Trendspotting is a term most commonly used in fashion circles. Top designers will spend thousands of dollars to send their curators all over the world to… spot trends. We’ve notoriously been told that the fashion industry is capable of predicting what colors we will want to wear before we even know we want to wear them. Financial analysts spend millions of dollars performing quantitative and qualitative analysis all in service of… trendspotting. Trends (and their reversals) can yield large profits if identified correctly by an investor. And back in 2004, Fast Company wrote an article about the way “trendspotting” was becoming a trend in and of itself.
So, how does trendspotting work for a business owner? It might surprise you the number of ways you’re doing this already every week, month after month. It shows up in the analysis of your metrics: Key Strategic Indicators, Key Performance Indicators, dashboards, etc. All of these tools ought to improve your ability to spot trends in the data. If they aren’t, chances are you’re not using them effectively.
Trendspotting should be a part of your employee feedback loop. Regularly collecting information from your team—regardless of the means with which you do it—can provide valuable feedback for Executive Teams about how well the company is executing its vision and living by its values in a moment. But over time, it becomes even more interesting to look at the movement in data and the trends. Your analysis of financial statements should always involve an element of seeking trends: Are sales always lower in Q2 of each year? Is our Cost of Sales becoming an increasingly higher percentage of our revenues? Why? Why did this other line item that was steadily increasing suddenly drop? A deep curiosity is a character trait required for any owner who wants to play the role of trendspotter. But it doesn’t come that easily to everyone.
What can you do to give you the best odds of spotting trends early on? Avoid these enemies of trendspotting:
- Bad Data: You can’t manage what you’re not measuring. It’s impossible to spot trends based on bad data and certainly not with data you don’t have. Make a commitment to getting clear about what data you really need to see to know how the business is doing on all fronts, and then create a roadmap to establish a reliable stream of that information for you to analyze.
- Lack of Expectations: It’s one thing to look at a line on a graph and say, “Hmm… This seems to have changed course slightly…” And another entirely to say, “This was expected to move toward 20% by month three, and we see that it’s only 17%.” When you’re analyzing a data set without expectations about what you’d like to see, you’re only getting half the job done. Most importantly, it will likely take much longer for you to identify the trend. If it’s a negative one, that could cost you in the form of continuing to make the same mistakes. Or if it’s a positive trend, it could cost you by not alerting you to capitalize on this immediately.
- Biases: We all have different orientations to life, to our work, to expectations we set for ourselves and to the results we like to see created. All of these can create biases that color the way we interpret and/or pick up on trends. What biases might you bring to the way you interpret your data? Are you a glass-half-full kind of individual? Then you may want to compliment that perspective with someone who shares a different orientation so you are looking for trends with a well-rounded perspective. After all, it’s very difficult to see what we’re not looking for.
Not all of us may be as gifted as John Nash was in the movie A Beautiful Mind. He had a knack for problem solving and trendspotting that rivaled any machine analysis available at that time. Today, the sophistication and availability of technology have made it such that any of us have the ability to become trendspotters for our own business. If you avoid the enemies above, and bring a healthy dose of curiosity, you’ll be amazed at what you uncover about your own business that you never knew.
Share with us your comments. What trends have you identified in your business? What did that tell you?