We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byBeatrice Grandin
Modified about 1 year ago
Slide 1 © Carliss Y. Baldwin 2007 Design Theory and Methods Carliss Y. Baldwin Harvard Business School MiniConference with the Professors and Students from L’Ecole des Mines October 16, 2007
Slide 2 © Carliss Y. Baldwin 2007 Overview of my presentation Why we study designs: Their impact on industry structure –Computers vs. Autos Design Structure + Option Value => Industry Structure and Evolution Our concept of design theory –Our Lineage –Our Definitions Current projects
Slide 3 © Carliss Y. Baldwin 2007 In the economy, value acts like a force operating on and through designs Value = money or the promise of money Consider the computer industry… Why we study designs…
Slide 4 © Carliss Y. Baldwin 2007 The changing structure of the computer industry Andy Grove described a vertical-to-horizontal transition in the computer industry: 1995-“Modular Cluster” 1980-“Vertical Silos”
Slide 5 © Carliss Y. Baldwin 2007 Grove’s Layer Map with Data Take a sector, and consider the basic SIC / NAISC codes –4 to 6 digit codes to compose the entire “ecosystem” as it evolves –Work with industry experts to construct the sectors’ list Tabulate the results in terms of “verticals” and “horizontals” –Objective: see how profit shifts from vertical to horizontal layers –…and how much “churn” there is within layers Map “Top N” Companies each year
Slide 6 © Carliss Y. Baldwin 2007 How the map works
Slide 7 © Carliss Y. Baldwin 2007 What a map looks like… Computers, 1979
Slide 33 © Carliss Y. Baldwin 2007 The End of the Verticals Value forced the industry to a new shape/structure Does this always happen?
Slide 34 © Carliss Y. Baldwin 2007 Look at the auto industry
In the beginning (1984)
Slide 56 © Carliss Y. Baldwin 2007 The industry turned over, but most value stayed in the OEM layer…
Slide 57 © Carliss Y. Baldwin 2007 Telecomm is yet another story…
Slide 58 © Carliss Y. Baldwin 2007 What Causes One Industry to Break Apart and Another to Integrate and Consolidate? Design Structure + Option Value
Slide 59 © Carliss Y. Baldwin 2007 Design Structure + Option Value
Slide 60 © Carliss Y. Baldwin 2007 In other words… Design structure/Modularity (of products and processes) determines industry structure –Because module boundaries are “thin crossing points” in the task- and-design network –Transaction costs are low at module boundaries –Every thin crossing point/module boundary is a potential place to put a transaction, i.e., bring in a different firm Option value of designs determines rate of change/industry evolution –Option value makes design experiments worthwhile –Experiments yield new designs (of products and processes)… –Better new designs replace or augment the older ones!
Slide 61 © Carliss Y. Baldwin 2007 Thus design theory holds the key to understanding the structure and dynamics of the economy But what is design theory?
Slide 62 © Carliss Y. Baldwin 2007 Influential Design Theorists Bell and Newell, computer hardware: Computer Structures Hennessy and Patterson, computer hardware-software interface: Computer Architecture Mead and Conway, semiconductors: Intro to VLSI Nevins and Whitney, manufacturing: Concurrent Engineering Nam Suh, mechanical engineering: The Principles of Design German design theorists (Hubka, Pahl and Beitz) in mechanical engineering: The Theory of Technical Systems; Engineering Design: A Systematic Approach March, Thompson, Galbraith, organizations: Organizations; Organizations in Action; Organizational Design
Slide 63 © Carliss Y. Baldwin 2007 Our Direct Predecessors Herbert Simon Christopher Alexander Fred Brooks David Parnas John Holland Our theory builds on theirs
Slide 64 © Carliss Y. Baldwin 2007 Herbert Simon Sciences of the Artificial Fundamental insight: Design is a decision- making process (under constraints of physics, logic and cognition) Rational and reductionist
Slide 65 © Carliss Y. Baldwin 2007 Christopher Alexander Notes on the Synthesis of Form; A Pattern Language; A City is not a Tree; The Nature of Order Fundamental insights: user- centered adaptive design; non- hierarchical complexity; unfolding designs; patterns Mystic and visionary (frustrating to scientists)
