(London Business School) Six trends to look out for in 2018
What developments can we expect to see in the business landscape over the next 12 months?
The world’s a mess, times are turbulent and almost every business is facing disruption. It’s all too much! Whatever next? Sadly we don’t have a crystal ball but here’s the next best thing. We proudly bring you some of London Business School’s finest minds looking ahead to 2018 and sharing their depth of expertise. From big tech to individual consumer behaviour, from adult learning to the impact of AI, from happier employees to better leaders and a more inclusive workplace – it’s all here. You’re welcome.
1. Big tech gets a tap on the shoulder
Julian Birkinshaw, Professor of Strategy and Entrepreneurship
The tech giants are huge beasts and there is a growing sense of unease about their power. The current regulatory and competition regimes were designed more than a century ago and they aren’t up to dealing with tech companies whose profitability increases as they become bigger and bigger. If we leave the tech giants unchecked and allow them to exploit their vast reservoirs of data about us in hitherto unimagined ways, where will we end up?
At the last count, Facebook had more than two billion active monthly users. Google handles 42% of all digital advertising in the US and has more than four-fifths of online search advertising. Amazon, which has focused single-mindedly on growth rather than profits and steadily expanded well beyond its original operation as an online bookseller, is now so big that no competitor or potential competitor has a chance of a look-in.
Companies such as Google and Facebook operate in a way that doesn’t fit the old supplier-manufacture-distributor-consumer model for which anti-trust legislation was designed. The more people who join Facebook or use Google, the more data the company can mine. The economies of scale become ever greater. So we need to rethink the way we monitor the power of the huge companies now dominating the business landscape.
In the US, Missouri’s attorney-general launched an investigation into Google in November to establish whether it had broken antitrust and consumer protection laws. Other states are looking at the power that Google accumulates by collecting consumer data. And in Europe, Margrethe Vestager the European Competition Commissioner, has already taken on Google, Amazon and Apple. Over the coming year we can expect to see more of this aggressively activist approach in tackling companies with dominant positions.
2. Organisations step closer to true inclusivity
Aneeta Rattan, Assistant Professor of Organisational Behaviour
2017 brought a long-awaited reckoning on some of the most insidious biases that persist in society and the workplace. Women finally gained traction on rampant sexual harassment and gender bias at major organisations, athletes of all backgrounds took a knee against racial bias on pitches and fields, and many organisations took a stand against institutionalised bias against the LGBTQ+ community.
In 2018, many organisations will need to continue doing the hard work of cleaning house – addressing biased behaviour and policies and asking themselves how they have been complicit in maintaining or concealing bias. How are organisations going to transform from spaces of silence to places that empower employees (both those targeted by bias and allies) to confront bias and create change?
This is the year for organisations to finally start leading on issues of diversity from the top – to stop being reactive and instead be proactive. For example, by April 2018 we will know the gender pay gaps across UK organisations larger than 250 employees. If firms report a gap, how are they going to address the issue internally and externally in a credible way?
More broadly, if organisations want to foster true inclusivity, they will need to determine what contextual cues are interfering with racial minorities’, sexual-orientation minorities’ and women’s sense of belonging and how to replace those negative cues with positive ones.
3. Lifelong learning becomes a priority
Lynda Gratton, Professor of Management Practice
Corporations and governments are beginning to understand that people want to be productive throughout their life. Many companies still seem to think that employing you is like marrying you and if you leave it’s a divorce – but it’s not! People will want to come in and out of the workforce – not just to care for children, but to take a break or to retrain.
These transitional states will be much more important in the future. Our transitions used to be around full-time education, full-time work, full-time retirement. Our MBA students will design their own careers and have different transitions. We know that more women will be working and people will live longer but some things are harder to predict. We don’t know how long it will take for men to take more responsibility for bringing up their children, for instance.
Governments need to realise that making transitions is part of being a productive human. We need to help people anticipate what the future is. In Singapore, right now, every citizen is given a sum of money to spend on their learning. AT&T in the US is making an investment in every single one of its employees in lifelong learning. As inequality rises, corporations and governments will need to focus on the social agenda and intervene.
