A better way to think about innovation

We must innovate! is a catchphrase of the digital age. In reality, most of us grip limpet-like to the things we know. Our inclination is to resent changes that force us to move beyond our comfort zone. This is called the familiarity heuristic in behavioural economics – our tendency to favour the familiar over the unknown.

A recent theory in psychology reveals that our brain is also a ‘cognitive miser’ – programmed to shun effortful, sophisticated thinking in favour of less effortful, simple thinking. In other words, our minds have evolved to avoid the difficulty and stress associated with innovative thinking.

But what if there was a way to improve the odds? This article outlines a way to structure your thinking about innovation. Who knows? It might lead you to the next big thing.

Answers shmanswers

Remember studying as a kid? Knowing the date of the Bolshevik revolution was important. You wouldn’t do well at school unless you memorised a laundry list of information. At university – even during your last job interview – you were probably judged on your ability to respond to the questions asked of you. But today, learning by rote isn’t what it used to be.

There are two reasons for this.

First, the ‘right’ answer to a question can change as the limits of human knowledge expand. For over a thousand years, people assumed the answer to ‘what are the laws of the universe?’ was found in the Bible. Newton then formulated his laws of motion, which held sway for three centuries. Einstein developed the general theory of relativity in the mid 20th Century, which now exists in parallel with quantum mechanics. We don’t know what will come next, but we know our understanding is incomplete.

Second, basic economic theory holds that scarcity creates value. Thanks to the internet, the answers to most questions are freely available in seconds. This trend has only just begun. As the artificial intelligence revolution accelerates, any occupation that revolves around collating data to spit out an answer will become much less valuable.

High-status professions like stock broking, medicine, accounting and the law are all in the firing line. Take accounting. In the very near future, the algorithms of companies like Xero will replace most of the accounting work currently done by humans.

If this all sounds concerning, it doesn’t need to be. It just means we have to think more creatively about how businesses and professions stay relevant. One way of doing this is to reduce the premium we place on answers and increase the premium we place on questions.

For instance, if the boards of Blockbuster and Kodak had asked more probing questions about the viability of their product, they might have recognised their answers to home entertainment (DVD hire) and preserving family memories (film photography) were at risk of becoming irrelevant. Netflix and the iPhone saw the opportunity that new technology afforded and ate their lunch.


Mark Twain

"He who asks is a fool for five minutes, but he who does not ask remains a fool forever."

Questions = innovation

So what’s the solution? To avoid going to the corporate graveyard, businesses need to understand the following insight: Those who ask the right questions transform the world. And every time a true innovator reaches a satisfactory answer, he or she can use it as a stepping-stone to ask a new, better question.

The idea that questions are the best way to develop new understanding comes from the dialectic method – the process of comparing and contrasting competing arguments to reach new insights. There is nothing new here – the idea has been around since Socrates – but it works. 

Here’s a simple method you can adopt:

  1. Think of an initial question.
  2. Try and answer it using as many falsifiable hypotheses as possible.
  3. Test those hypotheses through observation.
  4. Discard those that fail.
  5. Build on those that show promise by asking better and better questions.

He might have run into some controversy recently (all transformative thinkers do), but let’s take Elon Musk as an example. He begins by asking an initial question: How can I accelerate the world’s transition from a mine-and-burn hydrocarbon economy towards a solar-electric economy, for the benefit of shareholders and the environment? 

After discarding alternative hypotheses, his answer is to focus on electric vehicles (Tesla, Inc), lithium ion battery storage (Tesla Powerwall) and solar energy panels (SolarCity). But there are problems with cost blowouts, delays, and scepticism about whether his new technologies will become widely adopted. 

So Musk asks a better question: How can I create synergies, lower consumer costs, take advantage of economies of scale, and ensure my technology becomes mainstream? Musk answers by winning shareholder approval to merge Tesla and SolarCity; lobbies for billions in tax credits and government subsidies; builds a massive Gigafactory in Nevada to manufacture lithium ion batteries at scale, builds a massive factory in Buffalo to manufacture solar panels at scale, and gives away Tesla’s patents to competitors for free to guarantee the widespread adoption of electric vehicles. Musk recently repurchased the domain name, which he owned prior to creating PayPal. I suspect the website foreshadows a plan to combine Tesla with SpaceX, and take capitalism to the sun and stars. 

There’s only one Elon Musk. So don’t be discouraged if your initial question doesn’t bear fruit. No transformational idea is born perfect and ready for implementation. It’s a seed that grows best under the care and attention of a team, so get other people on board early. The trick is to start the process of asking the right question initially and seeing where it leads. As Mark Twain once said: He who asks is a fool for five minutes, but he who does not ask remains a fool forever.

Luke Heilbuth is Head of Strategy at BWD Creative.