David Dunne's Blog

Mental Models and Business Models

2009-01-06T14:54:00.000-08:00

Since the Irish potato famine in the 1840’s, Irish men and women had emigrated to England in great numbers and formed the backbone of the construction and service industries there. Yet in 1986, the return Dublin-London air fare was £200 (about $850 in 2007 Canadian funds). The alternative was to travel by car and ferry, which was much cheaper but could take as much as a full day of traveling.

Tony Ryan wanted to offer Irish emigrants and their families the convenience of flying at a price that would be competitive with overland travel. He launched Ryanair, Europe’s first and most successful discount airline, offering much lower fares based on a low-cost operating model. Today, Ryanair flies throughout Europe and is renowned for its rock-bottom fares – as low as £5 on many of its routes in early 2009.

The essence of Integrative Thinking in business is to develop new perspectives about an industry, a market or a managerial dilemma. To develop new perspectives, however, we need to understand, appreciate and place existing perspectives in appropriate context. Because Ryan had worked in the airline industry for many years, first with the Irish airline Aer Lingus and later as an aircraft “broker” matching buyers with sellers, he understood the industry intimately. But he also could see an alternative way of structuring an airline to achieve much lower costs.

By using secondary airports close to major European cities, Ryanair could negotiate much lower landing fees than existing airlines. By flying only point-to-point – no passenger connections – aircraft could be turned around more quickly with fewer costly delays. By using only one type of aircraft, the Boeing 737, training and maintenance costs were reduced. By selling tickets directly to passengers, agents’ commissions were eliminated. And by shaving every aspect of its internal operations, operating costs were pared to the minimum.

As a result of the success of airlines like Ryanair, there are now two dominant models in the airline industry: the “full service” model offered by legacy carriers like British Airways and Air Canada; and the “discount” model of Ryanair and others. While the boundary between the two models is not always sharply defined, legacy carriers tend to operate via major “hub” airports and offer passenger comforts and connections to other flights, and discount carriers approximate the Ryanair approach.

A mental model is a representation of a situation that both encapsulates our view of it and frames our thinking. As an example, the phrase “business is war” represents a mental model: it implies that we see business as riddled with conflict, and indicates how we are likely to regard moves against us by competitors. An alternative model might be “business is art” and we would expect quite a different set of attitudes to be associated with this.

Business models are not to be confused with mental models. A business model is the way a business operates to take advantage of patterns in its environment: Dell’s business model, for example, of manufacturing to order is very different from Apple’s standardized model. However, business models arise from the mental models of management, and from their willingness to challenge existing mental models.

Thus Tony Ryan refused to accept, as others had for decades, that there was a necessary tradeoff between high fares and long travel time between Dublin and London. And the next integrative thinker in the airline industry will refuse to accept the prevailing mental model that legacy carriers cannot match the low costs of discount airlines, or that discount airlines cannot offer outstanding service to passengers.

2009-01-03T17:16:00.000-08:00

Is Barack Obama an Integrative Thinker? A Designer? Or Both?

Integrative thinking and design have aspects in common, but are not the same thing. To think integratively is to reconcile opposing models. In business this means challenging received wisdom by taking a fresh look at an industry. But to do this, you have to be open to models that are different from your own, to practice inquiry rather than advocacy.

Thus far, this is similar to the design approach, but designers also have some other practices. Conceptual prototyping is one: designers sketch or construct models to try ideas out on a small scale. Both designers and integrative thinkers show empathy, the ability to see the situation from the perspective of somoene else, but user-centered designers also place a great deal of value on getting underneath what people say to understand their true feelings.

Where this may be applicable in the political realm is that both integrative thinkers and designers try to look at the broader system. In addition to pulling things apart (analysis) they put them together (synthesis) to form a broader view. This would be useful, for example, in the Middle East, where the President will need to consider the global impact of decisions made there as well as the local one. On the other hand, the opportunity to prototype things on a small scale will be limited.

I think we will be doing well if Obama shows himself to be a systems thinker - to appreciate the broader impact of his policies, and to show empathy with those impacted by them. I would not expect him to be a designer in the true sense, because experimentation is the essence of designing, but he could be an integrative thinker.

2008-12-27T16:09:00.000-08:00

Dilbert’s Approach to Creativity

This may be familiar. Your boss decides that your company needs some creative ideas, some new energy. Before you know it, you are headed to a half-day “brainstorming” at a hotel somewhere in the suburbs.

The hotel provides you with a meeting room, flip charts, some oversized muffins and weak coffee. As you arrive, your colleagues are there, some talking on cell phones, others chatting and others staring vacantly out at the parking lot.

Your boss calls the meeting to order. With marker in hand, he asks for ideas, but none are forthcoming. So he supplies a few, and people start to build on them. By mid-morning, flip chart sheets paper the walls. By lunchtime, the group is feeling very satisfied with itself. There are hundreds of ideas there. One colleague agrees to have the charts typed up.

