Tip when discussing megatrends in your company

In my previous blog post I’ve explained the process of using Megatrends to find new strategic opportunities and long-term threats for your company. If you’ve read the post you’d know that there is a strong focus on having internal discussions (Think Tanks) on how megatrends impact the company and its stakeholders.

These discussions are not always easy to lead. Some groups have a tendency to discuss the trends rather than the impact of the trend, and other groups might still wonder what the need is to discuss a trend like ‘ageing population’ for instance, while working in a farming company. I’m just making this up to make a point.

Something that has helped me tremendously in ‘opening the minds’ at the start of the discussions, is the use of ‘cue cards’. These are a set of around fifty pictures, words and expressions that I hand out at ‘live’ meetings, or distribute in PDF if the meeting is virtual.

Typically what I do after introducing the trend to be discussed (through the ‘fact sheets’ I prepared and sent out prior to the meeting), is to ask people to pick out one item from the cue cards which they strongly associate with the trend.

At the start of the discussion I do a roundtable asking people which picture they have chosen, and why. This creates the level of associative thinking I need for the discussion, but also it creates a group dynamic of discussing and sharing thoughts and ideas from the start.

After this, I ask people to take a couple of minutes to write down a couple of bullet-point thoughts on the impact this trend might have, in general, or on the company. The second round-table discusses each of these points (one thought per person, per round).

Of course, this process is not infallible, but it has helped me out with difficult groups, to the point that I systematically use them now.

Hereunder is an example of these cue cards (just one set out of the seven I use). It could figure out anything, though, so you could easily build your own set of cards.

Using megatrends to discover new opportunites, prepare for new threats

We just concluded the third of our yearly Megatrends exercise. This year, I’ve followed a new approach which I developed in order to dive deeper into the consequences of each trend. To be honest, it worked far better than my expectations.

It’s a simple process, easily replicable for any company for their long-range planning cycle or even to define short-term strategic priorities. It can be the subject of a team-building activity or –like I’ve done this year- involve a broad audience within the company.

Basically there are 4 steps in the process:

  
1. Selection of trends to include

This is perhaps the hardest part, since it is very difficult to avoid being influenced by the limits of your company’s business environment. The Megatrends exercise can only realize its full potential if you look much broader than that environment. Instead of just looking for trends that have an immediate impact on your industry, one should look for deeper underlying societal, political or even psychological changes that will affect society as a whole.

For this year’s exercise I’ve selected 24 trends based on what a range of professionals, economists, futurists and consultancies define as Megatrends (McKinsey, Ernst & Young, The Copenhagen Institute for Future Studies, etc.). When cleaning the redundancies, I ended up with 24 trends that could be categorized into 6 ‘themes’:

Don’t take these for granted. This is a consensus-based list, but one could easily come up with a different set of trends, dependent on which angle you depart from (for instance, if one would have taken a psychological approach, the list would have featured trends like ‘search for meaning’, ‘feeling of solitude’, etc.).

2. Discuss trends internally in ‘Think Tanks’ meetings

The practical organization of these Think Tanks could obviously take any form possible. What I have done is set up one Think Tank per ‘theme’, and lead discussions on the trends within each theme in a 3 hour session.
More importantly, however, is who you invite in these Think Tanks. It is quite important to have people from different backgrounds, different expertise, and different interests.

Ideally a Think Tank contains of 4-5 people with a good balance between genders, levels of seniority and professional background.

TIP 1: Prepare some ‘fact sheets’ about the trends you want to cover. Send these about one week before the meeting to have people start thinking about them. These ‘Fact Sheets’ should contain some graphical ‘proof of point’ of that trend, some general introduction and 2-3 key questions which need to be addressed in the Think Tank session.

TIP 2: Use a template with the key areas you’d like to cover in the Think Tanks, take notes on this template so that everyone can see them (this will stimulate interaction and generate new ideas with the attendees.
There are plenty of other techniques you can use in order to stimulate the ideas and maximize the level of engagement of your Think Tank participants. The choice, however, will be dependent on the exact nature of the meetings and groups (I had to run mine virtually, which somewhat poses a challenge in using these techniques).
  
3. Build conclusions and recommendations.

This is my favorite part, since it’s a tremendous challenge to make sense of all the discussions you had in the think tanks. You need to make a selection from all the ideas and thoughts the discussions have generated, and you need to condense and summarize them into impactful, short messages.

Some techniques and tools have helped me out hugely with this.

One example is the use of ‘heat maps’: Most of you would probably know how to do this automatically using Excell. Basically I listed the different trends horizontally and vertically the areas of which I wanted to study the impact of the trends on (in my case: our customer segments).

I then just had to give ‘scores’ for opportunities and/or threats in order to build a summary view like this one: (dummy data)

This is obviously not rocket science, but it helped me greatly to single out the most impactful messages.
Another good practice is to map the different trends and see how they interrelate with each other. The software that I use for that is called Cayra and can be downloaded for free on CNET (http://download.cnet.com/Cayra/3000-2076_4-10777905.html ).

But ultimately you want to conclude whether or not a trend will affect your business, and whether ot not you should take action on it. The best way to do that is by segmenting the trends. This can be done, for instance, by mapping the threat and opportunity level of each trend, like hereunder.

Last but not least, I would strongly encourage you to read through a couple of books about megatrends –or read the book reviews of the books that I read on this blog.

4. Communicate, influence

Impossible to give some standard recommendation about this phase, as this is obviously dependent on how strategy is dealt with in your company. One observation nevertheless: it is worthwile to communicate the final document broadly within the company, for Sales managers to better comprehend the challenges of their customers, or for you executives to argument some strategic decisions, or for any other purpose.

What I typically do is to produce a pack with all the ‘fact sheets’ and a summary of the findings of each trends, to be distributed widely across the organization. Next to that, I typically provide an ‘executive brief’ discussing the threats, opportunities and new business ideas that the exercise has generated. This briefing document is sent only to the strategic community in my company.


The aim of this article was to show that introducing a ‘Megatrend’ exercise in your company is easy and useful. By preparing for the future now, you can ensure your company’s success for the many years to come.

I hope you found this stimulating and useful, but if this article left you with unanswered questions, feel free to contact me (fredericdemeyer@hotmail.com).

The future of... your kitchen

Funny to see how our kitchen might evolve... Researchers from Intel have designed a technology to recognize the food you put on a table, and transform the same table in a touch screen where you could search for advise on what to cook based on the ingredients you have...

Question really: is this useful enough for people to buy and use? What needs does it fulfill? How much added value does this have compared to the alternatives (what's wrong with following a cooking book)?

It's probably worth searching for other applications for this technology...

A consequence of urbanization trend: vertical farming

I currently run internal discussions around Megatrends, in order to determine their effect on my company and our customer segments. As those of you who follow this blog know (for the others: I'll post a short overview of the process later this week), I organize 'Think tank' discussions around 6 megatrend topics: (1) sustainability, (2) Socio-Demographics, (3) Geopolitcs, (4) Technology, (5) Consumers and (6) Globalization.

