The One Creativity Tool To Manage Uncertainty in the Business
In 1983, William Smithburg, CEO of Quaker acquired Gatorade for $220 million. It was touted as an impulsive purchase. Quaker grew the brand value to $3 billion. In 1994, Smithsburg bought another beverage brand, Snapple, for $1.8 billion. Due to Gatorade’s grand success, none of the board members opposed or protested this acquisition. A few years later, Snapple was sold off to Triarc Corporation for $300 million. Does Success blind us?
‘Fastrack’ has been a monopolistic “Rental Taxi” service brand in Chennai for the last couple of decades. In the last few years, another brand ‘NTL’ came and the market became competitive. Fortunately, ‘Fastrack’ could successfully wither the storm, as NTL did not compete on any differentiation. But ‘Ola’ and ‘Uber’ came with a massive differentiation and disrupted the market. Though ‘Fastrack’ is still surviving, it had lost its market leadership. ‘NTL’ brand is pushed to the corners. If I was a “Fast track” owner, how would I know that somebody unrelated to my field would come and disrupt my market? Can any design thinking tool help?
Designer’s job is not to design a product or service, but solve a problem, anticipate future scenarios and prepare the team to face them. To solve a problem, we were taught to generate multiple options — “DO NOT PURSUE A SINGLE OPTION” — Single option blinds us, and we could get attached emotionally to the single idea.For every option, designers would generate multiple scenarios — this reduced considerable uncertainty and prepare ourselves to face the potential outcomes.
Designers use different creativity tools for creating multiple options. One of the creativity technique is “What If”. This tool could be used to explore various user scenarios in order to solve future uncertainties.
“What If” tool may not predict the exact future but could help in reducing some of the uncertainties.
An earlier success would create a bias in mind in the form of overconfidence. The first step in solving a problem is to remove the overconfidence, keep a beginner’s mind every time, look at the problem from different perspectives — from the perspective of a shop floor employee, a retailer, a customer, a user, an engineer. The research shows that to solve a problem, to predict the solution’s future implications, a person’s overconfidence makes him unconsciously draw conclusions and make decisions based on the information available close to him. A biased mind would be blind to many of the subtle hints in the environment, people. In this case, he would be blind to future surprises, which were beyond his existing source of knowledge.
WHAT IF as a Creativity Technique
‘What If’ forces your mind out of logical reasoning — it is a generative creativity technique. By asking ‘What If’ questions, we can provoke a fictional narrative for the future. It helps us to explore a spectrum of possibilities and prepare for the worst possible scenarios.
Long back, while designing a speaker, I asked myself a provocative question — ‘What If’ the speaker flies like a helicopter? We made a concept similar to the present minion toy, which could move around based on the sound’s movement.
Imagine I am starting a restaurant -
What if everyone working in my restaurant is an entrepreneur? We all have a problem with employees learning the skills, going out and starting another restaurant. But how about hiring people who would like to start their own restaurant in near future — You would have got a dedicated workforce providing wonderful customer service — None can match the team’s energy — Entrepreneurial thinking would bring forth radical ideas for your restaurant — You would be building a future network — You would gain franchising opportunities — With this provoking question, you were turning the problem into a solution.
What if my restaurant customer pays to keep his privacy? Vow! How about the whole restaurant is an open area, but you could create a temporary structure for families in minutes if they need privacy and willing to pay?
What if I allow my customers to sleep at afternoons? After lunch, we could allow them to sleep for 30 -90 minutes. We could explore this idea further.
What If I make customers pay with virtual currencies created by us? A loyalty programme — to make sure we build loyal customers — customers could order food before they leave home.
What If a customer pays for the ingredients used in the product or service? Customers could decide the type of food he likes and type of ingredients he would like to be added — It is a customer’s menu — the customer need not follow the restaurant menu — Loyal customers could mail his requirements and type of preparations and consult the chef’s opinion — you could charge for service, consultation.
What If my restaurant acts as a bank? People go and deposit money in the bank. Can we ask people to come, deposit their prepared food in our restaurant, so that we could sell it to other customers(Of course with stricter quality controls and customer feedback? Like Airbnb — You do not own kitchen, you do not cook — But you are a restaurant for people to come and eat — the menu changes every day and nobody knows what food we get — People love surprises.
What If a competitor opens a new restaurant just opposite to us? What If the competitor offers the food for half the price of us? What if the competitor is a famous brand? What if the government changes rules and regulations for our proposed innovative idea? What If our customers do not trust our services? What If we receive a negative review in the websites or press? What If somebody gets poisoned by our food? What If something falls over a customer of something dangerous happens to the customer?
WHAT IF in Business
Chip and Dan Heath in their “Decisive” book talk about a stock investor “Penstock”. One of the striking aspects of Penstock is his humility in his predictive abilities (Be Humble).
Most of the stock investors use a simple rule to predict what a stock is really worth — If the future target price is higher than the current price, we should buy the stock. Penstock feels that this rule provides a false confidence to the investors. According to him, “Future is uncertain. It is not absolute, but a range”.
He analyses his future by asking two questions. What if the situation goes bad? What if the situation goes well? Through these questions, he analyses the reasons why a situation would go bad, and what would be the lowest price in that scenario? Similarly, he analyses the possible bright scenarios and predicts the likely best price? He chooses a stock price that lies closer to the lower range and he is fairly successful.
WHAT IF and BACK FROM FUTURE
‘What If’ scenario helps you to create a concrete future scenario and work backwards to the present — It forces us to find explanations why the event might happen.
The Minnetonka Corporation was a seller of niche novelty items like bubble bath, scented candles, flavoured lip balms. In 1980s Minnetonka’s Robert R Taylor wanted to introduce a liquid soap called ‘Softsoap’ dispensed by a soft hand pump and could be used in homes for handwashing. Most people used bar soaps that time and the competition were heavier in this market due to bigger brands. Results from pilot testing of liquid soap sample in the market were encouraging. The “Softsoap” appeared that it would capture rapid market share.
Robert R Taylor asked himself two questions — What if Sales was booming high? What if competitors launch the copy product soon?
These questions had made the Minnetonka team generate explanations for those scenarios — They came across one common major reason for both the scenarios to happen — The dispensing pumps.
There were only two companies that supplied plastic dispensing pumps and they had a limitation in production quantities. If the sales were high, the pumps would be a bottleneck in meeting the market demand. If competitor launched a similar product, it would further affect the supply of pumps to Minnetonka. The solution — The Minnetonka executives signed a contract of 100 million units of the pump assembly with both the suppliers for a period of 18–24 months.
Big bar manufacturers could not get the Pump Assembly for the next two years and by the time they entered the market, Minnetonka had a firm foothold.
If you are planning to ask for a raise in salary to your boss, think about possible scenarios — What If his mood was bad, what would you do? What If he points out a past situation and bases his judgement on that incident — how would I counteract? What If he says that I am not a team player — How would I counteract, show examples? What If he asks me to leave the job — can I show him that giving a raise is cheaper, effective than a new hire? If you are preparing for a job interview — act future scenarios.
Though we cannot minimise bad outcomes, ‘What If’ scenarios help people to prepare for surprises, understand the early signs of failure and cope better when they encounter inevitable future difficulties. Some of ‘What If’ scenarios may help in mitigating risk, introduce, change marketing activities, business strategies, product features.
References: Decisive by Chip and Dan Heath, Well Designed by Jon Kolko.