"It's not over 'til it's over." Anonymous Future Forecast and Business Trends Reana Rossouw Next Generation Consultants November 2009

Where you are going in 2010 depends on where you are now. Who are you? Where are you? How are you?

Pondering Questions In the midst of difficult economic times, companies need to make difficult and complex decisions Are there particular choices that make some firms succeed, while others around them fail? Who do we believe?

In the midst of difficult economic times, companies need to make difficult and complex decisions

Are there particular choices that make some firms succeed, while others around them fail?

Who do we believe?

What is the world coming too? Where is the world going too? What does this mean for our own businesses?

Stuff I have learnt this year

A Recession is a good thing… It makes you wiser It makes you think outside the box A crises bornes a decision maker out of you It makes you appreciate what you have It forces change People can succeed despite a recession

It makes you wiser

It makes you think outside the box

A crises bornes a decision maker out of you

It makes you appreciate what you have

It forces change

People can succeed despite a recession

Lesson 1 – SME’s don’t do mass How businesses have marketed over the past 100 years is a result of mass production. Large scale output led to mass marketing and created mass media . Businesses wanted their messages to be seen by the most people possible. The bigger, the better philosophy worked because demand exceeded supply. It is 1 prospect, 1 appointment, 1 proposal, 1 sale, 1 day at a time – economics of one!

How businesses have marketed over the past 100 years is a result of mass production. Large scale output led to mass marketing and created mass media .

Businesses wanted their messages to be seen by the most people possible. The bigger, the better philosophy worked because demand exceeded supply.

It is 1 prospect, 1 appointment, 1 proposal, 1 sale, 1 day at a time – economics of one!

Lesson 2 – Don’t take notes from Big Business What makes big business efficient is process, systems, procedures, hierarchies = volume Entrepreneurs are not good at routine, fixed, established procedures, processes and systems and they lack the resources. Flexibility, adaptability, scalability is our middle name. Our first names are niche, customised, specialised, focused – we cannot compete so we should not compare

What makes big business efficient is process, systems, procedures, hierarchies = volume

Entrepreneurs are not good at routine, fixed, established procedures, processes and systems and they lack the resources.

Flexibility, adaptability, scalability is our middle name. Our first names are niche, customised, specialised, focused – we cannot compete so we should not compare

Lesson 3 – Return to the marketplace – again and again! Sales is the blood and oxygen of a business. We don’t sell to businesses but to people. Conversations with clients is engagement in a powerful way, they contribute to partnerships, inspire ideas, make us laugh and lead to building relationships. I should follow a flea market approach rather than the supermarket approach .

Sales is the blood and oxygen of a business. We don’t sell to businesses but to people.

Conversations with clients is engagement in a powerful way, they contribute to partnerships, inspire ideas, make us laugh and lead to building relationships.

I should follow a flea market approach rather than the supermarket approach .

Lesson 4 – I need to invest more – of everything and all the time By reducing my costs and overheads I have reduced my effectiveness and competitiveness . Competition has increased – other SME’s have become more aggressive, as people are laid off they are opening their own businesses, prices have been slashed and the demand has decreased

By reducing my costs and overheads I have reduced my effectiveness and competitiveness .

Competition has increased – other SME’s have become more aggressive, as people are laid off they are opening their own businesses, prices have been slashed and the demand has decreased

Lesson 5 – I had to stop considering myself a company People don’t like companies. They try and sell them stuff and charge too much. I have to focus on value and benefits even if it is to teach them what I know. I have to recruit friends, not clients.

People don’t like companies. They try and sell them stuff and charge too much.

I have to focus on value and benefits even if it is to teach them what I know.

I have to recruit friends, not clients.

Lesson 6 – I have to take more, better risks People stick to what they know and tend to fear change. But by trying to ensure a ‘sure bet’, I have eliminated the opportunity to change, grow and reinvent. Frequent customers are not synonymous with loyal customers – I have to think differently about customer profiles. I have to build both high volume and high value products and services, they are not mutually exclusive. Trying to maintain complete control is a losing game.

People stick to what they know and tend to fear change. But by trying to ensure a ‘sure bet’, I have eliminated the opportunity to change, grow and reinvent.

Frequent customers are not synonymous with loyal customers – I have to think differently about customer profiles.

I have to build both high volume and high value products and services, they are not mutually exclusive.

Trying to maintain complete control is a losing game.

Lesson 7 – I had to re-define failure Failure is a state of mind There is great learning in failure There is a difference between mistakes and failures I have to manage me, not my business

Failure is a state of mind

There is great learning in failure

There is a difference between mistakes and failures

I have to manage me, not my business

Into the great unknown

What do we know What don’t we know What don’t we know we don’t know

Risk describes a situation where you have a sense of the range and likelihood of possible outcomes. Uncertainty describes a situation where its not even clear what might happen, let alone how likely the possible outcomes are.

Survive or Thrive? Where to focus? Focus on core products and markets Where to spend? Invest in marketing and communications Where to save? Reduce non customer facing costs Where to be flexible? Prices, standards, sales

Where to focus?

Focus on core products and markets

Where to spend?

Invest in marketing and communications

Where to save?

Reduce non customer facing costs

Where to be flexible?

