seen and trendy, gyms are full and racing bikes dominate the roads during weekends.

People want to deal with corporate entities that do the right thing. People are then doing the right thing by association – a kind of spiritual materialism. This shows in the rise of ethical products and companies with social programs and supply chains that benefit those that are not as fortunate

Many paradoxes exist in consumers where for example they see no conflict in being concerned for the poor and needy and surrounding themselves in luxury, or see no inconsistencies in taking a budget airline to a holiday resort location and staying at a five-star resort (Hunter 2009, P. 573).

Consumers have values, aspirations and paradoxes and are exposed to new technologies, ideas, and products on a daily basis. Consumers are not so much looking for products that satisfy needs as much as they are seeking experiences and business models that touch their spiritual side. Psychological satisfaction is thus consequently the strongest differentiation a marketer can create (Davis 2002). Social media is connecting consumers in a way that has never been seen before where products become a narrative and marketers don’t have full control of their branding and image and need to collaborate with customers. Products must achieve a balance between spiritualism and also satisfy material wants and desires at the customer, employee, and shareholder level to be successful. Companies must integrate their values into their products. The issues that any firm must satisfy in order to successfully develop an aspirational brand strategy is to balance the concept of spiritual materialism that consumers look for in a product to make a connection as shown in Figure 1.

Figure 1. The concept of spiritual materialism.

Aspirational brand strategy is about being innovative and providing people with the means of fulfilling their aspirations and can be applied in almost any market. Unilever’s strategy in India to service the bottom of the market by creating pack sizes that can be used on a daily basis and selling them through ‘moms and pops’ stores in the slums is allowing people to pursue their aspirations of becoming a micro-entrepreneur and getting out of poverty (Prahalad 2009). CEMEX Mexico’s scheme to sell the building materials to poor rural families to make home extensions for their married children also fulfils family aspirations for the development of their extended family (Chan Kim & Mauborgne 2005). Village technology breakthroughs in India that improve infrastructure in villages helps satisfy peoples’ aspirations for better lives (Hart & Christensen 2002).

Companies spend hundreds of millions of dollars on projecting an aspirational image to consumers through sounds, images, colours and celebrities to trigger responses from consumers. Fictional and real characters like Colonel Saunders (KFC), Ronald McDonald (McDonalds), Clark Gable (Gordons Gin), Steve McQueen (Ford Motors), and John Travolta (Qantas Airways), etc. are used to add lustre to the products they endorse or act as spokesperson for. Their public recognition, attractiveness, extraordinary lifestyles are characteristics that can be transferred to the product by association (Mc Cracker 1989). Aspirational branding strategy is sometimes related to heroism where founders/CEOs like Sir Richard Branson and Steve Jobs become metaphorical figures for taking on the large corporations like David and Goliath or visionary wizards (Zaltman & Zaltman 2008). Table 1. below lists some well-known brands and the images and emotions associated with them.

The starting point for aspirational brand strategy is imagination (Levitt 1986, P. 127). Product creation requires imagination to construct the customer orientations necessary (Gabay 1998, Postma 1998). But the essence of opportunity also requires consumers to be imaginative, to imagine what it would be like to live at Sanctuary Cove on the Gold Cost of Queensland, Australia, to imagine what it would be like consuming a Ferrero Rocher Chocolate, to imagine climbing the Eiffel Tower in Paris, France, to imagine skiing at Boulder, Colorado during the winter holidays, to imagine owning an Apple iPhone, to imagine wearing Beyonce Perfume, to imagine the benefits to the community a cup of Starbucks Coffee would have, and how that raffle ticket would assist the fight against cancer. Imagination is an aid to practical thinking and opens the door to making purchasing decisions (Brown & Patterson 2000). All our hopes, enlightenment, fears, and desires come from imagination. Brands are able to give consumers a sense of identity and enrich their life experiences.

Table 1. Some major brands and the aspirations they tap

Figure 2. Some of the broad aspects of self concept (Hunter 2012).

Aspirational brand strategy reaches out to a person’s self concept, either their ideal self, their social self, or their actual self. This can be very powerful when appealing to how one would like to be or how one would like others to see the self. This can often relieve anxiety caused by the difference between what a person is and would like to be. One of the keys to aspirational brand strategy is finding out why people really buy products, how people see their own relationship between their own self concept and material possessions. A person may buy a Mercedes to boost their self perception of status, a Porsche for a lost youth or yearn to be noticed, a Volvo for a feeling of safety, or a 4WD for adventure, etc.

A person’s personality and particularly their self concept influences what they buy and consume. There are a number of theories of personality and self concept that places emphasis on different aspects in defining and shaping each theory. Self concept is much wider than personality as it also incorporates their national, cultural, racial, religious and sexual identity which can have a strong bearing on consumption habit. The importance of self concept is to find out a person’s attitudes, beliefs, and motivations so that an aspirational brand strategy can be attuned to them. Figure 2 shows some of the broad aspects of self concept.

Each of the variables above will influence aspirations of individuals. For example, different societal identification anchors or social classes will have different aspirations, but these may differ across different domicile outlooks, racial and ethnic groups, and national identities, etc. But if marketers can find common patterns within selected groups, then these groups can be appealed to. For example, sociable people will tend to go out more with friends and want to have coffee in public places. These groups may have other things they care about such as being able to get on-line to the internet, or being community involved. They may have lots of time to spare or only have time to pick up a coffee on the run. These will influence the brand persona that can be created, something like the persona of what a person would want to be in the Jungian sense. National pride and the threats of globalization was used by the Danish soft-drink manufacturer of Jolly Cola to defend itself against Coca Cola, by creating the images of coca-colonisation turning the symbolism of Coca Cola against itself in the 1980s (Askegaard & Csaba 2000).

