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Organizations are faced with significant challenges, particularly with the continued impact of globalization, heightened market competition, rapid business model change and the impact of new technologies. They must continually challenge themselves to keep up with rapid change in the business environment in which they operate.


Here’s something to think about: we are going to see $12 to $18 trillion in intergenerational wealth transfer in the next 12 years in North America. (US GDP is $12 trillion). By 2053, $130 trillion will have moved from one generation to the next, in rolling waves of wealth transfer. All this will involve monies moving to new customers who are far more independent, financially savvy, and technically sophisticated.

In other words, tomorrow’s customer is going to be completely unlike the customer of today. That’s why innovating — keeping up with the future – is critical!

Tomorrow I keynote a group of professionals in the life insurance industry. Next Monday, I keynote a national Association of Actuaries; the following week, an international accounting and professional services powerhouse. Last week, a major bank and a number of wealth management firms. The heavy duty theme this month is the world of finance!

Here’s the thing about anyone doing business in financial services: you can drown in all the noise and short term hype and hysteria that involve markets and economies in rapid change.

Or, on the other hand, you can manage through that, and think about the innovations that are set to occur through the next five years. Focus on those, and there’s your future strategy.

Here’s what’s certain in the insurance industry: someone will do one or more of these things, in a big way, that will cause significant and long lasting market disruption and transformation.

  • they will redefine the business model (particularly in insurance): for example, health care costs worldwide are set to explode, and the system will implode. Someone will ride this obvious trend and do something transformative that forever changes the industry. It’s not about managing health costs; it’s about redefining the concept of health care. Think bio-connectivity, and health care rearchitecture.
  • they will transform how business is done in the industry.Today, it’s still an industry that is still about brokers and distribution. Insurance is sold, not bought, based on fear of the future. That’s set to change. Tomorrow, smart widgets on top of a legacy insurance platform? The concept of “disintermediation” has been around for a long time, but here’s a certainty: tomorrow’s 50 year old is a very different animal from today’s 50 year old! Gen-Connect expects much more!
  • they will redefine the product. Today, we buy life insurance and health care insurance and other “products.” Someone will figure out that people don’t want products: they want their own unique, self-defined, self-managed solutions, that likely include multiple solutions from multiple sources. Think “iPhone meets the life policy!”
  • they’ll change the brand perception: fast movers will transform the product and services that are offered, by offering faster-paced, more relevant brands to consumers who aggressively self-manage every aspect of their daily life. Think Geico.
  • they’ll constantly change the target customer. Today, insurance is sold to groups of employees, directly to individuals, and to affinity groups. Tomorrow, it will be sold to rapidly evolving, temporary fast-moving customer targets. Think portability: if the typical person will have 30 different careers and 50 different jobs in their lifetime, they’re no longer a captive customer!

Is that a bunch of babble? Not really. Five, ten, twenty years out, the insurance industry will look unlike anything that we know if it today. Market transformation is everywhere, and its’ going to sweep this industry faster than fast.


dazedandconfused.jpgAt a particular keynote last week, I met a number of senior executives who certainly agreed with my message – we need to constantly realign our company to the reality of change that surrounds it. That’s where innovation comes from. But they also also indicated that they found it increasingly difficult to keep up with the rapid change occurring all around them.

There’s been an increasing number of these individuals, and I’ve come to call them the Led Zeppelin refugees: they’re simply dazed by the changes occuring in the high velocty economy, and are confused about what to do next.

That’s why there’s such a good question that flows from this: just how do you become an organization that is focused on innovation?

One of the easiest methods is simply by identifying the obvious and the not-so-obvious trends that will impact your business or organization — and then taking the time to figure out what actions you must undertake to deal with those trends.

Ask yourself this question: are you prepared for what comes next in terms of your business? The likely answer is no: my experience is that many organizations still have a very short-term minded outlook. They’re caught in an innovation rut, simply doing day by day the same old things they’ve always been doing, day in day out. And they don’t really think about how their world is going to change.

That’s why you should undertake a “trend-and-innovation” audit of your organization: quite simply, figuring out what comes next, and what you need to do about it.

How can you do this? By asking yourself a series of questions:

  • How quickly is our marketplace changing? How quickly might it change in the future? What’s the impact on what I sell, and how I sell it?
  • How are our products changing? Willl they change faster in terms of features? Will support become easier, or more complex? Can we manage to operate in a faster market?
  • Are our products moving upscale, or are they becoming commodities,such that you’ll be forced to compete on price? Can we do something so that there is more of a service element to our product?
  • What new competitors are appearing, or might emerge in the future? Is the basic business model threatened? Is there more likelihood of direct outreach to the consumer rather than through an existing distributor/wholesaler network?
  • What moves could we make to make sure we can remain competitive? You really must ask yourself some probing questions as you go through this process. You need to challenge yourself and think what might really be different in five years, in terms of what you sell, who you sell to, how you sell it, and who you are selling against.

