Automobiles, Blind Spots, and Organizational Strategy

Fall 2017

How does an organization identify its potential blind spots? This is one of the most common questions I hear from people conducting strategic planning processes.

To begin answering the question, I have a simple analogy that can be used as a springboard to organizational strategy. That is, today’s cars are equipped with three rearview mirrors and often a backup camera. The mirrors and camera let you visualize what is behind you, a place you have already been. They identify “competitors” from within your clear line of sight, but they do not tell you much about them. They are your “in-industry” competitors. Some cars have an embedded blind spot mirror in the outside mirrors. The blind spot mirrors allow a view of those close to you, potentially ready to overtake you. This is an important piece of trend data that puts you on the alert and identifies competitors from within your industry who might be ready to speed ahead and overtake your leadership position. However, what you really want to know is what lies ahead!

You can look out your front windshield and see the road immediately ahead or use GPS to see the road a few miles or even hours ahead (the short-term horizon). This is all helpful information, but you really want to be able to look a year or two ahead and know what road you should be on and what the traffic (competition) will look like. Will you be on the same old roads or a new road (new products and services)? As a driver today, you want to know if you will be driving a car or using another mode of transportation entirely (deriving from new industry competitors or new travel modes within your industry). Will your competition be driverless cars or a hyperloop? Can you predict those new competitors today and plan accordingly? Can you even identify those non-industry competitors? These are the real blind spots you want to know as part of strategic planning, not the extrapolated data from a “rearview mirror.”

At each stage of this blind spot analogy, you were broadening your view, eventually redefining your industry from personally driven automobiles to people moving. This could lead your organization to a major shift in “product line” and services, if you want to sustain the organization and its competitive position.

The 2017-2018 Baldrige Excellence Framework describes blind spots as arising from incorrect, incomplete, obsolete, or biased assumptions or conclusions that cause gaps, vulnerabilities, risks, or weaknesses in your understanding of the competitive environment and strategic challenges your organization faces. Blind spots may arise from new or replacement offerings or business models coming from inside or outside your industry (as you currently define it). To conclude the analogy, competition could come from driverless cars or driverless car services that take you from chosen point to point (a new business model) or from outside your industry (significant changes in mass transport or hyperloops, for example).

Where do we find the wisdom to recognize that our industry is people moving, not automobile manufacturing? How do we find what Donald Rumsfeld, the former Secretary of Defense, called the “unknown unknowns”? Kodak invented the digital camera but believed it was in the film industry/printing business, not the business to create memories that could best be shared online, digitally. It even realized that a “Kodak moment” was worth sharing but did not see far enough ahead to predict the business model for future sharing.

In the remainder of this column, I will explore common traps that lead to blind spots, then explore some don’t do’s, and finally, how to look for blind spots.

Blind Spot Traps

I have identified seven common traps that lead to blind spots. Many of the traps arise from the work of Professor Bettina Büchel at IMD.

1. Seeing what we expect to see: This is the theory of incongruence. We don’t see what is incongruent with our current beliefs and frame of reference. I remember seeing a video in which we were asked to count the number of times a basketball was passed; none of us noticed that a gorilla was walking among the players because we were so focused on basketball. We pay selective attention to our area of focus.
2. Misjudging industry boundaries: We narrowly define our industry based on our current products or services and how they are used today.
3. Failing to identify emerging competition: We don’t see emerging competition because they do not do things exactly as we do. They are tackling a different problem from our “blinders-on” perspective.
4. Falling out of touch with customers: We think we know what our customers need and want. We have been serving them for many years and believe in their loyalty. We do not seek their input on changing needs or unmet desires.
5. Overemphasizing competitors’ visible competence: We focus on our competitors’ current offerings and assume they will continue unchanged. We do not think about the research and development they may be doing on a disruptive product, service, or business model.
6. Allowing organizational taboos or prohibitions to limit our thoughts: Our practices or policies can limit our thinking. We fail to question practices and policies that may be outdated or incongruent with current technology or regulation. 
7. Relying on history: This is the way we have always done things. We let our historical patterns guide our future.

In essence, we fall into rigidity traps, rather than questioning the status quo.

Blind Spot “Don’t Do’s”

Before discussing what you should do to identify blind spots, let’s look at some “don’t do’s” that organizations engage in.

