DSI Newsletter

Paul Schoemaker has recently co-edited, with Wharton Professor George Day, a special issue of Long Range Planning on “Peripheral Vision.” It focuses on the challenge for individuals and organizations to pay attention to weak signals and other aspects of the environment outside their area of normal attention. The authors of the special issue include some of the foremost academic thinkers of strategy: C.K. Prahalad and Sid Winter along with George Day and Paul Schoemaker as well as some of the most articulate of the practitioner writers, John Seely-Brown, Stephan Haeckel, Larry Huston, Anil Menon and Andrew Tomkins.

This special issue was inspired by a conference organized by Wharton's Mack Center for Technological Innovation, where Professors Day and Schoemaker work closely together. It was clear that this conference had great potential for a wider audience. The editors did more than take the presentations from the conference: with the help of writer Robert Gunther and the authors, they have produced a unusual set of papers that reach across the practice-theory divide. Their pieces can be read standing alone or as a conversation.

To quote Prof. Charles Baden-Fuller, the Journal's editor: The question of how to deal with peripheral events is a long standing issue for both individuals and organizations. Ignore these events at your peril but spending too much time on them also leads to failure. This is a magnificent issue that not only draws our attention to this vital subject but goes a long way towards answering the question of “what to do,” using intellectual frameworks and practical insights.

This special issue of Long Range Planning was published in April of 2004 and is also available from www.sciencedirect.com . Executive summaries of the articles appear below.

Executive Summaries “Peripheral Vision: Sensing and Acting on Weak Signals”

Driving Through the Fog: Managing At the Edge
By: George S. Day and Paul J.H. Schoemaker (Wharton)

The periphery can be a source of opportunities, the area of strategic attack or a source of blunders, but the key thing is to learn from it. This paper tells us where we should be looking; how to scan the periphery; how to disseminate and interpret the information; and how to assess whether the information should be used, stored or ignored. The authors offer a roadmap for companies to improve their peripheral vision and say that practice will be key.

This article says managers need to peruse the periphery for new product ideas because this is often where the breakthrough innovations, that could drive the company's future business, will be found. It suggests three strategies for recognizing or creating new ideas at the periphery and bringing them into the centre.

Minding and Mining the Periphery
By: John Seely-Brown (Formerly with Xerox Parc)

This paper cites examples of where peripheral events have caused ripples that reached right to the centre of an organization. It suggests a variety of strategies and tools that enable to attend better to the periphery and concludes by saying managers need to create the ‘ambidextrous' corporation, whereby they use these tools for probing the periphery without making them a distraction from the central business.

Making Meaning Out of Apparent Noise: The Need for a New Managerial Framework
By: Stephan H. Haeckel (Formerly with IBM)

Doing business in the face of constant change requires a fundamental shift from a “make-and-sell” to a “sense-and-respond” framework. Giving up predictability requires attention to what would have been considered the “periphery” of the traditional make-and-sell company. This paper says that investment in peripheral vision is key to survival and a company must now invest in improving its vision.

The dominant logic of a company is embedded in the operating procedures and shapes not only how members of the organization act, but how they think as well. Over time, this limits the ability of people in the organization to drive innovation or see new opportunities and threats. This paper suggests that instead of focusing on “best practices,” managers need to look at developing “next practices.” It cites examples of companies that have attempted to overcome their dominant logic, with varying degrees of success, to recognize the threats and opportunities on their peripheries.

Learning About the Market's Periphery: IBM's WebFountain
By: Anil Menon and Andrew Tomkins (IBM)

This paper explores how companies can harness the internet to gain insights that could help them identify threats and opportunities. What prevents companies from making use of this information is not a lack of data, but the problem of identifying the questions to ask. This paper looks at the potential of such as IBM's WebFountain that is designed to help extract trends, detect patterns and relationships from vast amounts of raw data.

Moths and Bees: Specialized Perception, Selection, and Strategic Surprise
By: Sidney G. Winter (Wharton)

Just as moths and bees adapt their sensors to specific purposes, organizations can adapt their own sensing systems to specific conditions. A moth can hear the sonar of a bat, and take evasive action, but it has no system that warns it of an impending blow from a rolled-up newspaper. Similarly, bees have a vision system that is evolved to recognize opportunities among certain flowers. Just as with insects, a company may have evolved sensors that are mismatched with the current environment. The paper outlines systems that can help improve a company's peripheral vision.