Many of our parents didn’t have to make many choices about how they worked but we have the opportunity to determine what kind of lives we live. As individuals we should think about our intangible assets: develop our skills, maintain our reputation, build great relationships. We need to learn how to transform ourselves. And we need to bring being human back into work. That means giving people more time to be creative – to reflect, explore, be inquisitive.
4. Customers give way to consumers
Nader Tavassoli, Professor of Marketing
Mapping and measuring the customer journey, or its close relative the sales funnel, is a model that has survived for over a century. With big data providing insight into what customers searched and bought with incredible precision, it remains a powerful tool in helping companies capture value for themselves. But to capture value, companies must actually create value. And what a sale creates for the customer is a cost.
Value is created by the consumer, who might be a different person from the customer altogether: a parent who shops for the child or procurement in business-to-business settings who purchase but do not consume the offering supplied. Many businesses are still in their infancy when it comes to competing strategically on the basis of the consumer experience.
Do you put enough effort into making sure the consumer gets as much out of what they paid for as possible? My guess is not.
Fortunately, we are on the cusp of change. We are at the dawn of the age of the consumer, one fuelled by a new type of big data around how consumers are actually behaving – whether it’s fitness bands that track how fast and far you run to the industrial Internet that has transformed how Volvo trucks serves its customers. The old maxim says, if you can’t measure it, you can’t manage it. Well, when it comes to the consumer journey, increasingly you now can.
Those companies that are focused on the consumer journey, with its many moments that matter, are having a transformational impact. They are not just providing the basis for value creation, they are making sure it’s maximally achieved. As such, the consumer journey, of which the customer journey is only a small and discrete part, will be the real spine of competitive differentiation going forward.
5. Leaders work to regain our trust
Randall S Peterson, Professor of Organisational Behaviour
Surveys of trust in our leaders and professionals show that in 2017 we trusted hairdressers more than our political or business leaders. 2018 is the year when business leaders step up and begin the process of restoring faith in our economy, our prosperity and our future.
Over the last few years we have seen what happens when people lose faith – they become more willing to support extreme ideologies. Indeed, recent research by the Leadership Institute shows that people are more likely when they are economically distressed to support leaders who are dominant over those who have a track record of accomplishment, because they are desperate for reassurance in an uncertain world.
It won’t be easy to restore faith – there are more unknowns in the system than ever. Brexit, Donald Trump, the rise of China, climate change and digital disruption are all causing uncertainty and dislocation. But strong leadership that restores faith is not about dominance. Yes, strong leaders need to have clear strategies and points of view. They also tend to be high-energy and dominant. But, as I wrote in The Economist, people also want their leaders to be resilient, tactful, kind, caring, and tolerant.
In other words, dominance will get you the job but, once you have the role, successful leaders also need to listen, learn and adapt to stay ahead and be seen as a problem-solver in fast-changing and uncertain times. These great leaders will be strong without being authoritarian.
6. Happiness takes centre stage
Michael Parke, Assistant Professor of Organisational Behaviour
Many organisations are focusing on how happy their people are. Happiness is the pleasant feeling we experience when we are making progress toward our goals or when we are consistently achieving them. Happiness relates to greater wellbeing and mental health. It is therefore a noble organisational pursuit. But most organisations miss an important nuance: what makes one employee happy may not always be the same for the next. That is, there’s more than one kind of positive experience at work: do you want to be high-energy and passionate or calm and measured? You might value excitement or you might put greater weight on stability and security. Organisations need to realise that what makes each individual happy varies and to understand people’s different motivators.
Organisations are starting to shift towards becoming more open to the moulds of individuals’ uniqueness, talents and personalities. On the one hand, it’s challenging for companies because that means there are more differences, which are hard to manage. On the other, the potential for creativity and different ways of thinking is higher and we’re going to need those skills to drive the future.
If organisations adopt a greater acceptance of these differences in terms of positive experiences such as happiness, then they won’t be asking people to manufacture emotions to fit in – they can just be their authentic selves. Organisations that genuinely want employees to be happy at work will also have to understand that nobody is happy all the time. It’s healthier to actively work through negative experiences than to suppress or avoid them in the workplace.