Artificial intelligence is rapidly catching up to humans in a variety of expert tasks. Will it eventually make human managers obsolete, or will it? Reframing is a cognitive skill that people still have an advantage over others. Reframing does not involve solving a problem with intuition or conscious reasoning. It is about defining the problem and how it should be solved. Although it can be difficult and time-consuming, reframing is crucial to finding breakthrough solutions and adapting to rapidly changing environments. This ability can be nurtured by four tactics: allowing yourself to forget about the problem, making hidden assumptions clear, playful exploration, and using surprising analogies.
Thinking is the most important tool managers have to manage their business. This involves two distinct ways to process information: the intuitive and conscious. Nobel laureate Daniel Kahneman called thinking fast and slow. Computers are outperforming humans in both areas. Computers easily outperform humans in conscious-reasoning tasks due to their pure calculative power. As long as the rules and parameters are known, they can beat humans at both. To build investment portfolios, price decisions and understand supply chain risks, managers often turn to simulation and mathematical optimization. While humans were once better at pattern recognition (which is largely intuitive), computers can now be trained to create their own intuitions using large amounts of data via machine learning. Recent studies have shown that computers are better at identifying cancer in computer tomography scans, and selecting investment targets.
Can managers still add value to their organizations, given the current state of affairs? There is one cognitive ability that people have an advantage over computers: the ability to think really slowly.
Reframing is a process that requires slow thinking. This allows us to reexamine our assumptions, objectives, and parameters. Reframing does not involve solving the problem with intuition or conscious reasoning. It is about defining the problem.
It is not easy to reframing. Managers can have deep roots in their industry history, organizational history, as well as the executives' education and experience. We view reframing as slow thinking because it can take a lot of time.
Because innovative business models often arise when companies depart from traditional ideas about how value is created or captured, reframing is essential. Take Amazon as an example. CNBC's Jeff Bezos was challenged by a reporter in 1999 because of Amazon's large distribution centers and employees. This company wasn’t the pure internet investment that investors wanted. Internet, shminternet, Bezos replied. He refuted the notion that an online business model with low costs was necessary to compete. Instead of accepting the traditional retail versus internet dichotomy, the conversation was reframed by him as an obsession with providing great customer experiences and how all Amazon's strategic decisions were centered on this goal.
Reframing is especially important when market dynamics change. Consider Nokia. Nokia is a feature phone company that had come to expect success with new products. This was because it knew that sales would rise quickly and profits would be good. The company decided to not make costly investments and stopped taking actions that did not produce immediate results. It pulled out of many innovative innovations, such as touchscreen phones, tablet devices and mobile gaming, that it considered too risky or did not see widespread adoption in the early 2000s. This was especially true when the competition moved up to the ecosystem level. Nokia executives lamented that while Nokia was continuing to flood the market in new hardware, third-party ecosystems and apps and software development kits were second priority. A former Nokia manager stated that large-scale consumer services cannot be made in one year. It has been a common problem that we lack patience for this.
The ability of humans to think very slowly is also key to state-of the-art AI. AI doesn't work unless people first frame a business problem in terms of an AI problem. Ajay Agrawal and Joshua Gans argued that AI is just a collection of prediction algorithms. Problems that require time-consuming human judgement and careful analysis (e.g. identifying insurance fraud or assessing creditworthiness), can be reframed as prediction problems. This is exactly how Lemonade, Kabbage and other startups have shaken up established businesses like small-business lending and consumer insurance.
The ability to reframe is essential in a world that managers have the ability to use computers to improve their thinking speed and slow. Here are four ways to cultivate it.
Spend time focusing on the problem and not worrying about it. Research shows that incubation can lead to more creative solutions. You can set aside a problem to allow for restructuring and spontaneity. After you have started the process of solving a particular problem, take a break and do something else for a while.
Make assumptions that are not obvious. Most people are unaware of the limitations and self-imposed assumptions that we make when approaching situations. Cognitive conflict can be brought out by group processes that aim to incite cognitive conflict. One group can argue against the solution of another (devils advocacy), or two groups can develop opposing solutions to a problem ("dialectical enquiry"). A mathematical model of the problem is also helpful because it allows you to make assumptions about the root cause and the best possible solutions. Unexpected dynamics are often revealed by modeling, which can lead to shifts in mindsets regarding how best to manage certain things. Fluor Corporation developed simulation modeling to predict changes in costs and schedules for complex projects. Managers realized that these changes could be managed proactively rather than being dealt with retrospectively as was the industry norm.
Playful exploration is a way to get involved. Managers can inject an element of imagination into their decision-making process to help them mentally disconnect from industry rules and tacit assumptions. This will allow them to unleash creativity and disengage themselves from industry norms and industry wisdom. To liberate yourself from the constraints of everyday life, ask your teams to create Lego models of their business ideas to help you communicate them to others.
Surprising analogies are leveraged. Analogies can be a powerful tool for resolving common problems. You can use ideas and practices from different industries to transform another. Berry Gordy Jr. made Motown Records a success factory by modeling it after Ford Motor Company's assembly line. Sometimes, it's a good idea to expose yourself to something totally different, such as opera or combat sports. Apple's minimalist design was a result of the Bauhaus architecture, Zen Buddhism lessons, calligraphy, and calligraphy classes that Steve Jobs was exposed too. The analogy may be imperfect but it can provide rough guidelines for a novel frame of a problem.
Managers can include these practices in their toolkits to improve their reframing abilities, but they also have to make sure that the wider organization supports reframing. First, create channels and foster an environment where visionaries and devils can express their concerns. Second, make sure employees have the time to explore and incubate. Although these efforts might not immediately yield tangible results, they could be vital for the organization's renewal and long-term success.