Prices, standards, sales

The Recession is and will remain the Dominant Issue for Small Business in 2009/2010 Right Now: Small businesses focus on cash flow, cost containment, customer retention and survival Next 3 months: Re-evaluate, re-design and refine all aspects of their business to create opportunity Next 6 months: Improvements through incremental and business model innovation

Right Now:

Small businesses focus on cash flow, cost containment, customer retention and survival

Next 3 months:

Re-evaluate, re-design and refine all aspects of their business to create opportunity

Next 6 months:

Improvements through incremental and business model innovation

The new world is … flat The new risks Is not what you see right now The new markets Is not where you thought it might be The new customers Do not shop/buy the way they use to The new investors Have many more choices The new workforce Are more interested in a life/work balance The new supplier Is also the new retailer The new products and services Is being innovated as we speak

The new risks

Is not what you see right now

The new markets

Is not where you thought it might be

The new customers

Do not shop/buy the way they use to

The new investors

Have many more choices

The new workforce

Are more interested in a life/work balance

The new supplier

Is also the new retailer

The new products and services

Is being innovated as we speak

The new flat world The Entrepreneurial Economy is Here Small businesses: Employ over more than half of the world’s workforce Generate over half of the worlds GDP Create 60-80% of the worlds net new jobs Extremely diverse in size, style and goals

The Entrepreneurial Economy is Here

Small businesses:

Employ over more than half of the world’s workforce

Generate over half of the worlds GDP

Create 60-80% of the worlds net new jobs

Extremely diverse in size, style and goals

Future Trends

Future Forecast (1) Economic Trends The recession still (more so) drive small business creation and innovation Global infrastructure and stimulus spending must still filter through The number of small businesses will (still) increase in 2009/2010 Job losses will lead to “necessity entrepreneurs” Easier and cheaper to start a small or personal business than in prior recessions Small Business globalisation will temporarily slow Recession and currency market turmoil reduce export opportunities Small businesses will focus on local markets Small business failure rates will increase, but net will be positive Government plays an increasing role in the economy Economic turmoil, corporate malfeasance and regulatory failure lead to greater global government economic oversight

Economic Trends

The recession still (more so) drive small business creation and innovation

Global infrastructure and stimulus spending must still filter through

The number of small businesses will (still) increase in 2009/2010

Job losses will lead to “necessity entrepreneurs”

Easier and cheaper to start a small or personal business than in prior recessions

Small Business globalisation will temporarily slow

Recession and currency market turmoil reduce export opportunities

Small businesses will focus on local markets

Small business failure rates will increase, but net will be positive

Government plays an increasing role in the economy

Economic turmoil, corporate malfeasance and regulatory failure lead to greater global government economic oversight

Future Forecast (2) Demographic Trends Baby boomer retirement problems leads them to small business Baby Boomers Will Work Past Retirement Age Want to work Want change & work/life balance Skills, Ability, Flexibility Recession and stock market losses mean many will have to work. Gen Y turns to small business Generation Y Will Turn to Small Business Digital natives with excellent end user tech skills Don’t trust corporations Values oriented Limited near term employment opportunities due to recession

Demographic Trends

Baby boomer retirement problems leads them to small business

Baby Boomers Will Work Past Retirement Age

Want to work

Want change & work/life balance

Skills, Ability, Flexibility

Recession and stock market losses mean many will have to work.

Gen Y turns to small business

Generation Y Will Turn to Small Business

Digital natives with excellent end user tech skills

Don’t trust corporations

Values oriented

Limited near term employment opportunities due to recession

Future Forecast (3) Technology Trends Small Business Expands Use of Online Marketing Small business online presence growing Growing understanding of online marketing Starting to understand social media and search engine optimization Clear metrics and ROI Lead generation in a recession Understand the importance of online MARKETING and SALES

Technology Trends

Small Business Expands Use of Online Marketing

Small business online presence growing

Growing understanding of online marketing

Starting to understand social media and search engine optimization

Clear metrics and ROI

Lead generation in a recession

Understand the importance of online MARKETING and SALES

Future Forecast (4) Political Trends: We see a transformation taking place in politics Driven by expectations of better service delivery and fulfillment of election promises Accountability and responsibility is a big thing The new economic reality is creating a growing population that is: Socially intolerant Economically unsophisticated but extremely aspiring Increased levels of crime and corruption

Political Trends:

We see a transformation taking place in politics

Driven by expectations of better service delivery and fulfillment of election promises

Accountability and responsibility is a big thing

The new economic reality is creating a growing population that is:

Socially intolerant

Economically unsophisticated but extremely aspiring

Increased levels of crime and corruption

Future Forecast (5) Social Trends Human Rights is big – everyone is demanding basic rights Free Water Electricity Education Information People are connected and involved Social Media

Social Trends

Human Rights is big – everyone is demanding basic rights

Free

Water

Electricity

Education

Information

People are connected and involved

Social Media

Surviving the future

Some truths about the future It's incredibly fast : It involves a huge adaptability gap : It has a huge instantaneity : It hits you most when you don't expect it : It's being defined by renegades : It involves partnership : It involves intensity : It's bigger than you think : It involves innovation intensity : It comes from experiential capital :

It's incredibly fast :

It involves a huge adaptability gap :

It has a huge instantaneity :

It hits you most when you don't expect it :

It's being defined by renegades :

It involves partnership :

It involves intensity :

It's bigger than you think :

It involves innovation intensity :

It comes from experiential capital :

