The Chinese word for "crisis" means both "danger" and "opportunity".
The Chinese word for "crisis" is written by two characters. The first means "danger", the second "opportunity". Today's state of business offers both in abundance.
For producers of cement, steel, aluminum and other products that use large amounts of energy and raw materials the rising prices and tougher environmental standards generally present a danger. But for the company within the industry, which provides a service with the least environmental impact, the rising prices and demands are an advantage.
The story of the coming years can be told in two different ways. One is the story of making it through the Great Crisis. It's about cutting to the bone, focusing on short-term profitability and striving to maintain core competencies and capabilities, so you're ready to move again, once growth returns.
The second story is the story of The Great Conversion. It's about realizing that the world will, in fact, not be the same again and to understand the ways in which it is fundamentally changing. In this story, the projects that are shut down and the jobs that are scrapped, will not come back. It will be something else that drives growth in the next round - hence strategies and priorities are very different in the two stories.
Recognizing the new patterns of development and understanding the rules of the game of the future is crucial. By moving beyond the old mindset, and adapting to new circumstances, companies can gain an even stronger position after the great conversion.
In the new story, what used to be threats turns into opportunities; it is safer to move than staying put; competitors become partners; responsibility and initiative is distributed in new ways ... It is a confusing and dangerous game to play, but less so, if you know the rules and understand the logic behind the story.
Gray areas between the old and new
Mass production, one piece at a time. Microsoft's strength is that 1 billion people have installed the same program on their PC. Google's strength is that they provide 300 million completely individual searches daily.
Innovation has been the mantra in the efforts to ensure growth in a rapidly changing world – and the demand has been for radical than merely incremental innovation. However, one might question whether it is generally realistic that an incumbent will abandon cash cows and crown jewels in order to pursue something completely new
In most cases, a more realistic strategy will be based on a systematic exploration and analysis of the gray areas where old and new paradigms overlap.
New business rarely arises from scratch, but tends to emerge where hitherto separate industries, sciences, or ways of thinking meet and mix. It is in these hybrid zones, one finds the most dynamic environments, the most rapid growth and development, the new culture, and the business models for a new economy ... and it is in these gray areas, we are first confronted with the requirements for new skills and a different mindset.
A much-needed, comprehensive picture
It is obvious that we are in the midst of a paradigm shift. It is reflected in the steady stream of new buzzwords, phrases and theories that circulate, because each of them manages to capture some aspects of the great conversion that we are going through: Open Innovation, open source, Tipping points, wisdom of the crowd, winner-take-all, innovators dilemma, Crossing the chasm, complexity theory and systems thinking ...
At Impact by Danfoss we are passionate about making sense of it all – and communicating it to our clients.