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The importance of innovation in the era of the "new normal"

09NextEconomy.jpgThe CEO of the American Chamber of Commerce recently caught the essence of the state of our “new normal“, when he observed that we’re in the midst of “this move from a really bad economy, to the next economy.”

What is the shape of that next economy? While we can’t be certain as to the specifics, we do know that it is going to involve a lot more high velocity business change. If that’s the case, then the ability of an organization to respond to rapid, relentless, continuous change that will increasingly define its future success.

And so as we climb our way out of a global recession, it’s perhaps a good time for business organizations to ask themselves if they’re well positioned for what comes next – whatever that might be!

Are they? I’m not so sure. In the last decade, as a futurist and innovation consultant speaking at countless numbers of global conferences, I’ve had the remarkable opportunity to spend time with the senior leadership of some of the worlds most innovative, world-class organizations, ranging from Rockwell Collins and General Dynamics, to the Walt Disney Corporation, Lincoln Financial and Ingersoll Rand, among others.

In doing so, I’ve witnessed first hand what innovation leaders are doing to ensure that they can survive and thrive in a period of rapid economic change.

What are they focused on?

  • Mastering fast markets: they’re immersed in a world in which product innovations occur so fast that “time to market” is now measured in weeks rather than years.
  • Product innovation: They’re busy ensuring that they have a continual pipeline of new products or services that will generate new revenue as old revenue is displaced.
  • Dealing with disruptive technology: They’re dealing with the fact that a furious pace of technological innovation continues unabated, with the rapid emergence of new technologies that change entire industries: what happens, for example, when our cell phones and smart phones become the credit card infrastructure of the future?
  • Customer engagement: They are involved in rapidly changing the method by which they engage with their customer base and re-energizing their brand, knowing that consumer mindset has become increasingly difficult to capture as the relentless march of social networking technologies continues unabated.
  • Business model innovation: They are busy innovating with business models, knowing that the only certainty for future success is uncertainty. Consider Wizzit, a South African bank that is based entirely upon the exchange of text messages. That business model disruption right there!

No matter what type of high velocity change organizations are dealing with, in many cases it comes down to their adaptability and capability to share ideas, collaborate, and form ‘fast teams’ to tackle new opportunities and challenges.

It’s not just these areas that they are focused upon. They also know that their ability to compete on the global stage requires that they operate with a startling degree of efficiency. They ensure that they have a cost structure that permits them to operate in a world of razor tight margins. They know that their success increasingly comes from the existence of an intelligent, up to date network and technology infrastructure that provides the foundation for their innovation engine.

That’s the new world of business, and we’d do well to pay attention to it. The reality for many organizations going forward is that they must learn to act and operate at the same high degree of razor-sharp clarity of action as any other global competitors. That means squeezing out every drop of potential efficiency as operating margins become thinner. Managing with continued ongoing cost input volatility, particularly as a result of the wild gyrations in global currency markets. Learning to collaborate and generate innovative insight at blinding speed.

In a nutshell, many companies must operate more efficiently, and learn to contend like global competitors. They need to learn to scale, act fast, innovate fast, and compete fast.

To do that, they’ve got to make sure that they’ve got the necessary foundation in place that allows us to do what the global competition does.

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