Jack Uldrich: Predictions for 2012

Jack Uldrich is a well known author, blogger, columnist, keynote speaker, and global futurist.  Two books of his I recommend are 1) Jump the Curve: 50 Essential Strategies to Help Your Company Stay Ahead of Emerging Technologies and The Next Big Thing is Really Small: How Nanotechnology Will Change the Future of Your Business.

Uldrich has released his list of predictions for 2012.  I like reading his list every year because his predictions are integrated into stories and potential scenarios that could very well happen.  The stories and scenarios bring the predictions to life and helps you imagine other uses for the predicted technology trend.

Here’s a summary of his list

  1. Blackout Friday. Retailers will admit to using advanced facial recognition software.
  2. Collegiate Guarantees.   University helps unemployed alumni with special offer.
  3. Augmented Political Reality.  A mobile app to help voters match candidates to special interest groups
  4. Potty “Gaming”.  A new game to help parents potty-train their toddlers.
  5. Urban Crops.  A city will initiate a major focus on urban farming to feed it’s citizens.
  6. Paparazzi Drones.    Advanced miniature robotic drones to be applied to the celebrity industry.
  7. Virtual Grocery Stores.  Subway walls to become a smartphone enabled virtual grocery store..
  8. Nano-Drugs.   Trial program launched to apply groundbreaking nanoscience technology to cancer treatment
  9. Networked Traffic.    Social networking apps to reduce traffic congestion.
  10. Phone Food Sensors.  New device attached to smartphones chemically analyzes food while shopping at grocery stores.

You can read the detail behind Uldrich’s list at his blog  http://jumpthecurve.net/health-care/futurist-jack-uldrichs-predictions-for-2012/

IBM: 2011 Technology Trends Survey Results and Report

image Last month, IBM released it’s 2011 IBM Tech Trends Report, which is one of the top reports I suggest you read about tech trends going into 2012.  It’s a great report because it’s developed from a survey of more than 4000 IT professionals from 93 countries and 25 different industries. 

Summary: 

The IT professionals surveyed identify adoption drivers and inhibitors around important emerging trends such as Analytics, Cloud Computing, Mobile, and Social Business. 

Key findings in the 2011 IBM Tech Trends Report include:

  • Analytics:  Analytics was named as the most in demand area for software development in the future.
  • Open Source:  87% of respondents believe open source and open standard technologies will play a key role in the future of application development.
  • Cloud Computing:  During the next 2 years more than 75%  of organizations will engage in cloud computing.
  • Mobile and Cloud.  Fifty-one percent of respondents cited the adoption of cloud technologies as part of their mobile strategy.
  • Social Business.  Regional cultural differences impact social business adoption. India is highest with a 57% adoption rate, while US is at 45% and China’s at 44%. Russia shows the strongest resistance with a 19% adoption rate.

Top 8 Programming Skill Areas Identified

  1. Application Development
  2. Mobile
  3. Cloud Computing
  4. Database Management
  5. Business Analytics
  6. Security
  7. Software/systems engineering
  8. Business Process Management

For More Information: 

Report:  Get the report and share your thoughts at: http://www.ibm.com/developerworks/techtrendsreport

Twitter:  Join the Twitter conversation: #TechTrends

Videos:

Press Release:  IT Professionals Predict Watson Technology To Transform Education Industry

Nucleus Research: Top 10 Technology Predictions for 2012

Back in October, Nucleus Research (Boston) announced its Top 10 Technology Predictions for 2012.  Now that I am well into my trends research for 2012, I thought I’d blog about the Nucleus list.

Nucleus believes there will be an overall increase in IT spending in 2012 as companies start allocating more budget towards technology in order to meet business goals.   However, Nucleus cautions that the European banking crisis and the US budget debate remain as key issues in the overall global economy.

