An opportunity doesn’t knock at the door and announce itself. Opportunities need to be recognized.

Managers have to be skilled in searching for strategic opportunities, those that can contribute to the continuity and long-term success of their enterprise. These strategic opportunities have no existence until the management group identifies them as such.

Some strategic opportunities have to be constructed by the management group rather than discovered. Managers have to be skilled in market foresight. Managers have to anticipate what customers might want ahead of the customers’ awareness of these desires. Managers have to anticipate how emerging technology can influence the future of their industry. The ensuing management dialogue creates the strategic opportunity.

The identification of strategic opportunities is analogous to the story of three umpires discussing their role in the game of baseball.

• The first umpire says, " When the pitcher pitches there are strikes and there are balls, and I call them as they are."
• The second umpire says, "When the pitcher pitches there are strikes and there are balls, and I call them as I see them."
• The third umpire says, "When the pitcher pitches there are strikes and there are balls, but they are nothing until I call them."

Leaders in the game of business behave like the first umpire when they make no effort to look for strategic opportunities in the mistaken belief that opportunities are something tangible waiting to be utilized.

Leaders in the game of business behave like the second umpire when they make an effort to look for strategic opportunities in the correct belief that opportunities can be perceived and recognized. A managerial search leads to the discovery of strategic opportunities.

Leaders in the game of business behave like the third umpire when they go beyond the effort to look for strategic opportunities in the correct belief that opportunities can be constructed by a group of managers. This managerial dialogue leads to the creation of strategic opportunities.

Managerial search and managerial dialogue can proceed hand-in-hand. The identification of strategic opportunities should be a team effort, wherein the whole group reviews opportunities perceived by members of the team. The sequence can also move from dialogue to discovery. Discussions of such topics as "Our Strategy for the Future" and "Building on Our Strengths" can focus the search for and recognition of strategic opportunities.

Look where the organization does its best work. Many authors view strategic change as a process of small incremental steps, taking advantage of opportunities and situations as they occur. These opportunities arise when some sectors of the organization perform in a far superior manner than the routine performance of the majority of the organization. Management should ask itself "How can we generalize from these successful variations to apply them more broadly?"

• Grass-roots initiatives can be a source of strategic opportunities.

Look at what the organization does best. Many authors recommend competing on the basis of core competencies. Management should have a clear understanding of and agreement on the organization’s key success factors. A strategic opportunity can be discovered by considering how to utilize an organization’s strength to become outstanding, the best in its class.

• Strong capabilities can be a source of strategic opportunities.

Look at the culture of the organization. Organization culture generally refers to shared values and common group norms of behavior. Many authors believe that the culture of an organization can be a determining factor in its long-term success and continuity. Management needs to know to what extent there is organization-wide consensus on organization values, or sub-cultural differences, or fragmentation of beliefs. Reinforcing and empowering those sub-cultures with the most positive attitudes toward the organization can elicit a strategic opportunity.

• Committed groups and sub-groups can be a source of strategic opportunities.

Evaluate your customers. Identify those customers that have the most favorable opinions of the organization. Management should ask itself "What are we doing for those customers who think most highly of us? How can we offer the same kind of customized products or services to more of our customers?" Similarly, the customers with the least favorable opinions of the organization should be identified. The management dialogue should focus on rethinking strategic direction so as to prevent customers with common criticisms from moving elsewhere.

• Customer perspectives on the organization can be utilized for building a strategically responsive organization.

Evaluate your competition. Management should ask itself "Have new competitors entered the marketplace to compete for our products and services? Are our competitors offering our customers better value for their money? Do our competitors demonstrate stronger capabilities in areas of importance to our customers?" The management dialogue should focus on understanding the strategic thrust of their toughest competitors.

• Comparison with competitors can lead to suggestions of profitable business strategies.

Strategies that are designed for the future are quite distinct from strategies intended to improve the present. Customers, channels of distribution, competitors, technology will all have changed in 5 to 10 years from now. To secure its future, management cannot simply search to discover present-oriented strategic opportunities. Management has to become the author and architect of its strategies for the future. The preparation for the future can occur at three inter-related levels.

1. Strategies for the future can deal with product/service innovations. Management needs to anticipate what customers might want or need ahead of the customer’s awareness of these desires. This requires the development of skill in market foresight. In addition management needs to keep up to date with the latest developments in appropriate technologies.
2. Strategies for the future can deal with business design. The insights regarding customer value and competitor positioning can be utilized for redesigning the whole organization to better serve its customers. The road to profit requires a comprehensive strategic outlook involving building capabilities throughout the organization. Product/service innovations should be driven within the context of business redesign strategies.
3. Strategies for the future can deal with industry transformation. Business redesign strategies should be driven within the context of where the industry as a whole is heading.

New industries are arising and old industries are being substantially reinvented. The global marketplace coupled with the expansion of electronic information and communication technologies have created new design concepts such as virtual organizations and cooperation with competitors.

• The strategic opportunity to be created relates to how to become and remain a key player in shaping the future structure of the industry.