Let’s say you are the marketing executive at a medium-size U.S. business that only sells domestically. Your CEO is contacted by a distributor in Mexico that wants to sell your products there and she asks for your recommendation on the opportunity.
What do you want to know and what should you recommend?
When asked these questions, essentially all of my students – many of whom are experienced executives and managers – suggest “We need to see how big the market is in Mexico” and “It’s important to find out who this distributor is and if they’ll be a good partner.” Or “We should find out what the current competition in Mexico is doing before entering.”
All of these are fine suggestions and perhaps they occurred to you, too.
Unfortunately, they miss a big point. They focus only on what is in front of us and fail to “see what is invisible.”
What’s in front of us is the opportunity in Mexico, so we focus all our questions and thinking there.
What we fail to do is step back and ask if we should sell internationally at all. And if we should, is Mexico the best option? Or are there other countries we should consider as well?
In another case study we cover, a product is failing in Japan because of an ineffective partner and a bad marketing plan. Most class discussions center around fixing the situation in Japan. Only a few bring up the broader idea that the company’s sunk costs in Japan should not be factored in. Instead the opportunity and discounted cash flows from fixing the situation should be considered versus the discounted cash flows that would result from other investments.
We often miss the invisible in the case of employees, too. Let’s say an employee has a legitimate personal situation that requires him to leave work early over a long period of time, meaning he can’t carry his share of the workload. Obviously we should help him through the crisis – the question is how.
We could focus on shifting his work to other team members, but that fails to consider the unfair effects on the other team members. A better solution would be to hire extra help or prioritize the employee’s work so he has sufficient bandwidth to accomplish what is critical in that timeframe.
One final instance: When executives launch to strategies gain market share and increase profit, they often don’t think through how the competitor or customers will respond after the launch of the strategy. For example, a firm uses a major price discount to gain market share, but fails to consider that competitors are likely to follow suit with their own price cuts – resulting not only in the company not gaining share, but also reducing profits for everyone in the industry.
Paying attention to only what is before you and missing the opportunity to broaden your thinking to see what else is out there are human nature. To guard against it, try these simple steps. They will help you see the invisible, increasing your firm’s opportunities and reducing its risks.
- Stop and think about what “invisible” opportunities and risks you might be missing.
- For minor issues, spend a few minutes thinking about them on your own. But for major issues, bring in key team members and brainstorm a solid list of opportunities and risks.
- For those major questions, try the “implication wheel” to further think through the second and third order effects of your actions. Developed by Joel Barker, this tool helps you examine the implications of strategies, policies, trends and innovations. Here’s a short primer on it to get you started.