The Discovering Opportunities’ topics covered to date are all within a business, industry or market. The opportunities maybe external to your company but when you look for them, they are there. For business leaders, large or small companies, your employees are potential experts to discover these opportunities.
With the current economic, political, social, pandemic, population shifts, education challenges, tensions between countries/government, central banks, inflation, interest rates, stock market ups/downs – you name it for the US and globally – if you are business as usual, you may want to reconsider.
The external characteristics for discovering opportunities – demographics, change in perception, meaning, mood and new knowledge were defined by Peter Drucker in 1985 in Innovation and Entrepreneurship. Again, the approach for this blog is “then” and “now.”
Demographics – “change in population, its size, age structure, composition, employment, education status, income (p 88).” Drucker stated that these are the most predictable.
Change in perception, meaning, mood – simply stated, Drucker discussed the “glass half full/glass half empty” for perception. The facts don’t change – their meaning does. I think today a possible reference for this is “spin” to a certain perspective regardless of the facts. It switches conversation to glass half empty/glass half full. Drucker cited a number of examples in 1985 that today some would not be openly discussed because of the perception you or your company could be labeled. I will review some of the topics then and what is now possible perceptions.
New Knowledge – then, the “superstar” for opportunities and entrepreneurs, received the publicity, funding, what people considered when they think of innovation. Let’s be clear, innovation is this but much more. Knowledge based innovation initiatives can be technical, scientific as well as social based. Key elements of discovering opportunities – knowledge based are different from the others because “time span, casualty rate, predictability are factors for development and delivery.” The lead times are longer because of the requirements to be developed from the knowledge, then products, process for manufacture or delivery of service into a global market/supply chain. This longer lead time applies to non-technical, non-scientific knowledge as well. Drucker cited a number then of new knowledge examples and I will highlight some from now.
Demographics
Your business, industry or market may be dependent on an understanding of demographics.
One example cited by Drucker, those who plan to retire between 2050 and 2060 (Drucker used 2030 year) are in the workforce now and are in their 30’s and 40’s. He narrowed his analysis on the group in 1985 and most likely for now, “the occupation group that they will stay in until they retire or die (p 88).” This may be true for some now but not all. I provided data for the age group of 30’s and 40’s to total population.
Income, another important data point for demographics is the other statistic that I reviewed. It is the population and per capita income from 1968 to 2020. Is your business dependent on consumers’ income overall or their discretionary income?
Source: https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-people.ht
Drucker highlighted the following demographic predictions.
1938 – US population would peak around 140 million in 1943/1944 and then slowly decline (p 91). The current population in US is over 332 million and counting (Source: https://www.census.gov/popclock/).
1972/1973 – prediction by experts that participation of women in the workforce (then over 33 million) would continue to decline (p 91). The current number of women in the workforce is over 75 million (Source: https://www.dol.gov/agencies/wb/data/lfp/civilianlfbysex)
Drucker cited Black Death as one example of demographic catastrophe and now in the modern era, there is COVID. While COVID is not on the scale of Black Death (nearly 136 million throughout its history (Source: https://worldmedicinefoundation.com/health-news/bubonic-plague-death-toll-how-many-people-died-from-the-black-plague/), we observed in the US the impact across many areas in the economy. More will be learned as COVID issue remains in the news. The point here – change is upon us all, good or bad. During this period of change, are there opportunities for your business? I believe that there are and my search continues. Are you searching? For business leaders, I expect that many are trying to develop a go forward strategy.
The age structure within the population is an important factor to understand. How long have we heard about the aging population of the US and now globally? Population shifts are underway, state-to-state because of remote work options that could impact your business. Employment pre-COVID and post-COVID most likely will continue to be different. In April 2020 there were 20.5 million pink slips. In August 2021 4.3 million American quit their jobs (Source: https://time.com/6106322/the-great-resignation-jobs/). 15% of the workforce plans to quit their job between September 2021 and December 2021 (Source: https://www.resumebuilder.com/1-in-7-workers-are-quitting-this-fall/)
Change in Perception, Meaning, Mood
How many of you have considered this area and pursued business opportunities? I have not. My research into changes in perception, meaning, mood was a learning experience for me. Some characteristics of change in perception according to Drucker are (pp 104 to 105):
“Change in perception, the facts do not change, meaning does.” Meaning changes from glass half full to glass half empty. An example is “working class to middle class.”
