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The Application of Morphological Analysis to Discovering New Forms of Business
Som D. Karamchetty1
By applying morphological analysis to business processes, one can visualize many new forms of businesses. As technology, markets, cultural norms, and regulations change with time, new ways of doing business emerge. Morphological analysis can be conducted periodically to take advantage of changes and to modernize business operations. The analysis will allow new forms of businesses to be conceived, eval¬uated, and implemented. In this paper, I demonstrate interesting possibilities, with examples.
KEYWORDS: morphological analysis; business innovations; business processes; business opportunities; forms of business.
1. BACKGROUND
Zwicky (1962, 1969) explained the method known as morphological analysis as "total thinking." We aim at the totality of solutions to a given problem without any prejudice as to the value of any one solution. By enumerating all possible solutions, we can obtain a large number of alternative combinations constituting solution sets. Subsequently, a detailed analysis and evaluation of the solutions can be undertaken. Zwicky applied the method to a number of problems, both technical and societal. He obtained patents for a number of new propulsion systems and explosives discovered by applying this method. The application of the morphological method to technology impacts has also been discussed (Porter et at., 1980).
2. INTRODUCTION
In order to understand the morphological method, take a simple example: designing a house. Let our simple house consist of three components, namely, a floor, walls, and a roof. The first set of questions we ask relates to the types of materials we can have for these components of the house. Let Table I sum-marize the components and materials applicable to the components.
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Table I. Example of Components and Materials Applicable to a House
In the example in Table I, we identified sets of materials for the floor, walls, and roof of a house. We chose a set of three material types for the floor, a set of four material types for the walls, and a set of four material types for the roof. As this example shows, the number of choices of material for each component need not be the same (although representation in a rectangular table may lead one to a false sense of such a requirement). The number and types of components depend on the breadth of expertise of the analyst. Similarly, the number and types of materials are part of the analyst's experience base and knowledge.
Now we ask, "How many different types of houses can be conceived using the listed combinations?" We can choose one of four material types for the floor. For each floor type, we can choose one of four wall types, and so on. In the end, our total number of combinations of houses is 4 X 4 X 4 = 64. These combinations can be shown in the form of a three-dimensional filing cabinet (Zwicky, 1962, p. 42), as shown in Fig. 1.
While developing this table and figure with these combinations, we have questioned neither the feasibility nor the value of any resulting combination. For example, we have not said, "Why would anyone have a mud floor and a concrete roof?" Such value judgments will be made during the evaluation phase. But the first step is to exhaust all possible combinations. The power of Zwicky's method lies in such exhaustive enumeration.
The displays in both Table I and Fig. 1 place constraints on our ability to think in more than three dimensions. An array representation is more helpful. We may consider nine components and a variable number of sets of materials or alternatives for each component, as shown in the array in Fig. 2. It should be noted that "none" is a choice, as opposed to having no choice. In this array representation, we can determine a combination by circling an alternative for each component and connecting those circles by a line.
An elegant representation that can accommodate spaces of any finite num¬ber of dimensions (Warfield, 1994; Warfield and Cardenas, 1994) is shown in Fig. 3. Warfield's representation has the advantage of showing alternatives comprehensively.
Morphological Analysis and New Forms of Business
Fig. 1. Combinations shown in the form of a three-dimensional filing cabinet.
Up to this point, we dealt with the example of a house. We can generalize the explanation by using algebraic terminology, as in Fig. 4. Again, we can develop a combination by circling a chosen alternative for each component and connecting the circles. A typical combination can be written as
Rx = AiBjCkDl . . .
Where, Rx is a resulting combination, Ai is the ith alternative for component A, Bj is they jth alternative for component B, and so on.
Fig. 2. An array representing components and materials for a house.
3. EVOLUTION OF COMBINATIONS
As mentioned briefly earlier, the components as well as the alternatives for each component evolve over time. Reverting to the example of a house, let us look at the evolution of the components. Possibly, humans invented a roof over their heads first. At some point, humans thought of walls as distinct from the roof. Then a floor and, later, a ceiling were added. As humans yearned for comforts, plumbing, electricity, and air-conditioning were added. Modern humans constantly add components to the house.
Fig. 3. Profile representation of components and materials for a house.
Fig. 4. Generalized representation of a combination array.
Initially, for people of long ago, mud was probably the preferred choice of material for walls. Subsequently, timber walls were conceived. Steel was invented and steel walls were conceived. The availability of materials (real or potential) offers alternatives for the components. As the list of components and their alternatives grows, the combinations for solutions grow exponentially.
