In Part I, we noted that today’s business leaders are operating in an era when forces such as technological change and the historic rebalancing of global economic activity from developed to emerging markets have made the problems increasingly complex, the tempo faster, the markets more volatile, and the stakes higher. As a result, there is an ever-greater premium on developing innovative, unique solutions than ever before as organizations have to swiftly move from one temporary advantage to another to remain relevant in many constantly-changing industries. This is requiring these organizations to essentially innovate on demand.

However, innovation on demand is hard. Really hard. There is no one approach guaranteed to work for any particular problem, and given the wide range of problems facing today’s organization, there might not be any approach with a chance of success that exceeds the your chance of winning the lottery. We have the situation where some problems are so challenging that your odds of success are only favourable if you simultaneously attack the problem from multiple angles with multiple approaches. This is where flexons come in. Flexons, which are essentially problem solving languages derived from the social and natural sciences to accomodate the world of business problems, used in concert, provide a way for you to tackle a wide range of very difficult problems that will arise in the course of normal operations. They might not solve every problem, but, properly applied, have a good chance of solving a decent number of problems and are a good addition to your toolkit.

Flexons come in five flavours:

• Networks
  The network flexon helps decompose a situation into a series of linked problems of prediction (how will ties evolve?) and optimization (how can we maximize the relational advantage of a given agent?) by presenting relationships among entities. A properly constructed influence network can be used to determine who can best influence the adoption of a certain viewpoint, product, or solution; a properly constructed transportation network can help you optimize deliveries and shipments through various intermodal channels; and a properly constructed organizational map can help you determine which organizations your organization could partner with to quickly create a new servitized product offering.
• Evolutionary
  Based on the concept of an evolutionary algorithm, which uses randomness (to generate diversity) and parallelization (to generate multiple possible solutions) to quickly identify unworkable and/or sub-optimal solutions in a directed search process to get to a workable and/or near-optimal solution, the evolutionary flexon embraces a model where a series of low-cost, small-scale experiments involving product variants pitched to a few well-chosen market segments are preferred to a large all-in strategy. With every turn of the evolutionary-selection crank, where losers are discarded and winners are evolved into a pool of potentially better solutions, the company’s predictions will improve and the distance to the marketable solution will decrease.
• Decision-Agent
  Based on the definition of social behaviour as the outcome of interactions among individuals, each of whom tries to select the best possible means of achieving his or her ends, the decision-agent flexon represents teams, firms, and industries as a series of competitive and cooperative interactions among agents. The basic process is to determine the right level of analysis (such as the firm), ascribe to each agent at this level the beliefs and motives that represent their actions, consider how their payoffs change as a result of the actions of others, determine the combinations of strategies they might collectively use, and seek an equilibrium where no agent can unilaterally deviate from the strategy without becoming worse off.
• System-Dynamics
  Making the relations between variables of a system, along with the causes and effects of decisions, more explicit allows you to understand their likely impact over time and using a system dynamics lens that shows the world in terms of flows and accumulations of money, matter, energy, or information serves to shed light on a complex system by helping you develop a map of the causal relationships among key variables. This helps you identify the impacts of different decisions and is a great tool for identifying potential risks, and mitigations, in a system.
• Information-Processing
  This flexon focuses attention on what information is used, the cost of computation, and how efficiently the computational device solves certain kinds of problems with the goal of determining how to transform information in an intelligent way into an insight that a decision can be made on.

The approaches contained in these flexons can prove quite insightful in a wide range of industries. In their article on “five routes to more innovative problem solving”, the authors provide examples in biofuel manufacturing and telecommunications where the biofuel manufacturer wants to improve researcher productivity and the telco wants to predict future usage and customer desires. SI highly recommends reviewing the case studies if you believe that flexons would be a good tool in your innovation toolkit, which SI believes they will be for most organizations.

Last week, in our series on The End of Competitive Advantage (Part I, Part II, and Part III), we explained that the notion of sustainable competitive advantage is now a pipe dream in many industries and many markets and the only way some companies can hope to survive the new chaos is to swiftly move from arena to arena where they can temporarily acquire a transient advantage and profit.

Last Thursday, in our post on Maintaining Competitiveness – Adaptable Supply Chain Structure, we noted that a company would only be able to deftly move from temporary advantage to temporary advantage if it had a supply chain that could keep up. This supply chain — which needs to focus on risk, use a variable cost structure, support flexible capacity, and use shared services — will have to be innovative at its core, and may require the organization, and Supply Management, to innovate radically new solutions to existing challenges.

As noted in this recent McKinsey Quarterly article on “five routes to more innovative problem solving”, today’s business leaders are operating in an era when forces such as technological change and the historic rebalancing of global economic activity from developed to emerging markets have made the problems increasingly complex, the tempo faster, the markets more volatile, and the stakes higher. We now have a situation where the number of variables at play can be enormous, and free-flowing information encourages competition, placing an ever-greater premium on developing innovative, unique solutions. But how can an organization do this? There’s no one blueprint for innovation that will work for every company, and no one approach that will always work.

Some problems are so challenging, that your odds of success are only favourable if you simultaneously attack the problem from multiple angles with multiple approaches. One way to do this might be to use McKinsey’s flexon approach, where flexon is short for FLEXible Objects for generating Novel Solutions. While traditional problem-solving frameworks address particular problems under particular conditions, they have limited applicability. In comparison, flexons offer languages for shaping problems, and these languages can be adapted to a much broader array of challenges.

The creators of flexons have developed five flexons, or problem solving languages, derived from the social and natural sciences, to accomodate the world of business problems. Just like the Gang of Four’s^* five creational design patterns (which provide ways to instantiate single objects or groups of related objects) may not be sufficient for every object oriented system you can imagine, the authors don’t claim that their five flexons will be exhaustive, just that they are sufficient, in concert, to tackle a wide range of very difficult problems that will be sufficiently inclusive for most individuals. Furthermore, as with (object oriented) design patterns, it will often be the case that serious mental work will be required to tailor the flexons to a given situation, and each will retain blind spots arising from its assumptions, but multiple flexons can be applied to the same problem to generate richer insights and more innovative solutions.

Flexons are not the ultimate problem solving methodology, but they are a good methodology to have in your toolkit, because the more methodologies you have, the better your chances at solving a particular problem and innovating on demand. In Part II, we will describe the five flexon patterns.

^* If you don’t know who the Gang of Four are or what Design Patterns are, it’s not critical to understand this post but it is worth researching, especially if you want a better understanding of how good software (which you will rely on) can be constructed.