As far as technology trends and themes,  the cloud, mobility, and big data are a few of the trends driving Nucleus's 2012 predictions.  The ten predictions (and my summary) is below:

  1. Productive Enterprise:  The most successful firms in 2012 will be those that integrate technologies like mobile and social software in order to maximize the productivity of employees
  2. The Cloud Changes Development:  Nucleus says that the cloud will make development even more virtual as CIOs will not care where the developer is as long as good code is delivered on time.
  3. SAP Reemerges:  Nucleus expects SAP to leverage recent innovations like mobile device access and cloud delivery in order to create more customer value
  4. Big Beats Best-of-Breed:   Tech buyers are expected to increasingly look to big tech vendors for their solutions as usability, integration and TCO become more valued criteria in buying decisions.
  5. More Ways for All to Manage Big Data:  Businesses will increasingly turn to advanced analytics to draw insights out of the growing mounds of data.
  6. Capital Moves from Labor to Technology:  Given a choice, firms will spend more on technology in 2012 than on labor, hopefully improving the productivity of the existing workforce rather than adding to it.
  7. The Decade of Smarter Software:  Nucleus expects to see more intelligent applications that anticipate, search for, analyze, and push dashboard information to worker’s desktop.
  8. Labor Finally Gets Optimized:  According to Nucleus, businesses will use tools to help them figure out which employees are the most productive, show up on time, create the least scrap, and book the most sales.
  9. Healthcare Investments Increase:  Nucleus says that in 2012 Healthcare organizations will invest in data capture devices and services and electronic records management applications, spurred on by Government incentives.
  10. Renewed Focus on the Customer Experience:  Nucleus expects strong investment in CRM and related applications in 2012, as companies seek to retain their most profitable customers and attract new ones

Predictions 1, 6, and 8 all seem inter-related and could probably have been combined.   Regarding number 9, while I’d love to see a surge in healthcare investments, I believe EHR will continue to have a slow adoption cycle.

For more information, check out the Nucleus Top 10 Predictions for 2012 research paper.

IDC: 2012 Predictions for Information Technology Industry

“IDC predicts that worldwide IT spending will grow 6.9% year over year to $1.8 trillion in 2012. As much as 20% of this total spending will be driven by the technologies that are reshaping the IT industry – smartphones, media tablets, mobile networks, social networking, and big data analytics.”  – IDC Press Release

IDC Top Trends 2012 IDC released it’s high level list of predictions for 2012 yesterday.  I attended the annual international conference call which kicks off a series of IDC predictions and trends calls over the next few months. 

The 10 high level prediction areas from IDC for 2012 are:

  1. Worldwide IT Spending Growth – Spending growth returns to the industry, fueled by the emerging markets and mobile computing.  European debt crisis could spoil the party.
  2. Emerging Markets Growth – China to pass Japan in IT spending as emerging markets grows to 28% share of total global spending.
  3. Mobility Devices & Apps – Smartphone/Tablet usage grows and users want these devices to do everything.  Mobile apps explosion continues and the O/S battle rages.
  4. Cloud Services Adoption – Spending on cloud services growing 4 times the industry rate.  Apps moving increasingly to the cloud.  PaaS and SaaS wars/acquisitions accelerate.
  5. Cloud Services Enablement – Increased cloud services growth will drive huge demand for IT hardware and software offerings that enable those cloud services as well as for technologies that can optimize the cloud data center infrastructure
  6. Mobile Networks – IDC says that in 2012 spending on mobile data services will surpass fixed data spending, that growth of video traffic will be an issue, and that telcos are expected to focus on mobile cloud strategies.
  7. Big Data Analytics – Digital data continues to grow at an alarming rate (48% in 2012) resulting in focus on Big Data and analytic ‘mashups’ and related M&A activity.
  8. Social Business – IDC expects battles to continue between between Microsoft, SAP, Oracle, and IBM while Facebook aims to become the B2C platform of choice.
  9. Interactive Network of Things – The number of embedded systems, entertainment devices, appliances, and industrial automotive computing devices will outnumber traditional IT input devices by 2014.
  10. Intelligent Industry Solutions – Smart Cities related efforts will drive over $40 billion in technology investments in 2012, mainly in Energy, Government, and Healthcare.

The IDC predictions list aligns well with the research I have been doing the last few months.  I will be issuing my own annual trends report in early January. 

The 10 IDC predictions are detailed in the full report IDC Predictions 2012: Competing for 2020 which was authored by Frank Gens, IDC’s Senior VP & Chief Analyst with help from a vast army of IDC analyst teams. 

IDC’s prediction portal for 2012 is at www.idc.com/Predictions12 and it is there you can link to all sorts of content, events, press releases, and complementary research.  I recommend you check out the “Video Commentary” Frank Gens, IDC’s Senior VP & Chief Analyst .  You can also follow IDC on Twitter http://twitter.com/#!/idc  for real-time news and updates.