One may question the value or contribution of the morphological method, claiming that neither the invention of components nor the alternative choices for those components result from the method. While that claim is true, the morphological method allows one to conceive and enumerate all combinations, and increase the options for combinations any time new choices become available. For example, suppose a new material is invented. Let us say someone successfully employed an aluminum sheet for the roof of a house with timber walls and concrete floor. The morphologist will place the new material in the array and show that many new combinations of house designs can be conceived. Similarly, when one adds new components in the form of insulated tiles or soft furnishings for a steel-walled house, the morphologist will see the many new combinations of houses.
4. BUSINESS APPLICATION OF MORPHOLOGICAL METHOD
Zwicky (1969) used the morphological method for a number of nontech¬nical problems also. He explained its application in his efforts to furnish the war-ravaged libraries in Europe and also discussed its use in controlling smog (Zwicky, 1960).
Fig. 5. Instantiating components or form or function values in a generalized representation of a
combination array.
Using basic business information (Baker and Hayes, 1980; Dorland and Van Der Wal, 1978; White, 1977; Petty, 1982), let us now illustrate a simple business application of the morphological method. For this illustrative example, consider four basic business functions: (1) form of business, (2) source of funds, (3) manufacture, and (4) sales. We can start by setting up an array by instantiating the components column of the generalized array in Fig. 4, now shown as Fig. 5.
In each of these categories, we will consider several alternatives. Standard forms of business organization prevalent in the United States are (a) sole proprietorship, (b) partnership, and (c) corporation.
Source of funds can be from (a) equity or (b) debt.
Manufacture can be (a) within the company (make) or (b) contracted out (buy).
And sales (retail sales, to be precise) can be (a) conducted by the company or (b) carried out through distributors and retail outlets owned by other companies.
With these combinations, we will have (3 x 2 x 2 x 2) 24 forms of business for our company, as shown in Fig. 6. (For simplicity, this example does not consider hybrid forms.) Among all these combinations, we can recognize one that represents an entrepreneur investing his/her own assets, and manufacturing some products, but not being involved in retail selling. We can also see, as another combination, a large department store operating with funds borrowed from financial institutions, not manufacturing any products, but selling them to the public directly.
Fig. 6. Representation of a combination array of forms of business for the case illustrated.
In order to see the utility of such a formulation using morphological methods, one can add other characteristics or functions (e.g., subdivide manufacturing into research, development, design, prototyping, production, and testing). Such analyses will be the purview of universities, institutions, consortiums, and think tanks. Novel forms can be discovered that may have benefits in terms of taxes, profitability, business viability, and so on. Such benefits from a given combination can be discerned during the evaluation phase. While asserting that the morphological method can be applied to large-scale business problems, I focus this discussion on micro-level business processes.
Business process reengineering (BPR) has been a much-heard phrase during the past few years. The morphological method, having emanated from the engineering world, will find rich prospects in reengineering the business arena. Process analysis of a business should reveal a number of activities that constitute a given business. An activity serves a given purpose. By asking what purpose is served (what the outcome is) by an activity under scrutiny, we can come up with alternatives that satisfy a business need.
As an example, let us take the case of a customer whose purpose is to obtain a bag of chips. In a customary activity, the customer approaches a sales clerk at a kiosk and asks for a bag of chips. Because Alexander Graham Bell invented the telephone, another alternative exists whereby the customer may order a bag of chips—by telephone, of course. Or suppose the chips are in a vending machine. Since talking to a vending machine doesn't provide results, the customer pushes designated buttons. But hold it! Who says a customer cannot ask (speak to) the machine? If we rule out a customer speaking to a vending machine, we violate a fundamental rule of the morphological method. We have made a value judgment (the infeasibility of a process has been assumed hastily) and prematurely ruled out an activity. If, on the other hand, we use the alternative (orally ordering a bag of chips from a vending machine), a computer engineer could have built a speech interface into the vending machine. I hope that no one will argue that a speech interface would make the vending machine more expensive, because this is too early in the analysis to start evaluating. Again, one should not jump into premature evaluations.
What I wanted to illustrate with this example is that customer placement of orders is a business activity (business survival depends on it). The question that a morphologist asks is, "How many different ways (alternatives) can this activity be carried out?"
Imitation or copying of activities from one business to another is common. In the morphological method, once we become aware of an activity, we can add it to our repertoire and apply it to satisfy a purpose. Just as was shown in our house example, there are two major steps to the morphological method: (1) identify activities and (2) generate alternative ways of accomplishing the activities.
To illustrate the method using another business example, consider a laundry, emphasizing the business aspects as opposed to the technical aspects. Figure 7 shows 10 activities that constitute a simple laundry business: (1) transport clothes, (2) receive clothes, (3) ticket clothes, (4) bag clothes, (5) ship clothes, (6) receive clean clothes, (7) deliver clothes, (8) transport clothes, (9) receive payment, and (10) deposit payments in bank.
