What will business look like in 2009
Umair Haque maintains a fascinating blog where he follows the direction of business and his perspective on the changes in the economy are interesting to us at CommunityLend. When you are breaking new ground, it is useful to be able to relate to grander changes going on in the world.
Tomorrow will not be like yesterday. This is no mere recession tectonic global shift in savings, consumption, and investment. Today’s macropocalypse is a rupture in the global economic fabric – and the next half-decade will be spent reweaving it. It is not a temporary departure from business as usual, an illness – it is a structural transformation, a lasting change
These are powerful statements. He goes on to summarise a few of the posts from 2008 where he used certain market leaders as examples to point out the difference between old and new.
Tomorrow’s market leaders have new DNA. We’ve spent the last year identifying next-generation leaders – from the Obama campaign, to Threadless, to Zara – and learning from them. They look and feel radically different because they were built for 21st century economics, not 20th century economics.
The points being made here are fundamental and it is hard to disagree with them. The role of marketing is exposed as fulfilling what he describes as consumer addiction by using Madison Avenue tactics to push products. Whereas the role of marketing in 2009 is about producing value with that value being defined as the value felt by the customer. There are no more consumers – there are real people seeking value.
The role of corporations in this new world is one of innovation – innovation where companies will offer “higher level innovation” which provides that real value. What is the role of innovation in a world where greater investment will flow to reinventing moribund industries?
In the 20th century, innovation was about processes, products, and services: that’s why most boardrooms are still investing in lower-order innovation. At the Lab, we’ve found that higher-order innovation – business model, strategic, and management innovation – is associated with significantly more powerful and durable value creation. Think Apple (reinforcing simple product innovations, like the iPod and iPhone, with disruptive new value chain designs, via iTunes and the Apps Market).
The article might be a bit philosophical, but we are experiencing new times that have not been experienced during the lifetimes of most of us. It is becoming clear this is not a minor correction but rather, a dramatic shift in business and the old axiom of “it is not business as usual” has never been more relevant than now. CommunityLend intends to be part of that shift.