It is both sobering and exciting. 

If you are running anything, you need to think about this. There is a shift going on, which produces 'anomalies' - where what you did that used to work, doesn't work. The action suggested by really good management theory, well-executed, simply fails. The telling graph - 50 years of inescapably declining returns: 

In other words, 'management' isn't working at the large scale, even while some of it is still necessary in the here & now. That's a tough systemic issue to be caught up in!  

While Denning is talking about macro issues and mostly large corporates, this is a real challenge if you're in the middle of your career and wondering what's going on. It feels personal, as if all your training makes you as irrelevant as a carpenter in a semiconductor factory. 

Symptoms - what 'old paradigm' managers utter about the new paradigm: 

'I don't do twitter'

'Being an executive is all about leadership'

'I'm on the way up'

'I'm great at innovation'

'I'm a world-class manager'

'I've been an expert at ... all my career'

'I don't have time to just navel-gaze'

'I don't go for that hoodoo-voodoo stuff'

'It's wrong'

'It will pass'

That's part of the symptomatic vocabulary of those in the old paradigm. Perhaps it won't matter for a lot of executives, for quite a while, embedded in some large organisations, but you might need to explore these ideas, just to get a sense of what you could do now to invigorate your company, focus your team or generate a new career. Someone else may be 'disrupting' your industry right now. 

1. Explore how 'Design Thinking' is both a fad and a real revolution. 

2. Find out which of your competitors is 'disruptive' and how. 

3. Ask your most creative Gen Y's how long they intend to stay. 

4. Examine how many of your customers use you regardless of location. 

5. Go back to a colleague who proposed something 'ridiculous' and understand her idea fully. 

6. Use your organisation's social media reputation to generate at least one new business idea.

7. Innovate ON a process; Innovate AS a process.

The future is not an extrapolation of the present. To survive it you have to swallow some unpleasant truths about the overall system of management that can feel like a personal insult! I remember learning about quantum mechanics - it hurt. But it was a better explanation and predictor of the world than classical mechanics, which it didn't destroy - just included as a 'special case'. 

The irony is that giving up some (not all) of the ideas that made you what you are, will accelerate your becoming what's needed in the 21st century! 

"Factors contributing to weaker conditions

A range of factors are contributing to weaker conditions and the immediate near term outlook including:

• Persistent international volatility and the uncertain impact this has on the domestic economy
• An elevated currency is placing pressure on trade exposed businesses and reduces competitiveness
• Changing consumer spending patterns and the preference to reduce debt
• Unease about the performance of minority government and resulting policy responses which endorse a low growth green policy agenda
• The impact of higher utility prices brought about by the carbon tax and other emission reduction measures, and
• An established view of policy makers that business can help deal with the unexpected revenue shortfalls of government through higher tax rates or new taxes"

Read more: http://www.businessspectator.com.au/article/2013/5/1/industries/how-canberra-can-wake-small-business-hibernation#ixzz2SezmdOCH

The words I've highlighted in bold disturb anyone in business! Although later in his article Evans identifies a number of ways to fix these issues, they are all at Government, indeed, Federal level, including for example getting rid of excess regulation. They'll also take a very long time to implement. 

But what's a person to do here & now when running your own business of, say 100 to 5000 people? Electricity prices are the highest in the world. The currency makes your product or service 50% more expensive to export than it was a couple of years ago. And the head of Coca-Cola mentioned in the Fin Review today that labour costs are 15-20 times higher than in, say, Thailand. (Don't pretend they are 'not as productive' either...)

The trouble is that so many businesses have enough trouble with getting work and executing it that there is little time to change the environment. Yet, obviously, that's a task the CEO must undertake, somehow. This has to be done with the Board, not as a KPI the Board will evaluate her on. 

This means changing the system that you're in. Talking about this with a group of professional Board Directors the other day we hit exactly that issue - it's tough to change the system when you're only part of it. Yet when faced with a 'bad' system, the only way out is to disrupt it - even if that's just giving it a good kick in the shins!

It also means reframing your own perspective. If changing the system is hard, changing yourself is harder, especially when there's no time - it's not a 'project' you get resources for. And the outcome isn't guaranteed to be 'good' (ie more money). It feels like changing your brain while you're using it! 

It also means getting your team to innovate on the core question of the business. This also is hard. It's what comes even before the Vision Thing. If you don't have a real Executive - ie a core team with strategic skills feeling responsible for the entire organisation - you have a fractured set of competitive perspectives, that's all. They may 'innovate' but only on their chosen comfort areas. You need more from them. Your role requires more from them. There's no point being a lonely martyr. 

