Focal algorithm

Innovateur TIncubating Business Transformers

THE “FOCAL” ALGORITHM NEW VERSION (V2)

Created by Dominique Vian and Christophe Sempels

www.innovateur-t.com

http://www.innovateur-t.com/

Dominique Vian - Christophe Sempels (V2)

• Companies and organizations often face apparently insoluble

problems. Most of the time, they fail to see solutions because the

problem is being considered from a context level that blocks any

potential for action

• FOCAL is a method that identifies appropriate context levels; these

point to previously unconsidered means for solving the problem(s) in

question.

• FOCAL helps you to tackle the complexity of a given situation and

find a way forward.

FOCAL


• FOCAL is based on :

o Effectuation (Sarasvathy, 2001)

o The near decomposibility of complex systems (Simon, 1996)

o The combination of these frameworks (effectuation and

near decomposability - Sarasvathy and Simon, 2000)

o Sensemaking (Weick, 1995)

THEORETICAL FRAMEWORKS


DISCERNING NON-INTUITIVE RESOURCES FOR ACTION

Who am I? ?What do I know ?Who do I know ?

What can I do ?Interaction

withstakeholders

Effectualstakeholder

engagement (or lack of

engagement)Resources

available hereand now

Effects / possible fields of action

Simplified effectual process (adapted from Sarasvaty, 2008)

An initial problem in a

givencontext

FOCAL


DISCOVERING FOCAL – SOME EXAMPLES


THE FOCAL COGNITIVE ALGORITHMSTEP ONE: SPECIFYING THE INITIAL CONTEXT

Who am I ?XEROX,photocopierdivision

What do I do ? Manufacture

and sellphotocopiers

= CONTEXT LEVEL1


EXAMPLE : XEROX

Context level 1 : Manufacture and sales of photocopiers

Who are the key stakeholders (S) ?• B2B clients B2B, distributors, competitors

What are the problems?• Patents expire no more differentiation based on products• Market saturation fierce competition squeezes prices + need

to develop the replacement market (generates lack of pertinence for clients, e.g. because it incites programmed obsolescence)

• Increasing costs of parts• Clients want to reduce costs

Direct consequences of problems and subsequent information

• Nothing to add at this stageWhat can I do to solve the problems at this context level? • Only traditional, unsatisfactory responses such as marketing or

squeezing suppliers• Unsustainable and unsatisfactory

Context 1 raison d’être: Copying documents


DIAGRAM OF CHANGE IN CONTEXT LEVEL

Context level 1Manufacture and sales of

photocopiers

Context level2 : Photocopies of documents


EXAMPLE : XEROX

Context level 2 : Photocopies of documents

Who are the key stakeholders (S)? • B2B clients, distributors, competitors

What are the problems?• Clients want to minimise both investment costs and operating

costs (maintenance, consumables etc.)

Direct consequences of problems and subsequent information.

Clients always prefer operating costs to investment costs

New type of contract that transforms investment costs into operating costs

(e.g. leasing)

Leasing means the company retains ownership of the machines

Retaining ownership makes it possible to implement a circular economy (in

itself based on eco-design) to minimise production costs that in turn reduces

the cost of leasing

What can I do to solve the problem at this context level ?

Offer a leasing contract retaining ownership and set up a circular economy

system. This results in lower production costs for Xerox and reduced

operating costs for clients BUT : there is still an incitement to sell as many

leasing contracts as possible (in tension with wish to minimise operating costsfor clients)//consumables beyond the scope of action

Context 2 raison d’être: Managing documents



Context level 1:Manufacture and sales of

photocopiers

Context level 2: Photocopies of

documents

Context level 3: Document management


EXAMPLE : XEROX

Context level 3 : Document managment

Who are the key stakeholders (S)? • B2B clients, digitization specialists, business re-

engineering specialists

What are the problems?• Minimising the operating costs of a document management

solution

Direct consequences of problems and subsequent information Minimising operating costs presupposes that these costs have been correctly identified and evaluated• Such an audit shows that 1) document management is related to

individual behaviour and company processes 2) above a certain volume,

managing physical documents is more expensive than managing digitizeddocuments


Offer an integrated document management solution starting with an audit of

overall costs of this line of expenditure based on a contract that guarantees

savings for the client (easy to sell)

Satisfactory solution to the initial problems; end of process


PRESENTING THE FOCAL COGNITIVE ALGORITHM


THE FOCAL COGNITIVE ALGORITHM

STEP ONE: SPECIFYING THE INITIAL CONTEXT

Who am I?

