Insights gained from monitoring trends in your industry or your target market can be fascinating. Trends often provide insight into important changes in the needs of your customer base or of new directions in your industry. Following trends can move you boldly into the future or they can send you chasing down a hole (what we fondly call “the dip”). Following trends might not take you where you want to go. Identifying trends and jumping on the bandwagon is not good enough for successful companies. The trends must be analyzed carefully and meticulously for relevance to your firm before you follow.
It is disheartening to see a firm move itself off a growth plateau by chasing the wrong trend and plummeting to the bottom of a canyon. Not all trends are appropriate for every business – not even for all businesses in the same industry. Yet, when you have been stationary on a growth plateau for some time, watching profitability disappear, a few leadership teams panic.
In times of panic, emerging trends appear to be lifelines. Choosing to follow the wrong trend can quickly deplete available capital, diminish employee innovation and creativity, and sap the energy of the entire staff. Instead, it is vital to evaluate carefully both the applicability and the life cycle of the trend for your business. There is no benefit in allocating precious resources to pursue a trend that is likely to be short-lived. Nor will you build sustainable growth with a tenuous connection to a market trend that is barely peripheral.
Following a trend in your industry or market segment can sustain a company while it makes plans for a more sustainable future. No leadership team can afford to lose sight of the fact that every trend will come to an end. Following trends might not take you where you want to go. For this reason, it is better to risk remaining on a plateau longer than to follow the wrong trend. The right trend could result in an upswing. The wrong trend, however, could throw your company into a dip from which you cannot climb out. The future of the business might depend on the care with which you analyze emerging trends.