Future-oriented reasoning in strategic choices about novel product ideas Online publication date: Mon, 18-Jul-2022
by Boris Eisenbart; Andy Dong; Dan Lovallo
J. of Design Research (JDR), Vol. 19, No. 4/5/6, 2021
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.
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