Are you ready to bat?
When a professional baseball player goes up to bat, they:
Check how the fielders are positioned
Note if runners are on base and whether these runners are likely to steal the next base
Keenly observe the pitcher's current tendencies and are aware of past tendencies
Watch for signs from the coaches
Are aware of wind speed and direction
Keep track of the count and evolving game situation
Just as a batter needs to constantly monitor and process all these variables to make good decisions at the plate, as an organizational leader or business professional you should be keenly aware of what’s going on around you when you step up to bat. For businesses, this process is environmental scanning - which these days involves doing a deep dive on the internet and using AI to identify trends and forecasts that offer ideas on how you might proceed in the future.
Environmental scanning is critical, because the environment in which we all are operating is dynamic. Every day brings change – new opportunities and new challenges. A case in point is the recent Presidential election, which signals the advent of much change. If your organization is staying the same, something is wrong. You cannot stand pat over time in such a dynamic environment without sub-optimal results. Whatever direction your are now headed, where your organization will actually be in the future will be affected by additional external influences along the way. Economic changes, demographic trends, actions of competitors, legislation and regulation, environmental impacts, and much more in terms of external events can affect your organization. It’s definitely time to find how and what you need to change!
As I wrote in Don’t miss the signals, “It's easy to be lulled by things as they are and may have been recently, or to apply experience to the current situation and call it the same, or to miss signals in the noisy environment that would tell us the current is changing and flowing faster and pulling us toward the shoals.”
What to look for
Here’s a summary of the types of key trends and forecasts to look for to find strategic opportunities and threats, with examples showing how companies leveraged these trends and forecasts for greater success - or missed them, thereby bringing worse results.
Economic Trends
Keep an eye on economic trends such as GDP growth and inflation rates. Economic factors can drive shifts in consumer spending and overall market conditions that directly affect your business. Examples:
Walmart's expansion during economic downturns: Walmart recognized that during recessions consumers seek lower-priced goods. The company capitalized on this trend by expanding its low-cost offerings during economic downturns., gaining market share.
Following the COVID-19 pandemic, Disney capitalized on pent-up demand for travel and entertainment by rapidly reopening its parks and enhancing offerings. By timing the reopening to align with increased consumer spending, Disney captured significant revenue.
With consumer debt at high levels, PayPal capitalized on cautious spending by promoting its “Pay in 4” service, allowing customers to split payments into installments. This appealed to consumers looking to manage spending, boosting PayPal’s transaction volume.
Lehman Brothers was deeply overexposed to subprime mortgages and subsequently failed, missing warning signs of 208-2009 housing bubble and failing to recognize systemic risk in mortgage-backed securities.
Regional banks were taken over and merged in 2023 due to overconcentration in real estate lending as interest rates spiked.
GM and Chrysler missed the shift toward fuel-efficient vehicles when gas prices spiked and failed to anticipate the impact of the 2008-209 credit crunch on auto financing
Political and Legal Trends
Political changes, from trade policies to data regulation, can either create barriers or new opportunities. Foreseeing and understanding these shifts allows businesses to adjust proactively. Examples:
CVS Health anticipated stricter regulations on tobacco sales and growing public health concerns. The company proactively stopped selling tobacco products, repositioning it as a healthcare company.
Pfizer and Moderna leveraged government funding and rapid regulatory support to develop COVID-19 vaccines. Recognizing the political priority for vaccines, they sped up R&D and gained early approvals, securing significant market share.
Recognizing the trend toward higher minimum wages, Costco raised its starting wage above the national minimum wage to attract and retain quality employees as wage pressures increased. By getting ahead of potential wage regulation, Costco built a reputation for worker satisfaction and loyalty, reducing turnover costs and boosting morale.
Social and Demographic Trends
Social and demographic trends reveal how population shifts and changing values impact consumer behavior. Understanding these trends allows you to tailor your products and marketing to meet new demands. Examples:
Airbnb spotted and capitalized on the growing trend of the sharing economy and changing travel preferences, particularly among millennials. This foresight allowed them to disrupt the traditional hospitality industry.
Dove responded to changing social attitudes towards beauty standards and body positivity. The company launched its "Real Beauty" campaign, featuring women of diverse body types and ethnicities, which resonated strongly with consumers.
Toys "R" Us missed the decline in in-person shopping and the transformation to digital and carried excessive debt, which led to its bankruptcy in 2017.
Crumbs Bake Shop focused too heavily on the cupcake trend without diversifying their product offerings. When the cupcake trend declined, so did their business.
Technological Advancements
Technological advancements are all about new tools and innovations that can change the game. By embracing emerging technologies, you can stay ahead of the competition and enhance your operations. Examples:
Amazon identified the trend towards cloud computing and forecasted great growth. This led to the creation of Amazon Web Services (AWS), which became a major revenue driver for the company, separate from its e-commerce business.
Domino’s Pizza capitalized on the mobile app and online ordering trend, implementing a digital strategy that made ordering fast and customizable, enhancing customer satisfaction and driving sales.
Polaroid stuck with its “old technology” instant photography and missed the digital revolution, undercutting its strong brand.
Environmental and Sustainability Trends
Environmental trends focus on climate change, resource scarcity, and sustainability efforts. Companies that prioritize eco-friendly practices not only boost their image but also attract environmentally conscious consumers. Examples:
Patagonia recognized growing consumer concern for environmental issues and the need for sustainability. The company, led by Yvon Chouinard, built its brand around sustainability, using recycled materials and encouraging customers to repair rather than replace their products.
Toyota made early investments in hybrid technology when it recognized environmental trends and forecasted increased demand for fuel-efficient vehicles. This led to the development of the Prius, which established Toyota as a leader in hybrid technology and environmentally friendly vehicles.