One of the socio-demographic megatrends we discussed is Urbanization. No doubt the amount of people living in urban areas is increasing, as does the amount of 'megacities':

This poses specific challenges of sustainability, security, transport, etc. But perhaps the biggest challenge is to keep these growing cities livable. Feeding the citizens in itself will become a challenge, as the growing city 'eats' away more and more farming land around it. The answer to this? Vertical farming...

Some people on the Think Tank laughed at the idea, but as these 2 video's from The Economist show, it is getting very real...





Of course, vertical farming is not the only technological innovation to respond to the challenges of Urbanization. We can expect a broad variety of innovations to respond to its challenges...

(book review) The Next Big thing -William Higham

The next big thing – Spotting and forecasting consumer trends for profit, William Higham

To be fair: originally I bought this book hoping to find loads of new trends affecting consumers. There are a couple indeed, but the book is more about understanding the nature of trends, where they originate from, how they grow and, perhaps more importantly, how to build a process in the company in order to assess these trends and make decisions based on them.

Perfect! I  got much more than I expected !

The book starts with a couple of examples of consumer trends, which Highman often provides with a compelling name: boundary blurring (consumers are active participants in the market), gender blurring, ‘trading up’ (H&M asking Karl Lagerfeld to make a collection, Carlsberg exclusive ‘900’ brand), ‘Come together’, etc.

Highman then develops an argument for a ‘trend marketer’ function within a company (not only responsible for trend spotting, but also decision making and implementation). The idea is appealing, and I’d certainly apply for any such job –although it’s in fact another name for 50% of what I’m doing in my current role.
The main part of the book, however, is dedicated to understanding the nature of trends:

• How they start: pretty much –a bit to my surprise- a matter of  PESTEL factors (Political, Economical; Societal; etc.). I say to my surprise, since I do think that with that the author omits the Psychological factor, though he might argue that this factor is dependent on all the other PASTEL factors. We could argue for years before getting clear with that one…;
• Sorts of trends: behavioral vs. attitudinal; micro vs macro trends; … I’m thinking of developing a classification of trends myself, though Highman gives a good basis, I do think it can do with some more granularity.;
• Where trends occur;
• How to collect trends;
• How trends spread (opinion formers; 6 degrees; etc);
• Mapping trends: Causal analysis / assistance attribute / needs attribute / passive drivers… a very good aid to assess trends!
• How to draw conclusions and decisions based on the work above: ‘trend audits’, innovation workshops and scenario planning..

Though here and there the ideas might feel a bit light (the chapter on ‘how to collect trends’, for instance, doesn’t go much further than basic research), the beauty of this book resides in the fact that all these ideas taken together, they form a pretty solid process with which companies can deal and benefit from the trend-marketer exercise.

Pretty compelling and convincing at the end.

The annex is worth mentioning: Highman explains the full process he himself has gone through (or helped with) in discovering and assessing three major consumer trends: ‘traditionalizing ‘(how people get back to more traditional ways of living); ‘come together’ (where people will increasingly look for ways to meet and share events ‘live’) and ‘the new old’ and ‘the new old’ (changing spending patterns of ageing society –well, after all not changing at all).

All in all a very enriching read.

World population trends towards 2050

Given its link to megatrends like ageing population, urbanization and the rising power of the East, it is highly important to keep an eye on the evolution of hte world population. As this very good 'videograph' from The Economist shows, the growth of world population is set to decelerate and should stabilize at around 9 billion by 2050...

Things that will disappear in the next 50 years...

When looking at megatrends it is hard not to try to imagine what their concrete consequences might be. This is good, since it gets us closer to scenario planning. However, it is evenly hard to draw a line between realistic and workable scenario's, and mere speculation. Especially since with scenario planning you need to 'think the unthinkable', otherwise you wouldn't be prepared for all imaginable futures (re-read the Black Swan if needed).

So what to think of the 'extinction timeline' as designed by Richard Watson (author of the enjoyable: Future Files: A Brief History of the Next 50 Years)?



Probably too much info in this chart, so just in a nutshell here's the most striking 'extinctions' we can expect according to him:

2014: Getting lost
2016: Retirement
2019: Libraries
2020: Copyright
2022: Blogging, Speleeng, The Maldives
2030: Keys
2033: Coins
2036: Petrol engined vehicles
2037: Glaciers
2038: Peace & Quiet
2049: Physical newspapers, Google
Beyond 2050: Uglyness, Nation States, Death

... not all completely lunatic in my humble opinion... I'm caught in the game, and would add an extra one:

by 2060: Work (as we know it).


Yes, future watching can definitely be fun !

Major Internet trends for the coming years

On Youtube you'll find an interesting bunch of video's of the Web2.0 Summit last week... You can find the interviews with CEO's from Google, Twitter, Facebook etc, as well as an interesting view of 2 of the most successful Venture Capitalists in Cilicon Valley (just search for 'Web 2.0 Summit' on Youtube and you'll get all the videos).

The one most useful for my Megatrend exercise is the speech of Mary Meeker from Morgan Stanley, who provides a very valuable overview of the major Internet trends, covering Mobile, Social Ecosystems, Advertisements etc. Some key learnings from my part:

• Tencent vs Facebook: we tend to refer to Facebook when talking about social media, but the Chinese social community site Tecens already has more users than Facebook, and is quite different in some aspects (people are virtual, for instance -and for obvious reasons);
• Smartphones will outpace PC's in 2 years from now... clearly if this happens this will ignite a complete set of innovative applications (and consumer behavior shifts);
• Not so sure I like this one: but advertisement will invade social media in the years to come (more clicks for less $$);
• Innovation don't necessarily come from new entrants any longer... incumbents like Apple, Google, Amazon, Netflix etc are showing ability to develop very disruptive business models as well...

Global forces shaping the future of business and society

As you know from my previous posts, McKinsey is performing some thorough research on global trends and how they impact business and society. In this video, senior McKinsey people discuss why and how companies should adapt to these trends... worth following up (which I'll do in this blog as well):

(From McKinsey :)

"Today’s biggest business challenge involves knowing how to respond to a world in which the frame and basis of competition are always changing. Against that backdrop, any effort to set corporate strategy must consider more than just traditional performance measures, such as a company’s core capabilities and the structure of the industry in which it competes. Managers must also gain an understanding of deep external forces and the narrower trends that they can unleash.

In a major research effort, McKinsey identified five global forces whose impact—individually and in confluence with other trends—is rewriting the list of opportunities and challenges facing global business. They include the rise of emerging markets as centers of consumerism and innovation; the imperative to improve developed-market productivity; ever-expanding global networks; the tension between rapidly rising resource consumption and sustainability; and the increasingly larger role of the state as a business regulator and partner.

In this video, the latest installment of our ongoing examination of these global forces, McKinsey experts pinpoint the effects of trends, explore their makeup, and detail the actions that companies can take to make the most of the opportunities the trends carry along with them."

How generation Y will learn...

I’m in the middle of updating the Megatrends exercise within my company, this time in a completely different way –more about this to come. One of the topics we’re deep-diving into is the impact the ‘Generation Y’, or ‘Millennials’ will have on our business.

