Wednesday, January 5, 2011

Why Not ? By Barry Nalebuff and Ian Ayres

Why Not?

- How to use everyday ingenuity to solve problems big and small

By Barry Nalebuff and Ian Ayres

I am recounting an interesting story by Robert Fritz of The Path of least resistance fame on Thomas Edison. Circa 1878, when Edison decided to create the electric light, it was already well known that electricity could produce light. The task before Edison was to find the material that would not burn out and instantly consume itself. He began reading everything that had been written on the subject, and it is reported that he filled two hundred note books with jottings and diagrams. All scientists before him had followed a certain process. They looked for substances that would reduce resistance to the electric current, but they had found none that would produce an electric light. Instead of following the same process and limiting himself to producing the results he already knew, he tried the opposite. He tried for substances that would increase the resistance to electric current. After testing countless materials, he settled for carbonized element and placed it in vacuum bulb, thereby creating the familiar incandescent lamp.

He followed the famous maxim of Jacobi “invert”. This book is all about looking at various situations in a different light. It is worth a serious read – some of the episodes do offer some actionable insights. For the purpose of commentary, I would take only two stories and their general tools approach.

1: Penguin story: Adelie Penguins congregate on an ice floe and they all want to dive in to the water to feed on the fish. But, no one wants to dive first just in case a leopard seal or an orca is looking for lunch. Each Penguin stands on the edge and acts as if it is going to jump first. The problem is that, there is no great advantage of being first. Once it is clear the first one is not eaten, rest of the group jumps in no time as fast followers. By the way, even if the first one is eaten, it is still safe for others to jump in as the seal is already fed.

Like Pharma, first mover should have some advantage by law; else more penguin postures would happen rather than real acts. For example, the first one who does the price cutting does the customer a great help. The firm must be protected in order to prevent others from imitating for a while so that, some advantage in volume or market share happens for the first mover. At this point, no country gives such protection since patents have to be “non-obvious”. The authors even go to the extent of citing some of the new laws that have to be patented for a while – what they mean is that, when a state or province enacts a new law which breeds a better business environment, other states quickly copy it which renders the first mover’s efforts relatively ineffective.

2: Paying the polluter story: This is my most favorite one. Imagine a classic nuisance dispute between a polluting factory and nearby complaining resident. When it goes to court, it makes two basic decisions. First, if the resident has basic entitlement to stop the pollution. Second, if yes, how can it be protected by injunction or compensation if pollution occurs. Now, you get a 2by2 matrix.

Who owns the initial entitlement to control whether pollution occurs

INJUNCTION

Pollution allowed without compensation

Pollution prohibited without compensation

DAMAGES

Pollution allowed with compensation to resident

POLLUTER

RESIDENT

Now, you can see the missing category – “pay the polluter!” While it sounds alarming, there are some cases where it makes sense. Visualize a polluting factory that is located in no man’s land. But let us say, after 3 or 4 decades, habitation develops around that area. At that time, it is not fair to sue the polluter – worse yet, ask them to pay. Here, it is equitable to pay the factory folks to move out. They cite a case on these lines.

As to the four problem solving tools, authors cite them as four provoking questions. We will discuss one here.

1. What would Croesus do (WWCD)?

2. Why don’t you feel the pain?

3. Where else would it work?

4. Would flipping work?

WWCD is an interesting concept. King Croesus was incredibly wealthy and hence even today the expression “as rich as Croesus” exists. When trying to solve the problem, authors first advise you to imagine a solution not having any constraints – and then start working towards the solution. Howard Hughes, for example, wanted to watch specific films on T.V. whenever he felt like. Nearly 50 years back, there is no V.C.R, hence he bought the T.V. Station and asked the station General Manager to play the movie he wanted. While it may sound preposterous as a solution, the solution trajectory is on track. Come to think of it V.C.R. or today’s PVR is nothing but low cost personalized T.V. Station. In short, first make it possible, and then make it easy and affordable.

I enjoyed this book fully as it gave me subtle flips to various scenarios. Authors’ focus on symmetry is engaging - unless, one comes for the Antoni Gaudi‘s school of thought which does not subscribe to symmetry.

Thanks for reading thus far.

Regards,

madhu

14 comments:

mguru said...

"In short, first make it possible, and then make it easy and affordable"

- I liked this. Keep writing.

vivisa said...

Madhu-san, It was a good read.

(The phrase 'Pay the polluter' sounded quite counter-logical until I read it in full.)c

Ramesh N Raghavan said...

Madhu,
Interesting and thought provoking post. Will borrow it from you once I get around to completing my current stack :)

Suresh said...

Madhu,

Well written article. The problem I find with such books is not that the idea is bad. It is just that 'flipping', 'non linear', 'out-of-the-box' seem to assume that you work in vacuum. (Which incidentally is good for Edison's lamp.) The major problems encountered are due to people's inability to dream up good solutions but due to various cultural and ego issues. That is the reason why I always get a feeling of incompleteness when I read these books.

Mukund Srinivasan said...

Interesting, and definitely thought provoking. My take is that the quantum of innovation circa Edison days and now, is a wide one - ranging from an invention then, to just doing a routine task, more efficiently, in the current era. So, how does one effectively factor the thought process to account for this change in mindset?

GN said...

interesting read Madhu san,

I am reminded of a piece I read long back.

"Embrace the unexpected"

When the British had all the power, ammunition, army and were ready to counter a physical war of independence, Mahatma Gandhi resorted to Ahimsa.