Case Study (1) Shoprite Checkers Group Don’t change your lifestyle, change your supermarket Diversified – free range – cheese / wine route Flight and show bookings Money transfers African expansion Local procurement Supplier negotiations

Shoprite Checkers Group

Don’t change your lifestyle, change your supermarket

Diversified – free range – cheese / wine route

Flight and show bookings

Money transfers

African expansion

Local procurement

Supplier negotiations

Case Study (2) Clover

Clover

Case Study (3)

SME’s of the Future

The New Entrepreneurial Economy With lower barriers to reaching new customers and markets, and a global market open for business, small businesses are poised to compete in any industry, anywhere in the world Immigrant insights : Entrepreneurs with foreign market knowledge and unique cultural perspectives will be better able to identify and customise products for new and previously undefined market niches Family room factory: Advances in production technologies, such as inkjet manufacturing, will allow entrepreneurs to develop and market customised products and will enable them to drive a new wave of product innovation. R-E-S-P-E-C-T: Although most corporations historically paid little attention to small business, large companies have begun to recognise the small business sector has a fundamental supplier, partner and customer base. Global networking: Professional and social networks, both online and offline, will mute soft trade barriers, such as language and cultural differences, and fuel cross-boarder trade. Business anytime, anywhere: Lightweight technologies, such as online software applications, will allow small business owners to manage business growth with less time, money and technical skills. Niche knowledge: Small businesses’ agility, flexibility and deep customer knowledge will make them ideal partners for big business looking to serve niche markets with highly customised products. One world, one market: Small businesses will serve international markets almost as easily as their local customers. Similarly, foreign entrepreneurs will increasingly enter local markets. All-access pass: The ability to plug into large-scale infrastructure, such as Amazon’s e-commerce storefronts and UPS’ distribution and supply chain logistics, will allow small businesses to enter and compete in industries formerly served only by big business. Don’t wait, innovate: Entrepreneurial firms will see their ideas come to life, as large companies increasingly tap small business for innovation. In turn, small business gain access to big business scale and reach. Small business will no longer be confined to Main Street, or the mainland, as online storefronts and social networks help small businesses drive a new wave of globalisation Entrepreneurs will amplify their capabilities with lightweight technologies and plug-and-play infrastructures, making it easier than ever to run a successful small business. Small business brain will meet big business brawn, creating an increasingly complex and symbiotic relationship that will expand opportunities for small business success Borderless Business Plug-in Power Big Opportunity

Immigrant insights : Entrepreneurs with foreign market knowledge and unique cultural perspectives will be better able to identify and customise products for new and previously undefined market niches

Family room factory: Advances in production technologies, such as inkjet manufacturing, will allow entrepreneurs to develop and market customised products and will enable them to drive a new wave of product innovation.

Global networking: Professional and social networks, both online and offline, will mute soft trade barriers, such as language and cultural differences, and fuel cross-boarder trade.

Business anytime, anywhere: Lightweight technologies, such as online software applications, will allow small business owners to manage business growth with less time, money and technical skills.

One world, one market: Small businesses will serve international markets almost as easily as their local customers. Similarly, foreign entrepreneurs will increasingly enter local markets.

All-access pass: The ability to plug into large-scale infrastructure, such as Amazon’s e-commerce storefronts and UPS’ distribution and supply chain logistics, will allow small businesses to enter and compete in industries formerly served only by big business.

Don’t wait, innovate: Entrepreneurial firms will see their ideas come to life, as large companies increasingly tap small business for innovation. In turn, small business gain access to big business scale and reach.

The Connected world of entrepreneurs Entrepreneurs are cutting the cord on everything from web browsers to instant messaging. A new generation of entrepreneurs is poised to take advantage of this digital revolution Sale one block ahead: Mobile marketing via cell phones and connected cars will allow restaurants and retailers to send special offers to their customers when they are in the area. Sensitivity training: Embedded sensors in operational devices and products will monitor and report on conditions in production lines, supply chains and even in themselves to diagnose and fix problems as they arise. Virtual world, real word business: The expanding virtual world offers limitless small business opportunities. Plugging in lets anyone – from a local immigrant retailer looking to expand to the savviest Gen Y webpreneur selling virtual real estate – succeed in the real and virtual world. Always on: Pervasive high speed and high bandwidth wireless networks will keep entrepreneurs connected to their businesses as they dash across the city – or across the globe. Location, location, location: Mom and pop shops will no longer thrive on local ads and traditional word-of-mouth alone. Location-based consumer-generated reviews, offering virtual word-of mouth-advice and price-comparison data, will create the most-informed customers the world has ever seen. Automate that: Inventory low? Shipments running late? No problem! Smart computers will reorder, reroute and automate many routine business operations. Info on demand: Want a review of a restaurant as you walk by, or an inventory check on shoes in the window – information in the physical world will soon be instantaneous and available anywhere. Coffee house conference room: Emerging flexible and projection display technologies allow meetings or work to take place anywhere, as any surface – curved or flat, glossy or matte – becomes a high-resolution, mobile computer screen. Cold calls? That’s so over: An online presence will be the most important factor in generating business as customers increasingly choose what information they are looking for and what web sites they visit. Analyse this: Complex business analysis and forecasting that once required an MBA will soon be done by intelligent devices that will ‘talk’ to one another and make business decisions based on the interpretation of the data they collect. Virtually there: Global business partnerships will stem from online social networks creating virtual business networks. Entrepreneurs from California to Berlin to Cape Town can share customers and offer complementary products and services. Offices to go: Smart phones, or advanced computer-like cell phones, allow entrepreneurs the freedom to work where they want, when they want, making vacation homes or automobiles virtual offices. Consumers take charge of how, when and where they receive information, setting off a revolution that requires businesses to rethink and reinvent marketing campaigns Gut-instinct management will be less effective as technology enables more informed decisions, improved business operations and reduces the risk of owning a small business Web 2.0 technologies are taking the Internet from a flat information source to a 3-D interactive social and business network as the physical and virtual worlds collide Persistent social connectivity, wireless networks, and mobile communications are redefining the boundaries of presence and location Next-Gen Marketing Digital Intelligence Virtual Business Mobile Everything

