Will megatrends influence your go-to-market strategy?

I’ve been through some material on Go-to-market strategies lately, for a specific project I’m working on. One of the most interesting books I’ve been through is I’ve been through some material on Go-to-market strategies lately, for a specific project I’m working on. One of the most interesting books I’ve been through is
'Go To Market Strategy: Advanced Techniques and Tools for Selling More Products to More Customers More Profitably' by Lawrence Friedman. In it, he explains different steps to target the right markets and choosing the right (integrated) channel, and provides a very handy ’90-days’ roadmap for determining a new channel model.

But the most useful part for me was the way he maps channel go-to-market models. In a simplistic form, this gives for instance these 2 models:

The beauty of this simplification is that you can quickly model alternative routes-to-market (by playing around with the dots), and in a way assess their complexity and feasibility in the same graphic.

I’ve tried to apply this on my company’s business and found plenty of ways to go much deeper, by both expanding the ‘Sales Cycle’ elements on the Y axis to, for instance, key influencers; and by extending the list of alternative players on the vertical axis.

Each industry, and even each company, would have its own list of potential players in their go-to-market model. However, it might be useful to cross-check this with the findings of the Megatrend exercise I talked about on this blog, or make the impact on the go-to-market strategy a key discussion point in the Megatrend Think Tanks (see previous posts).

It might be worthwhile to input Crowdsourcing, for instance, or an online, Amazon-style affiliate program (which in effect is an example of crowdselling). Or, if you’re a Health Care company, it would make sense to input ‘governments’ in your model, since if the trend toward the ‘market state’ continues to amplify, it might well be that you’ll have to partner with governments in order to go-to-market, in a much more sophisticated way than what currently might be the case.

Friedman’s model definitely provides some interesting perspectives once you start playing with it.

The power shift to the east... should the West fear?

No doubt the shift in geopolitical balance in favor of the East -and especially China- will be a major trend in the coming years. But what exactly does this mean? Will we be 'invaded' by Chinese people? Will they impose a Chinese way of living on the West? Might sound ridiculous, but even people in my immediate environment express this type of fear.

This fear probably comes from the fact that basically we know very little from China, its culture and its mentality. At the London TED conference last year, economist Martin Jacques sheds his light on what makes China, and the Chinese, so different. According to him, it has to do with the unique way with which they look at their 'nation' (a notion which has a completely different meaning to them).

This is a truly enlightening presentation. My key takeaway is that the biggest risk we are facing, especially in Europe, is the fear itself, and the ignorance that causes it...

The business of Crowdsourcing

Ever since I started studying the impact of megatrends on corporate strategy, two of these trends have been stirring my mind as being the most intriguing and perhaps the most impactful: the Market State and the Global Grid.

Thinking further about the latter one (in its digital form), and its impact on how ‘work’ (in an structural form) gets organized, one quickly gets to the notion of ‘crowdsourcing’.

This term, launched by former Wired editor Jeff Howe, refers to the practice where specific tasks are being performed by an anonymous ‘mass’ of humans, and with a specific goal in mind.

To know a bit more about the subject –or rather, to get more concrete examples of crowdsourcing as a practice and as a business, I bought Jeff’s book ‘Crowdsourcing’ from 2008. My expectations were low given the 3 star ranking on Amazon UK (on 3 reviews, it has to be said).

The book has a structure that has become rather common lately: a thorough theoretical introduction to the subject, followed by a lengthy analysis of concrete examples. Nothing wrong with that, it’s for the examples that I bought the book in the first place, and I always welcome a little theory behind the bones.

The theory is without any doubt interesting. Through a short ‘history of crowdsourcing’ (before it was named like that, humanity already practiced it), Jeff somewhere concludes that an ‘enterprise’ way of organizing work isn’t necessarily the most efficient way. A thought worth deepening, which Jeff unfortunately doesn’t do in the book.