Our business is rather B2B, but I suspect the new generation will not only leave its marks on consumer habits (for sure they will), but might also impact the way work is organized, and the way companies do business together. The table beneath gives a pretty good idea about the changes in expectations and attitude the new generation is adopting (I picked the table from the Internet, not sure about the exact source I’m afraid):

Some people commented that these chances are unlikely to happen because of the recent crisis. With regard to work, for instance, the crisis would have made the next generation go back to the ‘traditional’ views of security and lifelong employment.

This remark is a showcase of the ‘zeitgeist bias’, as discussed by Adam Gordon in his book ‘Future Savvy’ (discussed in a previous Blog post). Trends, and especially if related to generational changes, last much longer than the memory of a crisis.

No doubt the next generation will think differently, and will have different expectations of life. They will even learn differently, in that the Internet provides ways to educate oneself which were unimaginable just a few years ago. And this doesn’t account solely on the fortunate ones who got their first laptop at the age of 2. As Sugata Mitra shows through a number of experiments, the Internet profoundly increases the ability to learn in a meaningful way. It also shows that, if we can provide Internet access to an increasing amount of people globally, this might reduce the educational deficit that ‘poor’ countries have. Okay, I might sound naïve, or ideological at best, but I don’t see this as an insult ;-)

At any rate, the presentation of Sugata Mitra is worth watching, since it provides a complete new picture on the abilities of our kids:

(book review) Future Files, by Richard Watson

This book is a major achievement. More than 200 trends and predictions –most of them realistic or at least plausible, a few a bit crazy- blended in a very credible account of where our world and our society -in almost all its facets- is heading.

Okay, here and there you’ll find some wishful thinking, and some of the trends are actually happening now (so it’s not a very big achievement to predict them). Furthermore, while Richard often succeeds in changing the paradigm of certain subjects he discusses, in other you sometimes have the impression he got stuck in the current paradigm, like when he talks about the future of Travel.

Nevertheless, given the sheer amount of trends it covers, and the very enlightening account on how they tie to each other, this provides an extremely lively and interesting read.

I can’t give a full summary without just copying the book (which I’m not allowed to do, obviously). But rather, let me reflect on a number of areas and thoughts that stroke me most:

SOCIETY

Watson paints a somewhat schizophrenic picture of future society, which will in a way polarize in many ways and on the other hand become much more undiversified. Both are perhaps not so contradicting…

1) Polarization will increase, at many levels in society: between globalization and tribalism; between rich and poor (the middle class might evaporate); between the ‘ever connected’ and the ‘opted outs’, between ‘enhanced’ people (augmented reality) and biological ones,

2) ..on the other hand, given the growing level of connections between people, they will increasingly behave the same way, have the same needs etc. Even the differences between generations will fade away as young and old will live in the same virtual world.

It’s one of Watson’s mantra throughout the book (a dangerous one, since easy to interpret negatively), due to all the societal trends people are likely to become more anxious in the future, and will hence be increasingly in search for meaning (see one of my previous posts).

TECHNOLOGY

In my blog I have often stated that, for me, technology in itself is not a trend, but rather a driver or inhibitor of trends. Watson seems to agree with this: ‘…it is technology that will dictate change and will be at the forefront of any paradigm shifts in social attitude and behavior’.


The book provides an interesting account on where current developments in nanotechnology, artificial intelligence and self-replicating machines will lead us, but makes an even more interesting point when it states that a SINGULARITY will be reached when humans will not be able to predict the behavior of the machines they create. Just to stress the importance: ‘singularity’ is the term Stephen Hawkins uses to describe what happened just before the ‘Big Bang’ (in a way, what ignited the Big Bang). I can hardly imagine a more powerful word to use in this context, and indeed, when you think of it: it’s ok for the machines that we build to have emotions, to make decisions etc, just as long as we have programmed them to do so. But if they start reprogramming themselves, this could become a singularity indeed…

POLITICS

Loads of views that stroke me on that topic, but if I had to make a choice:

- ‘City States’ will re-emerge due to a pull to both the regional and the supra-national level. Being a European, living in a country that is tearing itself apart due to regional differences, I can clearly see this happening. Though I realize I might be trapped in my own paradigm here ;-)

- ‘The trend toward tribalism also means that ‘micro-trends’ might become much more important than megatrends’… if this is true (no reason it shouldn’t) it would form another reason why society might develop in many different ways, regardless of globalization and inter-connectedness…

- ‘Families with many children tend to be more conservative. In a generation or two, these children will –mathematically- in a majority, hence will bring a baggage of conservative ideas with them’… interesting thought, though one might hope that children still like to rebel against their parents… the ‘60s revisited?

- It’s probably a sidekick idea from Watson, but quite an appealing one: since Public Sector employees are paid by the government, and it’s the same government that collects the taxes on these wages, why not just make the public sector wages tax-free? It would certainly be much more efficient and save a lot of employees in the finance department…

FINANCE

Another bold statement of Watson, but one that I’ve seen in plenty of other predictions since: ‘by 2050 there will be one global currency’. This might be wishful thinking (I also see loads of advantages to that happening), but ultimately it will depend on how the trend towards ‘Tribalism’ will evolve: it is very likely that it will be stronger than the push for a global currency…

Much of this chapter is spent showing that the importance of the banks will evaporate in the future… Some of its tasks will be taken over by retailers (not only for credit cards, but also loans and investments for which Retailers can certainly provide some better –if not innovative- solutions), while others will increasingly go directly peer-to-peer, such as loans (look for eBay-like lending sites ‘Zopa’ and ‘Prosper’).

What’s for sure is that banking –and in extension the Financial Sector- is facing some major challenges which are not totally due to the recent financial crisis.

RETAIL

According to Watson, in the future there will be 3 types of shoppers (and, hence, shops):

1) For buying the essential, monthly recurrent items: no thrill efficiency shops
2) Purpose buy: people will buy through Internet or other means, but will need to watch and feel the products first, so this will stimulate the emergence of ‘brand showrooms’
3) Slow shopping (‘shopping as an end’): this will have the full thrill experience with loads of investments in customer service, extra’s etc.

…looks quite realistic to me…

On another note: when predicting consumer behavior in the future, Watson as well as other futurists I’ve read assume that future elderly people (including myself) will have the same buying patterns as the elderly today… I have serious doubts on whether this assumption will hold...

HEALTH

The most thought-provoking thought on that topic is the merger between the Banking and Pharma industries. This prediction is a logical extrapolation from the fact that our DNA material is able to predict which diseases we’ll be having in 20-50 years from now (= pharma), on which financial companies can jump to offer saving schemes to pay for treatment of those diseases xx years ahead (= insurance).

…can’t think of any counter-argument to that, it’s definitely going in that direction…

TRAVEL

There might be a couple of ‘zeitgeist’- biased views in that chapter, like the increasing number of holiday destinations that will be influenced by ‘Climate Change’ concerns, but still, this leads to some interesting scenario’s, like ‘home holidays’ (provided that 5D –I meant 5, not 3 !- will become reality) or ‘voluntourism’ (take a holiday for a purpose).

WORK

In a way I’m living the way Watson sees the future of work. Until before the crisis I was what sociologist called a ‘modern nomad’, travelling for my company 4-5 days a week, packed only with my laptop and some clean underwear. I worked from hotels till late at night, did my confcalls from the room before going to my meetings or presentations.