What you need to do is ask yourself these tough questions, so that you’re thinking about where there might be new problems and new opportunities that will impact your business in the future, not just in terms of what you sell, but in terms of the structure that you use to get things done.

And therein lies the rub: I think a lot of organizations fail to do this type of simple analysis. There are too many who sit back and react to change instead of thinking: “ok we know some big change is coming what the heck are we going to do about it?” Think of it as forward-oriented innovation: it’s a simple concept, and one of the most important things you should be doing.

HighVelocityLeadership.pngOrganizations 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”

Global-EconomicTrends.jpgEven 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….

Sub-prime is a big issue, but it’s just another blip in the grand scheme of the churning engine that is the global economy. Through the next ten years, we’ll see a few other economic challenges along the way; various regional economies and sectors will be impacted; yet innovation will abound. That’s why I’ve also indicated that a key leadership mantra for the high velocity economy is this: “volatility is the new normal.” That’s a topic I covered in a recent economic interview.

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”

One of my recent keynotes for a global organization focused on the issue of high-velocity change. No matter who you are and what you do, there are certain realities: your markets, customer expectations, competitors, cost structure and business model continues to change really, really fast, and will continue to do so. This little video clip captures that message.

Innovative organizations recognize this reality, and orient themselves to a state of constant, forward-oriented innovation, not only to keep up with but to exceed the constantly rising bar of innovation that surrounds them. They do this by subscribing to several key ideas. Innovative companies:

  • adjust to rapidly evolving markets: it doesn’t matter what industry: consumer goods, pharmaceuticals, electronics, industrial supply, construction. Every industry is impacted by massive and sweeping change, in terms of product innovation, customer expectations, new business models. Look around you, and there’s fast paced change.
  • re-align for new workforce realities. With new career attitudes, the migration to the global, contingent workforce, and increasing skills specialization, deploying the right skills at the right time for the right purpose is becoming a core focus of innovation efforts.
  • jump on rapidly emerging trends: new ideas now evolve faster than ever before because of the global infinite idea loop. New products, markets and innovation can now go from concept to market in a matter of months or weeks. Innovative organizations know where they are headed, because they are tuned into the global idea loop that envelopes them.
  • track the impact of fast-science on product innovation: billion dollar markets are being born through global collaborative science. It’s a trend I explore in my Future Trends document on this blog. Understand it, and innovate from it.
  • generate ideas through generational collaboration: innovative organizations recognize that different generations have differing attitudes towards change. Rather than battling this reality, they work to ensure that they are getting the best ideas from the experience of longer term staff, combining that with the inspiration and innovative ideas coming from what I call Gen-Connect. Watch the cardboard people/plasma people video on this blog: it provides a good example of what can happen if you don’t capitalize on generational insight.
  • streamline process: innovative organizations focus on the concept of “agility” — structuring themselves for rapid response, fast solutions to emerging challenges, and quicker focusing of resources on the changes occuring within the high velocity economy. Search this site for the phrase “agility,” and you’ll find a wealth of ideas.
  • innovate upside down: 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.
  • continue to innovate in times of stress: it goes back to my recent blog post, Leading in turbulent times: How to innovate through the recession. Some economies might be in recession: but innovative organizations are already focusing on innovating for the inevitable upturn.

CreditSuisse.pngCredit 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

shoppingcart.jpgI 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.”

I was there to help take them to the next level, with a keynote theme, “Creating the Future: Leadership in An Era of Innovation and Change.” In the talk, I looked at additional ideas that they might pursue to stay on the leading edge.

All in all, a tremendous amount of fun, and a wonderful organization to spend some time with!

gen-connect2.jpgOne of my latest columns focuses on what will likely be the corporate issue of 2008 – managing generational challenges in the workplace.

In the column, “Here we are now, entertain us,” I take a look at the unique attitudes that Gen-Connect is now starting to bring in to the workplace. There are several key observations from the article that are critical to understanding the future of the workforce:

  • What is clear is that we are witnessing the death of the long-term career and corporate loyalty, which will soon be but a quaint memory from the previous century.
  • I often tell the story of a young engineering graduate who turned down a job with an architectural firm because its 9 a.m. to 5 p.m. work hours conflicted with the time he expected to be carving arcs into deep powder in the mountains. It’s a real attitude, and it’s already happening around us. The challenge, when such trends are so patently obvious, is trying to figure out what to do about it. And a good part of the solution will come through the transformation of rewards and remuneration.
  • Gen-connect has very little patience, particularly when it comes to being rewarded for good work or significant effort. These youngsters are used to instant rewards: their Xbox/Wii video-game-oriented world has them accomplishing a goal, moving up a level, and earning some points or other valuable form of currency that helps them accumulate additional armour, weapons or whatever else is needed to accomplish the game’s next challenge.
  • That’s why, at a recent conference, I framed the issue of rewards transformation to an audience of financial professionals this way: “Organizations that can attract, engage, retain and amuse an increasingly complex workforce will be the ones who find success in the rapidly evolving global economy.”
  • Put the emphasis on the word amuse. Today’s Gen Y doesn’t, and tomorrow’s Gen-connect certainly won’t, have any patience whatsoever for slow and steady career paths.

