I was catching up on some reading in preparation for this newsletter and re-read an article in the Company Director Magazine called “Planning for the Unknown.” Among a number of issues, the article highlighted the need for directors to be more on the alert for the so called “black swans” – that is events which are hard to “predict”.
The term “black swan” became popular by Nissem Taleb, an American finance professor, whose “black swan theory” refers only to unexpected events of large magnitude and consequence, and have played a dominant role in history. As such, black swans impact everyone at the same time.
As a decision making maverick and a competitive intelligence expert I would like to state that unless a business operates in a vacuum, executives and directors can identify events that will impact on their competitive ability, seek a number of options, and mitigate the risk.
The Lessons Are Clear
Over 25 years of working with multinationals, local businesses, large and small, the lessons are clear. While everyone knows that a business does not operate in a vacuum, senior executives and directors continuously exhibit blindspots which increase competitive risk and limit growth opportunities. Just think of all the companies you know that have lost market value or no longer exist.
Case study after case study, in every business degree in Sydney, Boston or London, identifies executive blindspots as the number one cause of company failures.
The first blindspot to be acknowledged is that you cannot know everything about your industry and customers. Every industry is moving too fast, morphing daily in some way. There is no way an executive can stay on top of it all including unexpected disruptors. And being internally focused only makes things worse.
The second blindspot is the belief you can do nothing about this, as it is so overwhelming. There is just too much data, too many inputs and it is all too time consuming. Well, these days we operate in a VUCA World (Volatile, Uncertain, Complex, Ambiguous) and we need to become very, very familiar with this. We need to have people who can provide insights to help mitigate risks and uncover all the options that are available in this dynamic environment.
Think, Reflect and Analyse
It is not about big data. It is about the ability to think, reflect, and analyse. Executives have an armoury of tools and methods to limit the risk from the unexpected. Tools such as Scenario Analysis, War Games to name a few and methods such as competitive analysis or competitive intelligence have been around for many, many decades.
- There is no business that operates in a vacuum.
- Learn about your competitive marketplace – I can assure you, you do not know it all.
- Limit your blindspots – get customers, suppliers, outside consultants, experts to provide insights into your competitive landscape and highlight what they see are some options on your horizon.
Black swans will affect everyone. Blindspots will destroy each company one at a time and these days at a much faster pace!
To find out how you can mitigate against blindspots in your business get in touch via our contact us page.