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THE OPPORTUNITY ZONE
In our work, we start from something called the opportunity zone. Simply put, the opportunity zone describes what is possible to do in any given situation. -it describes the action alternatives you have as a manager at any given time. As we all know, you rarely have unlimited room for maneuver. Most often, various factors complicate or prevent what you want to do and by that shrink the room for maneuver. Financial frameworks, organizational, competence, legal or technical conditions all set limits for what is possible to do in any given situation. They are limiting factors and the values they have set limits on what is possible to achieve in the given situation. A large part of the work we carry out therefore consists of identifying the limiting factors and what they allow and do not allow for opportunities for action in the given situation.
Now this approach gives a rather passive picture of the role as a manager; that the room for maneuver is something that is given once and for all and cannot be influenced. Of course, that is not the case. A large part of the work as a manager, and the work we do, is precisely to try to understand how you can expand the scope for action so that it is possible to achieve what you want. In terms of the opportunity space, this means that we study the various limiting factors and try to figure out how these must be changed to open the opportunity space so that it is possible to achieve what you want. This may mean that you need to make certain organizational adjustments, you need to replace or develop certain staff skills, create new abilities in your production, introduce data-driven business models or redistribute financial resources to create the room for maneuver required to achieve the goals you put up.
The limiting factor that perhaps most determines what the opportunity space looks like (Perhaps most trims the opportunity space), or in any case determines which action alternatives within the opportunity space are productive and worth investing resources in, are the goals you have with your business or what it is. is that you want to change or improve. You are only interested in implementing one of the action alternatives that lead to the goal. Spending time and resources on other courses of action is just a waste. It is therefore crucial to clearly define the business problem or business opportunity that you want to solve or achieve early in the work. Without a clear understanding of this, it will be difficult to evaluate the action alternatives you develop, how well they achieve the goals you have set.
FIELD OF SAFE TRAVEL
The possibility space is not something we invented ourselves but is a further development of a theoretical concept that has its origins in an article by Gibson and Crooks from 1938 which describes what a car driver must be able to do to drive a vehicle safely in traffic and what information is required for this. Gibson and Crooks considered that the information needed was information about what they called ”the field of safe travel” which is simply the area of the traffic environment where the driver can drive without colliding with any obstacles such as houses or other cars. Keeping track of how this area changes as the car and other vehicles move and how insecurities in traffic affect safety margins in this field is, according to Gibson and Crooks (1938), the main challenge for a car driver. If the driver can determine the distribution in this field correctly and keep the car in the middle of it, the journey will be safe. If the driver begins to approach the edges of the field or take chances and challenge the safety margins, for example in a hidden intersection, driving becomes careless and dangerous. Exactly which path the driver chooses in the field is of minor importance, as long as the driver stays within its limits he or she will not collide. In this way, the field describes all the possibilities the driver has at a given time to drive his vehicle in a safe way.
Gibson used this theory during his later career to study how organisms understand and interact with their environment and his work now forms the cornerstones of this area of theoretical psychology. The theory has been the basis for further research in a number of areas, such as air traffic control, healthcare, process industry, nuclear power, military command systems, and as decision support for naval combat tasks.
Field of safe travel protrudes from the front of the car. It is shaped by the behavior of the other cars and uncertainties about what the other cars should do are handled through safety margins created by letting the field bend in.
LIMITING FACTORS
Each situation is unique in itself and must be understood on its own merits. But this does not mean that all parts of each situation are unique, but if you move within the same problem domain, many aspects are recurring in different situations, even if their unique values and their interaction look different. This is also the case for the room for opportunity that we are discussing here. Since every assignment we have completed or every situation we are faced with is unique, the opportunity space there will also be unique and work will be required to sort out what it looks like. However, you do not have to start from scratch every time you have to identify the limiting factors, but many of these recur as long as you move within the same problem domain. Sorting these out and how they limit the space of opportunity is part of the work. Since each situation is unique, they may be such that in this particular problem there are a number of limiting factors that do not usually recur. This may be due to industry-specific conditions or other reasons that must be given special consideration. Limiting factors that often recur are, of course, those that affect business operations in general in one way or another. Financial conditions, corporate governance, strategy, organization, competence, technology are all examples of factors that limit the scope for opportunity and which we usually analyze to get an idea of the current scope for action.
The picture on the left shows how the opportunity space is the residual product that remains when the limiting factors have cut off what cannot be done. The picture to the right shows that a decision-maker who has to solve a business problem must find an action alternative that takes the company from the current state to a desired final position where the business problem has been remedied. In the picture, safety margins have been added to deal with the uncertainties surrounding finances, corporate governance and competence.