The crisis, and the fact that my company just developed and acquired videoconferencing systems, changed this dramatically. No travel for internal purposes allowed. The pre-crisis 2-3 conference calls a day now have increased to 5-6, and are mostly done from home, which gives me the leisure of doing my groceries in between –when the shop is empty- at the cost of staying till on the phone 9-10pm when I need to get in touch with my American peers.

Do I feel connected with my company? For sure. Am I faithful to my company? Absolutely. However, I could very well conceive that certain specific skills I have developed would be helpful to other companies (in other industries). I could offer my services to these while on holiday, in the weekends, or even take a sabbatical to see whether this might turn into a profitable business. It even gets more blurry: the Blogs that I write are for professional means, in that way that they help me to connect to other people working on similar projects and get ideas from them, but they’re done in my spare time, and on my own account.

I rarely feel ‘at work’, though (or because) I never ‘go to’ or ‘leave’ work. I work when I write my personal Blog, I work when I do groceries (I mostly do this when thinking about a specific work-related problem), but when ‘at work’ I might check the clips from Neil Young’s latest album, or order some novels to read during holiday.

This is pretty close to the ‘location-less’, ‘self-employment’ world of work that Watson is drawing, though he seems to think that this will cause anxiety and stress… To be honest, I live in this world and can witness that stress levels have diminished rather than increased, even though the amount of work I have to do is ever increasing…


As said, my comments above are merely reflections on a small number of trends discussed in this book.

One piece of advice if you read the book –which I’d strongly recommend to do: leave the book aside for a day or so after each chapter, and think about how the developments Watson discusses might impact your life. It is a highly rewarding exercise and will probably prepare you optimally for the likely future…

The future of Magazines

While some people -including myself-  like to think about the future, some others are actually building it, like these gentlemen. They actually have done a very profound analysis about the real added value of a thing as trivial as a magazine, and investigate whether this same added value could be brought through another medium.

This technological solution is certainly a response to a couple of megatrends (increasing mobility, customization, etc), but as is often the case the real adoption curve will depend on whether it serves a real need.

As far as I'm concerned, it does. I'm far from an early adopter in technology, and I'm far from buying any e-Reader to read books (my love of the smell of paper is too profound), but as far as magazines are concerned... I'm reading around 10 of them each month, but could easily imagine how I could end up reading 15 with the solution these guys are developing...

So yes, for this one I'd turn into an early adopter ;-)



Mag+ from Bonnier on Vimeo.

Faith Popcorn about adapting Brands to consumer trends

I didn’t know Faith Popcorn was still active –I’m one of those who bought her book ‘Clicking’ back in 1996 without ever reading it… Coming across a recent lecture of her at the Ideacity10 conference, I must conclude that her powerful trend watching skills hasn’t diminished a bit, and it adapted quite well to the current world.

In fact it shouldn’t come as a surprise, since she collects all kind if input on trends from thousands of people worldwide, through her website (http://www.faithpopcorn.com/). As an example: one Japanese contact pointed out a very successful small shop in Tokyo. The reason for its success lies in the fact that if a product runs out, the shopkeeper wouldn’t build new supplies. The scarcity of the goods makes customers crazy about them. This is what Faith calls the ‘short line’.

This sounds more like a smart business idea rather than a trend. It might become a trend if a substantial proportion of businesses would adopt the idea. Not likely…

Still, in her lecture Faith points out other trends which clearly are relevant and impactful:

• More informed and (hence) demanding consumers;
• Brain chips;
• Icon toppling (disbelieve and skepticism against ‘stars’ and ‘guru’s’ –though some other trends would contradict this, according to me);
• ‘You are what you share’ (your internet profile, quite an interesting one to develop indeed)

From all this she draws a compelling conclusion: successful marketing and branding nowadays is not so much about messaging and packaging, instead a company needs to get embedded into a (sub-)culture. For instance, every self-respecting creative mind would think ‘Apple’ when buying a laptop (or rather: he wouldn’t think about it at all, he wouldn’t even consider buying another brand).

Easier said than done, but it is worthwhile thinking about it when designing a marketing or branding strategy…

+160 business people assessing which trend will have biggest impact

There is an interesting debate going on on the Linkedin Group ‘Future trend’. Andreas von de Rheydt, a GM at l’Oréal, launched a discussion on ‘Which one is the SINGLE MOST important trend for you which will influence next years’.

A crucial question, to which 320 people responded so far (end of August). Rather than answering with my own vision, I took some time to go through the responses and tried to structure and segment them. After all this is some kind of a free survey, it would be a pity not to draw some conclusions out of it.

So here it goes, I took into account some 160 answers who were clear and directly answering the question:

Clearly technological developments are in most respondent’s mind. This is to be expected, though in a way it is puzzling as well. It is to be expected, since it is undeniably the most visible and impactful trend we experience. But at the same time it is puzzling, since technology (any specific one) is rarely a trend in itself. It can drive, create, bend a trend, but is it a trend in itself?

Anyhow, I’m not going into a semantic debate here. Technology is important, whatever way you look at it. And it probably came up that high in the responses to Andreas’ question since it covers so many aspects: nanotechnologies, augmented reality, social media, 3D, Cloud, Collaboration, … Again, no doubt each one of these developments will have an impact on our lives in the next decade.

The next group of trends which in between 10-15% of the answers mentioned includes:

• sustainability;
• consumer habits;
• geopolitics (shift to East);
• demographics.

No real surprises here, although I must admit that the shifts in Consumer behavior was out of my scope so far (which is why I’m currently reading the excellent ‘The Next Big Thing: Spotting and Forecasting Consumer Trends for Profit

The third group, mentioned by 3-5% of the respondents, offers a more interesting view.

I would have thought that ‘scarcity of resources’ would score much higher on the list, though one could argue that the topic is closely related to the ‘sustainability’ issue.

The ‘e-Learning’ one might be a good example of the bias in such survey, since this was mentioned by people from the education industry (so does that make it a megatrend?).Bytheway, there are other biased topics next on the list: ‘risk aversion’ and ‘cost cutting’ are very likely biased by the ‘zeitgeist’ in which we live, just after a dreadful financial and economic crisis.

But the two most intriguing topics from the third group of trends are definitely the ‘search for meaning’ and ‘increased speed/complexity’. They are interesting since they are not from a ‘material’ but rather from a psychological nature, they relate to how people perceive the world they are living in. Does that make them a megatrend? No, probably not, they are a reflection of the current times. But since these are psychological factors, they might influence ‘real’ trends in a very profound way…

Which brings me to the second reason why they are so interesting: they seem to relate in many ways to a vast number of other trends. The ‘search for meaning’ for instance relates closely to the ‘Sustainability’ trend, but can also be seen as an effect of some geopolitical and demographic trends (power shift to the East/ declining power of the West / elderly people more prone to feelings of fear/ …) and will definitely influence our consumption behavior in the future (another trend).