The most revealing part of the theory, however, lies in the areas in which crowds can be more performing or efficient than current organizations:

1. Making predictions – bizarrely, but statistically correct, the opinion of crowds seem to be much more accurate than any expert will ever be –under certain conditions that is. This conclusion basically refers to Surowiecki’s ‘The Wisdom of Crowds: Why the Many Are Smarter Than the Few
   ’;
2. Solving problems – dependent on the way the ‘problem solving’ gets organized, better solutions will often come from the anonymous crowd, even more so if it is gets access to the solutions previously submitted, and are permitted to build on top of these. Strong case on point: Linux, but there’s plenty more);
3. Brainstorming and designing things: the core idea here is that you let potential buyers design the products one will produce, but it entails many more forms of business innovation. Case in point: T-shirt e-Tailer Threadless, who lets customers design the t-shirts, vote on the best designs, produces a certain amount of them (which they can quite accurately predict through a ‘I would buy’ button next to the voting button) and sells them to the same audience. Brilliant !
4. Funding: crowdsourcing essentially is about using an excess of time and knowledge resources from the online community. This concept, hence, can be applied to something more tangible as well, such as money. I personally branded this trend as ‘get rid of the middle man’: it can be applied to such things as money lending (get rid of the banks) or music production (get rid of the music labels). Or even TV (get rid of the channels), which Google is working hard on.

Each of these possibilities, and even more so in combination with each other, offer plenty of ways for existing businesses to benefit from and new businesses to emerge. Regardless of its shortcomings (a very tedious history of the organization of work, and somehow a lack of current -2011- examples), the book excels in opening the mind on what will be possible through crowdsourcing in the future.

There’s undoubtedly plenty of excellent case-studies of how companies have improved or innovated their business model using crowdsourcing. One that came into my mind when reading the book: the Lonely Planet in effect always relied on crowdsourcing in the past, enhancing the information in their travel guides with feedback received from travelers using the guide. But going online and creating a travel community –even if it threatened their core product, the book- Lonely Planet was able to unleash a whole set of new services, and produce their core service more efficiently.

My eyes and mind are wide open for other examples…

How high performing companies beat growth cycles and stay on top

I've been watching this video interview with the two authors of Jumping the S-Curve: How to Beat the Growth Cycle, Get on Top, and Stay There with great interest.

I won't explain what this S-curve is about, in the video they do it much better than I could, but I was quite struck by their comment of how high performing companies are not market-led or even customer-led, but 'market insight'-led. It's the market insights, in a way the certainties about the future and the capabilities to adapt to this future, that make these companies stay on top.

As the CEO of Amazon has told them: you need to base you strategy on what you know for sure will happen in ten years from now. The risk that many companies face now, being too much focused on the short-term fixing of the consequences of the past crisis, is to be unprepared for the next thing coming.

It certainly strengthens my conviction that looking at megatrends within a company is not an option, but an imperative...



Haven't read the book yet, but it's certainly included in my short-list for the coming months...

Which global trends do leaders perceive as over- or underestimated

 Interesting survey in the latest 'Global Risk' report from the World Economic Forum:

Outlook on the Global Agenda 2011
 
The survey was asking 560 thought leaders accross the world on whether these trends will have an impact in the next 12-18 months, and whether this impact was either over or underestimated.

The result is quite striking, in that sustainability and climate change is seen as overestimated, but more societal trends like income inequality and the growth of youth population were seen as underestimated.

How megatrends influence and affect each other

A challenge...

I'm investigating ways of showing how megatrends influence each-other (as a driver, an inhibitor, or as a consequence from one another).

As you might remember from previous blog posts, I have been using the Cayra software previously (which you can download for free on cnet), with this type of result:

Nice indeed, but it hardly shows HOW the trends are interrelated, and to be fair the tool is a but harsh to use... loads of 'trial and errors' are needed before obtaining a decent picture, at least if you have as many variables as I have with the 24 megatrends I currently cover.


One reader (thanks, Adrew) suggested a matrix with the trends both on the vertical and horizontal axis. I tried it out:

 There's something in this, picturally it is much stronger than the Cayra tool, but again it is very hard to show HOW the trends inter-relate without having to use text... Perhaps with color coding (there's already some trial in the example above, the orange cells show a negative effect), and adding a meaning to the vertical vs horizontal reading...

