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 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 their values set limits on what is possible to achieve in the given situation. Therefore, a large part of our work is identifying the limiting factors and what they allow and do not allow for opportunities for action in the given situation.
This approach gives a relatively passive picture of the role as a manager that the room for maneuver is given once and for all and will never change. Of course, that is not the case. A large part of the work as a manager, and the work we do, is precisely 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, we study the various limiting factors and try to figure out how they can change to open the opportunity space so that it is possible to achieve what you want. Affecting the limiting factors to create the opportunity space required to achieve the goals you put up, can for example imply that you need to:
- make certain organizational adjustments
- replace or develop specific staff skills
- create new abilities in your production
- introduce data-driven business models or redistribute financial resources
The single limiting factor that most determines what the opportunity space will look like, or in any case determines which action alternatives in the opportunity space that are productive and worth investing resources in, are the goals you have set 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, it 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 the driver require 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 correctly determine the distribution in this field 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 limits to avoid collision, 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 safely.
Gibson used this theory during his later career to study how organisms understand and interact with their environment. His work now forms the cornerstones of this area of theoretical psychology. The theory has been the basis for further research in several areas, such as air traffic control, healthcare, process industry, nuclear power, military command systems, and decision support for naval combat tasks.
Field of safe travel protrudes from the front of the car. Its shape depends on 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 and must be understood on its own merits. But this does not mean that all parts of every situation are unique. If you move within the same problem domain, many aspects are recurring in different situations, even if their unique values and interactions look different. This also applies for the opportunity space that we are discussing here. Since every assignment, we have completed, or every situation we face is unique, the opportunity space there will also be unique. Our work will therefore require that we to sort out what it looks like. However, you do not have to start from scratch every time you 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, there are some limiting factors that do not usually recur. It can be due to industry-specific conditions or other reasons that demands 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 examples of factors that limit the scope for opportunity and which we usually analyze.
The opportunity space is dynamic
Another characteristic of the space of possibility is that it is dynamic, meaning that it change shape as time goes by. The dynamics is due to several things. First the conditions posed by world around us change, and affects the limiting factors. This change is not something that we can influence within the framework of the work we carry out. Still, 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 of laws and regulations. The conditions also change due to operations within the company that is ongoing and previous decisions. Finally, the opportunity space will change as a result of the measures we take within the scope of our work. Perhaps we realize that we must implement an organizational change to enable a particular course of action and that the organizational change will take a ceratian time to implement. When the change is implemented it will reshape the opportunity space in our favor so that it is possible to execute the desired course of action.
This type of decision making, litteraly rebuilding the aircraft while flying it, is an example of dynamic decision making. Important and challenging with this type of decision making, is to keep track of what decisions and changes that cause what effects. The objective with this is to assure that actions gives the right impact and thereby reduce waste. This task has proved difficult, but is nevertheless very important.
Objective, but perceived subjectively
The space of opportunities is not an invention that only exists in the imagination of a decision-maker, but something objective that exists in ”reality.” The problem, however, is to make an utterly 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 opportunities shaped by many factors which are ”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.
The opportunIty space must be shared with others
The opportunity space is not an invention that only exists in the imagination of a decision-maker, but something objective that exists in ”reality.” The problem, however, is to make an utterly 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 consisting of several ”soft factors”. Examples of soft factors can be the willingness for people to change or political factors in the organization. The boundaries of these are there but are very difficult to sort out with complete certainty. Therfore 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 opportunity space.
The fact that you can not access the objective space of opportunity creates problems because each person who participates in the work will work based on their own perception of the space. This phenomenon becomes especially problematic if you are a team that has to work together.
So how do you solve this then? The only way is communication, and it is essential 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. The only way to get close to a common notion of it is to reconcile and check each other’s understanding continuously. The times we have been most successful together with customers are when we have worked closely together, and everyone has been an active part in the work with responsibility for the result.
Another important part of the work is to also communicate the opportunity space with others that will be affected by the result. This is a challenge as it is a manager’s responsibility to communicate major changes and show leadership in major issues. The communication to carry out the message can and should not be delegated, this must be done by the client and the organization’s responsible roles themselves for it to have an effect and build trust in the organization for its management and perhaps dramatic course changes. We often play an active role as support to managers, as our role usually is to help clients with tasks they cannot delegate .
Working with the opportunity space as a tool for dynamic leadership
Work on developing the opportunity space starts immediately at the first meeting. We will then talk a lot about the business problem or business challenge you are facing. The discussion will be 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 that likely are important consider. 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 proved 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 will consist of drilling further into the limiting factors identified in the initial discussions. The work here can be done in different ways and we choose method according to the nature of the problem, available time, and availability of necessary people. This deeper analysis of the limiting factors can be done by gaining access to material or by conducting interviews, study visits, or workshops with relevant participants. It is important to be open to the nature of the problem and choose the best method to solve it. It is equally essential for us 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 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, precisely what must be achieved to solve the relevant problem. The goal picture is unclear, and without a clear goal picture, it will also be challenging to depic a correct opportunity space. The challange 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 develop 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 challenging to choose 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 tell whether the field of safe travel should point to the right, left, or straight ahead, even though you are 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 working out the objectives to describing the final destination.
Once we have established the opportunity space 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, 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 entirely internally. If implementation support or management is needed, we can assist with this and act as an exeutive staff function to support managers. 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 execution should proceed.
Not a linear process
Now it may sound like we are working in an utterly linear process, and of course we are not. This is due to the dynamics and uncertainties in the space of opportunity that we discussed earlier. The dynamics arose because the space of opportunity change continuously due to several reasons. First, due to events in the outside world impacting the operation and the company. These changes must be monitored if they affect the work to a sufficient extent, it may be necessary to go back and re-evaluate certain conditions or 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 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. On the other hand, the action alternatives and plans that are set in motion within the scope of the project have the purpose of influencing the opportunity space.
Since there are often many moving parts in play, it is essential 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 challenging to get information about certain limiting factors, as we said earlier, and these may not reveal their actual 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 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. 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.