IDC Announces Dates for 2012 Prediction Conference Calls

IDC IDC’s series of annual prediction conference series kicks off December 1st with it’s Top 10 Predictions for 2012 conference call.  I’ll be attending most of the conference calls and reporting about them here as I do every year.  

IDC's annual Top 10 Predictions for 2012 conference call is the most popular call in the sericeso.  Senior Vice President and Chief Analyst Frank Gens will talk about the key themes and opportunities that will guide the industry's direction in 2012. 

The Cross-Industry Overview call is another popular call.  Hosted by Meredith Whalen, Senior Vice President, IDC Insights and Vertical Markets Research, this call always features a panel of research vice presidents from the six industries that comprise IDC Insights. Here’s the list of dates that have been announced.

Below you can find a list of currently scheduled IDC Prediction Calls.   For more information about IDC events and webinars, go to the IDC Events page.

Overview/Summary Calls

Energy & Utilities

Financial Services

Government

  • Government – December 7, 2011 – 11:00 a.m. EST; 16:00 GMT
  • EMEA Government – December 13, 2011 – 9:00 a.m. EST; 14:00 GMT

Health

 

  • Health – December 5, 2011 – 2:00 p.m. EST; 19:00 GMT
  • EMEA Healthcare – December 14, 2011 – 9:00 a.m. EST; 14:00 GMT

Manufacturing and Supply Chain

Retail

  • Retail – December 8, 2011 – 11:00 a.m. EST; 16:00 GMT
  • EMEA Retail – January 18, 2012 – 9:00 a.m. EST; 14:00 GMT

Note: If you cannot attend the live broadcasts, slides and web conference replay recordings will be available afterward to pre-registered participants. You must pre-register to receive access information and reminders.

For more information about IDC events and webinars, go to the IDC Events page.

Eight Ways IBM Develops a View of the Potential Futures

Last week I presented at the 47th meeting of the Technology Market Analysis Group.  The theme for the meeting last week was “Trend Spotting and Forecasting Market Disruptions”, a theme that was right up my alley.   I’ll blog more about TMAG and the meeting in the coming days. 

How IBM Develops Views of the Potential Futures - Aug2011The inspiration for my presentation came from a white paper “100 years of foresight: The importance of long-term thinking at IBM” written by my IBM colleague David Jarvis, Senior Consultant of the IBM Center for Applied Insights team.

This was a very timely topic as this past June IBM celebrated its 100th birthday…a major milestone in the company's history.  It’s important to pause and reflect how a company like IBM continues to survive and even thrive in an industry that experiences one disruptive trend after another.  The answer lies in a series of initiatives designed to help the company understand and prepare for the potential futures that lie ahead.  

During the presentation, I provided an overview of eight examples of ways in which IBM approaches the discipline of strategic foresight.  In each of the eight initiatives collaboration plays a big part in planning for the future.   If you scroll to the bottom of this post, you’ll see I’ve also embedded the presentation which I have loaded to HorizonWatching on Slideshare.

Eight IBM Foresight Initiatives

1.Global Technology Outlook (GTO).  The GTO is developed annually by IBM Research and identifies disruptive societal, technical and economic trends that might impact IBM and its clients.  The GTO is used to drive technical initiatives in IBM Research and to jointly engage with IBM in formulating these initiatives.  For more information, check out the 2011 GTO report.  A side benefit of the all the work that goes into the GTO is the annual list of Five in Five…which provides a list of five technologies that may have a disruptive impact on our lives in five years.

2.Academy of Technology. The IBM Academy of Technology is a society of IBM technical leaders across all IBM Business Units.  The academy’s mission is to advance the understanding of key emerging technical areas.  Groups of technical leaders voluntarily study, organize, synthesize and advance technical dialogue and innovation across business lines on important emerging technical topics.

