For millennia, charlatans have claimed to see the future. Of course, the future is unknown, but is it as big a mystery as we think? Just because we can’t know precisely what’s going to happen tomorrow—or the day after, or the year after—doesn’t mean that we can’t be better prepared to conquer whatever the future holds. Electrical contractors [ECs] can analyze trends, spot signals coming from the markets and customers, develop scenarios, and make plans.
The most common, predictable trend is demographics, according to Peter Schwartz, senior vice president for global relations and strategic planning for Salesforce.com, San Francisco.
“Populations change through migrations, deaths and births, but in the short-term, demographics is fairly stable and relatively predictable,” he said.
But how do you get the numbers needed to track the trend? According to Schwartz, public sources for demographic data are easily available and not very expensive.
“Most of what you need to know, including demographic data tables, is included in The Economist magazine,” he said.
For more fine-grained levels of information, such as demographics specific to a geographic area, you can turn to most states, or even counties, which have demography forecasts and projections that are available to the public.
Daniel Burrus, founder and CEO of Burrus Research Associates Inc., Hartland, Wis., and author of “Flash Foresight,” also lists demographics as one out of three categories that he describes as hard trends.
“A hard trend is something that will happen; a soft trend might happen,” he said.
In demographics, for example, 78 million baby boomers have started to hit 65 years of age. With that predictable trend in mind, electrical contractors need to act on the fact that their most experienced people will begin retiring soon, taking their knowledge with them.
“[ECs] can use this demographic hard trend to capture that expertise and start mentoring younger workers,” Schwartz said.
Another predictable, hard trend, according to Burrus, is government regulations. The subject of new regulations is pretty well known, he believes, and includes safety, the environment, and energy efficiency.
“By taking a look at new laws for opportunities, contractors can create low-risk strategies for growth based on these upcoming regulations,” Burrus said.
Technology is Burrus’ third hard trend category, which he calls amazingly predictable.
“Within the next five years, there will be a billion machines communicating with each other over the Internet, sensors will be increasingly embedded to detect moisture, locations, pressure, etc., and smart cities, homes, cars, and infrastructures will require a lot of both wired and wireless solutions. Smart electrical contractors will tie into the certainty of that and offer those solutions,” he said.
To keep up with what seems like a great deal of information, Burrus suggests building one hour per week into your calendar to plug into the future and ask yourself what hard trend certainties are on the horizon and what opportunities these trends offer. If you’re not sure that it’s a hard trend, it isn’t.
“Defining certainties when examining trends is a powerful tool in determining low-risk and high-reward strategies,” he said.
However, according to Joshua Garity, owner of Candorem, a brand and strategy developer in Lake Mills, Wis., a company can only predictably track the trends they have total control over.
“There is a great misunderstanding in business that, when a popular website, business magazine or industry report is published with a list of the top trends for the upcoming year, that they are global trends,” he said.
Instead, he said, a company can examine customer behavior and see very real and specific trends laid out in front of them.
“The simplest advice I can give is to review your invoices. What service or product that you offer made the most money this year? Did it increase or decrease from the previous year or two? That’s the basis for everything,” he said.
Dave Washebek, president of Lemberg Electric Co. Inc, Brookfield, Wis., takes a pragmatic approach to planning for the future of his company.
“It’s hard for a contractor to look into the future. We are more at the mercy of developers, builders, politicians and general contractors—all of whom know about projects years before any subcontractor,” he said.
That doesn’t mean there aren’t ways for contractors to examine what might happen next, and Washebek suggests measures such as developing close relationships with customers, staying informed on the latest potential changes to the National Electrical Code (NEC) and getting involved with local electrical inspectors’ associations to help learn what Code panels are discussing and considering in terms of changes in installation methods.
“Tracking trends in our industry means networking with general contractor associations as well as with real estate and real estate management organizations to get a firmer understanding of potential future trends,” he said.
To determine which trends will have the greatest effect on your business, Schwartz recommends examining and understanding your own history. He suggested contractors determine what events occurred—such as governmental infrastructure spending, movements in the types of residential construction, or general real estate booms or busts—and see what made a difference in demand, competition and technology.
“Look back at least as far as you want to look ahead,” he said.
Burrus believes that every disruptive technology, such as smartphones and the market changes they brought, were clearly visible ahead of time, but the people who didn’t capitalize on them didn’t take the time to look at the trend.
“In that one hour per week you schedule, list all the hard trend certainties on the horizon, and then ask yourself which will impact the business the most,” Burrus said.
Participating in peer groups is Washebek’s preferred method for helping determine which trends will most affect the business.
“Peer groups enable a contractor to determine what new building, technology, project management or installation method trends are gaining speed in urban areas, which eventually migrate all over the country,” he said.
For example, a little over three years ago, Washebek learned of what was then a brand-new trend in prefabrication. Six months later, Lemberg Electric was offering prefabrication services, and today it’s a normal way of doing business throughout the industry.
Creating scenarios is another way to help predict the future.
“Take what made a difference in the past, and create stories about how it might be in the future,” Schwartz said.
For example, look at levels of government spending on infrastructure in the area, and discuss what that may be like in the future.
“Make two or three comprehensive stories about the future that go in different directions. For example, would increased government spending on infrastructure be good for the company, or would it be challenging for the company if that occurred?” Schwartz said, adding that you should be reasonably systematic and imaginative in creating your scenarios, and don’t underestimate the magnitude of change.
“Push out the boundaries of what’s possible, and remember that anything that’s happened in the past can happen again,” he said.
An important factor in scenario development is to identify current indicators of whether a particular scenario is actually beginning to play out. For example, Schwartz said, in the 2014 congressional election, if the Democrats take the House, that may lead to increased infrastructure spending. Or, if the Senate goes Republican, the opposite could happen.
“Take each of these scenarios and decide what the company needs to do if that trend or those events actually occur so that you can be prepared to move quickly as events unfold,” he said.
The company might develop new capabilities, hire new people or research new market potential to lay the foundation for future action even if it’s not certain that anything will occur.
Burrus, however, considers the method of planning for the future by devising a number of possible scenarios and developing contingency plans based on them to be outdated.
“Instead of creating scenarios that may or may not happen, examining hard trends is what will enable contractors to build plans around certainty, rather than uncertainty,” he said.
Washebek also sees the advantage of examining hard trends instead of creating scenarios.
“We certainly examine hard trends of potential market changes, such as demographics,” he said. For example, the coming need for sophisticated new and retrofitted, continuing and nursing care communities caused by the aging baby boomer population, as mentioned previously, is a definite hard trend. “We began pursuing the healthcare market 14 years ago, when we saw the upcoming construction boom that started in hospitals, and that is now expanding into specialty clinics.”
Is it working?
To determine if your strategies for predicting the future are succeeding or failing, track sales and bid success and failure ratios to determine whether customers are returning or you are expanding your customer base, according to Washebek.
“Not many contractors track sales or are actively engaged in sales techniques. To remain healthy, contractors must market quality, expertise and customer service,” he said.
With so many demands on everyone’s time, it can become increasingly difficult to keep up with trends, look beyond day-to-day operations, and be informed on topics such as consumer and government spending, social trends, and science and technology.
“Even so, examining hard trends provides contractors with the opportunity to jump ahead based on where we know we are going,” Burrus said.
Here’s another hard trend: over the next five to 10 years, businesses will transform how they sell, market, collaborate, communicate, innovate, train and educate. Every electrical contractor performs all of those functions, and it is up to each company to transform and future-proof the business.
For more information, visit www.salesforce.com, www.candorem.com, or www.burrus.com/resources/daniel-burrus-top-twenty-technology-driven-tre….