02/04/2014 12:29 pm ET | Updated Apr 06, 2014

The Paradox of Breakthrough Innovations

Creating breakthrough innovations require designers to live on the edge in order to sustain an extended exploration of concepts. Since working with breakthrough innovations entails high market and technology risk, this inevitably distorts one's sense of reality. So, what are the pros and cons of taking the path less traveled and developing breakthrough businesses and design concepts?

We recently studied eighteen design teams developing breakthrough innovative business opportunities at Hanyang University in Seoul, South Korea. Placed under intense pressure to perform, the design teams formulated business strategies for Apple Corporation and Fisker Automotive and translated these into business models and design briefs. Then, they presented business opportunities and their corresponding design concepts and over the course of fourteen weeks, we observed their risk-attitude, self-confidence and decision-behavior.

We found that strategic thinking led to a reduced number of intuition biases (illogical reasoning) in the conceptual phase, as well as during the final concept presentation. However, this insight came at a price, creating a distortion of the teams' sense of reality. Increased strategic comprehension was found to cause the teams to feel that they were in control and could predict their environment more accurately, than was actually warranted.

This much-hailed self-confidence propelled the teams to continue exploration of high-risk market and technology directions. But this confidence also proved to have a dark side, since team self-confidence did not translate into increased performance, as traditionally believed. In fact, the more confident the teams were, the less they were in touch with their own performance and that of the competing teams. When asked to bet on which teams would deliver the best business opportunity, they had the worst betting performance.

In design consulting, teams applying an ad hoc and unstructured approach make most initial concept decisions and this approach has two huge disadvantages. First, self-assessment by teams is notoriously unreliable and external experts have been shown to be better judges of team performance. Secondly, intuitive decision-making, when it comes to design, has proved inferior to systematic scoring on e.g. (the DCQ) the nine Design Quality Criteria.

The paradox of strategic comprehension reducing intuition bias on one hand while fostering reality distortion on the other, together with self-confidence propelling exploration on one hand, while preventing situational awareness on the other, can effectively blind both designers and managers alike.

Since increased strategic comprehension improves teams' multiple day-to-day intuitive tactical decisions and external independent experts are most effective in making systematic decisions, a combination of the two could eliminate biases, while ensuring broad exploration.

Perhaps design in breakthrough innovation could benefit from applying a three-prong management approach, corresponding to our legislative, executive and judiciary branch. Dividing the responsibilities of strategy, execution and decision-making could provide the objectivity required to tackle these paradoxes.

Today, a structure is already in place consisting of top management, the project teams and users. However, this static structure fails when developing breakthrough innovations for dynamic environments. Management blames the design team for lacking understanding and empathy for the user. Designers blame the failing on "design by committee" which meets the lowest common denominator, while users simply vote with their feet and money and move on.

In nature, it is survival of the fittest and those most adaptable are rewarded. So, perhaps the fault is not within the structure but in the destructive competition between the three functions. One could imagine a human body where the internal organs are at war with one another.

Alignment of incentives, transparency between the functions and timely and effective communication between these three approaches may be what is needed for making a sizable dent in the design universe.