Today, whether you agree or not, it’s clear that the global economy changed.
What has it changed to?
No one is certain, but what we can be sure of is that many industries will be fundamentally different; job losses and cutbacks will occur; some companies won’t make it; there will be pain and grief; turmoil is our new normal for a time.
For how long, we do don’t know.
But here’s the other aspect that I know from my previous participation in significant economic downturns after 9/11, ’08 and earlier: the future doesn’t stop. In fact, economic volatility often provides massive opportunities for disruptive thinking.
Business models will continue to evolve at a faster pace; new revenue opportunities will continue to emerge; customer expectations will continue ramp up in terms of quality and service; we’ll see the ongoing emergence of new competitors; product life-cycles will continue to shorten as innovation speeds up; a lot of science will happen; new inventions will be discovered; and a lot of transformative change will occur in markets and industries as really innovative people continue to shake up the fundamentals.
Big disruption occurs in periods of big uncertainty. What will you do today to align to those realties?
During previous downturns, I was brought in by CEO’s of dozens of organizations to speak to their team on volatility and recession strategies. Gosh, I was really busy late 2008-2010 just with recession-recovery keynotes!
During that time, I’ve seen and have worked with two different types of organizations and leaders.
The first category? I’ve seen innovation failures — companies that are stuck in their economic rut, and unable to figure out what to do next.
The second category? Real pioneers and fast-movers. They are the innovation leaders — they have the same sentiment I repeat incessantly in that they know they can’t panic — they have to go forward by innovating, changing and adapting.
Who are you?
And if the former, what’s holding you back? I think there are several common attributes:
- Fear of the unknown: I still see many organizations who are driven by uncertainty. What happens if our market doesn’t recover? What happens if we can’t rebuild the top line? What happens if our customers don’t start spending again? So much fear and uncertainty causes a form of leadership and organization wide paralysis to set in; they’re like deer caught in a headlight, and are frozen in time. Avoid that fate – and fast!
- Inertia is easy: when confronted by change, many people react by …. doing nothing. When things are uncomfortable, the easiest thing to do to deal with that discomfort is to avoid it. Such thinking causes many organizations and the people within them to fall asleep. They keep doing what they’ve been doing before the recession, hoping that will carry them forward into our next, different economy. Obviously that can’t work, for a whole variety of different reasons.
- It’s easy to avoid tough decisions : organizations are faced with a lot of change, in terms of business models, customer expectations, cost pressures, new competitors, and countless other challenges. To deal with any one of these issues requires tough decisions, but in many cases, it’s easier to put those decisions off into the future rather than having to deal with them. Particularly when uncertainty rules your world.
- An unwillingness to confront the truth: good times hide bad mistakes. Now the ugly truth might come out: your product might be out of date; your brand might not been seen as relevant and keeping up to date with fast paced innovation in your marketplace; your sales force might be wildly out of date in terms of their product knowledge; your competitors might have a more efficient cost structure because they made the heavy IT investments that you did not. I could go on, but the point is this: you might have serious systemic problems, and are simply unable or unwilling to focus on fixing them. Have a reality check, and use that as a catalyst for action.
- A short term focus: you are still caught up in the economic-downturn hysteria headlines, and don’t think about business trends longer than three months. By doing so, you are missing out on the fascinating transformations occurring in many markets and industries, and don’t see the key drivers for future economic growth, with the result that you aren’t capitalizing on them. Innovative organizations have moved beyond the meltdown, and are already busy positioning themselves for the inevitable long term recovery. Rethink your world in chunks of time – 1 month, 3 months, 6 months, 1 year, 5 years, 10 years. There’s opportunity there!
- A culture that is risk adverse: so far, you’ve survived through cautious, careful manoeuvres. Yet the volatility has left you naked with that strategy: going forward now requires trying to do a lot of things you haven’t done before. You’ve got a culture that doesn’t accept such thinking. Change that — now!
- Paralyzed by the fear of failure: related to your risk aversion is a culture that abhors mistakes. Anyone who errs is shunned; people whisper quietly about what went wrong, and what it might mean. Can that thinking: you should take your failures and put them up on a pedestal. It’s more important that you try things out, and learn about this new fast paced, post-recession world, since what worked for you in the past obviously won’t work for you in the future.
- Failure to adapt at fast markets : I’m dealing with companies that know that constant innovation with top line revenue — which means product and service innovation — is now all about time to market. You’ve got to have an innovation pipeline that is constantly inventing and reinventing the next revenue driver. What you sold in the past — you might not sell tomorrow. How are you going to fix that? By getting into the mindset of the high velocity economy.
- A refusal or unwillingness to adapt to new methodologies and ideas: in the manufacturing sector, it’s all about Manufacturing 2.0 or 3.0 or the next phase … in every industry, there is no shortage of new ideas, methodologies, processes, and fundamental change in terms of how to get things done. Maybe this economic shock will close your mind off to new ideas, with the result that you will fail to see how your competitors are rapidly shifting their structure, capabilities, time to market, product line, and other fundamentals. Wake up — we’re in the era of the global idea machine, and the result is that there is a tremendous amount of transformative thinking out there about how to do things differently. Tune in, turn on, and rethink!
- A loss of confidence: this economic downturn might have the effect of causing such widespread damage in various industries that some people and organizations and leaders will their faith in the future. They aren’t certain they can compete, adapt and change. Perhaps this is the biggest challenge of all to overcome — but you can only overcome it by getting out of your innovation rut and moving forward.
Bill Gates once observed that “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
It couldn’t have been put better.
What’s your choice – to be an innovation leader, aware of where we are going in the future, or an innovation laggard, still mired in short term thinking?