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TECH TALK: Good Books: Why Not

January 13th, 2004 · No Comments

Nalebuff and Ayres take the view that innovation can be learnt, and there is a framework for thinking out-of-the-box. The book, through a series of examples, shows the way in which we can implement innovative thinking as part of our normal course of work, giving a platform for coming out with ideas and hopefully, solutions to challenging problems. Why Not describes four approaches to problem solving.

The first is WWCD What would Croesus do? Croesus was a very wealthy king and in this context it is taken to mean infinite resources. So, how would we solve a problem if there were no constraints. What this does is show that a solution exists, and then we can work on refining it. An innovator might produce 99 percent of the benefit for 1 percent of the cost.

The second approach is to internalize the externalities Why arent you feeling my pain? This focuses on creating the right incentives. The trick is to look at some choice that buyers or sellers make whereby the decision makers benefit from the value is less than the cost it imposes on othersIf the decision maker is made to feel your pain, she will end up doing the right thingFigure out what you like the person to do differently, and then provide the right rewards and punishment, accordingly.

The third approach involves idea arbitrage Where else would it work? In this case, the tool starts with a solution and looks for other problems the solution can be translated to. Translation often requires adaptation not just brute arbitrage, but arbitrage with a twist. The translated solution needs be well translated or blended to fit the context and institutions of the new setting.

The fourth tool involves symmetry Would flipping it work? This means trying things the other way around. It takes an existing solution in a given context and turns it around to get a new perspective.

The goal, as the authors put it, is principled problem-solving, [which can] help you see the solution more clearly. While we typically think of filters as constraints, we want to convince you that identifying the underlying attributes of any solution can be liberating and can actually help you generate ideasPrincipled problem solving means that you take into account the principles that any solution must satisfy. The more of these principles you can identify, the closer you are to the solution. There may be fewer options to explore, but those are the right ones to focus on.

As I read the book, I thought about the challenges we face in our quest to tap the SME and rural markets. The key is to frame the problem correctly .For example, in addressing the issue of making computers more affordable, one should ask not how do we provide a computer to every employee? but how can we provide computing to every employee? The former question will invariably point us to a low-configuration computer (use one with a lower-end processor, or use a refurbished computer), but the latter will point us in the direction of thin clients and server-centric computing.

So, here are two practice exercises that Nalebuff and Ayres discuss to show how to apply the principles. (Read the book for the solutions.) The Four Seed Puzzle: The task here is to plant seeds so that each seed is equidistant from the other seeds. The Ten-Seed Puzzle: The task is to plant ten seeds in a way so that they form five distinct rows, each with exactly four seeds. Happy thinking!

{Postscript: A book on a related theme is How would you move Mount Fuji? by William Poundstone. It focuses on puzzles asked during job interviews at Microsoft.]

Tomorrow: Why Things Break

TECH TALK Good Books+T

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