On the other hand the chart shouldn't become too heavy or unreadable...

...as I said, this is a challenge... anyone with any bright idea?

How global talent shortage will affect long-term economic growth

The World Economic Forum just released a thorough study of the global talent shortage. The report examins the sources of this shortage, projects its impact on economic growth and makes a case of how to deal with it. Pretty interesting material which shows the challenges Western governments are facing and where they should invest in order to remain competitive.

Click here for the full report: Global Talent Risks Report 2011

Major facts:

• To sustain economic growth, by 2030 the United States will need to add more than 25 million workers and Europe will need to add more than 24 million employees.
• There are an estimated 214 million international migrants worldwide. Collectively, they would make up the world’s fifth-largest nation.
• Migration is not only a South-to-North phenomenon; in fact, 40% of the world’s migrants move from one developing country to another.
• Foreign nationals are authors of the majority of patent applications filed by many US companies: 65% at Merck and 64% at GE and 60% at Cisco.
• Foreign-born workers with university or equivalent qualifications make up just 2% of the European labour market, compared with 4.5% in the United States, 8% in Australia and nearly 10% in Canada.
• With 45 million new entrants in the global job market annually – most of them young – 300 million new jobs will be needed between now and 2015 to keeppace with the growth in the labour force.
• In North and West Africa, more than one-quarter of the population is under age 15 and unemployment rates for young people exceed 30%.
• Employability will continue to be a huge problem worldwide. Because of the uneven quality of education systems, only 25% of Indian and 20% of Russian professionals are currently considered employable by multinationals.
• Compared to today, in 2050, most G7 and all BRIC countries will have more than doubled age 65 and older dependency ratios, and all except India will have more aged societies than today’s most aged society (Japan).
• Even China faces long-term talent shortages. The number of those aged 60 and older is expanding rapidly, already forming 12.5% of the nation’spopulation. The country’s one-child policy and its drop in birth rates means that by 2050 the 10 workers now supporting each senior citizen will fall to 2.5.
• Eighty-nine per cent of women who voluntarily leave their jobs — for example to raise a child — want to go back to work but only 40% have been able to find full-time, mainstream jobs. 

 Major charts:

China and India to become biggest economies by 2050

According to a study just released by Price Waterhouse Coopers, China and India will become the two biggest economies by 2050. This is no different in comparison to their previous study from 2006, except that the global recession of the past two years have accelerated the pace with which the emerging economies are catching up with the Western economies. According to PWC, by 2050 there will only be two EUropean countries left in the top 10.

(PWC:) "This changing world order poses both challenges and opportunities for businesses in the current advanced economies. On the one hand, competition from emerging market multinationals will increase steadily over time and the latter will move up the value chain in manufacturing and some services (including financial services given the weakness of the Western banking system after the crisis).

At the same time, rapid growth in consumer markets in the major emerging economies associated with a fast growing middle class will provide great new opportunities for Western companies that can establish themselves in these markets. These will be highly competitive, so this is not an easy option – it requires long term investment – but without it Western companies will increasingly be playing in the slow lane of history if they continue to focus on markets in North America and Western Europe."

Click here for full access to the report.

Looking for examples of how megatrends affect companies

I’m looking for examples of how companies are benefiting from, or being threatened by megatrends. By Megatrends I mean longer term, current or upcoming shifts that are fundamentally changing society, demographics, geopolitics, technology, consumer behavior, etc.

As the examples I gathered beneath show, there are multiple ways megatrends can affect companies: some have been blind to how megatrend affect their business, and are suffering from that blindness (GM’s Hummer, Coca Cola), some are turning them into new opportunities (Bratz, Prosper, Tata), and others have turned them into appealing corporate messages (Siemens).

I’m looking for more examples in order to strengthen my argument of using megatrends in corporate strategy.

In a way, this question is testing what is possible with crowdsourcing as well. Crowdsourcing being one of the trends I look into, this question in itself might generate some interesting research, which I’ll share through this blog as well, of course.

…the floor is yours…