Related postings:

  • Article: Here We are Now, Entertain Us
  • Related article: Don’t Mess with My Powder, Dude!
  • Keynote topic: What’s Happening with Our Workforce: Achieving Competitive Advantage Through Skills Agility
  • Critical Trends Analysis: 10 Unique Characteristics of 21st Century Skills
  • FutureTrends.pngAs we end the year and start a new one, it’s a good time to be thinking about some of the trends and issues which will impact us in the future.

    Take a look at my newly released quick-report, What Comes Next: A Trends Perspective for 2008 and Beyond.

    My message for my clients throughout the year – whether it was 2,000 executives at the World Congress for Quality, or the senior management team of one of the largest commercial construction companies in the US — was consistent. The high-velocity economy demands that we think, react, plan and manage differently.

    Some of the guidance I shared with global clients concerning future trends is found in the report; I highlight what I think are some of the most important ones that we need to be thinking about, broadly defined as:

    • revenge of the math geeks
    • small is the new R&D
    • attitude and amusement is the new motivation
    • time disappears
    • resistance to change retires
    • careers end
    • knowledge & skills banks dominate
    • interactivity redefines markets

    It’s an Adobe Acrobat document; feel free to grab it, share it, and distribute it!

    I prepared the document on a MacBook Pro — I made the switch from Windows this year! — using the TokyoRPG Style Template for iWork 2007 Pages from KeynotePro. They have awesome styles for Pages and Keynote; if you’re an OS/X and iWork user, take a look.

    • Grab the What Comes Next PDF now
    • Learn more about iWork Themes from KeynotePro

    Can you innovate across the generations? If you can’t — then you’ve got a big problem to fix!

    I do a tremendous number of keynotes that focus on the issue of “managing millenials,” and the complexities of change occurring in the workplace. See, for example, my blog post, “Don’t Mess with my Powder, Dude.” (below)

    Yet organizations need to move beyond the staffing issues that come with new generations: they must also ensure that they can innovate at the rapid rates demanded in our new world, and they need to do that by keeping up with the new ideas and innovations occuring with younger staff.

    In this video clip, I take a look at the story of the “plasma people” and the “carboard people.” Innovation occurs when different generations — with different attitudes to change — can cooperate and see eye to eye, and take advantage of different strengths. In this clip, I tell tjhe story where this clearly wasn’t the case!

    This is a video clip from a recent keynote that I gave for hundreds of executives from the grocery and consumer products industries, titled Faster is the New Fast: Innovating for the New. High Velocity Customer . This story also became the opening chapter in my book, Ready, Set, Done: How to Innovate When Faster is the New Fast.

    Related postings:

  • read Don’t Mess with My Powder, Dude!
  • Can you run your business at video game intensity?
  • High velocity retail innovation
  • Creativity, trends and innovation in retail, packaging & consumer goods
  • ReadySetDone.jpgMy new book, Ready, Set, Done: How To Innovate When Faster is the New Fast, is now available in print.

    You can purchase it directly through this site, with immediate shipping. In addition, the book is available worldwide via Amazon.com.

    • purchase direct
    • purchase via Amazon.com

    Ready, Set, Done : How to Innovate When Faster is the New Fast is a timely book – it captures the rapidity that is found in our world today, whether it be rapidly shifting business models, technological change, the rapid advancement of science, the emergence of new competitors, and rapidly evolving professional skills and knowledge.

    The book takes a look at the concept of innovation in a new, and well, innovative way, in that it helps you understand how to link your innovation efforts to the high velocity change that surrounds you. It examines the concept of agility: how organizations can ensure they structure themselves to take advantage of and resopond to fast-changing circumstances. It builds upon that message, by examining some of the key innovation success strategies that you should be thinking about.

    Sprinkled throughout the book are various observations that I have made, of some of the innovative practices I’ve seen wtih various organizations, large and small. When you’ve been looking for innovative stories for close to a decade, you discover quite a bit of wonderful insight.

    The book will provide you the inspiration to adapt and change in order to keep up with high velocity change. It will also open up the minds of your staff as to the need for day to day transformation in what they do, how they do it, and why they do it.

    And it will frame the issue of innovation for you in a new and critical way. As I noted in the opening chapter, “Forget about the concept of innovation as simply involving the design of cool new products. In the high-velocity economy, where faster is the new fast, it’s your ability to adapt, change, and evolve, through a constant flood of new ideas, that will define your potential for success.”

