Detecting weak signals of change inside & outside your industry-Derzko's 12 tips

There are two strategies for innovation that I teach in my Idea lab course at the University of Toronto.

The first is a proactive approach -anticipate and design, where you become the trend leader, the trend setter and initiator. The second approach is reactive -rapid sense and respond, which means you have to be on the constant lookout for early weak signals of change.

"Becoming aware of emerging trends in the workplace before they become obvious is necessary in today's rapidly changing business environment," says a Purdue University leadership expert.

Beverly J. Davis, an associate professor of organizational leadership and supervision at the College of Technology located in Lafayette and Kokomo, said recently in a press release that the ability to identify "weak signals," which are defined as imprecise, early indicators of an impending important event or trend, is key to effective management.

"A weak signal may be lingering under any complex business environment, and today's technology has accelerated this cycle," said Davis.  "Often, big changes follow small events, and these changes can happen very quickly.  That's why an 'old world' view of leaders, even those of six months ago, won't work anymore."

Buckminster Fuller once said: "The thing for you to do is the thing you see needs to be done, but no one else sees - in other words, a felt need."

Davis says some examples of weak signals that eventually had major consequences include the impact of eBay on retailing, the rise in popularity of cell phones that has led many to abandon landline-based telephones and the surge in gas prices that affected the once-booming sport-utility vehicle market.

"It's important for managers to think big, and it's vital for them to be able to understand the difference between a fad and a trend," she says.  "If management in these industries would have been picking up on these weak signals, they might have prevented a lot of the damage done to their businesses."

Davis says in order for a fad to become a trend, it must appeal to the mainstream, be accessible to all, be easily understandable to the average person, be easy to obtain and be affordable.

"An excellent example of a company that picked up on a trend was Starbucks," she says.  "The founder expanded his Seattle coffee shop into a huge enterprise and made it appealing to the average American.  He was able to recognize that cafés were a strong trend in Europe and was able to pick up on the weak signal that Americans, despite their fast-paced lifestyle, were eager to embrace the idea of slowing down enough to visit a coffee shop, bookstore or library to connect with other people."

Here are my  12 tips for managers, scientists and entrepreneurs to stay on top of weak signals:

• Read all of your industry's materials that you can, even if they don't directly relate to your job or business.  This will give you a much larger perspective and viewpoint on which to base decisions.
• Scan other industry trends.  It is difficult to detect trends and weak signals when they begin where you least expect it ....That's why you have to stay on top of trends in every sector that could potentially impact your business, even if it's not immediately obvious today.
• Rely on your leadership experience and trust your intuition. watch out for early unsubstanciated hype.
• Beef up your sense-making skills to determine if a signal is legitimate or irrelevant and how that changes over time. It's not enough just to connect the dots, if you are not sure if they are real or not. Anticipate how unrelated signals could cluster together to form emerging trends. Spend most of your time trying to figure out how things can go wrong, or off track and be ready with strategies to mitigate those negative effects.
• Be open to ideas that are thought to be irreverent and disruptive of the status quo.
• Try to see the big picture or the system rather than focusing on parts. Construct your own personal mental model or world view. Where are we now? What do we take for granted about the situation? What's likely to change? Where are we heading?
• Use McLuhan's tetrad to anticipate impacts & consequences
• What's the holy grail, that everyone is chasing?
• Be aware of biases and chains of thought, in both you and the organization, and the limitations of relying on past certainties in your industry. Know you industry assumptions,(the what-do-we-take-for-granted-WDWTFG's), norms, unspoken rules of thumb, and tacit information on how the industy works and why..."in your sleep" and recognize when someone or something is about to challenge them. Example: Canadian manufacturers have had 6 solid years in an expanding business cycle to ramp up their innovation capabilites, knowing that the Canadian dollar was heading towards par with the US dollar and they would loose their competitive edge in the US marketplace. Yet, most did nothing about it, preferring to take the easy way out-layoffs, outsourcing or moving the plant to the USA instead of putting efforts to innovate.
• Know your 7 unknowns. What are we dealing with here? Uncertainty? Ambiguity, Complexity? Dichotomous thinking? etc and how do we address each one of these?
• Look for paradoxes, anomalies and contradictions in signals, the solution to which could open up new opportunity windows.
• Have an ongoing process to identity and monitor weak signals, and once weak signals are detected, prioritize and create action steps or goals for the organization.  Organizations can do this by conducting constant research and even having a task force or committee assigned to identifying possible trends and how they could affect the group or business.

When weak signals are detected, it's important to ensure that your organization sets up a system to act on legitimate signals and that leaders are encouraged to pursue action plans in response to the detection.

Source: Press Release, Purdue University Fri 15-Jun-2007 and the Idea Lab;Generating Ideas on Demand