Create early warning systems to detect competitive threats

Create early warning systems to detect competitive threats: right time to start is before the need for a response.

Extract from HBR:

Eighteen months ago, a massive earthquake struck off the northeast coast of Japan. The tsunami it unleashed caused devastating damage whose effects are still being felt. But it could have been even worse. Instead, a mere three seconds after the earthquake struck, a sophisticated early warning system kicked in. The system then triggered a series of messages via TV and cell phone warning about the impending tsunami that came about nine minutes later — which, as a Time magazine reporter noted, “can be just enough time to take cover, drive a car to the side of the road, step back from getting on an elevator or stop medical surgery.”

Corporations should have early warning systems to detect emerging competitive threats that have long-term potential to affect their business. Just as seismologists used research to determine what to watch for and then distributed networks of sensors to identify the right signals, strategists can look back at past transformations to inform their own analyses.

Strategists need to understand how tomorrow’s industry could be structured. The work of two of the most important scholars in the field, Clayton Christensen and Richard N. Foster, suggests considering five questions:

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