A moment of truth
The combination of widening budget deficits, an aging population and increasing competition from emerging markets is set to exacerbate the imbalances in public finances in developed nations around the world. There are no easy answers – pure belt-tightening might have a huge social cost. Achieving significant growth seems to be the only alternative.
Craig Barrett, former CEO and Chairman of Intel, has formulated it like this: We cannot save our way out of the crisis, we must innovate it!
Yet it is more than innovation in products and services. Innovation needs to comprise business models, organisation processes, public private partnerships, government services and the social sector. Ultimately we will have to innovate innovation itself. A combination of productivity increases and incremental and game-changing innovation will be the ingredients for growth and future prosperity. The time may also be over where we the West were the hub of the world for understanding and managing innovation. As the late and much missed C K Parahalad has demonstrated in his influential book The Fortune at the Bottom of the Pyramid, new ways of innovating are being created in emerging nations that might revolutionise innovation in the developed world. In the recent special report on innovation in emerging markets in The Economist Adrian Wooldridge provides impressive indications for a rapid shift in the centre of gravity for innovation in a world turned upside down.
What might be called “Innovation 3.0” must include system-level transformation taking into account the increasing interdependence and complexity of companies, economies and social systems. Innovation 3.0 is not just a quest for competitive advantage by individual institutions, a strategy game or sand table exercise for business and policy makers – it is the lifeline for 21st century society.
Hence, this is the moment of truth for management. Transformation, managing and accompanying profound change in organisations and reinventing the institutions of our society is an unprecedented challenge. Will this require reinventing management itself as postulated by a recent book from Julian Birkinshaw (Reinventing Management, Smarter Choices for Getting Work Done, Jossey Bass, 2009)? Or does it mean – as Fredmund Malik would argue – to finally apply the fundamentals of management as established by Peter Drucker and other great management thinkers (Führen Leisten Leben, Campus 2006)?