However behaviour is also somewhat unpredictable and people do not just react towards incoming stimuli, they also create their own situations and realities upon which they make their choices and act. Some behaviour is related to the stress and anxiety of realizing the gap between the real self and the ideal self and the disappointments that brings. Some people will affiliate with groups that help them cope with stress and buy products that build up their self concept, but not all people act in the same way.

Aspirations filter perceptions so that a person perceives things in their own unique way and makes their own interpretations. Perception is the process through which people filter, select, and organize information to create a meaningful picture of the world. Through the perception process people screen out most stimuli and only select what information that they are attentive to. Through various causes, what is called selective distortion; people interpret information in a way that supports what they already believe. This requires marketers to understand how perceptions will affect consumers’ interpretations of a brand, advertising, and promotion.

Figure 3. The various levels of needs and products that can be aligned with them.

People acquire attitude and beliefs and evolve their self concepts from life experiences. These attitudes and beliefs influence a person’s buying behaviour. Attitudes consist of peoples’ evaluations, feelings and tendencies towards people, objects, ideas, and situations, and therefore people carry attitudes about almost everything. An attitude determines whether a person likes or dislikes something and usually carries emotions. A belief is a descriptive thought about something which a person thinks is correct. A belief may or may not be based on knowledge, opinion, or faith. Unlike attitudes, beliefs do not necessarily carry with them the same emotions that attitudes carry.

A person’s attitudes fit into their behavioural patterns and are extremely difficult to change. Companies usually try to fit their branding creation into the attitude set, rather than try to change attitudes. There are some exceptions to this and if successful, create very strong unique market positions for firms. In Victoria, Australia milk consumption had been slowly declining for 25 years. The image of milk was that it was just for children to drink at school. Then in 1978 the Victorian Dairy Industry Authority launched the Big M flavoured milk brand with a fun, youthful, and social image, using popular rock bands, models in beach scenes, and themed story lines in a number of massive advertising campaigns. The product established itself as a true alternative to existing soft drinks, changing the attitudes of young consumers.

To turn attitudes into behaviour there must be motivation. A motive is a need that is sufficiently strong for a person to feel an urge to take some form of action to satisfy the need. There are a number of levels of needs that can be aligned with Maslow’s hierarchy of needs (Maslow 1954). Primary needs consist of biological and safety needs which require satisfaction to survive. After these basic needs are satisfied, social and esteem needs become a concern of individuals, and finally people have some need for their own self actualization, self meaning and understanding[1]. Today consumers tend to search for spiritual resources on top of material fulfilment (Fogel 2000). A consumer typology is related to demographic and psychographic segmentation. Psychographic segmentation is one of the primary marketing tools today, which focuses on lifestyles, attitudes, values and beliefs. This can be illustrated using Maslow’s hierarchy of needs as a way to understand market segments (Kotler et. al. 2007). Figure 3. shows product types matched to different needs levels (typologies) of consumers. When a product is matched to consumers’ aspirations and primary, secondary product attributes and strategy is accurately aligned, this theoretically gives a product a maximum chance of success.

As we have seen with the Big M example above, milk could be a basic survival need or with some creativity and imagination repositioned as a social or esteem based product. A single product may generate different levels of need. For example a person may buy a bicycle as a means of transport and exercise. But at another level he or she may want to impress others. At a deeper level he or she may want to feel young and free again. This is where the marketer can select and develop the most powerful needs to build up an aspirational brand.

Once identifying consumer aspirations and summarizing them into a theme, a consumer typology can be created. It is the consumer typology that the new product must appeal to. Product attributes should be designed to match the chosen typology. With this product attribute profile the new product development process can continue onto the other steps, as there is a clear idea of what is really required. The aim is to merge the brand image and the physical product together in synergy so the product presentation (formula, packaging, colour, advertising and corporate image), promotion, and other market strategies become all consistent (Lienado 1984). An example of a potential theme for a hypothetical range of products: Borneo Rainforest products could be as follows; Sabah is on the World list of ‘exotic’ locations; There is Mystic; There is cultural diversity; There is history and heritage; There is nature and serenity; Sabah is a place of peace, health and harmony (Hunter 2006).

Behaviour is complex as it is an interplay between stimuli, the brand, the environment, cues, attitudes and beliefs, and social reinforcements. An aspirational brand strategy hopes to motivate behaviour and if that behaviour leads to a satisfying experience, the consumer will seek to repeat the experience. This is not an easy process to manage even with large resources and a budget. However small SMEs with creative use of viral marketing practices and social media in some cases have been able to utilize these forms of strategies very well.

Branding gives the images to consumers of what companies do and stand for. This makes a person anticipate a certain level of satisfaction or service, where for example a person knows what it is like to fly on Air Asia, eat a Big Mac, or drive a Mercedes. One knows what the company stands for with the branding. The brand projects goodwill, thoughts, myths, realities, which affects consumer’s beliefs and assumptions about the company, its brand, and product. This is why almost more than half the values of companies are made up of goodwill[2]. A summary of the effects of an aspirational brand strategy is shown in Figure 4.

Enterprises must take great care when employing an aspirational brand strategy as the company really needs to be truly integrated with the strategy or consumer skepticism will quickly set in and destroy any concept and image. Employees and shareholders must understand the strategy goals and be part of them with their commitment. BP’s Gulf Crisis in 2010 has shown this and the firm’s aspirations of being environmentally friendly and concerned has taken great damage which will take possibly years to recover.

Figure 4. A summary of the effects of an aspirational brand strategy.

An exert from my book Opportunity, Strategy, and Entrepreneurship: A Meta-Theory, Volume 2, Nova Publishing, New York, 2012

Notes

[1] Zohar and Marshall (2004) reveal that Maslow in his later life felt that his pyramid should have been inverted with self actualization being at the bottom. This would place the pursuit of self actualization as the prime need of all human beings. Roll (2006) in another view points out that in Maslow’s hierarchy, self actualization is replaced with the social needs of status, admiration, and affiliation, and autonomy and independence have different connotations in some Asian Societies.

[2] Market price less tangible assets.