3.First of a Kind (FOAK). The First-of-a-Kind (FOAK) Program encourages collaboration of early adopter companies with IBM Research and Sales.  The effort pushes early thought leadership and experiences with new technologies and results in the piloting of experimental solutions and working prototypes.  For more on FOAK see http://www.research.ibm.com/FOAK/index.shtml

4.Global Innovation Outlook (GIO).  The Global Innovation Outlook focuses more on broad issues impacting all types of organizations. This is an open, collaborative, multi-disciplinary process with external business leaders, academics, researchers and policymakers.  The focus on tackling broad and challenging topics – spanning geographies, generations, industries and interests.  Access past GIO reports via http://www.ibm.com/ibm/gio/us/en/index.html

5.InnovationJam. InnovationJams (https://www.collaborationjam.com) are online collaborative discussions and brainstorming sessions for focused audiences ranging in size from a few hundred to hundreds of thousands.  The brainstorming sessions are enhanced by real-time text analysis and data mining software that highlights hot discussions and possible solutions.  An example was the HabitJam.

6.Institute for Business Value.  The IBM Institute for Business Value (IBV) is global team of 50+ consultants who conduct research and analysis across multiple industries and functional disciplines. IBV consultants author thought leadership papers, like “Future Agendas” and “C-Suite Studies” that provides an original, research-based point of view told from a client’s business perspective.  

7.Market Development & Insights.  IBM’s Market Develop & Insights is a global team of market research analysts and consultants that research topics of importance to IBM business leaders and strategists.   The team accelerates the understanding of new or emerging markets, and acts as a catalyst for future growth.  The team provides foresight from a marketing perspective, including market definition, opportunity analysis, market drivers/inhibitors, potential segmentation, and competitive intelligence.

8.HorizonWatch Community.  This is a cross-IBM community of 1900+ IBM employees from all types of functions, divisions and geographies that I have led since it’s creation in 2001.  The mission is to improve our collective ability to sense future disruptive technologies, business issues, trends and opportunities.  The community meets via monthly conference calls on an emerging topic, which are led by a subject matter expert.  In between calls, the community collaborates via an online community platform that allows the members to share and brainstorm ideas about how the future will play out.

Churchill Club: 13th Annual List Of Top 10 Tech Trends

Last week the Silicon Valley was abuzz as The Churchill Club held their annual Top 10 Tech Trends event in Santa Clara.  The annual event is much anticipated by the Silicon Valley crowd….as well as VC-types as it can provide an interesting perspective on what the future might hold for the software industry. 

As always, I have my radar up to capture any insights I can from events like these. I could not attend the event, but thanks to some bloggers and news articles, I am able to report what was discussed.

As the 10 trends were presented, four leading industry panelists were on stage to debate the worthiness of each trend.

Below is a list of the ten trends on the Churchill Club’s list along with my take on the pace of adoption of each trend.    From sources I’ve read, the panelists themselves only agreed on a couple of the trends. Which ones do you agree on?

1) Age before beauty:  This trend asserts that the Baby boomer generation will dictate the technology trends of the future.  The premise is that this is such a large market that is largely unserved today. 

  • My take: I don’t agree.  Although the retired population is a largely untapped market, it is not one that gets excited about technology trends.  They are not digital natives.  I don’t see my parents flocking to buy the latest Ipad or the latest 3D TV.

2) The doctor is in: The trend is toward complete automation: a combination of artificial intelligence, the Internet, and very low-cost medical instrumentation to provide high-quality diagnostics and advice—including answering patient questions—online to a worldwide audience.  

  • My take:  I see this trend happening, but the focus will be first on specialized medicine.  The trend will be very slow to adopt to a mass market.  Privacy, culture, and behavioral issues will make changing over to online medial practices a long road.  

3) Made for me:   Manufacturing is undergoing a revolution. This trend is about the one-off production of physical goods in widely distributed micro-factories: the ultimate customization of products.  It is becoming technically and economically possible to make products that are unique to the specific needs of individuals.   

  • My take:  Consumers and Businesses are all expecting more and more customization of products and services.  The enabler of this trend for product manufacturing is the 3D printer technology trend.  For services, it is the software and advanced analytics that drive Internet-based services. 

4) Pay me now: The trend is technology and business models based on attracting consumers to share large amounts of information exclusively with service providers.  Why?  Because information can be very valuable. This knowledge is becoming a key asset and a major competitive advantage for the companies that gather it and analyze it.  Businesses will become increasingly smarter and more aggressive in convincing us to share our information with them and not with their competitors  

  • My take:  I am not sure about the name of this trend here, but this all ties into the trends of privacy, cloud computing / storage, and database analytics trends.  Businesses who figure out how to use analytics to make sense of all the information they gather will know better how to target and customize services to individuals that are most likely to buy.

