Using Megatrends in Intelligence at Cisco Systems

Future orientation is one of the key characteristics of an intelligence program’s scope that can be taken to world class levels. Joost Drieman, Director, Market and Business Intelligence European Markets at Cisco Systems, explains how the company is using megatrends in Market Intelligence to create strategic foresight.

At Cisco, the Market Intelligence program has been built around four pillars:

  • Environment intelligence (economic predictions, market characteristics, social sustainability, opportunities in the addressable and adjacent markets)
  • Customer intelligence (customers’ buying behavior, segmentation, profiling, demographics, upselling and cross-selling opportunities, customer satisfaction and loyalty)
  • Competitive intelligence (the competitive landscape and power lines, strategies, presence in different markets, co-competition)
  • Channel intelligence (the channel landscape and dynamics)

Understanding megatrends is seen as important in all of the intelligence areas above, but what is a megatrend?

Joost Drieman gives an example: Over the next few years, 30 million Chinese will move over to Europe on business. A chain analysis quickly reveals that this trend will drive significant business opportunities in several industries: More aircrafts and airports will be needed ““ in the middle of the growing pressures of reducing air pollution ““ more hotels, restaurants, entertainment and various professional services will be needed, and all of the above will eventually set new requirements for communication infrastructure, which is of particular interest to Cisco,

Why then is understanding megatrends so vital for a company’s success?

One naturally does not want to miss a trend so as to avoid losing market share, but for Cisco, understanding megatrends still represents more of an opportunity: One of the company’s objectives is to grow faster than the IT market on the average, and understanding megatrends is seen as a means to facilitate such growth.

How to identify and prioritize megatrends?

Joost Drieman explains how Cisco has gone about mapping out megatrends that may have an impact on its business over the coming years:

  1. Invite a group of internal experts from different parts of the organization
  2. Gather insights from research providers such as academia, research institutions and consulting houses
  3. Conduct own surveys (Cisco conducted one on LinkedIn)
  4. Brainstorm based on the input on the potential upcoming megatrends, and list them out

In the end, Cisco had compiled a list of as many as 200 trends, and a critical assessment was in order: Was each one really impactful and enduring enough to be a megatrend, or were some of the observations rather just phenomena that would possibly fade away? As a result of the re-evaluation, Cisco ended up with a list of 50 megatrends that were put under surveillance to see if future signals would continue to reinforce the identified trends, or if further developments were already in process.

How to assess the impact of megatrends and derive opportunities from them?

In a complex world, not all trends happen at the same time, nor do they have an identical impact on the company’s business. Acknowledging this, Drieman and his colleagues at Cisco developed an Impact Grouping map where the identified trends were grouped under six categories based on their anticipated impact on business, and the timeline:

  1. Missed the train
  2. Are we taking action?
  3. Are we preparing?
  4. Nice to know
  5. Interesting
  6. Keep an eye on

The trends were then further mapped into a framework that connects potentially interesting trends together. As an example, maybe the trend of public sector indebtedness combined with the trend of sustainability will lead to a business opportunity for those who can produce green IT solutions for the public sector?

How to communicate the results of a megatrends analysis?

The results of a megatrends analysis are necessarily strategic in nature, but the analysis effort may be wasted if the messages are buried into a pile of powerpoint slides that is thick enough to exhaust any busy decision-maker up front. Knowing this, Drieman with his team paid specific attention to building fact sheets that were as crisp and digestible as possible:

  • What is the trend
  • Facts and figures
  • Impact on Cisco
  • Assessment of disruption

For most of the trends, more information was available in the notes. Also, the reports were available in both ppt and pdf format.

Finally, Joost Drieman points out that there’s ample evidence about global megatrends also provoking subsequent anti-trends, which is something for the trend analysts to bear in mind. Another thing to bear in mind is that eventually, all trends are driven by the end customers’ i.e. the consumers’ wants and needs.

Hence, even though many companies operate in a B2B environment, consumer behavior may have a significant impact on their business, too. Whatever the most impactful trends are for each company, a genuinely future-oriented corporate intelligence program should be equipped to systematically detect, monitor and communicate them.

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