Identifying the next big thing is often treated as an exercise in analyzing trends. But that's misleading. By the time a trend is established, any opportunities it presents have probably been captured by competitors. And although a company may need to reflect trends in its business plans, that may mean catching up with rivals rather than gaining a competitive edge. To take advantage of emerging trends, companies must identify them when they are embryonic--not purely speculative, but not yet named or widely known. At that stage the signs will be merely anomalies: weak signals that are in some way surprising but not entirely clear in scope or import. Most anomalies don't become meaningful trends, of course. But some do--and the businesses that identify and interpret them early will steal a march on the competition. The authors present a process for spotting anomalies that have the potential to drive a business, but the process isn't mechanical: Anomaly-driven strategy requires being open to unexpected ideas that may overturn long-held assumptions. Only if you are willing to look at your business from the outside in, question your existing models, and embrace ambiguity will you be able to identify the diamonds hiding in the data.

New research shows that market leadership is increasingly temporary. Just 17% of companies are able to significantly outperform their industry average for five years. The ones that do continually find new sources of competitive advantage by reinventing their businesses and adapting to evolving market conditions. Their example offers lessons for leadership teams trying to fight the relentless pull to the mean.

Considering the increasing pace of technological change and volatility in many industries, the need for corporate transformation is rising. Unfortunately, the chance of successfully achieving it is falling.