Slide 66 © Carliss Y. Baldwin 2007 Frederick Brooks The Mythical Man Month; No Silver Bullet; Computer Architecture Fundamental insights: the complexity catastrophe lurking in large designs; limits on the division of knowledge and labor; group inter-communication formula Architect of System/360
Slide 67 © Carliss Y. Baldwin 2007 David Parnas On the Criteria to be Used in Decomposing Systems into Modules; Software Fundamentals Fundamental insights: Information-hiding modularity; Abstraction; Interface; Modules are task assignments Software designer
Slide 68 © Carliss Y. Baldwin 2007 John Holland Hidden Order; Adaptation in Natural and Artificial Systems; Emergence Fundamental insights: Formal dynamics of complex adaptive systems; unified theory of natural and artificial evolution; operators Our best link to complexity sciences (better than Kauffman)
Slide 69 © Carliss Y. Baldwin 2007 Baldwin and Clark Design Rules: The Power of Modularity; Modularity, Transactions and the Boundaries of Firms Most important ideas: –designs are lodged in the larger economy; –financial value is a force driving design evolution; –designs are options; –modules are units of optional substitution; –uncertainty is valuable; –new firms attach at module boundaries
Slide 70 © Carliss Y. Baldwin 2007 That is our view of Design Theory We are eager to learn yours… But, first, for the sake of understanding, our definitions
Slide 71 © Carliss Y. Baldwin 2007 Our Definitions Design (noun) –Design (verb)—Process of Designing –Partial vs. Complete Designs Design Hierarchy Design Space Value Landscape of a Design Space Design Structure/Modularity (Alan) –Mirroring Hypothesis Options and Option Value (Carliss)
Slide 72 © Carliss Y. Baldwin 2007 Designs are the instructions, based on knowledge, that turn resources into things people use and value. Designs (noun)
Slide 73 © Carliss Y. Baldwin 2007 Implications of the definition Designs are not “the thing itself”, they are the instructions for making it –In software: source code = design –Compiled, running code = the thing itself Designs are information Designs are part of human knowledge –But not all knowledge is design –Designs make knowledge useful
Slide 74 © Carliss Y. Baldwin 2007 Is the process of filling in the set of instructions Designing occurs in time When design is complete, the design process is over, “production” can begin Along the way, you have partial designs –A source of huge amounts of confusion! The Process of Designing Design Process Start Complete Time
Slide 75 © Carliss Y. Baldwin 2007 Completing a Design—for a Mug
Slide 76 © Carliss Y. Baldwin 2007 There are Many Different Names for Partial Designs Design Process Start Complete Time
Slide 77 © Carliss Y. Baldwin 2007 Decision-Information Hierarchies Process of design is a decision-making process Some design decisions create the need for subsequent decisions MUG Cap? XXXX Handle XXXX Logo XXXX Material
Slide 78 © Carliss Y. Baldwin 2007 Decision-Information Hierarchies If no cap—Decisions contingent on “cap” disappear List of instructions becomes shorter MUG No Cap XXXX Handle XXXX Logo XXXX Material
Slide 79 © Carliss Y. Baldwin 2007 Decision-making design hierarchy (Marple, ducts and valves, 1961)
Slide 80 © Carliss Y. Baldwin 2007 Design Space A design space comprises the set of all possible variants of a set of designs Design spaces are bounded by prior design decisions –Mug … w/ cap –Pentium chip … w/ out-of-order, superscalar microarchitecture Can be mapped, unmapped, partially mapped
Slide 81 © Carliss Y. Baldwin 2007 All these—and many more— are in the design space of “bicycles”
The newer the artifact, the less we know, the more exploration of the design space is valuable…
Slide 83 © Carliss Y. Baldwin 2007 Value Landscape Maps points in design space to value In biology, value=fitness Fitness landscape for designs of eyes Created by Mike Land. Height represents optical quality and the ground plane evolutionary distance. From Dawkins R: Climbing Mount Improbable. New York, Norton, 1996.
