I recently had the privilege of attending The Yale CEO Summit which was a gathering of one hundred Fortune 500 CEOs in New York. Yale University Senior Associate Dean Jeff Sonnenfeld led a riveting discussion on this year’s topic: The NEW New World Order.
We are entering a time of unprecedented economic and geopolitical uncertainty. I had hoped for some insights about the disruptive influences that are shaping the world--but there was no consensus. The general sentiment was that the NEW New World Order will be increasing chaos and uncertainty. One interesting insight--in an anonymous electronic survey, a slight majority of the CEOs in attendance predicted a recession sometime in the next four quarters. Of course, no one really knew for sure.
As we enter 2019, here are a few thoughts which might help you manage in this time of extraordinary uncertainty.
Be Flexible. Stay Nimble.
Have a strategy for slowing growth rates. Develop the strategy before anxiety drives the plan. As volatility increases, you must increase the velocity and accuracy of your decisions. Decisions about price, promotions and inventory availability that were once made monthly or weekly must now be made daily, hourly or even in real-time. Stay attuned to growth opportunities even if there is a broad decline. Discovering hidden pockets of growth is the secret to help offsetting decline.
Price with Precision.
In 2019, customers will continue to become even more discerning and savvy competitors will become a thorn. Beware of stealth competition which will come from players using digital platforms giving them unfettered access to your customers. Segmenting your customers (and your competition’s) by predicting how they will respond to price differentials will allow to you win share by having individualized prices that your customer instantly accepts.
Reclaim Control of Customers.
Build competitive intelligence capabilities which enable you to see the market as the customer sees it, through aggregators and consolidators. Combining pricing analytics with intimate knowledge of consumer preferences will enable you to proactively connect your customers with real-time, targeted offers to pre-empt competitor moves.
Most companies have developed massive data lakes with billions of customer transactions. Few have realized their potential in driving competitive advantage – no one wants to fish in that data lake! In 2019 you can place machine learning tools on top of this untapped data to give you a clear view of how customers will respond to changes in the market. Apply adaptive algorithms to assure that you capture more customers at better margins by selling the right product at the right time for the right price.
Apply a Hybrid Approach to Decision-making.
In 2019, there will be enormous strides in artificial intelligence. Computers can process billions of pieces of information which give insight into consumer preferences. However, they cannot create strategic objectives or deal with uncertainties outside of the data. Collaboration between humans and machines will be the greatest innovation in the future. In 2019, focus on developing artificial intelligence platforms hand-in-hand with human intelligence systems to create an unbeatable combination.