A week later, you receive the list of ideas. But somehow they have lost their magic by now and the memory of your retreat fades into the background, one of those well-intended but ultimately useless ventures your group has undertaken.

It’s like a scene from a Dilbert cartoon: the boss says “get creative!” and suddenly everyone is expected to wear hair gel and pink ties. Ideas flow quickly, and are just as quickly forgotten.

There are two major problems with this model. One is that the techniques typically used at sessions like this are unproductive or misused, and the other is that creativity needs consistent encouragement.

Brainstorming is typically used in such sessions. Participants are encouraged to come up with as many ideas as they can, in a criticism-free atmosphere. Suggestions that appear to be impractical or off-the-wall are encouraged, as these may become the fodder for other, more useful, thoughts as participants build on each other’s ideas.

The problem is that, in most companies, a criticism-free environment is difficult to achieve. Clearly, if your boss is present, you are going to self-censor and the range of ideas the group comes up with will be tightly restricted. Even if the meeting is among peers, social and political networks are still operating and ideas can be quickly killed with a word, a sigh, or a patronizing smile.

Moreover, brainstorming has limitations. While it can be a good way of papering the wall with ideas, that’s all it does. Most of these ideas will be nonsense because brainstorming sessions tend to be fast-moving and fail to get into depth. After the euphoria of the session, the mundane task of follow-up is often forgotten and the ideas languish.

Other techniques, such as Synectics^TM, address some of these problems. But the fundamental problem is that creativity can’t be turned on and off like a tap.

To develop creativity in your organization, you need to foster it. That’s a much more challenging task that requires ongoing commitment. But it’s worth the effort.

To begin with, you need clear overarching goals – but the flexibility for your people to use their ingenuity in coming up with subordinate goals and ways of achieving them. You can tell them which mountain to climb, but let them find their own way of getting to the top.

Creativity happens in organizations as a result of motivation, domain knowledge and creative thinking skills. Creative people (and yes, your people are creative) are intrinsically motivated – that is, motivated by the task itself, not by external rewards. Throwing money at people does not encourage creativity, but throwing them wicked problems, and the support they need to solve them, does.

Domain knowledge means that those people charged with solving the problem should have an in-depth understanding of it – otherwise their solutions will be impractical or poorly thought through. However, since experts tend to think along familiar paths rather than truly innovate, you also need to provide them with skills in creative thinking from the many available courses.

The social and physical environment also need to be conducive to creativity. Creativity feeds on diversity, so it is important to have teams that can provide ideas from several perspectives. One major design firm recruits anthropologists, architects and MBA’s to staff its teams. The physical environment should make it easy for teams to meet informally, but should also provide a “creative bubble” of privacy when needed.

One brainstorming session will not make your organization creative. But a true commitment to creativity can transform it.

2008-12-27T16:05:00.000-08:00

The Illusion of Five-Minute Marketing

Fr. Guido Sarducci, the Vatican’s envoy to the US, once created the “Five-Minute University”, where he would teach you, in five minutes, all the average graduate remembers five years after leaving school. His Spanish course? ¿Como está usted? ¡Muy bien gracias! That’s it. All the average graduate remembers five years after leaving school. Takes about five minutes to learn. His business course: “you buy something, you sell it for more”. All this for only $20, including a graduation ceremony, cap and gown.

And Marketing? Well, Fr. Sarducci’s university didn’t offer a Marketing course, but if he did, it would probably be: “three C’s, four P’s”.

Fr. Sarducci was a fiction created by the TV show Saturday Night Live in the 1970’s, but the satire bites. Of course most people don’t remember much of Marketing after they leave school. That’s because they learned new tools, not new perspectives.

The three C’s (customers, competitors and company) and the four P’s (product, price, promotion and place) are the staples of Marketing courses at university. And for good reason: they are intuitively easy and useful. They provide a group of convenient categories for analysis and, with enough flexibility, could include just about anything.

Understanding the three C’s and the four P’s gives you the illusion that you understand Marketing. All you have to do is to plug in some numbers, add a dash of creativity, and off you go. But in the real world, things do not happen quite so neatly. Branding, for example, is inconvenient: it isn’t quite product, or price, or place, or promotion, but all of these, and more. (Plus it begins with a B, not a C or a P). And while the model implies that analysis (the three C’s) precedes marketing programs (the four P’s), in reality everything happens together, iteratively. We analyze a bit, try something out, go back to the drawing board, analyze again, and so on.

The illusion is that Marketing is a set of tools, as opposed to a different perspective on business. The piece that is missing from the “three C’s, four P’s” model is customer value. All that analysis, all that energy and effort, must be integrated to focus on a single idea: providing superior value to the business’ customers. The silos created by the traditional model are misleading because integration, not division, is the key to Customer Value Design.

