BECOMING MORE VIGILANTMany organizations have the desire and the potential to become more vigilant but are unclear about how to make it happen. Should they adopt a freewheeling opportunistic approach or a tightly disciplined process? What features of the most successful change initiatives could apply to them? Where and how should the leadership team start the initiative? In this section, we describe some common themes of effective change programs using a four-step framework. Successful change initiatives invariably start with a demonstration of leadership commitment, followed by an iterative sequence of taking a different approach to strategy-making, investment in foresight and a better aligning of the organizationJohn S. and James L. Knight FoundationKF_a1198cd6-ebbf-11df-ae5d-52537a64ea2aAcknowledgements: the authors thank the John S. and James L. Knight Foundation for its generous support of this study as well as the 345 organizations who participated in the survey. They are also grateful for the research support provided by the Council on Foundations, the Filene Institute and the Wharton School of the University of Pennsylvania. The report draws on a forthcoming MIT Press book by George S. Day and Paul J.H. Schoemaker titled See Sooner-Act Faster: How Vigilant Leaders Thrive in an Era of Digital Disruption where readers can find further background.Paul J. H. SchoemakerCo-Author -- Paul J. H. Schoemaker was the founder and chairman of Decision Strategies and is a prolific author. He served on the faculties of the University of Chicago and the Wharton School.George S. DayCo-Author -- George S. Day is Geoffrey T. Boisi Professor Emeritus at the Wharton School of the University of Pennsylvania, where he founded the Mack Institute for Innovation Management.Wharton Schoolof the University of PennsylvaniaSam GillCo-Author -- Sam Gill is a vice president at the John S. and James L. Knight Foundation.Council on FoundationsFilene InstituteMore vigilant organizations_58261f5e-6ee6-11e9-8b5f-bcb4ab9d818fTo facilitate successful change initiatives_58262120-6ee6-11e9-8b5f-bcb4ab9d818fCommitmentDemonstrate leadership commitment. _582621ca-6ee6-11e9-8b5f-bcb4ab9d818fStep 1Leaders can demonstrate their commitment to building vigilance in the following ways.ThoughtDevote more time to thinking about the future._58262260-6ee6-11e9-8b5f-bcb4ab9d818f1.1CEO Genome ProjectThe CEO Genome Project findings (Botelho et al., 2017) reinforced this key point.CEOsCEOs who excel at adapting to turbulent environments spend significantly more time -- as much as 50% of their time -- thinking about the long term to spot subtle trends. Less successful chief executives, by contrast, devoted an average of 30% of their time to long-term thinking.Short-termism can be the enemy of vigilance about longer-term undercurrents – akin to those passive frogs that slowly boiled to death as the water temperature gradually rose. DiversityEncourage diversity._58262300-6ee6-11e9-8b5f-bcb4ab9d818f1.2PromotionsPromote "mavericks" or others who are naturally more vigilant and externally focused._5826238c-6ee6-11e9-8b5f-bcb4ab9d818f1.2.1Leaders can foster vigilance by hiring for it externally as well as by promoting "mavericks" or others from within who are naturally more vigilant and externally focused.5HiringPose questions to assess job candidates' abilities to scan without losing the primary focus._58262422-6ee6-11e9-8b5f-bcb4ab9d818f1.2.2When hiring new staff, leaders can pose specific questions to assess a person’s ability to scan without taking his or her eye off the main focus.Thinking, Detection & PlanningEducate employees in critical and innovative thinking skills, scenario planning and weak signal detection._582624b8-6ee6-11e9-8b5f-bcb4ab9d818f1.2.3EmployeesVigilant leaders should also educate employees in critical and innovative thinking skills, scenario planning and weak signal detection.NetCast a wider net._5826254e-6ee6-11e9-8b5f-bcb4ab9d818f1.3LeadersVigilant leaders see sooner by acting like explorers. They seek to participate in diverse and unconventional knowledge networks to expand their world view. Engaging in diverse external webs, where weak signals may be serendipitous, is difficult for operationally focused managers, who are more comfortable in clearly defined and long-established industry meetings. Connecting with and building a network of contacts beyond these familiar domains requires curiosity, a tolerance for ambiguity, some courage and a willingness to take some bets that may not pay off. Vulnerabilities & ResourcesIdentify vulnerabilities and commit resources._582625e4-6ee6-11e9-8b5f-bcb4ab9d818f1.4The strongest signal of leadership commitment is putting serious resources into surveillance, scanning and other activities aimed at improving vigilance. This shifts the narrative from “operational concerns” and “current performance” to looking for what may be coming over the horizon. Where to best allocate leadership’s scarce attention resources should be guided by the leadership team’s assessment of major vulnerabilities. Leadership teams can use the Vigilance Survey in Appendix A to assess their organization's scores on a spectrum from vigilant to vulnerable and then decide where there is a need for improvement. It can be especially revealing if the survey is first individually completed by each member of a leadership team, since that will identify areas of agreement as well as differences in the diagnosis.DirectionEngage the board of directors._5826268e-6ee6-11e9-8b5f-bcb4ab9d818f1.5Boards of DirectorsGiven their broad experience base, boards can tap into a broader network of information sources about trends, weak signals and vigilance practices in best-practice organizations. What many directors want is some breathing space in the board meeting to help position the organization for an uncertain future. Once engaged in being vigilant, such directors become “scouts,” who are actively listening. Too many boards simply rubber-stamp the proposed strategy – their meeting time is mostly spent on progress reports, compliance policies and operating issues. Yet, bringing them early into the challenges of seeing sooner amidst turbulence can bring many benefits. ForesightInvest in