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 Martin’s Knowledge Funnel provides a high-level model for translating knowledge into business value.
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 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 are fixed formulas. 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.
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.
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.