Planned Opportunism12 May, 2016 / Articles
In the first few years of the new millennium, at the height of the boom in the offshore call-center business, Tata Consultancy Services, the Indian technology-services giant, made the counterintuitive decision to divest its call-center operations.
Why? Because although outsourced call centers were a fast-growing piece of its current business, TCS’s leadership had come to believe that they would soon be burdensome. Employee churn was exceptionally high, forcing the HR department into a round-the-clock effort to hire and train as many as half a million new reps annually. This drained resources and distracted the company from its real goal—to develop more-sophisticated capabilities and service offerings. By moving out of call centers even though demand was stronger than ever, TCS was acting to prevent the right future from being swamped by the wrong one.
TCS’s move was the result of what I call planned opportunism. The idea starts with recognizing that the future is unpredictable, shaped by nonlinear changes and chance events—the “opportunism” part. How you as a leader respond is the “planned” part. Planned opportunism requires sensitivity to weak signals—early evidence of emerging trends from which it is possible to deduce important changes in demography, technology, customer tastes and needs, and economic, environmental, regulatory, and political forces. Attention to weak signals gives rise to fresh perspectives and nonlinear thinking, which help an organization imagine and plan for various plausible futures.
TCS’s leaders had picked up on several weak signals. They saw that technologies were moving to the cloud, allowing business services to be delivered as an online utility rather than through traditional enterprise-owned technology infrastructures. They rightly believed that global businesses would eventually demand higher-level, more strategic outsourced services. (Sales revenue per employee tended to be higher for higher-value-added services, so by focusing on those services, TCS could significantly improve the top line with a smaller workforce.) And they knew that TCS needed to attract increasingly sophisticated talent, which would require HR’s recruiting efforts. They concluded that call centers would not lead to—in fact, would get in the way of—the future they wanted to pursue.
Planned opportunism is a systematic process not only for recognizing impending changes and ascertaining what opportunities they may offer but for developing experiments to distill and scale up promising nonlinear business ideas. It accomplishes three exceptionally important things for the enterprise: (1) It creates a circulatory system for new ideas; (2) it develops the capacity to prioritize, investigate, and act on those ideas; and (3) it builds an adaptive culture that embraces continual change. It will enable your organization to be proactive rather than reactive. To be sure, planned opportunism can accommodate scenario planning and other conventional tools and cultural aspirations, such as a flatter organization and a more empowered workforce. But it is not just an event, an activity, or a tool. It is a discipline encompassing processes and behaviors across many functions that will strengthen resiliency and lead to growth.
Identify and Capture Weak Signals
Organizational resiliency begins with a clear understanding of the circumstances that either favor or threaten your business. Consider the case of Hasbro, the toy and game maker. By the mid-1990s significant signals that technology was likely to disrupt the gaming space could be discerned. They included the rise of PCs and the debut of Atari’s video gaming system. But Hasbro also noted weak signals: The U.S. birthrate was falling, the population was becoming more ethnically diverse, and more households included two-income couples. At the same time, accelerated globalization stimulated the company’s appetite for growth in untapped markets around the world. Hasbro could not have predicted all the changes that would affect it over the next 20 years, but it picked up on enough weak signals to point it in productive directions.
Hasbro continues to deftly navigate frequent shifts in the industry because it has a process, developed by CEO Brian Goldner, for tapping into weak signals and envisaging futures that might develop from them. The process involves asking three basic questions: What factors and conditions does our current success depend on? Which of them might change over time (or are changing already), thus putting current success at risk? How can we prepare for these possible changes in order to cushion or even exploit their impact?
Goldner’s process works for Hasbro, but other organizations can employ different, equally effective approaches. TCS now uses an internal digital platform, Ultimatix, to encourage its more than 300,000 employees to share their perceptions about discontinuous industry shifts with management and one another. The company has developed a software application that sifts through the huge volume of responses and identifies common themes.
Ultimatix is one example of a free-for-all approach to collecting weak signals from employees. Creating a task force to perform the same function is another option. When I consulted for GE in 2008–2009, we designed a process for brainstorming about weak signals that might affect GE Healthcare’s future business in India. The challenge was to build a business to serve nonconsumers—in this case, rural Indians with limited access to health care—while competing against nontraditional rivals, including small local players. We assembled a carefully chosen task force: 20 company executives (not necessarily at the top of the organization) and 20 outsiders, including hospital administrators, health care academics, government officials, nonconsumers, and regulators. The members of the task force had very little vested in GE Healthcare’s past—specifically, its high-end medical imaging equipment, which it sells at a steep price to leading Indian hospitals. They spent a week identifying weak signals that suggested a variety of nonlinear shifts, including extensive unmet health care needs, low customer affordability, a shortage of hospitals and qualified doctors, an underdeveloped health insurance industry, poor physical infrastructure, and good digital connectivity.
The task force and free-for-all approaches could conceivably be used in combination. Ideas gleaned from an Ultimatix-style system might be refined by a task force, or the latter’s output might get feedback from the crowd. Whatever approach an organization takes, it is important to remember that a good process must address the following questions:
- Who will be your customers in the future? What will be their priorities?
- What disruptive technologies might open up new opportunity spaces?
- Whom will you be competing against in the future, and on what basis?
- Will your go-to-market approach change fundamentally in the future?
- What are the potential regulatory reforms?