you are here:   / News & Insights / Engineering Advantage Blog / What is Your Threshold?

Engineering Advantage

What is Your Threshold?

Simulation Product Development | Wilt Chamberlain | FEA Consulting
July 19, 2016 By: Nick Veikos

While driving around last weekend, looking for a new refrigerator with its own IP address, I listened to a piece on This American Life about choosing wrong. The story brought to my attention the work of sociologist Mark Granovetter, who developed the Threshold Model of Collective Behavior in the 1970’s to help answer the question of why people behave out of character.

Granovetter posits that people make binary decisions, e.g. – whether or not to partake in a riot - based not solely on their beliefs but rather on their “thresholds”. A threshold is defined as the point where the perceived benefits to an individual doing the thing in question (joining the riot) exceed the perceived costs. Individuals with low thresholds do whatever they want without worrying about what others will think, and those with high thresholds need everybody to be doing something new before joining in themselves.

While not joining a riot because of a high threshold would likely be considered a good thing, the program presented examples where high thresholds were the cause of individuals making the wrong choices. Wilt Chamberlain admitted that shooting free throws underhanded would have improved his percentage, but he did not do it because he “felt like a sissy”. So, he had a pretty high threshold.

As another example, David Romer’s paper was presented. It demonstrated that football teams could win 2 more games a year if they didn’t punt and went for it on fourth down; however, no professional teams have adopted this approach. This could be due to many factors, but one explanation could be that the owners and coaches of the teams have very high thresholds. They have all chosen to wait until everyone else tries the approach.

Romer goes on to extend the football example to question whether firms are actually trying to maximize profits in the best way possible, or if the forces of conservatism are major obstacles. This got me thinking about the countless conversations we have had with engineering managers, executives, and principals over the years in our attempts to demonstrate that introducing simulation early into their product development cycle will bring big rewards at the end of the day.

The data is pervasive and irrefutable – if I were a lawyer, I would say there is no plausible deniability. A simple web search on “Simulation Driven Product Development”, or SDPD, will result in hundreds of examples demonstrating the benefits. (I particularly like the thesis by Johansson and Sätterman.)

With all of the advantages, you would think that SDPD is ubiquitous in all companies. Based our experience, however, you would be wrong. Sure, all the best-in-class companies do it, but why not everyone? Where is the disconnect? I sure wish I knew, but I’m going to blame it on threshold. It fits the empirical data. In many instances, when we present the value proposition of SDPD to clients and back it up with a solid description of the return on investment, the light goes on and they agree to give it a try. Sometimes, they say that we were too optimistic in our assumptions and that they are not ready yet. To us, these are rational decisions, based on the facts. Something any logical engineer would embrace.

There are times, however, when this approach falls flat on its face. The client says they are not interested, without having any serious objections or pushback to our value assumptions.  This drives us crazy – there is no rational explanation which, as engineers, we crave. For years, I could not understand this behavior, but now I’m convinced that these individuals just have a high threshold. They know it’s the right thing to do but, until they see everyone on board, are not going to budge.

To test my hypothesis, I’m thinking we should begin our SDPD conversations like this: “Would you be likely to join in a riot if one started in your vicinity?” If the answer is “yes”, we’ve identified a low threshold individual and we continue the conversation. If not, we go find someone else in the organization to talk to.

So is it a high threshold, conservatism, misunderstanding of the risks and benefits, indifference or apathy? What do you think is keeping some organizations from adopting simulation driven product development while they watch their competitors eat their lunch and pop the bag? I’d love to know, what is your threshold?

 

Ref 1. Threshold Models of Collective Behavior STOR
Mark Granovetter
The American Journal of Sociology, Vol. 83, No.6 (May, 1978), 1420-1443.

 

Ref 2. Do Firms Maximize? Evidence from Professional Football
David Romer
University of California, Berkeley and National Bureau of Economic Research
[Journal of Political Economy, 2006, vol. 114, no. 2]
2006 by The University of Chicago. All rights reserved. 0022-3808/2006/11402-0006$10.00