The Ten Most Important Trends in Business

The latest edition of Strategy + Business magazine has a subscriber-only survey of the most durable current trends in business. They list 35 candidates, but I had no difficulty picking out the top 10. Here are my choices, in order, with the reasons why I think they will become even more important in the future than they are today:

Trend Importance, and What to Watch For
1. Open-Source Business Open-Source Business isn’t about software, or about reducing costs and prices to zero, it’s about open partnerships with those outside and inside the organization who can help the business provide better products and services to customers. The Open Source model (transparency of operations, collaboration with customers and others to manage the business and set priorities, and giving ‘commodities’ away free) can allow leading-edge businesses to make the transition to tomorrow’s Gift Economy effectively and painlessly. Much more about Open Source Business (about which very little has yet been written) in an article next week.
2. Disruptive Innovation Clay Christensen’s research shows the total futility of trying to create barriers to protect your turf from competitors, some of whom don’t yet even exist. The history of business shows that organizations that can find ways to serve the low end of the market for any product, or ways to bring existing products and services to entirely new customer groups, will eventually cannibalize incumbents’ markets from below or from without. Entrepreneurs: use this as your roadmap to success. Incumbents: do it to your own markets, or look out.
3. Complexity Dave Snowden is pioneering work that shows that existing business strategies and processes are designed to deal with ‘complicated systems’, and that a radically new approach is needed to deal with ‘complex systems’. Such an approach could successfully address previously insuperable and intractable problems and challenges in business, and in society. AHA!
4. Corporate Reform Something much bigger is lurking behind Enron and other disgraceful corporate behaviour, and Sarbanes-Oxley and other feeble attempts to address the problem. The corporation itself has become dysfunctional, even pathological, and corporate laws and charters need a complete overhaul. As consumers use exploding knowledge and connectivity to flex their muscles in dealings with suppliers, and as more horrific corporate abuses come to light, consumers will grow increasingly intolerant of ‘self-regulated’ corporatism and demand drastic corporate reform.
5. Innovation Incubation Innovation is risky, and incumbents dislike risk, which is why entrepreneurs (with some notable exceptions) have always been at the vanguard of innovation. But incumbents can, and must, get into the innovation game as well, and the way to do that is through innovation incubators, running as autonomous, separate divisions with a different kind of people and a different success model from the ones that dictate behaviour in the organizational mainstream. For many large organizations, such incubators will be the difference between sustainable success and stagnation.
6. Social Networking and Personal Productivity Improvement It’s all about the people, stupid. Forget the hierarchy and the cult of leadership. Forget about ‘organizational knowledge’ and ‘organizational learning’. Everyone in today’s organization knows how to do their job better than their ‘leader’. The modern organization is the sum of the capabilities and actions of its people, and modern management must be about setting clear, prioritized, achievable goals, providing effective processes and technologies, getting rid of organizational roadblocks, and then staying out of the way. Drucker says it’s the greatest management challenge of our century. Social network technologies (including weblogs and simple virtual presence), personalized productivity coaching, stories, and self-management processes like Open Space are the new tools of this trade.
7. Wisdom of Crowds The customer is always right, but today that’s usually only realized in hindsight. Recognizing the wisdom of crowds can allow organizations to tap into the collective knowledge of customers, employees, and society as a whole, and there’s plenty of evidence that doing so yields better business decisions at lower cost than either overtaxed, overpriced executives or unfamiliar outside consultants.
8. Channel Customization One size does not fit all. The future price of any manufactured commodity (and renewable natural commodities as well) trends to zero. The opportunity for profit, and the real ‘value-added’ is in customizing offerings to the unique needs of every consumer. Instead of a broadcast channel, delivering the same thing to everyone, the new model is narrow-casting to audiences of one, and allowing the customer to take ownership of the channel that brings your products and services to them. How do you market in such a world? You don’t — you let your customers tell the world how good you are, in their personal context, powerfully and virally.
9. Customer Relationship Management Most businesses still think their purpose is to sell products or services to a reluctant market. Smart businesses understand that their purpose is to identify and respond uniquely to human needs. The key to this is relationship — trust, deep knowledge, lots of conversations, face-time, time spent probing, listening, asking “what if”. That’s what real CRM is about, not databases of historical information.
10. Execution The modern corporation is like a refinery for small, incremental, insubstantial changes. For substantial changes it is a minefield. Most ideas, including the best and the boldest, get blown up quickly. Execution is about navigating a great idea through the organizational minefield. It takes enormous skill, tact, patience, strong networks and persuasion. Very few have what it takes.
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4 Responses to The Ten Most Important Trends in Business

  1. Nice and provocative post. To me, points 4 and 6 are interconnected and relate to the wider field of Health at Work which includes occupational medicine, occupational hygiene and ergonomics. Methodologies are already used, but the traditional managers’ MBA curriculum obviously avoids dealing with the human factors of occupational activities. The subjectivity issue of economics should be underlined and more human-centered systems developed (products, services and organizations). What’s at stake here: (1) develop a sustainable approach of economics; (2) avoid work-related injuries or diseases, allowing workers to accomplish themselves through their daily activities.

  2. Joe Deely says:

    Good stuff Dave. Thanks for all the hard work you put into this blog.

  3. Absolutely great timing on this post! You have given me the pieces I was missing for a sequel to my first book. Thank you, thank you, thanks…

  4. Greetings Dave!The Open Space listserv pointed me to your post today. It was great and refreshing to see OST at #6 in this survey. OS is one of those funny things of course which could be mentioned in any other slot, too.I hope to get this piece translated into Russian for the first issue of the electronic bulletin “News from Open Space.”I first ran into your blog sometime this spring. Wendy Farmer O’Neil mentioned your blog while we were at the Open Space on Open Space in Halifax in August.She said that you two met afterwards in Toronto for a very fruitful conversation.Have you had a chance to look at the 3rd blog Wendy has started, a team blog for those interested in exploring the life practice of open space (not just the method)? http://openspacesangha.blogspot.comI hope to make it to your page more often.Warmly,

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