The other week, I was in Beijing facilitating a company offsite. The company had absolutely no operations in Beijing, and no plans to start operations there. It is a disciplined operator, so this wasn’t a junket either. So, what was the company doing in Beijing? It was smartly spending time at the periphery of its industry.
One of the challenges facing market leaders is that transformational trends are only obvious when it is too late. Transformation typically starts in seemingly disconnected industries, or as innocent offerings targeting completely different customer segments.
To spot transformational trends early, companies need to follow the guidance of Wharton professor George Day and long-time McKinsey & Co. thought leader (and current Innosight board member) Richard Foster: they need to experience the peripheries of their industry.
Start with peripheral customers. MIT Professor Eric von Hippel has long advocated spending time with what he calls “lead users.” These on-the-cutting-edge users can often be powerful sources of innovation insights as their unique needs lead to them kludging together novel solutions. Young customers often are the first to snatch up new technologies because they don’t have to unlearn engrained behaviors. Consider customers facing extreme constraints as well. For example, a few years ago we helped a company looking at hydration opportunities to investigate the workarounds created by soldiers in Iraq.
Read the full article at Harvard Business Review
Scott D. Anthony is managing director of Innosight Asia-Pacific.