David Schatsky. - Signals for Strategists: Sensing Emerging Trends in Business and Technology

Signals for Strategists

Sensing Emerging Trends in Business and Technology

David Schatsky

Signals for Strategists: Sensing Emerging Trends in Business and Technology
Copyright 2015 by Deloitte Development LLC.

All rights reserved. Member of Deloitte Touche Tohmatsu Limited. No part of this book may be used or reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher, except by a reviewer who may quote brief passages in a review.

Electronic edition published 2015 by RosettaBooks LLC
Cover design by Santiago Uceda
ISBN e-Pub edition: 9780795345586
www.RosettaBooks.com

This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or its and their affiliates are, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.

None of Deloitte Touche Tohmatsu Limited, its member firms, or its and their respective affiliates shall be responsible for any loss whatsoever sustained by any person who relies on this publication.

No piece of thought leadership at Deloitte originates in isolation. Signals for Strategists began as a series of articles published online by Deloitte University Press. My co-author on these original pieces was Vikram Mahidhar, a former director in Deloitte LLPs innovation group. Vikram was a wonderful collaborator who brought a razor-sharp perspective on emerging business ideas and the development and commercialization of emerging products and services. Vikram also led the development of an early generation of our sensing technologies.

Deloittes sensing program is the product of the vision and leadership of Ragu Gurumurthy and Craig Muraskin. Together, they introduced sensing into Deloittes management lexicon and oversaw the development of the concept from PowerPoint deck to reality. Ragu is national managing principal of the innovation group in Deloitte LLP. He guides overall innovation efforts across Deloittes business units and advises clients in the technology and telecom sectors on a wide range of topics including innovation, growth, and new business models. Craig is managing director of the innovation group in Deloitte LLP. He works with firm leadership to set the groups agenda and overall innovation strategy, and he counsels Deloittes businesses on their innovation efforts.

Chapter 9, A Renaissance in the Domestic Oil and Gas Industry, benefitted enormously from contributions of John England, vice chairman and U.S. Oil & Gas leader for Deloitte LLP.

Chapter 10, Cyber Crime Fighting, profited from the experience of Kelly Bissell, a principal with Deloitte & Touche LLP. Kelly is the global lead for cyber security and leads the U.S. IT Risk Management practice.

Matt Lennerts inspired art direction and the artistic talents of Santiago Uceda produced the attractive and thought-provoking graphics that illustrate the Signals for Strategists series.

Jon Warshawsky, director of publishing at Deloitte Development LLC, has encouraged my work on Signals for Strategists and supported this ebook project with grace and wit.

Have you ever heard the phrase, heads down, as in, Im heads down because of an important deadline? Busy professionals are often heads down. This can make it hard for individuals and for organizations to keep sight of the horizon. But seeing what is coming is essential, both to avoid unpleasant surprises and to take advantage of emerging opportunities. To balance the tendency to be heads down under the day-to-day pressures, organizations need to work at being heads up.

This book looks at how organizations can cultivate the capability and the habit of scanning the horizon for signs of emerging trends, a practice we call sensing. Sensing is deliberately looking for signs of emerging trendsknown as signalsand monitoring those that may be relevant to your organization. Economic indicators such as interest rates and commodities prices are a classic type of signal. Other signals that may be meaningful, depending on the type of organization, include:

• Political events
• Consumer preferences
• Regulatory action
• Corporate actions such as mergers and acquisitions
• Patent filings
• Venture capital investments

Corporate strategists need a clear line of sight to the horizon. Sensing can be an invaluable practice for themhence the title of this book, Signals for Strategists. But sensing is not just for those for whom strategy is a formal part of the job description. No matter your role in an organization, understanding emerging trends can make you more effective on the job.

At Deloitte, the environment in which we operate is always changing. So is our approach to sensing. We use a combination of custom-developed and off-the-shelf tools to acquire, aggregate, and analyze information from outside the firm. Some of these tools highlight patterns in quantitative information such as mergers and acquisitions and venture capital investments. Some use natural language processing technology to analyze news stories to discover and quantify patterns. Alongside these tools, we rely on old-fashioned human intelligenceconversations with a diverse group of knowledgeable professionals inside and outside the firm.

Our organization is large, and the scope of our businesses is large. So we are interested in a broad range of trends. We pay particular attention to signals in the following domains: macroeconomic, regulatory, technology, human capital, and, of course, the activities of our clients, collaborators, and competitors. We are working to make sensing an integral part of our culture.

Each chapter in this book describes a trend we identified using our sensing methodology. The chapters start with a list of signalsfacts we observed that, taken together, helped to reveal a trend. The impact of new technology is a thread that runs through every chapter, whether it focuses on a specific set of technologies such as the Internet of Things or intelligent automation; the impact of technology on the role of the CIO and CMO; how technology is changing knowledge work and manufacturing; or how organizations need new technologies and new approaches to counter a rising tide of cybercrime. The oldest of these pieces was originally published in 2012. Some of the signals are from 2010 or 2011. Where practical, we updated the data cited in the original article. Even if some of the signals presented here are slightly out of date, they serve to illustrate the process of sensing. In all cases, the trends we identified have continued to unfold with growing significance for our organization and our clients.

As you read about each trend, I encourage you to reflect on what it may mean for you and your organization. Is your organization affected by, participating in, or evening propelling this trend? Could it be doing more to take advantage of new opportunities presented by this trend, or to hedge against the risks it brings? I also invite you to examine what your organization is doing to tune into signals of emerging trends that may be relevant to it. In a world where the pace of change continues to accelerate, sensing has become an essential discipline for all organizations.