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Are We Moved by Inspiration or Desperation?

Posted By Prucia Buscell, Thursday, March 17, 2011
Updated: Friday, March 18, 2011

Could Be Either, but it Helps if it's "Frinky"

Failure can be an engine of innovation if we learn to see it as a blessing rather than a curse, says Baba Shiv, professor of marketing at the Stanford Graduate School of Business.

Shiv, one of the pioneers of decision neuroscience-the study of what happens in our brains as we make decisions-suggests we can learn productive attitudes toward failure.

In a Stanford GBS News story, he says most individuals, managers and corporations, fear failure. They find it painful and shameful, and that makes them averse to risk. Shiv says people with a more enterprising mindset don't fear failures so much as they fear watching while someone else runs away with the best idea. For these more venturesome types, a failure can hold insight to a future success.

If experience has conditioned us to be fearful, how do we regain the adventurous spirit we probably had as children? One possibility is rapid prototyping. Wild ideas produced in brain storming are rapidly transformed into models or solutions that may or may not work. So you get rid of the ones that don't, try again, and in the process your brain gets the idea that failure is OK, and may even be instructive and pleasant.

Many companies have devised ingenious ways to inspire and reward innovation. Inspiration can work, unless the novel idea is ridiculed or vetoed by a fearful, risk averse manger. Other companies have successfully used desperation: cut the resources and demand better results. Jugaad is a Hindi slang word that means improvisational innovation driven by scarcity. Shiv says it's a common management concept in India, where people are experienced in coping with scarcity. According to a Bloomberg Businessweek story by Reena Jana, it's likely to be increasingly influential in the U.S., as consultants mingle the idea with Six Sigma, total quality, lean and Kaizen, the Japanese term for continuous improvement. The story notes that already companies such as Best Buy, Cisco Systems and Oracle are using jugaad (pronounced joo-gaardh) to create products and services that are cheaper for producers and buyers. Business scholars warn, however, that jugaad has to be practiced with attention to ethics and regulation, so it isn'tjust corner-cutting.

In his course "The Frinky Science of the Human Mind," Shiv uses rapid prototyping and other techniques to apply principles of human brain functioning to such tasks as putting customers at ease, encouraging them to choose one product over another, and being happy with their decisions. For instance, in one surprising bit of research, Shiv and colleagues found that people who bought an energy drink at a discount price performed worse on puzzle solving than people who had paid full price for the same drink. The idea that the drink wasn't quite as effective actually made them dumber. And Frinky? It's not in the dictionary. It's a word Shiv's son made up to combine counterintuitive and funky.

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