THE OPPORTUNITY ZONE IS DYNAMIC
Another characteristic that is characteristic of the space of possibility is that it is dynamic, that is, it changes shape as time goes on. This is due to several things: To begin with, the conditions in the outside world change and this naturally affects the factors that build up the space of opportunity. This change is not something that we can influence within the framework of the work we carry out, but it is equally important to keep an eye on it because it can severely curtail the space of opportunity, for example if there is a decisive change in laws and regulations. The conditions also change as a result of operations within the company that have been initiated earlier – the effects of previous decisions begin to take effect and this will change the conditions during ongoing work. Finally, the space of opportunity will also change as a result of the measures we take within the framework of our work. Perhaps we realize that we need to implement an organizational change to enable a certain course of action, and that organizational change will partly take time to take place but ultimately reshape the room for opportunity so that the desired course of action can be implemented. This type of decision making, so to speak rebuilding the aircraft while flying it, is an example of dynamic decision making and important and challenging in this type of decision problem is to keep track of what decisions and changes are behind what effects so that you can find out if what you do carries in the direction you want. This has proved difficult to sort out but is nevertheless very important to keep track of.
OBJECTIVE, BUT PERCEIVED SUBJECTIVELY
The space of possibility is not an invention that only exists in the imagination of a decision-maker, but in fact something objective that exists in ”reality”. The problem, however, is to make a completely correct depiction of it; namely, it is almost impossible to gather all the information required for this, especially if it is a somewhat realistic space of possibility and it is built up of many factors and these are by nature ”soft”. Examples of soft factors can be the willingness to change of management colleagues or political factors in the organization. The boundaries of these are there but are of course very difficult to sort out with complete certainty. This means that a decision-maker does not have direct access to the objective space of opportunity but must rely on assessments of these limits; he must rely on his own subjective depiction of the space of possibility.
In order for the subjective space to be useful, it must depict all limitations as accurately as possible and deal with the uncertainties that always exist regarding the values of the various limiting factors. This can be compared to a car driver approaching an obscured intersection. He can not see past the house that covers the road to the right and therefore does not know if there will be another car there or not, which you would know if you had access to the objective room, like if you sat in a helicopter and saw everything from above. However, the driver must deal with this uncertainty by letting his ”field of safe travel” (ie the space of opportunity) meander in from the intersecting road and manage that indentation by slowing down so that you can stop before hitting the edge or keep out of the indentation by for example, driving over into the second road lane. In the same way, uncertainties in the opportunities spaces we work with must also be managed through safety margins and buffers.
IT MUST BE SHARED WITH OTHERS
The space of possibility is not an invention that only exists in the imagination of a decision-maker, but in fact something objective that exists in ”reality”. The problem, however, is to make a completely correct depiction of it; namely, it is almost impossible to gather all the information required for this, especially if it is a somewhat realistic space of possibility and it is built up of many factors and these are by nature ”soft”. Examples of soft factors can be the willingness to change of management colleagues or political factors in the organization. The boundaries of these are there but are of course very difficult to sort out with complete certainty. This means that a decision-maker does not have direct access to the objective space of opportunity but must rely on assessments of these limits; he must rely on his own subjective depiction of the space of possibility.
The fact that you can not have access to the objective space of opportunity creates problems because each person who participates in the work will work based on their own perception of what it looks like. This becomes especially problematic if you are a team that has to work together. So how do you solve this then? The only way here is communication, it is important that everyone constantly communicates and describes their perception of what the opportunity space looks like, what factors affect it and what you should do to change these. Working with us thus requires a great deal of commitment from those who choose to do so. Namely, there are no shortcuts around the problem of the objective space. Everyone will have their own picture of the situation and the only way to get close to a common picture of it is to continuously reconcile and check each other’s understanding. The times we have been successful together with customers are the times we have worked closely together and everyone has been an active part in the work with a responsibility for the result.
Another important part of the work is to also communicate the space of opportunity with others around who are affected or participate in the work that we carry out. This is a challenge as it is a manager’s responsibility to communicate major changes and show leadership on major issues. This should not be delegated to external parties. On the other hand, we often play a role as active advisors and support to managers, as our role is often to help with tasks that our client cannot delegate. The scope and need for objectivity require the same or higher ability than the client himself. The communication and carrying of the message can and should not be delegated, but this must be borne by the client and the organization’s responsible roles themselves in order for it to have an effect and build trust in the organization for its management and perhaps dramatic course changes.
The objective space of possibility is perceived by four different people whose subjective space of possibility has a certain overlap. Within the overlap, the different people have the same perception of what is possible to achieve in the current situation.
WORKING WITH THE OPPORTUNITY ZONE
Work on developing the opportunity space actually starts immediately at the first meeting, as we will then talk a lot about the business problem or business challenge that you are facing. The discussion will be very much about what the client wants to achieve and why and what problems you see with this. These problems will be the first indications of which limiting factors are considered to be the most central to achieving what the client wants. We will also supplement our initial discussions with other sources to form a good idea of, for example, the market in which the company operates, the company itself, its customers and competitors. It has often been shown that the less we know about the client’s activities, the more rewarding the start-up and the better we can depict the opportunity space. The purpose of the initial phase is to test the problem; to ensure that the problem is a real problem and not just a symptom of an underlying problem.
