Last month, we looked at the current economic situation and how to use it as an opportunity to discard outdated business models and start introducing new ones. The idea was that by doing so you can better position yourself and your organization to lead the charge into the recovery phase, and into the next stage in the evolution of the global knowledge economy.
We began last month by considering five specific transformations based on our Enterprise of the Future framework. Here are five more worth considering.
Replace the mindset of "doing more with less" with "creating greater value from the resources you have."
Value creation comes primarily from two sources: learning and innovation. Last month we looked at learning from mistakes as opposed to repeating them. In the same vein, you need to move from reinventing the wheel to continually improving the wheel. You can no longer afford to pay for the same effort multiple times. A well-connected brain trust guided by a clearly defined strategy will reduce redundancy and greatly increase the return on your intellectual assets.
Action: Start putting systems and processes in place that make learning and innovation happen by design rather than by accident. SRI International has been doing this for years. Find out how by reading Curt Carlson and Bill Wilmot’s book, Innovation: The Five Disciplines for Creating What Customers Want.
Move from a posture of sense-and-respond to one of "co-creating."
Stephan Haeckel’s Adaptive Enterprise brought us from make-and-sell to sense-and-respond. In today’s environment, even sense-and-respond may not be enough. Enabled by massive social networks with memberships numbering in the hundreds of millions, the cycle of listening to customers and filling their wants and needs is both rapid and continuous. You need to get into your customer’s mind, and let your customer into yours. The same goes for your suppliers, even your competitors.
Action: Trash the stupid customer surveys, along with the sales presentations. Have an ongoing conversation instead. Ask thought-provoking, open-ended questions and listen intently (the right way to do knowledge capture). Focus on needs and desired results, and find the most efficient and effective way to achieve them.
Added bonus: Do the same internally, from staff meetings to budget planning to performance reviews. Get knowledge flowing in all directions.
Replace mass and niche market mentalities with "N=1."
The notion of N=1 is discussed at length in C.K. Prahalad and M.S. Krishnan’s book The New Age of Innovation. It means every customer is unique and discriminating in its requirements. That is driving suppliers to total customization, providing customers with tools, platforms and knowledge to help them build their own solutions. It is where co-creation really comes into play, in which customers become not only drivers but also key sources of innovation. If you play your cards right, you can take a customer-built solution and morph it into other products. Make sure your customers share in the reward. They are now part of the team.
Action: Think hard about building maximum versatility into your products and services. That doesn’t mean overwhelming your customers with options. Rather, make it easy for them to configure a solution unique to them. Then be prepared to act, as one or more may suddenly go viral.
When asked, "How many employees do you have?" say, "We draw from a talent pool of 1B*(R=G)."
I’m asked this question a lot. And I enjoy the strange looks I get when I give the answer. 1B means one billion interconnected minds (actually, it’s up to 1.3 billion and counting). R=G means "Resources=Global," also taken from Prahalad and Krishnan’s The New Age of Innovation. During times like this, underutilized resources are in oversupply. Smart, agile companies will make the most of that opportunity.
By the way, we need to tell our government and union leaders that the very notion of a job is passé … so 20th century. Think about it, would you enter into a labor contract with your brain? That’s what we’re trying to do when we force a 21st century knowledge work force into a 20th century business model.
Action: Do everything you can to eliminate the words "job" and "employee" from your vocabulary. Instead, your core team should consist of close associates and stakeholders who bring key competencies to the table. The rest is outsourced to anywhere on the globe where the work can be performed efficiently and effectively.
Shift your performance focus from profits to value creation.
Many will agree that the nearsighted emphasis on quarterly profits was, among other factors, a major contributor to the current economic crisis. The old business models almost always start with profits and work backward. Lots of innovation has occurred along the way, especially in the financial sector. Unfortunately, most of it was directed solely at "making the numbers work," as opposed to creating long-term value.
Instead, wealth should be viewed as a measure of the value you create, deliver and receive. Such value is usually hidden. You can uncover it in abundance in the conversations we talked about in Transformations 7 and 8.
Action: Make a concerted effort to free up the hidden value in your knowledge assets, especially your customer capital.
When the going gets tough, the natural inclination is to hunker down. If you have any belief at all in the global knowledge economy, take a deep breath and start making these transformations now. We’re just getting started. More big changes are on the way, so you might as well help co-create them, and be among the first in line to reap the benefits.