The Design of Business

If the talent were to advance the heuristic to the algorithm stage, the company could hand the specialist's job to a much less expensive person.

random samples of voters. Reliability, in this context, is achieved by narrowing the scope of the test to what can be measured in a replicable, quantitative way and by eliminating as much subjectivity, judgment, and bias as possible.The goal of validity, on the other hand, is to produce outcomes that meet a desired objective.

mysteries as well. "In a business," he says, "no matter how good the process is, no matter how much you've got it down pat, no matter how much money you're making, how efficient, you have to always go back and say `Is there something fundamentally wrong with the way we're seeing the market?

Matching McDonald's accomplishment-and that of every other organization that creates value across the knowledge funnel-requires two very different activities: moving across the knowledge stages of the funnel from mystery to heuristic and heuristic to algorithm and operating within each knowledge stage of the funnel by honing and refining an existin

thinking. They embrace a very specific way of arguing and thinking that includes a highly restrictive definition of what constitutes reasonable grounds for moving ahead with a project, a very narrow definition of proof. For analytical thinking, all proof emanates from the past-a general rule handed down from the past, or a set of observations of ev

hunch.

abductive logic, a concept originated by turn-of-the-twentieth-century philosopher Charles Sanders Peirce. His important insight was that it is not possible to prove any new thought, concept, or idea in advance: all new ideas can be validated only through the unfolding of future events.

the road to wisdom begins with ignorance, and that is where we begin.

Intuition-biased firms cannot and will not systematize what they do, so they wax and wane with individual intuitive leaders.