Session 3

Hypothesis / Model Construction

and Creativity
 An Hypothesis
• “The relationship between two or more
variables which is believed to exist and
which can be tested”

• If a hypothesis is proven repeatedly it

becomes enshrined as a theory or a law
(until disproved, modified or amended!)

• “The Earth is flat”

 Variables
• Must be measurable
• Ideally should be continuous
• Established methods of measurement
(SERVQUAL) / Units of measurement
(Likert scales)
• Ideally linear relationships ( y = mx + c)
• Many relationship are often asymptotic or
exponential
 Model building
• Looser configuration of variable thought to
be associated with the dependent variable
• No strong numerical relationships between
the variables.
• Many variables unsuitable to
measurement
• Often interactions between variables
• Models are complex and multidimensional
 Static and Dynamic modelling
• Static models are those which describe
“what is” at a specific moment in time
• Dynamic models are relationships
designed to forecast the future based on
changes in one or more variables
 Exercise
• “What factors impinge on the total sales of
ice-cream in Thailand?”

• Build a static model to describe the ice

cream market in the country.

• What factors are more important than

others? / which are related to each other?
 Methods of Business Forecasting
• The choice of method used depends on a trade
off between FOUR criteria:
Accuracy required
Resources available
Time frame
Data availability
Methods available can be defined along TWO
dimensions:
Subjective / Objective
Analytic / Experiential
 Typology of Methods of
Forecasting
Analytic

Expert Dynamic
Judgements Modelling

Subjective Objective

Delphi
Heuristic/extrapolation
methods

Charismatic Experiential
Judgements
 Research and Creativity
• Successful companies are those who have
the connection / transition from research
based knowledge to creativity

• Singapore is knowledgeable

• Europe and the US is knowledgeable and

creative
 What is creativity?
• The result of imagination rather than
routine skills
• The ability to imagine new and useful
solutions to problems
• A drive to see things other than they seem
• Thinking “outside the box”
 “Thinking outside the box”
• Using only 4 lines join all 9 points in the
square below.

. . .

. . .

. . .
 Thinking outside the box
Problem
A large Liverpool nightclub (1,500 – 2,000
dancers) has a problem with bar service
where typical waiting times are 15 – 20
minutes. Apart from adding more bar
space how can the problem be solved?
 Lessons learnt from this example
• Get rid of your assumptions (you assume
it is person to drink. Why not drink to
person?)
• Reduce concepts to their basics – liquid
transport
• Import ideas from other areas where the
same benefit is needed.
• Think differently
How smart are you?

The Giraffe Test

 Question

How do you put a giraffe in a refrigerator?

 Correct Answer

Open the fridge, put in the giraffe, and close the

door!

(This question tests whether you tend to do simple

things in an overly complicated way)
 Question

How do you put an elephant into a

refrigerator?
 Did you say ………

Open the refrigerator, put in the elephant,

and close the refrigerator?

WRONG
 Correct answer

Open the refrigerator, take out the giraffe,

put in the elephant, and close the door

(This tests your ability to think through the

repercussions of your previous actions)
 Question

The Lion King is hosting an animal

conference. All the animals attend, except
one.

Which animal does not attend?

 Correct Answer

The Elephant

The Elephant is in the fridge – you just put

him in there!

(This tests your memory)

 So you got those wrong?

One more chance to show your true abilities

 Question

There is a river you must cross but it is used

by crocodiles, and you do not have a boat.

How do you manage it?

 Correct Answer

You jump into the river and swim across.

Have you not been listening? All the

crocodiles are attending the Animal
Meeting

(This tests whether you learn quickly from

your mistakes)
 What does it all mean?
• According to Anderson Consulting, around 90%
of the executives they tested got all questions
wrong!

