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The pace of new business creation exploded during the pandemic. Entrepreneurs responded to the huge opportunities they saw when the economy underwent a landslide. Recently, the World Bank announced that we will have a period of Stagflation in the style of the 70s, with stagnating growth and high inflation. Those who know their corporate history know that many large corporations have emerged from economic crises. There is no doubt that as the economy undergoes another seismic shift, entrepreneurs will be looking to set up new businesses, and those who already own a business will seek to transform their business to take advantage of the future opportunities. Here are six key trends that will shape the future of business.
The Rise of Millennials
Millennials have become the largest living generation in the United States. Companies that want to be a major player in tomorrow’s economic landscape must win with millennials. According to a report from McKinsey & CompanyMillennials spend $1 trillion a year and will have an income of $8.3 trillion by 2025, compared to $6.4 trillion for Gen Xers and $1.1 trillion for baby boomers.
Companies must adapt to the tastes, habits and values of millennials if they are to succeed. They also need to align their strategies on winning the right millennial segment for their business.
Winning millennials isn’t just about creating and retaining customers, it’s also about hiring millennials. Therefore, social media platforms, schools and training should be used not only to create and retain customers, but also to attract millennial talent.
A more demanding labor pool
The population is growing more slowly and with the retirement of baby boomers, the labor pool is shrinking. The impact of a shrinking labor pool shifts more power to workers. We’ve already seen companies treat remote working as the new signing bonus. The Great Resignation shrank the labor pool even more, as workers decided to start their own businesses. Companies are under tremendous pressure to adjust their pay, working hours and work models to remain attractive to employees.
We see companies struggling to integrate remote and hybrid working models into their business. Not every business can go remote or hybrid. However, the success of companies like Dropbox, Twitter and Slack shows that it is possible to build a large and successful business with telecommuters. Where they can, employees will choose companies that offer this. This is all the more important as people migrate from cities in search of better, cheaper living conditions.
The Great Resignation also showed that many workers felt they were underpaid. This has put pressure on companies to offer better compensation packages. Better compensation isn’t the only form of compensation people are looking for, however: employees want a better work-life balance.
A more diverse population
Millennials are the most diverse demographic in the US, both because of immigration and the growth of minorities.
Companies will have to learn the cultural languages of the communities they want to target. Research by Erin Meyer shows the benefits a company can gain from investing capital to understand how to navigate the cultural minefield. Not understanding where your employees and audiences are on a cultural map can lead to a failure to manage effectively, or a failure to effectively create and retain a customer, or attract employees.
Being able to communicate between cultures is an increasingly important tool for managers. Companies like Netflix have invested heavily in training their managers and staff, according to culture cards to be more effective.
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The rise of platforms
Platforms are online marketplaces that match consumers with suppliers. Think Airbnb, Uber and Amazon. Today’s large companies are mediated by the internet and match supply and demand in very similar ways.
Software has eaten up pretty much every kind of business in the world. If your company wants to succeed in this new era, this too must be mediated via the internet and software. It goes beyond having an online presence – at this rate, no online presence is abnormal – improving search engine optimization (SEO), or even becoming a company that measures everything and tries to improve it. You need to reshape and disrupt your business to keep up.
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AI eats the world
Not only has software been eating the world for over a decade, but artificial intelligence has also started eating the world, disrupting countless businesses. You may not realize it, but you are in constant contact with some form of AI. Any task that can be automated should be, and AI is how.
To set your business on the path of automation, you must first understand the processes that drive the business and determine which aspects are open to automation. By mapping and analyzing your processes, you can find the technologies you need to transform your business.
It is important to involve your employees as they have a good understanding of the tasks that can be automated. If you don’t interact with them, they may not find your solutions helpful, making the whole process a mistake.
The rise of big data
Data is today’s oil. This is a function of the importance of internet and software. The internet naturally collects and disseminates data. Companies that can successfully extract actionable insights from the amounts of data their systems naturally create can derive tremendous value from that data, especially in forecasting future business trends.
Data can help your business better understand your customers, personalize offers to those customers, and become more efficient. No business can succeed without some kind of policy to maximize the use of its data.
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