Some takeaways from «Forrester's European Predictions 2020»
According to «Forrester’s European Predictions 2020» three strong forces will have an impact on companies and society in 2020.
First, the customers themselves. Their power manifests itself in personal, profound value systems on which they base their purchasing decisions. They force companies to take a stand on social, socio-political, and environmental challenges.
The second force that affects companies is security. But security does not only affects industries but also affects nation-states, as cyber risks will rise sharply. In some cases, industries and nations unite as a single entity to tackle the issue together.
Another force is concentrated on new technologies such as automation, artificial intelligence, and robotics. They penetrate deep into the corporate structures and operations and develop tangible proximity to the customers.
Not all of these forces have yet fully unfolded. A few of them are still at an early stage of development and only give indications of their later potential. Other forces are already established, but the organizations have not found an answer. The concentrated energy from the three forces, which affect companies with their potential for change, triggers fears among companies as well as consumers.
We'll take a closer look at some of the forces below.
Forces Affecting Europe in 2020
Consumers on the Search of Meaning
People are social beings. They tend to make decisions based on their affiliation needs and consider possible effects. Today, humans live in a turbulent, highly dynamic world characterized by disinformation campaigns, social isolation, wealth inequality, climate change, and political unrest. It is not surprising that this environment has resulted in a change in the value of consumers. They look for and buy from companies that give them joy and hope. This is not a new phenomenon. It is a trend that has evolved from niches to the mainstream and continues to grow.
What this means for leaders in 2020
More than 55% of consumers will consider corporate values when making their purchasing decisions.
Managers want to give customers what they want in 2020. There will be mixed results as far as the success of this endeavor is concerned. Some companies anger consumers because they can not keep their values promises; others do not know how to express values. Those organizations that create value-based experiences together with employees and customers will be more successful. Authenticity plays an essential role in the communicated and lived values.
CMOS: Everything Revolves Around Customer Value
Big companies like Netflix or Kellogg's have eliminated the role of the CMO. But do not worry - marketing will not go away. Only the status quo of marketing has changed fundamentally with the advent of the customer age. Today's consumer is capable and has power.
The intense fragmentation of the brand on numerous communication channels has led to a loss of control over the brand. The way companies build a brand today and generate commitment and loyalty has changed radically.
What this Means for the CMOs in 2020?
The top 10% of CMOs want to broaden their role in the name of customer value.
It's all about the customer. For the CMO 2020, the most significant potential for growth lies in a strategically planned ecosystem that delivers added value to the customer throughout its life cycle. The areas Employee Experience, Customer Experience, Brand Purpose, Creativity, and Technology are broken up and filled with a customer focus.
Short-term profit at the expense of customer affinity and strategies to manipulate customer interests are no longer appropriate. The marketing expenses become creativity, as the importance of a differentiated branding and a differentiated customer approach in the digital world increases.
B2B Marketers Welcome Customer Focus
Even in the B2B area, the search for products and offers has shifted to the digital channels. The buyers can now search and compare the market offers online. However, this realization is only slowly being integrated into efficient marketing and sales processes by B2B businesses.
The Turning Point for B2B CMOs will Come in 2020
30% more marketers will implement an audience-based organizational structure.
B2B CMOs are using digital transformation and the resulting change in information and purchasing behavior as a reason to restructure their organization and reprioritize their investments. This implies that 30% more B2B CMOs will implement targeted organizational principles. They use Customer Journey Maps for marketing planning. Besides, they realize that customers are not very interested in products, but in solving their problems. That's why they prioritize (and provide solutions to) customer problems in 2020, making their voices heard on the market. The increasingly important role of partners in the purchasing process is considered by improving the partner experience quality.
Customer Experience (CX) at a Crossroad
By 2020, CX professionals must prove that their customer experience initiatives are paying off. The CEOs wanted to show numbers and metrics that demonstrate the extent to which CX is reflected in the company's profits.
