We live in an extraordinary time! You have more opportunity in front of you than ever before, you have more career flexibility and freedom than your parents could ever dream of, and tomorrow holds even more promise than today. However, there is one very big caveat—success depends on some very specific abilities, and many people are going to fall short.
Today’s business world is driven by what I like to call the “The Innovation Economy,” and it is very different from the world of the past. The Innovation Economy places value on a very different set of abilities, it rewards different behaviors, and its winners and losers will be different from what we have traditionally come to expect. This new economy, with its new rules, has already dramatically affected individuals, companies, and entire industries. Today, I am going to take a close look at what individual professionals need for success. In later articles, I will also examine the Innovation Economy from the standpoint of leaders, companies, and industries.
An entirely different world – Yesterday vs. Today vs. Tomorrow
“Pure chaos!” That is the way most people describe today’s business world. There is a blinding pace of change, tremendous uncertainty, and the rules just are not clear. However, some are able to recognize the chaos as an indicator of unparalleled opportunity, and these individuals build success by navigating the connection. What is different about them and what do they know that others do not?
The first big difference is that they are very realistic about where we are; they recognize that the world of the past, the world of our parents’ generation, is gone and it is not coming back. Our parents worked in the world of the 1950s, 60s, & 70s, a world with far more defined rules, and much more certainty. In our parents’ generation, a successful career meant being with the same company for 30 or 40 years, advancing based on seniority and loyalty, and ultimately retiring with a gold watch and a good pension. This was the world of the “company-man,” and there was an understood covenant between employers and workers.
Then, in the 1980s, the covenant was broken. This was the emergence of the “Me Inc.” era, when the workforce became much more diverse and complex, employees started to think in terms of their own career development (not necessarily linked to a particular company), and employers started thinking of workers as more interchangeable and transient. That led to dramatic increases in flexibility and opportunity, but also significantly less career certainty. Employees began taking on responsibility for their own professional growth, career planning, and retirement, while employers started thinking more about the bottom line.
With the new millennium, the business world shifted once again, thanks to three key developments. The Internet reached critical mass (bringing us into a truly interconnected world for the first time), workflow and process automation technologies came into use (which allowed large-scale collaboration and decentralization of work across geographies), and social media and mobile technologies emerged (which acted as an accelerator to super-charge the pace of change).
The end result: today many professionals face global competition, there is virtually no protection, most employers see little value in maintaining long-term (ageing) workers, there is increasing focus towards cost-efficiency, and there is a never-ending cycle of disruption and tremendous uncertainty driven by a relentless pace of change. However, those who take the right perspective also see how the environment today is driving break-through business opportunities, and they understand how to use that insight to leverage opportunities for themselves.
The chaos vs. the opportunity
Let us look at some contrasting views.
- Today’s business environment is incredibly volatile and risky. In 1920, the average Fortune 500 company had been in business for 67 years, while today the average Fortune 500 company is only 15 years old. The speed at which companies rise and fall is faster than ever before, and some believe that by 2020, 75% of the Fortune 500 will be companies that we have not even heard of yet.
- However, this turmoil also frees up markets for new and novel ideas. Barriers to entry are lower than ever before, and it’s much easier for new players to compete against the established old guard. Digital media is an excellent example – In 2011, digital music sales outstripped physical sales, much of the younger generation has never owned a CD, and by 2016, e-books will account for half of all consumer book sales. In addition to creating new industries, this shift has enabled self-publication for music and books; thus providing enterprising musicians and writers with more freedom from the established publishing and recording industry.
- Once stable industries are under threat and nothing seems safe. Law was once a top field, and a very secure career path. Yet in 2007, major law firms started offshoring work to India, paying $25 per hour, instead of the $160,000 annual salary for junior associates. Now we’re seeing large numbers of legal jobs off-shored, resulting in employment challenges for new graduates from even the most elite law schools, as firms eliminate much of the routine work once done by entry-level attorneys.
