Picking Up and Responding To Weak SignalsAs a follow-on to my earlier post on competitive analysis, I'd like to call attention to a helpful article on "How to Make Sense of Weak Signals" in the Spring 2009 issue of the MIT Sloan Management Review.
This article by Paul Schoemaker, research director of the Mack Center for Technological Innovation, and George Day, a professor of marketing at the Wharton School, covers a broader range than just the task of scoping out the competition. Schoemaker and Day describe a straightforward way of attending to and responding to weak signals of all sorts that are relevant to one's business, as omens either of emerging opportunities or of looming threats.
A weak signal is defined as a
seemingly random or disconnected piece of information that at first appears to be background noise but can be recognized as part of a significant pattern by viewing it through a different frame or connecting it with other pieces of information.Schoemaker and Day divide the process of making effective use of weak signals into three phases:
- Actively scan for weak signals. Three strategies to consider:
- Tap local intelligence, i.e., information distributed among various individual locations in which the organization has a presence.
- Leverage extended networks, i.e., networks encompassing partners, suppliers, customers, etc.
- Mobilize search parties, i.e., task forces set up to monitor specific areas of interest.
- Amplify interesting weak signals to help in deciding what they mean. Three strategies to consider:
- Test multiple hypotheses. E.g., you might want to use red teams (MSWord) "to collect and synthesize information to prove that the current plan is wrong and needs to be changed."
- Canvass the collective wisdom of your organization. E.g., you might want to try a prediction market.
- Develop diverse scenarios. "Scenario planning systematizes the hunt for weak signals that may foreshadow fundamental shifts in the marketplace and society at large ..."
- Probe further, clarify, and act. Three strategies to consider:
- Seek new information to "confront reality," i.e., you need to recognize developments that make planning and executing an effective response imperative.
- Encourage constructive conflict "to ascertain and interpret the facts as they are."
- Trust seasoned intuition. "It takes many years of experience, with good feedback, to develop reliable intuition. But once it has been honed, intuitive hunches should be viewed as valuable inputs, along with more analytical ones, for the judgment process."