4.6 Global Trends

Top 5 Challenge Trends

Increasing Concern for the Environment

Buis (2021) highlights the effects of our behavior on climate change in the article: Extreme Makeover: Human Activities Are Making Some Extreme Events More Frequent or Intense. The number of catastrophic weather events is on the rise.  People are seeing the growing threat of global warming. Effects of climate change are failing crops, rising sea levels, shortages of drinking water, and increasing death tolls from disease outbreaks such as malaria and dengue fever. Currently, 192 nations have signed the Kyoto Protocol to operationalize the United Nations Framework Convention on Climate Change and pledged to participate in the process of reducing greenhouse gas emissions. According to McKinsey Quarterly’s (2007) Global Survey of Business Executives, executives across the world believe that business plays a wider role in society and has the responsibility to address issues such as environmental concerns beyond just following the letter of the law to minimize pollution. More and more companies now watch the “triple bottom line”—the benchmark of how they benefit, not just (1) profits but also (2) employees and (3) the environment as a whole. Companies realize they have to take bold steps to minimize their carbon footprint, create environmentally friendly products, and manage the company for more than just the next quarter’s profits. Managers can’t simply “greenwash” (pretend to be green through tiny steps and heavy advertising).

To learn more about how global warming has influenced the weather within the United States watch the video below.

_{Watch this video: Extreme Weather and Climate Change by EarthNow [4:00] (Transcript Available).}

Greater Personalization and Customization

We’re no longer happy with cookie-cutter products. Consumers are demanding more say in products and services. One size no longer fits all, and that means tailoring products and services to meet specific customer preferences. And as companies sell their products globally, that tailoring has to meet vastly different needs, cultural sensitivities, and income levels. Even something simple such as Tide laundry detergent can come in hundreds of potential variants in terms of formulations (powders, liquids, tablets), additives (whiteners, softeners, enzymes), fragrances (unscented, mountain fresh, floral), and package sizes (from single-load laundromat sizes to massive family/economy sizes). Customization and the growing numbers of products mean managing more services and more products. Managing for mass production won’t suffice in the future.

Faster Pace of Innovation

We all want the next new thing, and we want it now. New models, new products, and new variations—companies are speeding new products to market in response to customer demands. The Finland-based mobile phone maker Nokia sells 150 different devices, of which 50–60 are newly introduced each year. The new variations are tailored to local languages, case colors, carriers, add-ons, and content. David Glazer, engineering director at Google, explained how his company adapts to this fast pace: “Google has a high tolerance for chaos and ambiguity. When we started OpenSocial [a universal platform for social-network applications], we didn’t know what the outcome was going to be” (Slater, 2008) so Google started running a bunch of experiments. “We set an operational tempo: when in doubt, do something,” Glazer said, “If you have two paths and you’re not sure which is right, take the fastest path” (Slater, 2008).

Increasing Complexity

Our world is becoming more and more complex due to environmental challenges, increasing urbanization, and health impacts . VUCA refers to the increasingly volatile, uncertain, complex, and ambiguous environment in which we live (Kraaijenbrink, 2019).  Additionally, the fact that consumers expect more sustainability, customization, and innovation means that companies face growing complexity. Think of the number of phone models produced per year, many of which have 300–400 components, some of which contain millions or hundreds of millions of transistors. Those components have to arrive at the right manufacturing location, from whichever country they originated and arrive just in time to be manufactured. Now add to that supply chain challenges since the pandemic and those currently occurring due to the war in Europe. ‘Complex’ is an understatement.

Increasing Competition for Talent

We need people who can solve all these tough problems, and that’s a challenge all by itself. According to McKinsey’s global survey of trends (2007), business executives think that this trend, among all trends, will have the greatest effect on their companies in the next five years. Jobs are also getting more complex. Consider people who work in warehouses doing shipping and receiving. At Intel, these workers were jokingly called “knuckle-dragging box pushers” and known for using their brawn to move boxes. Now, the field of transportation and shipping has become known as “supply chain management” and employees need brains as well as brawn—they need to know science and advanced math. They’re called on to do mathematical models of transportation networks to find the most efficient trucking routes (to minimize environmental impact) and to load the truck for balance (to minimize fuel use) and for speed of unloading at each destination. Intel now acknowledges the skills that supply chain people need. The company created a career ladder leading to a “supply chain master” that recognizes employees for developing expertise in supply chain modeling, statistics, risk management, and transportation planning. Overall, demand will grow for new types of talent such as in the green energy industry. At the same time, companies face a shrinking supply of seasoned managers as baby boomers retire in droves. Companies will have to deal with shortages of specific skills.

