Ordered Thinking
First Order Thinking- The Bureaucrat
It's linear.
We do what we do because we have always done it this way. It will always be done this way because this is the way it's always been done.
Arena designers and stadium owners responded this way on why the people who pay the most (suite lessees) sit furthest away from the rink, floor or field until Gino Rosetti challenged this shiboleth with some third order thinking and created the more intimate and more financially viable modern arena design starting with the home of the Detroit Pistons in Auburn Hills, Michigan. Rosetti applied the European opera house design (multi-tiered levels of suites) to the arena and revitalized the construction and revolutionized the (private) financing of new buildings in North America in the late1980s.
Second Order Thinking- The Entrepreneur and the Successful General
It's curvillinear and non-linear.
It looks around corners. It sees advantages in problems. It is lateral. It turns problems into opportunities- it is fluid and changes direction unexpectedly and surprisingly.
Ego does not get in the way of a change. The not-invented-here syndrome is totally absent.
Excerpt from Shogun, by James Clavell, published by Dell Publishing, New York, 1975, p. 548. This is an exchange between Lord Toranaga and Mariko concerning her report to Toranaga on Yabu, Overlord of Izu Province in 15th century Nippon:
"What's your opinion of Yabu?"
"Yabu-san's a violent man with no scruples whatsoever. He honors nothing but his own interests. Duty, loyalty, tradition, mean nothing to him. His mind has flashes of great cunning, even brilliance. He's equally dangerous as ally or enemy."
"All commendable virtues. What's to be said against him?"
"A bad administrator. His peasants would revolt if they had weapons."
"Why?"
"Extortionate taxes. Illegal taxes. He takes seventy-five parts from every hundred of all rice, fish, and produce. He's begun a head tax, land tax, boat tax- every sale, every barrel of saké, everything's taxed in Izu."
"Perhaps I should employ him or his quartermaster for the Kwanto. Well, what he does here's his own business, his peasants'll never get weapons so we've nothing to worry about. I could still uses this as a base if need be."
"But Sire, sixty parts is the legal limit."
"It was the legal limit. The Taiko (supreme ruler of Japan) made it legal but he's dead."
Question: can you spot second order thinking here? There are three examples in this exchange. The point here is not to adopt the morals of 15th century Japan but to understand that, for example, sometimes your competitors can be your strongest allies. Why do the Exxons of the world locate next to the Shells or the Burger Kings next to the Mcdonaldses? Why, when your competitor opens a new 'for lease' building next door to yours could this be for your business?
Example:
Problem- X development company would like to build travel apartments targeted for use by the high tech sector. City of N laws state a single dwelling with 2 kitchens is not considered a regular dwelling unit and is therefore subject to several legal implications. X company would rather not get into extra legal affairs and would rather not break the law. X company would like to maximize rental revenue of travel apartment but cannot due to city regulations.
Solutions- It appears X company's options are 1. Break the rules. 2. Spend the time and pay the taxes (two development charges instead of one, rezoning costs) in order to meet regulations. 3. not build in that location, 4. just build a single (larger) unit with higher total costs and lower revenues.
2nd order solutions- Understand the rules and work with them and around them. Further thought and good design present an option to build one unit with 2 or 3 (depending on levels) travel apartments that have separated by individual accesses and have shared privileges to kitchen use. X company builds a standard housing unit that has individualized access, bath, living and sleeping quaters with the shared/lockable access to kitchen quarters.
Result- compliance with city officials, lower costs (only one kitchen required for two units), higher revenues (two units generating at least 50% more total dollars than one larger unit) and increasing in profitability for company X.
Third Order Thinking- Quantum Effects in the Human Brain, Quantum Leaps, Breakthroughs: the Scientist, the Social Scientist, the Teacher, the Business Person (Genius can be anywhere)
e = mc**2, Albert Einstein, Relativity and Special Relativity, time dilation, c, the speed of light, as a universal constant and speed limit.
"Eureka, I have found it!" Archimedes on how to measure the specific gravity of an irregularily shaped object.
Priceline.com, consumers name the price they are willing to pay for businesses to accept or not rather than businesses setting their prices for consumers to accept or not.
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