5) Rosie at last: Rosie was the Jetson’s robot who did most everything for the Jetsons and even had a personality anyone could love.  Robots ARE slowly becoming embedded in our environments.  They will take full advantage of the cloud and advanced analytics in order to anticipate, understand and fulfill our needs. 

  • My take:  I do see a future for personal robots. See my post:  A Primer on the Consumer Market for Household Robots.  This will be another long term trend.  We are not going to see explosive growth overnight.  However, there will be a gigantic industry in the future all around the robot and robot Industry … both for consumers and businesses.

6) Social, really: The rise of true social networks, creating real respectful relationships online. 

  • My take:  The key here is the word relationships.  The value of social technology is it can enable better relationships.  If businesses can find ways to leverage social technology to form better relationships, then their sales will benefit.

7) Augmented Reality: Augmented reality will become indistinguishable from actual reality. 

  • My take:  AR will transform how we receive and process information throughout the day.  The AR trend will take another 15-25 years to take hold in the mass market, but it will take allot longer (1-200 years) to get to the point where AR is indistinguishable from actual reality.

8) Engineering by biologists: practical engineered artifacts, devices, and computers based on biology rather than just on silicon. 

  • My take:  This is all about the convergence of computers, biology, chemistry, and nanotechnology.  This is another of the long-term trends that will have profound impacts on human lives over the next 200-300 years, but I don’t see much impact in the next 25 years.  

9) Tis a gift to be simple: Cyber defense through wide spread adoption of simple, low-feature software for consumers and businesses. 

  • My take:  The security industry is secure.  That is, the need for security solutions will only increase as technology becomes embedded in every part of our business and personal lives.  While these solutions may look simple and low-featured, there will be a huge technology capability under the covers.

10) Reverse innovation: the trend for developing countries to turn around the flow of innovation: Silicon Valley will begin to learn more from them about innovative applications than they need to learn from us about underlying technology. 

  • My take:  History has shown us that innovation (agriculture, industrial, military, technology) leads to good things.  The quest for innovation will always be an important part of the human journey.  Successful businesses must ensure they enable innovation daily, whether that innovation happens in America Valley or in BRIC or in other emerging markets.

For more information about the Churchill Club event

Leveraging Social Media and Communities for Foresight

Last Wednesday evening I delivered a keynote presentation at an end of the year student event at the University of Notre Dame’s Mendozza College of Business MBA program (http://business.nd.edu/). 

Mendozza Keynote

The students are all required to take a class in Futures Studies and this was their end of year event.  During the late afternoon Poster Session that was held in the atrium of the Mendozza building, they all assembled and displayed posters that communicated the results of their semester long projects.  The topics covered a wide variety of subjects, from the future of Electric Cars to Solar Technology, to how to solve water irrigation in Africa.   In all there were over 50 projects from teams of 4-5 students.   I was impressed with the students projects and the level of research, analysis and insight generation that went into the poster presentations.   I learned a lot just by walking from poster to poster.

After the poster session was done, we all assembled into the auditorium where I delivered my keynote to the students “Leveraging Social Media and Communities for Foresight”.  The deck has been uploaded to my HorizonWatching account on Slideshare and is also embedded below. 

During the keynote, I discussed how the emergence of online social media and communities is transforming communication around the world.  The shift from traditional institutional-led communications that is relatively controlled by a small number of companies to an era where any individual can create and publish content is a shift that is transforming the way individuals learn, collaborate, and create content.   This has a ripple effect across all business professionals and certainly is impacting the way we research, analyze and develop insights about emerging trends, technologies and issues impacting businesses and individual citizens.

I provide the students with my personal story of how I’ve led an internal IBM community called HorizonWatch since early 2001 and how I started blogging internally in 2006.  I also discussed my public social community effort called HorizonWatching.   Both efforts have helped me do a better job of scanning for emerging trends and then developing insights from those scanning activities.

I ended the talk with some advice to the students on how they could get started leveraging social media in their own careers.  My main advice was that they should all think about taking control of their personal online brand.  As they are soon to turn their attention to job searching, now is the time for them to think hard about what their digital brand looks like to recruiters and potential employers.  But after the job search is over, I believe those who will be successful in their careers are the ones that will figure out ways to leverage social media and communities to build their expertise.