Becoming More Connected

We can now use the Internet and the web to connect people as never before.  According to Statista (2022) there are 5 billion internet users worldwide which represents 63% of the world’s population.  This number will continue to increase as the developing world catches up with the developed world on internet usage (Internet World Stats, 2021). Through almost 1.9 billion websites (Martin, 2021), we can access information, words, sounds, pictures, and videos with ease previously unimaginable. The World Bank (n.d.) has created a surprising graph showing the dramatic increase in Individuals using the Internet over the past 20 years.

Becoming More Global

We can now tap into more global suppliers and global talent. Whatever problem a manager faces, someone in the world probably has the innovative products, the knowledge, or the talent to address the problem. And the Internet gives managers the tools to help problems find solutions, customers find suppliers, and innovators find markets. The global problems we face will require people to work together to solve them. Ideas need to be shaped and implemented. Moving ideas around the world is a lot less costly and generates fewer greenhouse gases than moving people and products around the world. Organizations and social movements alike are using social networking to help people find others with the skills and talents to solve pressing problems.

Becoming More Mobile

We can now reach employees, suppliers, and customers wherever they are. In June of 2021, almost half the world was using a smartphone (BusinessWire, 2021), and similar to Internet use, mobile phone adoption continues to grow. The penetration of mobile phones is changing the way we do business because people are more connected and able to share more information. Two-way, real-time dialogue and collaboration are available to people anytime, anywhere. The low cost of phones compared with computers puts them in the hands of more people around the world, and the increasing sophistication of software and services for the phone expands its use in business settings. Phones are not just voiced communication devices —they can send text as well as be connective devices to send data. The fastest mobile phone growth is in developing countries, bringing connectivity to the remotest regions. Fishermen off the coast of southern India can now call around to prospective buyers of their catch before they go ashore, which is increasing their profits by 8% while actually lowering the overall price consumers have to pay for fish by 4% (Corbett, 2008). In South Africa, 85% of small black-owned businesses rely solely on mobile phones.

Rise of the Creative Class

With blogs, Flickr, TikTok, and YouTube, anyone can post their creative efforts. And with open source and wikis, anyone can contribute ideas and insights. We have ubiquitous opportunities for creativity that are nurturing a new creative class. For example, OhmyNews, a popular newspaper, is written by 60,000 contributing ‘citizen reporters’ and has become one of South Korea’s most influential news sources, with more than 750,000 unique users a day (Hua, 2007; Schonfeld & Yen, n.d.). The demand for workers and the ability for workers to work from anywhere may lead to an ‘e-lance economy’ where workers may become free agents, working temporarily on one project and then moving to another when that project is done. Mobile connectivity means these new workers can live anywhere in the world and can work from anywhere in their community. For you, as a manager, this means managing workers who might be in a cubicle in Toronto, an apartment in Amsterdam, or an Internet café in Bangalore.

Increasing Collaboration

These solution trends combine to foster a rise in collaboration across space and time. We can now bring more people together to solve more problems more quickly. To design new products quickly—and make sure they meet consumer needs—companies are now looking beyond their four walls for innovation. Google, for example, identifies itself as an organization that believes in open, decentralized innovation. “Google can’t do everything. And we shouldn’t,” said Andy Rubin, senior director of Mobile Platforms, and “That’s why we formed the Open Handset Alliance” (Slater, 2008). This alliance is comprised of “a group of 84 technology and mobile companies who have come together to accelerate innovation in mobile and offer consumers a richer, less expensive, and better mobile experience. Together we have developed Android™, the first complete, open, and free mobile platform” (Open Handset Alliance, n.d). While the handset alliance is about ‘open’ cell phones (i.e., phones that aren’t tied to any particular phone company and can be programmed by users), collaboration means much more than communications. People can now not just communicate but actually collaborate, building coalitions, projects, and products (Friedman, 2005, p. 81). A myriad of different groups has and will continue to, self-organize on the Web.