A MOORE’S LAW OF CHANGE
10 trends business leaders need to watch in 2014
By Professor Thomas W. Malnight and Tracey S. Keys - January 2014
For organizations and individuals the opportunities and challenges that a Moore's Law of change offers are vast. Look for continued radical changes in retail and social networks and value chains being reconfigured as connectivity and technology redistribute industry. "Hubonomics" will shift how and where we operate and consume. The latest scientific advances will make the impossible, possible. Perhaps the biggest issue looking forward will be to understand and manage the contradictions these changes entail.
The challenge for leaders, however, is not accurately predicting the future. Rather it is about first having a broad and open understanding of the trends reshaping the world, second an informed point of view on the future and what it means for your organization and third, and most importantly, taking actions today to begin to prepare. Leaders who continue to act as if the old rules apply will find their organizations left behind, as Kodak and Nokia demonstrate. How long does it take to build new capabilities or business models? To change mindsets about consumers and building relationships with them? To change organizational culture? In a world of accelerating change, the biggest risk for leaders is not being wrong in their point of view about the future, but beginning to take action too late.
So where should leaders look today? In our forthcoming Global Trends Report 2014, The Fieldbook, we highlight 10 trends that business leaders need to focus on today. These are:From social everything to being smart socially
Social technologies are everywhere, but these vast repositories of digital "stuff" bury the exceptional among the unimportant. It's time to get socially smart. Users are moving to niche networks to bring back the community feel and intelligence to social interactions. Businesses need to get smarter about extracting and delivering value from big data including challenging business models. For social networks, mobile is the great leveller. Competition for attention with other apps will intensify the battle to own key assets from identity to news sharing, demanding radical reinvention.Information security: The genie is out of the bottle
Thought your information was safe? Think again. The information security genie is out of the bottle as cyber-surveillance and data mining by public and private organizations increases – and don't forget criminal networks and whistleblowers. It will be increasingly hard to tell friend from foe in cyberspace as networks build artificial intelligence to decipher your emotions and smart cities track your every move. Big brother is here: Protecting identity, information and societies will be a priority for all.Who needs shops anyway?
Retailers are facing a digitally driven perfect storm. Connectivity, rising consumer influence, time scarcity, mobile payments, and the internet of things, are changing where, when and how we shop – if smart machines have not already done the job. Add the sharing economy, driven by younger generations where experience and sustainable consumption are more important than ownership, and traditional retail models break down. The future of shops will be increasingly defined by experiential spaces offering personalized service, integrated online and offline value propositions, and pop-up stores to satisfy demands for immediacy and surprise.Redistributing the industrial revolution
Complex, global value chains are being redistributed by new technologies, labour market shifts and connectivity. Small-scale manufacturing, including 3D and soon 4D printing, and shifting production economics are moving production closer to markets and enabling mass customization – not just by companies but by the tech-enabled maker movement which is going mainstream. Rising labour costs in developing markets, high unemployment in developed markets, global access to online talent and knowledge, plus advances in robotics mean reshoring of production to developed markets will increase. Mobility, flexibility and networks will define the future industrial landscape.Hubonomics: The new face of globalization
As production and consumption become more distributed, hubs will characterize the next wave of "globalization." They will specialize to support the needs of growing regional trade, emerging city states, online communities of choice, and the next generation of flexible workers and entrepreneurs. Underpinning these hubs will be global knowledge networks and new business and governance models based on hubonomics™, that leverage global assets and hub strengths to deliver local value.Sci-Fi is here: Making the impossible possible
Cross-disciplinary approaches and visionary entrepreneurs are driving scientific breakthroughs that could change not just our lives and work but our bodies and intelligence. Labs worldwide are opening up the vast possibilities of mind control and artificial intelligence, shape-shifting materials and self-organizing nanobots, cyborgs and enhanced humans, space exploration, and high-speed, intelligent transportation. Expect great debate around the ethics, financing, and distribution of public and private benefits of these advances – and the challenge of translating breakthroughs into replicable benefits.Growing pains: Transforming markets and generations
The BRICS are succumbing to Newton's law of gravitation: Brazil's lost it, India's losing it, China's paying the price for growth, Russia's failing to make a superpower come-back, and South Africa's economy is in disarray. In other developing markets currencies have tumbled, Arab Spring governments are still in turmoil and social unrest is increasing along with the number of failing states. But the BRICS & Beyond growth engine is far from dead. Rather it is experiencing growing pains which demand significant shifts in governance, financial systems, education and economic policies to catch up. The likely transformers will be younger generations who aspire to greater freedom and quality of life than their parents.Panic versus denial: The resource gap grows, the global risks rise – but who is listening?
The complex nexus of food, water, energy and climate change presents huge global economic, environmental and societal challenges – heating up the battle to access new resources from the Arctic to fracking. Risks are growing, even as multilateral action stalls. It's a crisis of morals, governance, and above all marketing and media, pitting crisis deniers against those who recognize the threats but are communicating panic versus reasoned solutions. Expect more debate and calls for responsible capitalism – those that are listening will be taking action at multiple levels in society and business.Fighting unemployability and unemployerability
Companies are desperate for talented workers – yet unemployment rates remain high. Polarization towards higher and lower skill levels is squeezing mid-level jobs, even as employers complain that education systems are not preparing students for the jobs of the future. Fighting unemployability is driving new government-business partnerships worldwide, and will remain a critical issue given massive youth unemployment. Employers must also focus on organizational unemployerability – not being able to attract and retain desired talent – as new generations demand exciting and meaningful work where they can make an impact. If they can't find it, they will quickly move on or swell the growing ranks of young entrepreneurs.Surviving in a bipolar world: From expecting consistency to embracing ambiguity
Life is not fair, nor is it predictable. Income inequality is growing. Intolerance and nationalism are rising but interdependence is the currency of a connected world. Pressure on leaders to deliver results today is intense but so too is the need for fundamental change to succeed in the long term. The contradictions of leadership and life are increasing faster than our ability to reconcile the often polarized perspectives and values each embodies. Increasingly, they are driving irrational acts of leadership (think the US debt ceiling), geopolitical, social and religious tensions, and individual acts of violence. Surviving in this world will demand stronger, responsible leadership comfortable with and capable of embracing ambiguity and uncertainty, as opposed to expecting consistency and predictability.Are you and your business ready to take advantage of these 10 trends?
Thomas Malnight is Professor of Strategy and General Management at IMD. Tracey Keys is Director of Strategy Dynamics Global SA. Each year they publish The Global Trends Report (see www.Globaltrends.com).
This article was first published in The Economist's "Cassandra" blog.