As this was their last day of class, they were all eager to go out and celebrate, so the Q&A session was short and sweet.  However the 5-6 questions raised were smart and right on topic.  I wish all the students good luck and best wishes over the summer and challenge them to begin using social media and communities as a strategy to better understand the future(s).

My presentation is embedded below.

World Future Society: 2011 Top 10 Forecasts

The World Future Society Outlook 2011 report was released about 6 months ago, but I came across it again today and thought it would be a good post for my readers. 

The video below is 4 minutes long and provides a summary of the top 10 forecasts from the World Future Society.

Every year the WFS Outlook report (published by the The Futurist Magazine) examines the key trends in technology, the environment, the economy, etc and provides a summary of top ten forecasts for the coming year.  You can access these forecasts at http://www.wfs.org/Forecasts_From_The_Futurist_Magazine

The 2011 report provided the following ten forecasts:

1. Physicists could become tomorrow’s leading economic forecasters.

2. Environmentalists may embrace genetically modified crops as a carbon-reduction technology.

3. Search engines will soon include spoken results, not just text.

4. Will there be garbage wars in the future? Trash producers in the developed world will ship much more of their debris to repositories in developing countries.

5. The notion of class time as separate from non-class time will vanish.

6. The future is crowded with PhDs. 

7. Cities in developed countries could learn sustainability from so-called slums in the developing world. Dwellers of "slums," favelas, and ghettos have learned to use and reuse resources and commodities more efficiently than their wealthier counterparts.

8. Cooperatively owned smart cars and roads will replace dumb, individual gas guzzlers.

9. Fighting the global threat of climate change could unite countries—or inflame rivalries.

10. We may not be able to move mountains with our minds, but robots will await our mental commands.

All of these forecasts plus dozens more were included in the report that was published in The Futurist Magazine.  In fact, The Futurist, has also made public the contents from Outlook 2006, 2007, 2008, 2009, and 2010. You can access these forecasts at http://www.wfs.org/Forecasts_From_The_Futurist_Magazine

HorizonWatching at Tumblr is one year old today

A little over a year ago, I started contributing to the Smarter Planet blog on Tumblr at http://smarterplanet.tumblr.com/.  The Smarter Planet blog on Tumblr is the brainchild of Jack Mason at IBM and it has been fun contributing to that blog for the past year.  That blog, and it’s sister blog on Tumblr, Smarter Cities Scan is a great source for thought leadership content relating to emerging technologies and trends

As I started sharing content on the Smarter Planet blog, I found Tumblr (http://www.tumblr.com) to be an innovative platform for blogging.   I decided to start a HorizonWatching blog on Tumblr ( http://horizonwatching.tumblr.com/) to experiment with the Tumblr platform.  I wanted to have a place other than the HorizonWatching blog here on Typepad to experiment with content sharing.  

On the HorizonWatching Typepad blog I communicate my own insights and content.  I use the HorizonWatching blog on Tumblr to share other’s content (usually direct quotes, videos, webcasts, photos, etc) that I have found interesting.   I’ve also linked those Tumblr posts to a HorizonWatching page on Facebook

Today, I got an email from the Tumblr team indicating that I had been blogging a whole year.  I thought I’d use the occasion to introduce you to the HorizonWatching Tumblr blog and provide you with some direct links to some content I have posted on Tumblr. 

So to celebrate the 1st birthday to the HorizonWatching blog at Tumblr, check out some of links to the posts I have embedded below.

Growth Oriented Companies Pay Attention To Customer Goals

A few weeks ago I attended a 2 day conference jointly organized by the Kellogg Graduate School of Management (at Northwestern University) and the Marketing Science Institute.  The conference was titled Realizing Opportunities for Profitable Growth.  

It was a fantastic conference for me.  The agenda was packed with excellent presenters, I met many interesting people, and I felt like I was back at graduate school on the Kellogg GSM campus, my alma matar.   It was especially great to see one of my favorite professors, Professor Greg Carpenter, again.

I’ve had a busy couple of weeks since the conference so I am just getting around to organizing my notes from the conference.   Over the next few posts I plan on summarizing those notes and providing the most important nuggets of learning to you.

The first topic area discussed at the conference was how companies can go about the task of developing better strategies to achieve growth in a competitive marketplace. 