    10 Truths about the Future
    March 30th, 2007

    future-pt.jpgIn my keynotes, I often talk about how the rate of change — whether with business models, product lifecycles, skills and knowledge — is speeding up. With such change, there’s a lot of uncertainty within many industries as to what to do next: a senior executive of one client commented to me from his perspective, “….entities are engaged in survival tactics because they don’t know what to do next ….”

    Innovation is all about adapting to the future — and if the future is coming at you faster, then you need to innovate faster. Innovation shouldn’t be about trying to survive the future — it should be about thriving.

    At a recent keynote to executives within the direct marketing industry, I outline some truths as to the future:

    • It’s incredibly fast: Product lifecycles are collapsing. It’s said that half of what students learn in their freshman year about science and technology is obsolete or revised by their senior year. There are furious rates of new scientific discovery. Time is being compressed.
    • It involves a huge adaptability gap: Earlier generations — boomers — have had participated in countless “change management workshops,” reflecting the reality that many of them have long struggled with change. Gen-Connect — today’s 15 and under — will never think of change management issue. They just change.
    • It has a huge instantaneity: The average consumer scans 12 feet of shelf space per second. Most news becomes old hat within 36 hours of emerging. We live in the era of the rapid idea-cycle.
    • It hits you most when you don’t expect it: Every organization must deal with two realities: the rapid emergence of new technologies, the sudden adoption of old-hat ideas. If you want to understand what comes next, study Gartner’s concept of “hype-cycles”
    • It’s being defined by renegades: Increasingly, the future of many an industry is being defined by industry expatriates. When a real innovator can’t innovate within a company, they step outside, form a startup, and spark massive industry change on their own. Before you know, they’ve reinvented you.
    • It involves partnership: Old business models involved asking, “what can we do to run our business better?” The new business model is this: “What can we do to run our customers, suppliers and partners business better?”
    • It involves intensity: We must learn to run our business at video-game intensity: in fast paced markets, we need fast paced business capabilities.
    • It’s bigger than you think: I used to joke about a futuristic GoogleCar. I don’t think it’s a joke anymore. Complacency is a dangerous thing, particular when every organization is faced with constant, relentless external innovation from unexpected competitors.
    • It involves innovation intensity: With rapid change, everyone in an organization must innovate. My biggest frustration in appearing on Maria maria bartiromo’s CNBC Business of Innovation show a month ago, was that it featured a lot of “innovation elitists” who seemed to indicate that only special people can “do” innovation. Wrong : thriving in the future has a leadership that involves everyone in innovation. No idea is too dumb, no opportunity is too small.
    • It comes from experiential capital: With a fast future, you’ve got to learn and relearn. Corporate equity isn’t just money: it’s the cumulative experience and knowledge of the team. While Verizon takes a lot of abuse from analysts for its’ big fiber optic bet, here’s what I see: the CEO stating that the cost of installing fiber dropped 30% in 2005, and that there was a further reduction of 15-20% in 2006. By the end of end of 2006, they expect it to cost 1/2 that of 2005. That’s experiential capital, and that’s an invaluable asset.

    The future is going to hit you whether you like it or not; it’s your approach to it, and how you innovate with it, that defines your future success.

    Links:

    • Can you run your businses at video game intensity?
    • The GoogleCar
    • Gartner’s Hype Cycles

    conveniencestore.jpgBack in October 2005, I identified the major trends that would sweep the retail and consumer products industries, and some of the key innovation methods that organizations should pursue in order to avoid product and service commoditization. You can read the original post here.

    Since then, we’ve seen continued massive rates of change in these sectors. Three weeks ago, I keynoted a major convenience store conference, speaking both to store and franchise owners, as well as dozens of executives from major consumer product companies.

    The retail industry today is now driven by hyper-innovation, rapid technological advance, increased customer expectations, rapidly evolving product trends, and increasingly fickle consumers driven by the rapidity of instant trends.

    How can people turn these trends into opportunity? It comes from innovation — not just with new products, but with business process, store design and layout, rapid adoption of new products, format mix, and partnerships between the retailers, consumer goods companies and packaging companies.

    Some of the trends I highlighted in my talk included:

    • the rapidity of change: The retailer of today is drowning in new product innovations. According to the Washington Post, some 33,679 new products were introduced into the consumer products sector in 2004, up 53% from 10 years earlier. With room for only so many new SKU’s, it can be pretty difficult to keep up.
    • constant format change: There’s a lot of innovation with in-store formats and display technology : constant experimentation with store formats, brand partnering promo innovation, new in-store displays, logistics and tracking studies, and countless other new ways of doing things within the store are all critical.
    • zero-attention span customers: The average consumer now scans 12 feet of shelf space per second. News becomes old news within 36 hours. The average age of a video game player is now 37 years old. Today’s consumer has precious little attention, and you’ve got to work extra hard to get them interested in a product while in the store.

