on the importance of choosing the right opportunities for leaders. [ ]
In an earlier interview with The Smart Manager, Rita McGrath, author of The End of Competitive Advantage, said, “In organizations, we always think the sins of commission are the ones that might be punished. In smart companies in the future, we are also going to think about sins of omission—not taking the appropriate chances or pursuing the appropriate opportunities for the future.” Consciously looking for opportunities and leveraging the best among them defines the path to survival in the long term.
Afew years ago, Professor J Bruce Harreld of Harvard Business School studied businesses around the world of all sizes, in all sectors. Remarkably enough, he found that ‘only 1.7 percent’ of companies last more than 40 years. That is only half the typical human lifespan. How long should companies be able to live? Theoretically, forever. Why do they die so young?
all opportunities have a lifecycle
Just as products have a lifecycle, so do opportunities. While some can remain relevant for decades, others fizzle out in only months or years. These days, even iconic consumer products such as Coca-Cola are grappling with irrelevance.
All companies constantly invest in new opportunities, both to replace those facing irrelevance, as well as to create new growth. The Harvard study found that while all
corporate leaders are constantly on the lookout for great new opportunities, most fail to capture them.
Why? Because they go about this task incorrectly. The business graveyard is littered with the memories of once great companies that failed to overcome the forces of irrelevance. Remember Polaroid, or Kodak? Remember Nokia, or Blackberry? I could go on and on.
On the other hand, we constantly witness vibrant new companies popping up, seemingly out of nowhere, who make it big by taking full advantage of mammoth new opportunities.
opportunities are like powerful magnets
In my bestselling book Master Opportunity and Make it Big, I provide the lessons garnered by eighteen Indian entrepreneurs who started with nothing and leveraged huge opportunities to create iconic businesses. People such as Subhash Chandra, Uday Kotak, Harsh Mariwala, and Nirmal Jain.
Why can people who start with nothing capture great opportunities? Because all opportunities are free. You never have to buy an opportunity. Even better, the best opportunities are like powerful magnets that attract all the money and team required to scale successfully.
In the course of my consulting work, I have met several twenty something Indian entrepreneurs who have been able to raise $20 million+ from US venture capitalists such as Tiger Global. Have VCs invested in them because of their track records? Obviously not. They have invested because of the potential size of the opportunities they are pursuing.
Smart capital always chases the best opportunities. As famed investor Prem Watsa of Fairfax Holdings said recently, “I have found in my life, if you have opportunity, money comes.”
The best opportunities are like powerful magnets that attract all the money and team required to scale successfully.
why so many leaders miss opportunities
Most great new opportunities are not captured by incumbent players. Rather they are taken by people like those in my book, who came out of nowhere, and started with nothing. Why do industry leaders so often turn into followers?
In 28 years of consulting, I have spoken to thousands of business leaders. Virtually, all agree that the choice of opportunities is absolutely crucial to success. It is the responsibility of a company’s leaders to choose these opportunities. It should be their primary area of focus. After all, if they do not do it, who will?
Yet, ironically, I have found that most promoters and CEOs actually ‘actively avoid’ focusing on opportunities. Instead, they devote virtually all their time to activities that are ‘not’ opportunities, such as firefighting a vast array of operational issues that they would be better off delegating to others. Most human and financial resources are poured into fixing tired, old opportunities, in a never-ending battle against the forces of irrelevance.
New opportunities certainly can seem risky. To mitigate risk, leaders often choose opportunities based on ‘social proof ’, ie, ‘do what others are doing’. Yet the wisdom of crowds does not often apply to opportunities, any more than it does to investing. Buying a stock after everyone else rarely makes you money, and the same logic applies to opportunities.
why you need an opportunity process
The fact is, most leaders choose poor opportunities because they choose opportunities poorly. If you do not know how to do something, how could you possibly do it well? It is a question of process.
We all believe that systematic processes create better outcomes. They are the foundation of our modern world. Would you choose a surgeon who does not follow a proven process? Would you run your businesses without
processes? Would you choose a wealth manager who uses a blindfolded monkey to pick stocks? Of course not.
Yet 99.9 percent of companies in India find, evaluate, and choose opportunities without using a systematic process. They largely leave opportunity to chance. Ask yourself: is there any reason you do not need a systematic process to find, evaluate, and choose opportunities?
Opportunity is simply too important to be left to chance. That is why I created the six-step ‘Open Mind Process’, the world’s first systematic process to uncover, recover, and discover opportunities for sustained, profitable growth.
why you must audit your opportunity environment
If you wait for opportunity to knock, the chances are that a competitor will answer the door before you. When it comes to opportunities, most leaders are followers because they do not use a conscious process.
To be conscious, you must be aware. But aware of what? We are all bombarded by far too much information on a daily basis to possibly make sense of it all.
When you use Google Maps to get somewhere, what is the first thing you need to know? Your location. It is the same thing with opportunity. To find opportunities, you must first see them. To see opportunities, you must know where you are, and what is around you.
Opportunities are created by constantly changing circumstances in our environment. Opportunities are adaptations you can make to your environment that greatly benefit both you and your customers.
Therefore, it is crucial for you to examine and assess your own ‘opportunity environment’ in the most realistic and objective way possible. That is why the step 1 of Open Mind Process provides an ‘opportunity audit’. An audit is a thorough picture of reality, which is exactly what you require to understand your environment and clearly see the opportunities that lie within it.
how to see, evaluate, and choose opportunities Your opportunity environment has four distinct zones:
■ your mission: where do you want to go? What do you believe?
■ your model: what do you have now? What are your capabilities and resources?
■ your market: what do your customers want? What are your competitors doing?
■ your domain: what are the forces beyond the market influencing opportunities?
By carefully auditing all four zones of your environment, you will be able to identify an exhaustive ‘inventory’ of your opportunities—past, present, and future. This inventory should include opportunities you are currently working on, those you considered but never developed, others you missed but could recover, as well as new opportunities you never considered before.
To focus further, you must then filter the opportunities in your inventory through at least eight key evaluators: scale, relevance, uniqueness, sustainability, accessibility, suitability, actionability, and measurability.
As a final step, Open Mind Process filters opportunities for ‘alignment’. The best opportunities should not only rank high on the eight evaluators, but also be highly compatible with all four zones of your opportunity environment (mission, model, market, and domain). Compatible opportunities are easier to implement and are more likely to have a strong moat, allowing them to withstand competitive attack and provide sustained, profitable growth well into the future. ■
To find opportunities, you must first see them. To see opportunities, you must know where you are, and what is around you.