All too often these days, leaders of companies hammered by rapid market fluctuations admit to being blindsided by change. “We were focused on firefighting,” admitted one CEO after the company’s stock plummeted 34 percent. “We need to work on our competencies for the future.”
The fact is, in today’s world we all need to. Disruptions materialize so fast that almost nobody sees them coming or understands their severity. Sales mysteriously drop. Jobs are threatened. Draconian measures must be implemented.
Yet amidst this tumult, another set of organizations prospers. They are using a tool called corporate foresight. Recent research by professors Rene Rohrbeck and Menes Etingue Kum confirms the value. “Future preparedness turns out to be a powerful predictor for becoming an out-performer in the industry for attaining superior profitability, and for gaining superior market capitalization growth,” they note in a newly released longitudinal study.
What do these organizations do that gives them the edge? Here’s my boil down of a five-step process you and your organization can use to avoid being blindsided by change — and to discover opportunities in today’s emerging trends.
- Monitor and upgrade your firm’s information diet.
A good place to start is to ask: what information are you and your fellow managers consuming? This is what I refer to in my consulting work as your information diet. If your diet is composed exclusively of free information, it’s probably inadequate. The human brain can store three terabytes of information, yet this is only one one-millionth of the information that is now produced in the world each day. The modern internet is organized to attract your eyeballs and keep you browsing longer. The result is that a lot of what’s in your newsfeed amounts to empty calories. The valuable, credible insights and analysis are mixed in with chaff, and noise gets blasted as a signal. You need to be extremely careful and discerning of what you consume in terms of the nutritional value of your informational diet.
- Identify trends, emerging technologies, and possible disruptions coming at you and your organization.
In my studies of innovators across a wide variety of industries, the single most common characteristic they share is that they are trend-trackers. They are like vacuum cleaners sucking up the latest developments. Innovators work at tracking the trends in whatever environment they are in. They read voraciously, take in more information, ask lots of questions, they challenge and update their assumptions. In your reading and your life, throw out a wide informational net. Track not only the trends in your industry or profession but also consumer trends and social trends. Track geopolitical trends, economic trends, and demographic trends – encouraging yourself to keep expanding your areas of interest.
- Project ahead into the future. Ponder where the trend or technology is likely to go.
If it’s a demographic trend like the rise of Generation Z, for example, this generation will be 10 years older in their prime earning and spending years. If it’s a technology trend apply Moore’s Law which holds that computing power doubles every two years. Technology trends are now happening at an exponential rate so take this into account as you project out ahead. The impacts of the trend, the technology, the disruption ask yourself who’s going to be affected. Who’s going to win? Who’s possibly going to get slammed by this trend?
- Conduct a DITO Analysis.
In the 1960s, Stanford Research Institute introduced a new tool in which to analyze trends: SWOT, which stands for strengths (S), weaknesses (W), opportunities (O), and threats (T). The DITO analysis is an update: it stands for direction (of the trend or technology), implications, threats, and opportunities. Because the pace of change has sped up since the ‘60s, it’s now more important than ever to suss out the implications and apparent direction of trends. Let’s say you’re a videography company and you’re seeing the advance of artificial intelligence in your field. Or you’re a home builder, and you’re tracking the 3D printing trend. The DITO analysis is a way of guiding you through a developing trend and setting you up for defensive or offensive action.
- Embrace the opportunity mindset.
Lay your findings on the table and then get the creative juices flowing. Challenge yourself with a series of questions: how might we capitalize on this trend? How can we add value to our customers? And if it’s a disruption bearing down on you, the question might be: how can we take these lemons and make lemonade in today’s world? It’s all too easy to get blindsided by change but by incorporating this six-step formula into your life and your work, you can be prepared to profit.