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‘National M in o rity ‘business ‘Week
Oct. 6, 1999
C16
TRACKING BUSINESS TRENDS
B y D r . R oger S elbert
Thinking about the future is
not an exercise in extrapolation.
It’s much more challenging than
that. Thinking about the future
means thinking about change -
how and where it will occur and
what its impacts will be. It helps
to distinguish betw een three
types of change: structural, cy­
clical and superficial.
Structural change is the funda­
mental, a basic societal transfor­
mation that cannot be reversed.
For example, our shift to an
economy based on value en­
hancement, information and ser­
vices is a structural change. It is
the irreversible result of the ap­
plication of technology to our
primary and secondary economic
sectors (agriculture and manu­
facturing), making them exponen­
tially more productive with the
labor of far fewer people.
What does it mean for a re­
tailer to operate in a service
economy? It means that the value
o f the product you are selling to
the consumer may be partly or
wholly psychological. It means
that since a majority of the popu­
lation has already attained a
middle-class standard o f living
or better, a rising percentage of
purchases made from you are re­
placement purchases. It means
that the design, image and other
intangible qualities of the goods
you sell - and the buying experi­
ence itself - are critical in con­
sumer motivation.
Consider this as a lesson in
how to distinguish a fad from a
trend. The working woman is a
trend that’s here to stay; it’s un­
derpinned by other fundamental,
underlying trends which support
and reinforce each other. The edu­
cational trends suggest it, the
economic trends require it, the
social trend s allow it, the
deomographic trends demand it,
the technological trends encour­
age it.
Cyclical change is repetitive.
It ebbs and flows in cycles which
over time follow discernible pat­
ters of fluctuation These may be
long historical patterns (50 or
even 100 years) quite far-reach­
ing in their effects, or they may
be short-lived and frequent. Ex­
amples of cyclical change in­
clude business cycles, demand-
supply cycles (gluts and short­
ages), organizational and politi­
cal behavior cycles (centraliza-
tion/decentralization, party iden­
tification) and social and con­
sumer behavior cycles (styles and
consumer confidence).
Recognizing cyclical change
is important for retailers. No,
not because they can finally dump
the inventory that didn’t sell last
time around. They can't as there
is always enough of a subtle dif­
ference to make that gambit im­
possible.
Superficial change consists of
what appears as change but is in
fact old wine in new bottles. To
put it another way, you must know
your history before you an hope
to guess your future. This is not
because “the past is prologue,”
or because “history repeats it­
self.” (Like most cliches, there
are elements of truth in these
settlements but not the whole pic­
ture.) No, we look to history in
search of the constants. Deter­
mine the natural laws that have
and will always guide economic
and social life and one can say
much about the staying power of
current trends.
Developing Strategies
The first step in dealing with
change is becoming and staying
informed, or what can be called
“scanning and tracking." You do
not necessarily have to collect
vast amounts of data and infor­
mation on social and economic
trends, but you do have to expose
yourself to a broader array of
information sources than you're
probably accessing now. The goal
is to identify and monitor the
driving forces of change for your
business.
The next step in developing
strategies involves what you do
with this information. The result
of scanning and tracking should
“Technology
driver o f chan
tool to help í
the char
You should always develop two
or more scen ario s s im u lta ­
neously, basing each on a differ­
ent set of assumptions about how
your key forces will evolve and
throwing in a few “wild-card
events” for good measure. Sce­
narios encourage and enable
people to gain a feeling for inte­
grated sets of events, to think
through the consequences of pro­
posed policies, programs or ac­
tions. In addition, scenarios
should stimulate the imagination
to conceive of possibilities not
orig in ally
included.
The
technique’s effectiveness lies in
its power to reduce the future
shock of unanticipated change.
Ironically, but significantly, sce­
narios are usually tamer than his­
tory.
After the evaluation of your
Building the Corporation
of the Future
B y T o n ia M c D o n a ld
In the y e a r 2020 and b e ­
y o n d , c o m p a n ies w ith o u t a
g lo b a l
c o m m u n ic a t io n s
b u s in e s s -to - b u s in e s s s tr a t ­
egy to ru n th e ir b u s in e s s
m ay not su rv iv e .
