As the pace of change accelerates and the challenges facing businesses become more complex, leaders need new strategies, approaches and tools to navigate successfully into the future. According to a new report from Nielsen (Today’s Change Is Tomorrow’s Opportunity, © 2018 The Nielsen Company, US), disruptive change is the new normal, and it’s likely to accelerate.
“… the pace of change is so rapid, businesses can’t react like they have in the past; they need new models for innovation and growth. Without these, they aren’t likely to stick around long term, ” says Vanessa Bates Ramirez, “How to Stay Innovative Amid the Fastest Pace of Change in History,” SingularityHub, May 19 2017. No one can predict the future, says the report, but understanding macro drivers of change and how they may influence the consumer, retail and business landscapes can help guide focus and ideas about how companies should move forward.
Horizon Planning: Companies with strong organizational intelligence are those best positioned to forge a successful path into the future. Organizational intelligence is largely defined by how effectively a company leverages data, insights and measurement tools to understand market performance, trends and evolving consumer demands.Traditionally, most companies focus on sales and production data and information based on historical trends, says the report. While this approach provides essential inputs for short-term horizon planning, it’s less equipped to generate meaningful insights for mid- to long-term planning. As a result, their organizational intelligence is unable to keep pace with the rapidly evolving market landscape.
Short-Term Horizon: This time frame typically involves in-market and execution decisions that sales and marketing teams make to drive tactical day-to-day decisions on things such as price, promotion and supply, says the report. Companies can leverage historical data to provide insights around seasonal fluctuations, competitive strategies, consumer uptake and other areas to guide executional parameters. Increasingly, organizations need faster and more connected data sets on tactical elements like digital engagement, viewership and sales to make timely and relevant adjustments that maximize effectiveness.
Mid-Term Horizon: This horizon can include strategic decisions for three months ahead to more than two years into the future, says the report. It includes strategic decisions on areas like marketing and communication programs, innovation initiatives and portfolio management. Business intelligence to shape these strategies can include macroeconomic and category forecasts to understand consumer confidence, changing consumer attitudes, growth in channels and evolving consumer behavior.
Long-Term Horizon: Decision making in this horizon includes strategic and top-level discussions that can range from anything from two years to more than 20 years into the future, points out the report. These can include decisions on new geographic markets, major innovation, product lines or technological investments that need lead time. The further forward the timeframe, the more different the environment will likely be. Traditional extrapolation or forecasting is unable to anticipate disruptive future change; instead, big picture thinking and “joining the dots” approaches are needed so decision makers understand various scenarios of emerging change, macroeconomic factors and societal shifts. With that analysis, leaders can make their strategic big bets with much greater consideration and confidence.
Importance Of Horizon Planning: The biggest gap in most companies’ business intelligence is having the data and insights to make well informed mid-and long-term strategic decisions, says the report. Leading companies have invested in new analytical approaches and tools to support long-term strategic planning, and the benefits are already emerging for many early adopters. Apart from guiding the evolution of their businesses, the companies that embrace this approach are also better positioned to mitigate risks and avoid being blindsided by disruption and change.
In recent years, many companies have demonstrated an increased willingness to engage in public conversations on what they see as major shifts in society and the strategic opportunities and challenges these present, concludes the report. One result of this open dialogue is that shareholders are rewarding companies that can demonstrate a strong future perspective and strategies to ensure prosperity over the long term.
Please visit Nielsen here to review the report.