Customer Value Design can be thought of as four sets of activities (not silos) that happen iteratively, not sequentially: creating customer value, delivering customer value, growing customer value and measuring customer value.

The task of creating customer value is to derive insights through an intimate understanding of customers. Marketers have long been aware that customers do not know, or are unable to articulate, what they want. This raises a difficulty: how can you understand customer needs when customers themselves don’t know? Insight-driven research uses observational and qualitative methods to get beyond the obvious and create propositions that have true meaning in customers’ personal or professional lives. The user-friendliness of Apple’s iPod, for example, exhibits an intimacy with consumers who want something cool, easy to use and powerful – yet because consumers could never have envisaged an iPod, they could never have asked for it.

Delivering customer value is about enhancing the core insight with programs for pricing and distribution. The price of a brand such as Yellowtail wine, for example, is as much a part of the proposition as the contents of the bottle: not so cheap that it degrades the brand, but not so expensive that it becomes elitist. Growing customer value involves going beyond ordinary ways of communicating with customers, into integrated marketing communications in unconventional media with messages that reflect true insights about customers.

With the desire of many businesses to understand the marketing ROI, measuring customer value means pulling together all these programs and understanding their financial contribution. This involves developing a model of how customers make decisions over time, the investment required to get and keep them and their lifetime value to the company.

Canada’s business community includes many graduates of the five-minute university. Yet the Customer Value Design model is even simpler: just keep customer value at the centre of your efforts, and you won’t go far wrong. Perhaps we should launch a one-minute university.

2008-12-27T16:02:00.000-08:00

Does Your Marketing Plan Measure Up? A Letter to Product Managers

Dear John, or Jane,

At this time of year, you may be in the midst of Marketing plans. This is a great opportunity to think broadly and deeply about customers, question your existing strategies and work constructively with senior management.

Too often, however, Marketing plans fall short of this and become … well, anything but strategic. Here are some types of planning exercise companies engage in. Maybe you’ll recognize your own.

The Negotiation

To paraphrase Stephen Leacock, Marketing plans are the science of arresting the financial controller’s intelligence long enough to get money from him. Marketing plans become a negotiation in which Marketing asks for wildly exaggerated dollars, while the Finance tries to reduce the budget to zero, or as close as possible. Inevitably, they end up somewhere the middle – not because this makes sense, but because it is the only way they can reach agreement.

The Number Crunch

Remember when you were writing that tough History exam in high school? You figured that if you wrote a whole lot, some of it had to be right. There had to be at least a paragraph of good stuff and that would be enough to get you through. Many Marketing groups feel the same way about Marketing plans: if you throw enough data at the executive team, somewhere in those tables all their questions will be answered. The result, of course, is data overload and a loss of perspective on what’s really important.

The Corporate Planning Vampire

In large corporations, Marketing folks often spend all their time completing the forms and justifying their forecasts, to the extent that strategic thinking, the lifeblood of all planning, is drained out of the process. As a result, plans can be vacuous, fully justified with beautiful Power Point slides, but devoid of true inspiration or passion.

The Last Year Syndrome

When you don’t know what to do, do the same as last year – but add 10% growth and ask for 20% more money. Many plans use last year’s performance as the starting point. We should all learn from what we have done, but too much focus on last year leads to conservative plans that are vulnerable to attack from creative competitors.

On the other hand, great Marketing plans have four basic characteristics: Strategic Integrity, Appropriate Goals, Rigorous Analysis and Financial Realism. Within these four characteristics, here are 10 questions you could ask to assess your own Marketing plan.

Strategic Integrity

Strategic integrity is the idea that plans are based on a rich, deep understanding of customers and their needs.

Is there evidence in your plan that you understand customers deeply, intimately and personally?
Is there a strategic insight – an observation about customers that leads to a truly compelling value proposition?
Is there a real benefit, functional or experiential, that will significantly improve the lives of customers?
Is this benefit sustainably different from what competition is offering?

Rigorous Analysis

Great marketing plans are thorough without being overwhelming. They provide just the right analysis, and no more, to answer critical questions that will have a bearing on the success or failure of the plan. The measures used are reliable and valid.

Is your analysis thorough and correct? Are you measuring the right things?
Is your plan internally integrated – does the analysis support the proposed strategy, goals and financial plan?

Appropriate Goals

Goals should be specific, measurable and achievable – but they should also provide the inspiration for the company to perform at its best.

Are your goals stated in such a way that performance can be rigorously measured?
Do your goals inspire the Marketing team and the rest of the organization?

Financial Realism

Marketing’s reputation in some quarters as a sinkhole for corporate funds means that Marketing folks must take great pains to provide realistic projections. Too much conservatism means missing out on opportunities, while overly aggressive plans can result in a loss of credibility over time.

Is your financial forecast a reasonable balance of optimism and pessimism? Have you done a scenario analysis of contingencies?
Is there a strategic long-term perspective? Where does the plan lead in future years?

