One need only reflect on a short list of nearly obsolete items—folding maps, camera film, VHS tapes—to consider how powerful market forces such as disruption can be.
To thrive in today’s rapidly changing global economy, corporate leaders must always be thinking ahead. But how do you plan for a seemingly uncertain future?
After years of research, economist Mark Esposito and colleague Terence C. M. Tse developed a framework—called DRIVE—to help leaders examine the present to influence the future.
In their book Understanding How the Future Unfolds: Using DRIVE to Harness the Power of Megatrends, they write:
“We tend to think that today is certain and tomorrow is uncertain, but that logic needs to be flipped. Certainty, the present implies there is nothing we can do today to alter an outcome, and yet we can makes changes for the better today. Uncertainty implies we can have a different and hopefully better future. The better we deal with our current problems, the higher our chances are of creating a better future. If we don’t act now, tomorrow will not improve.”
WHAT CHALLENGES DO PEOPLE FACE WHEN TRYING TO IDENTIFY MARKET TRENDS?
Market trends are still today heavily inferred by traditional economic tools, like macroeconomic analysis, demographics, aggregate markets, etc.
All of these tools tend to take into account generic aspects of markets and growth. But they hardly spot the markets that tend to emerge as grassroots and unnoticed.
The better we deal with our current problems, the higher our chances are of creating a better future.
Take Blackberry, for instance. As the company focused on a corporate market and improvements to handheld features, it completely overlooked the consumer market where the availability of apps quickly grew as a priority for mobile phone users. Its shortcomings were its reliance on macroeconomic data.
Another challenge is that even when market trends are identified, it is difficult to make them relevant to the nature of the business in which professionals are working. This is because many trends are generic and merely on the surface of what can be statistically measured.
Those interested in customizing the specific entity will find things a bit hard unless we elaborate the impact of a specific trend within a specific industry.
WHAT ARE YOUR TOP THREE PIECES OF ADVICE FOR PEOPLE TRYING TO IDENTIFY MARKET TRENDS?
1. Keep an ongoing mindset for your market as well as your nonmarket strategies. The best opportunities do not occur in familiar and predictable markets.
2. Find a way to connect megatrends—the fundamental forces that have started to dramatically shape the social, economic, and political landscapes of tomorrow’s world—with actionable items at the company level. Always determine some proxies that allow you to turn macro into micro.
Keep testing hypotheses and experiment by turning ideas into pilots and minimal viable products to determine how the market responds.
An example of this is the rise of the sharing-economy giants, such as Uber or Airbnb. It was their ability to perceive that customers’ sentiments were shifting towards more personalized experiences that led them to initiate their innovative business models.
3. In lieu of fully developing products from the start, keep testing hypotheses and experiment by turning ideas into pilots and minimal viable products to determine how the market responds.
Rather than assuming that the market will embrace your products, you can collect real-time feedback and determine whether it is worth bringing a product to full production or not.