Abstract

Herbert Simon viewed innovation as a particular type of problem-solving behavior that entails refocus of attention and search for alternatives outside the existing domain of standard operations. This exploration outside of standard routines involves heuristic-based discovery and action, such as satisficing search for information and options. In our observations on the innovation process, we focus on knowledge generation. We propose viewing the process of generating knowledge—when knowledge is sufficient to instigate action, but not necessarily enough to eliminate the uncertainty of the situation—as a heuristic process. Because many personal and organizational decisions are acted upon in the presence of some degree of uncertainty, we argue that heuristics structure the way in which information is processed innovatively. We provide a catalogue of instances in business decision making.