If your meeting is to be effective, you will need to keep the discussion focused on strategy rather than tactics. With some senior management teams, of course, this is the biggest challenge of all. I wish you the best of luck.

Sincerely,

David

2008-12-27T15:48:00.000-08:00

Getting Tough with Customers

Who gets my prize for the world’s all-time best marketer? This may surprise you: the Catholic Church. Certainly it has longevity on its side: by comparison, “old” brands like Ivory Soap and Hudson’s Bay are mere pups.

Over the millennia, the Church has built the world’s greatest global brand – the original brand icon – to such an extent that it can afford to displease, even anger many of its customers and still count on their unmitigated loyalty. The crucifix is recognized everywhere, inspires intense emotions, transcends language and culture and is the only brand I can think of that people would die for.

So when the Catholic Church announced a minor change in doctrine recently, it was interesting to view it as an initiative in competitive branding. Through God’s brand manager, Pope Benedict II, the Church declared that it was abandoning the long-held doctrine that unbaptized infants who die proceed to Limbo – not Heaven, nor Hell, nor even Purgatory, but a “special place” where they await the end of the world. By contrast, Muslims believe that unbaptized infants go straight to paradise – an important difference in developing countries with high rates of infant mortality. So the Church’s announcement was a product improvement to match competition on a key attribute.

A few weeks before, Pope Benedict had angered the Islamic community with his ill-chosen words about the prophet Muhammed, unwisely quoting from an ancient text by 14th-century Byzantine emperor Manuel II Paleologus. While the matter was later patched up in an admirable show of brotherhood, it remains true that the two major religions are locked in intense competition for the hearts, minds and souls of the developing world.

Moreover, the Church faces other competitors. Applying Michael Porter’s famous “five forces of competition” model, in addition to internal rivalry between Catholicism, Islam, and others there are (relatively) new entrants in the form of Mormonism and a variety of cults; substitutes in the form of environmentalism or other causes; supplier power in the form of the community’s shrinking supply of clergy; and buyer power in the form of grassroots movements questioning Church doctrines. By any measure, this is an intensely competitive market.

In such a competitive environment, it might surprise you that the Church is also not afraid of angering its own customers on issues such as birth control, abortion and female clergy – to name but a few. But the Catholic Church didn’t get where it is today by ignoring the needs of its customers. Quite the contrary.

The Church, and other religions, at their core are all about customer experience. Customers are prepared to give their time and part with their money in exchange for a sense of personal well-being and transcendence.

As the Church shows time and time again, if you get the essence of the brand right, you can afford to dissatisfy customers on less important attributes – indeed, a tough stance can actually enhance your status with your core target group. It’s important for consumers of religion to know that their Church “stands for” something, much as Harley-Davidson riders like their sense of macho exclusivity, or Virgin’s customers want to be associated with values of youth, fun and flamboyance.

The Church nevertheless faces many challenges, not least the disaffection of its customers in developed countries and the decline in vocations to the priesthood. Apparently easy solutions to these problems, such as softening its stance on core values around contraception, abortion, female and gay clergy, will only alienate its core customers in developing countries.

While the Church may not like to see itself as a “marketing” organization, it is nonetheless an outstanding one. It gives the lie to the assumption that you have to be infinitely malleable to satisfy customers. Yet where business organizations conduct surveys and focus groups to understand customer needs, the Church (and others like it) understands its customers simply by staying close to them – through daily contact with parishioners and by playing a role in shaping their values. The Church’s decentralized organization is an ingenious way of maintaining intimate relationships with customers.

The lesson for the rest of us? The customer is not always right. You don’t need to be all things to all people: focus on your core customers and give them the experience they want (but nevertheless may not be able to articulate). To do this, you need to have an intimate understanding of their lives and where your experience fits within them. Once you know this, Heaven’s the limit.

2008-12-27T15:35:00.000-08:00

Beyond The Valley: A Wicked Problem on the Roof of the World

As Jet Airways flight 501 descended over the Kathmandu valley, I looked out across the terraced rice paddies. It was early May, and through the morning haze, I could pick out the brightly-coloured clothing of women trekking along hill tracks under massive loads. In the distance, the sun touched the jagged white peaks of the Himalayas.

I was here to learn about a new medical school based in Kathmandu and to make a short promotional film about it. Going in, I was aware that starting a medical school in Nepal would be a wicked problem; I did not realize how difficult shooting a movie would be.

When the plane touched down I was plunged into the chaos of Kathmandu: the eye-irritating smog, the potholed streets clogged with mopeds, roaming cattle and smoky cars, bearded Western backpackers and ragged street urchins.

I had visited Nepal a couple of years earlier as a tourist, and, like so many who visit the country, had seen how the splendor of Nepal’s mountains stands in stark relief against the desperate poverty of its rural people. No thinking person could fail to be moved by the contrast.

