"Surprise"

December 7, 1941

Nothing frustrates executives I speak with more than a crisis caused by surprise: a new competitor product or unexpected price cut, unexpected loss of a key bid or long-held account, or new technologies or shifts in buyer behavior that obsolete current offerings. And heads roll when these cause a miss in quarterly earnings or, worse, bankruptcy.

The question that always arises is how could we have avoided surprise?

Lack of knowledge is not the problem. “We now live in a world where knowledge transfer and information exchange are tremendously efficient, and where there are numerous organizations in the business of collecting and transferring best practices. So, there are fewer and smaller differences in what firms know than in their ability to act on that knowledge.”*

Said another way, surprise rarely occurs due to a lack of signals. Information on the Toyota Production System was available to the US auto industry for decades, and traditional retailers certainly had time to absorb intelligence on amazon.com’s business model well in advance of having to declare bankruptcy. In the military sphere, “an analysis of surprise attacks suggests that the intelligence community seldom fails to anticipate them owing to a lack of relevant information.” And a US Congressional Subcommittee that examined several critical US political crises pointed out that “in no case had lack of data been a major factor in the failure to anticipate the crisis.”**

Take Pearl Harbor – why did the US navy fail to detect anytime in advance the movement the most powerful fleet in history? It was not as if Japan’s blue water fleet was a surprise – in 1905 it destroyed the Russian Pacific fleet. Nor were Japan’s expansionist intentions a secret – it invaded Manchuria in 1931. And it’s not as if the US Pacific Fleet wasn't concerned about the Imperial Japanese Navy: it knew it was the only real threat to those intentions. Finally, beginning in early in 1941, there was a slew of signals that the Japanese navy was targeting Pearl Harbor.

Given this, “intelligence officers could perhaps have foreseen the attack if the US, years before, had…flown regular aerial reconnaissance of the Japanese navy, put intercept units aboard ships sailing close to Japan…or recruited a network of marine observers to report on ship movements.”***

Did the US Navy create its own surprise?

Next: Avoiding "Surprises"

*Pfeffer, Jeffrey and Robert Sutton, The Knowing-Doing Gap, Harvard Business School Press, 2000
**Kam, Ephraim, Surprise Attack, Harvard University Press, 1988
***Kahn, David, "The Intelligence Failure of Pearl Harbor, Foreign Affairs, 70, no. 5 (Winter 1991/1992)