B u sin e sse s th at w ere not
n u rtu re d in an in c u b a tio n in
an in te r a c tiv e c o o p e ra tiv e
e n v iro n m e n t w ith at le a st 50
o th e r sm all b u s tn e s s c lu s ­
te r s w e re d o o m e d to d ie
away.
B
s I I R .’
A C lu s te r is a term in te r ­
c h a n g e a b le w ith in c u b a to r.
C lu s te rs are g e o g ra p h ic or
v i r t u a l c o n c e n t r a t io n s o f
i n te r c o n n e c te d c o m p a n ie s
and in s titu tio n s in a p a r tic u ­
la r fie ld . C lu s te rs e n c o m ­
pass an a rra y o f lin k e d in ­
d u s trie s and o th e r e n titie s
im p o rta n t to c o m p e titio n .
C l u s t e r s p r o m o te b o th
c o m p e titio n and c o o p e r a ­
t io n . R iv a ls c o m p e te i n ­
te n s e ly to w in and r e ta in
c u s to m e rs . W ith o u t v ig o r ­
ous c o m p e titio n , a c lu s te r
w ill not su c c e e d . Y et th ere
is a ls o c o o p e r a tio n , m uch
o f it v e r t i c a l , i n v o lv i n g
c o m p a n ies in re la te d in d u s ­
trie s and lo c a l in s titu tio n s .
C o m p e ti ti o n c a n c o e x is t
w ith c o o p e r a tio n b e c a u s e
they o c c u r on d iff e re n t d i­
m en sio n s and am ong d if f e r ­
ent p la y e rs .
The S m all B u sin e ss Ad-
. m in is tra tio n (S B A ) re p o rts
th at an a v e ra g e o f 9 out o f
10 b u s in e s s e s w ill fail by
the end o f the f ir s t y ear. In
fa c t, ab o u t 80% o f all sm all
b u sin e sse s fa il if not p ro p ­
e rly n u rtu re d in sid e o f an
in c u b a to r, c o lla b o ra tiv e , or
external environment and where
it could be heading, it is time to
determine future strategy. Lead­
ers of the business must look
deeply into the core of the busi­
ness and themselves, and decide
what role they want to play. What
is the purpose of the business?
The goal? Its claim to the market­
place? Who is to be served? What
is the strategic intent of the stew­
ards? How do they envision its
future in the possible environ­
ments described by the scenarios?
The result o f these efforts
should be a proactive business;
one that anticipates, even fore­
sees, challenges and opportuni­
ties; one that is responsive, not
reactive, in dealing with contin­
gencies; one that is flexible and
adaptable on both offense and de­
fense. Remember, it is not your
goal to predict the future; your
most important accomplishment
will be a change in your business’
attitude, mindset or culture. In
the end, the creation of an atmo­
sphere of the possible could be
your greatest strategic contribu­
tion.
be a sense of your own future
environment, a cohesive (if not
comprehensive) outline o f the
conditions under which you’,1 be
competing for business. Consider
using the scenario technique.
Basically, there are two sce­
nario styles: the present forward
and the future backward. It puts
you in the future and recounts
the history of events that got you
there.
Scenarios put into motion the
principal forces of change for
your business that you have iden­
tified from scanning and track­
ing activities. They present a plau­
sible story of how these trends,
interacting with each other, can
shape a future that is in some
ways expected and in some ways
a surprise.
c o n s o rtiu m .
In in c u b a to rs, sm all b u s i­
n e sse s su cceed up to 95%
o f the tim e - o f th ey all
s h a re th e c o s ts o f d o in g
b u s in e s s w ith o th e r sm all
b u s in e s s e s in a n u rtu rin g ,
c o o p e r a tiv e e n v ir o n m e n t.
An e n tre p re n e u r know s he/
she m ust a ttra c t o th e rs w ill­
ing to pool th e ir resources
and ta le n ts to c o lle c tiv e ly
su cceed . E n tre p re n e u rs ’
p a r tn e r w ith o th e r s , tak e
r is k s a n d in v e s ts in new
id eas.