It’s intriguing to think about the interrelations of the trend. I’ve played around with the thought, combining the thoughts offered by the conversation on LindkedIn with some other thought from ‘professional megatrend watchers’. For the latter part I’ve selected the views of a number of people or companies (Ernst &; Young, McKinsey, IBM, CSIRO, CIFS (Copenhagen Institure for Future Studies, future watcher Richard Watson and Belgium’s top economist Geert Noels). This provides following picture:

But reflecting on my previous thought and how the psychological aspects can weight on trends, I’ve tried to put the ‘Meaning’ at the center, which provides even yet a more intriguing view:

I’m not an adept of any ‘new age’ or esoteric theory, neither am I a very religious guy, but if I’d ever write a book about megatrends and how to use them in corporate strategy (which I intend to do), I think I would use the concept of ‘Meaning’ as a red line across the book…

The view above is work in progress; feel free to leave a comment if you think I’ve missed a link or a ‘node’…

Five forces that shape the future threats and opportunities for business

For those who didn't see it yet, in the coming months McKinsey Quarterly will zoom in on the 5 global Forces it considers will have the most impact on the world's economy and -hence-businesses.

As Peter Bisson, Director at McKinsey, points out in the video introduction, these are trends that take shape very slowly, and hence might escape the attention of Business Leaders. But these are forces that undoubtedly exist, and those businesses that ignore them face the risk of discovering a whole set of well established new competitors in ten years from now. It also offers huge opportunities for those who can assess the impact the five forces will have on their industries. (Worth having an internal workshop about that !)

Those who follow my blog will know I share this opinion. What makes the McKinsey story compelling though are the way they structure the trends around the five 'forces'. Only the shifting power and behavior of consumers is missing -though one might argue that this is an effect of the 'global grid' force.

The Five Forces are mentioned below, but it's well worth watching the video introduction first:




The five forces McKinsey takes into consideration:

• The great rebalancing. The coming decade will be the first in 200 years when emerging-market countries contribute more growth than the developed ones. This growth will not only create a wave of new middle-class consumers but also drive profound innovations in product design, market infrastructure, and value chains.
• The productivity imperative. Developed-world economies will need to generate pronounced gains in productivity to power continued economic growth. The most dramatic innovations in the Western world are likely to be those that accelerate economic productivity.
• The global grid. The global economy is growing ever more connected. Complex flows of capital, goods, information, and people are creating an interlinked network that spans geographies, social groups, and economies in ways that permit large-scale interactions at any moment. This expanding grid is seeding new business models and accelerating the pace of innovation. It also makes destabilizing cycles of volatility more likely.
• Pricing the planet. A collision is shaping up among the rising demand for resources, constrained supplies, and changing social attitudes toward environmental protection. The next decade will see an increased focus on resource productivity, the emergence of substantial clean-tech industries, and regulatory initiatives.
• The market state. The often contradictory demands of driving economic growth and providing the necessary safety nets to maintain social stability have put governments under extraordinary pressure. Globalization applies additional heat: how will distinctly national entities govern in an increasingly globalized world?

'Future Files' from Richard Watson -an introduction

A few days ago I started reading 'Future Files: A Brief History of the Next 50 Years' of Richard Watson ...
 The book offers a highly compelling view of over 220 trends happening in 8 domains. Most of the predictions look perfectly realistic, albeit that Watson leaves some room for pure (fun) speculation as well...


The book unfortunately doesn't explain Watson't way of mapping all these trends (he does so on his website:
 http://www.nowandnext.com/PDF/trends_and_technology_timeline_2010.pdf ). The trend map does look a bit like a map of the London underground. Though complicated at first, it still offers some compelling reading!

As soon as I finish the book I will write a full review -as usual- but in the meantime I've been watching some of Watson's presentations on Youtube. The one beneath offers the best introduction to Wtason's work -and his way of mapping the trends. It's in 3 parts, unfortunately, but it's worth the 22 minutes.

PART I:


PART II:


PART III:

(book review) Future Savvy - Adam Gordon

This book forms a valuable addition to my quest for finding the best way to use megatrends in corporate strategy, even if it doesn’t provide any insights in any trends as such. Rather, this is a book about how to choose which prediction to take into account in your strategy, and about how to make a distinction between good, useful forecasts and loose, worthless predictions.


In his introduction, the author explains that everybody uses forecasts to take decisions , not only corporations, but also individuals (the forecasted growth of your income will help to decide which house to buy, the weather forecast to decide whether you’ll spend the weekend at the coast, etc.). Hence, being successful only depends on the selection of forecasts you base your decision on.


That’s an appealing starting point since it assumes that you can use existing forecasts to build your strategy on, rather than build your own, and secondly that choosing the right forecasts is a matter of sound judgment rather than specific skills or wisdom.


By drawing our attention to every bias and misconception that might occur in a forecast, Adam Gordon prepares us to make better judgments of which trends/forecasts to take seriously and act upon. And, as his book shows, there are plenty of considerations to take into account (I only comment on those that I was interested in or disagreed with, the book contains a lot more):

1. Categorization of forecasts

When looking at a forecast, one can better ask himself what purpose the forecaster has with the study. The important distinction is between ‘future aligning’ (are we taking the right measures to act upon a trend) and ‘future influencing’ (can we turn this trend into our profit) reports. Basically, the latter ones are about ‘lobbying’ towards a specific direction, and hence are often biased.


I’ve often experienced myself that, when confronted with the same data, people can have very different interpretations and conclusions. As Gordon rightfully points out, the interpretation often unravels which real purposes people have with the forecast.


2. Quality of the information

I work in an industry where even the size of the market is not and cannot be known accurately (I won’t go into details of why that is in this article, but if there’s interest I can develop this in a next article). So, to me, knowing the assumptions that forecasters make is more interesting than the figures they come up with. This is a point that Gordon misses in this chapter I think (that assumptions can be more revealing than the data).

But he is right in pointing out the things that can go wrong when using data in forecasts: incompleteness; taken out of context; ‘overhyped’, out of date. It’s sometimes the only data  one might have (it often happens in my professional activities), but still you should never be blind about the exact nature of the data you use.


3. Zeitgeist

This is the chapter that was most inspiring to me. A walk through the philosophers Foucault and Kuhn brings us to the concept of ‘paradigms’, patterns or structures that shape our mind’s ability to understand our environment and that are often prone to influences from our cultural belongings or the period we live in.

9/11 was in a way an example of this. While all the elements existed to predict such an attack, there was a lack of ‘paradigm’ that took into account the possibility of a globalized terrorist force that would eventually proceed with it. Hence it wasn’t ‘expected’, while it could have been –and most probably is from now on.


This is a kind of a ‘zeitgeist’-bias: we are limited by what our times consider as likely or not. No doubt none of the forecasts made hundred years ago would have considered a globalized, instantly connected world. But even closer to us: the end of the Second World War, in conjunction with an increase in technological innovations, led people to believe my generation would be spending holidays on the moon, or have robots doing all of the domestic activities for us. The oil crisis in the Seventies made all forecasts dim and gloomy. The fall of the iron wall in the 80s changed the paradigm again, which led to the 90’s believing in never-ending growth in wealth and stability.


What are the chances of us being limited in our forecasting activities? Will global warming look like a non-event fifty years from now? Will our children look back pitifully at our expectations about the ageing population, the emerging power of the emerging countries, or even the ever increasing connectedness of things?


