Saturday, September 6, 2008

Understanding and profiting from variability

Malcom Gladwell’s TED talk “What we can learn from spaghetti sauce” articulates a fundamental shift in science and economics from old school thinking. Until recently, the focus was identifying universal rules or the best single solution to a market problem. Over the last ten to fifteen years, the revolution in science and economics has been to understand variability and seek clusters of solutions that provide a better fit across the population and better satisfy market needs. In the past, scientists, psychologists, economists tended to seek universal rules that govern how everyone behaves. The recent trend is away from a single optimal solution toward understanding and taking advantage of variability.

“What we can learn from spaghetti sauce” describes how Howard Moskowitz learned to apply Rule Developing Experimentation (RDE) the systematic process of designing, testing and modifying alternative ideas, and products in a disciplined way so that the developer and marketer discover what appeals to the customer, even when the customer can't articulate the need.

1 comment:

fCh said...

This could make for a good model in some fields other than food. Indeed, we could all think of more segmentation, but by walking miles along the typical suburban super-grocery one can see that food differentiation has become neither food nor differentiation.

So, the practical question becomes: When you can afford to segment, where do you stop and how do you handle innovation?