Sale one block ahead: Mobile marketing via cell phones and connected cars will allow restaurants and retailers to send special offers to their customers when they are in the area.

Sensitivity training: Embedded sensors in operational devices and products will monitor and report on conditions in production lines, supply chains and even in themselves to diagnose and fix problems as they arise.

Virtual world, real word business: The expanding virtual world offers limitless small business opportunities. Plugging in lets anyone – from a local immigrant retailer looking to expand to the savviest Gen Y webpreneur selling virtual real estate – succeed in the real and virtual world.

Always on: Pervasive high speed and high bandwidth wireless networks will keep entrepreneurs connected to their businesses as they dash across the city – or across the globe.

Location, location, location: Mom and pop shops will no longer thrive on local ads and traditional word-of-mouth alone. Location-based consumer-generated reviews, offering virtual word-of mouth-advice and price-comparison data, will create the most-informed customers the world has ever seen.

Automate that: Inventory low? Shipments running late? No problem! Smart computers will reorder, reroute and automate many routine business operations.

Info on demand: Want a review of a restaurant as you walk by, or an inventory check on shoes in the window – information in the physical world will soon be instantaneous and available anywhere.

Coffee house conference room: Emerging flexible and projection display technologies allow meetings or work to take place anywhere, as any surface – curved or flat, glossy or matte – becomes a high-resolution, mobile computer screen.

Cold calls? That’s so over: An online presence will be the most important factor in generating business as customers increasingly choose what information they are looking for and what web sites they visit.

Analyse this: Complex business analysis and forecasting that once required an MBA will soon be done by intelligent devices that will ‘talk’ to one another and make business decisions based on the interpretation of the data they collect.

Virtually there: Global business partnerships will stem from online social networks creating virtual business networks. Entrepreneurs from California to Berlin to Cape Town can share customers and offer complementary products and services.

Offices to go: Smart phones, or advanced computer-like cell phones, allow entrepreneurs the freedom to work where they want, when they want, making vacation homes or automobiles virtual offices.

The Changing Faces of Entrepreneurs The next 10 years will see the most diverse pool of entrepreneurs ever Attuned to the opportunity knocking: Understands – often better than the natives – that South Africa and Africa is entrepreneurial heaven. Entrepreneurial skills already in place: High personal IQ, no stranger to budgets, adept at bargaining, not distracted by video games. Online, in business: eBay, Gumtree and other one-click links to the outside world make starting a personal business a snap. Groomed since grade school – or at least high school: Entrepreneurship is being taught not only at university and college, but also primary school. The lemonade stand is now a business case study. What is this city/country/world really needs is…: Sees small business as a good way to follow a passion Taught in the UK and USA: Many advanced degrees from international universities are earned by people born elsewhere. Don’t look now: Women college graduates now outnumber men. Can women entrepreneurs be far behind? Perfect candidate for a ‘personal business’: A one-mom, part-time shop. Flexible is my middle name: Having Myspaced, Facebooked, and Blogged, views social network as constantly in flux. My turn: Having devoted career to someone else’s company, ready to build a business of one’s own. International contacts: Knows people here … and there. Climbing around the glass ceiling: Tired of old boy’s club, starts her own business. (When it succeeds she tries not to smirk) Looking for other intellectual stimulation: Sees small business as a way to keep talents on simmer. Freelance forever: Sees contracting as a better alternative to a corporate career. Small nest egg, high expectations, long lifespan : Needs additional income to really live out that retirement dream. Bilingual, bicultural: Made-to-order in this global era. End of stereotype: That ‘one-man’ business” down the street is now headed by a woman. Jugglin act: Mommy will be with you in a moment, sweety, as soon as she closes this deal. Corporate Career? Nooo way: Watched parents suffer through company mergers, downsizing. Haven't been there, don’t want to do that. Save the rocking chair for later: Nearing retirement, but still looking for the next adventure Immigrant Professional Woman Mompreneur Gen Yer Baby Boomer

Attuned to the opportunity knocking: Understands – often better than the natives – that South Africa and Africa is entrepreneurial heaven.

Entrepreneurial skills already in place: High personal IQ, no stranger to budgets, adept at bargaining, not distracted by video games.

Online, in business: eBay, Gumtree and other one-click links to the outside world make starting a personal business a snap.

Groomed since grade school – or at least high school: Entrepreneurship is being taught not only at university and college, but also primary school. The lemonade stand is now a business case study.

What is this city/country/world really needs is…: Sees small business as a good way to follow a passion

Taught in the UK and USA: Many advanced degrees from international universities are earned by people born elsewhere.

