Key Concept ~ While major corporations continue to squeeze their human capital for productivity, entrepreneurial startups can position themselves to leapfrog their competition by fully embracing the creativity of their associates.
Bloomberg Businessweek® published an article late last week that reported on the implications of our nation’s revised productivity rate will have upon future growth, income gains, and job opportunities. The revised numbers, issued by the Department of Labor, indicate that worker productivity grew at a 2% annual rate beginning in 2007, when the recession began, through the first three quarters of 2011. The original figure reported was 2.7%. Of greater concern, is the forecast for worker productivity growth for the foreseeable future will be between 1.5% and 2%, well under the 3.4% annual growth rate from the last productivity boom period of 1997 to 2003.
This resonates with a strategic issue many corporate entities continue to, at best struggle with, and in the worst environments, outright ignore. In an age when the commercialization of intellectual property is the driver of value creation, a fresh approach to worker engagement must be embraced. The 2010 IBM® CEO Survey points to this in that the single most important attribute CEOs are looking for in future leaders is creativity and their ability to cultivate creativity throughout the organization. Yet, at the same time, a research study published in The Journal of Experimental Social Psychology demonstrates that professionals that consistently display creative thinking are sidetracked from positions of senior leadership on their way up the ladder. The current reality simply doesn’t support the desired outcome.
When we look at the current strategic climate in corporate America, many companies continue to demonstrate a slash and burn harvest mentality towards the operation of their businesses. But how long can a company cut its way to growth and profitability? Especially when the raw material of the day is human creativity? The fact of the matter is, we’re coming into an age of diminishing returns on traditional approaches to management. Philosophies and methodologies whose roots lie in the industrial boom of the early part of the last century (i.e. see Alfred Sloan, Henry Ford, Thomas Watson, etc.) We need only look at the employee disengagement crisis as a bell-weather for future, diminishing productivity under current leadership conditions (less than one out of three employees are fully engaged with their employer ~ Gallup & Co.®). In addition, the approach of throwing technology at a productivity problem no longer delivers the same return on investment as it once did some ten or fifteen years ago. That low-lying fruit has already been picked.
Culturally, our greatest core competency as a nation is our creativity and innovative thinking that has revolutionized so many industries. These attributes of a free society may just be our last, and most strategic, competitive advantage we hold in the rapidly shifting global marketplace. But only if we embrace it and cultivate it organizationally.
Until a shift in perspective is embraced, when leadership, strategy, and organizational culture align to cultivate a fresh approach to fully engaging the human element in value creation, we will continue to stagnate and eventually decline.
So what does this mean for entrepreneurs? We’ve reached the tipping point, when entrenched interests at the helm of corporate America are vulnerable to fast moving, highly innovative startups that can usher in a new competitive landscape. One in which the small company can dictate the terms of competition through creativity and speed of implementation. While technology has helped level the playing field, it is the approach small, entrepreneurial firms take to leveraging their human talent that can catapult them over the top.
© 2011, Terry Murray