The next step in the work will consist of drilling further into the limiting factors identified in the initial discussions. The work here can be done in different ways and here we choose the method according to the nature of the problem, available time and availability of necessary staff. This can be done by gaining access to material on which we make analyzes or by conducting interviews, study visits, or workshops with relevant participants. It is important for us here to be open to the nature of the problem and choose the method to solve it. It is equally important for us to be able to look at the problem from both a macro and a micro perspective, in other words ”go to gemba” as soon as possible. Either way, the work will focus on identifying the limiting factors, gathering information about trying to eliminate as much uncertainty as possible around them to understand how they limit the space of opportunity, and trying to understand if and which of these limiting factors need to be changed. to be able to achieve what you want.
It often turns out in the initial work that it is not crystal clear, not even for the client, exactly what must be achieved to solve the problem that is relevant. The goal picture is unclear and without a clear goal picture it will also be difficult to construct a relevant opportunity space. This can be compared with the driver’s field of safe travel, if the driver does not have a clear idea of his final destination, it is difficult to create a relevant space of opportunity. The car may be able to avoid a collision, but the field of safe travel should perhaps in its extension point towards Eksjö instead of Stockholm. In the same way, in order to create a relevant space of opportunity, it is also necessary to create a clear understanding of the current situation – where is the company right now? If you do not know where you are, it will also be difficult to choose in which direction to go to reach the goal. Here, too, we can compare with the driver – if you do not know where the car is, it is difficult to know whether the field of safe travel should point to the right, left or straight ahead, even though you are absolutely sure that you will drive to Eksjö . A large part of our work will therefore involve producing a description of the current situation as a basis for the opportunity space and start of the work, as well as objectives for describing its final destination.
Once we have established the room for opportunity and thus the room for maneuver, we move forward by formulating what courses of action we have and whether these are sufficient to achieve the goals we have set. If we see that the opportunity space is closed in some respect, the action alternatives will focus on influencing some limiting factor to open up the opportunity space so we can reach the goal. If the scope for action is large enough – the space for opportunity is open – the options for action will focus on taking us from the current state to the goal.
The action alternatives are then reformulated into plans which are then implemented. The implementation of the plans can take place in several ways. If they are well understood and accepted and the organization has the required competence, they can be implemented completely internally. If support or management is needed for the implementation, we can assist with this and act as a staff function as support for the implementation managers. If appropriate, we can also organize support for the practical implementation. Since each problem is unique, the implementation of the solution will also require adaptation, which is why a detailed discussion is required on how the implementation should proceed.
NOT A LINEAR PROCESS
Now it may sound like we are working into a completely linear process and of course it is not. This is due to the dynamics and uncertainties that exist in the space of opportunity that we discussed earlier. The dynamics arose because the space of opportunity changed continuously due to several reasons. First, due to events in the outside world outside the project and the company. These changes must be monitored if they affect the work to a sufficient extent, it may be necessary to go back to the work and re-evaluate certain conditions and limiting factors, which in turn can affect the room for maneuver or objectives of the work. Secondly, the opportunity space is changing due to activities that are going on within the company that was initiated earlier. This change will also affect the space of opportunity over time and is therefore something that must be monitored and reacted to if necessary. Thirdly, the space of opportunity is changed by what is going on within the project. On the one hand, the work with the current situation and objectives will affect the opportunity space, and on the other hand, the action alternatives and plans that are set in motion within the framework of the project have the purpose of influencing the opportunity space.
. Since there are often many moving parts in play, it is important to follow up and evaluate how the plans proceed so that you can adjust as early as possible if necessary. Uncertainties are also something that will affect the space of opportunity. To begin with, it can be difficult to get information about certain limiting factors, as we said earlier, and these may not reveal their true values until there is a change within the framework of the work. This may mean that we have to go back and re-evaluate the space of opportunity and the assumptions we have made about its form. Some problems are also of the nature that they do not reveal themselves immediately, you do not see them clearly until you start to press them a little. Here it may be that you have to ”beat the grass to startle the snakes” and get certain things rolling in order to reduce uncertainties about limiting factors and assumptions.
There will therefore always be an interaction between problem analysis, objectives, opportunity spaces, action alternatives, plans and implementation where information and effects from the different phases will improve the perception of the objective space of opportunity which in turn will affect action alternatives, plans and implementation. Here again, we must emphasize the importance of working closely with the client. Accepting that two steps back is necessary to get one step further is only possible if everyone has the same opinion about the space of opportunity. Having the same idea of what the opportunity space looks like, as best you can now, is only possible if you have close communication, which in turn is only possible if you work closely together. Yes, you understand. We have to work closely together. It can be hard sometimes, but it’s worth it.