Soon after my visit, I was given an opportunity to make a small difference through the Patan Academy of Health Sciences (PAHS), a Nepali initiative to educate doctors who would serve in isolated rural areas. The PAHS model of education engages villagers in community health and can bring desperately-needed care to millions of people. Through student support, a curriculum emphasizing rural medicine and rotations in rural areas, the PAHS vision is to develop doctors who can not only treat the sick, but improve the overall health of rural communities.

As the only non-medical member of the PAHS International Advisory Board, my role was to raise funds – a task that was new to me, but one that I nonetheless relished: PAHS seemed capable of making a sustainable difference to the lives of the rural poor in Nepal. As soon as I had a chance, I scheduled a trip to Kathmandu to visit PAHS’ founder, Dr. Arjun Karki, and learn as much as I could. As things turned out, I learned a lot more than expected.

The following day, I was to meet a film crew who had volunteered their time and energy to make a short movie about PAHS. Robby Reis and Dan Popa had graduated a couple of years prior from Montreal’s Concordia University and set up their own film company, Natali Film. PAHS captured their imagination: as filmmakers, they could see great visual possibilities in Nepal, and as humanitarians, they were excited by the idea of using their talents to make a difference in the world.

Back in Toronto, we had meticulously planned the film. True to my consumer-goods background, I had prepared a written film brief, complete with objectives, target audience, key messages and so on. Robby and Dan had responded with a detailed outline of what they intended to do: develop a compelling, emotional film based on stories they expected to hear about rural medicine while in Nepal.

Robby and Dan would arrive early the next morning. But before then, I was to meet the visionary behind PAHS. Arjun Karki arrived at my hotel that afternoon. A Nepali-trained physician who had practiced as a specialist in the U.S., he had returned to Nepal determined to help improve living conditions in his native country. I had met him briefly on my previous visit, and recognized him instantly when he arrived at my hotel. Karki was a quietly serious man with deep, soft eyes that betrayed many late nights. His presence was the reason so many volunteers were committed to the project, and I instantly saw why. His dedication to the project was single-minded and complete.

As we sipped lukewarm tea in the ornate hotel lobby, we launched into a discussion of PAHS, its history, his vision, its context. This was Arjun’s life’s work, and he was keen to share it with those who were willing to listen.

With crushing poverty, the most rugged terrain in the world, low levels of education and bureaucratic corruption, rural medicine in Nepal presented the wickedest of problems. PAHS was an original way of addressing these conditions: students would be brought to Kathmandu to upgrade academically, if needed, before entering a five-year program that included rotations in rural areas in which they would work on community health initiatives. Upon graduation, they would be expected to practice in a rural area. The project was in advanced stages of planning, with the first cohort of students scheduled to enter in 2009.

Early next morning, Robby, Dan and their friend Morris staggered out of the airport laden with equipment, and were immediately latched onto by a coterie of small boys clamoring to carry duffel bags larger than themselves. Many tips later, we were in a taxi on our way to the hotel.

Assaulted by the sensory overload of arriving in Kathmandu, they reacted as true filmmakers: equipment was extracted from bags and before we knew it, shutters were snapping and cameras were rolling. The shoot was under way.

Patan hospital is a large brick building in Lalitpur, close to central Kathmandu. Arriving there the next day, we were shepherded through dimly-lit corridors to the PAHS office, identified only by a typed sheet of paper taped to the door. The Nepali PAHS team was very excited about the film and immediately set about arranging interviews for the team with the CEO of the hospital, the chief surgeon and several doctors. Dr. Karki even arranged for us to interview the Nepali health minister. Arrangements were set in motion for a visit to a rural area to film the conditions there.

As the next few days passed, however, I began to appreciate how challenging an endeavour we had taken on. We had embarked on this project with a clear idea of what we wanted to do, but the logistical challenges of working in Nepal made many aspects of this difficult. For example, one part of our plan was to interview a rural doctor who was planning to visit Kathmandu. But due to a strike in that area, he was unable to travel.

Getting from place to place was in itself a wicked problem. Routinely, our best-laid plans were stymied by weather, strikes, bad roads, gas shortages, unreliable vehicles and a host of unpredictable obstacles. It was the beginning of the monsoon season, and torrential rain filled the muddy potholes in the roads. Drivers queued for several hours to buy their ration of a few litres of gas. Rotating blackouts made it difficult for the film team to charge their equipment.

The election of the new Maoist government had shaken up the fragile stability of Kathmandu. On one occasion, a man was beaten to death by Maoists in a southern town, and opposition politicians declared a general strike, which shut all of Kathmandu down for a day. Its beleaguered citizens, long accustomed to the intimidation that accompanied these events, simply stayed home and the city ground to a standstill. Since Buddha’s birthday occurred just before the strike, nothing moved in Kathmandu for a full three days.

With the Beijing Olympics approaching, there were regular demonstrations by groups of Tibetan monks outside the Chinese Embassy and at other points around the city. Just as regularly, the demonstrators were rounded up and carted away by police.