foresight. _5826272e-6ee6-11e9-8b5f-bcb4ab9d818fStep 2Two reliable methods for investing in foresight are to mount a disciplined search for threats and opportunities and engage with a network or ecosystem of partners to tap new insights and resources.SearchMount a disciplined search._582627ce-6ee6-11e9-8b5f-bcb4ab9d818f2.1IntuitFew organizations do this better than Intuit. When its leadership in 2010 first saw the possibilities of adapting personal-finance solutions to mobile devices -- such as doing taxes on a phone – there was resistance from managers who were sure that there was no money to be made with mobile. So, Intuit found companies that were making solid profits from mobile applications and assigned some of these managers to interview their executives. The insights from these contrarian interviews were shared at an off-site.PartnersEngage partners in the ecosystem._58262882-6ee6-11e9-8b5f-bcb4ab9d818f2.2MasterCardMasterCard has adopted an “adaptive ecosystem strategy” to engage multiple partners to create new digital solutions. MaytagThus, it worked with Maytag to develop Clothespin, a wireless laundry equipment pay-per-use solution that connects washers and dryers to smartphones and laundry equipment service providers. These uncommon partners drew on available technologies – smartphones, online credit card payment systems and devices connected through wireless cloud communications – to devise a novel solution to do laundry away from home far more efficiently. This approach recognizes that the best opportunities often lie at the intersections where market spaces and industries overlap. StrategyChange how strategy is developed. _5826292c-6ee6-11e9-8b5f-bcb4ab9d818fStep 3MasterCardMasterCard embraced this outside-in approach as it focused its strategic thinking on how to compete with cash. It found that many people preferred cash over credit cards because of the personal control. Others were forced by merchants to use cash, and many people in developing economies simply didn’t have bank accounts. But MasterCard also found that even the most reluctant adopters of credit cards preferred a cashless solution in such areas as transportation and meals, because handling cash was rather cumbersome in these settings.For many companies, the process of making strategic choices contributes to their vulnerability. Too few people outside of the leadership team participate in the process, and the cumbersome steps are a formulaic precursor to the real action, which is usually the annual budget cycle. The result is that the firm may suffer from an inside-out and short-term bias. To become more vigilant, such organizations need to widen their scope, lengthen the time horizon and expand the number of people who are involved beyond the leadership team. Vigilant organizations start their strategy dialogue with what is happening with customers, competitors and adjacent technologies.QuestionsGenerate guiding questions._582629e0-6ee6-11e9-8b5f-bcb4ab9d818f3.1We recommend an issues-based strategy process that is focused on resolving the big questions whose answers will shape future results (after taking into account the firm’s aspirations and goals). One of the best sources of these pivotal issues is to use broad guiding questions, which should be about systematically learning from the past, interrogating the present and anticipating the future. This is an antidote to the kind of close-in, precise and targeted questions typically used to evaluate and improve current operations. The latter do matter but far less in strategy workshops where the focus needs to be broader, forward looking and imaginativeAnomaliesSurface anomalies and address them while the strategy is being formed._58262a9e-6ee6-11e9-8b5f-bcb4ab9d818f3.2IntuitIntuit, whose survival skills we touched on already, calls this “savoring the surprise.” Once its leadership team saw that some users of Intuit's online money management service Mint weren't behaving like the young-professional target market was supposed to behave, the team dug deeper and found that these users had adopted Mint to manage their self-employment income and spending. Many, it turned out, were Uber or Lyft drivers, operating in the expanding gig economy. Embracing this learning, Intuit designed a variation of Quick Books especially for self-employed workers – and it became their fastest-growing product.A distinctive feature of vigilant strategy processes is their emphasis on surfacing anomalies and addressing them while the strategy is being formed. Whereas vulnerable organizations ignore information that doesn’t fit or convince themselves that it isn’t important, vigilant organizations seek out anomalies as early warning signals.OrganizationAlign the organization. _58262b52-6ee6-11e9-8b5f-bcb4ab9d818fStep 4Earlier, we showed how coordination and accountability enable vigilant organizations to flourish – or wither, if the organization is stuck in a rigid posture. Achieving alignment is an affirmation of the previous stages that puts the organizational pieces in place.TeamsUse small, self-governing teams._58262c10-6ee6-11e9-8b5f-bcb4ab9d818f4.1IntuitAt Intuit, new ideas are initially developed by small discovery teams that don’t report up the chain of command but instead have a direct line to the divisional general manager. Such small teams are especially suited to enhancing vigilance. Recently, 70 Intuit senior managers were grouped into small teams and told to investigate eight major trends that had surfaced either in customer interactions or diverse technology forums (such as how kids under 10 years of age use technology, conversational user interfaces and blockchains).One recurring theme of all alignment initiatives is the use of small, self-governing teams, perhaps consisting of only three people.TransformationConsider more fundamental organizational transformations._58262ce2-6ee6-11e9-8b5f-bcb4ab9d818f4.2More fundamental organizational transformations to heighten vigilance can include structural separation, which places exploration and exploitation activities in different units, or behavioral integration that puts these potentially conflicting activities together in a single unit by designing a supportive team context.2019-04-102019-05-05OwenAmburOwen.Ambur@verizon.net