These tasks need a process that includes: 

Tough collaborators - not only 'mates'

Reflection - not only 'thinking'

Creativity - not only 'analysis'

Pain - not only 'confirmation'

Synthesis - not only 'competition'

Rapid testing - not only 'guaranteed success'

If you're up for this kind of process, if you understand that the investment of time (which can be astonishingly short) means a 'rest of life' yield and if you have the courage (not the physical kind, but the intellectual, emotional, relationship kinds), you have a chance to be part of the real game. That real game is what could be available for Australian business when the rest of the world finally changes gear!

I think this is especially important because as employers you have responsibility to create pathways to the future for your employees even if the Government isn't helping. And since I've been hearing about these 'factors' or something similar in Australia and elsewhere for all my career, I don't think they are going to ever really go away. So the work has to be done even if it's 'difficult'.

There's no straight answer. But there's nothing better than wrestling the issues to the ground properly and discovering your best answer! This is what I love doing with my CEO/Exec team clients - it's what makes the difference between barely coping and long-term thriving. Give me a call on 0437 659 312. 

As Ross Dawson points out, when markets can't do what's needed, new ideas arise. Crowdsourcing for capital is one such response.

	Ross Dawson (@rossdawson)
24/04/13 1:30 PM Crowdfunding creates a new layer of capital markets and new layers of value bit.ly/Y2MjSW

It will develop and mature, so some of my current early-phase clients - with organisational structures that don't even fit the current expected model - will be tracking this for the time when growth depends on externally sourced capital rather than cash flow. Or their house. 

There's an interesting question here for anyone running something bigger..... what does this do over the next 10 years for your projected cost of capital? Will you be competitive if your only sources are traditional, with the provider's fee and cost layers built in? 

I don't know the answer, but I'm looking forward to watching the question grow! 

Strategy in particular suffers if there's not an adequate balance between analysis and creativity. 

The key to the great high-impact people I've had the privilege to work with has been an integration of both divergent, emotionally-based capabilities with convergent, analytical skills. (And lots of focussed, designed action). It's the combination that's powerful - 'Why have a goal?' and 'How do we make it real?' Each mindset frames and enables the other. 

What's more, the combination is essential for sustained performance. 

In effect, real performance is about being fully human. It should be simple but of course, that's the challenge and the delight! 

Do you know your preferred way of thinking? Does this dictate how all tasks are approached? What do you do - or who do you involve - to compensate and get the balance right? My own helpers ask those questions that I don't like to ask myself. It's uncomfortable but the questions uncover the capacity to answer them and actions that have greater impact. 

What wisdom in the other strange hemisphere of your mind holds the secret to your next level of performance? 

Jetstar's Jayne Hrdlicka - yes a female CEO - is really clear. She often used the word 'clarity' in the talk and of course I like that as 'Clarity' is the one thing my clients have said in common over the last 12 years that they get from our work. 

Without breaching Chatham House rules, I'd say that what she also expressed was how important several CEO-level tasks are (undertaken both by her and her predecessors) in achieving the outcome of growth and international expansion: 

1. Getting very clear with the key stakeholders - Qantas and other partners/owners - about the core concept and boundaries of the enterprise. In other words, what markets does Jetstar address and what markets does Qantas address? Then making this clear also inside the organisation. 

This is the Advocacy task zone. 

2. Getting very clear that capacity to innovate together with managing talent are critical to success when new ideas are being tested. Breaking into new markets - creating new markets. 

This is the Reputation/Intangibles task zone. 

3. Getting very clear exactly how Culture needs to be designed to generate the outcomes planned. Everything from understanding how to deal with customers (and fixing it when it's wrong) to building in the diversity of thinking that enables the business to be effective at starting up in 6 other countries. 

This is the Culture task zone. 

4. And of course the whole thing is not an accident - the way the business was created was deliberate. In other words strategy formulation is a continuous process rather than an in-house conclave, involves key stakeholders and relies on a real understanding of markets and numbers. Execution then follows Formulation. 

This is the Strategy task zone. 

Nothing's perfect of course. There were setbacks. But by sticking with these four task zones and not running the CEO role and the core team as if they were just 'more management', the group has been able to go from zero to $4billion in 8 years - impressive by any standards. 

Jetstar isn't a client and I'm not pretending to have had any input to this! It's interesting however to hear things well expressed at the CEO's level & to see my view of how CEOs should frame their role come alive on the stage. 

Thanks, Amcham and Jayne Hrdlicka! 

I've had a bee in my bonnet about contempt across professional boundaries for some time. My latest newsletter addresses it. 