Don’t look now: Women college graduates now outnumber men. Can women entrepreneurs be far behind?

Perfect candidate for a ‘personal business’: A one-mom, part-time shop.

Flexible is my middle name: Having Myspaced, Facebooked, and Blogged, views social network as constantly in flux.

My turn: Having devoted career to someone else’s company, ready to build a business of one’s own.

International contacts: Knows people here … and there.

Climbing around the glass ceiling: Tired of old boy’s club, starts her own business. (When it succeeds she tries not to smirk)

Looking for other intellectual stimulation: Sees small business as a way to keep talents on simmer.

Freelance forever: Sees contracting as a better alternative to a corporate career.

Small nest egg, high expectations, long lifespan : Needs additional income to really live out that retirement dream.

Bilingual, bicultural: Made-to-order in this global era.

End of stereotype: That ‘one-man’ business” down the street is now headed by a woman.

Jugglin act: Mommy will be with you in a moment, sweety, as soon as she closes this deal.

Corporate Career? Nooo way: Watched parents suffer through company mergers, downsizing. Haven't been there, don’t want to do that.

Save the rocking chair for later: Nearing retirement, but still looking for the next adventure

Managing the SME of the Future

SME’s of the future (1) More diversity Small businesses are more diverse than ever, with women starting businesses and immigrants refreshing the ranks of business owners. Baby Boomers— are rising faster in small business than any other age group. (2) Rise of the Personal Business The “personal business,” which is a new term to describe a business with no employees, is growing in numbers and in economic influence. These businesses now number roughly 20 million. “Free agent” working relationships are now seen as more attractive by younger and older workers. (3) Entrepreneurial Education Grows Entrepreneurial education is growing, especially at the university level, with over 1,600 higher education institutions offering such entrepreneurship education in some fashion. More people starting businesses will have training in the skills necessary to be successful as an entrepreneur.

(1) More diversity

Small businesses are more diverse than ever, with women starting businesses and immigrants refreshing the ranks of business owners. Baby Boomers— are rising faster in small business than any other age group.

(2) Rise of the Personal Business

The “personal business,” which is a new term to describe a business with no employees, is growing in numbers and in economic influence. These businesses now number roughly 20 million. “Free agent” working relationships are now seen as more attractive by younger and older workers.

(3) Entrepreneurial Education Grows

Entrepreneurial education is growing, especially at the university level, with over 1,600 higher education institutions offering such entrepreneurship education in some fashion. More people starting businesses will have training in the skills necessary to be successful as an entrepreneur.

Managing the SME of the future Think growth : It's all too easy right now to lose your enthusiasm and sense of purpose. When economies contract, so too does your motivation. Don't let that happen -- now is the worst time to lose sight of the future! Think opportunity: Check your speed : it's the high velocity economy. Markets, brands, products, industries, competition, and globalization are changing faster than ever before. Make sure you've got a team that can operate at the pace of change. Agility is the key word. Immerse in ideas: The global idea-cycle is collapsing. New ideas are launched, analyzed, and developed to concrete product at a speed that is astonishing. Rapid product change is the new norm: Check your bench strength: After the cutting begins, value goes out the door. Yet your ability to access ever more scarce, specialized skills will define your future success. It's your ability to establish a fast, agile, quick-to-assemble collaborative team that will define your ability to grab all the opportunity that is emerging out there.

Think growth :

It's all too easy right now to lose your enthusiasm and sense of purpose. When economies contract, so too does your motivation. Don't let that happen -- now is the worst time to lose sight of the future! Think opportunity:

Check your speed :

it's the high velocity economy. Markets, brands, products, industries, competition, and globalization are changing faster than ever before. Make sure you've got a team that can operate at the pace of change. Agility is the key word.

Immerse in ideas:

The global idea-cycle is collapsing. New ideas are launched, analyzed, and developed to concrete product at a speed that is astonishing. Rapid product change is the new norm:

Check your bench strength:

After the cutting begins, value goes out the door. Yet your ability to access ever more scarce, specialized skills will define your future success. It's your ability to establish a fast, agile, quick-to-assemble collaborative team that will define your ability to grab all the opportunity that is emerging out there.

Managing the SME of the future Assess your threats: Where could emerging technologies, fast science, radical business models, new industry dynamics, new regulatory macroeconomic, political or social trends impact your bottom line in a way that you hadn't thought of before? Two years ago, China and quality wasn't an issue . Invest in experience: Experiential capital -- the depth of capability that you have from exploring, taking risks, trying things out -- is the financial capital . It's a precious resource, and might be in short supply if you aren't working to build it up. Set the tone: If you let the current economic headlines drive your corporate spirit, you're sunk. You have to keep people focused on the future -- otherwise, your team will smell your fear. Leadership is all about keeping your team focused on opportunity and goals, not on ongoing and regular ("new normal") volatility.

Assess your threats:

Where could emerging technologies, fast science, radical business models, new industry dynamics, new regulatory macroeconomic, political or social trends impact your bottom line in a way that you hadn't thought of before? Two years ago, China and quality wasn't an issue .

Invest in experience:

Experiential capital -- the depth of capability that you have from exploring, taking risks, trying things out -- is the financial capital . It's a precious resource, and might be in short supply if you aren't working to build it up.