Coupled with all this was my emerging sense that the Nepali team and the Canadian filmmakers had different mental models about the film. From the Canadian side, an emotional approach that focused on the problems of getting adequate health care would be most motivating to Western donors; for the Nepalis, the project needed to be authoritative and the embody the hope of a new Nepal.

In the table below, I have summarized the film team’s model and my sense of that of the Nepalis, along with my interpretation of how each side’s model appeared to the other.

	How It Appeared to the Film Team	How It Appeared to the Nepali PAHS team
Film Team’s Model	We want to shoot an emotional film that tells Westerners about Nepal and convinces them to donate, by telling stories about rural Nepalis and their problems in getting adequate health care.	They want to show poverty in Nepal and portray us as a basket case. They are missing the point that this is an important initiative supported by government and eminent individuals.
PAHS Team’s model	They want us to do a lot of dry, serious interviews with officials and bureaucrats, and show happy, healthy villagers in idyllic surroundings. This will not motivate Western donors.	We want to see an authoritative and inspiring film that motivates donors and supporters, by showing how Nepalis are taking control of their future.

It seemed to the film team that, where they were aiming to produce an engaging, emotional film, the Nepalis would have been happier with a series of interviews with stuffy administrators and bureaucrats. Where the film team was looking for emotion, they were instead hearing high-level officials talk about the importance of PAHS to Nepal.

There was a cultural aspect to the disconnect: Nepal is an hierarchical, even feudal, society with a host of unwritten conventions around caste and social status: a ‘high context’ society, in the words of anthropologist Edward T. Hall. At the time of our visit, the king of Nepal was still on the throne as an absolute, if unpopular, monarch.

But there was more than culture involved here. Nepal has a long history of failed social initiatives, many sponsored by well-intentioned Westerners like us. While these have failed for a variety of reasons, the endemic corruption in Nepal had played a large part. For the Nepalis, it was important to reassure the world that this project was different and the best way to do so, as they saw it, was to show that important individuals were committed to it.

It was also a unique moment in history. With the election of the new government, there was a sense of genuine hope for the first time in many years: the decade-long civil war seemed over and the corrupt monarchy would soon be ended. PAHS was a symbol of this new hope. The film should capture this sense of optimism.

This model clash was especially evident in the film team’s visit to a rural area, a visit that both Nepalis and Canadians saw as essential to the film. With all the inevitable logistical hurdles, this took some time to arrange, but in the last few days of our visit we finally set off for the district of Makwanpur in the fertile Terai region. Our hope was to film some emotional content: we envisaged very basic conditions, which we would film but treat delicately in editing.

After a terrifying roller-coaster drive through the mountains on narrow switchback roads, we arrived late at night at the city of Hetauda. Even in darkness, it was easy to see that this was, by Nepali standards, a relatively prosperous place. The streets were clean and well lit, and there were well-kept buildings all around.

We were taken to Hetauda hospital the next morning. To Westerners, Hetauda hospital was basic, but it was evident that patients were receiving a reasonable level of care. If we wanted to show the need for PAHS, this would not be enough. We were promised that we would be taken to a small village that afternoon, and we hoped to enrich some of our stories there.

The road approaching the village told the whole story: a smooth, straight, immaculately-groomed pathway through the forest. Many villages in Nepal – those with the most pressing problems – are not even accessible by road. Instead, this was a model village. We interviewed the local nurse/midwife (also pharmacist and entrepreneur), a dedicated woman who ran an impeccable clinic. But we did not come away with anything that would illustrate how difficult conditions were in a typical Nepali village.

By now, it was clear that the Nepali group had never intended to show us any really wicked conditions. The reasons for this were partly logistical – to do so would mean several days travel on foot – but mostly, I felt, to do with the dignity of Nepalis. Nepal had been portrayed as a basket case often enough in the past, and with the new government and the impending abolition of the monarchy, there was a feeling, albeit a tentative one, that things could be different in the future. They were proud of all they had done with virtually no resources, excited about what they could do, and they wanted to the world to see the future, not the present.

From the film crew’s perspective, the Nepali vision of the film was uncomfortable. They were becoming impatient with hearing the same line about how important the initiative was to Nepal, how things were progressing, etc., far from the compelling personal stories they wanted to film. Tensions were beginning to show, and the crew complained to me about the time they were wasting in interviewing officials.

Despite their frustrations, for three weeks the film crew acted as sponges, absorbing everything they could, filming in Kathmandu and beyond the city itself in Bhaktopur, Nagarkot and Hetauda. With a limited amount of time, we had to be sure we had everything in the can that might possibly make it into the final film. Yet as we boarded our flights back to Canada, we were still at a loss as to how we might satisfy the needs of Nepalis and those of Western donors in one film.

