Early-Warning System: How to avoid being blindsided by the future

Q&A by Kathleen Melymuka

 
 

NOVEMBER 28, 2005 (COMPUTERWORLD) - "What don't we know that might matter?"

Every CEO and CIO asks that question, but answering it is a challenge. No wonder that in a recent survey of 140 corporate strategists by the Fuld-Gilad-Herring Academy of Competitive Intelligence, two-thirds admitted to having been surprised by as many as three high-impact competitive events in the past five years.

In this month's Harvard Business Review, Paul J.H. Schoemaker and George S. Day provide a framework for answering that question. Schoemaker, research director at the Mack Center for Technological Innovation at the University of Pennsylvania's Wharton School, talked to Kathleen Melymuka about how to "scan the periphery."

What is a company's peripheral vision? Its ability to pick things up in an area it's not focusing on. If I focus on particular types of customers, it may be what's happening with other customers. It's the ability, as in human vision, if I'm looking straight ahead to still notice things happening to the left and right.

Why is it so important? Because there's a lot of change in the outside world. The more things are changing in the environment, the more important it is to pay attention to what you're not really focusing on. Opportunities lurk in the periphery, but peripheral vision is ambiguous, so people don't like it. You can see motion and contrast [in peripheral vision], but you can't see detail and fine shapes.

What types of questions are useful for examining the periphery? Broader questions: What don't we know? What might surprise us? What are people saying that we don't listen to? If you're focused on something, you can develop well-defined questions, but this needs a more open-ended flavor. It's about exploration.

You write that first you should look at past blind spots. Why look back? Because if you want to think about the future, the two are connected, especially if you have repeatedly missed things in the realm of technology or public relations. Royal Dutch Shell was three times surprised at how the world responded to its actions. One of those times led to a major boycott. They're very good at engineering and energy production, but they're so analytical, they don't have a good feel for political and social and media undercurrents. The price of focus is loss of peripheral vision.

What do you do about past blind spots? List on a whiteboard where you were blindsided -- all the things you missed that had a negative impact. Then list opportunities that were missed and ask why. Did someone know this was coming, but that person was not heard? If that happens, it's easy to solve. More difficult is what happened with 9/11: Lots of people saw pieces of it, but they didn't share information, so no one put it together. There you need good information sharing, good knowledge management. The hardest case is when something really comes out of the blue and no one had any idea.

You suggest examining other industries. What are you looking for there? You may not see things happening in your own industry, but if you notice analogous things in other industries, you can get a feel for what that might be like. For example, if you're in nanotechnology, take a look at genetically modified foods. There are major societal objections to modified foods even though it's good technology. There are issues of safety and trust.

There's so much you could be looking at. How do you differentiate what's important from the clutter? You need guiding questions to get between a scattered perspective and one so narrow that you find only what you're looking for. Guiding questions focus loosely. You can look at the usual categories: social, technical, environmental, economic and political. Should you pay equal attention to all? Maybe you need a special focus on one. You could have task forces look at different areas, or a "crow's nest" to scan for new technology. But you need to find the middle ground between undirected and focused.

That sounds difficult. Bill Bradley, when he played [basketball] for Princeton, was known for his ability to see people open that no one else could see. He was tested, and they found that he had really superior peripheral vision. He said that as kid he would practice looking straight ahead and trying simultaneously to see to the left and right. An organization can also develop this ability.

You also suggest looking at the mavericks in your company. Who are they, and what can they tell you? Good mavericks are congenitally unhappy or else they just see the world differently. They're more independent-minded, or they may just live in part of the organization that is atypical. They may have a special function or serve unusual customers. They're not in the mainstream. We tend to discount those who think differently. Some may truly be crackpots, but there's a low cost to talking to these people, and they may have different views. There's so much filtering of bad news, and unconventional thinking doesn't travel upstream very well.

Moving on to the future, you try to imagine potential surprises. How do you do that? It requires a certain humility. We worked with the Venezuelan national petroleum company when they were tight with the political leadership. We asked them to paint a scenario where they were out of favor or there was a dramatic business or social change. They were so overconfident, they were not able to point to a scenario that did materialize: Hugo Chavez took over, nationalized the oil companies and fired 150 executives on TV one Sunday afternoon.

Would it make sense for a CIO to have his group do all this even if other senior managers aren't interested? The more backing from senior management, the better. But any unit that has some control over its own destiny would benefit from this.