Set the tone:

If you let the current economic headlines drive your corporate spirit, you're sunk. You have to keep people focused on the future -- otherwise, your team will smell your fear. Leadership is all about keeping your team focused on opportunity and goals, not on ongoing and regular ("new normal") volatility.

Managing the SME of the future Focus on growth: Shift your focus to opportunity rather than cost based competition Think "market transformation” : Don't tinker with strategy; you've got to be willing to shift assumptions, habits, routines Refuse to compete on price: Change the rules by recreating value in your product or service Make big bets: Whether its' infrastructure, sales force, distribution network: you've got to be willing to spend to transition Think international: Local markets are small markets; the global economy is well within reach for any organisation today. Think velocity: One of my most often used quotes when on stage comes from Rupert Murdoch: ""The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow “.

Focus on growth:

Shift your focus to opportunity rather than cost based competition

Think "market transformation” :

Don't tinker with strategy; you've got to be willing to shift assumptions, habits, routines

Refuse to compete on price:

Change the rules by recreating value in your product or service

Make big bets:

Whether its' infrastructure, sales force, distribution network: you've got to be willing to spend to transition

Think international:

Local markets are small markets; the global economy is well within reach for any organisation today.

Think velocity:

One of my most often used quotes when on stage comes from Rupert Murdoch: ""The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow “.

Managing the SME of the future Maximize your best revenue opportunities . Make sure that any existing revenue relationships remain intact, and then some. Work on having teams obsess on growing existing high value customer relationships through service excellence. It will likely be easier to keep existing revenue grows flowing rather than finding new ones, particularly through a time of economic challenge. Obsess over time to market: Work hard to accelerate product innovation; market life-cycles are collapsing, and make sure every member of the team reoriented themselves to that reality. Focus on getting R&D to think in terms of faster cycles; Ramp up sales force education so that they were better aware of what's coming next. Reduce product costs through process improvement and better project execution : There is no shortage of innovative ideas, structures and concepts involving process and production methodologies. Make sure you are looking at finding those who are doing leading edge work in this area, inside or outside our industry, and learn from them.

Maximize your best revenue opportunities .

Make sure that any existing revenue relationships remain intact, and then some. Work on having teams obsess on growing existing high value customer relationships through service excellence. It will likely be easier to keep existing revenue grows flowing rather than finding new ones, particularly through a time of economic challenge.

Obsess over time to market:

Work hard to accelerate product innovation; market life-cycles are collapsing, and make sure every member of the team reoriented themselves to that reality. Focus on getting R&D to think in terms of faster cycles; Ramp up sales force education so that they were better aware of what's coming next.

Reduce product costs through process improvement and better project execution :

There is no shortage of innovative ideas, structures and concepts involving process and production methodologies. Make sure you are looking at finding those who are doing leading edge work in this area, inside or outside our industry, and learn from them.

Managing the SME of the future Reduce structural costs through collaboration : Right off the bat, encourage a few cross-organizational collaboration efforts, to get people used to the idea of tackling fast new problems rather than arguing about structure and hierarchy. Relentlessly and aggressively chase costs : I'm not talking about spontaneous slash and burn spending cuts: Refocus on transitioning the role of staff from tactical efforts to a strategic role. Enhance quality and reliability of product : Avoiding quality problems remains a critical focus. Take a look at how well you are dealing with quality issues, and whether you have got the agility to respond in this new world of heightened PR challenges.

Reduce structural costs through collaboration :

Right off the bat, encourage a few cross-organizational collaboration efforts, to get people used to the idea of tackling fast new problems rather than arguing about structure and hierarchy.

Relentlessly and aggressively chase costs :

I'm not talking about spontaneous slash and burn spending cuts: Refocus on transitioning the role of staff from tactical efforts to a strategic role.

Enhance quality and reliability of product :

Avoiding quality problems remains a critical focus. Take a look at how well you are dealing with quality issues, and whether you have got the agility to respond in this new world of heightened PR challenges.

Global Trends

Global Trends Globalisation Asia Century India Brazil Russia Demographics Aging population Upcoming middle class More females More poor people Increasing migration streams

Globalisation

Asia Century

India

Brazil

Russia

Demographics

Aging population

Upcoming middle class

More females

More poor people

Increasing migration streams

Global Trends Energy and resource reversal Strategic resource scarcities (fossil fuels, freshwater, minerals, metals) Use of alternative sources of energy and renewable resources Revolution in energy efficiency Decentralised energy supply Climate change and environmental impacts CO2-discharges and global rise of temperatures Increase of environmental problems in emerging and developing countries Clean technologies Corporate responsibility increases

Energy and resource reversal

Strategic resource scarcities (fossil fuels, freshwater, minerals, metals)

Use of alternative sources of energy and renewable resources

Revolution in energy efficiency

Decentralised energy supply

Climate change and environmental impacts

CO2-discharges and global rise of temperatures

Increase of environmental problems in

emerging and developing countries

Clean technologies

Corporate responsibility increases

Industries (1) Automisation Social networking Standardisation Personalisation Age of individualisation Changing relationship patterns From mass markets to niche Self sufficiency and DIY economics Customisation Knowledge management Human Resource Management Capacity Development Women are integrated into the working world “ Female” soft skills become more important Participation as market actors: Defining influence on product and service standards Work-life balance

Automisation

Social networking

Standardisation

Personalisation

Age of individualisation

Changing relationship patterns

From mass markets to niche

Self sufficiency and DIY economics

Customisation

Knowledge management

Human Resource Management

Capacity Development

Women are integrated into the working world

“ Female” soft skills become more important

Participation as market actors: Defining influence on product and service standards