    In a follow article that I wrote for the conference, which will come out in June, I summarized my guidance to the audience: “Get on board the tornado of change in retail and ride it for all it is worth! You should develop a team that has a finely-tuned radar for unique trends, experiments, success stories and innovations. They’re swirling around you continuously, they are constantly reinventing the world of retail on a minute by minute basis – and you’ve got to understand them and capitalize upon them.”

    trendsloop.jpgIn the world of high velocity change, how could you go about actually keeping on top of all the trends that might impact your business models, customers, distribution channels, competitors and markets?

    How do you develop a forward oriented culture that allows you to immerse yourself in the developments occurring in the global innovation feedback loop, and provide for relentless, effective innovation in everything that you do?

    With many of my clients, I walk through the “trends and innovation loop” : it’s a model that I developed a number of years ago. It’s a methodology, and a way of thinking, that can help engender an ongoing culture of innovation. There are several elements to the loop, all of which are always operating full-speed, flat-out:

    • Trends Radar: Innovation comes from the ability to see the obvious, and so the first step in the loop is to establish a form of “trends radar” that keeps you attuned to the future. Everyone throughout the organization should be prepared to keep a constant eye out for new developments and opportunities that might impact your business or market, and that might provide opportunity for innovation. They should also be watching for trends, issues or signs that might indicate a potential threat or looming challenge. Everyone needs to understanding that having good radar can help the organization spot future opportunities and act upon them, as well as do what is necessary to ward off and deal with potential threats.
    • Trends Receiver: Having your people watch for trends, developments, all issues all around them is the first step in the loop; the second is to instill in them the confidence to share these observations with everyone in the organization. You can call this a collaborative capability: a cultural willingness to share information,
    • Trends Transmitter: A good trends receiver is critical to gathering all of the observations that your people have, but without a transmitter the ideas will go nowhere. The trends transmitter is the process of taking the observations and ideas generated from the receiver, sifting through them and finding the ones that might be important. This is a project and strategic oriented role, as well as an embedded cultural insight.
    • Innovation Trap: Many of the ideas that your trends radar might spot and share won’t make sense, and might be meaningless in the grand context of things. But on occasion, critical information will emerge that might spell a brilliant opportunity or a significant threat. When that happens, you must be able to turn those observations into actionable plans. The trap is a formalized or informal process that takes the best potential observations from the trends transmitter and turns them into concrete ideas and plans.
    • Innovation Factory: Your innovation trap can come up with a lot of great ideas, but if you are like many organizations, you’ll fail to see them turn into something that is real and sustainable. Most experts agree that new innovative ideas fail in many organizations, not because of a lack of imagination but due to a basic inability to turn ideas into actionable items. The innovation factory is a cultural willingness to embrace change; it is also the methodology by which new ideas are translated into real business processes, products, activities and initiatives.
    • Innovation Runway: once the ideas have been translated into concrete, actionable plans, you’ll need a method to ensure that they are properly launched and integrated into the organization – that’s your innovation runway. Your actionable plans might involve experts at implementation, project management and other individuals who can effect change within the organization.
    • Innovation Rear-view Mirror: To complete the process, place yourself in a position of continuous re-examination of your innovation success. You must constantly re-evaluate what you’ve learned, what you’ve implemented, and how well it has worked. Use this process to enhance your understanding of how to be innovative, by changing your approach for the next round of the innovation loop.

    A LAST WORD
    The key to the trends and innovation loop is that it is an ongoing, regular process. It must become part of the very fabric of the organization. A key point to the loop – to make it work, there must be a clear understanding that everyone in the organization is responsible for observing important trends that might impact the organization, for generating innovative ideas, and for helping to put those ideas into practice. Without that type of understanding throughout the organization, most efforts at innovation and dealing with the future will be doomed to fail.

    In the high velocity economy, you’ve got to be able to design for a future in which all assumptions will constantly change!

    In this clip from a keynote to a group of global media players, Jim takes a look at the attitudes and capabilities that an organization must develop to deal with rapidly changing markets.

    The key ideas to focus upon? Design for short term longevity; presume lack of rigidity; design for flexibility; build with extensibility; harness external creativity;plan for supportability; and revisit with regularity.

    With the lifespan of knowledge collapsing, furious rates of scientific advance, and rapid new discoveries, no one company can do everything.

    In this clip from a presentation to a cable conference, I’m talking about the new corporate model of the future — one increasingly based on “complexity partnerships.”

    A brand today can go from hero to zero in a matter of months….”

    oldendays.jpgAs the news media gears up for the release of the Sony Playstation 3, one wonders whether they are capturing an increasingly important aspect of the story: has Sony managed to keep any of the brand luster that it once had, or is already irretrievably lost?

