Continuing from the previous post...

https://durumis.com/ko/@ryan-reason/human-behavior-becomes-the-criteria-for-corporate-decisions-1-7q9sdmrd

Here, I introduce a phenomenon-driven approach.

A. 'Phenomenon' as the focus of analysis

Focusing too much on mega trends makes it difficult to explain situational details. When focusing on product value, if the size of the market and target group are emphasized too much, it becomes difficult to focus on understanding the needs and aspirations of customers. This in turn leads to a lack of criteria information about what new products should be offered in the future. Also, when taking a product-centric approach, quickly switching to problem-solving mode early in the process can ultimately increase the risk of developing products close to existing products or investing in products that fail to meet market demand.

To avoid these pitfalls, I propose a phenomenon-driven approach. Phenomenology focuses on everyday life, that is, intentional relationships between people and the meaning that people are interested in and experience. How is the role of a car changing for the driver? Why is our relationship with money so abstract? Why do patients create their own medication strategies? Simply put, phenomenology makes us understand that we are not simply looking at a glass bottle containing Coca-Cola. What we see is a Coca-Cola bottle that evokes emotions and their associations, leaving thoughts of confusion, nostalgia, pleasure, or disgust.

In this regard, the following three basic understanding elements are required.

• Understanding what it means to be human
• Investigative methods for understanding human behavior
• A process of reasoning that can lead to new insights

The main challenge of a phenomenon-driven approach is that it requires more analysis before specific concepts and solutions are developed. Instead, this approach is rewarded with richer, differentiated, and potentially unique growth opportunities.

B. Abductive problem-solving that infers the best explanation from observations

Hypothesis-driven problem solving is already widespread in the world of corporate business strategy. This approach is effective in providing a framework that is mostly fast, simple, and structured. However, its limitations are clear in that it cannot be used to develop original ideas in other situations with high uncertainty. Considering human confirmation bias, hypothesis-driven problem solving is limited to exploring imaginable hypotheses and can only help determine which of the existing biases is most likely to solve the problem.

On the other hand,abduction is the process of actively looking for data that may be contradictory to existing assumptions and biases, and then trying to understand it.Therefore, the form of inference is as follows. The surprising fact, C, has been observed. However, if A is true, then C would naturally be a problem. Therefore, there is reason to doubt whether A is true. In this regard, successful abductive problem-solving is characterized by data overload, continuous pattern recognition, open and critical discussion, and this process is much more intense than expected.

C. Data collection using various complementary methods

Following the abductive problem-solving principle based on observations of phenomena, data collection from various sources is necessary to reveal blind spots that were not visible. This process requires a perspective based on a rich and nuanced understanding of humans. Such a perspective can only be obtained through in-depth qualitative research, validation of a vast amount of data, and rigorous financial analysis. However, many companies struggle to apply qualitative data with the same level of confidence and rigor as when calculating NPVs or setting customer segment sizes. Therefore, simply collecting data from multiple sources is not enough. Rather, you need to be careful about when to collect the data.

• First, define the phenomenon that should drive the analysis. (For a company in the home appliance industry, it could be 'home', for a company in the wine industry, it could be 'banquet'.)
• Conduct internal interviews and open-ended surveys to define the company's DNA.
• Identify long-term drivers for future change and use socio-economic data to define potential hot spots.
• Use qualitative data (interviews with industry, adjacent industry, and academic experts) to look for signs of new customer/consumer behavior changes in related phenomena.
• Find new commercial possibilities that can be used to try business opportunities on each of the potential growth platforms.

D. Concretely from abstract data

Now we address the fundamental challenge facing management within the company. We determine the answers to questions such as which possibilities to invest in and how to make these changes affect the direct organization. To this end, we present the following 5 steps based on the acquired data.

1. Conduct ethnographic in-depth analysis in a specific market to identify the unmet needs and goals of customers that will drive the proposal.

2. Generate ideas using customer/consumer insights and select the best ideas.

3. Create a prototype of the best ideas.

4. Test the prototypes with real customers.

5. Evaluate the impact on the market and then deliver the new products and proposals to the internal direct organization or sell them to external partners. If the results confirmed are not as expected, they should be discarded.

This process not only provides a structured framework, but also helps to make the process more agile. That is, bad ideas can be eliminated early, allowing more time and money to be spent on good ideas.

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Finally, it should be clarified that moving away from the comfort of certainty is not a meaningful investment for all companies. However, my belief in writing this article is that the analytical challenges associated with the phenomenon-driven approach will ultimately be rewarded by the discovery of more attractive opportunities, which will provide a source of competitive differentiation for years to come.