Survival Just Won’t Cut It Anymore
Over the past few years, powerful icons of business success have been brought to their knees or buried, making survival seem like success. However, survival just won’t cut it anymore.
Productivity has been the star of the economics show, but it will move to a supporting role. This is largely because “productivity is about fixing the past, and innovation is about creating the future”.
The devastating impact of collapsed financial markets destroyed business’ equilibrium. Then risk became the mortal enemy, cost cutting became an art form and reducing costs to build the bottom line became the norm. This is not a sustainable model, however.
The Top Line Is the New Bottom Line
Given the massive cost cutting businesses have already sustained, top line growth is essential to continue improving the bottom line. Without top line growth, it will be impossible to continue delivering the increased profitability that today’s shareholders demand. In short: The top line is the new bottom line.
Innovation Drives Top Line Growth
We are not suggesting that productivity will go out the window. We ARE suggesting, however, that developing sustainable top line growth will become paramount, and that innovation drives top-line growth. This puts innovation in the bulls-eye of leadership priorities because “innovation fuels growth, and leadership provides the fuel”. Innovation will become the leading business imperative. Without innovation, businesses won’t grow and thrive, and if a business isn’t growing, it’s dying.
Responsible Governance Will Equal Accountability for Delivering Sustainable Growth
In addition, responsible governance will equal accountability for delivering sustainable growth. For at least the past decade, boards have been focused primarily on staying out of trouble, taking a proactive role only if the business is in crisis. Shareholders have had their fill of this lax approach, and the CYA oriented board has already begun to shift toward accountability for anticipating business outcomes. Moving forward, boards will need to pro-actively evaluation leadership bench strength, success options (short and long term), innovation pipelines, strategic financial investments, and people development.
We believe business priorities will shift from cost cutting to value creation, will put the spotlight on innovation and will demand that boards step up to their accountability as pro-active financial stewards. The winners will be the leaders who define a path to growth and then inspire their teams to create it. These are the leaders who will have it all and “Break Away”.
image credit: aeiok.com
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Named by BusinessWeek as one of the “100 Most Influential Search Consultants in the world”, Jane Stevenson is Vice Chairman, Board & CEO Services at Korn/Ferry International (Atlanta). An industry expert on recruiting leaders of growth and innovation and a pioneer in the field, Jane was responsible for bringing in many of the first Chief Innovation Officers and CEOs who focused on growth through innovation. Jane is the coauthor of Breaking Away: How Great Leaders Create Innovation that Drives Sustainable Growth–and Why Others Fail. (McGraw-Hill 2011).
Named by BusinessWeek as one of the worlds “Top 25 Masters of Innovation”, Bilal Kaafarani is Chief Innovation Officer and Group President for Yildez Holdings in Istanbul, Turkey. As a global innovation executive at P&G, Kraft, FritoLay, PepsiCo International and The Coca-Cola Company, Bilal has worked with some of the best brands in the world and to develop many innovations under his leadership. Bilal holds patents for a number of breakthrough food sector technologies and, along with Jane Stevenson, is the coauthor of Breaking Away (McGraw-Hill 2011).