But many primary schoolchildren got several

correct answers

Which proves conclusively that most professionals

have the brains of a primary schoolchild!
 BISOCIATION
• Bringing together of two previously
unrelated planes of thought
• Chipboard: Glue + wood shavings /
sawdust
• Windsurfing: Surf board + Sailing dinghy
• Adhesive brush: Adhesive tape + clothes
brush
 Brain Hemispheres
• Right: Creativity, Images, Colour, Emotion,
Holism, Intuition, Comprehension,
Recognition.

• Left: Evaluation, Logic, Reasoning,

Rationale, Analysis, Calculation, Realism
 Why creativity?
• If you do not, you will ultimately die!

• Innovating companies are more profitable!

• Your reputation as a creator will attract the

best employees (Microsoft)

• Encourages positive cultural values

 Areas of creativity
• Product / service improvement
• Product / service diversification
• New products / services
• More creative advertising
• Increased efficiency and quality / reduced
costs
• Increased personal effectiveness
 Creativity Blockers
• “The brain is a wonderful thing – it switches
on as you wake in the morning and doesn’t
switch off again until you arrive in the
office!”
• Blockers include: Habit, fear of making mistakes,
upbringing, language, fear of consequences,
absolute truths, principles, fear of change,
certainty, beliefs, self doubt, rational thought,
age, lack of time, politeness, specialisation.
 Use your senses!
• Look: In your garden or park, pick out 15
varieties of green
• Listen: Listen to a well known piece of music and
pick out the main instruments
• Touch: Close your eyes, reach out like a blind
person and feel
• Taste: Can you distinguish between Coke and
Pepsi – blindfolded?
• Smell: What do you associate with pleasant
smells?
 Producing creative ideas
• Brainstorming / Focus groups
• Defect analysis
• Dimensional extrapolation
• Synectics / Analogies
• Quality Circles / TQM / Benchmarking
• Re-engineering
• Identification (Clay pigeon shooting)
• Mind mapping
• Triadics
• Critical Incident Analysis
• Lateral Thinking
 Exercise: Nestle takeover
Rowntrees
• Nestles takeover of Rowntrees in the mid 1990’s
was reckoned, at the time, to be far too
generous to the owners. Nestle knew otherwise!
• Rowntrees had five important global brands
(Kitkat, Polo, After 8 mints, Smarties, and
Pastilles) which over the past decade have been
exploited by product development!
• Kitkat, at the time of takeover, consisted of two
products – a two finger and four finger version!
Your task: Extend the Kitkat family!
• Starting with the two versions Nestle
started with, extend the Kitkat family!

• Since 1995 Nestle have launched 22 new

products in the Kitkat family, from a
possible total of over 100 !!!

• You should not be short of ideas!

 Mind mapping
• Start with a key problem (the trunk of a tree) and
spread out the branches from the trunk. Try this
one!

Bangkok has a reputation as

the sex capital of the world
 Creative Output
• A creative organisation will demonstrate:
• A continuous stream of new ideas
• Attracting the brightest / most creative talent
• Will make quantum leaps in technology / design
(revolution not evolution)
• Will focus on problem solving / benefit creation
• Have strong contacts with leading edge
academics
 Presenting new ideas
• Visual aids (pictures, graphs, colour,
humour, alternative mediums, few words)
• Body language (be open, head up and
voice up, lots of eye contact, move
around, be aware of personal traits!)
• Question (welcome interruptions, reflect,
tie in to their problems, pre-empt
arguments, don’t show anger with
objections!)
 To summarise
• Creative companies are successful and
profitable companies
• Creativity can be learnt, but needs managerial
support and a supportive corporate culture to
thrive
• Employees often dislike / distrust change
• Creativity needs to be continuous
• If you are not creative you will die, and
business research is the starting point of
creativity
 Exercise: Hozelock
• Hozelock make green vinyl plastic hose, used
for watering gardens, together with a range of
attachments for cleaning cars, spraying lawns,
and rotary distribution.

• A recent report showed a long term decline in

the market due to smaller gardens, increased
competition from better products (flat hose) and
product sustainability.

• Advise the company how it might develop