Famous Last Words and Weak Signals: how you can shape the future

Famous Last Words, or in Italian “le ultime parole famose”, is an ironic expression, which refers to deathbed bold statements and predictions, famously challenged by the unfolding of events. The expression itself, in Italy, rose to fame because of Italian puzzle magazine “La Settimana Enigmistica” which featured a satirical strip named “Famous Last Words.”

Management history is filled with “last famous words” moments. And most of them spin around weak signals, under the gravitational pull of underestimation. Staying ahead of the curve, or barely surviving landscape shifts, often depends on a firms’ ability to sift through the noise and identify trends before they are trends. These are particularly difficult tasks, which are often cumbersome and expensive.

As a matter of facts, much effort goes into scanning for weak signals, while — on the other end — most of the identified signals might never actually reach their tipping point, so they are not immediately useful. Moreover translating weak signals into actionable plans has been, traditionally, a fringe activity, which seats on the extreme periphery of a company’s strategy.

Weak Signals: a definition

The notion of Weak Signals belongs to the broad set of management artefacts that are easy to understand intuitively, but hard to thoroughly define[1]. The challenge lies in the multi-dimensional facets of the concept. Weak Signals are early stage trends, which are so small that are often hidden in noise. While they have a low probability of converting in a full-steam, landscape-changing, trend, if they were to become mainstream, they would redefine a market, an industry or a technological ecosystem. And finally, because their are so small, weak signals tend to be often dismissed, by larger and established organizations.

Hence, their symbiotic association with Famous Last Words: like the CEO of Palm Pilot dismissing Apple entering the phone market, or the management of Blockbuster not having Netflix on their radar screen. IBM and DEC, pioneers in the computing industry, did not think much of Home/Personal Computing, just like Microsoft underestimated Google, and Walmart’s executives laughed at the idea that Amazon was a threat.

A framework for action

According to Ansoff[2], weak signals are pieces of information too incomplete to permit an accurate estimation of their impact. And, for him, only knowledge can fill the gap from weak to the hard signal. In the era of social media, filling the awareness and knowledge gaps is more natural, at least in terms of identifying and analyzing micro-trends. In a 2014 article on the McKinsey Quarterly[3], the authors explain how companies like TomTom and Nordstrom scan social networks like Pinterest, Instagram, and Tumblr for weak signals. Nevertheless, the core issue is translating the insights from micro-insights into actionable, cross-functional plans.

Translating weak signals into actions needs to overcome both personal and organizational biases[4]: selective perception — our ability to filter the information we do not expect — wishful thinking and rationalization are own biases that often impair our ability to scan for and identify weak signals. At an organizational level, these complement other types of biases, such as: impairment, narrow-minded analysis, tunnel vision and social bias, because weak signals acceptance needs a socially strong sponsor, as in companies the messenger is often more important than the message.

A three-step methodology

A successful framework for listening to and translating weak signals into plans requires three steps:

• Institutionalize resource scanning, by creating search teams relying on local and global networks within the organization. The occasional search asigned to an intern might not be able to separate the trend from the noise.
• Convert signals into scenarios: by co-creating, for example, possible scenarios and solutions based on the weak signals. In this way, the biases are removed from the picture, and signals are weighted in terms of concrete and relvant solutions rather than on small-scale, hard-to-assess, future trends.
• Elevate dissenters: identify dissenters and put them in charge of intelligence gathering on the weak signals and creative scenarios. They will fight harder for translating non-mainstream trends into tangible solutions and plans.

In conclusion

Avoiding the Famous Last Words requires scanning for weak signals and converting them into actionable insights and scenarios. Weak Signals are pieces of possible futures, which are hidden in plain sight. The ability to scan for, identify and make sense of those early trends, is a crucial step in the survival and transformation of the company in the future: what would have happened to a harness and saddler business if they had not changed their business model when combustion engines took over horses in mobility? We would not have known Hermes, the French luxury giant.

References

[1] Mendonça, S., e Cunha, M.P., Kaivo-Oja, J. and Ruff, F., 2004. Wildcards, weak signals and organisational improvisation. Futures, 36(2), pp.201–218.

[2] Ansoff, I. (1982). Strategic response to turbulent environments. Working Paper №82–35. Brussels: European Institute for Advanced Studies in Management.

[3] Harrysson, M., Métayer, E. and Sarrazin, H., 2014. The strength of ‘weak signals.’ McKinsey Quarterly, 1, pp.14–17.

[4] Schoemaker, P.J. and Day, G.S., 2009. How to make sense of weak signals. Leading Organizations: Perspectives for a New Era, 37.

Originally published at blog.thefutureof.report on February 13, 2019.