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 Large
corporations and multi-diversified conglomerates in the post World
War II industrialisation period developed distinctive, inflexible
organisational structures. Hierarchies were clearly defined and
there was near-metronomic efficiency in the process of mass production.
With the top management sketching out a long-term strategic vision,
the workforce executed specific roles and responsibilities, with
no upward mobility or timely rewards. Issues of motivation, human
capital management and job enrichment were rarely addressed. Innovation
and creativity were almost non-existent.
The emergence of services-based industries helped
break down certain rigid corporate structures and later the growth
of the it and telecom industries unleashed a progressive change
in company policies and cultures. There was greater empowerment
of employees. Firms started addressing business and work-related
issues beyond the usual standardised pattern. They were willing
to experiment with newer ideas and thought processes. However, it
was only during the raging new economy boom that upstart dotcoms
and internet start-ups blazed an innovative trail.
The culture of change, innovation and creativity
during the nascent stages of the new economy was also fostered by
a number of external variables like easier availability of seed
and venture capital, encouraging mentors or promoters, and sunrise
industry backing. New-fangled business and management philosophies
were espoused by most of the early successful firms. Flexible timings,
"work-away-from-home" options, ownership in the form of
stock options, entrepreneurship development characterised the "creative"
workplace culture. Expectedly, mere cosmetic creative "elements"
did not build up the requisite fundamental pillars for establishing
long-run firms. While some of these companies might have been fleet-footed
and proactive, they were not necessarily adaptive.
The bubble burst has made the current business
environment more volatile and has raised posers about the adaptive
nature of established firms as well as those with long-term promise.
How to build capabilities that have long-term success potential?
How to get back to fostering the 'intrapreneurial' culture? How
to redefine innovation so that it goes beyond short-run manoeuvres
of marketing professionals?
It can be observed that some of the great firms
of the past few decades have actually ridden the tough tidal waves
of the emerging 'information economy' better. While they might not
have been swift or adaptive enough to evolve during the boom phase,
they were keener about making incremental changes in order to consolidate.
With their acknowledged competencies and capabilities in place,
they seem the best placed to avail of new opportunities.
Apart from the best practices that they have
set in place to be high performance companies, these firms have
to be more flexible than rivals. The top management needs to be
more proactive and discerning to identify individuals who have the
innate skills and talent to make the company more dynamic, adaptive
and resilient in the face of external volatilities.
Firms need to understand that striving to achieve
sustained efficiencies alone will not ensure competitive advantage
for long. In time, they will have to factor the unpredictabilities
of business and economic change into their plans. The thinking that
innovation is the preserve of the top management has to change.
The innovative spirit has to permeate across all levels. For an
innovation to see the light of day, a bi-directional channel needs
to be established. For an innovation to become a breakthrough in
the form of a killer application or product or service, the company
itself should have the wherewithal to generate resources.
Unleashing creativity to build capabilities
is not an organisation-centric agenda alone. While insulating a
firm from economic and competitive forces, a breakthrough product
or service can bring growth in the industry and kindle a social
revolution. Encouraging innovation is not a capital-intensive process,
but a galvanising force that can lead to large dividends in future
in the form of increased goodwill, greater brand equity and an enduring
legacy.
The author is the Chief Executive
Officer of Cap Gemini Ernst & Young's
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