CHAPTER 7

Spotting Trends and Patterns That Affect Your Business

by Nina A. Bowman

As organizations strive to be more agile, and competitive forces demand a greater ability to anticipate and adapt, individuals need to understand not only what objectives they’re striving toward but also what key trends may affect these goals. Managers at all levels will need to “lift up” and find a greater balance between current-day demands and big-picture needs. As Rosabeth Moss Kanter demonstrates in chapter 11, the best leaders know when to focus in and when to pull back.

Lifting up requires you to keep an eye out for the weak signals of change that may impact your role, department, or business. These signals can come from within your company or the external environment.

Observe Signals Inside Your Organization

Start by paying attention to the internal signals within your company that may give rise to opportunities or challenges right under your nose. In many organizations, the heavy demands of day-to-day work and short-term goals lead to a myopic view of the business that can lead to flawed decision making and negative outcomes. Consider a marketing manager who misses the signs of his company’s broader financial struggles and presents an unrealistic budget. Or an HR manager who works tirelessly to hire highly sought-after tech talent but ignores the signals of falling retention rates in the existing employee base.

To identify the relevant changes happening within your company, look for trends related to different aspects of your function. Notice signals related to people, process, products, and strategy. The types of questions shown in table 7-1 can help you uncover the weak signals of internal change.

After you reflect on these questions, draw connections between the data by considering possible implications of these changes. Ask yourself, What might these changes mean for me and my department? and How will these signs in my department impact stakeholders in other parts of the business? By asking these questions, you’ll realize where your own strategy and priorities may need to adapt.

Additionally, consider the root cause of these changes by asking “why?”: Why is employee engagement dropping on my team? or Why are there increased requests from selected areas of the business? Understanding root cause can help you find a solution to the problem you’re facing or a better path forward if change requires it.

Study Trends Outside Your Company

In exploring root causes, you will also need to consider external forces affecting your business. External monitoring has long been the purview of dedicated internal strategy teams, external consultants, or forward-looking executives. But for organizations to be able to respond more quickly to outside patterns and trends, all managers must see this as an important task worthy of their time. Failure to pay attention to external signals—or waiting until a signal becomes strong before acting—can have harsh consequences.

At times of broad and fast change, you need to actively observe changes in your market and encourage your employees to collect and share relevant external information as well. First, specify what information is important to gather and how often you need to look for it. Your department’s function and the degree of change in your industry will determine how much effort to place on external monitoring. Routine monitoring efforts may suffice for more stable industries, while more dynamic industries, such as tech, may require more frequent action.

It’s important to draw from a broad array of sources. Doing so will likely unearth a trend faster than relying on one stream of information alone. Consider these different sources of information as you conduct your search:

• News and competitor updates. Regularly browse headlines across publications, explore conversation patterns in social media, and track competitors’ new product offerings and press releases. Ask yourself, Which information is most relevant to the work I do? Consider, for example, someone who develops toys for a living. He should take note of headlines that indicate shifts in buying habits or social media complaints about product features. If a competitor is developing a new tech-savvy toy for childhood learning, he would also want to jot that down to discuss with his team.
• The latest research. Reach out to your industry and trade associations or local chambers of commerce for the latest trend reports, and dig into key data sets from relevant federal bureaus. What patterns may have a direct impact on your business? For someone in the toy industry, these reports may reveal industrywide trends in toy sales as well as changes in who customers are and where they are making their purchases.
• People in your network. Conversations with former coworkers or friends who work at competitor companies can help you find out what others are seeing and how they’re reacting. For example, the toy developer may attend conventions and toy fairs, and set up coffee meetings with members of his network there. He can then ask, What trend is most interesting to you right now? Why do you think that’s happening? Any concerns about the industry? What are you excited about?
• Macro trends. Demographic, economic, social and cultural, technological, and political trends, like those discussed in chapter 10, can have direct and indirect effects on your industry and your organization. For example, for toy companies, technological trends would come into play as younger children spend more time on tablets and smart-phones. Average income data for key sales regions would also be important to consider when making pricing decisions.
• Sources outside your core area of business. Familiarity with our own industry and business can often blind us to what’s new or evolving. By looking at an industry you’re less familiar with, you can spot inconsistencies and commonalities. Look to other industries or fields and ask, Could this happen in my company, or my department? The toy developer may look into outdoor recreation, book publishing, the entertainment industry, or other activities that children and families do together when they’re not playing with toys.

As you and your team gather information, encourage your employees to share early observations and concerns. Plan small group discussions on market signals or schedule meetings to identify what you’re missing that enable weak signals to come to light.

