I recently did a swing through a number of major innovation consultancies and the buzz this summer is that top-line growth is again a topic of conversation inside US and European corporations. The obsession with cutting costs and survival is ebbing and CEOs are looking to the Fall to begin boosting sales and revenues.
This is good news for the innovation and design industry, good news for consumers and good news for the global economy as a whole. We’ve been in lock-down mode for nearly a year, just trying to get by. With the crisis in the financial system in abeyance for the moment, stock prices rising strongly, housing showing signs of life in the US and the UK and China and India pulling the global economy ahead, animal spirits are rising in the managerial class once again.
Of course, this is the same managerial class that got us in this pickle. Strangely, most of the CEOs of most banks and most corporations are still where they were two years ago—in the corner office. To deal with the New Normal of this recovery—and this recovery will be very different from others—we need fresh leadership and insight.
One of the big differences in this recovery is that the US consumer won’t lead it. The US consumer is being replaced by the Chinese consumer as the economic driver of first resort. At least that’s the hope and theory.
Which brings us back to innovation. There was a huge embrace of innovation by US CEOs from the mid-90s to the period before the Great Recession but much of that has turned out to be superficial. The same two dozen corporations make up virtually every list of innovative and design-centric companies. Most corporations have launched innovation intitiatives, only to silo them off and contain them. Most CEOs have championed innovation programs only to leave it to others to lead them. Most managers talk about innovation and actually mean technology. They don’t understand the critical cultural and social science components of it.
If the US is to stop its slide in the global economy by reseting its manufacturing base and advancing its service sector, CEOs will have to deal seriously with innovation. This generation of chief executives, with a number of important exceptions, has not. They should be replaced.
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