References

Askegaard, S. & Csaba, F.F. (2000). The good, the bad and the jolly: taste, image and the symbolic resistance to the coca-colonisation of Denmark, In: Brown, S. & Patterson, A. (Eds.). Imagining Marketing: Art, Aesthetics and the Avant-Garde, London, Routledge, pp. 124-140.

 Brown, S. & Patterson, A. (2000). Figments for sales: Marketing, imagination and the artistic imperative, In: Brown, S. & Patterson, A. (Eds.). Imagining Marketing: Art, Aesthetics and the Avant-Garde, London, Routledge, pp. 4-32.

Chan Kim, W., & Mauborgne, R., (2006), Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant, Boston, Harvard Business Press.

Davis, M. (2002). The new culture of desire: Five radical new strategies that will change your business and your life, New York, Free Press.

Fogel, R. W. (2000). The Fourth Awakening and the Future of Egalitarianism, Chicago, University of Chicago Press.

Gabay, J. (1998). Imaginative Marketing, London, Teach Yourself Books.

Hart, S.L. & Christensen, C.M. (2002). The great leap: Driving innovation from the base of the pyramid, Sloan management Review, Vol. 44, No. 1, pp. 51-56.

Hill, D. (2010), Emotionomics: Leveraging Emotions for Business Success, London, Kogan Page Ltd.

Hunter, M. (1995). The Evolution of Extrait Perfumes, Cosmetics, Aerosols, and Toiletries in Australia, Vol. 9, No. 2, pp. 19-24.

Hunter, M. (2006). Efforts to empower the community through essential oil production in Sabah, Proceedings of the Seminar on Community Involvement in Sustainable Bio-Resource and Biotechnology Utilisation, Sabah, Malaysia, 5-6th September.

Hunter, M., (2009), Essential Oils: Art, Science, Agriculture, Industry & Entrepreneurship: A Focus on the Asia-Pacific Region, New York, Nova Scientific Publishers.

Hunter, M., (2012), Opportunity, Strategy, & Entrepreneurship: A Meta-Theory, Vol. 1, New York, Nova Scientific Publishers.

Kotler, P., Kartajaya, H. & Hooi, D.H. (2007). Think ASEAN: Rethinking Marketing Toward ASEAN Community 2015, Singapore, McGraw-Hill.

Levitt, T. (1986). The Marketing Imagination, New York, Free Press.

Lienado, R. (1984). The role of fragrance in product development, HAPPI, June, pp. 59-60.

Maslow, A.H. (1954). Motivation and Personality, New York, Harper & Row.

Mc Cracker, G. (1989). Who is the celebrity endorser? Cultural Foundatiers of the endorsement process, Journal of Consumer Research, Vol. 16, No. 3, pp. 310-321.

McKee, S. (2007). Brands: The power of emotion – The sawiest marketers understand that successful product appeal to the heart, not the mind, Bloomberg Businessweek, 8th November, http://www.businessweek.com/smallbiz/content/nov2007/sb2007118_
797874.htm, (accessed 26th November 2010).

Prahalad, C. K, (2009). The fortune at the bottom of the pyramid, Revised and Updated 5th Anniversary Edition: Eradicating poverty through profits, Upper Saddle River, NJ., Pearson Education, Inc.

Postma, P. (1998). The new marketing era: Marketing to the imagination in a technology driven world, New York, McGraw-Hill.

Zaltman, G. & Zaltman, L. (2008). Marketing Metaphoria: What deep metaphors reveal about the minds of consumers, Boston, Harvard Business School Press.

Zohar, D. & Marshall, I. (2004). Spiritual Capital: Wealth We Can Live By, San Francisco, Berrett-Koehler Publishers.

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This article explores the phenomenon of entrepreneurial opportunity. Entrepreneurial opportunity is depicted as a nexus between the ebb and flow of the environment and our personal, family and business disposition, reflected in our personal knowledge. Opportunity recognition therefore must be seen as an ability not uniform throughout the community. Entrepreneurial opportunity is defined and described as existing within four typologies; imitation, allocative, discovery, and construction, which all have individual characteristics. The paper discusses seeing opportunity based upon prior knowledge, emotional sensitivity, and one’s current perspective. The entrepreneurial process and evaluation of any opportunity is considered with a modified SWOT configuration.

A Typology of Opportunity can be accessed here

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The key to improving GDP is through adding value within the economy. Adding value is the flip side to improving efficiency. Value and efficiency are the two determinants of productivity.

Productivity is a measure of economic performance that compares the amount of goods and services produced (output) with the amount of inputs used to produce those goods and services.

Increasing value through identifying and exploiting new opportunities is a key to the development of the Malaysian economy.

Productivity = Output/Input (Thus, increasing value through opportunity, increases national productivity).

This hypothesis explores the phenomenon of entrepreneurial opportunity.
Entrepreneurial opportunity is depicted as a nexus between the ebb and flow of the environment and our personal, family and business disposition, reflected in our personal knowledge. Opportunity recognition therefore must be seen as an ability not uniform throughout the community. Entrepreneurial opportunity is defined and described as existing within four typologies; imitation, allocative, discovery, and construction, which all have individual characteristics. The paper discusses seeing opportunity based upon prior knowledge, emotional sensitivity, and one’s current perspective. The entrepreneurial process and evaluation of any opportunity is considered with a modified SWOT configuration.

Access the article here

This article will assist you in understanding what constitutes real entrepreneurial opportunity and the value it can create.

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My good friend Dr Yoshifumi Harada passed away on 29th February 2024. This is an article we wrote together back in 2012. RIP Dr Harada. Dr Harada was an associate professor at Prince of Songkla University and University Malaysia Perlis.

