You have said that, “As business becomes more dependent on knowledge to create value, work becomes more like art.” Please explain.
Another kind of cost that is important is if you build a different kind of airplane and then you take off and it crashes. This isn’t quite the same kind of cost: the first one we usually refer to as reconfiguration costs, and the second we refer to as exploration costs. For rapid iterations to make sense, you have to figure out a way to get both of these costs to be low. I know from my Ford Motor Company days that it used to cost a few hundred thousand dollars to crash-test a real car. Of course, it now costs significantly less to crash test a virtual car: not only will save money but you can also crash test a lot more cars, which means you can experiment more. This is what’s driving the movement towards cheap and rapid iteration.
[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]