Thinking, creativity & decision making - slide showing how our cognitive system works, how we make decisions, and the concept and elements of creativity - with a focus on entreprenurial opportunity

1. Thinking, Creativity, Decision
Making & Opportunity
Murray Hunter
University Malaysia Perlis

2. Sensory Perception and Cognition

3. External Stimuli Perceptual Cognition
Environmental energy Inputs
Conversion of
environmental
energy to neural
Overview of the
Receptors Eye-electromagnetic energy,
impulses photoreceptors (primary visual cognitive system
cortex)
Various parts of Ear-air waves, mechanoreceptors
memory that (Auditory cortex)
Sensory Store
hold unanalyzed Tactile/haptic-tissue distortion, skin,
receptor input. (somatosensory cortex)
Tongue-aromatic chemicals,
mechanoreceptors, (organoleptic
and olfactory cortex)
The attention
Attention
mechanism selects
and blocks Mechanism
Visual/spatial, auditory, haptic,
perceptual olfactory, organoleptic and
information for motoristic
pattern recognition.
Pattern
Recognition
Recognizes and
determines which
Also includes
information a
smell, taste and
person will use and Visual Phonological
sensations.
remember.
Perception
Selection Where information is patterned
recognition and and sequences in a way our mind
interpretation. self organizes.
Patterning Bias A working limited capacity memory
carrying out the functions of rehearsal,
coding, decisions and strategies.
Temporary Mental Cognition
Decision
Psychotic, Working (Short Output
Making
Behavioral and Term) Memory Responses
Processes
Cognitive
Distortion
Long term storage memory
Heuristics, Long Term where short term memory
biases and retrieves and deposits
Memory
other information.
influencing
mechanisms. (Arrows represent neural transmissions)

4. Our cognitive system can
only process one thing at a
time

5. Please say the colours
Yellow Blue Orange
Black Red Green
Purple Yellow Red
Orange Green Black
Blue Red Purple
Green Blue Orange
An example of cognitive confusion

6. “Run Throughs” Fix Start Blocks Change shoes
Jogging
Our memory
and knowledge Fast sprints Size up
competitors
makes up a Warm up
schema Practice starts
Pre-Start
Stretching
Call up
Take off
Relax track suit
Running a
100m race
Wait for
Dip at line Stand behind
call up
blocks
Final acceleration Slow Attention
to finish line down
Get on marks
Whistle
Race
Call to marks
Accelerate hard Start
first part
Call to set
These are linked Run relax and coast
to our emotions ‘Explode off Gun Set position
blocks’

8. Learning & Learning
New Experience
schema
modification
Present feelings & New feelings & emotions
emotions
Created Interpretation
Experience unable
Existing Schema to coordinate new Modified Schema
experience with
(Prior Knowledge)
existing schema
Use of metaphor to
understand and
solve problems
If solved will lead to
reinforcement of
existing schema
Time

9. Problem Solving and Decision Making

10. The primary objective of reasoning, problem
solving and decision making is to find ways
out of difficulties, achieve aims or
objectives, make a selection or overcome
some form of obstacle. Decision making
requires special sets of skills, which not only
set us apart from the animal kingdom but
also set human apart from human. In his
book Sources of Power: How People make
Decisions, Gary Klein (1998) goes further and
states that decision making skills are a source
of power for an individual.

11. Please construct 4 equilateral triangles
constructed with 6 matches without any
matches crossing

12. To discover the correct arrangement of objects
may require a flash of insight to discover the
right combination of sequence. This may
sometimes occur after a number of attempts to
arrange and rearrange the objects through ‘trial
and error’. The necessary arrangement or
sequence of items to solve the puzzle or
problem may only be discovered after a number
of attempts to find the correct sequence

13. Shows how we need to change our patterning – 2D to 3D to solve the
problem

14. This was demonstrated well in a sequence of the film Apollo 13, directed by Ron
Howard. The level of oxygen was rapidly declining in the lunar module of the ill-
fated Apollo 13 mission, so a solution was needed to maintain adequate filtering of
the air to rid it of CO2 build up. The technical team in Houston was given the
problem of finding …”a way to make this (a square air scrubber filter from the
command module) fit into a hole like this (the shape of a round air scrubber filter in
the lunar module) using nothing but that (items that are available to the astronauts
in either the command or lunar module). This problem could only be solved through
trial and error until a solution was found.