Beyond Meat recognized the growing trend toward plant-based diets and sustainable food options. By developing plant-based meat alternatives, it tapped into a rapidly expanding market.
Global and Regional Trends
Global and regional trends highlight shifts in power dynamics and cultural influences. Being aware of these changes prepares you for globcal and regional challenges and opportunities, making your business more agile. Examples:
McDonald's menu localization: it recognized the importance of catering to local tastes in different global markets. The company adapted its menus to include items like the Maharaja Mac in India and rice burgers in Asian markets.
Starbucks identified the trend of growing coffee consumption in China and forecasted the immense potential of the market. This led to massive expansion in the country, making China Starbucks' second-largest and fastest-growing market.
Industry-Specific Trends
Stay tuned to industry-specific trends such as market growth and disruptive innovations. Knowing what’s happening in your sector helps you adapt quickly and maintain a competitive edge. Examples:
In response to the rise of online shopping, Walmart accelerated its e-commerce strategy, leveraging its stores as fulfillment centers to compete with Amazon’s speed and convenience.
The addition of compliance services to the portfolio os an international organization of government affairs and lobbying firms, based on our environmental scan that picked up "growing complexity of legal compliance for employers" as the second highest ranked of 23 public policy and legal trends viewed by HR executives.
11 trends for Maryland businesses
In preparation for my recent “Planning for 2025” workshop, I conducted a “generic” environmental scan for Maryland-based businesses. Following are seemingly important trends and forecasts that I unearthed. (Note that this scan was conducted before the 2024 Presidential election: Post-election, these trends call for reevaluation.)
A changing economic picture. Tax law changes will be on the agenda. The soft landing that the Federal Reserve has engineered suggests lower interest rates and softening labor demand. Rising state fiscal pressures point to possible tax and fee increases and reduced economic support.
Labor and workforce pressures. Maryland's minimum wage rises to $15 an hour. Competition for skilled workers, particularly in tech and healthcare, will remain strong. Businesses competing for these workers will need to adjust compensation and explore ways to retain talent. Automation and efficiency improvements can help manage labor costs
Sourcing and supply chain challenges. More disengagement with China is likely. Strategic planning should address supply chain resilience, contingency plans for geopolitical disruptions, and potential reshoring or near-shoring to mitigate risks.
Technological change. The rapid pace of technological innovation, particularly in artificial intelligence, automation, and digital marketing, will challenge small businesses to keep up. AI will transform businesses and enable competition. Companies should explore AI integration in business processes, assess opportunities for cost savings, and consider reskilling workers.
Health and wellness industry growth. The health and wellness sector will continue to expand, driven by demand for mental health services,fitness, senior care, and holistic health solutions. Offering personalized services, wellness products, or memberships could drive revenue growth.
Cybersecurity hub expansion. Given its concentration of federal agencies and defense contractors, Maryland is poised to further solidify its position as a cybersecurity hub. Businesses in IT, consulting, and related fields should plan for more demand and potential partnerships. Cybersecurity is moving beyond government to more private sector applications, opening new markets.
Biotech and life sciences growth. With the presence of major research institutions and proximity to federal agencies, Maryland's biotech and life sciences sectors are expected to continue to expand beyond traditional hubs, creating more widespread opportunities across the state.
Evolving tourism industry. Maryland's tourism industry is increasing emphasis on sustainability and unique local experiences. Businesses in hospitality should plan for changing tourist preferences, potentially focusing more on outdoor activities, local experiences, and sustainable travel.
Greater Chesapeake Bay-focused sustainability efforts. Maryland's position on the Chesapeake Bay will likely drive more water conservation and bay health.sustainability initiatives. Businesses may need to align with stricter environmental regulations aimed at preserving the bay ecosystem.
Clean energy transition. Maryland's clean energy goals, including 100% clean electricity by 2040, will create opportunities and challenges.
Local economic development initiatives. Maryland state and local government will continue focusing on local economic development, especially in biotechnology, cybersecurity, and renewable energy. Look for grants, incentives, and programs to support small businesses in these industries.
Think like a GM: Use what you learn for foresight
Environmental scanning gives you the information you need for strategic foresight.
Continuing the baseball analogy, I like to think of the relationship between environmental scanning and strategic foresight as being similar to the relationship between the results of scouting in baseball and what happens in the team General Manager’s office.
Environmental scanning is like having scouts at competitor’s baseball games collecting detailed statistics and observations about players, teams, and game conditions. They're gathering real-time data about and identifying trends in batting averages, pitch velocities, player injuries, and even factors such as stadium conditions and team dynamics.
Strategic foresight comes from what the General Manager does with all that scouting data. Baseball GMs utilize scouting data to evaluate players, make roster decisions, plan for the future, manage finances, and assess competition. Scouts’ detailed reports on players' skills, potential, and character help GMs identify talent, make informed draft picks, negotiate trades, and sign free agents. Scouting data also aids in building a balanced team, creating a strong farm system, and developing long-term strategies. Additionally, GMs use scouting data to allocate resources effectively, negotiate player contracts, and identify strengths and weaknesses of opposing teams. By analyzing player performance, matchups, and managerial strategies, GMs can make strategic decisions to gain a competitive edge.
I challenge us to think like Billy Beane, the former professional baseball player and front office executive most notably known for his work with the Oakland Athletics. He's famous for pioneering the use of sabermetrics, a statistical analysis approach to baseball. His philosophy, popularized by the book and movie "Moneyball," emphasizes the importance of data-driven decision-making and finding undervalued players.
Billy Beane famously said, "The future is now.” Indeed, scan for foresight and act to make that better future a reality.