Madhu Parthasarathy said...

Hi Suresh:
1. You have taken advantage of the "vacuum" :-)
2. Thanks for the serious conclusion.
It is true one may feel "incomplete" or "inadequate" but, even if modicum of those concepts gets applied in real life in a direct or obtuse manner, still it may be well worth it......I see hope!
regards,
madhu

Madhu Parthasarathy said...

Hi Mukund:
You have asked a tough question.
Let me attempt it.

Veron W ruttan, in his magnum opus work (induced innovation perspective)gives a crisp 2X2 matrix.

1 Quad: Edison quadrant: (intersection of market & technology)
It is called Industry sponsored technology research quad.
2 Quad : Pasteur quadrant
(intersection of market & scientific activities)
It is called use inspired basic research.
3: Quad : Bohr quadrant.
(intersection of scientific activities & Govt)
curious inspired basic research.
4: Quad : Rickover Quadrant.
Govt sponsored applied research.

Most of the books are in Edison's quad and hence we get that impression. As Prof Ruttan says, they are not self contained one leads to other. Hence, as a mind set, it can be curiosity, use inspiration, application mind or the safest one market driven.

Science was previously aristocratic, speculative and intellectual - and understanding nature. Technology is experimental action oriented -and controlling nature.
Now that difference has almost disappeared.
Now, it is all "applied".
Hence, any one of the four mindsets with focus would see it thru.

regards,
madhu

srini k said...

Madhu - Your review brings an interesting peek into the book, as always. Looking at problems in different perspective , call it out of the box - is not a new thinking in the realm of innovation.But the book emphasizes the why not or try anything aspect differently. Like the picture in the book cover. A boy trying to fly with a caper and goggles. The metaphor of audacity, sense of abundance or open mind, creativity captured in that picture. It is good picture that can be used both to introduce the book and the spirit of Why not thinking, when you want to trigger fresh perspective if not great innovation among the teams. Would recommend browsing whynot.net as well. Interesting collection of everyday problems thrown open with equally ingenious solutions.

Nimmy said...

Interesting, Madhu! Is the book mostly about paradoxical thinking (which some of your examples reflect) or out-of-the-box in general?
BTW, did you read The Upside of Irrationality?
Looking forward to discovering more such great books through your reviews.

Hari said...

The Penguin story reminded me of a talk I had seen in TED which talked of how important it is not only to be a leader but how important it is to be the first follower and how the leader should treat the first follower etc.

Mohanakrishnan said...

Madhu,

I felt this was the most thought provoking book that you have commented on here. Well this feeling is reading just the review and not the book, so you can take it with a good measure of Dandi salt :-)

The side question on the points discussed here is "how free should the free market be". Many (like this author) seem to think that we need very complex regulation to control the market.

And as always, very interesting summary by you - thanks for that.

Madhu Parthasarathy said...

Hi All,
Taking it from Google BUZZ
as it was public.
regards
madhu

Ramamurthy E S - Sikshana - Public
A Crazy Idea
Every good idea which is ahead of its time from one appears crazy to others; History is replete with instances. I was just reading a book " Why Not" by Barry Nalebuff and Ian Ayres. You should do it too; that will make it easy for you to understand what follows.

The State spends on a conservative estimate Rs 10,000 plus on every child in school at the primary level. We have now a plethora of problems facing us notwithstanding this munificent gesture. The State feels the kids ought to be thankful to it; but what do they do? They drop out of schools and / or fail their examinations, adding to the woes of the teachers. Those who are a bit better do even worse; they 'run away' to a private school! As for parents, all freebies notwithstanding, it does cost them money to educate a kid well even if it is in a Government school; starting from a few hundred rupees at the primary level, it goes up to a couple of thousands at the High School. This is behind many of the ills today.

With RTE around the corner, private schools are shuddering at the thought of having to admit the 'unwashed' among their midst; worse still with pretty little in terms of compensation.

I have an idea which will rid the System of all these. The State could learn to live with Rs 8800 instead of 10,000 ( if it is only that) and place Rs 100 in the hands of the kid every month - or Rs 4 per day of attendance- as long as he is in a State run school. That is not a tough thing to do. The amount may be deemed to be a stipend - so there is no stigma attached to it. Let us look at all the positive things this will achieve:

Dropouts and absenteeism will drastically come down ; the teachers will not have to visit the homes of the absentee kids any longer.
The enrollment figures in public schools will stop declining. The State may no longer have to worry about closing schools and relocating teachers; both have started happening at an alarming rate and are very unpopular measures to deal with.
The private schools could continue to do they are good at- whatever that is- without fear of the unknown arising from RTE.
Who knows , if the amount is linked to MLL's ( minimum learning levels) and a pass in an examination , we may even have spectacular increases in these areas too
The reason why I quoted the above book is simply this: it is often about the Why Not rather than the Why. Why should we always plan on the basis of children having to pay for education? Why cannot the State pay them for getting educated in their schools? After all, are they not spending a fortune already with pretty little to show? Could this not be taken as an investment for the future? Some may say that this is corrupting the young and education should not be had for such benefits; but then dont scholaships and mid-day meals fall under this category too?

This will naturally be resisted by those who are going to be affected when the budgeted 10k becomes 8.8 k. I am confident about one thing; these guys are smart enough to find 11.2 k when it comes to the crux. That will leave everyone happy.

A Post Script: There is no sanctity about the figure of 100. The results are bound to be even more dramatic if you double it.

E S Ramamurthy

Padma said...

Good read Madhu-san