Insights

You don’t have to look far back for events or instances where a new entrant has seemingly blindsided incumbent and successful products. Armed with 20/20 hindsight, most, if not all, seem painfully obvious. Some predicted the 2008 global financial crisis, but most, including Lehman Brothers, did not. And then there is the RIM Blackberry obliterated by the Apple iPhone, and Blockbuster killed by Netflix.

So why did the incumbents not see what was rearing up? Why did Apple and Netflix see things and act upon them while RIM and Blockbuster did not?

Igor Ansoff developed “Weak Signal Theory” in 1975 in the context of “strategic surprises”, where companies fail to anticipate discontinuities and abruptly find their survival or a product’s survival is threatened. Ansoff suggests being in a “state of knowledge” where opportunities and threats reveal “breaks with the past” in successive waves of information. The initial “weak signals” indicate what follows but are typically ignored because of incomplete or vague information. Instead, companies often focus on familiar threats as they know how to monitor and measure known risks.

Amy Webb, the founder of the Future Today Institute, has developed this into a Future Forces Theory. Disruption usually stems from influential sources of macro change. They look at eleven sources to organise their thinking around signals and trends. These sources are wealth distribution, education, infrastructure, government, geopolitics, economy, public health, demographics, environment, media/telecommunications, and technology. These macro sources of change are outside a leader’s control. She posits that all change results from a disruption in one or more macro source areas that begin as “weak signals.” The STEEP (Social, Technological, Economic, Environmental, and Political) framework is similar in its advocacy for capturing a wide breadth of signals.

So, what can you do?

Organisations should pay attention to all of them and look for inflections, areas of convergence, and contradictions. Leaders need to connect the dots.

How do you scan for weak signals? First, you must cast a wide net across the macro areas. Look for a changing sense of customer value, examine Reddit groups, investigate second-order implications of disruptive events, and use your intuition and that of others. But keep it broad and look beyond your comfortable swim lane. Focus on areas of low or unknown probability but potentially high impact. Don’t disregard incomplete data. Remember, they’re called “weak signals” for a reason.