Slide 84 © Carliss Y. Baldwin 2007 Value Landscape and Search History of a computer program Scored results of submissions to the Mathworks “Sudoku” programming contest. Red path shows trajectory of best design over time. works.com/contes t/sudoku/evolutio n.html
Slide 85 © Carliss Y. Baldwin 2007 Design Structure/Architecture The degree and pattern of interdependence among the elements of a design Establishes dependencies between design spaces, hence their scope/complexity Some key architectural types –Integral (all interdependent) –Layered (X depends on Y; Y does not depend on X) –Modular (independent blocks, all depending on design rules—combination of integral and layered) Architectures are somewhat under the control of designers (subject to constraints of knowledge)
Mozilla Before Redesign (RAD)Mozilla After Redesign (Targeted) Two Architectures, same functions, different states of knowledge © Alan MacCormack, Johh Rusnak and Carliss Baldwin, 2006
Mirroring Hypothesis: Integral architectures require integral design teams Mozilla BEFORE refactoringLinux of similar size Coord. Cost = 30,537,703 Change Cost = 17.35% Coord. Cost = 15,814,993 Change Cost = 6.65% One Firm, Tight-knit Team, Rich communication Distributed Open Source Development © Alan MacCormack, Johh Rusnak and Carliss Baldwin, 2006
Slide 88 © Carliss Y. Baldwin 2007 Alan and John will tell you more about our findings… But we have one more set of critical concepts— Options Optional substitution Option potential
Slide 89 © Carliss Y. Baldwin 2007 Options, Optional Substitution The right but not the obligation to take an action –Action = Use a new design –If new is better than old, use new; –Otherwise, keep the old (“optional substitution”) Designs have the property of optional substitution Unit of optional substitution is a module (that which can be changed without changing something else) Thus option value resides in modules
Slide 90 © Carliss Y. Baldwin 2007 Low Medium Zero High Option Potential ( ) Determines value of optional substitution Successive, improving versions are evidence of option potential ( ) being realized over time— after the fact
Slide 91 © Carliss Y. Baldwin 2007 Optional substitution at work— Evolution of a computer program
Slide 92 © Carliss Y. Baldwin 2007 /Option potential is like dark matter in the universe We can measure its effects but we can’t measure “it” “Architects” can perceive /option potential –But architects often don’t talk to scientists! Thus we lack ways to measure /option value scientifically –It is a “research frontier”
Slide 93 © Carliss Y. Baldwin 2007 Sources of /option potential Physics— –Moore’s Law—dynamics of miniaturization in electronic circuits (Mead and Conway) –Power and heat systems vs. logic systems (Dan Whitney) Users— –Users experiment to discover their own needs/tastes –New features, techniques, and applications=> new willingness to pay –Exaptations (designed for one thing, does another) Architecture — –Isolate sources of uncertainty, variability, and bottlenecks –Support new compositions & combinations (e.g. YouTube=movie+PC+Internet+Library)
Slide 94 © Carliss Y. Baldwin 2007 When options are present, variability in outcomes is valuable… When is this true? Which industries, which NPD processes? Why? How does one obtain variability in outcomes?
Slide 95 © Carliss Y. Baldwin 2007 Current Projects & Collaborations Dividing up the economic system—modularity and transactions Design structure in software (Alan and John) Price competition in modular clusters (J. Woodard) Design theory and user innovation (E. von Hippel) Strategic variability (M. Szigety) The value of modular production systems (V. Kuppaswamy) Transparency vs. modularity (L. Colfer) Modularity and intellectual property rights (J. Henkel) Layer Maps and Industry Evolution (M. Jacobides) ‘Selfish’ Designs—the institutional structure of innovation
Slide 96 © Carliss Y. Baldwin 2007 Thank you!
Slide 1 © Carliss Y. Baldwin 2006 Design Architecture and Strategy Carliss Y. Baldwin Harvard Business School Information, Technology and Management Seminar.
Design Rules: How Modularity Affects the Value of Complex Engineering Systems Carliss Y. Baldwin Harvard Business School International Conference on Complex.
Slide 1 © Carliss Y. Baldwin and Kim B. Clark, 2004 Design Architecture — Is What Links Knowledge to the Economy Carliss Y. Baldwin Advancing Knowledge.
1 © Carliss Y. Baldwin and Kim B. Clark, 2002 Where Do Transactions Come From? Carliss Y. Baldwin Harvard Business School Presented at NBER Organizational.
Modularity in Design: How the Building Blocks of Design Influence the Structure of Industries Carliss Y. Baldwin Harvard Business School Presented at MIT.
Exploring Core-Periphery Structures ©Alan MacCormack, John Rusnak, Carliss Baldwin Exploring Core-Periphery Structures in Complex Software Products.
Slide 1 © Carliss Y. Baldwin 2006 Innovation in Systems Industries— Discussion Carliss Y. Baldwin HBS Strategy Conference October 14, 2006 Boston, MA.
Does Code Architecture Mitigate Free-riding in the Open Source Development Model? Carliss Y. Baldwin and Kim B. Clark Open Source Conference Harvard Business.
System Design Decomposing the System. Sequence diagram changes UML 2.x specifications tells that Sequence diagrams now support if-conditions, loops and.
Modularity, Flexibility, and Knowledge Management in Product and Organization Design By Ron Sanchez and Joseph Mahoney SMJ (winter 1996) special issue:
Slide 1 © Carliss Y. Baldwin and Kim B. Clark, 2004 Insights from Agency Theory into User Innovation Carliss Y. Baldwin Harvard Business School LMU-MIT.
Rule Dynamics: A Journey into Organizational Intelligence Exploring the tension between performance and accountability.
