Leadership and Pattern Recognition
As an executive coach and team effectiveness specialist, I have the privilege of interacting regularly with business owners and senior executive to discuss alignment and productivity issue (two sides of the same coin) in the “here and now,” and to uncover growth opportunities and potential inflection points further into the future.
Pattern recognition plays an increasingly important role in helping leaders unlock value now and avoid downturns in the future.
What patterns do you notice when you “zoom in,” and what pattern emerge when you “zoom out” into the macro environment? What do those patterns tell you about possible inflection points ahead?
Back in 2000, Reed Hastings noticed a pattern among VHS customers paying late fees for VHS rentals. When he investigated further, he found that Blockbuster Video made over $800 million in one year from late fees, a full 16% of their revenue. That inspired him to start Netflix and offer a fixed price for video rentals, effectively eliminating late fees.
The next pattern he noticed was that customers entertainment habits were changing. Netflix recognized the shift to digital innovation and the need to adapt to the changing landscape of entertainment consumption. By aggregating content onto servers, Netflix could distribute it instantly to customers.
Inflection points like these can be traced to so many different industries, some of which were permanently disrupted, and no longer exist.
One pattern we’ve noticed through our budget planning conversations with senior leaders, is an increased focus on developing strategic thinking and critical thinking skills. The urgency to step back, reflect on, and analyze the world around us, before “placing bets” on the company’s future. Columbia professor Rita McGrath covers this in detail in her best-seller, “Seeing Around Corners.”
How can leaders develop and teach the skills necessary to focus on current opportunities, while putting the necessary pieces in place to successfully navigate potential industry inflection points? How can we learn to pay less attention to lagging indicators, and learn to identify and focus on leading indicators of success?
We have developed lots of exercises designed to stimulate divergent thinking, help teams identify and analyze relevant patterns, and spot possible inflection points. Given the constant need to adjust to micro and macro change, and the need to regularly redefine our competitive advantage, developing competencies around strategic thinking and adaptive learning have never been more critically important to an organization’s future.
That need to recognize, and respond to change is one pattern we expect will persist for years to come.