Innovation & Trends

You can't hide from a megatrend

These were the words of acting CEO Claus Kjeldsen from the Danish Institute of Future Research, when we asked him about how companies can learn to catch the zeitgeist and use it actively in the strategic work. One of his most valuable points is that it's important that companies learn to use the future in the present, so that they won't be overtaken by competitions, who have learned to read the future.

So, if you aren't already planning your strategy according to the megatrends of the future, then read along as Kjeldsen gives you valuable tips on how to begin to plan according to the way the future presents itself.

Long trails of change

Claus Kjeldsen describes a megatrend as a long trail of change that changes faster than society. So it is not small trends such as whether a long or a short skirt is fashionable next spring, we are looking at here. Because companies which makes a living from knowing what is fashionable next season already know how to exploit trends, or else their business wouldn't exist. We need to look at megatrends that really move society. Read more about spotting a megatrend here.

A classic megatrend – if we can allow ourselves to describe anything new as “classic” – is globalization. In the early 00’s we began to discuss globalization. A megatrend which we, today, are able to see was an obvious trend to follow. According to Claus Kjeldsen there were many who didn't listen to the “warnings” of the wave of outsourcing by western companies to the Far East. The companies who didn't react or change their strategy according to the proclaimed changes in market back then, are now not nearly as strong-positioned as those who integrated the changes in their planning from the very start. The reason that some chose to overhear the warnings it's difficult to relate to the future, even though it's interesting. According to Claus Kjeldsen it's a perfectly natural reaction. Why change anything when the company is doing just fine? However, this won't work forever, he says, and points out how important it is that a company addresses the future, which always have strategic space for change in which to work targeted and determined.

Seize the trend while it is here

Another megatrend which not only companies but entire (especially western) societies must take into account is that there will be an increasing amount of old citizens and fewer young people to take over in the need future. This might become a difficult task for any society, but according to Claus Kjeldsen you have to recognize the positive things in the changes that we will inevitably face. Should we build more and different retirement and nursing homes? This means more people working in the construction industry and more personnel in the retirement homes, etc. Companies who are capable of seizing a trend early on manage far better than the ones who attempt to get a bite of the cake once the trend has passed. Megatrends are like looking at yourself in the mirror everyday – you may not see any visible changes. But look at a picture of yourself from 10 years ago and compare it to how you look today, the change is most likely quite visible.

Strategic adaption is a must

In order to meet the uncertainties that the market of the future inevitably carries Claus Kjeldsen recommends that you draw up different scenarios. Scenarios are visualization of what the future will be like for your company. This means setting up different scenarios for what it will be like, if the development steers in one direction or another or possibly a third direction. According to Kjeldsen, scenario planning offers companies the option of being proactive in relation to the future, it also allows for a focus on the potentials that lies ahead and the ability to keep an eye on which drivers are becoming critical.

When we constantly keep several options open, it requires a certain degree of strategy adaptation – strategic agility, as Claus Kjeldsen calls it. When a company’s strategy isn't static but keeps being in a process of adaption, it makes it possible to handle different scenarios, and takes the complexity that an industry landscape in motion creates into account. 10-15 years ago you could look at the competition with calmness and quietly move towards the desired position, and strategy was something you planned once every second or third year. Today, your competitors keep moving, and strategy work is an on-going process, if you want to keep up. According to Kjeldsen you have to use megatrends in order to understand the market, because it'll be expensive if you don't adapt.

Read more about how scenario planning can be used here.

The future has different paces of implementation

Along with a megatrend comes one or several changes. And change isn't always welcome. When we look at a company that is made up of many different people, some will be ready for change, while others will oppose the new development – all on different levels. Some are very ready for change, whereas others are open to it but still skeptical. Implementing a change in every part of a company is an art form – not only when talking about changes initiated on account of a megatrend. An implementation is generally a tough process.

According to Claus Kjeldsen communication is key when striving for successful implementation. Leaders must communicate the change in several ways, so that everybody is on board – some need to be guided and would like to follow you, while others have already gone ahead.