15. Simple Decision making strategies
The Attribute Rating Totals of the two cars
Car 1 Car 2
Cost +2 +1
Power +1 +2
Economy +1 -1
Comfort +2 +2
Total +6 +4

16. Difference in the Scores of Each Attribute of the Two Cars
Car 1 Car 2 Difference
Cost +2 +1 +1
Power +1 +2 -1
Economy +1 -1 +2
Comfort +2 +2 0
Total +6 +4 +2
Our intuition will often override attribute scoring

17. Finding a segment for a shampoo

18. D G
Attribute 2
Attribute 2
F
C
E I
H
A B Attribute 3
A B C D
Attribute 1 Attribute 1
Figure 4.19. Two-dimension and three-dimension grids or matrixes.

19. Selection of different market levels
High Active
Concentration
Medium Active
Concentration
Highly
Low Active
Fragranced
Concentration
Organically
Produced
Conditioner
Conditions
Conditions
Shampoo
Various
All Hair
Selection of two
completely different
Selection of different market marketing strategies
segments

20. Intuition plays a major role in opportunity
identification
Degree of ambiguity
Active/Imaginative
Allocative Construction Intuitive
Analytical
Supply/Demand changes New technologies
Demographic changes New Business models
Value
creation n
io
v at
no Locus of change
In
Inductive
Imitation Discovery
Deductive Replication & Extension Incongruities
(Black & white)
Structural changes
Passive/Reactive
The range of entrepreneurial opportunities

21. Images and
Connections Vision Platform - Perception
The cognitive process
behind the Time & Space Potential
conceptualization of Concept Generator –
ideas Making Connections
Concepts
Learning:
Conceptual World Real World
Sources of Opportunity
Identifying Experimentation
concepts & Testing
Evaluation after
experience “A Narrative”
Ideas
Complete re-
evaluation (seek
further
information)
Structure common to all Evaluated and
opportunities Elaborated Upon
Vision – Outcomes
Time & Space Opportunity
Resources
Networks
Skills, Competencies & Capabilities
Competitive Environment
Strategy – scope & depth

22. Single
Perspective
Being able to switch
from view to view to
see the object,
person or event
from multiple
perspectives

24. Complex Problems like agriculture &
engineering

25. Location Climate Genetic Material
Humidity
Collection
Temperature Purchase
Sunshine hours
Topography UV radiation Plant physiology
Seasons
Slope & drainage Propagation Yield and
Rainfall characteristics Chemical
Constituents
of the
Humus Nutrients Method of extraction Essential Oil
Extraction time
Compactness Drainage & water
holding qualities
Pest & weed
pH control Pre-harvest handling
Mineral residuals Irrigation & preparation
Plant
densities
Soil type Time & method of
harvest
Agronomic Harvest &
Soil Practices Extraction
Practices

26. More Complex Problems

27. Complex decisions in relation to potential opportunities and suitable strategies
cannot be explained by simple models. These types of decisions are
multiple, sequential and must be decided in a flexible manner to suit different
situations within an overall changing environment. The characteristic environment
where these decisions are made will be;
•Related to ill-defined and ill-structured problems where a lot of effort has to be made
to understand what is happening.
•In a dynamic environment under situations of uncertainty where information will be
incomplete and ambiguous.
•Where there are multiple players within the environment, whose actions and
reactions are not always known.
•Where objectives may shift during evaluation periods and during strategy execution.
•Where strategy and work within the environment is complex and requires a high
amount of coordination.
•Where relationships between variable is not fully clear and these relationship can
even change over time.
•Where there is considerable time pressure where stress exists.
•There are costs involved with failure, and
•Where both organizational and personal goals are a guide to the direction decision
making will go.

28. Demographics The ever changing environment
Technology
Shock Competitor’s
new products
Change New
New Merging Opportunities
Information Industries
Lifestyle
Economy Gestalt
Changing Tastes Regulation

29. Inputs Culture (the way of doing things) Input New
Research
Ideas
Technology
Excitement
New Changing
Food Producers The supply Retailers
products demands
chain
Sustainability Ethics
Logistic science
Finance Lifestyle &
Houses values
Skills/capabilities
Underlying costs Retail practices
Supply Demand
Push Pull

30. Why do companies
need Innovation?

31. Products more than 5 years old
usually don’t make major
contributions to a company’s revenue
•Technology
•Consumer style change

32. Product Evolution
Pre 1900’s
Laundry Blue
Up to Late 1940’s Solid Soaps &
Powders
Laundry
Detergent Bars
1950’s until present Laundry
Detergents
Powders
Laundry Detergents with
Liquids Special
Detergents Additives
Concentrated
1980’s until present
Laundry
Powders
Laundry
Detergent
Tablets

33. Evolution Verses Revolution
Changing Technology
(slow to Change)
Changing Lifestyles
Cheap Clothes Available
(substitute)
Had to Reinvent the Company due to Slow Product Development

