The anatomy of a successful business
April 5, 2011
— business success, CEO, creativity
Success is a nice vague term used to define something good. Most people when relating success to business will list profitable, shareholder value or balance sheet as success metrics. Others may look at more idealistic goals such as impact on society, saving lives etc…their dent in the universe.
Whatever the measure of success is there are two common foundations that are present in every single successful organisation:
The challenge is that in today’s rapidly moving global economy these are often in direct conflict.
The reason is that historically innovation IN optimisation of the business was a path to success.
Product innovation and speed to market leveraged optimisation as a platform for improved success.
But product innovation and operational optimisation are no longer sources of radical market differentiation. They are table stakes to remaining competitive.
As a result there is a 3rd element, that has always existed within organisations but never been embraced as the key driver of success. That is creativity.
In May 2010 IBM released it annual CEO study. A study resulting from the face to face interviewing of over 1500 CEOs, from 33 industries in 60 countries. For the prior 9 years the number one challenge nominated by CEO’s as their primary challenge was “Attracting and retaining talent”. In 2010 that changed for the first time in a decade. CEO’s admitted their greatest challenge now was complexity, with 79% admitting they were expecting complexity to increase. The “standouts” as IBM refers to them turn this complexity into competitive advantage through creativity. Creativity in 3 areas:
- Creative leadership
- Reinvention of customer relationships
- Operational dexterity
The significance of this (and other reports) shows that organisations are having to rethink business models. That the business model that made you successful is not necessarily one that will empower future success.
Creativity is in fact the future success engine.
Both Innovation and Optimisation will continue to be critically important. However conventional approaches to both will need to be challenged and calculated risks invested to breakaway from the pack.
Creativity applied to both brings it’s own challenges
- Does the organisation have the culture to embark on radical / creative change
- Are creative thoughts (especially those from outside the organisation) dispelled as whacky, not possible myths
- Does the organisation have a method for working through creative ideas (risk / reward)
- etc etc
Creativity in many cases is seen as a high cost low return activity. Organisations become so focused on this month / this quarter that it’s hard to deeply envision a new business model that may take 3-5 years to achieve that will show no returns in the next 6-12 months. Yet it is through this continuous re-invention that organisations meet their success targets.
Creativity is not just people with great ideas. Ideas are the basis for innovation. Creativity is also the ability for ruthless execution, it’s looking at the status quo and challenging the conventional wisdom.
The organisations that will be successful in the coming decades will be those that embrace creativity both in their innovation and optimisation efforts. It will be those that seek creativity from outside of their organisation, where inside most are focus on operational execution. It is those that take customer delight to a level unseen before that look to creatively exceed customer expectations.
Success will be driven by the ability to make creativity actionable through a cultural launchpad to radical innovation and optimisation for improved business success – however that is measured.