As the old saying goes, “When we plan, the Gods laugh.”
As humans, we believe tomorrow to be similar to today. While we know a disruption may come along and change our fortunes, we often feel it’s too ambiguous to anticipate. No wonder we feel blind-sided when disruption occurs. We use words like “surprised,” “didn’t see that coming,” “never would have guessed” — and if the disruption is big enough, “paradigm shift.”
Typically, this isn’t how the future unfolds. Sudden, seismic change rarely happens out of the blue. Instead, the future is shaped by many seemingly unrelated events that gain momentum over time. We often don’t recognize the significance of emerging trends or their relationship with other trends. Individual trends mature and influence other trends with increasing frequency and coalesce until a tipping point is reached — much like a crescendo in a score of music. That’s why disruptions can have such a jarring effect.
Organizations can avoid being caught off-guard by reading the tea leaves. It’s a corporate competence that has mostly lapsed in the past 20 years, outside the purviews of futurists, strategists, and researchers. It will make a comeback as companies realize that tomorrow is nothing like today.
The pandemic is a catalyst for how companies operate, structure, and sell.
Individuals and organizations are forced into new behaviors. While we’d like to believe these are temporary, the longer new conditions are in place, the more new behaviors will become habit. Constraints are unmasking structural gaps in our economy, commerce models, and culture that must be addressed for survival.
Of the hundreds of signposts that indicate how the world is changing, we identified our top six megatrends that will soon determine how business is done:
- Time will become the basis of competition.
- Authentic human connections will redefine commerce.
- Companies will organize around the customer.
- Vigilant organizations will rise, driven by purpose.
- Business models will shift from optimization and efficiency to agility and speed.
- Global supply chains will restructure around proximity to demand.
“Time slips away like grains of sand never to return again,” said Robin Sharma.
The majority of people on the planet today are better off than their forefathers. With physiology, safety, love, and esteem generally satisfied, people strive for self-actualization. Yet what is most scarce is time.
Time is the basis of competition
We fret much of our time away in an economy fixated with busy. Time is treated as a commodity that does not belong to the individual. It belongs to organizations, obligations and meeting societal standards. The result is a population suffering from mental illness, unhealthy lifestyles, stress, substance abuse, suicide, and loneliness.
We see our busyness for what it was — an addiction. The price paid is the inability to invest time in interests that matter most to us, and a conflated sense of guilt when we do. Even what should be fun is seen as a part of busyness and obligation. The gym is another check on the list of to-dos.
Being forced to shelter in place with limited mobility forces us to realize the value of time. There is a global rise of a conscious freeing up of one’s time for those activities that provide real meaning in life.
Authentic human connections will redefine commerce
The past 40 years have introduced incredible advances in technology, radically redefining commerce and customer relationships. Power shifted from the salesperson to the customer. This trend unleashed new digital marketing and selling models, as vendors sought to establish more effective ways to reach, engage, and build enduring relationships at scale.
Customers and prospects overwhelmed with emails and content, cherry-picked what interested them, ignoring the rest. Phones are no longer answered. Brands found ways to reach prospects via SMS text, LinkedIn, Twitter, etc., and customers tune out what isn’t relevant.
Tune-out behaviors are in the physical world too — with the rise of ghosting, gaslighting, and ends-justify-the-means. Curiosity, openness, respect, and honesty were replaced by suspicion, hostility, fear, and ambivalence.
Navigating the labyrinth of chatbots, emails, social media accounts, and phone numbers to reach a human representative is exhausting. Customers are jaded by inconsistent experiences between pre- and post-purchase. On the flip side, brands are becoming less customer-aligned because the few employees with direct, in-depth experience dealing with customers do not have loud enough internal voices to shape change. Comforted in the distance and impersonal nature of NPS and CSAT scores, feedback surveys, and VOC studies, brands are out of touch with what customers want and value — human connection and authentic relationships.
The pandemic exposed how disconnected people are from their communities and each other. The overnight appearance of Zinners (Zoom dinners), quarantine cooking classes, virtual happy hours, and virtual customer meetups speaks to the craving people around the world have for authenticity. In the hundreds of hours I’ve spent talking with B2B sales and marketing leaders, and their customers across the globe, the same vocabulary is used to describe what people are looking for in vendor relationships — be human, authentic, compassionate, connected, sharing without expectation, and free to do the right thing.
Organize around the customer
For businesses, saving customers time without sacrificing expectations will become the basis of competition.
The abundance, diversity, and continuous introduction of new products and services during the past 50 years; coupled with customers’ easy access to information, suppliers, product options, and vendor ratings have increased the demand for individualized products. Personalized medicine, vitamins, and trainers. Swag from Vistaprint. Eerily prescient financial advisors. Gifts from Etsy. Coffee prepared to specification. Custom-built homes. Designer vacations.
Delivering a service faster, in and of itself, will not produce market leaders. Deep, actionable understanding of expectations through the eyes of the customer will. This is a table stake to defining the right new offerings. Innovation will produce new ways of saving time and speed up activities through new products, services, and software.
Product lines will be redesigned with minimum core features and a vast menu of add-ons to personalize each product to meet each customer’s unique specifications. 3D printers will be commonplace in the workplace, replacing traditional vendors and purchase channels — from the hardware store to Amazon. The rule of thumb may well be: If the customer can print the product faster with the desired quality and ability to customize, why buy anywhere else and wait? New services will emerge to help customers navigate the process of configuring and buying individualized products.
The bottom line: Speed, quality, and customer-driven are critical success factors to compete in the new normal, accelerating the pace of change.
Meeting customers’ evolving expectations requires a different type of organization than what is prevalent today.