What do I do?

Who satisfiesrecipients’

needs?What do they

do?

CONTEXT LEVEL 1

=



Context level 1 : problem scope

Who are the key stakeholders (S)? • List of stakeholders at this context level

What are the problems?• Formulate the problems related to this context level. Express

these as established facts• A key step because the problems and what is known about them point

the way to higher level contexts. • You must focus on the main problems in this context level: avoid making

a laundry list


• List the direct consequence of one or several of the problems above

• From these consequences, extrapolate additional information that may be

relevant to the problems to be solved

• What can I do to solve the problem at this context level ?

• Do we have any means within the scope of the above problem to solve all

or part of the problem(s)?

• If so, do these provide a satisfactory solution? If they do, we have found

our way. If not we need to continue by modifying the scope of the problem. We do this by investigating one of the raisons d’être of the current context

• If there are several raisons’d’être, choose the one that correlates mostdirectly with the initial problems (see below).

Raison d’être of context 1 = context level 2


IDENTIFYING A RAISON D’ÊTRE

• There are many raisons d’être. These range from very concrete (e.g. the raison d’être

of a coffee machine is producing a hot drink) to highly conceptual (procuring pleasure,

giving energy, taking an imaginary voyage to a coffee producing country etc.)

• Depending on the type of specification, each raison d’être extends to a broader or

narrower range of possibilities (“producing a hot drink” extends to producing tea, hot

chocolate, soup etc. // ” procuring pleasure” extends to an infinite variety of possibilities other than coffee that may lead far away from the initial idea)

• If two raisons d’être seem possible, choose the one most directly related to the initial

problem(s) at level 1. It is always more advisable to choose a strong (rather than a weak) link between raison d’être and initial problems.



Context level 2 : extended problem scope

Who are the key stakeholders (S)? • List of new stakeholders in this new context level

What are the problems?• Formulate the problems related to this context level. Express

these as established facts


• List direct consequences of one or several of the problems at hand. From these consequences, extrapolate additional information that

may be relevant to the problems to be solved

• What can I do to solve the problem at this context level ?• If YES : stop, end of process• If NO : on the basis of additonal information :

o Either go up to the next context level investigating one of the raisons d’être (cf.above )

o Or specify a new sub-context

Either : Raison d’être of context 2 = context level 3

Or : Sub-context of context 2 = context level 1.2


Context level1.2.1.


Context level 2

Context level 1.2

Initial contextlevel 1 (becomes

context 1.1)

Go up 1 (raison d’être)

Go down 1 (a sub-context of

context 2

Go down 2 (a sub-context of context 1.2


A CASE IN POINT

• In some cases, specifying a sub-context leads to its repositioning as part of the initial context. This means that the choice of raison d’être in the initial context was toogeneral

• Example• Context level 1 : coffee machine• A raison d’être : procuring pleasure• Context level 2 : the procurement of pleasure

• Analysis shows that “a pleasant experience over coffee” is included within “ the procurement of pleasure”. It is thus indeed a sub-context of context 2

Let’s look at the diagram…



Context 1.1Coffee

machine

Context 2 :procurement of pleasure

Context 1.2A pleasantexperienceover coffee

WRONG

Context 1Coffee

machine

Context 3 : procurement of pleasure

Context 2A pleasant experience over coffee

RIGHT

Because the coffee machine is an occurrence of the context “a pleasant experience over a coffee”


WHAT DID WE LEARN FROM THIS CASE?