34. The Evolution
of Fashion

35. 1800s

36. 1930s

37. 1950s

38. 1960s

39. 1970s

40. 1980s

41. 1990s

42. 2006

43. Thai Hong Kong
Malay
Fashion Fashion Fashion
Geographical as well as time differences in fashion

44. Technology/Market Positioning
Hotel Coffee Shop Coffee Bean
High
Style
Kedai Kopi Fast Food
Low
Low High
Technology

45. New Economic Pollution
Paradigms Growth Fossil Fuels
Export/Import
Transport
Farm
Raw materials
Transport
Government
Power
Production Transport
Diversity generation
Warehouse
Management
Supermarket
Conflict
Research & Community
Development
Consumption Education
Regulation
Competition &
Tension
Air Transport
Poverty &
Unhappiness Development Waste
Health
Uncertainty A simplified environment

46. Any environment has the following factors;
•A field,
•Objects within the field,
•Relationships between objects,
•Actors,
•Relationships between actors,
•Events,
•Relationships between events,
•Relationships between actors and events,
•Relationships between actors and objects,
•Relationships between actors, objects and the field,
•Relationships (or no relationships) between everything,
•The situation,
•Movements and stillness,
•motives,
•relationship between self and the actors, objects and the field, and
•Interpretations of the above.

47. The generic problem solving process
Problem Problem Implementation
The
Identification Resolution & Strategy
Environment
“The Mess”
Data Ideation Elaboration
Set of sub-
Gathering & Extension
environments
Return to ideation to refine
detail to complete concept
Objective Data
Subjective Data Each step requires: Followed By: Another problem
Feeling & Intuition Divergent Thinking Convergent Thinking in itself
to open up the issues to focus on the issues

48. Cognitive Tools
Personal
Desires
The ongoing story construct
Perceptual Biases
Environmental Potential Scenarios
1
Information Narrative
2
3
Prior Knowledge 4
Concept
+
+
Organizational
Goals Visual
Spatial
Consistent with personal
and organizational goals,
New in accordance with prior
knowledge, enhanced
Knowledge
Developed Idea with new knowledge and
developed and verified
with various cognitive
tools.

49. Memory
Truth Beliefs
Knowledge

51. Predicting the future

52. Present time
The Past
We know the past and
present Without any changes our
timeline will remain relatively
unaltered

53. Present time
The Past
2 in 1 shampoo This changes the
creates a new parallel of the
market segment market gradually
The effect of competitor
innovation will bring product
evolution

54. Present time
The Past A Radical change in
technology
Will radically
change the
timeline into a
The advent of mobile phones new industry

55. Consumers
Positioning Potential new novel Opportunity
product extending
market field or
creating a new one
Attempting
through existing or
to create
Targeting new channels and Refining the
some form
business models. Idea
of
competitive
advantage
Segmentation
Concept
Product idea to
compete with
Market existing products
in market
Identification The set of possible
ideas/products/markets
The Causation Process The Effectuation Process

56. Existing Products New Products
Existing Causation
Markets
New
Effectuation
Markets

57. Developing a Central Theme into an Implementable Strategy.
Brand Signal
Features Benefits Channels
Theme Attributes
Strategy
Characteristics
Central Theme Organically produced high active
(Product Proposition) concentration shampoo with product
variants to suit various conditions.
Underlying
High & discerning Low
Assumptions Rapidly growing
market end. competition segment.
Customers who in segment.
want mass
custom produced
products.
Sustainable Products match
personal values.

58. Opportunity Shift Time
Newly identified
opportunity needing
different goals,
An identified strategies,
opportunity in competencies, skills,
the past resources and
organization than
previously
The Opportunity Landscape
What strategies are
required to successfully
Present Needed
exploit the new
Strategies Realignment of Strategies Strategies opportunity and meet the
organizations new goals?
Competitiveness
What type of
organization and
Present Needed business model is
Organization Realignment of Organization Organization needed to support the
selected strategy?
What skills,
competencies and
Present Skills & Needed Skills & technologies are
Realignment of Skills & Competencies needed to support the
Competencies
Competencies new business model
and strategy?
What resources are
needed to support
Present Needed
Realignment of Resources skills, competencies,
Resources Resources technologies, new
business model and
strategy?
What networks are
Present Needed needed to exploit the
Networks Realignment of Networks Networks opportunity, acquires
skills, technologies and
resources, support the
new business model
and strategy?
What new goals are
Present Goals New Goals
Setting of New goals needed to exploit
the newly identified
opportunity?
Reengineering of Total Organization