An obstacle to growth for many maturing customers is how they currently think about their customers.  Many companies can't grow a mature product until they put aside their traditional thinking about how and why their customers buy.  Many companies in mature markets have blinders on and have hard fast assumptions about their customers.  For example, they think that their customers have the following purchasing behaviors

  • Lower price is better
  • Buyers choose rationally
  • Buyers know what they want
  • More choice is better
  • Information improves choice

Growth companies tend to throw out those assumptions and ask: How can we think differently about our customers?   Companies that do a good job of developing competitive growth strategies in maturing product categories know that it requires a deep understanding of what customers value. 

To understand what customers value, we must understand how customers set goals…for goals are what drive customer decisions.  Goals are desired future states of being.  Customers set goals because they have ambitions about the future.   They set both short term and long term goals.   The goals drive customer wants, needs, and purchase behaviors. 

There are, of course, different types of goals, but from a marketing perspective, there are three important types of goals that customers have that impact purchasing decisions.  

  1. Emotional goals
  2. Functional goals
  3. Economic goals

Most goals are set high and are somewhat difficult to achieve.  So by the mere process of setting goals, customers are also creating problems that need to solved if they are to achieve the goals.   Thus goal setting quickly turns into a process of learning what problems they need to solve and then coming up with action plans to solve those problems.   As a result, customers place a high value on products and services that can solve their problems. 

Growth oriented companies who pay attention to their customer’s goals and help position products to help solve problems, can grow, even in mature product categories.  They can do this by helping shape how customers learn how to solve problems.

As they go about solving problems, customers seek knowledge.   All customers have a process for how they go about learning how to solve problems, and eventually, making decisions.  Based on learning activities they choose participate in customers form their own sense of reality.   Growth oriented companies develop marketing strategies that are designed to influence what and how the customers learn …and therefore impact customer’s perception of reality.

Growth companies look to create new learning paradigms around maturing products by innovating uniqueness in their products.   By innovating uniqueness into maturing products, growth companies cause customers to seek more knowledge.  But you also need to keep things simple as customers need to know just enough information to solve their problems…not much more than that.

It is also worth noting that customers have an unlimited supply of goals.  As goals are achieved, new goals are created.  So this leads to a unlimited supply of problems customers must solve. 

As I said above, look for a few additional posts in the near future summarizing some of the other key thoughts from the conference.

Thanks to the Marketing Science Institute for putting on such a great conference!!

Foresight Method – A Primer on Scenario Planning

Primer on Scenario Planning Introduction To Scenario Planning

Scenario planning is a Foresight technique that can help provide a view into the future in a world of great uncertainty.   Scenarios are carefully crafted stories about the future embodying a wide variety of ideas and integrating them in a way that is communicable and useful.  Using scenario planning techniques, teams can imagine plausible futures with the objective to explore potential surprises and unexpected developments.  It can help manage strategic risks and opportunities. 

Scenario planning has its roots in military strategy studies, but it was transformed into a business tool in the late 1960's and early 1970's, by Pierre Wack of Royal Dutch/Shell.  By applying scenario planning techniques, Shell was better prepared to deal with the oil shock that occurred in late 1973.  As a result, Shell greatly improved its competitive position in the industry during the oil crisis and the oil glut that followed.

Why Should Companies Do Scenario Planning?

Scenario planning is a technique analysts and strategists can use to deal with major, uncertain shifts in a company’s environment.  Scenario planning is particularly useful in emerging markets or when existing markets are gong through rapid changes and disruption.  It is during these times that information is limited and it is hard to predict with certainty what might happen in the future.  In these cases, traditional forecasting techniques often fail to predict significant changes going on in the external environment.  Consequently, important opportunities and serious threats may be overlooked and the very survival of the firm may be at stake.  

Other benefits of scenario planning include:

  • It forces people out of their typical view of the market and therefore can expose blind spots that might have been overlooked in the current long range strategic plans

  • As the future unfolds, we are better able to recognize a scenario in its early stages as it happens, rather than being caught off guard.

It is important to understand that the objective of scenario planning is not to fully predict the future.  Instead, it attempts to help describe what is possible.  The objective of scenario planning is to describe a group of distinct futures, all of which are plausible.  Once those potential futures are developed, the challenge then is how to deal with each of them.

