Since the dawn of the Industrial Revolution, corporate leaders have relentlessly pursued operational efficiency. The fundamental institutional goal was that of exploitation—maximizing the payoff from existing knowledge to solve problems. Using historical data, quantitative analysis, and inductive and deductive reasoning, explicit, incremental, step-by-step processes were developed to reliably predict outcomes and assure risk-mitigation. A sterling example is Ray Kroc of McDonald’s, who “Simplified the McDonald’s system down to an exact science, with a rigid set of rules that spelled out exactly how long to cook a hamburger, exactly how to hire people, exactly how to choose locations, exactly how to manage stores, and exactly how to franchise them.”
The polar opposite of exploitation is exploration—the search for entirely new knowledge. Exploration involves creativity and innovation and is based upon gut feelings, intuition, and instincts. Through knowing without reasoning, exploration is focused on achieving valid solutions and often results in false starts and major unexpected leaps forward. Exploration grasps risky new opportunities efficiency thinkers ignored. For example, “Early on, McDonald’s left health issues by the wayside. Subway made healthy eating the centerpiece of its value proposition, touting its fresh ingredients and low-fat specialties in response to consumers’ increasing concerns about unhealthy fast food.”
Are we stuck choosing between exploitation and exploration in our organizations? The answer is a middle ground, call design thinking. Design thinking seeks to balance innovation and efficiency (BOTH are necessary for success), continuously redesigns the business to take advantage of each, and closely matches consumer’s needs with what is technically feasible. Unlike the use of inductive and deductive logic in exploitation, and intuitive thinking in exploration, design thinking utilizes abductive logic. Abductive logic asserts that anything is possible, reaches out toward what might be, and can only be proven when the future arrives.
Martin, Roger (2009). The design of business. Boston: Harvard Business Press
The polar opposite of exploitation is exploration—the search for entirely new knowledge. Exploration involves creativity and innovation and is based upon gut feelings, intuition, and instincts. Through knowing without reasoning, exploration is focused on achieving valid solutions and often results in false starts and major unexpected leaps forward. Exploration grasps risky new opportunities efficiency thinkers ignored. For example, “Early on, McDonald’s left health issues by the wayside. Subway made healthy eating the centerpiece of its value proposition, touting its fresh ingredients and low-fat specialties in response to consumers’ increasing concerns about unhealthy fast food.”
Are we stuck choosing between exploitation and exploration in our organizations? The answer is a middle ground, call design thinking. Design thinking seeks to balance innovation and efficiency (BOTH are necessary for success), continuously redesigns the business to take advantage of each, and closely matches consumer’s needs with what is technically feasible. Unlike the use of inductive and deductive logic in exploitation, and intuitive thinking in exploration, design thinking utilizes abductive logic. Abductive logic asserts that anything is possible, reaches out toward what might be, and can only be proven when the future arrives.
Martin, Roger (2009). The design of business. Boston: Harvard Business Press