    That’s an important question in this world of instant obsolescence. I often tell the story on stage of how my sons — now 11 and 13 — perceive many of the things which were once a part of my life as being from the “olden days.” We’ve actually come up with a pretty long list; just the other day, when looking at a Web site, my youngest asked me with all innocence, “what’s a cassette player?”

    Sony once had a really cool brand name, and the Walkman had deep, deep brand value. Yet Sony seemed to lose its innovative spirit, and started going wrong in a big way. It ended up destroying a good chunk of the brand value behind the Sony name — when I think of Sony now, I think of a company that is slow, behind the times, ponderous.

    Which begs the question : are you operating with enough agility and rapidity in order to ensure that your own brand doesn’t become a “brand from the olden days?”

    The rate at which the Sony brand lost its value is nothing short of stunning — and was due to a series of well known missteps (among others):

    • they failed to keep up with the rapid growth and demand for flat panel TV’s and other hot new technologies: they failed with market agility.
    • they decided that going to war with their customers (by slipping destructive software onto their music CD’s) was more important than developing great technology that caught the next wave of consumer electronics.
    • they dropped the ball on the necessity for continuous operational excellence , as evidenced by a disastrous recall of laptop batteries.

    Are you making similar mistakes that is costing you brand image? You certainly are, if:

    • Your brand looks tired, because it is tired. Case in point — many companies in the automobile industry missed out on the revolution in the passenger compartment, because they weren’t watching what their customers were doing. They were busy releasing automobiles that were some five years behind the living rooms of their customers — and that certainly brought the brand sheen off of some of the biggest auto companies.
    • Customers see a lack of innovation: Consumers today are immersed in a global cloud of new ideas. They’re witnessing constant, relentless, awe-inspiring forms of innovation all around them, as they deal with a flood of new consumer technologies, packaging based product innovation, and ongoing advancements in retail environments, both offline and online. They’ve come to expect that the brands they deal with are at the leading edge, in design, functionality, message and purpose.
    • Lousy, ineffective customer service: Guess what – when it comes to interaction with your customers, they measure you up against the world’s best. If you don’t add up, you are doing some significant damage to your brand equity right there. Customer support is no longer good enough — fanatical support is better.
    • You don’t know that you customers know more about your brand than you do: Your customers today are immersed in the global innovation idea feedback loop. They busy sharing ideas on what’s really cool, and they are even busier taking apart the folly of those who have been left behind. In doing so, they are rapidly reinventing products, services, brands and image. If you aren’t listening, you are guaranteeing that you’ll fall behind.
    • A lack of purpose or urgency: I’ve studied many organizations who still don’t have the key information they need for market agility. They don’t have instant feedback mechanisms which tell them of rapid developments in specific markets. They don’t know how to regroup quickly “when bad things happen.” They still operate blind, as if it’s 1990: their sales force goes into a customer meeting, oblivious as to what that customer has been thinking about them. They approach every day as if it were the same as yesterday; meanwhile, their market and their customers have run away from them!
    • A lack of market and competitive intelligence: It’s the information-age, get it? There’s no shortage of information to be had. Yet I see companies who seem shocked when a competitor drops a ‘bombshell’ announcement — only to realize that they were the only one who thought it was a bombshell. Everybody else knew what the competition was up to, because in this new hyper-connected world, everyone knows what everyone else is doing!
    • A regular series of fumbling missteps: The saddest thing is that Sony has messed up in so many ways, that some customers now look at as if it has a “L” on its forehead. Today, small mistakes can be instantly compounded. Take the concept of compounded financial interest. Now realize that a small PR mistake, a lousy executive decision, or poor execution, can lead to the same type of instant, global brand devaluation — that can compound on itself at an extremely high interest rate!

    A brand today can go from hero to zero in a matter of months. How do you avoid such a fate?

    • Recognize that brand longevity is now a critical issue
    • Ensure your sales, marketing, development and customer support team are relentlessly focused on the currency of the brand
    • Make sure that continuous brand innovation is part of your corporate mantra
    • When confronted with the new and challenging customer, learn from them rather than running away
    • Be incessantly focused on the likely innovations that will come to impact your brand
    • Learn to think five to six product lifecycles in advance — and plan to do them all within six months.
    • Make forward oriented intelligence a critical aspect of what you do.

    farmer.jpgYesterday I gave the opening keynote for the annual manufacturers meeting of the Hearth, Patio and Barbecue Association. Most of the folks in attendance were CEO’s and senior management with a wide variety of companies, and they were keen for insight into what they should be doing beyond knowing that the world is flat.

    There was quite a bit of information to share with them. In the last few years, I have hosted a dozen or more sessions on behalf of the global computer giant SAP. I’ve interviewed the CFOs and CIO’s of a wide range of major manufacturing companies such as Purdue Pharma, Hunt Oil, J Crew, Fossil Watches, Lennox Furnaces, Endo Pharmaceuticals, Adaptec and more. I’ve studied and analyzed what it is that these companies are doing to ensure that they can thrive in a world of rapidly changing markets.

    Several key themes have emerged.

    • Concentrate on rapid replenishment: smart supply chains are the bare minimum for today’s manufacturers. What you really need to do is build an information-partnership with your suppliers and customers, ensuring that you stay lean and mean at the same time that you meet very tight delivery expectations. It’s not about building-to-inventory — it’s about building to demand and build-to-order.
    • Meet the raised bar of expectations : The new math is easy: that purchasing manager you are dealing with is often dealing with the best and the brightest companies on the planet. They will expect and demand the same level of service from you. The bar of expectations is pretty high, and it gets higher every day. At the very least, you’ve got to be able to provide instant, 110% service with everything you do — support, order status, bid prices, dispute resolution. If you don’t, you are increasingly out of the game. Today’s customer has options, and they won’t hang around waiting for you to fix your problems.
    • Focus on planning agility: Gone are the days of sitting back and figuring out how to crank out a production run of 700,000 items. Markets and demand are changing so rapidly that you might need to retool, rework and redo your production capabilities, so that you can respond to something new that is going to happen next week. That’s why you’ve got to ensure that you make agility — the ability to change your own goalposts — the cornerstone of your manufacturing capability.
    • Go maximum on flexibility: Here’s your new production mantra: volatility is the new normal. The last five years have taught us that unpredictability now comes at us in regular waves. If you are a food manufacturer and can’t instantly respond to sudden, new food traceability requirements, you’ll be faced with whopping, new, unmanageable excess costs. If you can’t provide detailed new logistics information to respond to some sudden new security concern, you don’t have the right flexibility. Today’s manufacturers live with the new unknown, and plan for it.
    • Transition single source labor to multi-source skills: Old line manufacturers have different workers that do different stuff. The new guys have transitioned themselves with an investment in training and attitude so that their production team members can take on multiple different projects and assignments. It’s not about single-sourced skills — it’s about ingrained capabilities to instantly shift skills and resources to meet sudden new demands.
    • Have deep insight into rapidity: With the collapse of product lifecycles and wildly fluctuating consumer / customer attitudes, you’ve got to stay on top of how quickly demand might change. All of the manufacturers I’ve studied with have ensured that they have the systems and technology that provide them deep, deep insight into how quickly their markets are changing. This includes CEO’s and executive management who can access real time, high-level snapshots of all kinds of key operating metrics. Sales force and marketing and production teams who know exactly what is going on in the marketplace, minute by minute by minute, and plan accordingly.
    • Concentrate on commonality of business / manufacturing processes: Most manufacturing companies of any scope and scale have had multiple, independently operated plants and facilities, with countless numbers of different production control, manufacturing, planning, logistics and supply chain systems. Anyone with any degree of smarts today has ripped out the junk, and has gone to one, single, comprehensive system to do it all. Time should not be spent on trying to make different bits of code work — time needs to be spent in focusing on the competitive challenges in the marketplace!
    • Implement flexible, just in time processes: What will your customers be buying six months from now? What new products might come out that will blow away your market position? If you don’t know, you should — and you should have the capability to quickly revamp, refocus and redo your business and manufacturing processes on an on-demand basis. The companies I’ve studied have pursued two key goals: ensuring that they can quickly redirect their manufacturing process, and in addition, having an IT staff that can quickly roll out sophisticated new business applications at the drop of a hat. Hand in hand, these two factors allow the organization to respond to the rapidity of market change that is a reality today.
    • Develop better bid or service costing: Forget flying by the seat of your pants when you are putting out a bid on a contract. With margins so tight and with everyone becoming religious on cost management, that’s a surefire way of ensuring that you’ll lose money. Smart manufacturers have put in place the intelligent information backbones that let them bid and cost with a precision that matches the quality of their manufacturing process.
    • Work to become the “supplier of choice: Your key goal today? You want to make it as easy as possible for your customers — whether they are wholesalers, retailers, distributors, end users or other manufacturers — to do business with you. Think of instilling “electronic glue” in your relationship — it’s all about partnering with them and putting in place business processes that makes it so easy for them to do business with you, that they will be unlikely to take their business elsewhere.
    • Be relentless on operational excellence: Globalization means that being great is no longer enough — you have to be even greater. That’s why pursuing and achieving absolutely pure excellence within every aspect of the manufacturing operation is critical — you’ve got to go beyond greatness, to excellence, in order to compete in the massively global, increasingly flat, ever more rapid, customer-empowered marketplace that is today. It’s only by aiming for the highest that you can begin to hope to do what needs to be done.

