Each year I interview hundreds of business leaders about their companies, and their outlook on the future. Key question: “what’s keeping you up nights?”
What I’m hearing in recent months is the rise in business uncertainty. Is the decade long economic recovery about to end? Will the U.S. and China come up with a trade agreement? No question the challenge of planning and executing during this period of economic and geopolitical tumult is causing sleepless nights.
But there’s another condition my interviews are picking up on as 2019 gets underway. It comes up when I ask: “do you feel your organization is being disrupted right now, and if so, by whom?”
Responses to this question during the past year have been almost universally affirmative. The causes of disruption vary widely. Responses range from “talent wars” to “low cost competition from China” to “fintechs eating away at our loan business” to “Amazon” to “index funds” to “retail apocalypse” to “we are becoming irrelevant to our customers” and many more.
Perhaps because of rising uncertainty and high rates of disruption, clients want to know how to counteract disruption through stepped up innovation. They want to make the case for improved innovation performance, and cultivating a culture of innovation. They want to master new tools that will enhance their ability to manage uncertainty and pounce opportunistically on fast-developing trends.
Toward these objectives, I’d like to draw your attention to a format that we’re offering called “Managing the Future: Capitalizing on the Driving Forces of Change.” In all, there are over 30 driving forces, ranging from A.I. to V.R. to Age of Acceleration. Here are six of these trends to get you thinking about your top objectives for 2019, which, by the way I think is going to turn out just fine for those who don’t let circumstances or the economy dictate their mindset:
Driving Force 1: The war for talent will heat up in 2019
Predicting what the economy will do this year — recession or no recession? — has become a distraction from other ticking time bombs. Meanwhile, workforce challenges — the “War For Talent” — will continue to demand attention from leaders far and wide. When polled, CEOs acknowledge their growth is now being impacted by workforce disruption even more than an uncertain economy: positions that cannot be filled, applicants that lack the necessary skills, and a decline in employee engagement and work ethic. Meanwhile, experienced workers — aging Boomers for the most part — are retiring at the rate of 10,000 a day and taking their knowledge with them. Result: talent competition will be a dominant trend going forward, even if the economy softens. Smart firms will revamp and rethink recruitment, on-boarding, hiring, wages, culture and retention strategies for competitive advantage.
Driving Force 2. Millennials are now the dominant generational cohort. Here’s how to manage the future of demographic trends.
Not only are they the majority generation (92 million members) in the workplace, Millennials are the driving demographic cohort in the marketplace, eclipsing Generation X and Boomers in buying power, economic influence, and political clout. The oldest Millennials are in their mid-30s and moving forward fast: getting married, starting families, founding startups, buying houses, investing for retirement, and paying off those burdensome student loans. 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 workplaces that are unresponsive to their needs. With the unemployment rate at a 49 year low, look for higher rates of job-jumping in 2019, as Millennials seek better pay and career advancement.
Driving Force 3: The Fourth Industrial Revolution is a Disruptive Game Changer. Here’s how to go from lagging to leading Industry 4.0.
Digital disruption has already reordered the playing field in industries ranging from college textbook publishing to cable television to advertising. But the Fourth Industrial Revolution (Industry 4.0) is an even higher magnitude Driving Force of Change in its infancy. The first three industrial revolutions promulgated steam power, electrification, mass production and early electronics. The Fourth Industrial Revolution (Industry 4.0) is about the acceleration brought on by 50 years of Moore’s Law (a doubling of capacity every 18 – 24 months). It is also about the convergence of an array of technological innovations, from the Industrial Internet of things to virtual reality to drones to artificial intelligence, to biotechnology and beyond. To profit from 4.0, businesses and their leaders will need to think ahead of the curve, and revamp the way they do strategic planning and create cultures of innovation. Nothing less will keep up.
Driving Force 4. In the Age of Amazon, real time responsiveness and convenience will become table stakes for staying in the game. Here’s how to benchmark yourself, and plan ahead.
Amazon’s Same Day Delivery service and its artificial intelligence-based Anticipatory Shipping program are examples of real time convenience innovations now transforming consumer and B to B buyer expectations across industries. Businesses that are mired in “the way we’ve always done things around here” will falter. But those that treat this Driving Force seriously and think ahead of the curve will win. Among my recommendations for capitalizing on this driving force: challenge time based assumptions. Seek to eliminate customer waiting, friction, cumbersome forms and procedures, whether online, in-store or over time. Look for the Amazon Effect to impact more and more industries, and be prepared to lead your firm in pioneering convenience advances while there’s still time.
Driving Force 5. Artificial Intelligence has entered the age of implementation.
Real estate broker Coldwell Banker is experimenting with A.I. to target classes of likely buyers for a specific property. Fidelity is finding ways to apply artificial intelligence, computer algorithms, and voice recognition software to the hidebound world of money management and investing. Every technology goes through the Discovery Phase then enters the Implementation Phase. This is where the action will be in 2019 and beyond: forward thinking firms will begin to automate routine office tasks like accounting and billing, but then seizing the larger opportunities: looking across your entire enterprise, and using A.I. to enhance customer experience, get better at sensing demand trends, automate machines, and serve customers in new ways.
Driving Force 6. Social Media is heightening decline of social distrust. Here’s how to understand and manage this trend in your business and career.
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 going forward, as Millennials, among others, begin to distrust entire industries and make consumer decisions accordingly.