Why engineers should learn social as well as physical sciences

8/13/2019 Why engineers should learn social as well as physical sciences

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Why engineers should learn social sciences

as well as physical sciences

October 15th2013, Philadelphia

Andrew Maxwell Ph.D.

Asst. Professor, Temple University


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What are the physical sciences?

The behaviors of how non-living things work and behave,including physics, chemistry and astronomy

The behaviors of how living things work and behave, including,psychology, economics, and sociology

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What are the social sciences?

Andrew Maxwell, 2013 [email protected] IEEE October 15
mailto:[email protected]:[email protected]


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I suggest that to enjoy successful engineering careers,

engineers must also be trained in the behavioral sciences:- behavioral economics

- individual decision-making

- social psychology

This involves understanding how technologies & economics interact,

how individuals make decisions, & what motivates behavior.

These are all critical to successful technology design & deployment

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Tonight I have a proposition for you:

I suggest that it is as important for engineers

to learn social sciences as physical sciences.



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Making the case for social science education

I will share four well known technologies and ask the questions:What was the critical barrier to success?

Were they technological?

If not, what was the barrier and how was it overcome, or not?

4 Andrew Maxwell, 2013 [email protected] IEEE October 15


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Andrew Maxwell P.Eng. Background

Studied Electrical Engineering at Imperial CollegeWorked for GEC plc in design, fabrication, project

management, finance and on shop floor, thenMBA at London Business School (Finance,Accounting, Operations Management, Macro

Economics, Marketing, Law, HRM, Strategy and Marketing

Worked for ABB for three years, then started 5 tech ventures

At U. of Toronto started tech incubator (30 start ups), 2 venturefunds, taught Tech Commercialization at Rotman

Despite education/serial technology entrepreneur experience,was not prepared to teach technology commercialization orprovide much assistance to technology entrepreneurs. I foundthat most texts perpetuated technology management myths.



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Ten myths of technology management

1 Small companies are the same as big companiesjust smaller

2 Individuals make rational decisionsthat maximize their utility

3 Entrepreneurs are motivated by financial reward

4 New ventures require a detailed business plan

5 Asking customers what they want is a recipe for success

6 Effective entrepreneurial teams are similar in nature

7 Superior technology solutions will win out in the market place

8 Investors make trade offs between risk and return

9 Entrepreneurs take on high levels of risk10 Investors weigh all information before making investment

Disconnect between what I observed and texts encouraged me toundertake Ph.D. in technology management.



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Xerox Model A

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Chester Carlson invented the firstplain paper copier in 1944

Rejected by both IBM and Kodak(price $25,000)

They identified the capital cost asa barrier to purchase

Success was changing thebusiness model:

Small monthly rental charge

plus per page click chargeCreated very successful

technology company

A lesson in behavioral economicsalso known as sticker shock



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Eiffel Tower

Alexandre Eiffel designed the towerfor the 1889 worlds fair

For over forty years it was the higheststructure in the world.

In 1889 it cost $400,000 to build, butthis was more than budgeted

The tower only went ahead whenEiffel agreed to finance it himself

He only included one conditionthatfor the first twenty years he wouldearn all entrance fees

A lesson in trading off risk for reward



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BetaMax

Sonys Betamax

introduced in 75,

JVCs VHS in 76

Format war emerged,based on tape lengthand price

JVC allowed many manufacturers to develop low price

models, while Sony controlled priceOvertime, VHS won out, based on basic economics

A lesson in basic economics and competition



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Blackberry Q10

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Similar challenge for RIM,pioneered Smartphonemarket

Superior technology wasthought to win out

Very difficult to developapplications forBlackberry

Blackberry lost focus on

business market; challenged consumer product experts(Samsung & Apple)

A lesson in competitive advantage and value chains



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Successful Innovation

Innovation is adoption of a newproductnot its invention

Innovation therefore requiresunderstanding adoption decision

Geoffrey Moore (and Edwards) creatediffusion and adoption models

Two important lessons:

Understand the sociology of howtechnology diffuses

Understand the psychology of bothfirst and second customer

Andrew Maxwell, 2013 [email protected] IEEE October 15 12

References:

Moore, G (1991) Crossing the chasm,

Harper, New York

Rogers, EM. (1985) Diffusion of

Innovations, Free Press, New York


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Crossing the Chasm & Innovation Diffusion