    All of the CFO’s and CIO’s and senior management teams at the companies I’ve studied have concentrated their efforts on three key words: agility, insight and execution. Pretty cool stuff!

    videogame.jpgVideo game business intensity is coming to all industries.

    This provides some important food for thought — can you run your business at the high degree of intensity that occurs within the high-tech gaming (not gambling) industry? Remember — the key words today are rapid time to market, agility, and execution.

    One of the most innovative companies I’ve met in the last few years is a distributor of computer/console video games – they operate between the video game manufacturers and the retailers. They have one core mission — they make sure that new games get to the store and to the shelf on time.

    The CIO of this organization indicated that 45-60% of the total life revenue stream of a typical video game is made within the first four days of its release.

    That’s why this company is relentlessly, aggressive focused on operational excellence – their entire culture, information system, management structure and organizational responsibilities are completely focused on this market reality.

    Tie this observation into the fact that accelerated innovation and rapid time to market is becoming a key trend in every industry today. With that comes short, sharp shocks of revenue hits, with a good chunk of total lifecycle revenue happening in just a few short days.

    That’s why to thrive in the high-velocity economy, you’ve got to think about business intensity, and the concept of short-term, rapid operational and market excellence.

    Can you do it? If not, you’d better look at your innovation mindset, and begin to adjust accordingly.

    skills.jpgThere’s been a lot of talk about the skills crisis lately. Most of it is focused on the wrong thing — people seem most worried by the fact that a lot of baby boomers are set to retire, and are taking their skills out of the economy.

    That’s a big issue, but that’s not the big issue.

    If an organization is to survive the high-velocity economy, it needs to be doing a lot of innovation with the 10 Unique Characteristics of 21st Century Skills:

    • skills are more specialized. Rapid knowledge growth means that it is increasingly difficult for people to keep on top of what they need to know. That means people need to specialize; knowledge niches are the reality for most professions and careers. As they specialize, simple supply/demand reduces skills availability, leading to skills inflation. It’s going to cost more to get the right specialized skills — that’s a big problem.
    • skills are disloyal. A recent survey out of Belfast indicated that 36% of people indicated that on their very first day on a new job, they were already thinking about looking for another job! I don’t think that’s unique to the Irish — (and I am of Irish descent….) — I believe that it confirms that a massive philosophical shift towards a “job” and “career” is underway. The death of corporate loyalty means an increasing difficulty to get the right skills.
    • skills are degradable. The half life of knowledge is decreasing at a furious rate. Most organizations are discovering that the skills they do have are becoming increasingly useless as knowledge obsolesence takes hold. Skills are ready to walk out the door as soon as they arrive — and if they hang around, their value decreases rather quickly!
    • skills are renewable: Fortunately, out of date skills can be given new life. if people and companies can develop the ability to generate just-in-time-knowledge — a phrase I coined over a decade ago — they’ll learn how to adapt and evolve.
    • some skills have no urgency: The challenge is that a lot of skills don’t really worry about the points above. Some professions, and many staff in organizations, simply don’t think about the reality of skills extinction as a real trend. They have no desire to upgrade, enhance, or change their capabilities. The lack of urgency leads to a sclerosis that impacts the overall ability of the organization to change, innovate and create.
    • skills are disposable: The unique thing about skills today is that companies clearly don’t need staff anymore — they simply need the right skills at the right time for the right purpose. After that need has gone, they will need different skills for a different purpose. In the high-velocity economy, the idea of a permanent skills base is a quaint concept from the 20th century.
    • skills are increasingly portable. That’s the good thing we’ve learned with globalization: with the depth of the emerging skills crisis, it doesn’t really matter anymore where the skills are — as long as you can get them, that’s all that counts!
    • skills can be transferable: the boomer retirement issue is real. Smart organizations are spending big money to ensure that important knowledge is captured, retained and archived.
    • skills should be experiential. This goes back to my ’21st century capital’ post: I think that one of the most important assets a company requires is the depth of it’s experiential capital — that is, the knowledge is has learned through innovation, risk, failure and success. Boost that skills capability and you’ve done something that flows onto the bottom line.
    • skills are generational: We’re going to have a lot of active 80 year olds in the economy as the end of the concept of retirement draws near, at the same time that companies seek skills from bright, knowledge aggressive 15 year olds. We are going to have the longest life-span economy that has ever existed. If we prepare for that culturally and organizationally, we’ve got a good strong plan for dealing with the skills challenges of the future.

    Some months back, in an entry I wrote a blog entry on the concept of “21st century capital”. One item I included was the concept of capital including a “strong skills accessibility capability”, noting that “talent, not money, will be the new corporate battlefront ….

    That’s an important battle, and it’s going to require a lot of innovation and creativity in terms of solutions.

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