5 Trends That Will Shape Business in 2015

The world of work is changing, and with it how companies must deal with employees, customers, and suppliers

CEB’s work across 2014, and the thousands of conversations with executives from Seattle to Seoul to Sydney that it represents, marks out five important trends.

These trends should shape the decisions of any leader – whether in the line or the corporate center – as they try to increase revenues and/or spend those revenues wisely in 2015 and beyond.

But, while these trends have implications for all, CEB would be remiss if we didn’t set out what corporate functional heads and their teams should do differently in response. This is the first post in a series that will show how leading heads of HR, IT, finance, legal, sales, marketing, and operations around the world are all responding to the trends.

The Five Trends

1. Changing nature of work: As the way companies sell products and create profits changes, so does the way in which that work is accomplished. Employees must be able to work as easily with colleagues in different functions and parts of the world as the one in the next-door office. Simultaneously, the value that employees create is becoming more interdependent on other employees’ work, placing a premium on what CEB research calls “network performance.”
   In fact, the research finds that workforces that excel at both individual task performance and network performance can boost year-over-year revenue growth by 11% and profit growth by 5%. This change in the nature of work requires firms to change how they attract, develop, and manage employees.
2. Changing needs of internal clients: For corporate functions, internal customers or clients seem to be increasingly difficult to serve. Line managers’ need to work with – and depend on – more colleagues, to manage a wider portfolio of products, and to serve more knowledgeable and demanding customers (see trends 3 and 4) has meant they must claim more authority and freedom in their decision making.
   That requires internal service providers — from IT to HR to risk management to strategy development – to enable their clients to do much of the work that those same providers used to do. And that requires a shift in the support they provide, from prescriptive templates and rules to guidance and context that help line managers make intelligent decisions, such as about provisioning their own technology.
3. Changing nature of the consumer: Consumers’ access to information, and an increasing need to approve of a company as well as the products it sells before making a purchase, means firms must communicate more authentically with customers, and make sure the branded experience they promise matches the reality of consuming and interacting with their products.
   For example, millennials (those born between the early 1980s and the early 2000s) demand social relevance, the opportunity for self-expression (customizing the home screen of their smartphone for example), and a sense of belonging from the products they buy, and from the “experience” that comes with those products. In the US alone, brands that fall short in millennial consumers’ eyes risk losing touch with one-quarter of the population. And worse, this segment makes up the majority of first-time homebuyers and new parents, and commands $1.68 trillion in annual consumer spending.
4. Changing nature of B2B customers: As the complexity of business-to-business deals – for anything from a large corporate stationery order to enterprise software – has risen, so too has customers’ risk aversion and the number of stakeholders that must sign off on a given purchase. CEB research shows that 5.4 people are involved in the average B2B buying process.
   The consensus these groups require to make a decision makes the buying process longer, and a lot more difficult for sales rep. This is something that buyers and suppliers alike must learn to overcome. Without any intervention, sale cycles extend, and both buyers and suppliers walk away with smaller deals than either side wanted.
5. Changing impact of information: No one in business needs to be told that that the information we can all access is growing exponentially, but executives underappreciate the toll that it takes on the users of that information. People struggle as they hit the limits of their cognitive ability to process, make sense of, and ultimately put to use the huge and varied array of information at their fingertips.
   From consumers to senior executives, people are aware of more options than they were in the past. They have access to more information to aid them in the decision-making process, and yet they struggle more to make decisions and often fail. CEB research also shows that the cost of poor decision making can be upward of $375 million. Leaders in the organization need to make information helpful, not harmful, to decision making.

 source:executiveboard