Perhaps... There’s very few ways to know. But we should take this into account in our forecasting. And this accounts as well for all the experts in the field, which we sometimes survey in a Delphi-study in order to know more about the future. The consensus that is reached is most likely a reflection of our ‘Zeitgeist’.


4. Technology

Two chapters of the book are dedicated to drivers and inhibitors of trends. Gordon rightfully points out that it is the perceived ‘utility’ of the ultimate beneficiary of a trend, which will make it happen or not. If there’s no incremental value to something, it will not be adopted; hence it will not become a (lasting) trend.


While this is not applicable to all trends (ageing population is hardly something people can adopt or not), it is certainly applicable to one of the major drivers of new trends: technology.


Technology can create (not only drive) new trends in itself, and Gordon somehow fails to present a full scope of this –but probably this would take another book- but as he rightfully points out the availability of technology in itself is not a driver, it is the perceived utility of the technology that will.


“The future is never just about what is possible to do. It is always about the choices people and the market will make from among what we can do” (Adam Gordon).


5. System forecasting

Another interesting approach is to investigate the ‘systems’ in which trends occur. Looking at the causes and effects of all the influencing elements help s indeed to discover tipping points of trends, although Gordon states that this method doesn’t help to show drivers and inhibitors of these trends.

This systemic analysis would’ve deserved more thought –or a separate book altogether. There are probably more models to be found other than the reinforcing or balancing loops, and I’m certain there would be ways to show the drivers and inhibitors in such a systemic modeling. Food for thought.



But all in all this is a valuable reading. Gordon develops the caveats with using forecasts in a very complete and lively fashion, enabling his readers to be more critical when using them and to select the most useful ones in their own strategy.

The only weakness of the book lies in the lack of positive examples of good forecasts. Gordon excels at criticizing trend predictions and forecasts, but is very careful in developing his own…

(book review) Futurewise - Patrick Dixon

It’s probably a matter of timing. I read this book in 2010, in the third edition published in 2003. This illustrates the challenge for every future-watcher: how can one ensure to be still relevant seven years from now?

The starting point is still attractive though: Dixon segments the global change into one that will be ‘Fast, Urban and Universal’ and another that will be ‘Tribal, Radical and Ethical’. These two overarching views of the future are conflicting, but both are happening indeed –even after seven years

The problem is that Dixon uses this idea to make over 500 predictions –or expectations- which are sometimes right (‘mobile phone becomes a PC’, ‘TV on the Web’, …) but often plain wrong (‘internet will destroy traditional banking’, ‘The successful transformation of Russia into a strong, vibrant, secure country will also do much to ease reforms in China’) or obsolete (‘majority of PC screens will still use cathode ray tubes’, or his failure to predict that wages in China and India will sooner or later rise to Western standards).

The logic behind some trends is sometimes awkward at best (‘Most computers are young. Therefore the majority of big [computer] failures are around the corner. And most will hit Small and Medium sized companies hardest’ –WHY?), if not absolutely inexistent (‘expect retail chains who will increase own-brand sales from 15-20% to 30% by 2010’ … no explanation at all behind this). This gives the impression Dixon is just spitting out his gut feel on each subject that pops into his mind. This  feeling is enhanced by the fact that, except for the categorization into 6 trends, there is very little structure to be found in this book.

Nevertheless, the book has its merits:

(1) The ‘Questions to management’ at the end of each chapter are certainly worthwhile food for thought for any business leaders, since they force him to think broadly about the –often not obvious- impact of trends on his business;

(2) Grouping the 500 trends into 6 themes that are ‘emotional’ (Fast, Tribal, …) rather than ‘factual’ (as for instance: ‘political’, ‘economical’, ‘social’, …) is certainly valuable since it permits a more dynamic study of the interrelated impact of each trend on different elements of society.

(3) Dixon’s 500 expectations are sometimes wrong or obsolete, but as often right and even still relevant nowadays. For instance, when he says ‘expect news gatherers of the future to be members of the public equipped with nothing other than video phones’. He might be wrong about the ‘video phone’ but surely  the Flip camera’s and alike would make this possible (just bought my first one, wonderful tool: Flip UltraHD Camcorder, 120 Minutes (Black)
.

(4) Last but not least, many of Dixon’s thoughts would still be relevant today in that they would unleash a solid conversation about the future.

Take for instance, the finding that puberty is coming at an increasingly earlier age. According to Dixon this will drive parents to have more control over the activities of their kids. It’s worthwhile thinking further about that one, since it might drive much more changes than just monitoring Internet traffic of the kids. If this is true it would also drive the choices of living environment of the parents, their involvement in societal tasks (school) etc. In my eyes this ‘parental monitoring’ will also take the shape of a ‘partnership’ with the kids. In my immediate environment I see parents taking an increasingly active part of their puber’s life. One mother even goes to university classes with her daughter as a free student, not to control her, but just because they have the same passion for the subject.

I would’ve been ashamed at the thought when I was young. Kids now seem to take pride of it. Surely this will have an impact on the parent’s behavior (and spending patterns?) as well.

Another subject for debate is the ‘tribalism’ as one of the key shifts of the future. Dixon seems to interpret this in a limitative way, people would increasingly gather into smaller groups with a common identity. Apparently the full potential of Social Media wasn’t apparent yet at the moment Dixon wrote his book. Social media implies an ever growing size of the ‘groups’ to which we belong, driven not so much by commonalities of the group members, but rather by the way they are networked together. Same thing on the work flour: the virtualization of the Enterprise (which Dixon mentions as a trend) will make employees gather around common goals rather than around common skills or tasks.


But here lies the true value of the book: the sheer amount of ideas that it contains, even if some prove wrong, makes you think broad and deep into the trends that shape the future. All in all a worthwhile read.

(book review) Ecological Intelligence -Daniel Goleman

Sooner or later I’ll write about which Megatrends you need to take into account to sharpen your strategy, and how to structure them in order to be of maximal use to you. But before doing this I decided to spend some time reading ‘Future’-oriented books on the subject, as a cross-check to my own thoughts, and to complete my initial ideas on it.

First one on the list is ‘Ecological Intelligence’ by Daniel Goleman. Why start with this one? Well, no doubt the move towards sustainability and ‘green ‘behavior is a Megatrend that took shape in recent years, only to grow in the next decades, both for companies and individuals. But, apart from my own efforts in reducing my family’s carbon footprint, I must admit that I know very little about the subject.

So choosing an author who takes a psychological approach to the subject –after all he was also the author of Emotional Intelligence: Why it Can Matter More Than IQ
and Social Intelligence: The New Science of Human Relationships
- would make sense. And it does, but in a way that I didn’t imagine at first.

I was expecting a roundup of new ecological ideas and trends, do’s and don’ts, examples of what works and what doesn’t. Instead I read a book about just one single idea. But what an idea !

The central theme of the book is ‘Radical Transparency’. In Goleman’s ideal world, all buyers from any goods or service would be informed about the complete impact (not only ecological, but also social and human) the good has initiated, before making his choice. This knowledge would not be limited to the impact the good has when in use, but also throughout the whole ‘life cycle’, so including in the management of the raw materials, the production process, and after the product’s ‘life’.