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“WALKING UNDER A LADDER”: SUPERSTITION AND RITUAL AS A COGNITIVE BIAS IN MANAGEMENT DECISION MAKING

Journal: Economics, Management, and Financial Markets 7/2012

Author(s): Murray Hunter, Yoshifumi Harada

As we go about our lives, we are unconsciously immersed within the cultural fabric of the society we live in. To a certain degree what we think and do is greatly influenced by the values, beliefs, and meanings adopted by that society. Embedded within our belief systems are a wide range of customs, rituals, taboos, and behavioral codes that have basis upon superstition.

Superstition conceals hidden motives at a social level that cover society’s hidden traumas. In the Freudian sense, superstition could be considered a social defense mechanism, as a means to deal with fears and anxieties that society faces. For example in hunter-gather times women were forbidden from leaving their homes when their men went hunting in order for the man to concentrate on the job at hand without worrying about the women left behind¹.

Superstitions are based on flawed causalities where rationality and reasoning has been abandoned. Superstition can be seen as extended metaphors, transmitted through stories that people tell, in attempt to cover up irrationality. These stories emerge as timeless myths that become culturally patterned remedies for something that is not understood and has its basis upon events and history, a universal acumen of culture².

Many superstitions derive basis in ancient science and remain as remnants such as the evolution of astrology³. Superstition becomes a tool to deal with what we cannot deal with or what we don’t know how to deal with, and as a’perceived means’ to achieve outcomes we desire. Consequently, superstitions have no basis in today’s science but still appeal as a remedy to cope with some fear, anxiety, hope, or aspiration⁴.

As such superstitions become symbolically real as a solution to a social problem. And through reinforced repeated behavior, symbolic reality turns into objective reality, where objects, people, and situations attract new meanings. The nature of the object itself manifests a superstition, hence the built up mythology around ladders and broken mirrors, etc. Thus superstition infers a belief in some form of esoterically, magical, or supernatural causality where one event is the cause of another event without any necessary rational or physical process linking the two events⁵. Thus the realm of superstition encompasses specific socialized behaviors, belief in luck, prophecies, spiritual beings, and that future events can be foretold by unrelated rituals and ceremonies⁶.

Superstition is an anchor to the past, transmitted through our collective consciousness by culture. History, education, film, media and religion all contribute to both maintaining and modifying a national narrative passed along from generation to generation.

New superstitions continually evolve in our national narratives to handle what we fear through the manifestation of new beliefs. For example the belief in a weapon system that will destroy asteroids on a collision course with the earth could be construed as a recently evolved superstition. There is no scientific validity to this belief, but the idea portrayed through films Like “Meteor”, “Deep Impact”, and “Armageddon” and the Reagan Strategic Defense Initiative known commonly as “Star wars” during the 1980s led to the belief that the technology exists.

More controversially the saga of 9/11 can be looked at from the paradigm of myth and superstition. Fear was generated by this tragic event, and the trauma and fear was added by the 7/7 attacks in London, the railway bombing in Spain, and Taj Mahal hotel attack in Mumbai, India, reinforcing recurring messages to society sent through the media. This occurred until rationality disappeared and a mythical enemy arose that must be fought. Thus society both intellectually and emotionally invested in the superstition of an “organized enemy” willing to stop at nothing to take away the life that society currently knows and enjoys, and to accept a “hero” to fight this evil. And with any struggle, sacrifices are needed. Thus according to Martin Day in his book The Many Meanings of Myth, the subsequent actions reduced feelings of chaos and uncertainty, and brought a new sense of unity to society⁷. This allowed governments an almost unhindered ability to take what measures they wanted to in order to fight this “evil enemy”.

From the decision making aspect, superstition skews thinking into archetypal patterning that is reinforced by a generally accepted cultural beliefs. This is manifested by myths, stories, taboos, ceremonies, and rituals such as wearing“something oil, something borrowed, and something blue” at a wedding ceremony, or ’touching wood’ in the hope of a particular outcome. With society following these rituals and other practices, fallacy is embedded into our cognitive processes, influencing our daily and strategic decision making.

Superstition creates behavioral boundaries through taboos which remain unquestioned and something we unconsciously learn. This is what can be called superstition bias.

Superstition is universal

Although superstition is an important aspect of culture, the positivist culture theorists Fons Trompenaars and Geert Hofstede didn’t discuss the subject at any length or provide any methodology to measure it. In depth analysis of the meaning of superstition in society had been left to anthropologists and ethnographers like Clifford Geertz and Margaret Mead, and psychoanalysts like Sigmund Freud and Carl Jung. Superstition has also only being scantly covered in organizational literature, and never mentioned in management literature, leaving a very limited research base concerning the impact of superstition on beliefs and decision making in organization and management⁸.

Nevertheless, superstition is universal around the world which can be seen through a sampling of examples below;

• In Japan and some parts of China the word “four” is pronounced “shi“ the same as the word for death. Consequently just like number “13” in the west, the “4th”, “14th”, and “24th” floor, etc, are skipped in some buildings. Gifts consisting of “four” pieces are avoided probably with the fear that this could be an unlucky omen. The number “8” is considered lucky because it’s pronunciation is similar to the word prosperity, therefore car number plates with “8” and multiples of “8” are highly desired for good luck. Consequently, many consumers are willing to buy products at a premium because of lucky colors and 8 rather than 10 units in the packet because of superstition⁹.

• In India and across Asia it is unlucky to get a haircut on Tuesdays. There are numerous taboos about what activities, such as moving into new premises can be done on what days.

• Throughout the Asian region fortune tellers and astrologers are commonly sort out for advice before making big decisions.

• “Fengshui“, a Chinese system of heavenly geometry is commonly used in deciding building aspects and layouts where practitioners play the role of a legitimizer and comforter in strategic decision making¹⁰.

• Iranian politics appears to be influenced by “divine supernatural experiences” which lead to the belief that policies and actions are “divinely sanctioned”¹¹.

• It was reported that Pakistan’s President Asif Ali Zardari has been slaughtering a black goat every-day since becoming president in an attempt to ward off “the evil eye”¹².

