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Fact Finding vs. Trend Spotting – One is Key to Business Strategy

October 4, 2011

Strategy Concepts

Source: http://www.datapointed.net

 

If you want to have a chance of your business strategy succeeding, you should have a view of the future state of the market you will be playing in.

Strategy for the Future

I don’t think it is too hard to understand that long-term strategy to sustain a business needs to be based on what ‘will’ happen, not what exists today.  Maybe you’ve been bitten by (or know another business owner that has) a shift in the market that you “knew” was going to happen but didn’t adjust your business strategy to it.  This sense of being able to predict the future or “know” something was going to happen comes from being in-touch with the market, but unconsciously, perhaps.  Ending up, therefore, with that “sure, I can see how that happened” or “I knew that was going to happen” set of thoughts when you didn’t actually call the change early enough to plan accordingly.

What happens in practice is that business leaders  end up with a fantastic picture of today’s business environment and not of tomorrow’s.  The reason is that we often will mistake facts for trends, but pull them together after something happens and walk around with the “darn, I KNEW that was going to happen” frustration.  I have seen this fact vs. trend trap beginning strategists most of all.

Trend Means Change

To separate and clarify the idea of key trends, let’s start with what a trend is (well, by definition).  Merriam-Webster online defines a trend as:

verb
1
a : to extend in a general direction : follow a general course <mountain ranges trending north and south> b : to veer in a new direction : bend <a coastline that trends westward>
2
a : to show a tendency : incline <prices trending upward> b : to become deflected : shift <opinions trending toward conservatism>
noun
1: a line of general direction or movement <the trend of the coast turned toward the west>
2
a : a prevailing tendency or inclination : drift <current trends in education>
b : a general movement : swing <the trend toward suburban living>
c : a current style or preference : vogue <new fashion trends>
d : a line of development : approach <new trends in cancer research>
.
So what we see here, and maybe understand anyway, is that there is a component of ‘change’ that must exist to be a trend.  It is the change that you would build your business strategy to address and advantage or defend against.  Clearly, strategy is targeting success tomorrow, not just today.
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Here are some tips to use when assessing trends in your business environment.
  • Trends are not facts (e.g. teenagers like the color blue)
  • Trends are not static (e.g. teenagers buy more music on-line than at retail stores)
  • Trends occur over a period of time and indicate changes in a situation over time (e.g. there is a trend toward increasing purchases of on-line music by teenagers (vs. retail stores) with an expectation that 70% of music purchases in 2015 will be on-line from 15% today) [not a real statistic, by the way]
  • Trends will require that you make some interpretation as to the influence of that trend on your business!
  • Consider, as a final example the difference below [real statistics from UN report] in how these 2 statements might affect a business strategy differently.

Fact:  The aged population of the world (>59 years old, in 2009) is 11%.

Trend:  At the world level, the number of older persons is expected to exceed the number of children for the first time in 2045.  (Source: United Nations, WPA2009_WorkingPaper)

Really consider this last example.  This is a very different insight on the world populations vs. thinking that today the % of older persons is fixed today.  A business succeeding in 2009, may not be prepared for the coming change of an aging population (though in this case 2045 is a bit far away; but the trend is there!).

Capture Key Pieces of Market Info to Build Trends

Something you can do now is get control of information that you have access to and begin to assess the impact to your business.  Once you have a tracking system to manage your business and market information (from previous post), after about 15-30 days of notes, review what you have and assess the entries for “fact vs. trend”.  Look for a time component; some factor that is changing and tag (identify) those key items to separate from other fixed pieces of information.

Now just read those tagged/highlighted parts.

What story is being told in just the highlighted items?

 

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