Nevertheless, twice as many companies will recognize the benefit of customer experience than before. They are those who are ready to shake their foundations to strengthen their innovative power.
What this Means for CX and CX Professionals in 2020
The number of CX executives will grow by 25%.
Companies that do not believe in CX initiatives will dismiss their CX managers. On the other side are those companies that make the customer experience their day to day focus. They hire more CX executives. Their deep customer understanding is expressed in a clever combination of technology and creativity to deliver innovative and exceptional customer experiences.
But those companies that have left the CX approach are facing declining experience quality for their customers. Compromising on CX could be expensive, especially if customers give their loyalty to other brands.
Automation Redesigns the World of Work
Due to increasing automation in 2020, future-oriented labor market composition will lead the way. Automation will have a global economic impact on income distribution and salary stagnation and will replace 1.06 million jobs by 2020. In contrast, 331,500 new jobs are created for physical/mental agility workers, cross-functional know-how carriers, and digital elites. Even when the technology automates processes and makes labor unnecessary, customers want to perceive a company as human and near. For this reason, customer service is one of the most critical drivers for excellent customer experience and customer loyalty - because human channels are essential.
What this Means for Companies in 2020
Anti-automation backlash will cause a PR nightmare for at least one Fortune 500 company.
Customer contact centers will reduce their staff by 40% and instead use chatbots and AI-based audio applications for improved customer experience in the customer service department. For the full performance potential to be drawn from the technologies, it requires a technology-oriented and well-trained workforce.
Few companies have adequately prepared their employees for technology change or invested in further education and training. The consequence of this is a highly insecure workforce, who shy away from the new technologies. Forrester expects one of the Fortune 500 companies to find itself in a PR nightmare in 2020 due to striking workers.
CIOs Focus on People
2020 will be the year where CIOs focus on people management. Continued volatility and slower growth are also putting pressure on the CIO budget. You need to increase efficiency and automate 10% of IT tasks. However, employees will not be dismissed. Instead, the CIOs will train their teams for more complex tasks and integrate them into agile DevOps teams.
What CIOs do in 2020?
The CIOs will automate 10% of their IT tasks and try to empower their teams with new skills.
The CIOs become valued advisors and partners in the field of employee experience and HR teams to support the workforce in dynamic change. These include new technologies such as Employee Insights Platforms, to build the analytics field for employees. This way, changes are better anticipated, and the HR technology portfolio can be adjusted faster.
The CIOs will be actively working to prepare their company for automation, to minimize growth barriers, respectively, to unlock the potential of their digital transformation.
Customized and Deeply Embedded IT
Through continuous, technology-driven experimentation, new business models are continually being created, constituting a technology-driven innovation. Leading companies rely on technology as a key factor for future competitive advantage. The limits of IT, technology, and business are disappearing or merging for an even more powerful and flexible IT.
What this means for IT in 2020
80% of enterprises will recognize the threat of automation islands and set up strike teams.
As companies take advantage of the opportunities offered by emerging new technologies, a flexible, deeply embedded IT in the enterprise becomes very important. In order to better integrate existing technologies into the company and to reduce the risk of technology silos and automation islands, companies will increasingly use special teams. They serve as an interface to traditional IT and will close technology gaps as robotic architects or as automation enablers.
Outlook for Executives
Ideally, a company will benefit from its resources and investments built-in 2019 in 2020, so that it moves into substantial growth. However, even less favorable scenarios are conceivable: The effects of Brexit and trade wars lead to the collapse of the global economy, and fear of recession becomes a reality. Of course, many other scenarios are possible.
Regardless of the scenario that will occur, executives need maximum adaptability in 2020. They need to understand market dynamics and anticipate them. It is essential to adapt agility for the quick use of opportunities, whether they are small or large. Whether the market dynamics allow for rapid growth or small market share gains or whether it protects existing markets: Managers need to make predictions for 2020 to identify potentials for their beneficial use.