This past year has been a revealing one. Many businesses, struggling with the sputter and stall of the global economy, have started to realize an unsympathetic truth. This economic situation doesn’t represent a temporary, recessionary valley between two growth peaks. It is a plateau – a new normal.
Look around you and the evidence is in plain sight. Yet, for all the pain, we do see a few smiles. For every bucketful of firms who are consolidating or losing ground during this economy, there are a handful of companies who are winning. Some businesses are even booming.
Closer analysis reveals why. The losers are looking backwards, and hoping for a return to times when their business and capital investment models were viable. They spend precious hours trying to predict a V, U, W, or L shaped recovery.
The winners, on the other hand, have cut their losses and gone back to basics. They are prudent, willing to eschew the status quo, and don’t blame Europe or China for their problems. They realize that every problem is actually an invitation to change –and to learn.
If this is, indeed, a new normal, and we won’t see too many governments, organizations, and individuals return to the profligate ways of the past, what does the playbook for the future look like? What business investments will generate the best returns during this new, hard economic plateau?
I have five suggestions. In the future, winning businesses will invest in:
- Knowledge- It is our pace of learning that drives our pace of change. Leaders must make investments that enable a growth of ideas, innovation, and creative solutions to new problems. Learning must be a daily activity and embedded in the job. Forget the old fashioned training programs. Invest, instead, in those things that increase learning on the job and provide unique experiences, such as staff rotations and peer dialogue.
- Customer intelligence – Customers today are more aware and better informed than ever, and a globalized world means businesses are no longer protected by domestic boundaries. You now compete both on quality and price with the best in the world. How should you respond? By letting customers drive your change. Listen carefully to them. Involve their ideas and feedback in product development, and don’t waste money educating them. Instead, invest your money learning from them.
- Relationships – Invest in your alliances. The mantra of today’s economic world is “we win together, and we lose alone.” Find your allies, cooperate to increase your reach, and reduce your cost. Outsource and reduce overheads. A lean and collaborative business that plays to its strengths has a better chance of navigating the future, when compared to a siloed, lumbering megalith. In this new world, collaboration trumps complexity any day.
- Experimentation – For 30 years, authors and consulting firms have tried to convince us that success can be copied. By adopting a GE process, we can become the next GE. Sounds incredulous, but it’s true. We have spent billions of dollars and millions of hours trying to be someone else. The age of best practices is dead. The age of experimentation is upon us. Now, invest the same money and time in trying to be your best self. Invest in developing your own methods, products, and strategy. Remember, inquisitiveness is still a virtue, but copy less and experiment more.
- The Employment Contract –Arguably, this factor is the most important of the five. Today, data tells us that the contract between employee and employer is at its weakest point in recent history. In good years, voluntary employee attrition goes through the roof, and in bad years, layoffs do the same. Trust is eroding, and eroding fast. This situation needs our focus and investment – and just throwing more money at talent isn’t the answer. If they don’t enjoy coming to work, more money may make their bodies turn up, but their minds will still be in bed.
Invest, instead, in helping employees achieve their goals, both professional and personal. Invest in their ideas, and they will see these ideas through. Also, leaders must train managers to supervise employees in a changing environment. Specifically, leaders must create a more assertive, empowered, and purposeful professional. Innovate the workplace, encourage flexible working, and champion diversity. Realize that if only half your headcount is engaged, the other half on your payroll are actually benefiting from your competition.
About the Guest Blogger:
Gyan Nagpal is a Senior Fellow, Human Capital at The Conference Board. In this role, Gyan supports the Human Capital Practice which includes The Conference Board Human Capital Exchange™, research, conferences, webcasts and programs in a broad spectrum of human capital areas.
In addition to serving as a Senior Fellow, Gyan is also CEO and Principal at PeopleLENS Global Associates (PLGA Consulting), which offers strategic H.R. support to fast growing companies across the world. Based in Singapore, PLGA Consulting partners with CEOs and HR Heads who seek to move beyond existing HR processes and programs, and create highly commercial talent strategy. The PLGA method acknowledges market differences, remains anchored in business realities and helps align discretionary HR investments with a company’s commercial ambitions.
This post originally appeared on The Conference Board Human Capital Exchange Blog on October 29, 2012.