• People don’t make decisions based upon their true experience¹³. Many stock and mutual traders believe that particular superstitions have some influence on their trading. A special algorithmic trading system based on superstitions has been launched in the United States¹⁴.

• Many Thai people believe they are protected by an amulet imprinted from a selected temple, including prime ministers¹⁵, in a similar way some Christians may wear a Saint Christopher’s medal for a sense of protection from injury.

These few examples above just confirm that people in business and public office have their own little idiosyncrasies and superstitions such as favorite ties, pen or suit to wear to meetings, have a particular ornament in the office, or read the daily horoscope before leaving home. Research has shown that adhering to a regime of superstitions may have something to do with a belief in self efficacy¹⁶, and thus superstition in business decision making is skewed to the positive. Superstition in the case of business may act as a confidence bias, and reinforce persistence¹⁷.

Superstition influences our assumptions and shape our mental maps

As superstitionis a cultural phenomenon, it must work its way into our assumptions in order to integrate into mental maps and shape our values. Then superstition or the assumptions behind our superstition will act as heuristics that assist in solving our basic problems. Some of the basic assumptions we may carry over into mental maps from superstitions may include:

• The nature of reality and truth:Some of the basic “Western” superstitions like black cats crossing your path and walking under a ladder carry the assumption of care within the environment. These may have evolved from religious beliefs in maintaining the Holy Trinity and black cats being associated with witchcraft in medieval times. Some superstitions like making a wish on a “wishbone”, carrying a rabbits foot or crossing one’s fingers may give a person some form of illusion of control over the environment¹⁸.

• The nature of time: Superstitions such as bad luck comes in threes is a time based caution to be vigilant in the environment in the future. Friday the 13th along with many Asian superstitions about times concern tempting fate at certain periods.

• The nature of space: Many people feel that if an object has come into contact with a person with some form of sickness like HIV or cancer, they are loathed to touch it, and avoid direct contact¹⁹.

• The nature of human nature: Making a wish on a “wishbone”, carrying a rabbits foot or crossing one’s fingers carry the metaphor of hope and pursuing aspiration. The rabbit’s foot may have been based upon Celtic folklore in England, the “wishbone” with early “medicine-men” and crossing fingers with the Christian faith.

Conclusion

Superstition is a coping mechanism for overwhelming feelings of fear and anxiety, or hope. In business it may also be a means of developing confidence and a sense of self efficacy. As we have seen, superstitious beliefs work deep down within our core assumptions and can be defined as social heuristics. Superstition as a heuristic is intertwined without our knowledge structure and therefore becomes a factor in the assessments, judgments and decisions we make. They are part of the decision process²⁰.

On the negative side, heuristics can become cognitive biases. Cognitive biases are errors of judgment based on misconceptions of the facts, memory errors, probability errors, motivational factors, and/or social influences. These are the basis of irrational reasoning which can lead to all sorts of mistakes in judgment²¹.

Hood postulated that superstitions came out of our sense of duality where we tend to seek external solutions to our problems and apportion external reasons for success and failure, etc. Thus objects take on a certain “vitalism” through our projections upon them of our fears, anxieties, and aspirations²².

Finally we postulate that there could be three types of superstition, from the perspective of influence upon decision making.

The first type of superstition has only a marginal influence and only taken half seriously by the majority of people in society. These are folklore superstition like luck coming from holding a four leaf clover, or the number “13” being an unlucky number. These superstitions may only be “half believed” or “taken as a grain of salt”, so as to say. Even though many of these little superstitions are seen for what they are, the taboos are often avoided consciously. For example, in many buildings in Western countries there is often no “13th” floor. The “13th” floor may be designated “12A” or just missed altogether. This however may not directly reflect any superstition on the part of a building owner, but more as a measure taken so as not to make any potential tenants hesitant to lease or rent space in the building.

The second type of superstition is what could be called pseudo science. Pseudo science encompasses beliefs that may be portrayed as being scientifically based, but are really based on anecdote, rather than strict empirical based research²³. Such practices that could be considered pseudo science may include astrology, aromatherapy, Reiki, and homeopathy. Even many management ideas portrayed as positivist theories without empirical research support could also fall into this category²⁴. As our knowledge evolves, many ideas we once had become redundant and replaced with new knowledge. However some people tend to cling to old ideas, which by definition become superstitions.

The third type of superstitions are those that as we have seen, are embedded deep in our assumptions, shaping our mental maps manifesting themselves as heuristics in the way we think and make decisions. These are dangerous when we are not aware of the real influence these superstitions have upon our thinking. The only way we can really see the influence of superstition upon a person is through very carefully analyzing a person’s narrative to see the assumptions behind what they think, say and do. This can sometimes be picked up in narrative, as phrases like ‘I think’, ‘I feel’, ‘I believe’, ‘I reckon’ or ‘it is unlikely that’, etc²⁵. These deep set superstitions may also manifest through artifacts and how they are used, like Saint Christopher’s medals, Buddha statues, or Qu’ranic calligraphy²⁶, and the rituals and ceremonies a person may perform, and understanding the real reasons the person is actually performing them.

The problem with any categorization, like the one above, is that what could be truth and knowledge today, may be superstition in the future. Peoples’ categorization of their superstitions may vary according to the individual depending upon the belief commitment to particular superstitions they may have.

Attitudes to superstition are rapidly changing, however many superstitions are subtly embedded within our assumptions, shape our mental maps, and manifest as unconscious biases through heuristics upon our thoughts and decisions.

Superstition is a primeval aspect of our consciousness, an archetypal hangover from our primitive beginnings²⁷. Superstition is the basis of many rituals and ceremonies creating part of a person’s nexus with society. As we have seen superstition is still very much used as a tool by institution and government playing on the primeval origins of our psych as modern manifestation of witches and warlocks, good and evil, playing on fear and pandering to the need of survival and protection²⁸.

The authors believe that superstition will receive much more attention from management researchers in the future.

