Looking for the unexpected could put your company, your employer on a path to leverage opportunities for revenue and profit. The unexpected category for opportunities as Drucker identified in his book Innovation and Entrepreneurship is one path to consider. My previous blog on “Discovering Opportunities” was on “unexpected success.” This blog will highlight the other two in this category – “unexpected failure and an unexpected outside event.”
As Drucker explained, the “unexpected failure” could result due to a couple of things – “mistakes, the result of greed, stupidity, thoughtless bandwagon-climbing or incompetence, whether in design or execution.” On the other hand, if failure comes, “despite carefully planned, carefully designed and conscientiously executed that failure often bespeaks underlying change and with it opportunity.” (Drucker P 46)
For products and services, assumptions are made. If failure for whatever reason is the result, the assumptions don’t fit reality. The unexpected failure could be due to a market branching into other customers who purchase based on other requirements. An understanding is important to know. What is important to take away, “unexpected failure was a symptom of basic change.” (Drucker pp 46, 47)
A response for this unexpected failure, Drucker suggested “go out, look around and listen.” Failure should always be considered a symptom of an “opportunity for innovation and taken seriously.” (Drucker p 49)
Did you grow up with the Edsel Story? I did. The story of this unexpected failure fell on Ford. However, I did not hear the entire story. Ford examined the results, failure against its assumptions, plan, strategy. The result which I never heard and Drucker explained – the Ford Thunderbird. The Ford T Bird allowed Ford to reclaim lost ground in the automotive industry. The Ford T Bird is one example of failure turned into success by listening, going out, understanding and innovating. (Drucker pp 50-52).
The unexpected outside event – Drucker defined this as “events that are not recorded in the information and the figures by which management steers its institution.” (Drucker p 52). Drucker cited two examples – IBM’s personal computer and Book Store Chains. While these are good case studies from 1985, let’s examine the characteristics of an unexpected outside event that you may use to filter information through for a benefit.
- IBM and Book Store Chains represents “genuine innovation and not diversification” (Drucker p 54). IBM remained in the computer industry and chain book stores remained in the retail industry.
- A success factor for an unexpected outside event – “it must fit the knowledge and expertise of one’s own business” (Drucker p 54).
- The event could “be an extension rather than a diversification” (Drucker p 55).
- The unexpected outside event requires innovation in product, service, distribution channels (Drucker p 55).
We all observed how companies, large and small, changed in response to a global unexpected outside event – COVID
- Honeywell – N95 respirator mask production, shifted 2 chemical manufacturing plants to produce hand sanitizer.
- Ford in partnership with 3M used modified auto parts from the F-150 to produce respirators.
- SC Johnson in partnership with DOW produced hand sanitizer.
- Brooks Brothers shifted shirt and tie production to masks and gowns.
- GM shifted production in partnership with Ventec to produce ventilators.
Source: https://www.triplepundit.com/story/2020/companies-retooling-operations-covid-19/88921
There are many more examples of companies, large and small, that shifted production in response to COVID. Follow the link for the complete list: https://www.aei.org/multimedia/defense-production-act-production-tracker/
The unexpected outside event was obvious and many companies responded. However, unexpected outside events may not be so obvious. If not obvious, what can a company’s leadership and employees do?
- Leadership needs to seek out opportunities of all kinds on a regular basis.
- The search for opportunities of any kind requires organization, function within an established process, provide necessary resources, accountability, allow employees to present, innovate, test, pilot, present findings for acceptance, to leverage for revenue, profit and meet market demands.
Corporation’s monthly reviews should be a twofold process as I wrote in my previous blog on “Discovering Opportunities.” One review is for operations and the second is focused on opportunities. As I cover the various categories for opportunities from Drucker, you will have criteria to review for your specific company. For now, specific criteria for unexpected success, failure, outside events has been provided.
Discovery analysis is not one dimensional but should be multi-dimensional around the company’s short-term and long-term objectives. For this reason, Innovation Advantage LLC includes three areas with our Discovery Process to meet client’s short-term and long-term objectives. Please check out our website and other blogs there for more information.
Next blog in discovering opportunities is on Incongruities.
All the best in your opportunity journey – identification, developed, piloted, scalable, commercialization.