Category % Characteristics Diffusion model

Innovators/ Technologyenthusiasts

2.5% Risk takers, educated,multiple info sources

Knowledge- learning about the existenceand function of the innovation

Earlyadopters/visionaries

13.5%

social leaders, popular,educated

Persuasion- becoming convinced of thevalue of the innovation

Earlymajority/Pragmatists

34% deliberate, informal socialcontacts

Decision- committing to the adoption ofthe innovation

Latemajority/Conservatives

34% skeptical, traditional, lesseducated

Implementation- putting it to use

Laggards/Skeptics 16% neighbors friends maininfo sources

Confirmation- the ultimate acceptance (orrejection) of the innovation



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Understanding Innovation Adoption



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Linked in

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Linked in is a social/businessnetworking platform

Customer adoption is easypartly because it is free

and partly because theybuild on user networks

Revenue comes from premiumservices/added functionality

Lessons in both behavioraleconomics and sociology



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KIK Interactive

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Kik is a multi-platformmessenger service

Value comes from offering freemobile messaging between

platformsCreates massive adoption by

encouraging users to telltheir friends

Lesson in sociology andpsychology



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Enterprise software

Software innovators tend to think it iseasy to sell their novel technologyto large users

Large companies, not only take a

while to make decisions, butReluctant to rely on new venture for

mission critical applications

Offering to establish software inescrow: solution to business risk

Also need to consider challenges ofimplementation

Lesson in risk mitigation17 Andrew Maxwell, 2013 [email protected] IEEE October 15


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Motor vehicles

The success of automobileinnovations is not just afunction of technology

Googles driverless car is

raising concernsdespitethe fact that it is safer

Likely have to be some waysto reassure public

Although going back to thesolution of 1865 might notbe optimal

Lesson in sociology



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Toshiba Wind-Power Generator

While barriers to adoption mightappear to be technological

There are often other societalconcerns behind them

Wind-power technology offers aviable generation technology

Oposition comes from land-userswho complain about noise

Initial solution is to locate unitswhere there is already noise

Lesson in sociology and psychology



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Automated spinning and weaving technology

to power the Industrial Revolution

Invention of steam power & water powerin late 1700s allowed

creation of spinning, a &weaving technology

Much skilled work replaced by byby new machines

Fear of losing livelihood ledto civil unrestLuddites

Only ended when some weretried, convicted & executed

Lesson in psychology and sociology



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Behavioral science lessons from my research

Interested to know what made the difference betweensuccessful and unsuccessful technology companies

Chose to investigate the investment decision process:controlled environment, short time frame, clear outcome

Expected to find that investors were:

Rational decision makers who looked at all factors

Maximized utility by trading off risk and return

Decision based on critical venture factors, and entrepreneur

capabilities

Used Observational Interaction to code TV Show (Dragons

Den/Shark Tank) and found None of these to be true.



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To make decision - investors use decision

heuristics and observe entrepreneur behaviors

I looked at how investors make decisionseven if they dont knowInvestors enter interactions with a negative mindset, looking to

reject opportunities as quickly as possible

Use heuristics, or decision short-cuts, that trade off decision

accuracy for decision expediencyFirst examine easiest to retrieve and assess factors, eliminating any

opportunity that has a fatal flaw

Next look at risk / return: Eliminate, without making tradeoffs, any

opportunity with excessive risk OR insufficent returnSubsequently look at entrepreneurs characteristics in relation to

venture, and eliminate any opportunity with excess risk

Finally, look at potential relationship with entrepreneur, to see if theycan trust them TEDX talk ow.ly/gKCeo



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Assessment tool to identify barriers to innovation

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Innovativeproducts

Service

Innovation

ProcessInnovation

Innovative

businessmodels

Resources

- Financial

- Physical

- Technological

- Human

Strategy

- Cost reduction

- Improved

customer

relationships

- Product innovation

Innovation

Inputs

Innovation

Outcomes

Employees

Suppliers

Customers

Distributors

Stakeholders

- Bureaucratic

- Risk averse

- Slow to respondCulture

- Functional decisions

- Embedded

- Manage changeProcesses



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Ten aspects of behavioral science useful to

engineers

1. Behavioral economics

2. Technology adoption

3. Customer behavior and market diffusion

4. Risk assessment and mitigation5. Economics

6. Psychology

7. Presentation and communication skills

8. Decision-making9. Innovation and creativity

10. Personality traits



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How many of you now agree with this

proposition?

Questions?

25

Tonight I started with a proposition: I suggested

that it is as important for engineers to learnbehavioral as well as physical sciences.


Why engineers should learn social as well as physical sciences

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