2011 Word of the Year: volatility

by Bruce Kasanoff on December 22, 2010

Looking forward to 2011, I’m guessing the word that will best sum it up is: volatility.

Most people in the developed world are caught between two forces: inertia and change. The former is because once we establish a business, or build a house, or develop a city – we think it will last forever. The latter, of course, is reality: everything changes.

In recent years, technology is advancing in ways that can be difficult to comprehend. Here again, there are opposing perspectives. Some folks like to be overly optimistic or dramatic about the implications (“this will change everything”), while others don’t recognize changes even after they have happened (can you say Blockbuster?). Billions of people now carry mobile Internet devices; I can remember when analysts were debating why anyone would possibly need a personal computer in their home.

Here are some pretty certain realities that most are ignoring:

- In the United States, our governments have made promises they will not be able to keep. There will be dramatic changes in the way states operate. Taxes will go up, services down. Constituents will be furious. There will be defaults. It will be scary.

- Our weather will get crazier. Human activity is influencing our climate, and we lack the solidarity and strength to deal with this fact. The developing world is, well, developing, which means more cars, more factories, more forests burned down. Natural disasters will increase in frequency and scale.

- Jobs will become more fleeting in nature as some companies grow faster than ever (i.e. Groupon), while others disappear suddenly. As volatility increases and the economy gets worse before it gets better, companies will remain loathe to make long-term commitments. They will hire people when needed, but security will be harder and harder to find.

- Retraining and lifelong education will start to become as important as high school diplomas. None of us possess the skills necessary to keep us competitive over a ten year period, never mind an entire career. Our notion of going to college then working will continue to give way to working and going to “college” simultaneously — and continually.

- Business models will come under increasing pressure as both humans and all our devices become increasingly interconnected. Already in 2010 we started to see customers who – thanks largely to their ever-connected smart phones – had better access to product information, competitive offers, and expert opinions than the companies trying to serve them. Smart customers served by “dumb” companies is not a sustainable business model.

This sounds pretty bleak, doesn’t it? Hard as it might be to believe, I am not pessimistic about our future, only about the near term. Each of needs to make a personal decision regarding whether we are going to accept change and deal with it rationally and honestly. We need to decide whether we are mature enough to work with people who don’t think precisely the way we do. Most importantly, we need to decide whether 2011 is the year in which we tackle tough challenges, or push them off until they become disasters.

It would be nice if we started right now, but I suspect that most aren’t quite ready – which is why I am thinking that the watchword for 2011 will be volatility.

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