Associative Thinking — What, Why and How?
When Air Deccan in India ran its first low-cost airlines offering tickets for as low as $0.02, India witnessed an airline revolution which was never anticipated. The idea later described as the one originating from a sparrow — which covers its distance, flying its way by stopping for several intervals but similarly consuming less food because its small size, associating a bird’s characteristics to plan flights was very new. It is very interesting to note that the very origins of aviation started with the visualization of birds and bugs. Air Deccan, just like a pigeon, implemented point to point route strategy where it did not time its flight to connect with other flights. In combination along with using Small ATR aircraft as well as the dynamic pricing model [1], they laid the stone for an important transition in airline travel.
Ideas like these have revolutionized the world for a long time. We, humans, have a long tendency of associating a known thing with the unknown and it happens naturally for us. However, there has been no term coined to what happens. Thus, when Giovanni Gavetti introduced the concept of Associative Thinking through his article[2], there was an obvious buzz around the concept. What was very interesting to note is this article came during the days were following the bandwagon on trends (without understanding the implications) had led to the Dot-com Bubble in the late 1990s and early 2000s(1) and a decade later with the Financial crisis in late 2000s(2). While organizations and leader’s ability to understand and contemplate the trends resulted in the Making or Breaking the organization’s fortunes during the crisis, there was rising reluctance within organizations to move out of the organizational inertia.
In the new uncertain and fearful world, leaders now needed to be good economists to understand the impact of trends as well as good psychologists to be able to influence the organization to work towards the change. In the time to follow, we saw many start-ups become unicorns and organizations develop to have revenues equal to the GDP of some nations, we even saw organizations failing miserably. As stated by Rohrbeck in the research article [3] after critically analysing the reasons for organizations failure to innovate, there are three main points;
1. The high rate of change: One of the factors relevant is the increased speed of diffusion of information [4]
2. Ignorance: Many organizations fail to perceive discontinuous change. This can happen with leaders perceiving low probability events as those with low impact or when top management lacks sufficient capacity to assess the potential impact of the situation.
3. Inertia: People usually fail to think outside the box and are influenced by structural inertia.
While this highlight the need for leaders to develop themselves to become good economists and psychologists, an interesting pattern emerged within the successful companies. These companies perform roles like providing retail experience within the comfort of homes, decentralizing the software development industry and many more. As the world experienced rapid globalization, companies helped people stay together while away from home while once industry behemoths who stuck to their ideals, embraced organizational inertia failed miserably.
The pattern that emerged back provided a robust innovating mechanism. The ability to associate familiar occurrences of one industry (the trends) to unfamiliar industries ultimately led to great innovations. This concept is called Associative Thinking. Organizations which embrace associative thinking have an added edge over their counterparts. The reason is very evident. Instead of fighting in a competitive market, the organization that innovate using Associative Thinking can constantly gain a competitive advantage as the first movers.
However, Associative Thinking does not happen naturally to many organizations and strategists alike. The blockage is because of the structural inertia, the inability to come out of a structured work environment that has been designed to optimize process efficiency. A lack of a clear framework or method to adopt associative thinking means many would prefer working on current tasks rather than innovate.
We at The Pre-Mediators understand the pain. So, we have come up with our tool to make associative thinking an everyday thing. We call this tool The Pre-Mediators Trend Reaction Equation.
The Pre-Mediators Trend Reaction Equation Tool
We know we had to exhibit associative thinking ourselves in coming with the tool. Being Engineers, we had encountered multiple chemical reactions. The beauty of the Chemical reaction is that it does not go ahead unless every individual element necessary for the reaction is present in the required quantity. Innovations too are very similar; it needs signals or trends mixed rightly and the trends need to mature at the right amount to finally lead to the outcome. This tool looks like this;
The tool consists of the following parts;
1. Trend: The trends including weak signals from the market or megatrends already shaping the market.
2. Industry: The relevant industry where innovation is being thought of.
3. Catalyst: A catalyst is an event that would hasten or slow down the process the innovation, example of a Catalyst can be a Blackswan like COVID-19.
4. Innovations: The outcomes of Associative Thinking, to write as many Innovation ideas as possible. It is important to note that the innovations can be used as Trends to form a chain reaction.
The iterative nature of using Innovation as trends to keep the reaction continuing helps in sustaining innovation and understanding its long term.
While this equation helps leaders, strategists and everyone to adapt Associative Thinking in their decisions, innovations fail because they fail to offer a value proposition relevant to the market.
To build a robust customer-centric innovation model for your organization with a clear view of long term stakeholder partnership, please participate in our Interactive Futures Simulator. Our simulator also solves another purpose of effective innovation implementation, it helps members in understanding how to psychologically influence a change within an organization based on the innovation models constructed. Our simulator is based on extensive research done in Innovation Management and Foresight Innovation Strategies and our team consist of members with experiences across a diverse range of Industries from Energy to Technology.
For more information, please contact Aditya Shashidhar at aditya.shashidhar@edhec.com.
References
1. Jeffery L. Sampler, Air Deccan, CISR WP №365 and MIT Sloan WP №4657, November 2006.
2. Giovanni Gavetti, The New Psychology of Strategic Leadership, Harvard Business Review, July-August 2011.
3. René Rohrbeck, Hans Georg Gemünden, Corporate foresight: Its three roles in enhancing the innovation capacity of a firm, Technological Forecasting & Social Change 78 (2011) 231–243.
4. H. Lee, K.G. Smith, C.M. Grimm, The effect of new product radicality and scope on the extent and speed of innovation diffusion, J. Manage. 29 (2003), 753–768.