R e se a rc h show s th at the
fu tu re su c ce ss o f any b u s i­
ness d e p e n d s on m em ber-
ow ned a llia n c e s th a t create
and c o lla b o r a te in a n e t­
w orked econom y.
C lu ste rs are c o n d u civ e to
new b u sin e ss fo rm atio n for
a v a rie ty o f re a so n s. In d i­
v id u a ls w o rk in g w ith in a
c lu s te r can m ore e a sily p e r­
c e iv e gaps in p ro d u c ts or
se rv ic e s around w hich they
can b u ild b u s in e s s e s . B e­
yond th a t, b a rrie rs to entry
are low er than elsew h ere.
N eeded a sse ts, s k ills , in ­
p u ts a n d s t a f f a re o f te n
re a d ily a v a ila b le at the c lu s ­
ter lo c a tio n , w aitin g to be
a sse m b le d into a new e n te r­
p rise . L ocal fin a n c ia l in s ti­
tu tio n s and in v e s to rs , a l ­
ready fam iliar w ith the c lu s ­
ter, may require a low er risk
prem ium capital.
In ad d itio n , the c lu ste r o f­
ten presents a sig n ific a n t lo ­
cal m arket, and an e n tre p re ­
neur may benefit from e sta b ­
lished re la tio n sh ip s. All o f
these factors reduce the p e r­
ceived risks o f entry - and o f
e x it, sh o u ld the e n te rp rise
Dr. Roger Seibert is the
Growth Strategies Group. He
can be reached by email at
mscc@moyaselbert. com
león D. M c K en zie
INSURANCE AGENCY
LIFE INSURANCE & FINANCIAL PLANNING
( t tetnto
232 S.E. OAK
SUITE #107
PORTLAND, OREGON 97214
\J r W ®
503/233-9588
ïïlcITlenamms kennedy School
fail.
SII \ R | \ G
Rl SO I R( I S
Few p e o p le w ho la b e l
th em selv es “ e n tre p re n e u rs ”
actually are. W hy? N ine out
o f ten e n trep ren eu rs and self
em ployed people interview ed
in the last ten years were un­
w illing to share costs with
others in going into business.
They also lack ed tru s t for
each other in the sharing the
cost o f rent and equipm ent.
People are so unsure about
the future that they revert to
th e ir old m ethods o f b u si­
ness, i.e., stealin g inform a­
tion, w orking under false pre­
ten ses.
T hinking about the future
and how com panies and in­
stitu tio n s fit in is an obvious
necessity for long term suc­
c e s s . H o w e v e r, th in k in g
about a c o lle ctiv e future and
o b s e rv in g th e c a u s e s and
events leading up to it, have
barely begun to be studied
and therefore is larg ely un­
p re d ic ta b le .
A su c ce ssfu l consortium ,
c o lla b o ra tiv e , co lle ctiv e and
econom ic en g in e acts as a
su c ce ssfu l b u sin e ss c lu ste r
or incubator. T hrough mem­
b e rsh ip fe e s, c o rp o ra tio n s ,
e d u c a tio n a l i n s t i t u t i o n s ,
sm all and m id -s iz e d b u s i­
nesses have access to shared,
d is c o u n te d s e rv ic e s , jo in t
ventures and jo in t costs of
research and developm ent.
P o o lin g ta le n ts , m oney,
risk and rew ards is a small
price to pay to jo in a group
th a t is m oving fo rw ard in
business success.
T o n ia M c D o n a ld is the
P resident o f G lobal B usiness
I n c u b a to r. H er w e b site is
w w w .cvberparkusa.com
)
J
frid a y , O ctober 22
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L iv e M u s ic w ith
L ily W ild e © H e r B o y frie n d s
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H isto r y T o u rs 2pm and 3pm * B a llo o n G u y
E n t e r to w in tic k e ts to tb e N e w Y e a r s E v e S h o w
f e a t u r i n g N o r m a n S y lv e s te r a n d H i s B a n d
McMenamins Kennedy School
5736 NE 33rd • Portland, Oregon • (503) 249-3983
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