Session 3

Hypothesis / Model Construction

and Creativity

An Hypothesis

• “The relationship between two or more variables which is believed to exist and which can be tested”

• If a hypothesis is proven repeatedly it becomes enshrined as a theory or a law (until disproved, modified or amended!)

• “The Earth is flat”

Variables

• Must be measurable

• Ideally should be continuous

• Established methods of measurement

(SERVQUAL) / Units of measurement

(Likert scales)

• Ideally linear relationships ( y = mx + c)

• Many relationship are often asymptotic or

exponential

Model building

• Looser configuration of variable thought to

be associated with the dependent variable

• No strong numerical relationships between

the variables.

• Many variables unsuitable to

measurement

• Often interactions between variables

• Models are complex and multidimensional

Static and Dynamic modelling

• Static models are those which describe

“what is” at a specific moment in time

• Dynamic models are relationships

designed to forecast the future based on

changes in one or more variables

Exercise

• “What factors impinge on the total sales of

ice-cream in Thailand?”

• Build a static model to describe the ice

cream market in the country.

• What factors are more important than

others? / which are related to each other?

Methods of Business Forecasting

• The choice of method used depends on a trade off between FOUR criteria:

Accuracy required

Resources available

Time frame

Data availability

Methods available can be defined along TWO dimensions:

Subjective / Objective

Analytic / Experiential

Typology of Methods of

Forecasting

Analytic

Dynamic

Modelling

Objective

Heuristic/extrapolation

methods

ExperientialCharismatic

Judgements

Delphi

Subjective

Expert

Judgements

Research and Creativity

• Successful companies are those who have

the connection / transition from research

based knowledge to creativity

• Singapore is knowledgeable

• Europe and the US is knowledgeable and

creative

What is creativity?

• The result of imagination rather than

routine skills

• The ability to imagine new and useful

solutions to problems

• A drive to see things other than they seem

• Thinking “outside the box”

“Thinking outside the box”

• Using only 4 lines join all 9 points in the square below.

. . .

. . .

. . .

Thinking outside the box

Problem

A large Liverpool nightclub (1,500 – 2,000

dancers) has a problem with bar service

where typical waiting times are 15 – 20

minutes. Apart from adding more bar

space how can the problem be solved?

Lessons learnt from this example

• Get rid of your assumptions (you assume

it is person to drink. Why not drink to

person?)

• Reduce concepts to their basics – liquid

transport

• Import ideas from other areas where the

same benefit is needed.

• Think differently

How smart are you?

The Giraffe Test

Question

How do you put a giraffe in a refrigerator?

Correct Answer

Open the fridge, put in the giraffe, and close the

door!

(This question tests whether you tend to do simple

things in an overly complicated way)

Question

How do you put an elephant into a

refrigerator?

Did you say ………

Open the refrigerator, put in the elephant,

and close the refrigerator?

WRONG

Correct answer

Open the refrigerator, take out the giraffe,

put in the elephant, and close the door

(This tests your ability to think through the

repercussions of your previous actions)

Question

The Lion King is hosting an animal

conference. All the animals attend, except

one.

Which animal does not attend?

Correct Answer

The Elephant

The Elephant is in the fridge – you just put

him in there!

(This tests your memory)

So you got those wrong?

One more chance to show your true abilities

Question

There is a river you must cross but it is used

by crocodiles, and you do not have a boat.

How do you manage it?

Correct Answer

You jump into the river and swim across.

Have you not been listening? All the crocodiles are attending the Animal

Meeting

(This tests whether you learn quickly from your mistakes)

What does it all mean?

• According to Anderson Consulting, around 90%

of the executives they tested got all questions

wrong!

But many primary schoolchildren got several

correct answers

Which proves conclusively that most professionals

have the brains of a primary schoolchild!

BISOCIATION

• Bringing together of two previously

unrelated planes of thought

• Chipboard: Glue + wood shavings /

sawdust

• Windsurfing: Surf board + Sailing dinghy

• Adhesive brush: Adhesive tape + clothes

brush

Brain Hemispheres

• Right: Creativity, Images, Colour, Emotion,

Holism, Intuition, Comprehension,

Recognition.

• Left: Evaluation, Logic, Reasoning,

Rationale, Analysis, Calculation, Realism

Why creativity?

• If you do not, you will ultimately die!

• Innovating companies are more profitable!

• Your reputation as a creator will attract the best employees (Microsoft)

• Encourages positive cultural values

Areas of creativity

• Product / service improvement

• Product / service diversification

• New products / services

• More creative advertising

• Increased efficiency and quality / reduced

costs

• Increased personal effectiveness

Creativity Blockers

• “The brain is a wonderful thing – it switches

on as you wake in the morning and doesn’t

switch off again until you arrive in the

office!”

• Blockers include: Habit, fear of making mistakes,

upbringing, language, fear of consequences,

absolute truths, principles, fear of change,

certainty, beliefs, self doubt, rational thought,

age, lack of time, politeness, specialisation.

Use your senses!

• Look: In your garden or park, pick out 15 varieties of green

• Listen: Listen to a well known piece of music and pick out the main instruments

• Touch: Close your eyes, reach out like a blind person and feel

• Taste: Can you distinguish between Coke and Pepsi – blindfolded?

• Smell: What do you associate with pleasant smells?

Producing creative ideas

• Brainstorming / Focus groups

• Defect analysis

• Dimensional extrapolation

• Synectics / Analogies

• Quality Circles / TQM / Benchmarking

• Re-engineering

• Identification (Clay pigeon shooting)

• Mind mapping

• Triadics

• Critical Incident Analysis

• Lateral Thinking

Exercise: Nestle takeover

Rowntrees

• Nestles takeover of Rowntrees in the mid 1990’s

was reckoned, at the time, to be far too

generous to the owners. Nestle knew otherwise!

• Rowntrees had five important global brands

(Kitkat, Polo, After 8 mints, Smarties, and

Pastilles) which over the past decade have been

exploited by product development!

• Kitkat, at the time of takeover, consisted of two

products – a two finger and four finger version!

Your task: Extend the Kitkat family!

• Starting with the two versions Nestle

started with, extend the Kitkat family!

• Since 1995 Nestle have launched 22 new

products in the Kitkat family, from a

possible total of over 100 !!!

• You should not be short of ideas!

Mind mapping

• Start with a key problem (the trunk of a tree) and

spread out the branches from the trunk. Try this

one!

Bangkok has a reputation as

the sex capital of the world

Creative Output

• A creative organisation will demonstrate:

• A continuous stream of new ideas

• Attracting the brightest / most creative talent

• Will make quantum leaps in technology / design

(revolution not evolution)

• Will focus on problem solving / benefit creation

• Have strong contacts with leading edge

academics

Presenting new ideas

• Visual aids (pictures, graphs, colour, humour, alternative mediums, few words)

• Body language (be open, head up and voice up, lots of eye contact, move around, be aware of personal traits!)

• Question (welcome interruptions, reflect, tie in to their problems, pre-empt arguments, don’t show anger with objections!)

To summarise

• Creative companies are successful and profitable companies

• Creativity can be learnt, but needs managerial support and a supportive corporate culture to thrive

• Employees often dislike / distrust change

• Creativity needs to be continuous

• If you are not creative you will die, and business research is the starting point of creativity

Exercise: Hozelock

• Hozelock make green vinyl plastic hose, used for watering gardens, together with a range of attachments for cleaning cars, spraying lawns, and rotary distribution.

• A recent report showed a long term decline in the market due to smaller gardens, increased competition from better products (flat hose) and product sustainability.

• Advise the company how it might develop