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A friend shared an online Harvard Business Review article by George Stalk, Jr. and Sam Stewart about how Avoiding Disruption Requires Rapid Decision Making. They advance a model explaining superior fighter pilot performance as a recommended way for how to avoid disruption in your markets.

How to Avoid Disruption with SODA

Innovation Strategy

The model’s acronym is easy enough to remember: SODA, representing Scan–Orient–Decide–Act. Within a few paragraphs, the authors mention brands typically noted for disruption: Amazon, Zappos, and Alibaba. They also share fundamentals behind the model:

  • Scan – Be on the lookout for new market patterns, emerging customer preferences, unfamiliar competitors, and pattern-breakers changing your industry.
  • Orient – Take advantage of your diverse leadership team to assess where your business is (or could be) potentially losing competitive advantage.
  • Decide – Regularly asking and answering a set of strengths- and weaknesses-oriented questions to help identify important strategic drivers and priorities.
  • Act – Quickly taking advantage of opportunities and addressing disruptive threats through a simple and well-understood strategy that everyone in the organization understands and implements.

All smart ideas, and easily summarized in an acronym. The challenge lies in how to innovatively bring the acronym to life. Let’s build out ideas for activating SODA with your executive team and organization:

Scan

The authors point to using big data to identify otherwise-imperceptible patterns and emerging market preferences. We agree: if you have the big data, that’s a huge benefit—one you should use aggressively. Many organizations don’t have data available and need other ideas for scanning the external world to anticipate emerging developments.

One productive technique to anticipate emerging competitors is to list a diverse set of general characteristics of your business. You can start by completing these statements about your organization:

  • We sell to ___________ (markets or types of customers)
  • We offer ___________ (products, services, both, or something else)
  • Our best customers ___________ (describe them in multiple, meaningful ways)
  • We are really smart about ___________
  • We are really fantastic at ___________

This is a starting point. Once completed, determine who else—whether you perceive them as competitors or not—shares the same characteristics that your team identified across all five areas. To consider unexpected competitors, identify which companies satisfy only two of the criteria and could make a move to disrupt your organization.

Another productive exercise: list the customer benefits (not features) that your brand delivers. Ask which other players inside and outside your market deliver comparable benefits. This can be another source of emerging competitors.

To develop insight into emerging customer trends, identify which customers (and competitors’ customers) move well in advance of the market. Reach out to them, asking what they think is happening today and in the near future. Their answers should unveil insights into where your broader market will head in a few years.

Orient

This step involves determining where your organization is most vulnerable. Organizations typically have standard lists of weaknesses and threats that everyone knows. To uncover overlooked vulnerabilities, think about any areas that are missing from the familiar list of weaknesses. Engage your leadership team in this activity and explore the following questions:

  • Who are our largest, best, and/or most dedicated customers? What would happen if a significant number defected?
  • What’s working tremendously well, but would be crippling if it stopped working?
  • What are the strongest, most dependable areas inside our organization and relationships with external parties? What if they deteriorated dramatically?
  • What areas are growing most strongly? What strains are they undergoing?
  • Which processes or functions are the most complex? How many people fully understand them?
  • What are the hidden secrets of our organization that could damage our reputation if they were public?

Answers to these questions add to the list of potential vulnerabilities. Based on collective input, rank them according to their potential risk and the likelihood to occur within a few years. From this exercise, you can develop a better sense of areas primed for disruption.

Decide

This step entails focusing your leadership team on questions to uncover critical organizational truths and insights. The HBR article features a brief set of productive questions for this step. They address customers, capabilities, and the vulnerabilities identified in the Orient stage. To their list, we’d add the following questions to help identify and articulate your organization’s focus:

  • What do we most want to accomplish in the organization?
  • What does our brand stand for?
  • Who do we win the most business from and why?
  • Who do we lose the most business to and why?
  • What do we think / know is most important to driving growth (revenue, share, and profit) in our market?

Act

The final stage addresses the importance of an organization moving quickly and effectively to execute strategies. The authors recommend goal clarity, alignment, and broad communication and employee empowerment as keys for organizations (especially large ones) to continue moving quickly.

Step one is simplifying strategy statements, so they are understandable, mean something, and convey to employees how to act on them. We counsel executive teams to state their strategy statements to individuals who are not directly involved in their development, and ask:

  • What does this suggest to you that we find important and try to accomplish?
  • What would it suggest to employees to do when they are faced with an opportunity or problem?

If the answers to these questions aren’t in line with what you hoped, there’s more work to do for your executive team.

A further step is to translate your strategy into concrete behaviors that will help employees understand where to focus their actions to carry the strategy out. Both steps help move the organization to having many employees all pulling in the same direction to implement your strategy.

Ready to Open Up a Can of SODA on Disruptive Competitors?

Scan-Orient-Decide-Act is a solid model for focusing and aligning strategy and as a method for how to avoid disruption. The key is to move it from a handy acronym to routine way of strategizing and implementing. - Originally published in Inside the Executive Suite

strategic planning questions
disruptive innovation