Radical enough, but is it feasible? The latter 2/3d of Goleman’s book are spent highlighting initial efforts to obtain such a Radical Transparency, through concrete examples and discussions with business and thought leaders. The most striking example is probably ‘Goodguide’, a company that is now piloting the ability for customers to scan the barcode of products in a shop with their mobile, and have immediate access to the full Life Cycle Assessment of the product and its alternatives next to it in the shop. Surely that would change customers’ behavior, at least those that are sensible to ecology, ethics or just their personal health?

How exactly does it change buying behavior? 

Goleman provides some striking examples.

Would people who buy a bottle of red wine in New York better buy a Californian wine instead of a French one, based on the fact that the French wine has to travel further? Not really, the French wine is transported by boat, which emits much less CO2 than a truck, while the Californian wine would have to cross the whole country in a truck.

Should you buy your tomatoes locally for the same reason? Perhaps, but the seeds with which they were grown might as well come from a Chinese farm with less than human labor conditions.

Goleman provides plenty of such examples. What they tell us is that even a sound buying decision based on ecological, moral or health standards can completely miss the point if you are not aware of the full life cycle of the good. For sure this would change my own buying habits…

Why would that be beneficiary?

As the economist and Nobel Prize winner Joseph Stiglitz showed, an economy can only be efficient if there is an equal access to information. This has not happened for the last decades, where suppliers of goods had access to much more information (sometimes keeping it secret) than the buyers. ‘Radical Transparency’ would reestablish this equilibrium.

To put it more clearly: if a sufficient amount of buyers would base their buying decisions on the same ecological, social or security parameters, and be knowledgeable of the impact of the ‘life cycle’ of the goods they buy, this would force suppliers to take these into account and  adapt their behavior.

A sustainable, green, moral way of doing business cannot be imposed by government, but can only be imposed by (a sufficient amount of) buyers.

Will it make a difference?

Well obviously not every consumer would want to base their buying decision on moral or ecological arguments –price is still the major drive for most of them. But some surveys show that a little difference in price would drive a substantial amount of people towards the ‘ethical’ products. The ‘price elasticity’ of these products is not so steep after all.

As Goleman shows, a number of very promising initiatives are being taken to provide this ‘Life Cycle Assessment’ to the customers. In a way the success of the early experiments might feed itself, with a growing number of people basing their consumption patterns on this knowledge as it becomes more easily available and more easy to understand (sometimes a green or red label might do).


No doubt a trend to be tracked closely, and a book absolutely worth reading !

The world population by 2050

A fascinating view again from Hans Rowling (author of the thought provoking Global Health: An Introductory Textbook): the world's population will grow to 9 billion over the next 50 years -- and only by raising the living standards of the poorest can we check population growth. This also puts the 'Western World' in a completely new position -and gives technology another role in the future world... An interesting 10 minutes for all of you who want to understand our future:

Do megatrends create anti-trends ?

Food for thought: can Megatrends (automatically) initiate anti-trends?

The thought was launched by an Australian scientist (Kristin Alford from Bridge 8) as a response to a presentation of the ‘Commonwealth Scientific and Industrial Research Organization’ (CSIRO) on 5 megatrends they have come up with. Basically Kristin argued that each of the megatrends the CSIRO put forward would spur a counter-trend (see the examples beneath).

It provides a compelling story, since many of the ‘anti-trends’ she proposes might create a big opportunity for companies targeting a specific niche audience –remember ‘crossing the chasm’ and the ‘Blue Ocean’ strategy?

Obviously the ‘anti-trends’ don’t apply to every megatrend. The ageing society for instance is hardly something a group of people could rebel against –however hard some people try.

However, the idea applies quite well to other trends. Take the increasing ‘connectedness’ of society –through the ever increasing importance of social media, but also through the ‘internet of things’ where each object will be connected to everything else. It isn’t too far stretched to believe an increasing amount of people will ‘opt out’ of this connected world.

Which type of businesses might benefit from this anti-trend? Well, firstly the local craftsmen, but also the manufacturers of ‘old-fashioned’ quality products with no embedded technology at all.

Another example –one from the list beneath- is the ‘customization’ of products and services. Everything seems to be ‘tailor made’ nowadays. Any buyer has to deal with an increasing number of choices and options. This doesn’t apply to all products and services, of course, but it is clearly a trend everyone experiences is daily life.

It’s not unrealistic to imagine a growing amount of people will not want to have the choice between so many options, who will grow tired of having to decide on every feature and gadget. What will they go for? Products that are basic and uncomplicated. Products that are just made to fulfill the basic need.

If you recently bought a car you will know what I mean. Tata have clearly seen an opportunity in the ‘anti-trend’ by building a simple, ‘one size fits all’ car. Okay, their purpose was to build a car as cheap as possible for the Indian market, but I’m sure many European consumers are dreaming of such a ‘fuzz-less’ car as well.

KEY TAKEAWAY:

My key takeaway from the trend/anti-trend idea is not to take things for granted. When studying the impact of megatrends in your company, always think about which counter-trends they might create, and which opportunity this generates for your business.

(thanks to Tim Harper who mentioned this debate on his Blog)

Life in 2050...

Interesting series of interviews conducted by BigThink, about how the world will look like in 2050. The series contains 10 interviews, but those are the 3 that caught my attention:

1. "Faster, More Urban, More Diverse", by Richard Florida of the University of Toronto.

The changes to our urban and rural areas will reinvent our education system. Our economy will be less real estate driven, people will be more flexible, and the divisions between home and work and life will all fade away

2. "Descreet Technologies will transform cities" by Bill Mitchell from the MIT.

Cities won't look like "some sort of science-fiction fantasy," but it's likely that technological advances and information overlays will change the way we live in significant ways

3. "Everybody could be planting crops", by Glenn Roberts, owner of Anson Mills

The ethical responsibility to grow and preserve and sustain land-raised systems will survive, and local, land-raised cuisines will return and thrive.

How to assess the impact of a megatrend on your company

(Frederic De Meyer)

There are probably thousands of ways you can assess and show the impact of a megatrend on your company’s opportunities and threats. Obviously the easiest one is to have a discussion about the megatrends during a coffee-break, but chances are that no impactful action plan will result from it.

Clearly you need to have some ideas and conclusions on paper, in order to define a common view on the opportunities and threats of the megatrends within the company. Again there are many ways of doing this, but probably the simplest one is to develop ‘Heat Maps’ for each megatrend. All it requires is some internal discussions and a couple of clicks on Excel’s ‘conditional formatting’ feature. As the example beneath shows, this provides an easy-to-understand, quick overview of where the trends affect your business or your customers.

There are different viewpoints you can develop here: a company-centric or a market-centric one. In the company-centric view you can make a list of all the stakeholders of your company and assess the impact of a megatrend on each one of them. In the market-centric view, you’d look at your market segments and assess the impact of the megatrend on them. Needless to say that both lists will be different dependent on your line of activity, your company size or the geographies you serve. For instance, a B2C company might want to define ‘the market’ in terms of consumer segments rather than in terms of industries.

In the examples beneath I took the trend of water scarcity as a basis. According to the International Water Management Institute, this problem will become acute as from 2025, even in Europe –see graphic beneath. This will likely have an impact on geopolitical balances, increasing global risk and tensions. Future wars are likely to be fought over water rather than oil (this is a prediction, not a trend).