Examining weak signals requires teams to become comfortable with exploring what might initially seem like a “silly idea.” Your team may be hesitant to do so at first. Support your team members by making it safe to discuss these fledgling ideas. Then decide which signals are worth continuing to monitor, focusing on trends with impact—those with a broad scope and the ability to endure over time. To sort out the important information from the noise, ask, Could this trend have significant impact on market share or sales? Or Does this trend have the potential to exacerbate the company’s weaknesses?

Move from Information to Insights

To find value in your research, you must connect these seemingly random external and internal signals and translate them into usable insights. By combining internal information with external observations, you can find new ways to overcome challenges or new opportunities to pursue.

Let’s say that you’re a manager at a skin-care manufacturer and you notice a drop in sales of moisturizing lotion. On a first review of internal sales data, you may simply conclude that the company’s branding efforts are ineffective, or that you need to tweak product placement or price. But when you consider external trends as well, you discover other potential causes for the dip. A trend that “consumers are increasingly pressed for time” may indicate that users are dropping the task of putting on moisturizer altogether. Warmer temperatures may mean customers are swapping out the lotion in favor of sunscreen. These findings can lead you to different proposed solutions—perhaps considering partnerships with other products, so that a busy individual can combine using the moisturizer with already established routines, or identifying other products you might sell during warmer seasons to make up for the drop in sales. These options could be much more effective than simply changing placement, price, or branding.

The following tips can help you convert seemingly disparate trends and observations into strategic insights:

• Detect patterns by looking at information and data over time. Patterns may not be obvious in the short term but often become clearer as we look at data over time, such as six months, one year, three years, or more. But don’t wait too long to react. Analyzing employee engagement numbers, for example, can reveal a lot about your employees’ job satisfaction and what they value, so you can continue this activity over time to find ways to improve the workplace. But if you begin to see signs of increased negativity and decreased productivity, you’ll want to respond to the situation quickly, before critical team members leave the company.
• Categorize the information into common themes. Information gathering can quickly become overwhelming. Organizing your findings into common themes can decrease the number of items the brain needs to process, allowing you to see connections more easily. If you notice trends that involve customer shopping patterns—even across differing industries—group them together and see if there are connections to your company’s offerings.
• Discuss the implications of trends. Not every trend you identify will matter. As a bank manager, you may not need to spend too much time analyzing a general trend that individuals are moving closer to cities. But if this data shows that more people are renting homes, rather than buying them—particularly in the region where you operate—this may indicate a decrease in loan requests in the future. By focusing on implications, you can find the trends that have the potential to impact your space.
• Explore peripheral ripple effects. It can be easy to ignore trends that don’t have a direct impact on your environment, but it is important to explore the longer-term consequences or ripple effects before declaring a trend “unimportant.” For example, the increasing number of people using social media was seemingly unrelated to the service industries—that is, until users started posting reviews and complaints on social platforms.
• Combine trends and build multiple scenarios for the future. Meaningful insights often arise when we combine different trends and then ask the question, “What would happen if . . . ?” If you’re in a medical profession, for example, you may notice changes in health-care offerings by insurers, increasing concern by individuals about how they’ll afford treatment, and more families hesitant to vaccinate children. By combining these trends, you can ask yourself, “What would happen if kids suffer from rare diseases and can’t afford medication? What options can I offer my patients in these situations, and what will this mean for other patients in the community?” By thinking through three or four plausible scenarios for how selected trends might unfold, you can decrease your response time if a particular scenario arises.
• Ask the big questions. Insights are a product of the questions asked. Ask bigger questions and you will get bigger insights. A manager in the leadership and development space may ask, “How can I prepare John to be a more effective leader?” and get a short-term response. Instead, they should ask, “How will age demographics affect our overall leadership pipeline?” This broader question will lead to a set of actions that can position the company for the long term.

In lifting up to see trends and patterns, it’s important to realize that your biggest roadblock may not be the information itself but managing your own analysis. Our assumptions and unconscious biases may cloud our objectivity, which can cause us to see a trend that we want to see, rather than what is actually there.

Take conscious steps to prevent these tendencies. Openly challenge your assumptions, look for data that goes against your beliefs, and craft discussions with your team that allow individuals to let go of current constraints so you can decrease the effects of bias and create the conditions for effective strategic discussions. With greater awareness, you can observe trends more accurately and lift up in a manner that supports the organization objectively.

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Nina A. Bowman is a Managing Partner at Paravis Partners, an executive coaching and leadership development firm. Previously, she held various advisory and leadership roles in strategy. She is an executive coach and speaker on issues of strategic leadership, leadership presence, and interpersonal effectiveness. She is also a contributing author to the HBR Guide to Coaching Employees (Harvard Business Review Press, 2015).