This is part two in a three-part series with Rowan Gibson, discussing how the world’s best innovators come up with breakthrough innovations, and how his clients – most of them not the typical tech darlings we’ve come to think of being great innovators – find new avenues for growth via business model innovation.


In today’s rapidly transforming world, it is important as a leader to be able to spot and capitalize on the emerging trends that could revolutionize your industry as you know it now.

Not catching the right waves and changing at the right time can create very real problems later on for your business — just take a look at Nokia, Borders, Kodak. They did not keep up with market changes and now they are floundering or non-existent.

Knowing that you have to align your strategy with the current trends is one thing, but how can you identify new trends? How can you capitalize on them ahead of your competition? How can you tell the trends from the fads?

Author of The Four Lenses of Innovation Rowan Gibson shares from his extensive experience in helping large companies harness new trends and redefine their company.


To Predict the Future, You Must First Understand the Present

“Everything you need to know about the future, you can basically know,” says Gibson. “In today’s world, very little knowledge is actually proprietary anymore. It’s all out there to be found, if you’re willing to take the trouble to look and to join the dots. The future will be formed from trends that are already observable.”

The challenge is no longer so much about trying to imagine and predict or even invent the future. It’s more about being fully aware of what’s already going on around you right now, and then harnessing that knowledge to create the new value that customers will be looking for tomorrow.

That means we have to develop a deep understanding about the emerging trends and discontinuities across many domains, and then synthesize them into a   compelling vision and a strategy about what to do next. What’s important there is to distinguish between the big, industry-shattering trends and the passing fads that will fade away very quickly. You don’t want to be banking your company’s strategy on the latter.


Amplifying Weak Signals

So how can you tell one from the other?

Gibson suggests an exercise called “Amplifying Weak Signals”.

Ask yourself, “If this small, rather insignificant trend – this ripple on the ocean – actually grew and became more important, what would the consequences be?”

Take something like the rapid increase in internet bandwidth, for example, in the early 2000s. That was something that quickly opened up the doors to file sharing, which led to music downloads and iTunes, and eventually to the downfall of the record industry as we had known it for decades.

“Basically, anyone could see that internet bandwidth was going to increase exponentially, so why did it take the record labels so long to react? They basically went into denial, and tried at first to fight the file sharers by threatening them with prison, rather than coming up with a new business model like iTunes, for example.” said Gibson.

“It’s the same principle with streaming media — Netflix and Spotify jumped on that trend, whereas Blockbuster clung onto their old business model based on physical retail outlets and DVDs.”

You can usually see the signs of the next big wave. They’re not necessarily invisible. It’s just that they may be more than a little unpalatable if that oncoming wave threatens the current way you run the business. It may even turn out to be a giant tsunami – a tide of history – that could wash your company away, if you’re not careful.

Here’s the good news: it’s entirely possible to react properly to these trends, although that doesn’t by any means suggest that it’s easy. Take Netflix, for example. Just like Blockbuster, their business model was based on renting out DVDs. In their case, of course, they didn’t have physical retail stores, but they did have big warehouses, and shipping, and logistics, and call centers etc. Yet they were able to achieve a complete overhaul of their business model to make the shift to streaming. And now they’re a major player in that space, while Blockbuster is dead. So it is possible to harness a huge industry-transforming trend, and to make the necessary transition, but it’s still very difficult. However, the alternative is to simply become obsolete and die. That’s not a good option B.”


Take a look at one or two trends, some thingsthat might be changing in a rather minor way at first. Try to scale them up and project them into the future.

Ask yourself:

  • What if this became really big?
  • What kind of difference will it bring to our industry?
  • What are the consequences?
  • Who would be impacted by those things?


Disruption in the Next Ten Years

With the pace of change rapidly increasing, it’s reasonable to expect pretty much every industry to be disrupted within the next decade. Today’s disruptors, too, will be susceptible to disruption if they do not continue innovating.

The question isn’t whether your industry will be disrupted, it’s when and by what, and by whom. Perhaps mostly importantly, it’s how to respond.

“Most people, when responding to surveys, say that they expect their industry to be disrupted in the next two to three years. So they’re aware of it, but they’re still very often stuck in their conventional business model. It’s one thing to recognize that there’s disruption coming your way, it’s a whole other thing to make the kinds of major changes that disruption may require,” notes Gibson.

His recommendation to companies is for them to not just understand what the trends are, but to figure out ways to incorporate them into the existing business.

“Let’s take the combination of autonomous driving  and ride-sharing, for example. If you scale it up and you look forward, in the future there is a big possibility that nobody will really want to own a car. They’ll probably just take the next Uber or whatever that’s going past the door. They won’t even have to learn to drive or own a driving license. What does that do to car sales? And to car financing? And to car insurance, and so on?”

“We know that we’re rapidly moving towards an era where it might not even be a car, but a quad-copter outside the door. If we’re in insurance, we’ll have to realize that we’re not necessarily insuring the drivers anymore, but the vehicle instead. If we’re a bank, we’d need to know that consumers won’t be buying a car or needing a car loan anymore. We’ll need to rethink the whole idea around insurance and loans.”

The most important takeaway is to take a good look at the various ways the world is changing and then make sure you change with it. The key is to harness the power of change to continuously rethink and reinvent your business model so that remains fit for purpose in the new ‘Transformation Economy’.



Industry Shifts Map is powerful strategy tool you can use to help identify and map out the impending shifts in your industry and adjust your strategy to be ready for them. Download it for free here.

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