As we enter the New Year, there are no lack of issues to be concerned about. But if you take a step back and look at the big picture today, there are developments happening that are cause for tremendous optimism as well.
As a futurist and innovation speaker, my work involves studying the driving forces of change: technological, demographic, social, and economic — and helping people translate change into opportunity. In ruminating over the important trends that will shape 2018, I see that more than ever before, businesses and their leaders will rise or fall based on their ability to anticipate and creatively respond to rapid change.
The challenge is one we all face. Busy fighting fires, we often fail to take stock, or take the time to separate trends from mere fads. And we fail to devise plans to translate change into opportunity. Here are six driving forces of change that demand your attention going into 2018:
1. America’s economic recovery is real. Don’t let the current boom pass you by.
Positive economic indicators are popping up everywhere. Consumer confidence is up. GDP growth is up. Tax cuts will soon put more money in consumers’ pockets. Stock markets here and abroad are setting records. Granted, there could be a correction coming, or even a recession at some point, but now is the time to take advantage of favorable conditions — or miss losing out.
Action steps: Challenge yourself and your team with a series of questions. Are you bringing “this is the way we’ve always done it” assumptions to bear on future opportunities? How can you and your team take advantage of rising consumer confidence and a buoyant market to drive growth and enter new markets? What career changes (a pay raise, graduate degree, lateral move, etc.) should you make this year to take advantage of this seller’s market in human talent? How can you turbocharge your personal value proposition in 2018?
2. In 2018, Millennials will reach a demographic tipping point.
Already the majority in the workplace, Millennials are poised in 2018 to become the dominant demographic cohort in the marketplace, eclipsing Generation X and Boomers in buying power, economic influence, and political clout. Today’s Millennials are no longer in a delaying mode. The oldest Millennials are in their mid-30s, getting married, starting families, starting businesses, buying houses, investing savings, and moving up the career ladder. Millennials are ethnically and racially diverse, open-minded, and tech-savvy. They are not just cutting the cord to cable television, but to businesses, brands, and institutions that are unresponsive to their needs. This is a generation of ultra time-starved shoppers that have more information at their fingertips than any generation in history. Where and how they spend will determine winners and losers in the marketplace going forward.
Action steps: Regardless of what you make or sell, seek to align with Millennials in both the marketplace and the workplace. Update outdated perceptions about this rising generation. Talk with members of this generation and ask them questions about their lifestyles, buying behavior, aspirations. Aim marketing, workplace environment, and recruiting efforts on being relevant to this 80 million-member cohort. Anticipate their burgeoning needs and help them resolve contradictions. For example: while they yearn for the convenience of online shopping, they are now acutely aware that where they spend their hard-earned dollars will depend on whether local shops (especially surviving bookstores and independent retailers) continue to wither away, or whether that experience will be available to them and their offspring in years to come.
3. Big brands, incumbents, and entire industries will continue to face the forces of disruption. But in 2018, small businesses and new entrants have unique advantages as well.
Digital disruption will continue to radically destabilize industries ranging from textbook publishing to cable television to advertising. Big global brands and incumbents in every category are facing an additional threat as well. Brands such as Procter & Gamble, Unilever, Nestle, Kraft Heinz, and others are all facing what amounts to consumer revolt. Their once-loyal consumers are deserting them for store brands, and smaller, niche, and locally sourced products, services, and business models.
Startups ranging from Shave Club for Men (sold recently to Unilever) to Warby Parker to The Honest Company are making inroads into incumbents’ territory at every turn. How? By introducing new choices, offering better pricing, and appealing to social responsibility. The Honest Company, founded by actress Jessica Alba, sells an array of household products from diapers to vitamins, to consumers concerned about “ethical consumerism.” Manufacturing costs and barriers to entry are falling, enabling startups to capitalize on consumers’ desire to support the local brand, help the independent producer. Social media and e-commerce enable startups to establish direct relationships with customers and avoid middlemen.
Action steps: Count on further disruptions ahead, both digital and societal. Ask: how can you and your company capitalize on local or regional differences to offer unique choices? How can you pounce on consumer disappointment with incumbent poor service, prices, or terms to offer unique value? How can new technology – artificial intelligence, wearables, big data, etc. — give you advantages?
4. Real time responsiveness and convenience will become key competitive differentiators to firms that exploit them.
In 2018, businesses that eliminate customer waiting will win, whether online, in-store or over a period of days. Financial institutions will provide instant approval of every service, and mobile banking will soon be derigueur. The quest for speed and convenience is insatiable. An ATM machine gives you cash faster than a bank teller, but even better is not having to use cash in the first place. What about making a simple motion with your smartphone to pay the babysitter instead? Brick and mortar stores will upgrade their “convenience quotient” or continue to lose customers to e-commerce. Even mighty Amazon cannot rest, innovations such as same-day delivery, “anticipatory shipping” and (possibly) drone delivery attest to Amazon’s weakness in this arena.
Action steps: Continue to challenge your company’s hassle factor, and make doing business with you easier and easier. Chip away at the time gap that exists between the customer saying “I want” and “I am satisfied.” Ask: in what ways might we reduce the elapsed time at every step of our operation in order to make speed our competitive advantage?
5. Small and mid-sized businesses will begin to adopt artificial intelligence (A.I.) in 2018, changing the nature of work and life.
Real estate broker Coldwell Banker is experimenting with A.I. to target classes of likely buyers for a specific property. Fidelity is trying to find ways to apply artificial intelligence, computer algorithms, and voice recognition software to the hidebound world of money management and investing. Your company could be next.
A.I. encompasses computer systems that are able to perform tasks that heretofore required human intelligence to perform. Things like speech recognition, visual perception, enhanced decision-making, and language translation all come under this tech-category. And while Netflix, Amazon, Google and other tech giants have been pioneering artificial intelligence for well over a decade, look at growing numbers of non-tech companies in 2018 to begin using this tool.
Action steps: Identify places where artificial intelligence could differentiate your company, both internally and with external customers. Start by becoming better informed about A.I. and its potential. How might it help you add tangible value to your customer’s overall experience? An edge in customer acquisition? Look at what needs to be done or could be done better, cheaper and faster using A.I., and look to vendors willing to partner with you to make it happen.
6. Social Trust is on the decline. Businesses and leaders that offer trust will gain.
Wells Fargo employees, under pressure to meet sales goals, created two million phony accounts, charged improper and unauthorized fees, and withdrew money from customers’ accounts. A data breach at Equifax caused the release of sensitive personal information on 143 million Americans. Volkswagen was fined $30 billion for cheating on emissions requirements. It doesn’t take a clairvoyant to see that trust will be a huge issue in 2018 and beyond.
“Social trust,” according to researchers, has been declining gradually since the early ‘70s, but has dropped noticeably in recent years. The social impacts of rampant technology are occurring faster than anyone can digest them, and there’s a great reckoning afoot. Social media was supposed to connect us (and it does), but it also divides us. Personal technology was supposed to liberate us, but recent research shows that it debilitates us as well, if overused.
Take action: Seek to prove trust-worthiness both with internal employees and external customers and suppliers. Make the demonstration of trust-worthiness a strategic priority.
In summary: While explosive technological change is the driver today, other changes must not be ignored. If not duly observed, taken into account and acted on, they can spell doom for an organization. Or boom, if they are. This “spot a change, create a response” mindset will become the touchstone of innovation for the vast majority of businesses going forward. Not always breakthroughs, but constant adjustments and constant improvements that add value to customers, and make your company an exciting place to work. Leaders with imagination and foresight, who can keep a positive attitude about the unrelenting pace of change will have unprecedented opportunities in the years ahead.