Harnessing the power of megatrends insights for your organisation

How to use megatrends insights

With our definition and explanation of ‘megatrend’ outlined in Part 1: What are the megatrends to watch, we can switch our thinking to how best to use this information for business success. Harnessing the power of megatrend insights enables organisations to bring future-thinking to life, to examine and consider possible futures based on what we know is happening now and what will continue to shape the world – even if the exact outcomes are unknown. We see three key use cases for any organisation – at different stages of the strategic opportunity and delivery lifecycle.
 

Strategy and planning

When commencing any strategic or planning initiative, identification of the relevant megatrends and an evaluation of their risks, opportunity and impact on organisational operations, asset management, current and future workforce, customers, and wider stakeholders should be completed. Megatrends allow for scenario planning and risk analysis and management. Executives should grasp the potential realities of alternative future scenarios where their organisation's relevance may fade, or the industry may experience a profound transformation. We see this type of ‘futures-thinking’ as critical within organisations in both the public and private sector.

For example, climate change is a transformative megatrend that demands adaptation and prioritisation of environmental concerns. It affects all sectors of New Zealand's economy and has the potential to disrupt supply chains and international partnerships. Under the recently mandated Climate-related Disclosures regime, large companies and financial institutions in New Zealand will need to disclose the climate risks and opportunities in the short, medium, and long term. This includes transition risks – which could include consideration of the megatrend of scarcity – as the goods and services required to decarbonise are likely to be in high demand globally for many years. Climate change is requiring futures-thinking within the public sector too. In 2020, the Ministry for the Environment published the National Climate Change Risk Assessment, which identified 48 priority risks with significant consequences across different timeframes. In response, two key planning documents were released in 2022 - the Emissions Reduction Plan, targeting multiple sectors, and the National Adaptation Plan, focusing on climate change impacts and adaptation strategies. Ongoing futures-thinking is necessary to effectively address persisting climate-related challenges and their compounding impacts.
 

Delivery

It is critical to determine and establish the investments required for successful execution of the strategy. Gaining an understanding of how megatrends impact strategy, or a project, is important to determine the right cadence for review, enhance risk management, and ensure sustained achievements.

Megatrends can also shine light on how successful delivery can be enhanced. An example that illustrates the significance of the hyperconnectivity megatrend was during Cyclone Gabrielle in New Zealand. As the world increasingly relies on connectivity, vulnerable or remote communities lacking adequate infrastructure face adverse consequences. In this event, rural areas were completely cut off from power and communications, hampering the disaster response. Had a disaster response delivery model been assessed through megatrend analyses, the importance of hyperconnectivity in its delivery would have likely emerged as a key area to be better addressed.

The megatrend of an ageing and changing population is another that is important to understand for long term planning. As the population ages, there’s a gradual shift in infrastructure and mobility needs, necessitating the development of increased support options for the elderly. An ageing population in a developed country also points to increased consumption, as people retire and spend their retirement savings on more travel, discretionary consumables, and healthcare. In New Zealand, a large wealth transfer from property and KiwiSaver assets in the future is likely, which will shape the millennial generation’s spending and investment habits in decades to come.

A changing population not only means shifts in age distribution but also changes in values, culture, and priorities across the different generations that make up society. The largest adult population in the workforce are millennials, and in ten years’ time they are set to be the dominant leading voices too, while Gen Z makes up the bulk of the current adult population. The workforce of the future is likely to continue to prioritise wellbeing and adoption of technology to accelerate productivity.

Optimisation

Following the delivery of a strategic initiative, evaluating how megatrends have shaped outcomes during a project or strategic venture is a valuable exercise. Optimisation requires accountability, reflection, and critical examination of an approach to ensure organisations are aware of how megatrends have influenced outcomes, and what this means looking forward. Are there any distinct correlations we can make?

Undoubtedly, the megatrend of the accelerating technology landscape has a profound and ongoing impact on our thoughts and behaviours, permeating every aspect of our lives. It plays a vital role in maximising the potential of all megatrends and deepening our understanding of future possibilities. Effective utilisation of technology prompts critical thinking, challenges existing mental frameworks, and fosters awareness of emerging trends - aligning business purposes with social values. But not all organisations have been able to harness technology effectively. As technological advancements continue, businesses are confronted with a fast-changing technology. The emergence of new technologies such as Artificial Intelligence (AI), food technology, 3D printing, the Internet of Things (IoT), shared ownership models, drones, and robots presents companies with the challenge of navigating emerging technology and regulation to remain competitive and create positive impact. By understanding how an organisation has previously been able to harness the power of technology, and therefore identify opportunities for improvement, organisations can make sure they are part of the technological advancement megatrend.

Using megatrend insights allows organisations to build risk intelligence and long-term strategies that are proactive and forward-thinking, rather than reacting to events as they happen. The analysis that comes with this level of strategic thinking means businesses can make sense of where they are today while ensuring they remain relevant, with more certainty about the choices they are making and the ability to deliver results and impact with confidence in the face of megatrends.

If you would like to harness the power of megatrends insights for your organisation, please contact your Deloitte team.