![]() ![]() Thus managers need to adopt an external perspective. As Intel’s former CEO Andy Grove famously said, “When spring comes, snow melts first at the periphery, because that is where it is most exposed.” But anomalies that may signal new trends will appear in the external world. A company can be thought of like a sphere-as it expands, its internal volume increases faster than its external surface area does, driving internal focus by default. Managers disproportionately focus on internal processes rather than changes in the outside world. ![]() So managers must be prepared to: Take an external perspective.Īs companies grow, they often become more introverted. And even if we don’t ignore anomalies, we may not try to interpret or explore them. Indeed, the word “anomaly” is most often used to dismiss a data point as unrepresentative and irrelevant. ![]() If we do see them, we may ignore them, because people and organizations are predisposed to confirmation bias, focusing on what aligns with their mental models rather than what violates them. We usually can’t see what we aren’t looking for, so anomalies are often missed. Let’s look at what that process involves. Only if you are willing to look at your business from the outside in, question your existing models, and embrace ambiguity will you be able to identify the diamonds hiding in the data. In this article we present a process for spotting anomalies that have the potential to drive a business, but it’s more than mechanical: Anomaly-driven strategy requires being open to unexpected ideas that may overturn long-held assumptions. Instagram’s founders, for example, focused their initially multifunctional social networking app, originally called Burbn, on image sharing after they noticed an unusual amount of activity around that feature. Most anomalies don’t become meaningful trends, of course, but some do-and the businesses that identify and interpret them early will steal a march on the competition. At that stage the signs will be merely anomalies: weak signals that are in some way surprising but not entirely clear in scope or import. To take advantage of emerging trends, companies must identify them when they are embryonic-not purely speculative, but not yet named or widely known. And although a company may need to reflect trends in its business plans, that can be more a matter of catching up with rivals than of gaining a competitive edge. By the time a trend is established, any opportunities it presents have most likely already been captured by competitors. Identifying the next big thing is often treated as an exercise in analyzing trends. The authors present a process for spotting anomalies that have the potential to drive a business, but the process isn’t mechanical: Anomaly-driven strategy requires being open to unexpected ideas that may overturn long-held assumptions. But some do-and the businesses that identify and interpret them early will steal a march on the competition. Most anomalies don’t become meaningful trends, of course. And although a company may need to reflect trends in its business plans, that may mean catching up with rivals rather than gaining a competitive edge. By the time a trend is established, any opportunities it presents have probably been captured by competitors.
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