This piece is by Esther Clark, author and outstanding contributor to Forbes, the Global Peter Drucker Forum, and the World Economic Forum. She is the Executive Director of Marketing at Inspired Education and writes about innovation, strategy, and international education. Follow @ClarkEsther.
Growing up on sailboats and off the grid, I learned that doing things differently leads to some of life’s most valuable experiences. Like when my father used homing pigeons to send love letters to my mother when other communication methods failed or when, sailing across the Pacific Ocean at the age of ten, I learned celestial navigation before I understood algebra. So, imagine my joy when I discovered the story behind Clayton Christensen’s “Anomalies Wanted” sign that speaks directly to the spirit of inquiry, of exploration, and of being comfortable with ambiguity that was the leitmotif of my childhood. And is now a lesson integrated into my professional career.
For those who don’t know the story, Clay had a sign outside his office at Harvard Business School (HBS) that read: “Anomalies Wanted.” In most offices, signs display our name, title, or department. Clay’s sign was a form of identity and a call to action. With his sign, he was inviting challenge and setting expectations about not ignoring anomalies just because of what we think we know, because of where we work, or because those anomalies may not fit our worldview. Clay believed that seeking out the unexpected fosters the greatest advances in learning. He had a thirst for being correct not for being right. In other words, Clay wanted to be proven wrong to better enhance a theory or test it in new ways. Clay sought out anomalies to question his own frameworks and to blaze a new path for what is to come.
For businesses, the spirit of “Anomalies Wanted” can enrich strategy and innovation decisions by encouraging a start-up culture, igniting a spirit of constant inquiry, and ensuring an organization is appropriately resourced for innovation.
Welcome anomalies, welcome innovation
Organizations today that foster such an active learning loop will naturally self-correct. “Anomalies Wanted” is, therefore, a powerful call to action to improve frameworks and theories that enable organizations to spot a trend or an idea before it happens. They can become better at what they do and who they serve.
New patterns start off as anomalies in data sets before they come out and play as a pattern or trend. Simply stated, anomalies are weak signals that are, in some way, surprising but not entirely clear in scope or importance. Most people miss them because they don’t have a place for them, so, they either bundle them with the closest “known” entity or dismiss them entirely because it’s so far from the known that it must be an error, a false read, or something that’s irrelevant.
What would happen if we started to use anomalies to drive innovation or even strategy? What does the research say?
Anomalies won’t appear on a meta-trend list until they have become trends—they must first appear as something unusual. The greatest researchers I know intuitively find anomalies because they are open to finding them. They are slow to judge, and they take their time to collect observations and connect dots; they are fluid with assumptions and don’t try to reach a hasty conclusion. Instead, they scan the market for surprises, and they hold off in trying to make sense of an anomaly right away to not lose it in the “knowns.” They look to be proven wrong. They may use a mix of novel and traditional data collection methods, and they interrogate what they think they know.
Translating to a business culture, it’s powerful when employees and leadership are free to seek out insights and spot anomalies. Using a phrase I heard years ago from entrepreneur and thought leader Steve Blank, the biggest gift we can give is to tell people to “get out of the building.” That is, get real insights from real people. Walk in their shoes, dine with them, and experience a school run or a neighborhood sports game. Go for a round at the local bar. Ride the bus and jump into the pool at the local community center. Some companies may call this “Gemba” or being in the place.
When we focus on activity, as strange or mundane or normal as it may seem, we can learn to spot unusual activity. Cesar Lastra, a global insights and innovation expert, stated that “as a researcher, when I discover what seems to be an anomaly, I try to understand the ‘why’ behind it and see where it takes me.”
An impetus for disruption
“Anomalies Wanted” is about scanning for changes in our world; our customers’ world; and in the social, political, and technological context that might shape the emergence of new and/or unmet needs. Yet, as companies grow, they become more and more focused on prioritizing what’s known to work. Expected bureaucracy in the name of efficiency sets in. But if we look at average consumers as well as atypical consumers, lapsed consumers, nonconsumers, and the broader consumer landscape, it can be incredibly informative, revealing, and profitable.
Who does this well? Start-ups: the Airbnb’s, the Netflix’s, and the Apple Computers of the world. The disruptive innovators. The Mavericks. The value creators.