The obverse quality in an executive is Respect. And now a great exemplar of the value and power of respect in the Australian business scene has died. 

When I arrived in Australia in 1991, James Strong was already 'a name' because of qualities and abilities he consistently demonstrated in all manner of complex and difficult business situations, and with all manner of professionals. The articles and tributes in all the media reflect this well (see The Australian article here). 

What comes across is how he achieved this level of respect because he in turn respected others. And he understood them from the inside. His life was fully expressed through the people around him, whether in business, different sports, the arts or his personal relationships. 

When Executive teams are not working, one of the telling factors is whether Respect is given and received - or contempt. As the AFR said of Strong - 'For some, he was the first to show that Australian businessmen weren't just bruisers.' In other words, achievement and respect for others (while still being able to make and execute tough decisions) go together. 

Of course an exemplary life raises the question, 'How does my life compare?' What can you learn, and put into action more effectively in your life, that James Strong's life teaches? Some of the markers of Respect seem to be: 

• Deep listening 
• Understanding the other's motivators - and the logic behind them
• Not confusing Conflict for Confrontation
• Separating the structural from the personal causes of difference
• Keeping your joint, long-term co-existence in mind
• Courtesy at all times

(Of course, it's obvious that these are not easy, or soft .... )

Can you tranform that acid of Contempt into a Respect that can create a legacy? 

This is despite various concerns - uncertainty in markets and 'what's the Government going to do to us' - that may seem petty beside the situation facing European companies. 

For me this is a signal to grab the bull by the horns and push through to a new level: 

• What does 'realistic optimism' suggest we do about our markets and our offerings? 
• How can we prepare efficiently and thriftily for the next growth phase?
• How can we get better at the process of innovating - not just on 'stuff' but on the core processes of the business? Can we really do it without investing in innovation & talent?
• Is the Executive Team the right group of people, with the right Board supporting them, the right strategy and the right culture for the next growth phase? Or are they too tired and jaded? 
• If you're the CEO, do you have the energy and freshness for the next push? 

A 'global survey' can look abstract and distant - but it is a wonderful signal for initiatives at the personal level, for those who are running things. 

Keep an eye on my blog and sign up for the newsletter where you'll find tested ideas to help you lift your game - whatever the future has in store. 

Here's to an exciting 18 months or so! 

Getting this nailed for an organisation can have a 'bow wave' of impact that is 25/35 years out! That's what CEOs really get paid to achieve. 

http://goo.gl/Ehk4B for the TSR Alpha scorecard for 31 December 2012

Robert Cialdini is the author of the core book on the science of influence, which brought the whole idea home to me several years ago. But I wish I'd thought of animating and summarising the book in a 12 minute video. 

Here it is! 

Since the CEO's and every Executive's role includes Advocacy of the organisation, leading through culture and persuading the organisation to follow the strategy, influencing skills are critical. This short video will either confirm what you knew - or explain why not quite everyone agrees with you all the time! 

It looks like critical issues for 2013 and onwards are going to be: 

• Keeping your own and your team's cohesion, motivation and energy up, when it takes more effort to get the same result
• Being creative enough under stress to design better processes, rather than run the old ones until they break
• Generating resilience at many levels, personal, team, and organisational. 
• Developing a network that is mutually supportive.
• Framing opportunity in difficulty - it's there! 

Although working on these issues with clients is 'Normal', as part of improving their business under current conditions, and resolving them has surprisingly high dollar impact, it's important to keep going through 'Crisis' to establish a new 'Normal'. The new can look quite different.  

In particular, if you look at what emerges in images and words when 'crisis' is part of the discussion, the tone is complex. Reflecting on my own experience of various personal and professional crises (when is it ever smooth sailing?!) and in the last decade with my clients, feelings include:  

• Shock - being unable to think straight - or at all!
• Despair - so much is being destroyed
• Hopelessness - it's hard to 'see' the other side, the new 'Normal'
• Inertia - no action seems adequate
• Shame - somehow, it's our fault & we should have foreseen/anticipated/prevented/avoided it
• Doubt - can't trust 'the truth' any more because the crisis falsifies our precious notions about work

None of these help. 

However, for anyone running an organisation, while these are the (secret) feelings, they are fantastic clues to how to lead. It takes real emotional courage and tolerance of real pain (like all leadership) but being the one who sees, acknowledges and still acts in the midst of these feelings marks out (for me) the leader the organisation needs. Tough stuff on the 'soft' side of organisational life - but key to survival.

The future will be different, but as I wrote in Winter into Spring, I think there's a real chance that the other side of the upcoming tough times will be the making of a very exciting, more firmly based, growth phase. That will be the place you can lead others to!