You can’t solve a problem or take advantage of an opportunity until you know it exists. You can’t be creative in generating alternatives until you have a reason to do so. Rational techniques for environmental analyses focus on standard control processes and environmental scanning, but there are more recent, less traditional approaches that we will discuss today.
All companies want to be the best in their industry, but what does it take to do so? In a live trends news, Andrew King and Karim R Lakhani write for the Harvard Business Review how benchmarking against others can help determine if you are actually doing better or worse than your competition.
Companies benchmark their best practices to track the progress of their competitors, identify potential problems with their own company’s performance and set goals for improvement. The following list some new ways to conduct your own environment scans:
The term ‘benchmarking’ is used to describe the process of measuring and comparing a firm’s performance with that of its competitors. While this practice has been around for over 50 years now, organisations have started using this only in recent decades as part of their strategic plan by choosing specific initiatives where they want to be number one or two within an industry.
A true benchmark comes from something measurable such as sales per square foot (for retail stores), quality ratings (in healthcare) or and customer satisfaction levels.
There is such a thing as ‘phantom competitors’, which gives off the impression of being ahead of the rest when they are really not even close. Phantom competitors are a concept in a market where you can’t see your competition. This is because when customers search for solutions to the problems they face, they don’t consider all of their options equally. They may only look at one or two different ways that could solve their problem before settling on what seems like the best idea.
The result is that oftentimes, there are other companies out there who offer similar products and services but never get seen by potential customers because they’re not considered during customers’ searches.
Companies that try to beat others’ ‘best practices’ may find themselves outpaced because this concept doesn’t account for things like customers’ preferences. Benchmarking should rely on data instead of assumptions so that we know where our business stands relative to peers.
Hiring a futurist or other consultant can provide you with new ideas and insights. For example, they may be able to see the forest for the trees so that what is important stands out from everything else. This could help someone close to the situation who might not have this perspective as easily since it’s all around them every day.
In order to make a successful real estate investment, two developers decided to buy inexpensive properties that were likely to become profitable soon. They did this by selling their own expensive property during the recession and using those funds for additional purchases of cheap yet promising land.
Real estate developers used weak signals in the market to find new, affordable investment opportunities during a recession. Real estate forecasting services and attending industry events helped these two determine what properties were about to be released from bankruptcy or foreclosure proceedings. They purchased many of those distressed assets at low prices with funds generated by selling some prominent realtors’ high-priced inventory (that they had acquired earlier).
A manager shares how he reads science fiction to find new ideas for his business. This helps him avoid being limited by traditional sources, which provide an opportunity for search that can lead him somewhere completely different. He also shares some tips on what you can do to try something new and not limit yourself, including researching the latest trends in your industry with questions about their implications applied towards your own business goals/tasks.