As information thunders through the digital economy, it’s easy to miss valuable “weak signals” often hidden amid the noise, says Martin Harrysson, Estelle Métayer, and Hugo Sarrazin of the consulting group McKinsey & Co. These “snippets” of data they say can help companies to “figure out what customers want and to spot looming industry and market disruptions before competitors do”. This article ties in nicely to many of the key messages in our leadership and development programmes. Recently we were running a future-proofing leadership bootcamp with John Lewis Partnership and we were discussing the important but seldom used leadership skill of asking questions. In a rapid fast pace complex and ambiguous world, predicting the future is a wasteful exercise. Rather leaders need to be asking questions that start or shift conversations, ask questions that motivate or inspire people to change and importantly ask questions that help identify the opportunities behind weak signals. By doing this leaders can identify disruptive forces and innovate to leverage the competitive advantage disruptions offer.
Weak signals are everywhere, of course, so deciding when and where to keep the antennae out is critical, the article by McKinsey provides a nice framework for a four step process to seeing weak signals:
1) Engaging at the top
Senior leaders need to get actively involved in the social media where weak signals are coming from. They need to engage with the thought-leaders and tribal heads of social communities. Tony Hseih is a great example of a leader who uses social media platforms to share his dreams, thoughts and aspirations. With over 2.8million followers most importantly Tony does not use the platforms to sell his company, but rather as a way of having a dialogue with the people important to him both inside and outside his company.
You can view an excerpt of the remaining steps below or follow this link to MQ
2) Listening and mapping
As the manufacturer’s example implies, spotting weak signals is more likely when companies can marshal dispersed net-works of people who have a deep under-standing of the business and act as listening posts. One global beverage com-pany is considering including social-media awareness in its hiring criteria for some managers, to build its network and free its management team from “well-rehearsed habits.”
Weak signals are everywhere, of course, so deciding when and where to keep the antennae out is critical. One such sit-uation involves a product, market, or service that doesn’t yet exist—but could. Consider the case of a global adver-tising company that was investigating (for one of its clients) a US growth opportunity related to child care. Because no one was offering the proposed service, keyword searches on social media (and on the web more broadly) wouldn’t work. Instead, the company looked to social-media platforms where it might find weak signals—finally discovering an online content service that allows users to create and share individu-alized newspapers.
In the child-care arena, digital-content channels are often curated by mothers and fathers, who invite conversations about their experiences and concerns, as well as assemble relevant articles by experts or government sources. Analysts used semantic clues to follow hundreds of fine-grained conversations on these sites. The exercise produced a wealth of relevant information about the types of services available in individual markets, the specific levels of service that parents sought, the prices they were willing to pay, the child-care options companies already sponsored, the strength of local providers (potential competitors), and the people in various communities who might become ambassadors for a new service. This wasn’t a number-crunching exercise; instead, it took an anthropological view of local child care—a mosaic formed from shards of information found only on social media. In the end, the weak signals helped the company to define the parameters of a not-yet-existing service.
Spotting visual clues
It’s also useful to search for weak signals when customers start engaging with products or services in new, tech-enabled ways, often simply by sharing per-ceptions about a company’s offerings and how they are using them. This can be hard for companies to relate to at first, as it’s quite removed from the usual practice of finding data patterns, clustering, and eliminating statistical noise. Spotting weak signals in such cir-cumstances requires managers and employees to have the time and space to surf blogs or seek inspiration through services such as Tumblr or Instagram.
As intangible as these techniques may sound, they can deliver tangible results. US retailer Nordstrom, for example, took an early interest in the possibilities of Pinterest, the digital-scrapbooking site where users “pin” images they like on virtual boards and share them with a larger community. Displayed on Pinterest, the retailer’s products gener-ate significant interest: the company currently has more than four million followers on the site.
Spotting an opportunity to share this online engagement with in-store shoppers, the company recently started dis-playing popular Pinterest items in two of its Seattle-area stores. When early results were encouraging, Nordstrom began rolling out the test more broadly to capitalize on the site’s appeal to customers as the “world’s largest ‘wish list,’” in the words of one executive.2 The retailer continues to look for more ways to match other customer inter-actions on Pinterest with its products. Local salespeople already use an in-store app to match items popular on Pinterest with items in the retailer’s inventory. As the “spotting” ability of com-panies in other industries matures, we expect visual tools such as Pinterest to be increasingly useful in detecting and capitalizing on weak signals.
As the Nordstrom example demonstrates, listening for weak signals isn’t enough—companies must channel what’s been learned to the appropriate part of the organization so the findings can influence product development and other operational activities. Interestingly, TomTom, a company that offers products and services for navigation and traffic, found that the mechanism for spotting weak signals proved useful in enhancing its product-development process.
As part of normal operations, TomTom monitored social media closely, mining conversations to feed into performance metrics for marketing and customer-service executives. The normal process changed after an attentive company analyst noted that users posting on a UK forum were focused on connectivity problems. Rather than let the tenuous comments get lost in the company’s performance statistics, he channeled them to product-development teams. To resolve the issue, the teams worked directly—and in real time—with customers. That helped short-circuit an otherwise costly process, which would have required drivers using TomTom’s offerings to check out connectivity issues in a number of locales. The broader payoff came in the form of new R&D and product-development processes: TomTom now taps directly into its driving community for ideas on design and product features, as well as to troubleshoot new offerings quickly.
At most companies, weak signals will be unfamiliar territory for senior manage-ment, so an up-front investment in leader-ship time will be needed to clarify the strategic, organizational, and resource implications of new initiatives. The new roles will require people who are comfortable navigating diverse, less corporate sources of information.
Regardless of where companies observe weak signals, the authority to act on them should reside as close to the front lines as possible. Weak signals are strategic enough to demand top-management attention. They are sufficiently important to the day-to-day work of customer-service, technical-development, and marketing teams to make anything other than deep organizational engagement unwise
1 See Martin Harrysson, Estelle Métayer, and Hugo Sarrazin, “How ‘social intelligence’ can guide decisions,” McKinsey Quarterly, November 2012, mckinsey.com.
2 See Rachel Brown, “Nordstrom touts merchandise with Pinterest,” Women’s Wear Daily, July 2, 2013, wwd.com.
Martin Harrysson is an associate principal in McKinsey’s Silicon Valley office, where Hugo Sarrazin is a director; Estelle Métayer, an alumnus of the Montréal office, is an adjunct professor at McGill University, in Montréal.
Copyright © 2014 McKinsey & Company. All rights reserved.