Book Review of Leapfrogging | Risk Management

by Morgan O'Rourke | September 26, 2012 at 4:08 pm

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When software developer Intuit debuted Quicken, it was intended to be used to manage home finances and balance personal checkbooks. The company was soon surprised to discover that small businesses were using it as well, despite the fact that the software was never designed to handle complex business accounting procedures. But rather than discourage these users or simply dismiss the trend, Intuit saw a market opportunity for small business accounting software and designed QuickBooks, which captured almost 70% of the market and became one of the company?s most profitable products.

The developers of OpenTable.com, the online restaurant reservation website, encountered their own surprise while starting out. They thought restaurants would jump at the chance to fill their seats using an online tool, but they quickly learned that most restaurants didn?t even have internet access, let alone digital reservation systems needed to link to the service. Rather than abandoning the idea, however, OpenTable saw an opportunity and got into the hardware business. The company installed new, computerized reservation systems for its clients and, in some cases, even made sure that the restaurants were wired for the web. OpenTable became successful because it went from a simple online-booking system to a ?customer relationship and service enhancement tool.?

Businesses typically view surprises as something to be avoided. The feeling is that surprise creates uncertainty, which implies a lack of control and a possible threat to success. But as Soren Kaplan details in Leapfrogging, looking at surprise as a purely negative event cause business leaders to miss valuable opportunities. In fact, surprises can often result in business-altering breakthroughs. As a result, organizations need to change their way of thinking about uncertainty if they want to open themselves up to the widest range of possibilities for success and ?leapfrog? the competition.

For strategic risk managers accustomed to thinking about both the upside and the downside of risk, this should be a familiar refrain. Because often in the bleakest of circumstances lies the greatest opportunity.

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Source: http://rmmagazine.com/2012/09/26/surprises-are-not-necessarily-something-to-avoid/

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