New Opportunities in Business: Search, Find and Multiply

I’d like to start discussing this topic with an episode from the Torah. When Moses led people of Israel to Canaan, before they stepped on the new land, he sent 12 spies that they would assess the place and the opportunities for conquering it. Coming back to Moses 40 days later, ten out of twelve spies “gave a bad report about the land they explored” and only two confirmed that this is the “land flowing with milk and honey, a very fertile land.” Without claiming the accuracy of my version of this biblical episode, I see interesting business connotations.

Managing a company, you’ve realized that one road has come to an end and it is time to choose a new one and search for new “land to be conquered.” How do you make the decision about choosing a new path? What tools do you need to make the right choice? How to explore new territories? At this point let’s get back to the above-mentioned episode from the Torah. In the situation with people of Israel the said reconnaissance did not bring them happiness and I’d risk to surmise that this happened because the information about the new land was collected and interpreted by the same people. As a result, that information was too biased, since those 10 spies who delivered a bad report about the new land turned out to be too scared with the power and bellicosity of local inhabitants. They feared those people and doubted that they were strong enough to overpower them. That fear affected the way they construed the situation, even though they too admitted (and this is important) the attractiveness and fertility of the new land. Eventually, they infected others with their fears, disbelief, faintheartedness. After that people of Israel began complaining and “murmuring against Moses” and “they said to each other, ‘Let’s choose a leader and go back to Egypt.’” (Numb. 14:4). I wonder what the result could be if information was collected and analyzed by different people. What if the conclusions about those territories and whether they were worth conquering were drawn not by the spies, but by people who were not gripped with fear?

One of the most important rules in intelligence: information should not be interpreted by those who collect it. This is an axiom. To demonstrate, how important it is, I’ll give another example. Suppose FSB is after Islamic terrorists who want to operate in Russia. It has a list of suspects and one of them may reside in Spain. Now imagine that you are an FSB agent in Spain. Performing your duty, you watch a certain Mr. X somewhere in Madrid and see him meeting in one of the restaurants with a local Spanish banker. You record this fact and send your data to the head office of FSB. The head office, in its turn, gets plentiful information from other sources as well, so the episode with the banker is just a small piece of the bigger puzzle. Take note that the head office does not ask the local Spanish agent: “What do you think about this situation? Could Mr. X be the unknown culprit we are looking for?” Because the local agent has too little information to the effect and lacks ample resources to compare this information with other data, bring them all together and draw parallels. The head office may already have information that the same banker came to Russia a month ago and perpetrated certain deeds in this country…

Now let’s see how this “division rule” works in business. Suppose you want to see where to move further. To have a full view, you should obviously analyze the situation in its entirety: the policy of competitors, consumer behavior, economic specifics, technological novelties. Sending people to get information, make sure this information is cleared of their own judgments and impressions. These must be facts alone, analyzed by other people in conjunction with a lot of other data. And to adjust the drawn conclusions, the data of one “spy” will be insufficient.

One day I was asked to audit the operations of a large publishing house in different regions of Russia. More specifically, the task was the reduction of its branch network. The client’s mistake was that they asked me both to get and to interpret the information. Moreover, I had to interpret it only from one perspective: cutting the number of branches, while the company’s higher efficiency might require other measures or the optimization of other expenditures. For example, it was necessary to close loss-making periodicals, generate new projects in accordance with the state of the market, cut the spending on contractors (distribution, printer’s services, etc.), cut administrative expenditures, including the rent, change the principle of forming regional editorial boards, regrouping them after the pattern of federal districts. In this context optimization of the branch network looks too general a solution, treatment without a specific diagnosis. For some reason, Dovlatov comes to memory: “A paramedic took out a pill, broke it in two and pronounced in a stern voice: ‘This half is for your head and this one for your stomach. Beware of confusing the two…’”

So we made it clear that different people should serve as spies and analysts, and that it is important to get facts from the spy, rather than their interpretation. I can’t give you an obvious recipe how to clear information of personal attitudes of those who share it, but it can be helpful to recall a method used by police in their interrogations. To uncover lies, law enforcement bodies ask the suspect to tell the story again and again from the very beginning. The more implausible details are invented, the more difficult it is for a person to remember them during a new interrogation. It is for this reason that police try to make their questions as detailed as possible while the suspect tries to evade these specific questions, understanding too well that it will be a lot more difficult to remember detailed lies, than answers like “I do not know”, “I did not see it”, “I do not remember”. But… let’s deescalate our tense discussion a bit and talk about it not in the context of crime or deliberate lies, but in the context of human propensity to jazz up events and facts through our emotions. How to call the employee’s bluff? How to discern only dry facts? This is where details will come in handy: ask her very specific, pinpoint questions. Classic questions of the news reporter like “What?”, “Where?”, “When?” would do, as well as “How much?” and “How often?” But you should be wary of the “Why?” and “What for?” type of questions – or you won’t be able to avoid judgmental attitudes, which are already the lot of analysts. Also ask the “spy” to share evidences. What were the sources or resources of the information: a media article, an opinion of some respected person, comments to a Facebook post, or a discussion at a specialized conference? Everything can be factored in, but the credibility of any such source must be questioned.

And now, who should we trust the analysis of all incoming information, to discover a new niche for business development? Who should analyze all available data? The first thing coming to mind is analysts and marketers. Normally it is thanks to their effort that new ideas spring up and are later transformed into new products… But let’s not be too hasty with our conclusions…

Each of us has a certain paradigm of the reality perception, a “frame” of mind through which we look at this world. Reality means nothing in itself, since it is manifested only as a consequence of our attitude to it. We cannot imagine a room without gravitation. We cannot imagine reality outside the time and space. These are some basics we cling to, as we define reality. And it’s difficult and sometimes impossible to imagine something beyond our perception. But this does not mean this other reality is non-existent! We just can’t imagine it!

