From Trends to Business Opportunities

WHETHER YOU CALL it product development, strategic planning or sales forecasting, in the end, it comes down to the same thing: to be successful over time, businesses need people who can see the future. They don’t have to be geniuses or visionaries in the mould of Thomas Edison, Henry Ford or Bill Gates. And they certainly don’t need to come up with vacuous “vision statements” about having a passion to serve customers and be the best. What every business does need, and always will, is individuals who can see what’s coming next.

On one level that may amount to little more than functional foresight. For example, right around the holidays, planes will be overbooked, shopping will be intense, and any production services needed will be slower than usual. Base any plans around any of those factors and you won’t go far wrong.

At other levels, though, the decisions required become less operational and more strategic. Managers must foresee not just what’s around the corner, but also what lies ahead to keep the company moving in the right direction and at the appropriate speed. That means predicting where markets will grow, which services will sell, what technology will change and how money is to be made.

While hindsight is an exact science, foresight unfortunately far from it. Therefore, companies in every field will continue to launch products that fall flat, pay over the odds for acquisitions, and underfund research projects that could have led to the next big breakthrough. However, such missteps can be kept to a minimum, and successes correspondingly multiplied, if executives are trained to see the future.

There is nothing magical or mystical about this. It is simply the ability to identify trends and trace them to a logical conclusion. What it comes down to is asking a constant series of questions on different themes and applying a little-educated guesswork. And it is something everyone should make a habit of, whether they are supervising, selling, designing, inventing, cost-cutting, buying or training.

The essential aspect is to spot and examine distinct trends as a prelude to interpreting their impact on the needs or wants of target groups of people.

When mapping trends, the first step is to consider how things stand today in your business and beyond, and to determine which factors have the most influence. One recommended approach is to adopt the PESTLE model, which stands for political, economic, social, technical, legal, and environmental issues. Under each of these headings, it should always be possible to identify several short- and longer-term trends.

For instance, when thinking about politics, one could obviously say that a country’s political situation and its potential impact on policy-making and consumer behaviour is very important. In economics, the market conditions might indicate an increase or decrease in volatility. In social terms, how social media platforms evolve over time or vary from market to market impacts how information is shared. The technical arena is moving towards greater mobility and connectivity, with machine learning and AI on the horizon, presenting new opportunities and potential hazards. A country’s regulatory approach and of rule of law will factor in estimating legal exposure. On a global scale, one of the greatest environmental trends we’re facing today is global warming.

At first glance, shifts in any of these factors might seem “distant” as far as an individual business is concerned, but a closer study shows the big issues will always affect something closer to home. Just consider how the points above could raise questions for a European company operating in China.

Raising questions and proposing answers will lead to more questions, which is exactly what you want. It shows that the process of “seeing the future” is well and truly underway and that people are using their insights and intellect to look further than the end of the week.

Moving from that to predicting new trends involves elements of science and art. The scientific part may entail research and analysis of anything from historical data and industry numbers to seasonal patterns and overseas markets. The artistic or intuitive part comes in interpreting that data and seeing where it points – or potentially could point.

This is where you go beyond the obvious of that day’s headlines and look for the subtleties and clues that suggest how things might develop, given the usual likelihoods or a push in a certain direction. It is not rocket science, just awareness and observation followed by analysis and deductive reasoning.

To ensure relevance, though, it is also vital to understand as much as possible about the environment in which your company operates. By doing so, you will not make the mistake of overlooking or dismissing a significant trend just because it doesn’t seem to have an immediate impact on your business. As a banker, for example, you might not see much of a link initially between your day-to-day operations and the problem of global warming. However, once you started to hear about customers shifting to more sustainable products, or government action to promote green technology, the connection would become clear. The impact on your business might be indirect, but one way or another it is there.

Once you have developed the habit of identifying trends and examining how they could affect your business, the next step is to consider how to turn these trends to your advantage. There are all kinds of possibilities, among them new business opportunities, themes for advertising campaigns, chances to cut costs, or enhanced products and services to offer your customers.

But when considering the future development and possible impact of any trend, remember that both rational and emotional forces will come into play. For instance, a rational outcome of the 2008 financial crisis was an increase in the number of foreclosures and shrinking retirement funds.

The related emotional impact is a backlash against bankers and their bonuses. Alternatively, in the case of global warming, the rational implications include an increase in severe weather events and impacts on economies, governments, and people. The emotional aspects, though, can range from anger about government inaction to ambition to change the world.

Whatever you are examining, it is obviously important to think through both rational and emotional factors and anticipate how people may act or respond. Applying this methodology to the trend of “going green”, one could explore such themes as reducing power consumption, recycling, eliminating plastic bags, or using public transport. On the emotional level, it would be fair to assume employees, customers and the wider community would expect and support action in each of these areas. On the rational level, the challenge would be to implement practical schemes that move these ideas forward while minimizing unintended consequences.

The conclusion might be to develop eco-friendly products, or invest billions in a high-speed rail system. Clearly, the options available vary depending on the company and its scope of business. However, a good rule of thumb is that every organisation can find a link to every major trend if they look at it from multiple perspectives and apply a little imagination.

 

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