• That the problems were probably too wide ranging and not focused enough on the main problems that need solving

• When listing the main problems, it should be evident that the context “procurement of pleasure” is too broad to correlate directly enough with this specific and restricted list.


CAVEAT

• FOCAL requires a good level of knowledge about the situation

under analysis (Who am I? What do I know? Who do I know?)

• FOCAL must be used by at least two people who can share their

representations. In fact, each cognitive map* is a

representation of reality that should be discussed with others,

notably to refine the terminology. It is not easy (nor effective)

to use FOCAL in isolation.

* Here cognitive map are map of categories


ADDITIONAL EXAMPLE – ACCESSIBLE ENERGY FOR

PEOPLE IN INSECURE CIRCUMSTANCES


THE FOCAL COGNITIVE ALGORITHMSTEP ONE : SPECIFYING THE INITIAL CONTEXT

Who am I ?A citizen wishing to find an innovativesolution to providelow cost energy for those in need

Who satisfies the recipients’ need(s)?Energy distributors

What do they do?Distribute energy

CONTEXT LEVEL1 =


CONTEXT LEVEL1

Context level 1 : Energy distribution

Who are the key stakeholders (S)?

• Energy distributors, network operators, B2B and B2C clients

What are the problems?• The price of energy is increasing (+30% forecast by CRE over the

next 3 years)• The number of energy insecure people is increasing


• Break with fossile fuels (whose costs result in price volatility)• Renewables depend little or not at all on the cost and

availability of fuel• Producing ones own renewables could help to reduce energy

costs in the long term


• Organise a collective to negotiate lower prices limited and

unpredictable range of action

Raison d’être of context 1 : supplying energy equipment



Context 1Energy distribution

Context level 2 : Energy equipment supplyDirect consequences of problems and subsequent information.

• Break with fossil fuels (whose costresults in price volatility)

• Renewables depend little or not at all on the cost and availability of fuel

• Producing ones own renewablescould help reduce energy costs in the long term

Additional information shows that a key component of the context “supplying energy

equipment” is producing energy. This component (or sub-context) may be acheived through

fossil fuels or renewables. Since we wish to escape from fossil fuels, we can easily see that relevant sub-context is that of producing renewable energy.


1.2.1. Renewable energyproduction


Context level 2 : Energy equipment supply

1.2. Energy production

1.1. Energydistribution


CONTEXT LEVEL 1.2.1

Context level 1.2.1 : Renewable energy production

Who are the key stakeholders (S)? • Renewable energy equipment producers, energy

producers, financers, installers, public information bureaus for energy efficiency

What are the problems?

• The price of equipment for producing renewable energy isinaccessible for people with energy insecurity (e.g. they couldnot afford to fund a solar panel grid)

Direct consequences of problems and subsequent information.

• The price of equipment must be reduced• « Do it yourself » (DIY) has published plans, instructions and

videos for producing solar panels or wind turbines very cheaplycompared to professional equipment l (e.g. under 50 euros for a solar panel)


• Find innovative means of funding (highly complex given the low

level of resources of people with energy insecurity)

Unsatisfactory solution

Occurrence of context 1.2.1. : DIY renewable energy production


1.2.1. Renewable energy production


Context level 2 : Energy equipment supply

1.2. Energy production

1.1. Energydistribution 1.2.1.1. DIY renewable energy

production


CONTEXT LEVEL 1.2.1.1

Context level 1.2.1.1 : DIY renewable energy production

Who are the key stakeholders (S)? • DIY communities , retired practitioners seeking to

help young people develop skills, young unemployedseeking to acquire skills, municipal waste centres

• What are the problems?• Need to find raw materials, workforce, skills and machines to

manufacture equipment for producing renewable energy

Direct consequences of problems and subsequent information Municipal waste centres are full of waste that can be converted intoproductive raw materials• Unemployed young people could be motivated by taking part in

a project that gives them skills and a role to play. • Retired professionals could be motivated to coach these young

people • FabLabs could (at least initially) provide the machines needed to

manufacture the equipment


• Set up a community of those wishing to transform the resources

in municiple waste centres into DIY renewable energy

production equipment and install this for energy insecure

houeholds

• Start the project via crowdfunding

• Be paid from the savings of energy insecure houeholds once the

equipment is installed (third party investment )