The long bull market after the Great Recession came from businesses continually optimizing for efficiency. Enterprise technology was both a great catalyst and an enabler. Automating routine tasks, streamlining processes, standardizing information exchanges, adding sophisticated intelligence to data analysis to improve decision outcomes, and empowering customers and employees to self-serve their needs are just a few examples. New technology created new opportunities to work smarter, increase productivity, and shorten business cycles.
Yet, the more intra- and inter-company business practices integrated with technology, the less flexible organizations became. To effectively compete on speed requires organizations to have agility as a core competence.
In response, businesses will shift from optimization and efficiency to agility and speed.
Vigilant organizations will rise, driven by purpose
Growth in the next era will not come from short-term opportunistic business models. These will be crushed under the velocity of change; success will be to those with a long term perspective.
Rise of vigilant organizations driven by purpose addresses this significant reversal from today’s short-term obsession with profit.
Vigilant organizations, as defined by George Day, are long-term oriented companies with a learning culture. They invest in strategies driven by outside-in perspectives, in-depth customer insights, continuous external trend analysis, and sense-making. Within the organization, data is transparent and fluid to empower all workers’ actions and decisions.
What defines these organizations is their mission to do good. Increasingly, customers and workers demand organizations that embrace meaningful causes tied to the United Nations Sustainable Development Goals.
Just like Tom’s Shoes’ commitment to put shoes on the feet of people in need or Unilever’s Sustainable Living Plan, company missions and cultures with purpose at the core will be successful in the new era. Early leaders have overcome the challenges that come with shifting to a sustainable model: higher costs and prices in the near term and ineffective circular economy ecosystems, are just two.
The real game-changer is the idling of the global economy. It demonstrates the impact we have on the planet. From the lack of air pollution over major cities to clear waters in Venice canals and the measurable reduction in the earth’s vibration, the importance of sustainability is becoming unavoidably evident.
Shift to agility and speed
To achieve both agility and speed in response to rapidly evolving customer demand, organizations will evolve their structures and operating models to be flexible-first. The increasing velocity of change does not afford organizations the luxury of institutionalizing rigidity under the banner of stability. That does not mean organizations will run amok with anarchism; instead, we will manage and organize them differently.
Three key elements to flexible-first: Digital transformation, redefining employment, and strategic planning.
Digital transformation will extend beyond self-service; automated workflows; and open information access to customers, employees, and partners. Flexible-first organizations rapidly assess and share how programs, resources, and Service Level Agreements (SLAs) change as a result of decisions made — up and down the organization and value chains. Digital transformation will be instrumental in automatically communicating decisions — along with cascading plans and objectives — across organizational teams, internally and externally.
Alignment is critical to agility. In flexible-first companies, each worker aligns with the organization’s strategic plan. Not in vague terms, but in specific ones where, regardless of rank, each worker commits to deliver quantifiable results by agreed-upon dates. I call these target contributions. Each target contribution ties to specific corporate objectives. Add up all the target contributions, and they equal or exceed the associated objectives.
As corporate objectives evolve in response to internal and external factors, so will each individual’s target contributions. This participatory process is not new. What is new is how digital transformation speeds the process, institutionalizes alignment, and provides near real-time transparency into what’s working and what isn’t.
Corporate alignment and strategic planning rub hierarchical organizational structures the wrong way. It requires accountability, evergreen participatory planning, a culture of transparency, and setting measurable objectives across business areas, not just revenue. Not a great fit for organizations wedded to a command-and-control, perks-with-rank culture.
Companies in the next era will usher in new forms of organizing workers. Organizing for flexibility-first requires taking a page out of Agile methodology. Instead of hierarchies of workers, groups of cross-functional teams (or pods, as I like to call them) organize around customers, markets, and partners. Innovation makes a through-line across the pod structure. Within each pod is the competence and expertise required to plan, serve, and deliver results. They are self-governing yet stay aligned through mutually agreed upon service SLAs, framed by corporate strategic objectives. Pods can spot and act on emerging opportunities faster, enabling complex organizations to effectively deal with high levels of uncertainty and be successful.
This shift from short-term-ism to agile long-term orientated business models will have a dramatic impact on global economies. As companies make the shift, it will drive tremendous innovation and transformation in supply chains.
Proximity to demand
Global supply chains are at the core of optimization and efficiency. Component parts are produced where the labor and supply costs are the cheapest. Electronics and consumer goods in China, fast fashion in Vietnam and Bangladesh, software code in the Ukraine, pharmaceuticals in India. Supply chains are the backbone of globalization and raised the standard of living for billions. However, the economics of supply chain optimization require that slack and excess inventory be removed along the chain to further reduce costs and demand risks. Hyper-optimization does not comfortably accommodate sudden massive disruptions. We see the effects across every industry, from healthcare to grocery stores.
Companies are rethinking their entire supply chains and moving key production to be in close proximity of demand, ensuring their customers continual supply. That includes determining which parts of the supply chain should be on- or near-shore, reassessing optimal inventory levels, and determining which products should no longer be produced en masse.
As speed becomes the basis of competition, an interplay will be seen between next-generation supply chains, innovation and customer expectations.
To the customer, it’s all about having one’s uniqueness recognized, served, and remembered — delivered quickly — without compromising value and quality. That’s a tall order, but it is also in response to the social upswell for authentic, empathic relationships. #behuman
The difference between the past 20 years and the future is that customer experience and strategy will become core corporate competencies again and enjoy a renaissance. While we will settle into the new normal in the coming five-plus years, it would behoove us to learn the lessons from this disruption — read the tea leaves and act on them. The trends that will be the seeds of the next disruption are already in play.