Tracking Trends – Six Essential Steps for Spotting Your Next Opportunity
I once asked Fred Smith, the founder of FedEx, what led him to start the company back in 1971. He explained that, at the time, he was running a company at the Little Rock, Arkansas, airport, refurbishing executive aircraft. It was there he began to notice that with increasing frequency, business people were showing up at his company to see if they could charter one of his planes to get some “time sensitive” shipment someplace in a hurry. “The existing freight forwarders hadn’t noticed this unmet need,” he told me. “To us it seemed like an huge opportunity.”
Smith found a need and filled it. And he acted. The Opportunity Mindset he embodies is becoming a touchstone of success in the Digital Age. When you look for it, you see it everywhere. “It was our reading of trends that led us to make this move,” Filippo Passarini, the chief information officer at Procter & Gamble told me when I interviewed him for the book Innovation is Everybody’s Business. “One of our pillars is thinking out in the future, anticipating what’s coming, and then making our move.” By thinking ahead of the curve, Passarini was able to reorganize Procter’s back office operations, and eliminate over a billion dollars in costs.
Here is a 6-step trend tracking process we use with clients to spot opportunities in change, and avoid being blindsided by disruption:
1. Observe trends in your daily life. Innovators are noticers above all. They are interested in everything. They take in more information. They read voraciously. They ask questions. They question assumptions. So step one is to start noticing more wherever you are, wherever you go. Track consumer trends, technology trends, social trends, global trends, economic trends and political trends.
2. Project out ahead. Ask yourself: where will this trend will be three, five and ten years out? For example, take the artificial intelligence industry. Today, A.I. is said to be at the same stage of development as the Internet in the mid-1990’s. Yet, more and more products and services have A.I. capability built into them all the time. The industry is expected to balloon from $8 billion in revenue today to $47 billion in 2020. Huge opportunities will accrue to those who are willing to project out ahead, then make their move.
3. Consider the larger impacts of the trend, technology or disruption. In other words, who’s going to be affected? Who will benefit from this development and who might lose out? Take driverless cars: five years ago where were they? Now early versions are available for purchase at your local dealership. Now consider the impacts yet to come. For example, if you’ve got young children; will they even need a driver license? Will the younger generation choose not to own a car? Perhaps they’ll simply order a ride with their phone when they need one. And how about auto insurance companies? With fewer and fewer car owners, and fewer accidents, what happens to them? And what will our roads and transportation systems need to do differently? By considering the societal impacts of a trend or technology, it gives you a big picture perspective.
4. Do a SWOT Analysis. Now think about the trend from the perspective of your career, your family and your organization. Big question: how fast will disruption happen to those who don’t handle this trend right? Take, for example, the 3D Printing trend. If you’re a manufacturer, you may be sensing this new capability is a potential game changer for your firm. So you’ll want to perform an initial SWOT analysis with an emphasis on the speed of change. Examine your company’s Strengths, Weaknesses, Opportunities, and Threats that 3D Printing might pose. Look at how this new way of making things might or could impact your business and your industry. How fast will all this happen? For a given business, here’s how fast it can happen: The U.S. hearing aid industry converted to 100 percent additive manufacturing in less than 500 days, according to the Harvard Business Review, and not one company that stuck to traditional manufacturing methods survived. Concludes HBR: “Managers will need to determine whether it’s wise to wait for this fast-evolving technology to mature before making certain investments or whether the risk of waiting is too great.”
5. Research early responses to the trend. As part of your SWOT analysis, do a Google search. In today’s connected world, by the time you identify a trend or development as noteworthy, somebody somewhere is probably already acting on it.– They may be around the world, or right in your community. But your response to the trend can benefit from their experience.
6. Embrace the Opportunity Mindset. Come back to the “O” in the SWOT acronym. After you review your firm’s strengths and weaknesses, and after you’ve sized up the threats inherent in the technology or the trend, lay your findings on the table, and then let your creative juices flow. Challenge yourself and your colleagues with a series of questions. How might we capitalize on this trend? How can we add value to the customer vis. a vis. this trend? If it’s a disruption bearing down on you, the question might be: how can we take these lemons and make lemonade?
In today world, it’s all too easy to miss the trends. Just ask Blockbuster, Blackberry, Nokia, Kodak, Circuit City and a host of others. By incorporating this 6-step process into your routine, you can leapfrog your competition and avoid getting blindsided by change.