The role of Information Technology In Creating Economic Sustainability Kip Garland, founder – innovativeness Sustaining an organization, be it a business, a government, or other groupings of people, requires the ability to create new growth. When organizations stop growing – they lose their relevancy. Economic studies show that sustaining growth in productive sectors Is Increasingly difficult. From 1950 to 2005 the average time that top company could sustain Its relevancy among the top 500 companies fell from 65 to 8 years’.
Among the top fifty firms in the world only 5% could sustain a growth rate of a mere 6% while they were leaders. Among the 95% who could not sustain growth, only 4% were able to sustain a growth rate of even 1% 2. Conclusion – If you cannot find new ways of growing…. You become Irrelevant. Sector Saturation – Twentieth Century 3 If new forms of growth are the key to sustaining organizational relevancy, a closer look reveals a more complex problem. Similar to biological organisms. Economic growth is a non-linear.
This means that growth is a complex function (more pacifically, changes in inputs are not proportional to outputs). The result is that traditional management practices are inutile, and many times harmful for creating new growth. Instead of fighting against these forces – a firm grounding In the circumstances that affect these non-linear situations goes a long way towards the ability to create new growth. In fact dealing with the complexity of growth in many cases means going against deeply instilled management practices, like listening to your customers, developing better products, and robust financial management.
One powerful approach to these complex circumstances Is to begin to examine the fundamental “questions” our organizations were set out to answer. In trying to come up with new answers to long-running questions we sometimes lose track of what the original question was, and what its relevance is to the future. As an example of this process, Whirlpool – the company behind powerful brands like Brashest and Consul, had one-hundred years to perfect answers to the question of how to build better machines to help with household chores Like cooking and question, the creation of new growth required new questions and not Just new answers.
Some of these new questions could turn out to be even more relevant to the future. How to deliver well-being to the home was one of these new questions. Answering this new question led to fundamentally different types of thinking and learning, which let to new forms of growth. It enabled the creation of different answers – answers that would not have been addressed from the original question of how to improve refrigerators, ranges, and washing machines.
In a series of innovation focus groups conducted by innovativeness consultants Kip Garland and Carol Raking at the 2007 IT Forum, Coo’s began conceptualizing the growth challenges facing their companies. Independent of their respective industries, these executives concluded that maintaining relevancy was the key to creating sustainability. They found the identification of new forms growth, while at the same time extending the relevance of current growth, is the key for an organizationally sustainability. In effect, the Coo’s were able to turn a complicated robber like sustainability into a growth opportunity.
In groups of five or six, Coo’s began to use innovation tools as way to think differently about their internal beliefs and the ability to influence external change. These tools included ways to examine internal orthodoxies in order to understand our own role in limiting options for new growth. Coo’s then were then invited to participate in a simulation in which they began to better understand the difficult choices top firms place when then seek to create new growth. The conclusion of these focus groups was that innovation is one of the elements that an be used to create options for new forms of growth.
In a business context new growth takes the form of innovative business models, where the existing premises and orthodoxies about the customer, the benefit, and how is this benefit created and delivered can be overturned in order to create new options. As to implications for the role of information technology in specific, Coo’s concluded that their role is changing from “supporting” to “facilitating”. This means that instead of merely supporting an existing business model, IT moves into a role of helping to create new business models.
Further, in many cases IT actually moves into the fundamental role of being the new business model itself. When we virtually “purchase” music online instead of physically buying the product, IT moves from a facilitating role (“how’) to a benefit (“what”) role (access, convenience, speed, security, reliability, etc. ). This fundamental change – from “how’ to “what”, creates powerful choices for IT professionals. The ability to create more options at lower risks (time, money) means that the cycle times of growth curves will be increasingly short.