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:

Strategic Intelligence doesn't necessarily require budget

Frederic De Meyer, Strategic Marketing, Cisco Europe (fdemeyer@cisco.com)

(to avoid any confusion: the experience I share with you in this article is one of a Market Intelligence Manager in a multinational selling Network Technology products, so this article has no commercial purposes whatsoever)

I recently had the opportunity to do a presentation for the Chambers of Commerce of Western Flanders. Given the audience –international Sales Directors of Small and Medium businesses of the West Flanders region- I didn’t give the classical speech showing all the flashy and sophisticated thing we do in the Market Intelligence department at Cisco. With all respect, I doubt that any of the persons in the room had any budget for Market Intelligence activities at all, let alone for Marketing.

So I had to give my message a special twist in order to be relevant to them, and I ended up giving 2 concrete examples of strategic research anyone can perform without any budget and without too much time investment. As a matter of fact, I came to the conclusion that my team has developed quite a bit of this type of costless intelligence over the recent year.

Obviously, our ’intelligence’ budget has been reduced during the crisis (as with many of yours, I suppose), but more importantly it is the fact that my company is getting into so many new and untapped areas, for which virtually no relevant data or market analysis exists, that made us think about new, unprecedented ways of looking at our market potential.

Don’t get me wrong, there’s nothing revolutionary about it, it’s just a matter of using the information that you already have, or can obtain for free, and combining it in order to generate meaningful conclusions.

An example:

A year ago a newly appointed manager of a new division in Cisco –I won’t mention which one for the sake of making this case relevant to more people- asked me in which European countries to invest first in order to maximize his success. The challenge lies in the fact that he had to cover the entire EMEA region with just 5 people. As you will understand, prioritizing the workload on the most promising countries became quite crucial to him.

With half a day of work, and no budget at all, we were able to give him following conclusion:

This view (which is basically a ‘country benchmark’) is built on 3 parameters:

• X-axis: composite indicator of the ‘business environment’ in European countries (is there room for customers to invest ?);
• Y-axis: composite indicator of how countries have adopted a selection of previously launched new technologies;
• Bubble size: composite indicator of how important the key target industries for this technology are in the given countries.

Again, all these indicators were built on readily available sources (internal Finance; WEF reports; Eurostat reports; professional associations). Admittedly, it sometimes takes experienced knowledge dealing with those databases, but the major point here is that they are freely accessible.

This view can easily translate into which ‘go-to-market’ strategy to use in order to approach the European countries:

The conclusion was clear, the research didn’t cost us a dime, and the time-investment was altogether quite limited… We even standardized this type of analysis into a ‘gap analysis’ which we consistently perform on each of our products now.

Don’t get me wrong here: I’m not saying external analyst reports or primary surveys are obsolete. My key message here is: if you get to the core questions you need an answer to, you might find out that you don’t need primary surveys or external analysts. Nor budget…

There were other key points that I made in this speech –see hereunder.

Don’t forget this advice was given to an audience of SME’s, they would look completely different if I had to do a speech for larger companies.

Obviously I’m happy to start a conversations with you on these…

Frederic