How Leaders Anticipate Sudden Changes

A car crash involves two crucial moments. First, there is the point of surprise. This is the moment when you consciously realize something is not going the way you had expected. In a car crash, this would be the moment when sweat breaks out and swearing is permitted. The second moment is the point of no return. From this moment onward, impact is inevitable.

It is only in the period between the two points that you can act on the changed reality. This is why you want the interval between the two moments to be as wide as possible: It gives you the most time to react and prevent the crash. However, as the point of no return lies beyond your control, the only way to maximize this interval is by influencing your point of surprise. That means concentrating on the road, avoiding distractions such as phone calls, and not driving under the influence. Factors such as these can increase the amount of time in which you can still respond to sudden changes.

Likewise, one of the key skills of strategic leaders is their ability to anticipate change and reorient their organization toward the most promising future direction. In leadership literature, this is called “adaptive capacity”. This first-class noticing skill is considered paramount to developing yourself as a leader.

We expect our leaders to engage constructively with the future, to have an open mind toward changing realities, and to demonstrate leadership agility by seeing—and acting on—changes early. In other words, we seek leaders with adaptive capacity and well-developed early noticing skills.

The Theory of the Car Crash helps us understand what that implies. The point of surprise corresponds with the moment you become aware of a changing reality: you’ve noticed information that requires you to reassess your assumptions about the future. This information might be about changing customer behavior, the emergence of new technologies, scientific advances, shifts due to regulatory adjustments, or more. The second point, the point of no return, corresponds with the moment the window of opportunity has closed: others have surpassed you, have seized the change and reaped the bulk of the benefits of early noticing. They have captured first-mover market shares, introduced new products, entered into vital partnerships, or made other strategic moves that put you at a grave—and sometimes insurmountable—disadvantage.

Clearly you would benefit from pulling your point of surprise forward: it would maximize the window in which you can react to a detected change, and give you a head start over all those who will only become aware of the change once it has become conventional wisdom.

A company that has mastered this concept is Cisco. Despite operating in an environment of constant, and occasionally even radical, change, Cisco has managed to remain a leader in its industry for over three decades. This in contrast to related technology sectors, such as the PC industry and the cell phone industry, which have seen a revolving door of winners and losers over that same period. In an interview with the Harvard Business Review, CEO John Chambers shed light on the company’s extraordinary performance, describing a strong focus on what he calls “market transitions”. These are the very early indicators of change, the precursors of market disruptions. At Cisco, they are continuously on the lookout to identify and discuss such market transitions, even if these occur well ahead of the impending technology cycle.

All of the above testifies to the power of developing a company culture in which leaders engage constructively with the future and continuously work on pulling the point of surprise forward. In [easyazon_link asin=”0814449077″ locale=”US” new_window=”default” nofollow=”default” tag=”achievstrate-20″ add_to_cart=”default” cloaking=”default” localization=”default” popups=”default”]Anticipate: The Art of Leading by Looking Ahead[/easyazon_link], I described various effective methods to do this, for organizations as well as individual leaders. One of these methods is the deceptively simple technique of FuturePriming, a low-effort, high-impact way of priming your mind to recognize game changers as they emerge in the unfolding future.

Developing this crucial ‘seeing things early’ side of your strategic leadership is not about becoming a great predictor of the future. What it comes down to is sparking and fine-tuning your alertness to early warning signals of change, like Cisco does on an ongoing basis. This will pull your point of surprise forward and maximize the interval in which you can still react to the changing reality—before the point of no return swoops in and crushes the window of opportunity.