1 Chapter 15 Designing and Leading a Learning Organization.
What is Software Architecture?. An Example Architecture??? Control Process (CP) Reverb Model (MODR) Prop Loss Model (MODP) Noise Model (MODN)
Slide 1 © Carliss Y. Baldwin and Kim B. Clark, 2005 The Power of Modularity: The Financial Consequences of Modular Design Architectures Carliss Y. Baldwin.
THEORIES OF TECHNOLOGICAL CHANGE Definitions and Concepts.
An Introduction to Software Architecture Software Engineering Lab. Summer 2006.
Conway’s Law Revisited ©Alan MacCormack, John Rusnak, Carliss Baldwin Conway’s Law Revisited: Do Modular Organizations develop Modular Products.
The tenuous (?) relation between IT, modularity and industrial evolution Geneva, June 1-2, 2006 ‘Digital Transformation in the Information Society’ Parallel.
Slide 1 © Carliss Y. Baldwin 2007 Architecture, Innovation and Industry Structure Carliss Y. Baldwin Washington University St. Louis April 9, 2007.
My Top 10 Book Picks for the Compleat Instructional Designer (From Outside the ID World) Andrew S. Gibbons Brigham Young University My Top 10 Book Picks.
The roots of innovation Future and Emerging Technologies (FET) Future and Emerging Technologies (FET) The roots of innovation Proactive initiative on:
Multi-cellular paradigm The molecular level can support self- replication (and self- repair). But we also need cells that can be designed to fit the specific.
SYSE 802 John D. McGregor Module 8 Session 2 Platforms, Ecosystems, and Innovations.
1 © Carliss Y. Baldwin and Kim B. Clark, 2002 Where Do Transactions Come From? Carliss Y. Baldwin Harvard Business School Presented at Centre St. Gobain,
Slides Prepared from the CI-Tutor Courses at NCSA By S. Masoud Sadjadi School of Computing and Information Sciences Florida.
Slide 1 © Carliss Y. Baldwin and Kim B. Clark, 2005 The Looming Complexity Catastrophe in Large (and Ultra-Large) Systems Carliss Y. Baldwin Harvard Business.
UML - Development Process 1 Software Development Process Using UML (2)
Slide 1 © Carliss Y. Baldwin and Kim B. Clark, 2004 Selfish Designs: What Computer Designs Need from the Economy and How They Get It Carliss Y. Baldwin.
Simulation Models as a Research Method Professor Alexander Settles.
Artificial Intelligence Lecture # 01 Lucky Sharma Information Technology Subject Code: IT 833.
1 CS 501 Spring 2005 CS 501: Software Engineering Lecture 2 Software Processes.
Intro to Architecture – Page 1 of 22CSCI 4717 – Computer Architecture CSCI 4717/5717 Computer Architecture Topic: Introduction Reading: Chapter 1.
The Pricing and Profitability of Modular Clusters Carliss Y. Baldwin Modularity Mini-Conference London Business School October 2, 2003.
Software Architecture for DSD DSD Team. Overview What is software architecture and why is it so important? The role of architecture in determining system.
1 CS 501 Spring 2004 CS 501: Software Engineering Lecture 2 Software Processes.
Introduction to Design (and Zen) CpSc 372: Introduction to Software Engineering Jason O. Hallstrom Authorship Disclaimer. These.
Tussle in cyberspace: Defining tomorrow’s internet D.Clark, J.Wroclawski, K.Sollins, R.Braden Presenter: Baoning Wu.
Global Innovation Management VeMBA Business Models.
ARCHITECTURES FOR ARTIFICIAL INTELLIGENCE SYSTEMS.
The New Economy, High Tech Industries and the Role/Limits of State Economic Development Policy.
Sanchez and Mahoney (1996). Modularity, flexibility, and knowledge management in product and organization design. SMJ.
Tussle in cyberspace: Defining tomorrow ’ s internet D.Clark, J.Wroclawski, K.Sollins & R.Braden Presented by: Ao-Jan Su (Slides in courtesy of: Baoning.
Chapter 10: Architectural Design Presented By: Andy Carroll.
SOFTWARE DESIGN. What is? It’s a meaningful engineering representation of something that is to be built. There are four major concerns for design. They.
1 CS 501 Spring 2003 CS 501: Software Engineering Lecture 2 Software Processes.
CSE 331 Software Design & Implementation Hal Perkins Autumn 2012 Wrapup 1.
Development of Concepts for R&D Management R&D in an Individual Enterprise.
Systems Architectures System Integration & Architecture.
Conceptual Modeling of the Healthcare Ecosystem Eng. Andrei Vasilateanu.
© 2017 SlidePlayer.com Inc. All rights reserved.