To stay ahead of trends, start by envisioning your worst-case competitor.
Disruptions rarely start with a big bang. Most begin quietly as “weak signals,” barely noticed — until they’ve suddenly turned the market upside down.
Weak signals occur every day. The trick is discerning where they intersect to bring about change over time. For example, we’ve all witnessed rising college costs, faster data speeds, and endless improvements in information technology. Yet, how many could foresee that these forces would converge to allow universities to stream online classes around the globe — for a fraction of the cost?
The fact is, recognizing weak signals amid marketplace noise is no easy task, and one that isn’t on the radar of most CEOs. According to KPMG’s U.S. CEO Outlook 2016, 85 percent of chief executives don’t believe they have enough time to strategize about responding to disruption with innovation.
So how can business leaders better discern nascent trends? And how can they use those insights to adapt their organizations to stay ahead of disruptions? What if they could envision their “worst-case competitor,” a hypothetical company uniquely suited to capitalize on emerging trends? Would that help guide them to the best path to take?
The pressures of running a profitable enterprise drive many companies to focus inward. Concerned with challenges in their immediate competitive domains, they risk missing the small but important signals of change.
KPMG has found that an “outside-in” sensory approach — that is, studying political, economic, social and technology (PEST) trends at their earliest stages — can help uncover weak signals that could turn into market disruption for our firm and our clients.
We study trend indexes to monitor venture capital flow, start-up launches and technology investments — as well as insights from clients, academia, social media and industry analysts. Taken together, we are able to generate a holistic picture of emerging forces with the potential to disrupt tomorrow’s markets.
Instead of beginning with changes stemming from the latest technology, we prefer to start with the human element, putting an emphasis on customer needs and experiences. We find that ethnographic research into areas such as demographic shifts, evolving buyer behaviors and changing communication preferences helps illuminate where the greatest opportunities for innovation lie.