Macro trends are big social and economic shifts – technology, consumer demographics, culture, or historical turnings – that can reshape markets and create big new opportunities. When you pay attention to the horizon, you can see macro trends coming your way and have time to prepare for and capitalize on them.

In the natural world, scientists are making it easier than ever to tell if a tornado will hit.  The National Weather Service has an experimental strategy, Warn on Forecast, which allows forecasters to issue warnings before storms form, based on high-resolution satellite imagery, radar data and surface observations. This data is fed into a very high-resolution weather model that is run every 15 minutes for a period of time on storms of interest or for areas that could produce storms. The net benefit is that citizens have a lot longer time to respond.

But we don’t have early warning systems in the business world (at least, not this accurate).  And not every macro trend we see in the business world requires a full-out corporate response.  As marketers we need to evaluate trends and decide what to do about them.

An approach I have found helpful is inspired by how communities respond to real tornadoes:  spot the trend, describe it, understand it, predict its impact, and act.

Ten questions to assess macro trends

1. Where do trends ultimately affecting my business tend to start? (spot)

If you track back previous trends that have had an impact on your business, you can to identify some of the sources of these trends.  What past trends can you trace back to their beginnings?  Is there a pattern?

2. What are the warning signs? (spot)

Consider what early signs you could look for and how to measure them, to get further ahead of what’s happening.  For example, if you want to know what’s coming to your grocery store in the next year or two you might want to attend the Aspen Food & Wine Magazine Classic.

3. What trend do we see on the horizon? (describe)

How would you describe the trend?  It might be expressed as a new interest, an emerging concern, or a major shift in consumer attitudes or behaviors.

4. What are the roots of this trend? (understand)

Consider the history of the trend and its causes or inspirations.  Is this trend sparked by a single event, or is it part of a major historical cycle?

5. How fast is it developing / gaining in popularity? (understand)

Are opinion leaders embracing this trend?  Does the trend appear “sticky”?

Diffusion of Innovations theory tells us that when about 16% of the population adopts a new innovation, it reaches a tipping point where people think “everyone is doing it” and adoption accelerates.

6. Who or what will be affected?  (understand)

Consider who, and how many, will be affected.  Will this trend impact your core customers?  What other important constituencies, such as strategic partners, will be affected?

7. What will happen – good or bad – when the trend does take hold? (predict)

Role play what would happen to those affected if the trend takes hold.  What’s the initial impact likely to be?  What follow-on impacts will this cause, in turn?  What scenarios can you envision?

8. What are the likely consequences? (predict)

What are the benefits or how serious will the negative consequences be if the trend takes hold on a large scale?  If they are significant and long lasting, the trend requires a response.

9. What to do about it?  (act)

There are four main strategies for responding to trends:  embrace, counter, deflect, or ignore.  If you believe the trend will stick, and your company is likely to benefit, consider associating with the trend and building products or services to further capitalize on it.  If the trend is likely to threaten your business you can argue against it (counter) or try to change the conversation (deflect).  But if your most important constituencies aren’t affected, consider masterly inaction (ignore).

10. How shall we do it? (act)

Once you decide on your overall strategy, now you have the task of forming a specific plan and assigning people and resources.  Even if you have decided to ignore at trend, you’ll still need to communicate your reasoning to your constituencies.

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In the natural world, when a tornado hits, your range of actions is pretty limited:  hope it doesn’t touch your neighborhood, try to out run it, or retreat to your underground bunker.

In business, we have more options, as long as we take a careful look at the trends coming our way.  I hope the questions above will help you evaluate and respond more effectively.

What’s your process for evaluating macro trends?  I’d love to hear.

This post was originally published by the American Marketing Executive Circle. 

(Main photo source: https://weather.com/news/weather/news/experimental-model-weather-tornado-warn-on-forecast)

This time I thought it would be useful to talk about a best practice you can use when you do have a chance to step away from your daily routine.

I call it Tornado Sighting. Otherwise called: keeping your eye on macro trends.

Macro trends are big social and economic shifts – technology, consumer demographics, culture, or historical turnings – that can reshape markets and create big new opportunities.

When you watch the horizon, you can see trends coming your way and have time to prepare for and capitalize on them. Understanding macro trends can also prevent you from being sideswiped by something you didn’t see coming.

Three ways to use macro trends to innovate more successfully

1. Research trends that could affect your business

Several years ago, the New England Journal of Medicine published a study on the Atkins Diet that showed people could lose weight by shifting their dietary intake from carbohydrates to protein. This was reported widely by the media, sparking consumer interest that quickly developed into a craze. The newly appointed U.S. retail president of Sara Lee wanted to understand how this trend would affect the company, which makes both Jimmy Dean sausages and other meat products (Atkins-friendly proteins) as well as pound cakes (evil carbohydrates).

We researched the literature and interviewed a variety of experts: the medical community, scientists, influential chefs, food trend researchers, manufacturers, media and consumers.

It became clear that the Atkins Diet would soon lose popularity, and that the much bigger issue would be obesity, which was not yet getting much press. Sara Lee was able to develop products and marketing plans that addressed the true long-term trend and avoid the distraction of launching short-lived products tied to what ultimately proved a diet fad.

Ask your team to search for information on a continuous basis, and report back on what trends might be coming your way. You can start with global macro trends from sources like Euromonitor for inspiration. Once you have a handle on which trends you want to pay most attention to, assign individual members of your team to each issue, to set them up as internal experts.

2. Identify and learn from your expert network

Of course, you can’t become an expert on everything, and the good news is that you don’t have to. There are plenty of people out there to learn from.

If your target audience is millennials, for example, find out who understands them well. Experts could include other companies marketing to the same target, psychologists, intergenerational consultants, even a panel of Millennials themselves. Follow their work; potentially enlist their active help.

If your company is incorporating virtual reality (VR) as part of your customer experience, for example, find out what companies are pushing the boundaries on VR and related technologies, what reporters and analysts are covering them, and follow them. CB Insights, a publication that serves the venture capital community, covers emerging startups and is a good place to hear about new technologies.

Conferences are a great way to immerse your team. This is also a great time to bring in your agency, as they are in the business of understanding different target audiences, technologies and cultural trends.

3. Build macro trends into your annual strategic planning process

At Nordstrom, in preparation for a Board meeting, we were once asked to investigate “What’s the future of service?” This was an interesting question coming from Nordstrom, as they are considered by many to represent the ultimate in service. But Nordstrom is humble enough to realize that they had to continue to earn that reputation every day.

We conducted secondary and primary research, including online anthropology, to understand how people talked about service, what companies they associated with great service, and why. One of the key findings was that service didn’t have to involve people – wow. The Board and executive team immediately saw the implications for Nordstrom’s brick-and-mortar stores and online business. As we see the rise of Amazon in fashion today, it’s obvious that they have begun a major competitor. Nordstrom will continue to evolve to serve their customers better.

It’s good discipline to look at macro trends as part of your strategic planning process. Make this its own section. Report on macro trends you see on the horizon and the strategic implications for your company. You can own this yourself, but it’s even more effective if you can invite your counterparts from other departments to contribute their thinking as well.

Now what?

It’s not enough to simply become aware of what’s going on, obviously. You’ll need to decide what should you do more of, less or, or change. to stay competitive.

What macro trends should you be paying attention to? I’d love to hear. 

This post was originally published by the American Marketing Executive Circle.

(Main photo source: http://www.csmonitor.com/Science/2011/0418/Can-you-outsmart-a-tornado-Take-our-quiz/warning)