For those companies that have experienced major disruptions in their business or industry, most never saw it coming—until it was too late. Video rental stores. Brick-and-mortar bookstores. The mall. The stories are all familiar, the outcomes are all the same. Fast forward to today with innovation happening at breakneck speed, and there’s a major disruption potentially around the corner for just about any company.
So, what can you do to defend your business against a threat you don’t even know exists yet?
According to a recent MIT Sloan Management Review article, taking a wider look at the “forces” that impact your business is a good place to start when identifying potential disruptions. Some of the traps that companies can fall into when trying to do this include focusing on “familiar threats” with quick decisions that add little value. To overcome this, companies should examine a broader range of outside forces that are likely to be unfamiliar, but can impact the business, factoring them into the business and future planning.
To help further identify the outside forces that can disrupt the future of your business, the article lays out 11 sources of macro change that can impact any company. The list is pretty exhaustive, but it offers a broad view of the many factors that business leaders can consider. Take a look:
- Wealth Distribution: This includes the distribution of income across a population or market, a concentration of assets, and the ability for individuals to advance their financial status based on location or other external factors.
- Education: Access to education, workforce training, and certification programs are all factors that help determine the attributes of a market or future market. The way people learn and what they are studying can also come into play.
- Infrastructure: This includes the physical and digital structures a society needs to operate, such as power grids, roads, WiFi, and bridges. Business leaders should understand how they work together, as well as with other states and countries.
- Government: Public planning. Regulatory environments. Elections. All of these public forces can impact your business, meaning your company should take the time to understand which ones are critical for success.
- Geopolitics: For companies on a larger or global scale, the relationships between leaders and governments of different countries can also present unknown risks and economic challenges.
- Economy: Understanding when shifts in both micro- and macro-economic conditions may occur is critical to business planning.
- Public Health: How a population lives, including health and behavior, and changes that take place in response to factors like popular culture, government regulation, or even disease can impact business in unforeseen ways.
- Demographics: Income, birth rates, death rates, and migration. These are just some of the shifts that need to be monitored to help predict changing market conditions.
- Environment: Extreme weather, climate change, rising sea levels, and more. The environmental changes and challenges the world faces cannot be ignored by business leaders planning for the future.
- Media and Telecommunications: Communication is more prevalent and widespread than ever with social networks, digital platforms, and 5G. Knowing how these new modes of connectivity can shape your future business is critical.
- Technology: Innovation is often a source of disruption, requiring companies to always be on the lookout for what’s next, and how it can impact the company and its operations—both internally and externally.
The MIT Sloan Management Review article goes on to cite numerous examples of what can happen if you ignore the factors noted above. To learn more about monitoring unfamiliar forces that may impact your business, read the complete article here.