Throughout history, industry expertise has been a fundamental asset that distinguishes exceptional leaders from their counterparts. It has provided leaders with credibility, informed decision-making capabilities, and influence. This continues to be true today.
However, in a world of shifting horizons and blurring boundaries between industries, leaders who limit their knowledge and insights solely to their own sector are becoming less relevant and may miss out on valuable opportunities for innovation and growth.
Don’t be the frog in the well
Are you familiar with the fable of the frog in the well? The story, attributed to Chinese philosopher Zhuang Zi, goes:
Once upon a time, there was a frog that lived at the bottom of a deep well. The well was the frog’s entire world, to the extent that the frog believed nothing existed beyond its narrow surroundings. The frog was content with its limited view and believed it was the most knowledgeable and important creature in existence.
One day, a frog from a nearby pond hopped into the well and started a conversation with the frog in the well. The newcomer talked about the wonders of the outside world and the experiences it had encountered. The frog in the well, however, dismissed these stories, thinking they were nothing but fantasies or exaggerations.
As the conversation continued, the frog from the pond began to realize the closed-mindedness of the frog in the well. It tried to convince the frog of the greater world outside, urging it to explore and broaden its horizons. But the frog in the well stubbornly clung to its limited perspective, insisting that nothing mattered beyond its familiar well.
Eventually, the frog from the pond left the well, saddened that the frog inside was unwilling to learn and grow. It knew the frog in the well would never experience the wonders and beauty of the world beyond its limited viewpoint.
The story of the frog in the well, while exaggerated, is a lesson of caution against keeping your focus limited to the boundaries of your industry.
Why sector myopia happens (and why you must avoid it)
Industries emerged when companies realized that by pooling resources, sharing infrastructure, and achieving economies of scale and scope, they could produce goods or deliver services more efficiently and cost-effectively.
Companies that could specialize in meeting industry-specific customer needs focused their efforts, developed expertise, and differentiated themselves in the market. Moreover, regulatory frameworks and legal factors governed specific sectors, creating conditions for industry formation and growth. The lines between industries have offered myriad benefits, but also (as exemplified today in some industries like healthcare and financial services) sluggishness and inflexibility.
One chief strategy officer we spoke to described “sector myopia” as a condition in which in-depth industry awareness can cause a lack of imagination, intellectual insights, and foresight for what’s coming next. The risk of sector myopia is high for many leaders who spend their days entrenched in organizational planning discussions, industry conferences, and market insight reports formulated for their sectors. This tunnel vision can prevent them from seeing opportunities and potential threats from beyond their immediate industry.
Leading strategy thinker Rita McGrath warns us that “snow melts from the edges.” Disruptive change most often comes not from deep inside your industry, but from outsiders experimenting and solving customer problems on the edge. Trends hit different industries at different times. For example, media was one of the first to go digital. Beyond that, it’s fairly safe to say that the lines separating industries are not going to be the same 10 or 20 years from now as they are today. On the Outthinkers podcast, Miklos Dietz, senior partner at McKinsey & Co., shared that we are moving from 88 sectors down to 12 large ecosystems. If you’re only talking to people in your industry, you increase your risk of being blindsided by the next wave of transformation.
Successful leaders in today’s ever-changing world need what David Epstein describes in his book Range. Deep industry knowledge was useful when the rules of the game were well-established. Now, with disruption ever present and the rules constantly changing, leaders need a broad range of skills and ideas, often outside their industry, that allow them to adapt.
Fortunately, there are some things you can do to prevent getting stuck in sector myopia.
Avoiding the industry trap
In the 1800s, industrialist Henry Ford, businessman Harvey Firestone, inventor Thomas Edison, and writer and naturalist John Burroughs embarked together on a series of camping trips. These gatherings enabled them to share ideas through fireside chats and hash out solutions to the issues they were facing. “Only at camp, removed from the demands and pressures of daily life, could great men discern the greater good,” explains the article. Their “cross-industry” camping group offers a glimpse of what can help you to avoid sector myopia.
Avoiding sector myopia requires a step back—outside the well—to get the full picture of the surroundings of which your industry makes up a small part. Even more important than this is learning the language of other industries. At Outthinker, we believe that emerging concepts and trends (in technology, business, and social movements) start first with the words and language that describe the concept. A new vocabulary is introduced and, if the new language is useful and it helps the community solve a problem, the narrative will begin to spread more quickly.
For example, Apple is not calling its new headset a “headset” but a “spatial computer”. The word computer connects it to something familiar. It makes us think we might be able to do the things we do with computers with this new device—it’s not just for fun and games but might help us to work. “Spatial” invites us to imagine the new spaces where we might take computing.
If you’re having trouble solving a problem, you might simply lack the language that would present the right solution. Learning new vocabulary outside your industry can open the door to creative new ideas.
You can do this by:
- Reading publications outside your industry: Every week, whether it’s online or out in the world, select a magazine or website that’s completely different from what you would normally read. Read at least 10 pages to get an idea of the language that’s being used in that industry. That’s it. The vocabulary will add to your reservoir and may (or may not) surprise you by coinciding with something close to your industry.
- Attending a conference that seems to have nothing to do with your industry: As a keynote speaker, I have the blessing of traveling to speak at conferences in what seem like totally unrelated industries—food and agriculture, education, financial services, and many more. When I compare them side by side, it’s clear that many of our challenges are universal and there are more commonalities and opportunities for cross-industry problem solving than we might think.
- Joining a cross-industry peer network: A cross-industry peer network can prevent blind spots and expose you to trends, language, and ideas from your own industry and beyond. At one of our Outthinker Networks events, a member from one of the leading banks learned that she shared many common challenges with a member from one of New York’s leading museums.
Step back from your industry and you might be surprised at what you find.