Design Advantage : The Secret to Creating Long-Term Value 4 Derived from: Roger Martin’s The Design of Business

RAP2 : The Knowledge Funnel
PROFIT : The key to Value Creation lies in our use of what we know and don’t know. If we don’t know how something works, we can’t exploit it. Roger M
artin’s Knowledge Funnel provides a high-level model for translating knowledge into business value.

Mysteries
Mysteries are not understood. There’s something going on and we can’t quite explain it. Exploration starts with curiosity and a question. What do you want to know? Artists, Scientists, Researchers and Designers typically work in this domain.

Heuristics
Heuristics are rules of thumbs. They’re simple and incomplete understandings of more complex things. They increase the probability of getting a specific result and don’t guarantee it. Knowledge workers and Professionals work in this domain.

Algorithms
Algorithms are fixed formu
las. They’re step-by-step procedures that guarantee a specific result. Think software – it works the same every time and almost anyone can do it. This domain includes the franchise, production lines and software code.

Examples
Artist
PhD Student
Researcher
Architect
Facilitator
Lawyer
McDonalds
Multi-Level Marketing
Factory Production
Software Code



Up and Down
When you move down the funnel you decrease costs and increase your efficiency and scale.
When you move up the funnel you create the opportunity to re-invent what you’re doing.
It’s risky and the potential rewards are high.

Transitions
To move from Mystery to Heuristic develop a hunch that explains what’s going on.
To move from Heuristic to Algorithm simplify what you’re doing. Delete the extraneous, generalize circumstances and create a specific how-to model.

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