- However, this new thinking inspires innovation. The new perspective about the nature of legal services, and new potential business models has opened market opportunity for LegalZoom and other online providers. Company founders recognized an opportunity to build a business model around standardization, and providing routine legal documents and common services at a fraction of the prior price.
- There are no rules to follow anymore. Companies are heralded as a “success” one moment, and then quickly fall from grace. Facebook and Twitter were seen as giants in social media and innovation, having created entirely new industries; yet in 2013, neither company made Fast Company’s list of 50 most innovative companies. Why? According to Fast Company’s editor Robert Staflan, “Neither produced innovations worth celebrating. A spot on the list is not a tenured position.” In fact, only one-third of companies generally return from one year to the next in the most innovative listing, and in 2013, only 7 returned.
- However, this constant rethinking and questioning of the established clears the way for new players and motivates constant innovation. Most of the companies on the 2013 list were new players, and returning companies (like Nike, Amazon, and Apple) only did so by delivering even more break-through thinking. This means that new players have as good a chance, or perhaps an even better chance, than the established. Furthermore, there is a hunger in industry for employees that can deliver truly innovative thinking.
Understanding the Innovation Economy and what’s valuable today
Innovation economics is a theory that was developed in the 1940s, however, I believe we are only now seeing the full impact of the concept. In an innovation economy, knowledge and innovation drive value, technology is an accelerator, and entrepreneurial thinking is rewarded. We now live in an interconnected world—social media and other technologies foster rapid communication, idea sharing, and collaboration, and geographic barriers have largely collapsed, enabling competition on a global scale.
As a result, companies and consumers now look globally for almost every product and service, and new and innovative players are able to get attention very quickly. This means that innovative thinking is quickly recognized and rewarded, and anything that can be seen as a commodity (i.e. manufacturing, IT services, and even routine legal services) quickly attracts price-based competition and falls to the lowest cost provider.
In this world, where knowledge and innovation are at the center of the value proposition, professionals who are able to embrace (and drive) change, who are nimble and agile in their thinking, who are agents of innovation, and who can constantly learn and reinvent themselves, will find rewards. All others will find themselves competing based on price in an increasingly crowded marketplace.
Getting started in your Reinvention Thinking
Success in the new Innovation Economy is a matter of understanding how the world has changed (and how it will continue to change), recognizing that value is now driven by knowledge and innovation, and designing a plan to leverage this change as a means to personal career success.
Here are five key steps to start using Reinvention Thinking for your own success in the Innovation Economy.
- Let go of the past – Recognize that the “good old days” will not return. Many are stuck in a cycle of denial or “wishful thinking,” and this prevents them from taking the steps necessary to move forward.
- Establish your vision – Your vision is your anchor, your road map, and your compass. At times of uncertainty, a well-formulated vision of what you want to achieve in the near, mid, and long-term is one of your most important assets.
- Understand your value proposition – Take a critical look at your skill-set, experience, and aspirations from the perspective of an economy that values knowledge and innovation. Which of your skills are truly high-value, and which are commodities or outdated skills? What changes might be needed to increase your value proposition?
- Establishing your success strategy – Armed with your vision and your value proposition, it is time to establish a strategic plan for success, and there are many possibilities, depending on your situation. You may choose to make very substantial changes right away, or to take a more modest path towards achieving longer-term goals. In either case, it is critical to have a plan that looks ahead at the next several steps towards your vision.
- Plan to pivot and reinvent – The most critical part of success in the innovation economy is the ability to learn, evolve, and adapt, and that needs to be part of the planning as well. As you proceed, there will be further changes in the environment, you will learn new things, and your goals may indeed shift. Part of your go-forward process should also include checkpoints for evaluation and course adjustments.
Reinvention Thinking for success in the changing economy is the most common area that I work with my clients on—whether it is seeking success or advancement in a current positing, planning the next career move, successfully navigating a career transition, or establishing or growing a new business venture.
If you would like to talk more about how Reinvention Thinking might work for you, feel free to contact me and set up a complimentary coaching session to talk more. I would love to hear what is on your mind.