Your organization—including you, your employees, and your stakeholders—exists in a marketplace that provides both opportunities and threats.

The opportunities come in the form of your existing customers, new markets for your goods or services, and sources for your supply chain. Without the external world, its needs, and its wealth, your organization would not exist. Without a doubt, the mission of your organization specifies that the organization is striving to effect some change in the world or in your community: to feed people, or help them communicate, or entertain them.

The threats come in the form of competitors, technological and cultural disruption, government regulators, climate events, human criminals—the list is long. Threats can be positive, in the sense that they spur you to innovate and stay ahead of the pack, or they can be dangerous, and even threaten your existence.

As you drive towards sustained innovation, both opportunities and threats need to be subjects of your focus.

As an externally focused leader, you’re driven by all of the outside forces pushing against the organization. You are concerned with whether or not your customers are happy, what the toughest competitor is doing, and how the economy is performing.

Market Research and Gut Instinct Are Both Useful

Some leaders have had an almost spooky ability to focus on the market and sense what customers want even before they know they want it. Steve Jobs said, “Some people say, ‘Give customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d asked customers what they wanted, they would have told me, “A faster horse!”’ People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.”

That’s not to say that you should abandon market research, because when used correctly it’s extremely powerful. The consumer products giant Procter & Gamble—which since 1837 has consistently remained a market leader and even disruptor—uses market research both relentlessly and wisely. They began in the 1920s when the company realized that most of its customers were housewives, and in order to make them happy they had to know exactly how and why their products were being used. Under the direction of D. Paul Smelser, a Johns Hopkins University graduate with a Ph.D. in economics who to the other executives at Procter & Gamble was known as “Doc” Smelser, Procter & Gamble recruited customers and shadowed them as they did their everyday chores. The information gained through these field research studies was used to improve the company’s existing products and to inform the development of their new products.

The P&G approach is based not on conjecture or wishful thinking but on actual evidence of real-life consumer behavior. It’s gained by a keen focus on the market and what it wants. As your organization pursues innovation in all its forms, that should be a key part of your strategy.