Saturday, May 28, 2016

Understanding Global Trends

I found all three whitepapers related to global trends to be fascinating, especially in light of the fact that they were slightly dated. McKinsey & Co.'s "What Happens Next?" (2010), "Ten IT-enabled Business Trends for the Decade Ahead" (2013), and the National Intelligence Council's "Global Trends 2030: Alternative Worlds" (2012) aim to sketch out broad global trends and explain their impacts and possible future influences to decision makers. There are some commonalities between the papers: demographics, influence of technology, global networks, decentralization of control/power, sustainability and scarcity of natural resources. Overall, I think understanding these kinds of broad trends are crucial for strategic positioning. Even though we may think that these trends are too large scale to impact our niche area, the fact is that strategy development that only looks inwards and doesn't look outwards is doomed to fail. When attempting to understand the competitive environment in your market, "Competitor Analysis" states, "the current situation is less important" and that you should see to understand where things will be in "the months and years ahead" (8). Looking outwards is the only way to do that.

Even though these papers are fairly recent, certain glaring items stood out to me and underscored how fast things can change in the global context. "What Happens Next?" seems to assume (as many did at the time) that China's impressive growth could never be stopped. Today, China is in a bit of a slowdown and growth levels are more modest. "Global Trends" called out Greece's potential exit from the EU as a possible "black swan" event, but today "Brexit" is more on the minds of analysts world wide than "Grexit."

I was especially intrigued by the "potential worlds" section of the "Global Trends" piece. Much like the "envisioned future" exercise, this narrative really helps to put into specific detail some of the possible impacts of trends. Today, fours years after this is published, it does seem like some of the predictions in the "Gini out of the bottle" and "non state world" scenarios have come true. Falling energy prices have caused problems for certain states who aren't diversified - Venezuela comes to mind as a particularly good example of this. ISIS or Daesh, a non-state actor, has significant influence not just in their region but increasingly internationally. Especially in Syria, they create a 3-sided conflict with the state and rebellion.

One never knows how and in what ways this kind of global trend information will be helpful in strategy planning - we may find that it influences us indirectly, but the fact is that if we don't have the information then we definitely can't be responsive or proactive when these trends influence our industries.

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