1. The impact on your company


In order to show how this exercise can be different dependent on the industry you’re in, I assessed the impact the water scarcity might have on three completely different types of companies: (1) a global ICT company, (2) a local Retailer and (3) and international Transport company. In the example beneath, green stands for opportunity, red for a threat.

You will see that the potential impact of water scarcity leads to a completely different conclusion for the three types of companies.

Important to note: the example beneath is a product of my own thinking. I can’t stress enough the importance of having a group/team discussion within the company (preferably with an external person assisting) in order to come up with a better, consensus-based view.








2. Impact on your market


Another way to look at it is to assess the impact a trend has on your (potential) customers, on your ‘market’. Hereunder I tried to assess the impact of water-scarcity on a number of industries, but obviously you’d need to adapt this to the customer segments you are serving.
And again, this view can only be finalized after in-depth internal discussions in your company, the view beneath reflects my personal view and only serves as an example.

The aim of this article is to show that there are easy ways to discuss the impact of megatrends on your company, and draw some strong and lasting conclusions from these discussions using simple techniques like ‘Heat Maps’. Putting the conclusions of the discussions in such a way makes it easy for everyone to understand and communicate, plus it makes it easy to get back to the conclusions at regular intervals (yearly) to keep the discussion alive! After all the ‘Megatrend’ exercise is a team-building exercise as well…

Adapting your strategy,vision and mission to Megatrends

Siemens is a good example of how Megatrends blend with corporate strategy and vision. As the video beneath shows, each of the business units of Siemens fit nicely as a response to (some) megatrends.

Obviously this is a story of the ‘chicken and the egg’: the business units of Siemens existed well before the trends became apparent. But nevertheless, they do a very good job at mixing their corporate vision with the big challenges the earth and human society is facing, making it a very strong and appealing story.

In my eyes any company, however small or in which industry it operates, should take this example, for following reasons:

• It sharpens the company’s vision, providing it with a long-term objective;
• It gets everyone focused on the longer term, since the ‘story’ will become so much more appealing;
• It will make employees proud of working for a company with a mission that serves a bigger purpose (and they will talk about it around them!);
• It is a very strong, visionary story to tell customers and other stakeholders.

(for those who might wonder: no, I’m not a Siemens employee)

Roadmap to using Megatrends in your company

On the request of some of you I have developed the different steps to perform a Megatrend exercise within your company a bit further. Obviously the steps shown below can be shortened or extended at will, but this is the process that I use currently.

If you're interested in running the exercise in your company, I can help (for free) on a couple of steps, like 2.1 and 2.3. The others steps are much more time consuming, though I could be of help there as well...

Anyhow I'll go deeper on a number of these steps in future posts...

Using Megatrends for strategic planning

Two years ago I introduced the concept of ‘Megatrends’ as an input to strategic planning in my company. The idea is very simple and costless, and the impact of this exercise has far exceeded my expectations. It is now a key element in discussing new strategic opportunities, as well as in ‘opening the minds’ of everyone involved in business planning, may they be in Sales, Marketing or anywhere in the company.

Why do we do it?

1. Generate new ideas for strategic, long term focus areas
   Some of the megatrends are showing shifts in market needs or usage of our products and services. Understanding these shifts now will enable the company’s sales teams in such a way as to benefit maximally from these shifts and the opportunities they offer;
   


2. Conversation starters with customers and partners
   Some of the megatrends will impact our customers’ and partners’ business in a disruptive way. Understanding this impact NOW enables us to determine the best way to respond and help our customers with the challenges they are facing, which in turn will create new business opportunities for us.
   


3. Prepare for key challenges and opportunities for the future
   Most of the trends will impact our business directly or indirectly. Some will turn to be a challenge, other concrete opportunities. Understanding this in an early phase, and building action plans around them, will ensure our success as visionary business leader.
   


4. A fantastic theme for Team discussions
   Last but not least, I experienced that many teams in my organization are using these ‘megatrends’ in order to have meaningful discussions amongst themselves. Most of the traditional strategy and planning discussions are about how much incremental business can be achieved, or where the biggest opportunities are. From feedback I receive, many teams find it a relief to discuss broader topics and trends that are not necessarily linked to their day-to-day business. In fact, it has strengthened their understanding of one another.

How to get started?

The ‘process’ (how I hate the word) is intentionally kept very simple. After all, the point is not to be accurate or complete –neither of these words apply to this exercise- but to open our eyes to the overarching trends that might be of influence to our business.

1. The first thing to do is to select a group of people within the organization that will provide input about trends they see happening, not only in their respective areas of expertise, but also in their personal life or through discussions they have with customers and partners. At this stage, there are no limits to what ideas or subjects can be proposed, so virtually any topic can be submitted. Important here is to select a group of people with a broad range of interest, throughout any level and unit in the organization.
   


2. Secondly, we determined a number of criteria for the trends, in order to make a selection of the ones we need to highlight. In our case, the criteria were:
   - is the trend disruptive ? does it change anything at all?
   - is it a lasting trend or is it an event? (typically a trend should last longer than 3 years)
   - is it new or has it started a long time ago? Is it still ‘news’?
   What we have done then is to ask a number of people to judge each of the submitted ideas on these criteria’s, through an XLS-based survey.
   


3. Based on the results of that survey –and some ‘gut-feel’ from ourselves- we then selected the top 50 trends to highlight. Again, it is important to note that at this stage any trend or topic, even far-stretched, and even if not applicable to the company’s activities, are considered.
   


4. Last step is to build a 1 slide ‘argumentation’ (a ‘fact sheet’) around each of these trends (see example below). In our case, the slide would typically include (1) proof of points and sources, (2) key messages, (3) assessment of the level of ‘disruptiveness’ of the trend and (4) assessment of its impact on our company.

How to draw conclusions from the exercise?

I think this is the most crucial aspect of the exercise, and probably the one that is mostly overlooked by anyone looking at Megatrends, for planning purposes or more in general: SEGMENTATION !

In our case, we have chosen to segment the trends on 2 axes (see below): a timeline on the X-axis (is the trend currently happening, is it starting now, or will it start somewhere in the future?) and a judgment on the impact of the trend on my company on the Y-axis.

The advantage of this segmentation is that it clearly indicates which behavior we should adopt against any of these trends:

Top left: trends have happened but we didn’t take action – too late to act;
Bottom left: trend shave happened but don’t have much impact on our company –forget about them;
Bottom middle: trends are happening but don’t have an impact – nice to know;
Bottom right: trends will happen with low impact – follow in order to see whether they might have an impact in the future;
Top right: future trends that might have an influence on our business – closely monitor;
Top middle: trends are happening now and do have an impact – do we/ should we/ could we take action?

How to make sense of all the ideas…

A nice way to maximize the impact of the megatrend exercise is to show the links between all of the trends, and ‘cluster’ them around central themes. Obviously there are thousands of way to do this, but if you use the exercise internally you will soon find that the ‘clustering’ will be around themes that are directly relevant to your business. Just as an example, this is where we got with the ‘mind mapping’ of the 50 trends we selected, using a free ‘mindmapping’ tool: