Being an optimist: a keynote on economic development
So I'm in an airport, on my way to keynote a conference on economic development.
And of course, I saw the latest news on the 'bailout', and the plunge in the Dow.
And so I went to look up the definition of being an optimist, to reassure myself:
- Optimist: 1. One who usually expects a favorable outcome.
That's me! And my keynote is being adjusted on the fly before I get on stage tomorrow.
Here's the fascinating thing that is going on: I'm getting far more calls, and a lot of new business, from CEO's and senior executives who have determined that one of the ways to stay in front of this mess is to keep innovating. In other words, innovation -- adjusting business plans, tackling new markets, focusing on opportunity, seeking what to do next -- is now more important than ever before.
That's probably good news for the many folks who read this blog. There continues to be unparalleled opportunities out there. The short term might be rocky, but the longer term is very, very real.
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Interview - "Is it time to panic?"
The CBC contacted me for my thoughts on the events this week, and in particular, the impact on the Canadian economy.
They invited folks to write in with their questions. As you can see, many people are worried about the safety of their investments.
I take the first question -- about whether there is a panic out there -- and try and put things into perspective.
"I remain quite the optimist about the potential for economic growth worldwide. There are 650 million people worldwide entering middle class through the next decade, and there are a lot of growth markets that emerge with that. Health care, the environment, energy -- all of these industries are immersed in very rapid scientific advancement and fast paced innovation, with new discoveries, and hence new markets.Things are moving at light-speed out there, but remember -- when it comes to trends and the future, there are short term events but long term trends. The former can often by scary as heck; the latter are often calmer.I'm dealing with global manufacturing companies who are moving beyond market commoditization and the impact of Asia, by focusing on more sophisticated product and higher-value skills. I spend a lot of time with a variety of global companies that seek my guidance, and certainly see that despite financial market turmoil, there's a lot of growth out there. Think about it another way -- we've had quite a few "large scale economic hits" which have whacked the stock market over the last ten years. The Asian currency collapse in 1998 caused havoc with global markets.
Then there was the dot.com implosion in 2000. There was a lot of concern with the telecom meltdown a few years later -- remember Nortel and the hit to the pocketbook of many Canadians? Not to forget the huge market downturn which occurred with 9/11.
More information
- Read the transcript
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Economic panic? 7 Things to Do Right Now As the Upturn Begins!
I'm often providing detailed strategic guidance to senior executives and leaders on trends and the future, and certainly the economy has become a big part of what I address today. Much of time is spent putting into perspective the fact that we've always had downturns; there's still plenty of growth opportunities out there; innovation is even more critical now to ensure that you're ready to go as the economy starts firing on both cylinders again (which it will.)
What has become evident is that the most pressing issue for leaders today is focus. While volatility rocks global markets, there continue to be fundamental truths: your industry, products, competition, skills requirements, organizational capabilities, and ability to respond to rapid change will define your future success.
Here's my advice on what you should be doing right now to ensure that you are ready for what comes next, based, in part, on a blog entry I wrote last April!
- think growth: It's all too easy right now to lose your enthusiasm and sense of purpose. When economies contract, so too does your motivation. Don't let that happen -- now is the worst time to lose sight of the future! Think opportunity: study my "Where's the Growth" document, and think about what it implies
- check your speed: it's the high velocity economy. Markets, brands, products, industries, competition, and globalization are changing faster than ever before. Make sure you've got a team that can operate at the pace of change. Agility is the key word. Search this blog for insight on that!
- immerse in ideas. The global idea-cycle is collapsing. New ideas are launched, analyzed, and developed to concrete product at a speed that is astonishing. Rapid product change is the new norm: I'm dealing with the CEO of one organization that is involved in a rapidly emerging, multi-billion dollar market that will appear, go super-nova, and disapper, over the course of about 18-24 months, before it is superseded by the next generation of product. That's fast, and that's the new reality.
- check your bench strength. After the cutting begins, value goes out the door. Yet your abililty to access ever more scarce, specialized skills will define your future success. It's your ability to establish a fast, agile, quick-to-assembe collaborative team that will define your ability to grab all the opportunity that is emerging out there.
- assess your threats. where could emerging technologies, fast science, radical business models, new industry dynamics, new regulatory macroeconomic, political or social trends impact your bottom line in a way that you hadn't thought of before? Two years ago, China and quality wasn't an issue.
- invest in experience. Experiential capital -- the depth of capability that you have from exploring, taking risks, trying things out -- is the financial capital. It's a precious resource, and might be in short supply if you aren't working to build it up.
- set the tone. If you let the current economic headlines drive your corporate spirit, you're sunk. You have to keep people focused on the future -- otherwise, your team will smell your fear. Leadership is all about keeping your team focused on opportunity and goals, not on ongoing and regular ("new normal" volatility.
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High velocity globalization - massive markets, major trends
I'm hitting the ground running this week, with an opening keynote presentation for a global legal firm, who are holding their annual shareholders / partners conference in Las Vegas.
- Goldman Sachs has identified that the next growth sector will come from the "Next 11" economies -- those that are going to see a rapid transition and growth. These are Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey, and Vietnam
- Almost a billion new consumers will enter the global marketplace in the next decade .... with an income level that allows spending on discretionary goods - McKinsey
- By 2013, consumer spending power in emerging economies could match the spending power of Western Europe - McKinsey
- The ranks of the middle class will swell by 1.8 billion to become 52% of total population, up from 30% today - McKinsey
- 80% of sales are now from abroad
- they just had record sales of $3.59 billion
- 6-7% of sales is committed to R&D
- 30% of current sales comes from new products developed in last 3 years
- sales are up 8.5% year over year
- 59% of it sales are in Asia, and 2/3 of its 59 manufacturing facilities are abroad
In other words, if your clients are aggressively globalizing, as a legal firm you need to do so as well -- and do it fast.
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Transitioning the global economy
There are a zillion fast, zippy cool trends out there. And then, there are the big, sweeping, massive transformative trends that change entire economies.
- Global Economic Trends: An Interview with Jim Carroll
- "Where's the growth: Global innovation strategies for the long term"
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A memo to the CEO: Innovation matters more than ever
Memo
To: CEO's worldwide,
(particularly in the financial sector)
From: Jim Carroll
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I know things are extremely busy, particularly given our economic climate, but I think there's a key issue that you need to make sure is on your agenda.
The most important thing that you can do *right now*, as you work to navigate your way through the challenging economic shoals that surround you, is to make sure that you don't kill innovation in its tracks.
In the last few years, you've nurtured and created a core group of people in your organization who have become relentlessly focused on innovation. They've been obsessively focused on process, service and product innovation. They're matching the needs of customers, are taking you in to new markets, and are figuring out what to do in an economy that changes at a furious pace.
In the months and years to come, these executives are going to be some of the most important and critical individuals on your team.
Leaders set the tone. The tone you need to set for your leading innovators is that innovation matters now more than ever.
I know it's a tough sector to be in right now; there's a lot of bloodletting underway, and there's likely more to come as hundreds of billions of dollars of losses are absorbed. Yet you'll likely get through it, and you are going to have to be relentlessly focused on meeting customer needs, open new markets, and continually re-orient your business models to continue to focus on growth.
In January 2008. I was honored to be one of the judges for the annual Monarch Innovation Awards. We examined various innovative service and product offerings from such major financial institutions as Wachovia, SunTrust, USBank, Bank of America, WellsFargo and others. The key goal of the awards, sponsored by Barlow Research, was to "recognize financial institutions that provide the most innovative products to business customers" and to "recognize risk takers in the financial services industry who create/promote innovation within their organizations."
Throughout the financial sector, there are innovation heroes like those who won the Monarch Innovation Awards. These are the folks who are willing to stick their heads up, take a risk, and do something new and dramatic.
It's your innovation heroes who will help you open the future.
You must ensure that they still have the courage to take risks. To open new markets. To do innovative things that will solve customer problems. To realign the business for the future.
Celebrate them. Elevate them. Make their contributions known.
As the CEO, you set the tone for your organization. You have a momentary chance to ensure that you stay focused on the opportunities that come from your innovation heroes.
If you want to chat about this, give me a call. I'm at 905.855.2950. Or just send me an email: innovationmatters@jimcarroll.com
Sincerely,
Jim Carroll
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More information
- Print A memo to the CEO: Innovation Matters More Than Ever
- Marketwatch press release: Barlow Research Monarch Innovation Awards
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Innovating in a flat world - the jewelry industry
I keynoted the 2008 Manufacturing Jewelers and Suppliers of America Expo New York yesterday, on the theme of ""How to Unlock Your Potential in the High Velocity Economy." Just about a week from now, Dubai will hold a similar event. The challenge for the AJMA members is that they now find themselves in a world that has gone massively global and is far more competitive; and as the world has flattened, so too have their challenges. They're competing not only against the City of Gold, but countless other highly innovative jewelry centers.
The focus of my keynote: what to do after the world gets flat! How can they innovate to deal with the unique challenges of today? Most certainly, the challenges go far beyond just globalization: rapidly changing consumer attitudes are also playing a key role. I used some recent insight from research firm Mintel UK, which provided a few fascinating nuggets:
- only 5% of all the customers surveyed buy jewelry frequently - compare that to the trends with consumer electronics spending - a lot of discretionary spending now goes to the latter, and not the former.
- 22% compare prices before they buy
- 15% buy online
- 17% of women are finding jewelry sold in supermarkets an "increasingly attractive" option
These are all the classic signs of commoditization of an industry -- wherein existing competitors find themselves in a never-ending black hole of being forced to compete on price.
How do you innovate your way out of this? The advice I included in my 75-minute talk covered a vast number of issues; here's a few of the things they should focus on:
- faster time to market : fashion happens faster; they need to deal with this. If P-Diddy appears with a new ear-stud and it gets noticed, kids will want it. Agile jewelers align themselves to such instant production, by revamping their process and cost structure.
- innovate upside-down. Adopt new design philosophies: rather than innovating, focus on upside down innovation. Work with their retail partners to restart the design process. Innovative organizations recognize they can't do it all. They seek partners with everything they do, recognizing that there are of lot of really wonderful innovative ideas that transcend their organization and their culture. This allows them to discover new innovative ideas they hadn't thought of before; a process I call upside down innovation.
- revamp manufacturing capabilities: a lot of these folks manufacture to inventory, and with the high and fluctuating cost of gold and other metals, that's an expensive business model to maintain, particularly in the context of increased global competition. Leading edge manufacturers are using CAD/CAM tech to change their design process and are learning to shift their business model as a result.
These were just a few of the issues I covered ; the key is accepting the fast-change that envelopes the industry, and challenging your assumptions and habits to move forward!
More information
- Read the MJSA article Change Your Mind: Staying One Step Ahead
- Read What do you do after the world gets flat? Put a ripple in it!
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Gloom has set in on global markets. Volatility rages. Some organizations have gone into a mode of "aggressive indecision," deferring action while they try to figure out "what comes next." A pretty lousy strategy that is doomed to fail in the longer term.
Future oriented leaders understand the reality of growth. They know that we live in a time in which opportunities for growth abound. They've aligned the mission of the organization so that they are capitalizing on real opportunity, not short term economic challenges.
Growth is everywhere.
It's easy during a time of economic volatility to lose sight of where the global economy is really headed. Yet while stock markets might rock, innovation thrives.
New ideas continue to be explored, markets grow, and industries emerge. A variety of trends indicate that opportunities for growth continue to surround us.
Read this document to get in the right frame of mind for the future.....and think growth. Think opportunity. Innovate for future, don't stagnate with the past.
Download Where's the Growth? Global Innovation Opportunities for the Long Term
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High velocity leadership: how to stay focused on growth
Organizations today are looking for deep insight into the trends that will affect their markets and industries. CEO's are focused on the need for innovation, knowing that a world of high velocity change requires that they respond to opportunity and challenge in an instant. They are looking for guidance on establishing high-performance, innovation oriented teams that are focused on achievement.
I've been doing quite a bit in this area; the other day, I spent time with a global organization, for a full day, with a keynote and workshop focused on the issue of "growth." It's easy -- in a challenged economy -- to lose sight of opportunities for growth. That's what I talk about in the recent interview by Credit Suisse.
With this particular client -- and many others -- I went beyond a keynote, and participated for the balance of the day through a series of workshops. This new document outlines what I do: I'm often called upon to deliver unique, half day or full day executive retreat, leadership oriented programs.
More information:
- Read High Velocity Leadership
- Read my Credit Suisse interview for my thoughts on "growth"
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Leading in turbulent times: how to innovate during the recession!
Even as news and financial pundits endlessly debate the question, let's face reality: the US economy is in a recession.
Given this reality, the key question going forward is: what do you do now to ensure that you remain innovative, competitive, and forward-oriented?
Innovate for the upturn! That's the key message I focused on with my clients in 2002-3, and the same message holds true today. And that was the focus of a keynote last week when I spoke to one of the largest US commercial / industrial real estate brokerage groups. There were several bits of insight I shared with them:
Put sub-prime into perspective
One of my first comments for this audience of senior executives? We need to think about the sub-prime mess in the context of a longer term view. In the last ten years, we've been through many economic challenges:
- the 1998 Asian currency collapse
- the 2000 dot.com meltdown
- the 2001 global telecom restructuring
- from 2001 to 2003, the impact of 9-11 and economic uncertainty
- 2007 to 2008, the march to $100 oil
- and now sub-prime....
Keep focused on the longer term view
I tend to be an optimist: that's because I think in a longer term perspective. Think about it: over the next 10 years, there are several certainties:
- scientific discovery will continue to advance at an ever increasing pace, opening new markets, evolving existing markets, and establishing countless new opportunities
- global collaborative knowledge communities will continue to lead to faster innovation in every industry and market
- new products, methodologies, skills, ideas, organizational structures will continue to evolve at a fast pace; agile organizations will continue to come out on top
- the transition of economies in the Mid-East and Asia will continue despite regional economic challenges
- rapidly aging economies in North America and Europe will drive rapid spending, innovation and knowledge discovery in the world of health care
- global energy conciousness will continue to lead to ever more rapid evolution of "green" solutions
- 1/2 of the global population is under the age of 25. They're change aggressive, and will continue to lead to the rapid adoption of new ideas.
- growth in markets is a simple reality: in agriculture, global food production still has to double in the next 25 years to keep up with population trends. Sub-prime has no impact on this reality.
Don't let aggressive indecision take over your thinking
To innovate in the upturn, don't let a short-term vs long-term trend disconnect take over your strategic thinking. Already, I can see the signs of some companies heading into an innovation rut, their staff and executives encumbered by a dangerous state of complacency, while other companies innovate, change, and adapt to the "new normal" that is now our reality.
In the last recession, "aggressive indecision" became a driving cultural and leadership trait. Organizations that fell into this funk fell behind. Innovative companies didn't permit that to happen then, and you shouldn't let this happen now.
More information:
- Read Global Economic Trends: An Interview with Jim Carroll The reality of future trends: grab the What Comes Next trends overview
- Read my 2003 article about "aggressive indecision"
- Read my Credit Suisse interview for my thoughts on "growth"
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Credit Suisse Bulletin: Success Comes to Those Who Evolve
Credit Suisse, headquartered in Zurich, is global financial powerhouse operating in 50 countries; 48,000+ employees, assets of $75 billion US, and net assets under management of $1.345 trillion.
They've just released their 2008 Bulletin magazine, a publication provided to key investment banking, private banking and asset management clients worldwide.
They've include a fairly lengthy Q&A with me, in an article titled Success Comes to Those Who Evolve, in which they wanted wide-ranging views on the word "growth." It came out well: my key message has always been that we must always link the concept of innovation to rapidly emerging trends in order to constantly change what we do -- often simply to keep up, or attain competitive advantage.
Here's the key point: So what's the recipe to kick-start innovative thinking? I think it's about having your entire organization understand everybody is responsible for constantly figuring out how they need to change to keep up with the rapidly changing world. They need leadership that supports and encourages them to be open and share ideas, and that leadership needs to hammer home that message on a regular basis."
More information
- Read: Success Comes to Those Who Evolve
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Which way forward? An economic interview with Jim Carroll
Jim Carroll is frequently approached by global news organizations to comment on economic issues. He was recently interviewed by the CBC (Canadian Broadcasting Corporation) for his perspective on how the Canadian economy will be impacted by recent global events. This document summarizes key components of the interview.
The interview includes a variety of topics, including this one: How can an economic region discover opportunity? From Jim's perspective, it's through skills transformation. He recently keynoted a community economic development summit in an auto-industry dependent city. He comments about the challenges that exist in the manufacturing sector: and how some regions are turning challenge into opportunity.
You'll also find a news report that ran in newspapers across Canada after this economic development conference; you'll find some unique views on the types of careers that are emerging in the future.
More information
- Read: Which Way Forward: An Economic Interview with Jim Carroll
- Read the news cover: "Knowledge Explosion Key to the Future"
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Innovating locally in a global economy
I spent the day yesterday with management executives and store owners of DoItBest, one of the largest US hardware retailers. It's a fascinating organization, because in the midst of the current economic challenges in the US, it's managed to grow its profit at the same time that it saw a dramatic revenue decline.
As with all the keynotes that I do, I undertook an extensive amount of research into the company and industry before I took to the stage; this is combined with the fact that I have keynoted dozens of retail oriented conferences through the years.
What I found was a really cool, and extremely innovative organization. Their online Web site has seen a sales increase of 60%; they've included an option where shoppers can have orders sent to their local DoItBest store (of which there are 4,000+). The site is price competitive with Target and Amazon. They are doing a lot in terms of supply-chain, online store portals and rebates. They've rolled out three different store designs, and are discovering new micro-markets. All this, while they've seen sales fall to $2.81 billion from $3 billion from the year before -- and yet, they also achieved record profitability.
In my mind, there are a number of innovative strategies that the organization has pursued that any organization can learn from:
- rapidly transition challenged product lines: lumber saw price declines of 25%, and panel prices dropped 60% according to an article in Home Channel News. Do It Best stores responded by focusing on all kinds of other lines in hardware and new market opportunities such as home-decord
- be relentless on customer service: a search of news articles shows any number of articles in which customers rave about the knowledge that a staff member in a Do It Best store has when it comes to hardware, tools, home renovation and just about everything else. They've maintained a relentless focus on customer service, even as the big-box chains have lost site of its importance. If you need a power tool: these folks know power tools.
- recognize that micro-branding works: the new store format design has three components: one for those fully within the DoItBest brand, one that is sort of halfway, and one for those stores that want to maintain a distinct, local, "general store" type of image. The fact is, in this era of homogenized big-box brands, some folks like the feeling they get from a small, local hardware store brand. "Do It Best owners understand the micro-economy" -- that's what Jeff Prupis, of Pomona Paint & Hardware, a Do It Best store in Pomona, NY, stated in another Home Channel News article.
- when markets commoditize, specialize: at their trade show yesterday, they were featuring a "Christmas in January" theme; with various vendors showing the unique Christmas offerings they might be thinking about. Everywhere you look, you can see some of their stores learning about and experimenting with new premium markets and service opportunities.
- make life easy for customers: We're time compressed. We're in a hurry. We need solutions. We want "fast." That's why the comment from Joe Talor, CEO, Taylor's Do It Center, Virginia Beach, is so appropriate. "We're like the 7-11 of the hardware industry. You can get in, get out, and get back home to enjoy your weekend."
All in all, a tremendous amount of fun, and a wonderful organization to spend some time with!
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At the Swiss Innovation Forum in Zurich, I took a look at the real impact of globalization -- the new consumer, market commoditization, rapid emergence of new business models, shortened product lifecycles.....
The bottom line? "We need to shake ourselves out of any complacency that we can continue doing tomorrow what we did today."
That's why innovation is critical : organizations today are in a situation in which everything around them is fluid, constantly changing and evolving. Permanence has been torn asunder.
It is only by focusing on continual, rapid change that an organization can adapt to today's new global realities.
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