59. Product Reengineering Process
(Process for FMCG Product) Product from Market
Step 1: Examination of
the product to determine
characteristics.
a) What type of process
was it manufactured by?
b) What would be its
formulation/recipe?
C) What materials are
used in its manufacture?
Step 2: Develop a full Product Technical &
technical specification for Market Specifications
the product and
production process.
Probable Product
Production Process
Step 3: Include any
improvements to the
product
Laboratory Development
Step 4: Laboratory & Production Trials
development of
formulation/recipe and
Return to lab. For any
development of
modifications
production process
Product Trials
(Both consumer use &
Step 5: Undertake production)
consumer product testing
and production trials
Completed Product

60. C Constructed Concept
Concept Extraction Charcoal Burger Grill
A (location) + B (characteristics) 1. Location near young people
= C (constructed Concept) (university): convenient
2. Cheap and affordable
University 3. Good service
4. Authentic charcoal BBQ
burger grill (western style)
5. Convenient meeting place
A with WiFi etc.
Location
Fastfood
B
Concept Extraction
(General Characteristics)
1. Cheap
2. Good standard of hygiene
3. Good service
4. Fast and efficient
5. Specialize in a particular food
6. Know what to expect
7. A meeting place for people
Potential success
parameters

61. Groupthink
Janis (1972) postulated that the symptoms of groupthink are;
The illusion of invulnerability which creates over optimism of potential success and
willingness to take high risks,
An inherent belief of their own morality where the consequences of their decisions
are ignored,
Collective rationalization where warnings, signs and messages are rationalized
according to existing group assumptions,
Negatively generalized and stereotyped views of external people and entities,
where they view others as weak and foolish,
Self censorship and pressure on dissenters to carry the group line and not express
any disagreements, including the suppression of outside views disagreeing with
the group,
The illusion of unanimity in the belief that individual views conform to the majority
view and silence means consent,
Social pressure on those who have doubts about group consensus, and
There are self appointed ‘mind-guards’ to protect the leader and group from
information that may threaten any potential group cohesiveness.
Kowert (2002) also added that an overload of information may
also contribute to causing the groupthink phenomena.

63. Antecedents Observable Consequences
Defective decision
Decision makers are a
1.
cohesive group Symptoms of groupthink making
Organizational Overestimation
Incomplete survey
Structural Faults Vulnerability
of alternatives.
Insulation of group – illusion of
Incomplete survey
Low probability of successful outcome
Lack of leader invulnerability
of objectives.
impartiality - Belief in inherent
Failure to examine
Lack of procedural morality of group
risks of preferred
methodology Closed Mindedness
choice.
Social homogeneity of - Collective
Concurrence- Failure to reappraise
members rationalization
seeking initially rejected
- Stereotyping of
tendency in alternatives.
outsiders
group Poor information
Pressures toward
Provocative search.
conformity
Situational Context Selective bias in
- Self censorship
High stress from processing.
- Illusion of
external threat information at
Unanimity
Low self esteem hand.
- Direct pressure on
induced from recent Failure to develop
dissenters
failures, difficulties in contingency plans
- self appointed
current decision mindguards
making that lower
members sense of
self efficacy. Moral
dilemmas
The Groupthink Process

64. Influence of cognitive rigidity on firm
Level of Innovation
Optimal level of Innovation
“Hierarchy” “Anarchy”
Too unstructured
Too rigid to to turn creativity
be creative into innovation
Level of creativity
Channelling of information Need to know basis Relevant information available to who needs it Too much incoming information
Degree of internal Strictly hierarchical Connections occur where relevant Ungoverned connections
and external connections
Dispersal of power Hierarchical According to knowhow & expertise No fixed determination
Degree of diversity Conforming membership Diverse membership Diverse membership
Levels of stress and High stress & anxiety Stress & anxiety minimized High stress & anxiety

65. Experience
Attribute
Substitution
Increasing Availability
Word of
Heuristics
Mouth
Media Reports Fallacies
Intuition
Misconceptions
Data
Potential
Creativity
Information
Abstract Process
Inferences (Circumvents
knowledge logic &
perception)
Faulty or invalid
premises Cognitive
Wisdom
Biases Ideas
Decision
Reasoning
Making
Strategy
Factors influencing thinking Increasing Usefulness

66. Self Confidence
The way our imagination develops ideas,
motivation and determination Belief in success
Determine
Familiarity
any future
Emotions
action
Motivation (goals
& objectives)
Vague Aspirations A Desirable future Determination
Imagination Image Concept Idea
(conceptions) (vision)
(Framing/reframing)
Stimulation Effectuation
Retrieval Mental imagery, Construction,
Create new schema, Metaphor,
Comes as Analogy, Seeing something in
Mixed Reality & Fantasy memories, beliefs, new way, Connecting unrelated
assumptions, concepts (pictorial & haptic
processes)
emotions
Memories Perceptual
experiences