Satisfactory solution to the initial problems: end of process


ADDITIONAL EXAMPLE – PESTICIDE SALES




Who am I?A company thatproduces and sellspesticides

What do I do? Manufacture and

sales of phytosanitary

products

= CONTEXT LEVEL 1


CONTEXT LEVEL 1

Context level 1 : Manufacture and sales of phytosanitary products


• Farmers, competitors, regulators (represent civil society expectations), NGOs and environmentalgroups, press, research centres, manufacturers and sellers of pesticide deployment equipment


Pesticides generate huge negative externalities for human health and nature.

regulations are becoming stricter, practitioners and the public are aware of the

problems

Pesticide manufacturers’ income is directly related to the volume of pesticide sprayed

in tension with regulations aiming to reduce the amount of phytosanitary products

and promote more sustainable agriculture

The equipment is costly for farmers, huge increases in fixed costs further weaken

their position need to curb costs

Direct consequences of problems and subsequent information Need to escape from manufacturers’ economic model based on volume


• It is impossible to encourage low impact or organic farming

because of the nature of the economic model that depends

directly on the volume of pesticides deployed.

Raison d’être context 1 : protecting crops



Context level 1Manufacture and sales of

phytosanitary products

Context level 2 : Crop protection


CONTEXT LEVEL 2

Context level 2 : Crop protection


• Farmers, direct competitors, indirect competitors(insect predators etc. protective clothing etc.), regulators (representing civil society’s expectations), NGOs and environmental groups, press, researchcentres, manufacturers and sellers of pesticide deployment equipment

What are the problems?• Farmers want to minimise the costs of protection and avoid being

undermined (any destruction of crops means a decrease in revenue)


• Pesticides are not the only way to protect crops (sexualtrapping, parasite predators, physical protection etc.)

• Being stuck in an economic model based on volume is not an incentive to change technology

• Innovative contracts could help pesticide manufacturers to escape from constraints of volume


Offer an integrated solution of crop protection paid per acre

protected, or based on an “acceptable rate of loss” (with a bonus-

malus system)

Pesticide use becomes a cost that has to be minimised

Any less costly alternative is worth pursuing (e.g. free ecological

advisory service) and is supported by a new R&D strategy

Satisfactory solution to initial problems: end of process


ADDITIONAL EXAMPLE –AUDIOVISUAL EQUIPMENT

FOR SCHOOLS




Who am I ?A company that sellsinstalls and maintainsaudiovisualequipment for schools

What do I do? Sell, install and maintain audiovisualequipment used for teaching

= CONTEXT LEVEL 1


CONTEXT LEVEL1

Context level 1 : Sales, installation and maintenance of audiovisual equipment for teaching


• Schools (essentially purchasing departments), equipment manufacturers, related professions (e.g. electricians)

What are the problems?• Equipment prices are decreasing (down by 2/3 in 3 years)

drop in turnover and margins• Increasingly strong competition from professions offering

equipement new on the market• No differention - products all made in Asia• Impossible to transform service into monetary value (directions

for use and technical advice etc. ) • No incitation to maximise product life


• Maintaining a feasible and sustainable economic model iscompromised


• Nothing

Raison d’être of context 1 : Encouraging good teaching practices



Context level 1Sales installation and

maintenance of audivisualequipment for teaching

Context level 2 : Encouragement of good teaching practices


CONTEXT LEVEL 2

Context level 2 : encouragement of good teaching practices


• Schools (purchasing departments, teachers, students), equipment manufacturers, specialists in education and pedagogical techniques


• However excellent the equipment, there is no guarantee thatteachers will really take it on board. If teachers do not take full ownership, there will be no impact on teaching quality and in turn the establishment will consider the investment to be of no measurable added value

Direct consequences of problems and subsequent information.• Teachers must be guided so that they take ownership of the material

and the impact of this guidance on teaching quality must bemeasurable.