The perception may not be explained by sociologists or economists. Change in perception is a fact, may not be quantifiable or if it is your opportunity to leverage for revenues, profits, growth or affect may be too late.
It appears perception in our world today is promoted daily from social media, media in general and some of the population takes its cues. Now polls are a popular instrument today. It seems polls are done to shape perception positively or negatively.
An important element to determine about change in perception for Drucker, is it a fad or permanent? If a fad, its life cycle is short, 1 or 2 years. You could invest in something that is not sustainable.
If a change in perception is determined to be permanent or more than a fad, the process to leverage needs to be simple, small and specific (p. 106).
Some “then” examples from 1985 include:
Health – perception in 1985, glass half empty. Today, does perception remain the same? Equipment for home use is advertised constantly, new products are introduced regularly, now with videos, support, tracking apps on phones, apps for all things tech.
COVID pre and post perception for social distancing, social isolation – now what is perception – football games, no masks, no social distancing but go into stores, doctors’ offices, medical facilities – signs remain to social distance, masks required. Vaccine mandates or no mandates in states. What are the facts vs perception? The glass half empty seems to apply.
In 1985, Drucker also cited the perception around African American population, American Feminists and the Ford Motor Company Thunderbird. In a previous blog, I highlighted his observation about the Edsel and Thunderbird. Drucker pointed out the success of the Thunderbird was due to a perception change. The automobile market was defined by income group but segmentation shifted to lifestyle (pp. 99 to 104). Your product, your service, how is the market divided? Is it different now than 5 or 10 years ago? Is there a perception change in your business, industry or market?
New Knowledge
In the past 50 years what new products or services have been discovered and capitalized on that started with new knowledge? What new products/services for your company?
New knowledge opportunities’ characteristics are long lead times, higher failure rates, can be technical, scientific, social, non-technical, non-scientific. All knowledge may not be available, delays completion, increases risks. Drucker presented that the timeframe for new knowledge ideas to develop is 25 to 35 years.
Some examples of New Knowledge from the past
- Light bulb, was the new knowledge needed for the electric power industry
- Airplane, two knowledge roots are gas engine and aerodynamics
- Computers, the knowledge-based requirements were “a scientific invention, the audion tube, a major mathematical discovery, binary theorem, new logic, the design concept of the punch card, concepts of program and feedback (p 112).”
- Newspapers, telegraph and high-speed printing
Now examples – a limited few
- EV, batteries
- Space travel for all – incremental knowledge, NASA developed, now private business leads
- Stealth, a brief history of the new knowledge needed
- 1940’s – Jack Northrop’s YB-49 flying wing, smooth surfaces, rounded edges, no tail, no fuselage. YB-49 cancelled in 1949
- 1960’s – Pyotr Ufimtser, Russion physicist developed a theory on electromagnetic waves but was ignored
- 1970’s – current military aircraft vulnerable to radar. In 1974 DARPA and Air Force began a major effort for stealth. Contracts awarded in 1975
- 1981 – F117 made its first flight, Lockheed
- 1981 – Northrop awarded contract for what would become B-2
- 1982 – Northrop BSAX demonstration, Tacit Blue first flight that made a total of 135 test flights. This became the B-2 with its first flight July 1989
- Initial trade-offs for stealth aircraft were speed and aerodynamics
- These were overcome in 1997 with the F-22 and in 2006 with the F-35
Source: https://www.airforcemag.com/article/History-of-Stealth-From-Out-of-the-Shadows/
The Discovering Opportunities’ Blogs (a total of 6) were done to demonstrate that opportunities are in the marketplace and an approach for you to think and find them. The blogs were based on the concepts from Peter Drucker’s book, Innovation and Entrepreneurship. There are two major categories for discovering opportunities, those within a business, industry or market and those outside.
However, you search for opportunities it requires a process, support by leadership (time, resources, patience, involvement, direction) and hard work. For any opportunities your current employees are potential experts.
Change is upon every business, big or small, what are you waiting for to discover opportunities that could impact your revenues and profits? Innovation Advantage LLC could help.
All the best in your discovering opportunities’ journey.