Title: Future-oriented reasoning in strategic choices about novel product ideas

Authors: Boris Eisenbart; Andy Dong; Dan Lovallo

Addresses: Department of Industrial and Architectural Design, Swinburne University of Technology, John Street, Hawthorn, Victoria, 3122, Australia ' Mechanical Engineering Department, Oregon State University, 212 Rogers Hall, Corvallis, OR, 97331, USA ' The University of Sydney Business School, University of Sydney, H70 – Abercrombie Building, Sydney, NSW, 2006, Australia

Abstract: This paper addresses the problem of decision-making related to investing in novel product ideas that are attractive to potentially turn into successful innovations but are uncertain and thus risky. We discuss how classical models of choice may not provide sufficient guidance in this situation. Instead, we integrate the literature on cognitive strategies rooted in divergent, creative thinking to propose that applying designerly, future-oriented reasoning may increase the accuracy of predicting the success of ideas for innovative products. Our work provides an empirical test through interviews with executives and an experiment on selecting ideas for innovations obtained from crowdsourcing. Participants in two groups primed for future-oriented reasoning were compared to a control group. Future-oriented reasoning had a medium effect size on increasing decision accuracy overall and a large effect size on reducing Type-1 and Type-2 errors when participants were presented with a portfolio of low-probability ideas.

Keywords: design innovation; decision-making; abductive reasoning; creative cognition; divergent thinking; creativity.

DOI: 10.1504/JDR.2021.124230

Journal of Design Research, 2021 Vol.19 No.4/5/6, pp.308 - 329

Received: 28 Aug 2020
Accepted: 18 May 2021
Published online: 18 Jul 2022 *

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