Is it possible that the reason you seem to be having a hard time convincing some people that their understanding of the scientific method is outdated is because they actually think they are observing its elements in your business model?
Some quotes from your post appear to suggest a more traditional approach than you otherwise suggest:
"I employ people with keen observational skills to discover the leading edge, to keep pushing the boundary."
"Its strength is in an improved (broadened in this case) ability to predict outcomes in new territories where my model failed to make useful predictions."
"Then the PhDs follow behind with an explanation that sometimes is immediate and at other times takes many years. The success of the PhDs (called scientists) allows my engineers to better apply and refine applying the results thereby leading to new technology."
From these lines of your description, it looks to me that observation, prediction, hypothesis, disproof, adaptation and explanation are parts of your improvement process. And I am not sure how you capture improved outcomes from predictions without measuring them.
For another perspective, here's how the UK science council defines science:
"Science is the pursuit and application of knowledge and understanding of the natural and social world following a systematic methodology based on evidence.
Scientific methodology includes the following:
Objective observation: Measurement and data (possibly although not necessarily using mathematics as a tool)
Evidence
Experiment and/or observation as benchmarks for testing hypotheses
Induction: reasoning to establish general rules or conclusions drawn from facts or examples
Repetition
Critical analysis
Verification and testing: critical exposure to scrutiny, peer review and assessment"
Having observed all of this, the initial process of creativity, scientific and otherwise, is as close to magical as we come. Where do ideas emerge from?
For me, that part of the process is probably impervious to a general explanation for the moment. How did Einstein think all the way up to his equations? How did Michelangelo know David was inside that block of marble? I dunno. Science tests creative thinking of certain types. But the scientific method doesn't explain the origin of ideas.