Executive Thought Leadership

Improving Peripheral Vision

Whenever we deal with emerging technologies or developing markets, we encounter more uncertainty. The terrain is less familiar in terms of players, customers, channels, rules of the game, and so on. In this kind of environment, it is especially important to have good peripheral vision. There may be early warnings of a new competitor or of an emerging technology that could obsolete your core product line. To avoid being blindsided by threats or missing big opportunities, your organization needs strong peripheral vision.

Because most managers are fixated on the narrow path ahead, their companies typically lack the ability to see around corners sooner than their rivals. Our Wharton study found that more than 80 percent of companies have a major vigilance gap between their need for peripheral vision and their existing capability. We also found that when surprises hit a company, somebody in the organization or its extended network saw it coming. But management didnt know what that person knew, and that person didnt know that management needed to know.

Superior peripheral vision is much more than sensing signals early. It is also knowing where to look more carefully, how to interpret the weak signals, and how to act when the signals are ambiguous. In our book Peripheral Vision, we lay out a seven-step process to help managers and their organizations close the vigilance gap.

1. Set the right scope for inquiry. To see everything is to see nothing. Ensure that your focus is neither too broad nor too narrow by using a set of guiding questions, such as: Who in your industry has a good track record in picking up weak signals and acting on them ahead of the competition? What are your mavericks and outliers trying to tell you? Is there an unthinkable scenario?

2. Use multiple methods for scanning. Choose different tools and approaches for detecting signals in diverse parts of the periphery. Among the possible methods: monitoring complainers and defectors; data mining in specific market segments; looking beyond your most direct competitors to ones below and beyond you; and learning from influencers and shapers in the media, your industry, and the realms of policy, law, and politics.

3. Interpret what the data means. How do you integrate and make sense of the glimpses youve gathered from the periphery? What cognitive and organizational biases may get in the way? You need diverse viewpoints, like those in the process of triangulation, to add depth and perspective.

4. Know when and how to probe further. Formulate good hypotheses, and know how to test them to confirm or reject them. In some cases that will require experiments and other investments to test the market and better understand the phenomena you are tracking.

5. Act judiciously to stake out options early. Sometimes a threat or opportunity requires decisive action even in the face of uncertainty. But often the signals require a cautious and measured response using a rea-o-ptions perspective.

These five steps can be executed by the manager. Two additional steps will strengthen your organizations overall capacity for peripheral vision:

6. Develop proper organizational alignment among your sensing capabilities. Weak signals often get lost or distorted somewhere in the organization. You need a structure, process, and culture that are conducive to exploring the unknown. Who talks with whom and how often? Is there a healthy dialog, in a spirit of trust and mutual respect, across organizational boundaries? Managers who live in silos or organizations that share information only on a need-to-know basis may be good at performance or delivery, but not good at learning.

7. Use leadership to foster curiosity at all levels and widespread sharing of insights. Leaders set the tone. The questions they ask are the cues others resonate to. Are the questions about minute internal issues, operational results, or the outside world? Leaders can foster organizational curiosity by exploring issues just beyond the edges of peoples attention field.

Even if your company has solid mechanisms and processes for peripheral vision, you will be limited if senior leadership has a short-term operating mentality. Leaders determine what voices are heard; they can either open up the organization to weak signals or shut them out. When dealing with new markets and emerging technologies, you need leaders who are curious about the edges of the business as well as the core.

Adapted from George S. Day and Paul J. H. Schoemaker, Peripheral Vision: Detecting the Weak Signals That Will Make or Break Your Company (Cambridge: Harvard Business School Press, 2006).