Alternative ways of accomplishing each of these activities are also illustrated in Fig. 7. In this example, there are 3 x 3 x 4 x 4 x 4 x 3 x 4 x 4 x 5 x 4 = 552,960 combinations. While the number may seem to be overwhelming, the morphological method restates that there are many ways to skin a cat! And, while most options will be eliminated in the evaluation phase, awareness of all the possibilities improves the odds against your competition coming up with something you missed.
Note that in the traditional laundry service sequence, the customer drops the clothes with a clerk, is given a receipt, and later picks up the clothes from the clerk, paying by cash (or check). In another sequence, the clerk picks up the dirty clothes from the customer's home, bags them, transports them to a washer, brings the clothes back to the customer's home, and collects cash; this is old fashioned by today's standards. (The case in which the customer does everything, including the washing, is a trivial case where no laundry business exists.)
But we may next examine a couple of new concepts in this illustration. If a customer drops the clothes into a vending machine and later picks up the clothes from the vending machine, paying by credit card or by an account with the business, this is indeed a novel concept. Such a new business can be discovered by the application of the morphological method. But what was the origin of the idea of receiving clothes from a vending machine? We commonly see vending machines dispensing candy and soda. This might suggest the thought, "Wouldn't it be nice to have a vending machine that gave my clothes back?
Fig. 7. Array of activities in an illustrative laundry business.
Then I don't have to abide by the laundry's schedule." Presto! We invented a clean clothes-dispensing machine.
How might we have come up with the idea of a machine that received clothes? We saw borrowers returning books at the library, and customers dropping express delivery packages in a designated mail box. But our devil's advocate cautions that while all candies are equal, all clothes are not ours. Initially, while doing the morphological analysis, we ignore such wisdom from the devil's advocate. But, during the evaluation stage, we ask functional or technical experts if a certain method of doing some task is feasible. We ask the economist if it is economically viable. In this particular case, we might get out of that bind (that all clothes are not ours) by observing that the solution lies in providing a key to the customer as in a locker box at a rail station or a mail box at a post office. But these boxes go round as in a vending machine.
But wait, we are getting into too many details.
The primary interest in the morphological analysis is to see if there are new ways of doing things. Technologists can be counted on to come up with devices and systems to ensure the feasibility of a path. Whether or not a method becomes practical depends on the technology, market, economics, cultural climate, and regulatory environment. In certain countries, it is cheaper to have a human clerk than a vending machine. In developed countries, customers are more likely to value the convenience of dropping off their dirty clothes at times of their own choosing. Rich people can afford valets. Local regulations will also determine what process alternatives are permissible.
In another example, say one enters the aisles in a warehouse store after passing by the soda vending machines, practicing morphological thinking: one might come up with a new concept. The main store itself could be organized into clusters of vending machines. A customer inserts a store "smart card" at the appropriate point, and the vending cluster delivers customer-selected items. The customer can place them in the shopping cart and move on and out. A customer then need not come in contact with a single store clerk (not that clerks are ever not nice to customers, or anything like that).
5. MODIFICATIONS TO CLASSICAL MORPHOLOGICAL METHOD
Zwicky exhorts us to consider the totality of solution alternatives to a given problem. A university or a research institution can undertake an exhaustive enumeration of all possible forms of business. But it will be hard to convince a thriving business enterprise to undertake such a study, especially when the result could be unwieldy, with millions of combinations. Evaluating them can become a business in itself (just as BPR has become a thriving business). Instead, what we could do is twofold. First, we could add to or delete activities from an existing business, and second, we could consider alternatives to selected activities only.
Zwicky also suggested that the morphological process is actually iterative by comparing it to the "method of successive approximations" in mathematics. As I noted in the earlier discussion, we can apply the analysis to a given set of activities in a business and alter the number of activities over time. Likewise, for a given activity, we may have new and novel alternatives available. A new activity may introduce additional activities or may eliminate some previous activities.
The iterative method can be approached in an incremental manner. For example, open only a small segment of the business to morphological analysis. Subject only the customer interaction portion of the business to the analysis, while keeping the rest of the business functions closed from the analysis. (In fact, that is what we did in some of the previous examples.) This approach is illustrated in Fig. 8, where only three segments of the business are open for analysis, while the others are closed from consideration at this time. This is more acceptable to those business leaders who would like to bring about incremental changes that benefit the business. This iterative approach will not overwhelm managers with a myriad alternatives. The disadvantage is that synergistic combinations may lie hidden.
Fig. 8. Open and closed segments of an array of activities in an illustrative laundry business.
Obviously, morphologists will have two tendencies. One is that when they observe an activity, they ponder where else this activity can be applied to satisfy a similar purpose. The other is that they watch an activity being performed and look for alternative ways of satisfying the purpose. Especially when one is in a slow line waiting in frustration for a service, one draws on one's own experience base or knowledge base and thinks up alternatives to the long wait. (Reading Zwicky's writings, one cannot help but notice the frustration he must have felt that led to his many inventions.)
