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Chapter four from IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy) is about extreme innovation, AKA, serious disruption.

Innovative products and services aren’t enough any more.

“As one U.S. CEO explained, “We’re starting to think about things we couldn’t do before.” With the Internet, businesses can now find niche markets for rare, surplus or highly specialized goods — a virtual “garage sale,” as it’s often called. Business processes, as well as some products and services, are becoming more virtual. New delivery channels and electronic methods of distribution are overturning traditional industry conventions. And these advances are not just changing the way individual companies work — they’re creating entirely new industries.”

So what exactly is happening? Is there a direction that the majority believe will work?

“Among those making extensive changes to their business models, enterprise model innovation is the dominant choice. Forty-four percent of CEO s are focused solely on enterprise model innovation or are implementing it in combination with other forms of business model innovation. This trend toward enterprise model innovation is even more pronounced in emerging economies (53 percent).”

What does ‘enterprise model innovation’ mean? It refers to the challenge of offering your customers something truly different all by yourself—a business model that is fast dying in a world of speedy global connections, sophisticated, interconnected consumers and breathtaking speed of change.

“While 38 percent of CEO s plan to keep work within their organizations, 71 percent — nearly twice as many — plan to focus on collaboration and partnerships.“

And the most important point, as pointed out by one Australian CEO, “It’s about deciding when to collaborate, whom to involve, how to lessen the destructive force of competition.”

More on this next Saturday.

Is your company involved in enterprise model innovation?

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Chapter Three from IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy) is about being “globally integrated.” It may sound as if it’s strictly for giant multinationals, but it’s not.

“It was striking that CEOs of companies of all different sizes and geographic coverage were engaged and enthusiastic about these topics, which suggests optimization is crucial whatever the current geographic scale.”

Integration isn’t about selling products or outsourcing work or even doing lots of business in China and India—it’s about connecting, both internally and externally.

According to one US CEO, “We need to move away from an operational focus to a client interface focus.”

That translates to connecting and listening to your customers, even when you find it disruptive or just don’t like what they’re saying, because the one thing you can count on is that someone, some where, is listening and responding.

To spark global integration in your company focus on size-appropriate variations of these five questions

1. “Are you effectively integrating differentiating capabilities, knowledge and assets from around the world into networked centers of excellence?
2. Does your organization have a globally integrated business design (even if it does not have a global footprint)?
3. Do you have a detailed plan for global partnering and M&A?
4. Are you developing leaders that think and act globally?
5. Do you nurture and support social connections to improve integration and innovation?”

The answers to these are more than operational, they are attitudes that must be embedded in your corporate culture, but ‘corporate culture’ must expand in a global workplace.

As one Japanese CEO said, “The key for doing business abroad is not to seek homogeneity. Instead, we must be able to work effectively with people of different cultures and from different countries. We can learn this by working collaboratively with them.”

This is doubly important for micro biz to remember. Your market may be local, but your customer base is still multi-cultural—even in those rare areas where it isn’t multi-ethnic.

How is your organization addressing these questions?

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Continuing last weeks conversation about change based on IBM’s The Enterprise of the Future.

Let’s start with the fact that change isn’t easy and well-managed change is even more difficult.

“CEO s rate their ability to manage change 22 percent lower than their expected need for it — a “change gap” that has nearly tripled since 2006. While the number of companies successfully managing change has increased slightly, the number reporting limited or no success has risen by 60 percent.”

The problem isn’t just change per se, but

• the speed of change;
• relentlessness of change; and
• how it’s approached.

Global competition and the need to address fast moving targets, with Wall Street/your stakeholders demanding immediate results, puts still more pressure on CEOs and the executive team.

And underlying it all, you must constantly change MAP (mindset, attitude, philosophy™)—your own, your people’s and your culture’s.

But it’s not just about managing change; it’s about creating a desire for it. It’s about creating an environment where changes are being driven by your workers, not just by you and your execs.

How do get your people to want/love/demand change?

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A week ago I brought IBM’s The Enterprise of the Future  to your attention and said I’d be discussing it in the future, but there’s so much material in the three studies that I decided to make it a Saturday staple for awhile.

Additionally, if you or someone you know, would like to provide a guest post based on or related to any of the three IBM studies (CEO, CFO and HR) I would love to have them.

In the Global CEO Study five critical traits needed for success were identified through conversations with more than 1000 CEOs around the world.

The first is that to be a powerhouse, no matter your size, you must be “hungry for change,” not scared, tolerant or even willing, but hungry for it.

You must see “change within the organization as a permanent state” and build your culture accordingly.

According to Masao Yamazaki, President and CEO, West Japan Railway Company, “The key to successful transformation is changing our mind-set…it is easy to be complacent…company culture must have a built-in change mechanism.”

While corporate culture is the reason that “employees are comfortable with unpredictability. In an environment in which products, markets, operations and business models are always in flux, values and goals provide alignment and cohesion,” it’s MAP (mindset, attitude, philosophy™) that provides the underpinnings for it all.

And it’s not just organizational change that’s moving so quickly, but positions, including CXOs, are, too.

In an insightful article in MIS Asia, Chris Potts says, “In less than five years’ time, the CIO role, according to CIOs themselves, is destined to become either an executive leader of business change or absorbed into another role,” and walks you through the reasoning and the changes that need to happen.

“There is a pressing need for integrated leadership of business and technology change. With enterprise architecture and investment portfolio management, CIOs have the two strategic tools onto which that leadership depends. The CIO’s cultural challenge is to explain that these tools are primarily about people and collaboration, not technology.”

Change requires talent and a paucity of talent was rated as the greatest barrier to growth, more so than even regulatory and budgetary considerations.

Moreover, the kind of talent needed has changed radically from the descriptions so often heard as has the ways to remunerate them. Now, it’s “people who question assumptions and suggest radical, and what some might initially consider impractical, alternatives” with the potential for “differentiated rewards, such as a stake in the business they helped create.”

Managing this kind of talent takes more than good people skills or charisma, it requires MAP that’s secure and willing to hire people smarter than itself, share a vision of the needed results, turn them loose and trust them to accomplish it.

Do you know many managers with this kind of MAP?

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IBM has surveyed 1,130 CEOs who are collectively responsible for 2.224 trillion dollars of revenue.

The 2008 study uses their “collective insights and wisdom” to formulate what IBM calls “The Enterprise of the Future”—an enterprise that encompasses these traits

• hungry for change;
• innovative beyond customer imagination;
• globally integrated;
• disruptive by nature;
• genuine, not just generous.

“This Global CEO Study report presents findings related to each of the attributes of the Enterprise of the Future. It draws on the rich insights from our CEO s through statistical and financial analyses as well as the voices of the CEO s themselves. Each chapter concludes with some implications and thoughts about how organizations can move forward toward becoming an Enterprise of the Future and a case study to illustrate a leading company.”

Additionally, there are two other reports available, the IBM Global CFO Study and the IBM Global Human Capital Study.

No matter the size of your company, they’re worth downloading (free registration required) and reading. There’s plenty of food for discussion and I plan to refer to them on and off over the next few weeks.

Do you find information like this helpful?

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