1. Don’t be a slave to strategy: In a world where technology, business models, economics, and global political environments are in a constant state of evolution, organizations need to be agile. Slavishly adhering to a strategy created several years ago can take an organization down a path toward obsolescence. An organization can devote years to an outdated strategy, achieve it, and fail as an organization. And if the organization does not fail, achieving an outdated strategy could lead to the conclusion that developing strategy is useless. Today, strategic plans need to be regularly reviewed and modified as conditions and opportunities warrant. The approach should be toward strategic thinking, not strategic planning as a periodic event.
2. Don’t focus on fear: While a healthy respect for all sources of competition is important, fear should be turned into opportunity. Fear can stifle breakthrough thinking. Confront organizational challenges and seek to capitalize on them through disruptive ideas and new solutions, not extensions of old ideas. Explore new capabilities needed to pursue opportunities. As suggested by Clark in an HBR blog, war-game your potential failures. Perform a pre-mortem. Assume the idea will fail and look for options to avoid the failure.
3. Don’t trust: Don’t rely on sources that we tend to give undue weight. Don’t trust the wisdom of the crowd.  Group-think can lead to consensing on a safe path, rather than expressing bold ideas. Brainstorm with all opinions valued. Don’t trust instincts, seek data and careful analysis of implications. Perceptions can be clouded by personal biases. Don’t trust minimizers. It is easy to deny problems and assume things will get better. It is also easy to assume things are better than they appear. Don’t trust individual experts. Experts can get it wrong and different experts have different opinions and ideas. Seek the thoughts of multiple experts.

Blind Spot Identification

Finally, let’s explore the processes you should use to seek and identify potential blind spots.

1. Explore upcoming technologies: Are any emerging technologies capable of being exploited for your next generation products or services? Are there emerging technologies that could create new industries that challenge yours? Are there new technologies that could generate add-ons to your existing offerings? If yes, would it be an intelligent risk for you to invest early and capitalize on your brand recognition to be a first entrant.
2. Assess global trends: Investigate global changes in demographics, political environments, regulation, production and purchasing capabilities, and markets. Are there any major shifts likely that could impact your marketplace positively or negatively?
3. Get out of your comfort zone: Break tradition. Shake up the norm. Try to identify and test your implicit assumptions. Take your leadership team to totally different surroundings. Get you news from a different source that has a different focus than your normal channel. Talk to people that you wouldn’t normally interact with. For example, if you are a physicist, talk to an economist or social scientist or industrial engineer. Ask probing questions. Try to talk to someone new on a regular basis.
4. Seek employee input broadly: Discuss potential game-changing ideas with employees at all levels of the organization. Solicit and listen to their reactions. Solicit other ideas from them. Bring people together from different parts of the organization and different job functions to brainstorm together and to share what they are hearing or reading outside the confines of their workplace.
5. Talk to your customers: Ask your customers about their unmet needs and desires. Talk to your customers’ customers to gain additional insight. Observe your customers in action to understand their behaviors and frustrations. Look for creative solutions.
6. Broaden your field of view: Don’t assume companies or organizations will remain in current industry boundaries. Look at adjacent industries and benchmark what they are doing. Ask yourself what business are you really in (e.g. automobile manufacturing or people moving)? What is the ultimate goal or impact of your product or service for the user? Given global and technology trends is there a new business model you should pursue?

Final Thoughts

To find blind spots you need to look broadly and not be constrained by current biases and boundaries. You need to trust instincts less because they harbor your current biases. You need to seek new and different sources of information and synthesize what you learn. Verify your conclusions. Plan a specific course of action. Continue monitoring trends and your progress. Stay agile. Look not just straight ahead, but around corners.

For additional reading on blind spots, I suggest articles by Davia Temin, James Kerr, and Scott Anthony.

Resources

It Is 2017. Is Your CEO Thinking about Current Issues? (Summer 2017)
Why Not You? (Spring 2017)
Archived Columns

This blog marks the first time the periodic Insights on the Road to Performance Excellence has appeared on Blogrige. We welcome the addition of this longer, researched column and welcome your comments. Prior and new Insights columns will continue to be found on our website under Publications Archive.