In order to reinforce the method, let us consider another example where businesses interface with customers. A few years ago, a hairdresser shop made an innovative use of a computer. Instead of customers entering and "taking a number" to wait their turn, they entered their name into a personal computer. When a customer's turn came, a hairdresser called the customer and attended to that customer's needs. In light of that observation, whenever we visit a big corporation or a government office, and see a receptionist asking customers to fill in forms, we see a possible new process for that activity.
In that process, a number of computer terminals are placed in the reception area to greet visitors. The visitors fill out "smart" forms, and the computer, with some help from a receptionist, processes them. The advantage of such a system is that the individuals are more likely to fill in their personal particulars very accurately. The data can be checked by the computer in real time, then immediately stored in databases. At the end of the day, the company or agency can update its visitor files. A variety of statistics can be developed. This process could become a good productivity improvement initiative.
In fact, this process might work so well that the company may decide to eliminate the receptionist desk. A walking receptionist can approach and warmly greet the visitors. What is morphologic about it? Once we know that a reception activity can be done by a set of computers and a walking receptionist, we can consider applying it as an alternative in all other reception activities. There are millions of offices that we visit daily where receptionists ask us to sit and wait while they sit and, perhaps, talk on the phone. An even better method would be one in which visitors and customers carry smart business cards that can be inserted into a computer in the lobby and relevant personal information is transferred from the card to the computer. I illustrate with an example.
A few years ago, some of the car rental companies introduced an innovative rental car return process. A clerk approaches the renter in the return lot and processes the return on the spot. Instead of a customer approaching a clerk at a fixed desk in a building, a roving clerk gets to the customer. This leads to faster processing, and a concept I would call the deskless office is born. In areas with expensive real estate, why should companies lease expensive desk and counter space when an inexpensive, economical, expeditious, and welcome alternative exists? Can we add it to our repertoire of alternatives to customer processing? Certainly, yes!
Morphological Analysis and New Forms of Business
Morphological analysis technique can readily be applied to telephone usage in developing countries. In developing countries, a small fraction of the population has telephones. Recently an innovative system of telephone booths came into being. A human operator manages a phone in the booth. Customers make long-distance and international calls, a computer prints a bill/receipt, and the customer makes a cash payment. This scheme (set of processes) increased the phone traffic and placed a technology at the disposal of more people, who could not otherwise afford the use of telephones. But this scheme cannot help if one wants to receive a call. It is obvious that in order for a person to use a phone, the person and the phone have to come together. The developed countries solved it by having a phone in every home (in every room for that matter). The developing countries, as explained above, brought the caller to the phone in a booth. If we don our morphological cap, we will see at least one more alternative, and that is to bring the phone to the customer. Thence results a concept where a mobile phone can be transported to a customer. This may not be economical in countries with high-wage couriers. But in the developing countries, couriers on bikes can transport the mobile phones at a reasonable cost. A whole new business can be started on this concept, which complements the existing phone booth business.
In summary, the key to success in morphological analysis is to be open to any and all solutions. Zwicky had no patience with prejudice. He said (Zwicky, 1969), "Prejudices stemming from personal weaknesses and limited experience, from stupidity, inertia, aversions, superstitions, sympathies, love and fear, neuroses, from taboos and conventions, from influences of pressure groups and from restrictions imposed and suppressions practiced by dictators, whether they be of the communist or fascist brand, have in the past poisoned and falsified much of the thinking of man." Zwicky's admonitions about prejudices should be taken to heart by any thinker who attempts to solve problems for the business world today. Globalization of world business, trade, technologies, communications, economies, cultures, and politics makes it imperative that we deliberately and systematically set all the problems under scrutiny into a larger and more generalized context.
6. CONCLUSIONS
Zwicky proved the worth of the morphological method by inventing a number of devices with the application of the method. I have shown that the method can be applied to business applications beneficially. The method can be applied to large-scale problems as well as to subtasks in businesses. The method, followed by an evaluation phase, could revolutionize modern businesses. Numerous new business opportunities can be discovered. As technologists try to satisfy new business functions, many novel technologies can be invented.
As modern technologies evolve, regulations are imposed, cultures emerge, international societies interact, and new business opportunities may be presented that can be discovered through morphological analysis. Those who are ready to discover and implement new opportunities survive at the expense of the unprepared.
ACKNOWLEDGMENTS
The author thanks Dr. John Warfield, COL August Smith, and COL James Correia for their encouragement to publish this paper. The author appreciates greatly the patient and professional editing done by Ms. Cathy Coleman and Dr. Barbara Collier.
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Zwicky, F. (1960). A morphologist ponders the smog problem. Engineering and Science Journal, California Institute of Technology 24:(2): 22-26.
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