_{1 Freud, S., (1950), Totem and Taboo, London, Ark books, P. 98.}

_{2 Levi-Strauss. C., (1963), Structural Anthropology, New York, Basic Books, pp. 208-209.}

_{3 Clow, B., H., (2011), Awakening the Planetary Mind: Beyond the trauma of the past to a new era of creativity, Rochester, Vermont, Bear & Company, pp. 14-15.}

_{4 Hood, B., (2010), The Science of Superstition: How the developing brain creates supernatural beliefs, New York, HarperCollins.}

_{5 Vyse, S., A., (2000), Believing in Magic: The Psychology of Superstition, Oxford, Oxford University Press, pp. 19-22.}

_{6 Vyse, S., A., (2000), “Believing in Magic”, pp. 5 & 52.}

_{7 Day, M., S., (1984), The Many Meanings of Myth, Lanham, Maryland, University Press of America, pp. 254-255.}

_{8 Kramer, T. & Block, L., (2008), Conscious and non-conscious components of superstitious beliefs in judgment and decision making, Journal of Consumer Research, Vol. 36, No. 4., pp. 783-793.} 

_{9 Block, L. & Kramer, T., (2009), The effect of superstitious beliefs on performance expectations, Journal of the Academy of Marketing Science, Vol. 37, No. 2, pp. 161-169.}

_{10 Tsang, E., W., K., (2004), Toward a Scientific Inquiry into superstitious business decision-making, Organizational Studies, Vol. 25, No. 6, pp. 923-946.}

_{11 Ali Rahnema, (2011), Superstition and Ideology in Iranian Politics: From Majlesi to Ahmadinejad, Cambridge, Cambridge University Press.}

_{12 Bass, S., (2010), Superstitious Politicians: Zardari’s Goat Sacrifice, ABC News, 2nd August, http://abcnews.go.com/blogs/headlines/2010/01/superstitious-politicians-zardaris-goat-sacrifice/, (accessed 10th November 2012).}

_{13 Kahneman, D., (2011), Thinking Fast and Slow, London, Allen Lane, P. 12.}

_{14 See: Wolman, D., (2012), Superstitious Fund: Too mystic to fail, BBC Future, http://www.bbc.com/future/story/20120731-bulls-bears-and-black-cats, (accessed 10th November 2012).}

_{15 Trsaithep Krai-ngu, (2009), PM protected by amulet shield, The Nation, http://www.nationmultimedia.com/2009/12/13/politics/politics_30118407.php, (accessed 10th November 2012).}

_{16 Damisch, L., Stoberock, B., & Mussweller, T., (2010), Keep Your Fingers Crossed! How superstition improves performance, Psychological Science, Vol. 21, No. 7, pp. 1014-1020.}

_{17 See: Makridakis, S., Hogarth, R., & Gaba, A., (2009), Dance with Chance: making it work for you, Oxford, Oneworld, and Small Business Superstitions and Why They Work, http://worklovelife.com/2010/05/small-business-superstitions-and-why-they-work/, (accessed 10th November 2012).}

_{18 Wegner, D., M., & Wheatley, T., (1999), Apparent mental causation: Sources of the experience of will, American Psychologist, Vol. 54, No. 7., pp. 480-492.}

_{19 Rozin, P., Grant, H., Weinberg, S., & Parker, S., (2007), Head verses heart: Effect of monetary frames on expression of sympathetic magical concerns, Judgment and Decision Making, Vol. 2, No. 4, pp. 217-224.}

_{20 Wright, W. F. and Bower, G. H. (1992). Mood effects on subjective probability assessment, Organizational Behavior and Human Decision Processes, Vol. 52, pp. 276-291.}

_{21 Baron, R. A. (1998). Cognitive mechanisms in entrepreneurship: why and when entrepreneurs think differently than other people, Journal of Business Venturing, Vol. 13, No. 3, pp. 275-294.}

_{22 Hood, B., (2010), “The Science of Superstition”.}

_{23 Gardner, M., (1957), Fads and fallacies in the name of science, 2nd edition, New York, Dover Publications.}

_{24 For example in Thomas Peters and Robert Waterman’s seminal book “In Search of Excellence” they postulate that by “sticking close to the knitting” a firm will have more chance of achieving excellence. However this is not supported by research. Differing research in this field may often come to different conclusions, so this could be considered a myth or even superstition. See: Byrne, J. A. (2001). The Real Confessions of Tom Peters: Did In Search of Excellence Fake Data? A Magazine suggests it did, Bloomberg Businessweek, 3rd December, http://www.businessweek.com/magazine/content/01_49/b3760040.htm, (accessed 9th February 2011).}

_{25 Hunter, M., (2012), Opportunity, Strategy, & Entrepreneurship: A meta-theory, Volume 1, New York, Nova Science, P. 329.}

_{26 It is important to mention here that it is the person’s belief in the properties of the artifact that is important here.}

_{27 Jung, C., G., (1964), Man and His Symbols, London, Aldus Books,P. 71.}

_{28 Jung, C., G., (1964), “Man and His Symbols”, P. 86.}

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Argentina’s President Javier Milei warns the world that the state is destroying the wellbeing of the world through totalitarian socialist policies. He looks at the economic history of the world over the last 200 years. Milei says that the world grew and prospered under a neo-liberal system, while socialism creates poverty. Free trade-capitalism eliminated hunger, poverty, and created growth.

Milei warns about regulation of the markets and economy and the evil of bureaucrats that support such systems. Milei criticizes collectivism, and the practice of social justice is actually unjust. They look at redistributing the economic pie, rather than creating growth. Capitalism is a way of discovering new modes of growth. This is now being criticized and destroyed by todays neo-Marxist leaders, the media, and international organizations.

Governments controlling and regulating markets, giving subsidies, instituting price controls doesn’t create wealth. The state is not the solution, it is the problem.

