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Think like a system, act like an entrepreneur

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Einstein once said ‘if I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about the solution’. Here, Rowan Conway, Director of Innovation at the RSA introduces the concept of ‘thinking like a system, and acting like an entrepreneur’ and suggests that this might be a new way to look at public procurement.

In partnership with Innovate UK, the RSA recently undertook a research project that looked at ways to optimise the potential of the Small Business Research Initiative (SBRI) as a catalyst for social innovation. In the RSA’s new report, From Design Thinking to Systems Change, we take a deep dive into the SBRI process and suggest ways to support innovations to get to scale and have lasting impact.

The rule book for public procurement might need a rewrite

SBRI is effective when a problem is clearly identified and requires technical expertise and imagination to fix, however, its longer term impact relies on there being a market for the eventual product: either within government and public services or in the consumer sphere.

But there are times when the public service challenges it is applied to present unclear pathways to scale or face complicated markets to enter. The report concludes that if SBRI is to stimulate innovation for public good that scales beyond the competition, a new approach to problem definition and selection might be needed. More radically, perhaps the rule book for public procurement might need a rewrite.

We suggest that this new approach should be predicated on systemic thinking and entrepreneurial action. We term this ‘think like a system, act like an entrepreneur’ – a design thinking method that looks at problems systemically and then identifies entrepreneurial actions that leverage the most effective solutions.

The Think Like a System, Act Like an Entrepreneur model.
The Think Like a System, Act Like an Entrepreneur model.

Problems are not the same as markets

In our research, we found that challenge prizes, or SBRI competitions, effectively stimulate ‘competition demand’, but providing the elusive first customer does not always give a guarantee that there will be a second. This is because societal problems don’t always equate to consumer markets – and different kinds of problems lead to different types of diffusion and scale.

‘Tame’ and ‘wicked’ problems

Horst Rittel made the distinction between ‘tame’ and ‘wicked’ problems. ‘Tame’ problems can be relatively easy to define explicitly and tend to have a rational and linear pathway to a solution. Conversely ‘wicked’ problems are difficult to define and grasp both in diagnosis and prescription.

SBRI will struggle to solve wicked problems requiring more than a technical fix or market intervention, but it can tackle low hanging fruit as part of a broader mission.

Disaggregating between tame and wicked is therefore a critical prerequisite for SBRI success.

Step 1: Is the problem technical AND does it present market opportunities?

Thinking systemically can reveal the nature of the problem that SBRI is aiming to tackle and ensure that the right ones are picked. In the RSA’s reimagined SBRI process, would-be competition commissioners are required to conduct a systems analysis phase (as illustrated below) to assess the type of problem they are facing.

By engaging in a comprehensive process of problem definition, SBRI users can define the type of problem that they face, and have a better sense of how to proceed. The first challenge is to determine if the problem is both technical in nature and presents market opportunities.

The RSA suggests augmenting the SBRI competition process with a dedicated phase for problem definition
The RSA suggests augmenting the SBRI competition process with a dedicated phase for problem definition

Step 2: use design thinking to develop the solution

From this systemic understanding of problem and context flows the ‘act like an entrepreneur’ element. SBRI commissioners encourage enterprises to use design thinking to develop their product or service solutions, but the entrepreneurial action should not be left to the enterprise alone. The role of the entrepreneurial commissioner is to intelligently assess and act to improve the market opportunities for an SBRI innovation.

Step 3: designers need help to commercialise solution

Responding to this challenge our design thinking model suggests a SBRI phase 3 focused exclusively on commercialisation, in which designers can be helped to position themselves most effectively for market success.

SBRI competition winners should be supported in taking their product to market with a dedicated commercialisation phase
SBRI competition winners should be supported in taking their product to market with a dedicated commercialisation phase.

Use Civtech as a role model

A model with some similarities to this is already being prototyped in Scotland. Civtech, a challenge stimulation body run out of the Scottish Government’s Digital Directorate, provides demarcated time for problem definition and dedicates a phase to ‘pre-commercial development’ following the development of a prototype.

To stimulate sustainable innovation and make the best of SBRI, we see value in UK public procurement moving in the direction of Civtech by trialling the think like a system, act like an entrepreneur approach.

We argue that an approach centred on a systemic appreciation of the problem will produce better competitions, resulting in better innovations and ultimately impact.

As Russell Ackoff once said, ‘we fail more often because we solve the wrong problem than because we get the wrong solution to the right problem’. And as Einstein knew, time spent on the problem is time well spent.

Follow Rowan on Twitter: @RowanEConway

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