Guest post written by Frederic De Meyer
– Trends series, article 2 –
There are plenty of examples of how big and small companies are impacted by megatrends –my book covers more than 20 of them. For the sake of space, let me just highlight those companies that have struck me most in four areas of using megatrends in corporate strategy:
Example 1. Companies that didn’t see megatrends coming, and suffered from it
Water shortage definitely became a major issue in the last decade, and will remain to do so in the coming ones. Those companies operating in an environment subject to draught need to have a very close look at their processes, or else share the fate of Coca-Cola India, whose products were boycotted several times between 2003-2006 because of (very) bad water management in their plant in South Indian stateKerala.
This story has a painful tail: Coca-Cola has since revamped their operations (worldwide) to take better care of the water usage –and received many sustainability awards for it-, but whenever you google ‘Coca-Cola India’ you’d find thousands of negative articles before finding something about their sustainability achievements. The Internet has a long memory…
Example 2. Companies that discovered new opportunities by studying megatrends
The most obvious example here is Tata’s Nano car, the ‘cheapest car in the world’, specifically designed to serve the rising middle class in India. The idea is as simple as it is obvious: the income of millions of Indian households is rising to standards where they can afford some extra luxury goods, surely they’d want to buy a status item such as a car? Well, not so quickly. The Nano car has not quite met expectations in terms of sales –there’s a significant amount of reasons for this, none of them is questioning the fact that there is a huge market potential for the car. It shows us that finding new opportunities and executing on them are two different things.
Example 3. Companies that embrace new business models emerging from megatrends
Business model innovation is the biggest thing in business right now, to such an extent that some argue it is a trend in itself. Fair enough, but some new business models are a result of distinct megatrends as well. And the most crucial question any business is facing with regard of this is: should I fight or embrace such new models?
Take the ‘desintermediation’ trend as an example. With the ever increasing interconnection of people worldwide, many businesses that serve to connect supply and demand seem to become obsolete. Even the banking business is not safe –why not create platforms to connect people with too much money with people who are in need of it? Welcome to ‘peer-to-peer’ lending. While relatively small and prone to some growth pains, the business is growing some 400% yearly. Should banks combat this, or should they embrace it? ABN Amro seems to have made the very first –although very careful- step in this direction.
Example 4. Companies who have made megatrends the center piece of their strategy
The single best example in this space is Siemens. Just type ‘Siemens megatrends’ on Youtube and in 7 minutes you will see exactly what I mean. What Siemens did was to (re)align each of its business unit with a specific megatrend (urbanization, ageing society, climate change, …). This offered a very compelling message to all its stakeholders (‘Siemens is working on resolving big issues’), but, more importantly, in terms of strategy execution it tremendously helped them to sell the new strategy to its employees, hence ensuring a smooth transition to the new structure.
“As for the future, your task is not to foresee it, but to enable it”
–Saint-Exupéry
Frederic De Meyer is the author of Megatrends. Read more from Frederic at his blog.