The ability to outstep the bounds of existing reality, our traditional corporate reality, is extremely important. For it is here that new development opportunities exist along with breakthrough ideas and revolutionary projects. But because it’s difficult for us to imagine something that never happened in our life, it’s a challenge for us to rise to this new quality level. I’ll give several interesting examples from business showing how a traditional context limited the potential of the industry leaders and even derailed their business.

The most well-known case illustrating this topic is the railway industry in the United States. At the turn of the 19th century this industry was growing at an incredible pace. This was a giant having no equals. The history of railway transport in the US is the history of huge public resources and natural wealth of the nation mobilized in favor of several railway tycoons. Railway companies were provided government subsidies for each mile of the future tracks, along with a freehold to the land, 10 miles to each side from the rails. So this was the wealthiest industry and nothing boded ill. But… at some point the industry of air transportation spawned and that was a low blow for the railway tycoons. Stricken with panic, railway operators did everything in their power to destroy the aircraft industry, derailing the aviation infrastructure at the level of federal authorities, putting up large-scale advertising campaigns to question the safety of air services and thus discrediting the industry. It took millions of dollars, but they did not spare the money because they had it in spades… As a result, the railway industry fizzled while the aviation industry firmly established itself in the national economy.

What was the main problem with railway tycoons? I think their problem lied in their perception of reality. It seemed to them that the key factor of success was the extension of railways in the country and the amount of transport infrastructure. It was this goal that they worked towards unremittingly, trying to expand into new territories. Did they think that the speed of transporting people and goods could be key in their business? Did they ever think that their business was about the speed of moving goods and convenience of services, not about stations, locomotives and railway extension? If they timely changed the angle and broadened their “frame of mind”, they may possibly become the initiators of aviation industry, especially since they had ample capital for investments. But, alas, they invested in marketing campaigns against their nascent competitor…

Another interesting example is rivalry between television and cinematograph. The story is very similar to the previous one. The Hollywood industry born first was popular and in high demand, earning millions and was on the acme of success. But then suddenly television emerged – such a formidable foe that during long years Hollywood had given it a hostile reception and rejected any collaboration. As a result, it suffered losses from its denial as TV had not shown a single Hollywood movie during the first 20 years. Should Hollywood timely recognized that its mission, rather than being limited to showing movies at theatres, was much wider and included bringing entertainment wherever there was grateful audience, the results of cinematograph development in those years would have been a lot more impressive.

One more example is NOKIA. Once upon a time it was as successful as APPLE today and it was hard to imagine that everything would end so sadly. But again the habitual reality and the impossibility to outstep the limits of the commonplace paradigm did them a disservice. The company’s top managers, analyzing their own experience and success, assumed that everything needed was creating just a more refined mobile phone. But people no longer needed just a phone – they needed communication and online specialization. Alas, the company failed to get adapted to the new needs of its target audience quickly enough.

We seldom think out of the box. I remember being at a loss, when the first mobile phone with a built-in camera was marketed. I did not understand why: you make a couple dozens of pictures and that would be enough for you to play. Who could think that a simple phone camera would develop into a whole industry (QR codes, mobile apps like Instagram, Foodie, Slapsticker, etc.). But it’s quite possible that the one who invented this toy did not guess what effect it would have. Yet there was someone who was able to think out of the box and see an entire entertainment option in this telephone camera.

Why do I give you these examples? To answer the question: who must help analyzing the incoming information and look out for new development opportunities? As a manager, you must find people in the company who are least involved in operational business, in the conceptual development of your company services, and ask their advice. These should not be top managers, marketers or project directors. These should be people distanced enough from your world, whose eye is not blurred and who have the perception paradigm which is different from yours. This could be newcomers who joined your company yesterday, or employees of attendant units, or students having internship at your company.

When NOKIA found itself on the brink of disaster, who do you think made all further fateful decisions that wrecked the business? Alas, these were the same people in the board of directors who had first created a large business empire and then ruined it with their own hands. They had been all days and nights with NOKIA, but could not outstep the bounds of their corporate reality and could not offer the company anything radically new, capable of rescuing it from its deplorable condition. But should they have invited to the meeting of the board of directors some junior managers who had recently joined the company and asked their advice, perhaps those novices would have suggested the idea that could rescue the business. I am sure indeed that “unengaged” personnel are capable of bringing fresh ideas, groping for offbeat approaches and exciting opportunities! But I am also positive that many large corporations facing problems undervalue this opportunity and never seek help from their line managers. “Why asking them if they cannot boast such competence as top managers and do not have such an impressive background behind their shoulders as the Managing Director?” This common delusion can mark the beginning of the end even for a most promising company with a great future!

Surely, I am not suggesting that the company’s management should be farmed out to junior personnel. I am also far from urging to give up on the expertise of marketing experts who are usually engaged in the generation of new opportunities for business. In no way do I belittle the role of the company’s top managers. I simply insist that it’s often worth looking for new business opportunities beyond the established reality. Who if not people from a different “paradigm” with different perception of reality could help us in this matter?

And one more recommendation… Already after you get information from all possible sources, clear it of third-party judgments, analyze the matter with the help of “unengaged” employees and receive a clear answer to your question, it’s high time then to drop a hint of doubt! However ideal the solution looks, whoever has generated it, however attractive it may seem in terms of efficiency, cast doubts! Review the situation from different angles, look for benchmarking and do not be fanatics of your ideas. We make too many mistakes; it’s good if one out of five seemingly ingenious ideas hits the target, so you should not overvalue the importance and depth of the decisions you make. Especially since the world tends to change too fast for you to become a hostage to only one “stable policy”. It’s much more important to constantly rethink the reality and act with reference to today’s context.
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