Work-life balance

Industries (2) Global Marketplace Asia, India, South America Automotive Green Cars Small Cars Low cost Cars Disenfranchisement of dealers Consumer goods and retailing US and Asia majority markets, India Low cost goods a priority Food / local sourcing critical Supplier relationships very important Brand extensions and white label brands more popular The Third World participates in economic wealth (Bottom of the Pyramid) Catch-up luxury in China, India, and Russia Sustainable consumption in the West (LOHAS, Eco Chic, Moral Commerce)

Global Marketplace

Asia, India, South America

Automotive

Green Cars

Small Cars

Low cost Cars

Disenfranchisement of dealers

Consumer goods and retailing

US and Asia majority markets, India

Low cost goods a priority

Food / local sourcing critical

Supplier relationships very important

Brand extensions and white label brands more popular

The Third World participates in economic wealth (Bottom of the Pyramid)

Catch-up luxury in China, India, and Russia

Sustainable consumption in the West

(LOHAS, Eco Chic, Moral Commerce)

Industries (3) Energy Increased prices Alternative sources/energies Civil unrest/activism Financial Services Product/Service differentiation (niches) High tech/high touch Recessionary educated consumers Healthcare and Pharma Changing market place – demographics More new diseases/ growing antibiotic resistance/ new treatments Cost of healthcare vs state of healthcare New foodstuffs (functional food, genetically modified food, novel food) New converging markets (food, pharmaceuticals, drugs, cosmetics) Learning from Nature – Biomicry Biology becomes the leading science Renaissance of bionics Swarm intelligence: New forms of social organisation

Energy

Increased prices

Alternative sources/energies

Civil unrest/activism

Financial Services

Product/Service differentiation (niches)

High tech/high touch

Recessionary educated consumers

Healthcare and Pharma

Changing market place – demographics

More new diseases/ growing antibiotic resistance/ new treatments

Cost of healthcare vs state of healthcare

New foodstuffs (functional food, genetically modified food, novel food)

New converging markets (food, pharmaceuticals, drugs, cosmetics)

Learning from Nature – Biomicry

Biology becomes the leading science

Renaissance of bionics

Swarm intelligence: New forms of social

organisation

Industries (4) Manufacturing Wanted: Everything cheaply Workers evolve Brand advantage Public Service Quality of service Customers, always right Importance of collaboration Telecommunications New products, new rivals Collaboration is king Content/ diversification / niches

Manufacturing

Wanted: Everything cheaply

Workers evolve

Brand advantage

Public Service

Quality of service

Customers, always right

Importance of collaboration

Telecommunications

New products, new rivals

Collaboration is king

Content/ diversification / niches

In closing…Forecasts!

Big Ideas Go Big Time There’s a lot of big ideas out there, and each one can spark massive industry change — because big ideas increasingly make sense. Big ideas are executable and can succeed because organisations can now pull together resources in ways that had not previously been possible. The result — they aren’t just big ideas anymore, they are the foundation for significant transformation in every industry.

There’s a lot of big ideas out there, and each one can spark massive industry change — because big ideas increasingly make sense.

Big ideas are executable and can succeed because organisations can now pull together resources in ways that had not previously been possible.

The result — they aren’t just big ideas anymore, they are the foundation for significant transformation in every industry.

Revenge of the Math Geeks Analytics is hot Remember those kids in school who were really good at math? They own the future. Our world is faced with a tremendous number of complex challenges and fascinating opportunities, and it’s the math experts who will figure it all out. That’s because they have mastered the skill of processing complex analytical algorithms with massive computing horsepower, and solving some of world’s most complicated issues by doing so The 21st century is all about math: some of the most unique, innovative ideas are emerging with these types of analytic projects. This is where the next billion dollar industries are being born.

Analytics is hot

Remember those kids in school who were really good at math? They own the future.

Our world is faced with a tremendous number of complex challenges and fascinating opportunities, and it’s the math experts who will figure it all out.

That’s because they have mastered the skill of processing complex analytical algorithms with massive computing horsepower, and solving some of world’s most complicated issues by doing so

The 21st century is all about math: some of the most unique, innovative ideas are emerging with these types of analytic projects. This is where the next billion dollar industries are being born.

Attitude & Amusement Take a look at this kid. He's your next employee. How are you going to recruit, retain, manage, interest and amuse this fellow? If you don't have this issue figured out yet, you'd better start thinking about it in a hurry. More than 50% of young people in a US survey indicated they believe self employment to be more secure than a full time job. Every study suggests that they don't want to work for big organisations: they’re nomadic, contingent workers, entrepreneurial and global in their outlook . More challenging yet: they’re the gaming generation. They get extremely bored, very fast. They expect to have 20 or more different careers in their lifetime, because they thrive on change. The fact is, you’ll need them.

Take a look at this kid.

He's your next employee. How are you going to recruit, retain, manage, interest and amuse this fellow? If you don't have this issue figured out yet, you'd better start thinking about it in a hurry.

More than 50% of young people in a US survey indicated they believe self employment to be more secure than a full time job. Every study suggests that they don't want to work for big organisations: they’re nomadic, contingent workers, entrepreneurial and global in their outlook . More challenging yet: they’re the gaming generation.