Milei’s speech in front of the World Economic Forum was very brave and his 20 minute speech is well worth listening to and thinking about.

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This is the introduction of the series of report chapters I am uploading about developing SMEs in Sarawak (Yes, I posted this last). This is applicable for all of Malaysia. The was co-written by Dr Rosni Bakar), formally UNIMAS and UNIMAP). Most of the strategies in this chapter were inspired by my time working with the One Tambun, One Product (OTOP) program in Southern Thailand, a number of years ago.

MSME development policy should be specifically tailored towards each individual community. It needs to be adaptive and innovative to meet the needs of the communities in question.

The link to the chapter on PDF is here.

Here is an example of how we tackled rural development last decade.

You can access all the chapters below:

Chapter Two: Food Sector

Chapter Three: Handicrafts

Chapter Four: Homestay

Chapter Five: Developing Entrepreneurs

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Today, entrepreneurship is one of the most written about topics in the field of business, but in general opportunity has not been seen to directly drive the firm's strategies, capabilities, and resources. This book attempts to bring the concept of opportunity into mainstream discussion and consideration by presenting a meta-theory which dissects all the elements of opportunity, so this phenomenon can be better understood. The first volume looks at the nature of opportunity and considers how opportunity is closely linked with our society's development, and how innovations today will lay the foundation for further opportunities in the future. The book continues on to discuss how our attitudes, biases and mental maps have great influence upon how we see opportunity. Volume one finishes with a chapter discussing how creativity is vital to making connections between the environment and our own experience and prior knowledge. Creativity and the ability to make connections are more important than intelligence in seeing opportunity. 

You can access the PDF copy here.

From the Back Cover

Murray Hunter has meticulously written a very useful work, examining the influences on entrepreneurial strategy from a number of different paradigms. He argues that opportunity is as much a product of our mental schema as it is from the external commercial and social environment. He concludes that strategy should be opportunity, rather than firm-based and presents a relevant opportunity meta-theory to the socio-economic conditions of this new millennium.

--Amar Bhidé
Thomas Schmidheiny Professor
Fletcher School of Law and Diplomacy
Tufts University

Murray Hunter's book has put opportunity at the centre of strategy. He has been able to blend contemporary strategic theory with the wisdom of the east in a meta-theory that extends our understanding of opportunity. Murray stresses the perceptive and interpretive issues around understanding the environment and forming strategy, which is a timely reminder for firms facing the turbulent markets of today.

--Hermawan Kartajaya,
Founder and CEO of MarkPlus Inc.
Co-author with ProfessorPhilip Kotler of five books, including:
Think ASEAN & Marketing 3.0
President of World Marketing Association.

Murray Hunter has written a book that adopts an innovative approach to business in keeping with the dynamic and evolving requirements of capitalizing on commercial opportunity in the new millennium. The focus of the book is on opportunity as the driver of strategy and entrepreneurship rather than the traditional focus, which is on the firm and its strengths and weaknesses as the drivers of strategy and entrepreneurship. This book raises the issue of what actually comes first - the firm or the market. The thrust of the book is that opportunity comes first in today's business environment and that strategy and entrepreneurship flow from this. Rather than firm oriented factors, Murray Hunter's meta theory of opportunity, strategy and entrepreneurship focuses on what are the variables and factors involved, how are they related and why they are influenced by underlying psychological, economic and social dynamics? Viewing the world through the prism of opportunity takes the reader on a journey that involves an exploration of opportunity from socio-economic, economic history, political economy, economic geography and biographical perspectives. This innovative approach to strategy formation and entrepreneurship development, as advocated by Murray Hunter, is to be commended.
 
--Professor Richard Fletcher,
School of Marketing,
University of Western Sydney

Hunter has reached the top-most heights, a veritable vision platform that no author has previously achieved in the study of human innovation and enterprise. In one tome, he has been able to cumulate our entire knowledge of human opportunity. The depth and scope of Hunter's understanding is staggering and unrivalled. Encompassing the entire history, science and philosophy of opportunity in a digestible form, this book will serve students and scholars of innovation and entrepreneurship for years to come. It will not easily be obsolesced--only supplemented--because of its wide coverage, skilful writing, accumulation of knowledge, integration and interpretation, and above all the profound wisdom that Hunter's work evidences. This book must be in every library and read by every serious student of human enterprise.
--
--Howard Frederick,
Professor of Entrepreneurial Education,
Centre for Entrepreneurship, Innovation and Community (CEIC),
Deakin University, Melbourne, Australia
 
Brave, honest and passionate, Professor Murray Hunter's new book is more than a content-rich read.It is an intellectual journey par excellence. By revisiting and rethinking the best of the west and the essentials of the east; the author inspires, encourages and energetically invites us to bridge both mental and physical distances. Professor Hunter contrasts and compares; still, he does not exclude and separate; but includes, concludes, shares and sublimes. Disheartened by the McFB (McDonalads-Facebook) world, dominated by anti-intellectualism and nearly automated conduct, turns numerous possibilities into ever fewer probabilities. Mounting crises discourage and constrain us. Hope and vision comes with Hunter's "Opportunity".
Homo cogitus: homo faber!

--Professor Anis H. BajrektarevicChairperson for International Law and Global Political Studies,EXPORT EU-ASEAN-NAFTA,IMC University,Austria, Europe

Professor Hunter brings about an important aspect; for the world to know that opportunities have to be discovered by strategic design of search and research. He combines the wisdom of the east with business environments of the west in order to optimize resources with a win-win paradigm for both an entrepreneur and a customer. He advocates that customer needs must be identified as the customer does not know what he or she needs until he or she has seen the product. His wisdom applies equally well to the service domain. A must read for those considering global opportunities and strategic planning in government, academia, industry, or the service sector!