Over the summer, Robby and Dan spent many hours on editing the film. They consulted with me and showed me some previews, and I eagerly awaited the final cut. The PAHS film was screened at PAHS’ first fundraiser at the University of Toronto’s Hart House in September 2008. Robby and Dan came to Toronto for the screening, shuffling nervously into the room like proud parents about to show off their baby, hands trembling slightly as they switched on the video display.

They need not have worried. The film was a beautiful, sensitive, portrayal of Nepal and the PAHS project. The audience responded warmly.

The film opened with some beautiful footage of the Kathmandu valley set to Nepali music. The remaining scenes focused closely on the Nepali team who had dedicated their time and energy to the project and with the Minister for Health. Arjun Karki was presented as the inspiring leader of the project, and two Western members of the international board were also interviewed. In the closing scenes, the theme returned to the beauty of Nepal with a portrayal of some religious singers.

Having traveled so far on this journey with them, I was impressed with their ability to reconcile the two mental models in one the film. Throughout the film, the visuals and interviews made it clear that this was a Nepali project, established and managed by Nepalis with minimal involvement from outside. This would, I felt, both satisfy the Nepali desire for dignity and motivate Westerners through the evident dedication of the team.

Footage showing the beauty and cultural side of Nepal was both informative and inspiring: perhaps irrelevant to Nepalis, but essential to Westerners. In their portrayal of the rural hospital and its patients, they had struck a fine balance between the pathos needed to motivate a Western audience and the self-respect of Nepalis. And by showing interviews with the health minister and the international board, they had achieved a high degree of authority.

As I write this, I am preparing for another trip to Nepal to meet with the Nepali team, who have yet to see the film. I must admit I am still a little nervous. In spite of our best efforts to understand the Nepalis’ perspective, we may still have got it wrong.

The film, of course, was only one small challenge in the wicked problems that PAHS is designed to address. There will be many more such challenges along the way.

Robbie and Dan named the film Beyond the Valley. I thought the title very clever, as it neatly captured the challenges to rural Nepal outside the Kathmandu Valley. But there was another valley here: the valley between two cultures, two distinct ways of thinking. As a team, we tried not so much to bridge this valley as to move beyond it, not to compromise but to transcend.

2008-12-27T15:08:00.000-08:00

Learning to Love Mess

Are you a manager or a chef? Think about it.

Picture a restaurant kitchen on a busy Saturday evening. It’s a hubbub of noise, clatter, shouts, flying utensils, spilled sauces, broken eggshells. For those unfortunate individuals who have to clean it up afterwards, it’s a nightmare. It’s a mess.

Now switch to the average corporate boardroom. What comes to mind is just the opposite: mahogany table, middle-aged men in dark suits, white shirts, writing pads in neat leather binders, Mont Blanc pens, open laptops, quiet, polite discussion.

Mess gets a bad rap in business. Yet mess, I’d like to submit, is good.

Designer and professor Horst Rittell[1] claimed that many problems facing society were ‘wicked’. As distinct from ‘tame’ problems, wicked problems are difficult to define. These are problems that involve tradeoffs between multiple stakeholders and which can never really be ‘solved’ in the sense of finding an optimal solution; they can be seen as symptoms of other problems; and each one is essentially unique. As an example, because there is no real consensus on what constitutes success in the field of socio-economic development, projects in this arena are wicked; the same goes for urban renewal or curriculum design in public schools.

Wicked problems cannot be solved through linear methods. The standard approach to problem solving proceeds by understanding the problems, gathering information, analyzing information, drawing conclusions and developing solutions. This is fine for tame problems that can be clearly defined and simplified. For wicked problems, however, this process does not work, because wicked problems are ill-defined and require an in-depth understanding of their context.

Contemporary business problems are often wicked: they are social problems that affect multiple stakeholders, with each attempt to create a solution changing the nature of the problem. Customers are messy. They all want different things, and what they want varies from occasion to occasion. Heck, they don’t even know what they want. And colleagues are messy. Working in teams means accepting different perspectives and valuing the ideas of others.

Yet in most business schools, students learn how to solve ‘tame’ problems, not wicked ones. They learn to tidy up where they should learn to be messy.

By contrast, designers, long accustomed to dealing with mess, have developed several ways of thinking that help them understand such problems without glossing over their essential complexity. In contrast to the analytical perspective often taken in business where issues are narrowed and key variables isolated from each other, designers dive deeply into a problem, think broadly about it in context and generate new possibilities.

To be specific, designers excel in framing and reframing problems and in collaborating with others to develop solutions. User-centred designers make users the core of the design process, and some even bring users into the design process. Diversity in teams enhances the process because the more diverse the team, the broader the range of experiences it can offer. Designers learn to think of issues as a system of interacting parts rather than a set of independent components, and use structured processes to generate ideas in their teams.

The design model’s ability to address messy problems makes it an attractive idea for business. For business students, exposure to these methods not only prepares them to be superior managers, but pushes them to question their basic assumptions about problem solving.