The Basics Of Scenario Planning

Scenario planning usually takes place in a workshop setting.  The workshop can range from a half a day to a number of days, depending on the complexity of the market being studied.  It is best to have a diverse team assembled, including  analysts, strategists, subject matter experts, and industry leaders.  The idea is to bring together a group that has a wide range of viewpoints in order to fully explore alternative scenarios that are outside the current accepted forecasts. 

Any scenario planning workshop should encourage unstructured thinking, therefore, the process itself should not necessarily be too structured.  With that in mind, the following outlines the sequence of actions that may constitute the process of scenario planning.

  1. Form Team.  Identify people who will contribute a wide range of perspectives.
  2. Conduct pre-workshop interviews as appropriate.  Ideally, the process should include pre-workshop interviews with managers who later will formulate and implement strategies based on the scenario analysis.  Without their input the scenarios may leave out important details and not lead to action if they do not address issues important to those who will implement the strategy.
  3. Begin workshop.  Introduce Scenario Planning Exercise.  Define goals/objectives.  Specify the scope/time frame.
  4. Develop a clear understanding of the present situation.  This will serve as a common departure point for each of the scenarios.
  5. Document current trends any future events/elements that are virtually certain to occur.
  6. Understand external environment.  Identify the critical uncertainties in the political, economic, social, and technological factors.
  7. Identify the more important driving forces.  Take into account the potential variation and impact of each driver.  After listing all driving forces, rank the driving forces in order of significance.
  8. For the most important drivers, consider a few possible values for each.  Range between extremes while avoiding highly improbable values.
  9. Understand potential interaction between the driving forces.  One way to do this is to develop a matrix of scenarios using the two most important variables and their possible values.  Each cell in the matrix then represents a single scenario.  Assign names to each scenario and sketch out rough pictures/descriptions of different futures based on these scenarios.  One of these scenarios most likely will reflect the mainstream views of the future, while others will shed light on what else is possible.  At the end of this step, there is not any detail associated with these rough scenarios.  They are simply high level descriptions of a combination of important environmental variables.
  10. Develop Detailed Stories.  During this step further work is needed to develop detailed impact scenarios that explain in more detail how each scenario might affect the corporation.  Specifics can be generated by writing a story to develop each scenario starting from the present.  The story should be internally consistent for the selected scenario so that it describes that particular future as realistically as possible.   Experts in specific fields can be called upon to develop more detail around each story.  The goal of the detailed stories is to transform the analysis from a simple matrix of the obvious range of environmental factors into decision scenarios useful for strategic planning.
  11. Quantify the impact of each scenario on the firm, and formulate appropriate strategies.
  12. At this point, if the team is comfortable doing so, it can be useful to assign a probability to each scenario.
  13. Establish signposts for each scenario.  During this step, the team should identify a set of early warning signals or signposts for each scenario.  These are event that could happen that would indicate to the team that the particular scenario is beginning to unfold.
  14. Finally, the team should establish a process that regularly monitors, evaluates and reviews the scenarios.

What comes out of the scenario planning process is a number of plausible scenarios that can be used to as input into strategic planning discussions.  The point is not to select one scenario as the preferred future and hope for it to become true.  Nor is the point to fund the most probable future and adapt to it.  Rather, the point is to make strategic decisions that will be sound for all plausible futures. 

It should be noted that strategists/executives may not take scenarios seriously if those scenarios deviate too much from their preconceived view of the world.  Many will prefer to rely on forecasts and their judgment, even if they realize that they may miss important changes in the firm's environment.  To broaden their thinking,  it is useful to create "phantom" scenarios that show the adverse results if the firm were to base its decisions on the mainstream view while the reality turned out to be one of the other scenarios.  For each scenario, I always like to ask the question:  What is the worse impact that we can imagine will happen if we do nothing and this scenario comes true?

Summary

 

Scenario planning works by understanding the nature and impact of the most uncertain and important driving forces affecting the company's future.  It is a group process which encourages knowledge exchange and development of mutual deeper understanding of central issues important to the future of the business. 

The goal is to craft a number of diverging stories by extrapolating uncertain and heavily influencing driving forces.  The stories together with the work getting there has the dual purpose of increasing the knowledge of the business environment and widen both the receiver's and participant's perception of possible future events. 

I'd encourage you to try out scenario planning as a way to imagine the potential futures. 

Additional Reading/Resources