I share the perspectives that we have developed on the long-term forces that are fundamentally re-shaping our global economy and the implications in terms of how all institutions will need to adapt to this every different environment
The forces that are re-shaping our global economy are creating mounting performance pressure for all of us – no one is immune. In times of mounting pressure, we as human beings have natural psychological reactions that are understandable yet can become very dysfunctional. By understanding the psychology of pressure, we can more effectively devise approaches that can help to turn mounting pressure into expanding opportunity.
In the peak of the dot com bubble, business strategy seemed a quaint relic from the past. Business strategy is now clearly back with a vengeance. The real question is: does business strategy have to adapt to changing needs? I focus on underlying economic forces and maintain that a different approach to strategy is required in times of high uncertainty. Drawing on examples from a variety of industries, I show where traditional strategic principles still apply and where they need to change. Most importantly, I lay out a basic approach to strategy that promises to improve both near-term economic performance and long-term advantage.
Companies are beginning to realize that cost-cutting delivers diminishing returns. Executives are reassessing their innovation needs. Traditional forms of innovation – product innovation and managerial innovation are necessary but not sufficient. Growing competitive pressures require a more aggressive institutional innovation across multiple levels of business activity. In the process, the boundaries and even the role of the firm will be redefined. By pursuing this institutional innovation, companies will be much better positioned to pursue product and process innovation.
All large institutions will need to transform themselves in order to respond effectively to the long-term forces reshaping the global economy. The traditional “big bang, top down” approaches to transformation invariably run into the immune system and antibodies that work to subvert change in all existing institutions. I explore an alternative approach – scaling the edge – that is becoming much more feasible given the evolution of the global economy and that is much less likely to encounter the immune system and antibodies that make transformation so challenging.
John Hagel There's a big problem in the world of work: How do you keep your employees both happy and up to date on current trends? John Hagel ...
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