Educating students to be business designers means helping them frame, deeply understand and solve messy problems. In a design course I taught recently in Austria, I worked with students in applying a design-based innovation process to an art gallery, a zoo and a financial service. The process involved provisionally identifying the problem to be solved, conducting ethnographic research and developing solutions. However, the students learned more than just a design process: that problems are often not what they seem to be, and that uncertainty is not to be avoided, but welcomed. For many, this was not merely a new skill, but a profound personal transformation.

A diagram of the process the students followed is given in Figure 1. While the diagram appears quite neat, the process is certainly messy in practice. The messiness comes from the realization that the problem is not what it appears to be: after an initial statement of intent – a summary of what they were trying to accomplish - students took a deep dive into the customer, business and technological aspects of their problem, using a variety of thought tools to help them make sense of the information. Invariably, they found they had to rewrite their statement of intent at least once before proceeding to develop solutions, an experience that was both frustrating and enlightening.

One team embarked on a project to develop a financial service for students. The team’s early thinking was to provide easy credit for students and, thinking they had solved the problem, they learned everything they could about student credit.

But it soon became clear that this was not such a tidy issue. It emerged from the team’s ethnographic research that Austrian students were very reluctant to take on debt, however easy or inexpensive it may be: they would rather live with their parents or on very tight budgets. By this time, the team was already moving on to implementation plans for their easy-credit scheme, and this revelation came as a major setback – in effect redefining the project.

Instead of wanting easy credit, students needed to learn how to obtain grants, budget their limited funds and manage their finances. They were overwhelmed with information – but the wrong information. This created an entirely different kind of opportunity for the team, and after many iterations between proposed solutions, customer research, brainstorming and refinement, they developed an information clearinghouse that provided financial advice and connected students with services they needed.

For the students, the lesson was not to rush to a solution, but to understand the problem deeply first. One student wrote as follows about the experience:

The redefinition of our research question helped us to focus the problem. So I learned the right question can help me to [understand] the problem and to focus on the pain points … Each redefinition made us get two steps ahead.

Another source of messiness was the diversity of the students in the teams. In the Austrian course, students came from very different backgrounds. Within the Austrian students, there was a mix of men and women from urban and rural areas and with very different interests – one student had been brought up on a farm, while another played guitar in a rock band – and there were several exchange students from different parts of Europe. In addition to language barriers, there were gaps in cultural understanding between several of the students. At times, these gaps led to misunderstandings and tension within the project teams.

Digging deeply to resolve these problems, students found that the empathy they were developing with users could also be applied to their colleagues. By conducting ethnographic research, they had learned to listen and suspend judgment. Now they used these same skills to hold back from criticizing each other’s ideas. With a new, tolerant atmosphere in the groups, ideas began to flourish.

Although the design process was highly structured, making sense of all this mess did not mean trying to tidy it up. Conventionally, students learn to solve problems by dividing them into separable elements and analyzing each element separately. But because changing one part of these problems affected all the other parts, the students had to keep the truly complex interactions of all the elements in view, and to do so, they needed to represent the problems in all their messiness.

The students used several tools for this, but perhaps the most dramatic was developing prototypes of the customer experience. Using scissors, tape, glue and magazines, students were encouraged to make a mess – as indeed they did – to draw out further insights about their innovation. Visual representation of the project brought out ideas that went beyond words and helped the teams communicate with each other:

It is important to be able to express the thoughts and emotions not only with words, but even with pictures and other creative techniques because not every feeling can be expressed only with a word. Only if there is something … your colleagues can touch, can they start to understand the meaning of the idea.

For business students accustomed to tidy theories imparted by well-dressed professors in orderly classrooms, this tactile approach was new and inspiring. Now the classroom was a busy kitchen, a hub of activity, noise and creation.

But beyond the fun was a serious lesson: that uncertainty in problem solving is not to be feared, but welcomed. The initial frustration students felt early on gave way to a realization that their final ideas were much more robust as a result of their willingness to suspend judgment and work with half-formed ideas. This gave them a new-found confidence in their ability to solve any problem that came their way:

Having a look on my everyday life, I often find myself looking out for possible solutions when I recognize a problem. I cannot stop that, it is crazy! But I like it. Next week, I start an internship in the international human resources management at an Austrian production concern. In my mind, I already have so many approaches to innovate the existing tools and habits that I would like to go there and change everything.

Some have suggested that the MBA should become an MBD: Master of Business Design. But perhaps an even better idea would be MBM: Master of Business Mess. As every chef knows, you can’t make an omelette without breaking eggs.

[1] Rittel, Horst and Melvin Webber (1973) "Dilemmas in a General Theory of Planning," Policy

Sciences 4, Elsevier Scientific Publishing, Amsterdam, pp. 155-159.

2008-12-27T14:57:00.000-08:00

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