While incumbent companies target their core consumers for increased engagement with their established services and products, disruption often takes place. New entrants in the market develop simpler, cheaper, and not-as-good-as ways of doing something and servicing a part of the market that may be typically underserved or overserved and, therefore, overlooked.
Disruptive Innovation takes place because while established players try to understand their core customers and marginally improve their products or service, new entrants begin to serve the untapped potential of a market. Over time, disruptive entrants improve their offerings to eventually outperform incumbents.
In short, these innovators spot anomalies that may have been excluded, wrongly categorized, or that didn’t make sense to the larger players.
Harnessing anomalies
There is an art and science to searching for anomalies. Instagram’s founders, for example, had an initial multifunctional social networking app, originally called Burbn, but soon honed in on image sharing after they noticed an unusual amount of activity around that feature. The founders called it a “false start” because they had to evolve from what they thought people wanted to the real Job to Be Done, which was photo sharing. Facebook existed, but it wasn’t serving the unmet need for beautiful, simple image-centric social sharing.
Another example is illustrated nicely in “The Power of Anomaly” by Reeves, Goodson and Whitaker. In 2000, Google was considering expanding beyond text links into new types of searches when it noticed a significant anomaly: searches for the green dress worn by Jennifer Lopez at the Grammy Awards broke the record for the most popular query ever. According to the article, “Google had already identified image search as a potential opportunity, but the enormous number of searches for the dress indicated just how much momentum and potential impact the not-yet-existent service had, persuading Google to make it a priority and launch it the next year.”
An anomaly may be just a fad or may translate many years later into innovation or a game-changing product or service. But no matter the outcome, all anomalies can enable us to see around corners; and it’s been said many times over in boardrooms and workshops that seeing around corners is key to strategic resilience.
Can anomalies drive strategy or strategic shifts? How would organizations incorporate that into innovation practices?
To begin, organizations would need an altered approach to evaluating and seizing opportunities that might not fit into the typical Return on Investment (ROI) discussion. For example, does your organization require new initiatives to be backed by an unambiguous return-on-investment analysis showing a clear course of action leading to a quantified payoff? Due to the uncertainty and path dependency (what has occurred in the past persists because of resistance to change) of emerging trends, that ROI analysis may not be possible. Some companies talk about ROO (Return on Objectives) while others adopt the 70/10/20 methodology. Where 70% of budget is allocated to tried-and-tested products and services (development and business as usual); 10% is for experiments where results may be vague or not trackable; and the final 20% of budget is to further explore the initiatives that last year were in the 10% bucket, and that worked and need further development.
In addition, organizations would need to adopt an inquiry-type profile. Start-ups are great at uncovering unmet needs and hidden desires to better serve the overlooked customer or market. It involves a shift in observation and approach: listen, learn, and iterate. Go from observation to insights by constantly asking the question “why?” This implies the need to look at the business from the outside in, getting out of the building or just being “in the place” (Gemba), and questioning existing models and truths. By embracing ambiguity, organizations can prepare for the next big thing by incorporating innovation practices into daily, seemingly mundane, activities.
Once an anomaly has been detected, and considered seriously, established business models will need to create and invest in an “autonomous unit”: a separate division with the ability to create its own unique business model. (Read here for a more in-depth description of an autonomous unit and why it’s needed)
The Anomalies Wanted sign may have been a hand-carved wooden sign on Clay’s door at HBS, but it represents so much more. It invites us to interact with some of life’s most valuable experiences by opening conversations and worlds of possibilities. Successful start-ups show just how innovation starts with questioning something. When observed before their time, anomalies may look weak, confusing, or unimportant because we couldn’t possibly know they were the thing we were looking for or that inspired us to create change. Anomalies challenge us to test our theories and question the models we have constructed to make sense of the world. “Anomalies Wanted” may be what you didn’t know you were looking for but needed to know.
Following conversations with researchers and entrepreneurs alike, I would say it’s about time we demystify changemakers and refrain from jumping to conclusions when looking at data. Like my childhood on a sailboat, let’s invite more people to reframe what is “normal.” Let’s encourage people in our organizations to put up their own versions of the sign with their own passepartout or frame…translate it into various languages, set it to music, embody it, and make it their own.