• It is not enough to master the equipment. Teachers must developfundamentally new pedagogical approaches.

• New partnerships in the interests of pedagogical excellence and COPsamong teachers will benefit all concerned.


Propose an integrated offer including guidance, promotion and

evaluation of pedagogical excellence through technological and

pedagogical innovation

The equipment is no longer the centre of the value proposition

Strong cooperation with schools and external partners could be

beneficial

Satisfactory solution to the initial problems: end of process


ADDITIONAL EXAMPLE– SEEKING TOURIST

ATTTACTIONS IN THE FAR NORTH




Who am I ?An entrepreneur whohas combined hertwo passions: art and the Far North –by developingoutdoor exhibitons of ice scultpures

What do I do ? Outdoor exhibitions

of ice sculptures = CONTEXT LEVEL 1


CONTEXT LEVEL 1

Context level 1 : Outdoor exhibitions of ice sculptures


• Artists, media, art lovers


• Given climate change, it could rain in the Far North even in winter. This is precisely what happened to this entrepreneur during an exhibition and all the works were destroyed.


• Putting on more outdoor exhibitons is not a sustainable solution because all the art works were totally destroyed by the rainbefore the exhibition opened.

• We could envisage an indoor exhibition of ice sculptures


• Nothing

Raison d’être of context 1 : Exhibiting ice sculptures in the Far North



Context level 1Outdoor exhibition of ice

sculptures

Context level 2 : Ice sculpture exhibitions in the Far North.


CONTEXT LEVEL 2

Context level 2 : Ice sculpture exhibitions in the Far North

Who are the key stakeholders (S) ?• Artists, media, art lovers, those who rent out

exhibition space or marquees, suppliers of cold production equipment


• Renting suitable air conditioned covered space will increasecosts and could even compromise the event itself


• Renting suitable air conditoned space does not seem to be a viable solution

• Solutions exist using “natural” cold (e.g. igloo)


• Build a giant igloo to house the artworks

• BUT the cost of construction willl be hard to recover through the

exhibition alone

Raison d’être of context 2 : offer an experience in an “extreme cold” environment



Context level 1Outdoor exhibition of ice

sculptures

Context level 2 : Ice sculpture exhibitions in the Far North

Context level 3: An experience in “extreme cold” environment


CONTEXT LEVEL 3

Context level 3 : An experience in an “extreme cold” environment

• Who are the key stakeholders (S)? • Artists, media, art lovers, igloo makers, event

organisers, hotel and catering etc.


• An experience based only on exhibiting ice sculptures cannot beprofitable in a large sized igloo (niche to narrow)


• Diversification could enrich the offer of the experience• It has to go beyond the niche to access a far wider public


• Build an ice hotel firstly to house the ice sculptures but also to

offer a wider range of hotel and catering/gastronomic services (ice

bar, ice restaurant, …)

Satisfactory solution to initial problems: end of process


BIBLIOGRAPHY

• Sarasvathy S.D. (2001), “Causation and Effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency”, Academy of Management Review, Vol. 26, N° 2, P. 243-288.

• Sarasvathy, S.D., Simon, H. A. (2000), “Effectuation, near-decomposability, and the creation and growth of entrepreneurial firms”, First Annual Research Policy Technology Entrepreneurship Conference, University of Maryland.

• Simon, H. A. 1996. The architecture of complexity. Sciences of the Artificial, 3rd Edition, Cambridge, MIT Press.

• Weick, K.E. (1995), Sensemaking in organizations, Thousands Oaks, London: Sage Publications.


RECOMMENDED READING

• Silberzahn P. (2014), Effectuation : Les principes de l’entrepreneuriat pour tous, Pearson Edition.

• Vian D. (2013), ISMA360, la boussole de l’entrepreneur innovateur, de boeck Edition

• Julien F. (2005), Conférence sur l’efficacité, Presses Universitaires de France


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