Change is happening rapidly in the business world. Artificial Intelligence, Augmented and Virtual Reality, and ever improving technology at almost level are just a few of the new trends that business owners will need to deal with in the next five years.
With these trends being pivotal for businesses of every size, we asked Rohit Talwar and Steve Wells of Fast Future Publishing to highlight the 20 future factors that business owners will need to address as they chart their course to tomorrow;
Trend 1 – Cognitive dissonance – long term vs. right here, right now
Many leaders are challenged with how to deal with a growing leadership juggling act. On the one hand, they clearly see radical changes taking place and a very different future emerging. However, on the ground this isn’t always reflected in the immediate requests coming from customers.
They also know from experience that the change starts off imperceptibly slowly at first and then take off can often happen very fast. This tension between focusing on the here and now and allocating time and resource to an uncertain future is likely to grow rapidly.
Developing the capacity to lead in this “new normal” will become a critical priority – learning how to balance the “urgency of now” with the “importance of next”.
Trend 2 – Future awareness
Businesses typically fall into three categories when it comes to future readiness.
Some organizations and their leaders can rightly be proud of their level of awareness about the factors that might shape their world in the coming years and they are prepared for a range of possible scenarios. They have strategies that can kick in if the economy suddenly nosedives or if growth opportunities develop faster than expected.
The second group are happy to rest on their laurels, believing that they are bulletproof, that their offerings are always going to be in demand and that their client relationships are cast in stone. This group are often the slowest to respond to change and feel the most negative impacts when it happens, as they are least prepared for it.
The final group are honest enough to say they are uncertain about what might happen next, how change might impact them or how to prepare for future uncertainty.
Knowing where you stand is a critical start point. The next step is to ensure that across the organization, leaders and managers are investing their own time and encouraging their staff to scan the horizon, read about impending changes and think about possible implications and responses. If they lead by example, their teams will follow.
Trend 3 – Starting from zero
In the past, companies might have started their annual planning knowing that at least some proportion of our business was repeatable and they would see recurring revenues in the year ahead.
However, in many cases, contracts are shortening, retainer relationships are being dissolved and organizations are having to start from zero when analysing where next year’s revenues might come from.
Budgeting from zero is a mindset and capability that needs to be developed across the business. At one extreme, this is driving firms to reduce headcount and adopt a more contingent workforce model, at the other we are seeing innovative strategies to try and lock-in longer term customer commitments.
Trend 4 – Exponential organisations
The idea of driving exponential or bigger improvement at speed is going to capture attention across the board.
Most commentators focus on the big technology-enabled examples e.g. AirBnB handling 90 times more bedrooms per employee than the typical hotel group or Local Motors generating new car designs for its 3D printed Strati 1000 times cheaper than the average car manufacturer.
However, equally attractive are the simple innovations that can deliver rapid improvements – such as airports introducing parallel loading bays at security checkpoints to double or treble the flow of passengers.
Leaders will be expected to encourage the pursuit of exponential gains and lead by example in the search for opportunities.
Trend 5 – Ecosystem thinking
Faced with the complexity of modern business, rapidly changing markets, short-lived opportunities, and exponential rates of development in technology, firms have little choice but to work with a network of external partners.
This helps both to absorb the constant onslaught of change and provide the capacity to respond faster. A mindset shift is taking place from “not invented here” to “who can do it better, cheaper and faster”.
To make these ecosystem models work, there is critical requirement to develop leaders, managers, and staff with a collaborative mindset and a willingness to share, learn and create solutions in partnership rather than through dictat.
Trend 6 – Brokenomics / economic warfare – stuck in the middle
There is a growing awareness that the economic, financial and monetary control systems that govern our world have become overly complex and unworkable. Many have been extended long beyond their useful life and represent a source of significant risk.
Emerging risks include an estimated US$4 quadrillion in derivative contracts (the global economy is about US$78 trillion), seemingly non-viable pension systems, and personal, corporate and government debt obligations collectively running at many times global GDP.
In the face of these potential time bombs, our governance mechanisms no longer seem fit for purpose. At the same time, more nationalistic political agendas are emerging around the world and could drive intense economic warfare.
Firms already find themselves stuck in the middle and increasingly coming under government pressure to invest locally rather internationally.
Robust scenario planning and a rapid execution capability are both vital in these circumstances. The former can help explore the possibilities and map out the options, the latter can help reduce the time to value and avoid projects being stuck in limbo.
Trend 7 – Gagging on green
Firms may find it an increasing challenge to honour their environmental targets in an uncertain commercial landscape. Failure to do so could be reputationally damaging.
Some are adopting the policy of pushing the responsibility to suppliers – demanding that they meet both cost and environmental requirements in order to win supply contracts. Others may increasingly seek low or no-cost ideas from staff that can be actioned with little capital outlay.
Trend 8 – Facts as an art form – the post-truth society
Terms like “alternative facts” and the “post truth society” have entered our vocabularies and the concern is that it will require sophisticated AI to fact check everything before we accept something as true.
At one level, these terms are amusing descriptions of a culture where for some, the “facts” and what is said or shared are distant relatives. At a deeper level, they highlight an erosion of trust in the veracity of what governments, businesses, public agencies, the media, and fellow citizens are saying.
As individuals, we crave honesty and naturally favour organizations that we trust inherently. This offers a critical future opportunity for firms to differentiate themselves because of their commitment to radical honesty.
Trend 9 – Artificial intelligence vs. Genuine stupidity
Artificial Intelligence (AI) is no longer the stuff of science fiction. From airline autopilots to smartphones and call centre chatbots to automated legal contract generation – the technology is firmly embedded in society and its scope, functionality and processing power is increasing.
Sadly, many in positions of power are refusing to invest the time to understand how AI could transform their business and generate new market opportunities.
Under the guise of pragmatism and risk avoidance, they are actually putting the future of their business at risk. Even carving out a small amount of time to understand the technology, how it is being applied and what it could mean for your sector could help you form a perspective on how and when to approach it.
Trend 10 – Hooked on transformation and the race to obsolescence
It is not uncommon for large firms to be investing hundreds of millions of pounds on digital transformation projects. For many, they are playing catch-up and following the prescriptions of advisers who are promoting similar strategies to their competitors.
The danger here is that the faster we automate, the easier it is to copy what we do and the harder it is to sustain a point of digital differentiation for any length of time. The risk is that many are locked in a race to the bottom – commoditising their offering and potentially sowing the seeds of their own demise.
A vital role here for leaders is to challenge those involved to explain how the outcomes will help us stand out and enable us to be more innovative and responsive than competitors pursuing a similar path.