They get extremely bored, very fast. They expect to have 20 or more different careers in their lifetime, because they thrive on change. The fact is, you’ll need them.

Time Disappears Most news becomes old news in 36 hours or less. People scan 12 feet of shelf space per second when they’re in a store. Brands go from hero-to-zero in a matter of minutes. That’s kind of fast — and that’s the new reality.

Most news becomes old news in 36 hours or less.

People scan 12 feet of shelf space per second when they’re in a store.

Brands go from hero-to-zero in a matter of minutes. That’s kind of fast — and that’s the new reality.

Resistance to Change Retires One of the most significant trends to come will unfold as the current leadership generation hands over the levers of power to GenX. As this happens, change accelerates. The two generations are inherently different. Baby boomers learned COBOL and used punch cards while in university courses; GenX was weaned on video games and PC’s. Yet there is no such “mystery” for the next generation. The coming generation of senior management aggressively pursues and implements new ideas. While the first is reluctant to embrace new business models, the next steamrollers them. Expect velocity!

One of the most significant trends to come will unfold as the current leadership generation hands over the levers of power to GenX. As this happens, change accelerates.

The two generations are inherently different.

Baby boomers learned COBOL and used punch cards while in university courses;

GenX was weaned on video games and PC’s. Yet there is no such “mystery” for the next generation.

The coming generation of senior management aggressively pursues and implements new ideas. While the first is reluctant to embrace new business models, the next steamrollers them. Expect velocity!

Careers End Not having a job will be your only future career option. By 2010, it is estimated that more than 60% of engineering professionals will work on a contingent, or contract basis; other professions are seeing similar trends. With rapid career and knowledge specialisation, companies might need a particular, unique skill for only a short period of time before moving on. They are reluctant to hire “staff,” because they know the cost of downsizing will only continue to increase due to ever more generous severance packages.

Not having a job will be your only future career option.

By 2010, it is estimated that more than 60% of engineering professionals will work on a contingent, or contract basis; other professions are seeing similar trends.

With rapid career and knowledge specialisation, companies might need a particular, unique skill for only a short period of time before moving on. They are reluctant to hire “staff,” because they know the cost of downsizing will only continue to increase due to ever more generous severance packages.

Green is the new black There is no doubt that a new environmental awareness is providing opportunities for growth Impact of climate change Carbon Trading Scarcity of resources in particular water Conscious consumption Green Design Sustainable buildings Sustainable Packaging Fair-trade/Eco Trade Carbon Neutral Economy Green Jobs Responsible supply chains Local Sourcing

There is no doubt that a new environmental awareness is providing opportunities for growth

Impact of climate change

Carbon Trading

Scarcity of resources in particular water

Conscious consumption

Green Design

Sustainable buildings

Sustainable Packaging

Fair-trade/Eco Trade

Carbon Neutral Economy

Green Jobs

Responsible supply chains

Local Sourcing

False Economics & Green Shoots Things are looking up; we have passed the worst; green shoots are emerging. Or are they? Despite a sense that the mood is changing, not everyone agrees - some commentators see the current good news as a false dawn; that far worse is to come over the next few years. We may be facing a second, deeper downturn, rather than the bottoming out of the crisis or even the beginning of an upswing of the cycle.

Things are looking up; we have passed the worst; green shoots are emerging. Or are they?

Despite a sense that the mood is changing, not everyone agrees - some commentators see the current good news as a false dawn; that far worse is to come over the next few years.

We may be facing a second, deeper downturn, rather than the bottoming out of the crisis or even the beginning of an upswing of the cycle.

Growing storm or Perfect storm ? The uncertainty and fear caused by the economic downturn is resulting in protest ; it is also likely to exacerbate and reinforce existing tensions and problems . The wider knock on effects and repercussions - social unrest, crime and intolerance – could, but may not, escalate creating longer lasting changes and a context in which extreme incidents can occur.

The uncertainty and fear caused by the economic downturn is resulting in protest ; it is also likely to exacerbate and reinforce existing tensions and problems . The wider knock on effects and repercussions - social unrest, crime and intolerance – could, but may not, escalate creating longer lasting changes and a context in which extreme incidents can occur.

The END The world is currently changing at a more rapid pace than ever before, driven by six “megatrends:” technological progress Globalization the new consumer population trends political uncertainty and the corporate social responsibility imperative These trends are forcing companies to innovate and refine their fundamental business models . Organisations must not only deal with all those changes, but also with more intense competition. To do so, they need to understand their clients, their environment and their competitors, and respond effectively.

The world is currently changing at a more rapid pace than ever before, driven by six “megatrends:”

technological progress

Globalization

the new consumer

population trends

political uncertainty and

the corporate social responsibility imperative

These trends are forcing companies to innovate and refine their fundamental business models . Organisations must not only deal with all those changes, but also with more intense competition.

To do so, they need to understand their clients, their environment and their competitors, and respond effectively.

Thank You Preparing for 2010 - Worksheet Reana Rossouw Next Generation Consultants Specialists in Business Development and growth Tel & Fax: (021) 9766291 E-mail: [email_address] Web: www.nextgeneration.co.za

Preparing for 2010 - Worksheet

Reana Rossouw

Next Generation Consultants

Specialists in Business Development and growth

Tel & Fax: (021) 9766291

E-mail: [email_address]

Web: www.nextgeneration.co.za