--Vijay K. Arora,
Director, Graduate Studies, Wilkes University
Chair of the International Division of the American
Society for Engineering Education (ASEE).
Leading Educator of the World, 2005
 
Murray Hunter penned a business strategy book for our times by placing the idea of 'opportunity' at the centre of entrepreneurship and society. He highlights the importance of being alert to the possible and, in turn, able to exploit that opportunity. If we want to build solid structures on ever-shifting sands as the pace of global change accelerates, Hunter underscores the need for developing new mental models.

--Professor Ciarán Ó Catháin,
President of Athlone Institute of Technology (AIT), Ireland.

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Today, entrepreneurship is one of the most written about topics in the field of business, but in general opportunity has not been seen to directly drive the firm's strategies, capabilities, and resources. This book attempts to bring the concept of opportunity into mainstream discussion and consideration by presenting a meta-theory which dissects all the elements of opportunity, so this phenomenon can be better understood. The first volume looks at the nature of opportunity and considers how opportunity is closely linked with our society's development, and how innovations today will lay the foundation for further opportunities in the future. The book continues on to discuss how our attitudes, biases and mental maps have great influence upon how we see opportunity. Volume one finishes with a chapter discussing how creativity is vital to making connections between the environment and our own experience and prior knowledge. Creativity and the ability to make connections are more important than intelligence in seeing opportunity. 

You can access the PDF copy here.

From the Back Cover

Murray Hunter has meticulously written a very useful work, examining the influences on entrepreneurial strategy from a number of different paradigms. He argues that opportunity is as much a product of our mental schema as it is from the external commercial and social environment. He concludes that strategy should be opportunity, rather than firm-based and presents a relevant opportunity meta-theory to the socio-economic conditions of this new millennium.

--Amar Bhidé
Thomas Schmidheiny Professor
Fletcher School of Law and Diplomacy
Tufts University

Murray Hunter's book has put opportunity at the centre of strategy. He has been able to blend contemporary strategic theory with the wisdom of the east in a meta-theory that extends our understanding of opportunity. Murray stresses the perceptive and interpretive issues around understanding the environment and forming strategy, which is a timely reminder for firms facing the turbulent markets of today.

--Hermawan Kartajaya,
Founder and CEO of MarkPlus Inc.
Co-author with ProfessorPhilip Kotler of five books, including:
Think ASEAN & Marketing 3.0
President of World Marketing Association.

Murray Hunter has written a book that adopts an innovative approach to business in keeping with the dynamic and evolving requirements of capitalizing on commercial opportunity in the new millennium. The focus of the book is on opportunity as the driver of strategy and entrepreneurship rather than the traditional focus, which is on the firm and its strengths and weaknesses as the drivers of strategy and entrepreneurship. This book raises the issue of what actually comes first - the firm or the market. The thrust of the book is that opportunity comes first in today's business environment and that strategy and entrepreneurship flow from this. Rather than firm oriented factors, Murray Hunter's meta theory of opportunity, strategy and entrepreneurship focuses on what are the variables and factors involved, how are they related and why they are influenced by underlying psychological, economic and social dynamics? Viewing the world through the prism of opportunity takes the reader on a journey that involves an exploration of opportunity from socio-economic, economic history, political economy, economic geography and biographical perspectives. This innovative approach to strategy formation and entrepreneurship development, as advocated by Murray Hunter, is to be commended.
 
--Professor Richard Fletcher,
School of Marketing,
University of Western Sydney

Hunter has reached the top-most heights, a veritable vision platform that no author has previously achieved in the study of human innovation and enterprise. In one tome, he has been able to cumulate our entire knowledge of human opportunity. The depth and scope of Hunter's understanding is staggering and unrivalled. Encompassing the entire history, science and philosophy of opportunity in a digestible form, this book will serve students and scholars of innovation and entrepreneurship for years to come. It will not easily be obsolesced--only supplemented--because of its wide coverage, skilful writing, accumulation of knowledge, integration and interpretation, and above all the profound wisdom that Hunter's work evidences. This book must be in every library and read by every serious student of human enterprise.
--
--Howard Frederick,
Professor of Entrepreneurial Education,
Centre for Entrepreneurship, Innovation and Community (CEIC),
Deakin University, Melbourne, Australia
 
Brave, honest and passionate, Professor Murray Hunter's new book is more than a content-rich read.It is an intellectual journey par excellence. By revisiting and rethinking the best of the west and the essentials of the east; the author inspires, encourages and energetically invites us to bridge both mental and physical distances. Professor Hunter contrasts and compares; still, he does not exclude and separate; but includes, concludes, shares and sublimes. Disheartened by the McFB (McDonalads-Facebook) world, dominated by anti-intellectualism and nearly automated conduct, turns numerous possibilities into ever fewer probabilities. Mounting crises discourage and constrain us. Hope and vision comes with Hunter's "Opportunity".
Homo cogitus: homo faber!

--Professor Anis H. BajrektarevicChairperson for International Law and Global Political Studies,EXPORT EU-ASEAN-NAFTA,IMC University,Austria, Europe

Professor Hunter brings about an important aspect; for the world to know that opportunities have to be discovered by strategic design of search and research. He combines the wisdom of the east with business environments of the west in order to optimize resources with a win-win paradigm for both an entrepreneur and a customer. He advocates that customer needs must be identified as the customer does not know what he or she needs until he or she has seen the product. His wisdom applies equally well to the service domain. A must read for those considering global opportunities and strategic planning in government, academia, industry, or the service sector!

--Vijay K. Arora,
Director, Graduate Studies, Wilkes University
Chair of the International Division of the American
Society for Engineering Education (ASEE).
Leading Educator of the World, 2005
 
Murray Hunter penned a business strategy book for our times by placing the idea of 'opportunity' at the centre of entrepreneurship and society. He highlights the importance of being alert to the possible and, in turn, able to exploit that opportunity. If we want to build solid structures on ever-shifting sands as the pace of global change accelerates, Hunter underscores the need for developing new mental models.

--Professor Ciarán Ó Catháin,
President of Athlone Institute of Technology (AIT), Ireland.

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