67. Creativity Tool Cognitive Skill
Knowledge
(vocabulary) of
odorous substances
Imagination Olfactory
sensitivity
Knowledge of
potential strengths,
weaknesses and
applications of
odorous materials
Knowledge of Curiosity, enquiry
outstanding and Perfumer
fragrance creations experimentation Excellence
within the domain
Practical knowledge
& experience Process &
Interest and Product
passion
Time, patience,
perseverance
Factors influencing
creativity
Emotion
Knowledge Base

68. Elements of creativity
Perception Attenuation
Mental Maps Knowledge
Attention
Prior Knowledge
Expertise
Heuristics
Technical Knowledge
Practical Knowledge Unconscious Creative
Intellectual Knowledge Cognitive
Thinking Skills Creativity
Tacit Knowledge Processing
Experience Assumptions,
Beliefs, Values
Motivation
Ego
Sensitivity Energy
Motivational
Trigger
Curiosity
Emotion
The Environment

69. Increase of energy
Negative Energy Positive Energy
Low self Esteem Excitement
Anxiety “Worthlessness Gravity” “Belief in Success Gravity” Sense of Challenge
Feeling of Passion
Powerlessness
Things not going well Moving forward towards success
Assumption of
Where we are now
“worthlessness” “Tension” Person’s “Vision”
The Forces of the Motivational Trigger.

70. Curiosity
Insight
Exploration
Security &
Discovery
Purpose
Openness to
Wisdom Learning
Confidence/
Excitement
Self Esteem
Obsessive Passion for
Persistence the domain
New Skills Dedication
Mastery
The path to wisdom and insight

71. Personality Situation/Life
Experience
Sense and view of the
world & reality
Inner drive
- aggressive/destructive
- sensitive/appreciative Filter External
Obtainment strategies Ego Mechanism Stimuli
Libidinal love for outside
world/internal world Concept
Self confidence
Responsibility Influences
Accountability Attention
Drive/Courage
Capacity to
Synthesize Discipline
Motivation
Feelings & Defense
Thoughts Emotions Mechanisms Desires
The role of ego in thinking

72. Puzzling situation, curiosity, questioning
of something given or problem in the Some parts of the elaboration process
environment. require further creativity like strategy
development.
The creative Engagement
process
Opportunity
Insight
Preparation
Period
Incubation Frustration
Period Period
This may be a process
The Creative of creating a number of
Insight innovations so the idea
will be able to be
exploited as an
opportunity.
Verification Elaboration
Period Period
If flaws found with the insight, there
may be a return to frustration, If no flaws in insight found there will
preparation or incubation again. In be an advance to the elaboration Solution, concept,
some cases there may be a period where the insight is developed idea and eventual
questioning of engagement. into a concept, idea and eventually
opportunity
into a potential opportunity

73. Stimulation from the
The incubation process
environment through our
sensory systems
Insight
Short Term
Memory (STM)
Sub-Consciousness
Imagination
Long Term
Memory
Self
Organizing
System
Sub-conscious
operation creating free
associations from bits
of random information
Coded Domain Prior Knowledge
Domains become more Imagery,
fluid and flexible allowing
Semantics &
for analogies
Syntax Still following patterns from learning

74. New Ideas
Unknown Opportunities
A metaphoric concept of Developing Strategies
Surrounding
creative intelligence Environment Solving Problems
“Domain” &“Field”
Environmental
Environmental Factors conducive
Factors that to creativity
hinder creativity
Internal Influencing Perception
Factors
Motivational
Focus & Attention Trigger
Creative Sensitivity Patterning
Energy
Emotion Thinking
Curiosity Processes Prior
Empathy (Self Organizing Knowledge
Patterned Thinking
Confidence System)
Processes
Discipline
Interest
Passion Cognitive Thinking
Tools & Styles Memory
Heuristics
Belief
Imagination
Applied Thinking
Fantasy
Tools,
Domain & Field Experience
Manifestations &
Acceptance/ Tacit Knowledge
Elaborations
Rejection
Creative Product

75. Positive Optimum level of
emotions for creativity
Self-actualization/spirituality
Concern & compassion
Service to others
Self Mastery The optimal
Power within motivation
Exploration & improvement area
Self assertion & power over others
Anger
Greed & Craving
Fear
Anguish
Apathy
Guilt & shame
Negative