How to recognise 'tipping points' in society and business

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Read about this from 21st June 2022 in the newly published Five Horizons book (How to Succeed in the Age of Stakeholder Capitalism).

Change is constant and quite normal, but we often find comfort in what we know, treating change as a distant and remote threat. Disruptions occur within all areas of competition through innovation of technology, business models, and the shifts that affect why, what, and how people buy and how they choose employment. The failure to foresee and act upon these shifts is the primary cause of company failures.

Change takes time to establish itself

Changing cultural factors and opinions first appear among outliers in society. Viewing these people as non-conformists or contrarians traps us into believing that such ideas will never become the mainstream. Shifts in technology or business models can take time to take root and gather momentum, often needing adjacent innovations to occur before change is embraced as the norm. This can also lead to the assumption that technology and business paradigms are sacred and constant.

Even if you are good at spotting new ideas and niche innovations, most people expect and hope that they will be ignored until some undefined ‘later’ point. It is common to resist valuable insights, even risk failure and instinctively protect a normative comfort zone until it is too late. Too easily a comfort zone can become a danger zone.

Shifts are already taking place

It is predicted that there will be a plant-based protein disruption somewhere between 2020 and 2040. Up to 40% of the food production market will move to plant-based methods. At the same time, alternative dairy products will account for roughly 60% of that market. While there are several innovations still to be made for these evolutions to be a complete success, it is something that burger companies, cheese makers and farmers should be taking very seriously. These changes are well researched and undoubtedly well discussed in the sectors.

Not all market shifts can be foreseen

Not all changes will be as predictable however. We are entering a period of change in underlying go-to-market conditions that can not be considered feasible without first considerably changing one’s mindset. Public opinion is reaching a critical mass that will trigger a tipping point. A combination of a current major transition between generations and humanity reaching an existential precipice that is largely blamed on businesses has created disquiet among the public, and pressure on businesses to respond to their concerns. The businesses that are better at solving issues will be rewarded, and those that show ambivalence will be punished by the unforgiving and immediate forces of competition and customer demand.

You can see evidence of such great shifts littered throughout history, yet you might reject the notion that this can happen now. Time will tell, but it’s not healthy to wait before acting. Businesses must keep track as subtle shifts in society approach hidden tipping points, even though their timing, nature and effects are nearly impossible to predict.

Tracking tipping points through market dynamics

One way of assessing these matters is based on the normal competitive and demand dynamics of your market. The Five Horizons Model asks you to look within your own value chain and then to examine the value chains around your ecosystem, across customer markets and supplier-side.? Seek out vulnerabilities and opportunities, places where harmful practices might be overcome by your influence.?

To do this you can use the tried and trusted SWOT model (strengths, weaknesses, opportunities and threats), but add to that a good explanation of what impact will occur if threats or weaknesses are not resolved, and what actions could be taken to overcome those risks.

Once you’ve gathered these insights, consider within which time scale each of these issues will affect your business, either as a potential threat or an opportunity to differentiate from other companies. However, the chances are, that if you drew these conclusions so too will competitors. The opportunity for business is to capture the brand value from championing these ideas and doing so before a competitor gets their first.

Work with your people

If you are stuck asking the question of ‘when is the right time to act upon this?’ and ‘what should we prioritise?’, the answer is simple. You will find those answers by inviting people from the places in your ecosystem, your business’s spheres of influence, that are most affected by these issues to share their perspectives. These people will be the various stakeholders who have viewpoints, insights and non-conformist opinions, all of which add up to become a source of genius that you do not yet possess.

It is likely that you will do a much better job of studying your competitive landscape with these people, rather than by yourself or with your immediate team. Twenty pairs of eyes see more than three pairs of eyes can. Encourage people to stray from the prevailing way of thinking and give them permission to share their unconventional ideas. That is where you’ll find unforeseen and unspoken truths. You will be able to deduce the most compelling issues raised, the timeframe within which they are likely to take place, and make them the basis for a flexible business strategy. That will define how you prepare your business to act upon each shift.

Identify and empower your brand evangelists

Once you have these new insights and use them to inform your business strategy, the next step is to engage the same people as ambassadors for your business, championing the impact you want to have. Valuing everyone and their point of view, striving for inclusiveness creates positive energy and can be a powerful tool for success.

Be prepared to have no concrete plan

It is impossible to precisely know the critical mass point at which to take an outlier idea into the mainstream - the tipping point of that idea. Often it boils down to understanding what conditions to monitor; what people in the market might say; moving demand patterns; actions of competitors; whatever you and your group of champions decides could signal you’re nearing the tipping point. If those conditions happen sooner than you imagined, simply bring your strategy forward and start earlier.

When it comes to big changes in markets and societies, forget about looking for singular sources of great influence or genius. Look for the indicators in the way the world is guiding itself and you will be able to identify great shifts that are about to be thrust into the mainstream. And, as you spot the value of championing these shifts, you might just become one of the winners.

Watch closely, listen to the outliers, choose judiciously which ideas to grasp and act early. You will find an opportunity to offer new alternatives into which the floodwaters of demand will naturally flow.?