{"id":131493,"date":"2024-09-26T17:19:00","date_gmt":"2024-09-26T21:19:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=131493"},"modified":"2024-10-02T17:43:08","modified_gmt":"2024-10-02T21:43:08","slug":"how-to-identify-business-opportunities","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/how-to-identify-business-opportunities\/","title":{"rendered":"How to Identify Business Opportunities in Unexpected Places"},"content":{"rendered":"\n

How can discrepancies open up opportunities for innovation? How can you take advantage of a bottleneck in the market?<\/p>\n\n\n\n

The lesson learned from successes and failures is that opportunities to innovate can be found in unexpected places. In particular, Peter F. Drucker emphasizes mismatches in economic assumptions<\/a>, customer value perceptions, and inefficient industrial processes as fertile ground for innovators.<\/p>\n\n\n\n

To find out how to identify business opportunities in these situations, keep reading.<\/p>\n\n\n\n\n\n\n\n

The Mismatch and the Missing Link<\/strong><\/h2>\n\n\n\n

If you’re wondering how to identify business opportunities, Drucker states that economic realities that defy long-held assumptions are powerful indicators of innovation opportunities.<\/strong> For instance, when increasing demand for a product<\/a> fails to translate into higher profits, it signals a disconnect between conventional wisdom and market forces. Mismatches between assumptions and reality often stem from deeply ingrained industry practices that have gone unchallenged for many years. Such discrepancies create openings for innovators to disrupt the status quo by introducing more effective practices. However, Drucker emphasizes that to successfully capitalize on these opportunities requires that solutions be supported by readily available technology to increase their ease of adoption.<\/p>\n\n\n\n

(Shortform note: To recognize and overturn erroneous assumptions in search of Drucker\u2019s potential innovations is hard because it requires diving into the complexities of the market and questioning many of your accepted beliefs. In Freakonomics<\/em><\/a>, Steven D. Levitt and Stephen J. Dubner assert that many cherished beliefs aren\u2019t supported by data,<\/a> but instead are reinforced by anecdotal evidence, making them seem more reliable than they are. Furthermore, those beliefs are often propagated by \u201cexperts,\u201d who, despite their seeming authority, are just as misled by assumptions as the rest of us. Levitt and Dubner write that to accurately understand the world, you have to fight your own assumptions with rigorous data analysis.)<\/p>\n\n\n\n

Another avenue for innovation stems from the disconnect between how a business values its product and the actual values that drive its customers.<\/strong> Drucker points out that a product\u2019s users may be seeking to fulfill entirely different needs than those envisioned by its creators. Savvy innovators will reframe their question from “What is our product?” to “What do people need <\/em>from our product?” Pricing and positioning your products in the market based on what the customer wants to buy, rather than what the manufacturer wants to sell, unlocks a way to bridge this difference in values and create an entirely new market for a product.<\/p>\n\n\n\n

(Shortform note: The innovators who spot this particular mismatch are more likely to be the salespeople on the front line rather than the business managers Drucker is writing for. In The Little Red Book of Selling<\/em><\/a>, Jeffrey Gitomer advises sales representatives to understand why <\/em>people buy their product<\/a> so they can capitalize on specific customer desires. The reasons that Gitomer lists behind many customer decisions include trust in the sales rep, a certain value in the product or service they\u2019re buying, and things that distinguish a company from its competitors. Identifying the specific reasons why some salespeople are more successful than others can help managers identify innovations they can make to the overall business line.)<\/p>\n\n\n\n

Opportunities in Bottlenecks<\/h3>\n\n\n\n

The final productive \u201cmismatches\u201d Drucker addresses are inefficiencies in established industrial processes that can serve as grounds for innovation.<\/strong> When a particular step in an industrial chain acts as a bottleneck that disrupts the flow of a common process, it signals a need for improvement via innovation. These process \u201cmissing links\u201d are often widely acknowledged within an industry, but have nevertheless gone unaddressed. Resolving such issues may require new fields of research or technological inventions, but by methodically analyzing industrial processes and pinpointing areas of friction, a business can introduce improvements that streamline operations and unlock higher levels of productivity.<\/p>\n\n\n\n

(Shortform note: Innovations to resolve Drucker\u2019s \u201cprocess mismatches\u201d may be organizational rather than technical. In The Goal<\/em><\/a>, Eliyahu M. Goldratt goes into detail about bottlenecks in production and how to fix them<\/a>. While some issues may point to mechanical inefficiency, other reasons for a process mismatch may be endemic to a workflow\u2019s design, how many staff it needs, or how long a piece of equipment can run. Goldratt\u2019s solutions\u2014and targets for innovation<\/a>\u2014include inventing ways to redirect workflow around the bottleneck, reorganizing production teams and staffing around what the bottleneck requires, and making changes to the production process so that work arrives at the bottleneck no faster than it can handle.)<\/p>\n","protected":false},"excerpt":{"rendered":"

How can discrepancies open up opportunities for innovation? How can you take advantage of a bottleneck in the market? The lesson learned from successes and failures is that opportunities to innovate can be found in unexpected places. In particular, Peter F. Drucker emphasizes mismatches in economic assumptions, customer value perceptions, and inefficient industrial processes as fertile ground for innovators. To find out how to identify business opportunities in these situations, keep reading.<\/p>\n","protected":false},"author":14,"featured_media":131575,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,79],"tags":[1606],"class_list":["post-131493","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-entrepreneurship","tag-innovation-and-entrepreneurship","","tg-column-two"],"yoast_head":"\nHow to Identify Business Opportunities in Unexpected Places - Shortform Books<\/title>\n<meta name=\"description\" content=\"Opportunities may lie where you're not even looking. 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