The New Competence of the Knowledge Age
To discover the future,” influential strategy expert, Gary Hamel says, “it is not necessary to be a seer, but it is absolutely vital to be unorthodox.”
By “unorthodox” Hamel refers to the ability to think and create outside the confines of existing categories, and the willingness to constantly re-examine and challenge long-standing legacies and sacred cows. Unless you can get your organization to challenge assumptions and think outside formulaic patterns and solutions, you cannot expect different results or steer it into a different future.
The larger point here is that the need for “unorthodox thinking,” outside formulas and prescriptions, is not just for Bill Gates and his friends but, to varying degrees, for all of us doing business in the knowledge age. So if your members and customers are declining or you want to come up with a plan to grow, don’t look to more products and formal strategic planning for answers. First build the capacity for innovative, strategic and market-centered thinking, and frame an open and collaborative discovery.
“We are moving from an industrial society where wealth is created by products to a knowledge society that builds wealth through partnering and strategic solutions,” says leadership and strategy expert Michael Maccoby in his book, The Productive Narcissist: The Promise and Perils of Visionary Leadership. The 21st century requires thinking that is no longer linear. Success is based on the ability to constantly discern, re-organize and leverage “pieces of a puzzle that are constantly shifting.” Maccoby calls this type of thinking, Strategic Intelligence.
Crafting strategic solutions rather than producing programs requires an entirely different set of competencies and ways of thinking. You are now competing on the strength of the value you can create and the innovation you enable. Bureaucratic, product-driven organizations, however, are not set up to create solutions or reward resourcefulness and innovation. They are driven by linear, inside-out thinking and, often, tactical intelligence. Think about the product development process in most associations and other bureaucratic organizations.
The basis for most of their programs, products, services and relationships is essentially transactional and the mode of development, from the inside-out. Products are developed primarily through internal committees and processes, and sold mainly individually without consideration of how they might be applied and integrated into solutions. The association then has to invest heavily in persuading members of the value of its products and services. Maccoby would call this an industrial- age model.
Staff in this type of organization is trained to develop products within existing categories; through defined processes and roles in the hierarchy. Would they have the foresight, market instincts, understanding of customers and creativity that led Amazon to continuing growth and transformation from book retailer, to one-stop shopping community and leader in cloud computing? Would they be able to see the value of assets, outside their current use, leverage it for a different market and through a different model, and launch a new business? Sermo did. Originally an online network for physicians, it tapped the value of physicians’ case-based discussions for industries that did business with health care to create a new corporate services business line. Corporations, in essence, paid to access these conversations and have the added benefit of Sermo’s strategic advice on how to best interpret and apply this intelligence to enhance their new product development.
The intelligence capabilities needed to perform routine tasks or make product and process innovations within the same model and categories are very different from those needed to perceive and act on opportunities that do not fit in existing categories; craft new solutions or reinvent entire models. And yet the latter is what is needed in a fast-paced, unstable and unpredictable knowledge-based economy.
“For change has changed,” says Gary Hamel in his recent book, What Matters Now. “No longer is it additive. No longer does it move in a straight line. In the twenty-first century change is discontinuous, abrupt, seditious.”
Like it or not, the fundamental bureaucratic framework of most associations is at odds with today’s market dynamics and mainly engenders and nurtures capabilities for managing processes and innovating on a small scale along the narrow confines of products and services. In customer-centric, entrepreneurial and innovative companies like Amazon innovation is continuous and has the freedom to reinvent entire industries and categories rather than be limited by them.
The pursuit of constantly new solutions to customers’ problems re-shapes an organization’s mode of thinking and doing business. The innovation process does not end with the launching of a new product. Instead, every launch of a new initiative and every interaction with customers become a learning opportunity and pivot for the next innovation.
Compare the tenet of conversations and implicit mode of thinking in conversations between conventional associations and a company such as Amazon.
Out of the approximately 120 topics on ASAE’s Executive ListServe in one month, none dealt with the strategic dimensions of an issue or the customer. Instead they included largely logistical and operational concerns such prospective board member packages, product/program evaluation tools, conference speaker remuneration, rogue board members, electronic board books and changing from fiscal to calendar year.
These topics dominate internal conversations and a good part of public discourse in the association sector, among others. They represent what is what is considered “real business,” rather than luxuries, in a great many associations. They also illustrate why most associations have not made leaps in market value and competitiveness but are stuck, instead, on incremental improvement, which is the fast path to irrelevance.
Compare the typical association mode of thinking and concerns to those at Amazon’s. In an interview in Wired Magazine, this is what Jeff Bezos had to say about how his company develops new products and innovates:
As a company, one of our greatest cultural strengths is accepting the fact that if you’re going to invent, you’re going to disrupt. A lot of entrenched interests are not going to like it….they’re going to create a lot of noise, and it’s very easy for employees to be distracted by that. It could be criticism of something that we actually believe in. It could also be too much praise about something that we’re not doing as well as the outside world says we’re doing it. We’re going to stay heads-down and work on the business.
In short, Bezos embraces and encourages disruptive thinking; commits to it and develops strategies for overcoming the obstacles to it. Their innovation and growth stem directly from that thinking. Conceptualizing new solutions and innovative products do not require formal committee meetings and facilitators. The thinking and values that give rise to them are the language spoken every day. This is how Bezos describes the process that led to their leadership role in cloud computing (in the same Wired article):
Approximately nine years ago we were wasting a lot of time internally because, to do their jobs, our applications engineers had to have daily detailed conversations with our networking infrastructure engineers. Instead of having this fine-grained coordination about every detail, we wanted the data-center guys to give the apps guys a set of dependable tools, a reliable infrastructure that they could build products on top of.
The problem was obvious. We didn’t have that infrastructure. So we started building it for our own internal use. Then we realized, “Whoa, everybody who wants to build web-scale applications is going to need this.” We figured with a little bit of extra work we could make it available to everybody. We’re going to make it anyway—let’s sell it.
This is not the era of narrow production where your staff crafts the same line of products from inside isolated cubicles. Discerning opportunities and crafting unique solutions requires interpretive, analytical thinking—recognizing assets and sources of value in the least likely places.
Which of the two types of conversations and cultures do you think is most likely to generate the innovations and solutions that will make them indispensable to their customers and markets?