5 New Rules for the New Economy

5 NEW RULES FOR THE NEW ECONOMY

12/7/2022

Ever wonder what it was like to be a buggy whip maker during the rise of the automobile?

Look in the mirror.

Numerous trends are converging to create the dramatic change we’re experiencing today, including the generational shift away from Boomers, the splintering of cultural norms, and the unnerving impact of late-stage digital industrialization literally changing how everything is made, sold, and delivered.
We may not be buggy whip makers anymore, but we’re experiencing a similarly historic change in the fundamentals of our economy. And just as businesspeople in the 19thcentury bespoke economy had to learn the new rules of industrialization, we must learn a new way of conducting modern business.
Below are five new rules for our new economy. Together, they are a foundation for generating momentum for businesses and value for customers in our transforming world.

1. SYSTEMS BEAT SWITCHES

Western civilization champions individualism and the use of the scientific method to parse out discrete problems, identify “control” variables, and pursue solutions by manipulating one variable at a time. This perspective views problems as if they are light switches in a home that can be isolated and manipulated room by room.

Silicon Valley, on the other hand, champions a worldview more prevalent in the East that sees reality as a series of interconnected networks in constant flux. Think Butterfly Effect minus Ashton Kutcher’s 2004 film of the same name. Winners in our digital economy (not coincidentally, built by those Silicon Valley engineers) embrace a view of business rooted in Systems Thinking. It’s not just a light switch, but a house filled with wires, a city-wide infrastructure, a regional power source, and a national electrical grid.

The truth is that business and life are dynamic. Reality is a complicated web of interconnected systems. It’s unrealistic to isolate variables and turn them on and off like a light switch in the real world. So don’t pretend to.

20th century companies think in switches. 21st century companies think in systems.

2. FLEXIBILITY BEATS SYNCHRONICITY

Business models that thrived under mid-stage industrialization were built on synchronicity. Break the product into its component parts, get everyone and everything set up perfectly on an assembly line, then keep everything running as smoothly as possible. Like a symphony, when this model worked, it was beautiful.

But late-stage digital industrialization has changed the game. The internet fragments everyone and everything, creating many little pockets of change occurring simultaneously at incredible speed. This new world requires an entirely new approach to business that emphasizes flexibility over efficiency.

Ditch the assembly line and burn the conductor’s baton. As I’ve written before, the future belongs to jazz.

3. VELOCITY BEATS SPEED

Fast. Faster. Fastest. Speed is on everyone’s mind because technology is enabling such rapid change. According to our latest research among business leaders across the country, nearly 30% of companies today are suffering from stalled growth or commoditization. Companies (and even industries) are moving through the Disruption Cycle so quickly it’s making everyone feel dizzy.

But trying to stay competitive by just running faster isn’t enough. Speed is simply a measure of how fast something is moving. But speed alone can just as easily hasten decline as keep one competitive.
Velocity, on the other hand, is the measure of speed with direction. You can move quickly in circles, but it gets you nowhere. Add direction to your efforts.

Speed is only part of the solution. Growth requires velocity.

4. CONFIDENCE BEATS CERTAINTY

The comparably slow rates of change enjoyed in the past enabled a powerful illusion. Because one could count on culture and technology gradually changing over years or even decades, looking back at historical data had some value in predicting the near future. This illusion provided confidence by removing uncertainty. And now it’s going away.

Because the modern economy moves exponentially faster, looking at historical data has limited predictive power. To avoid losing their nerve, organizations need to find ways to get their swagger back. Agile methodology, customer-centeredness, and prototyping are all techniques to stay in the now and make confident bets. As an executive of a Fortune 100 corporation recently stated to a colleague of mine, “It used to be test, test, test, test, then rollout,” he said. “[Now it’s] test, rollout, learn, modify…”

Certainty was yesterday’s illusion. Confidence is today’s way of doing business.

5. MOMENTUM BEATS PERFECTION

During Facebook’s rise it famously painted “Done is better than perfect” across its walls. As digital technology transforms the economy and increased speed-to-market becomes a price of entry for business, it’s imperative for leaders to throw off the fading luxury of perfection and embrace a new ethos.

Today’s leadership must foster a shared feeling of growth and improvement in their organizations best referred to as momentum.

Businesses that pursue momentum instead of perfection are more concerned with customer problems than internal navel-gazing, appreciate the power of organizational health, and understand that if a group of people feel like they will win, they often do.

Perfection was last century’s lie. Momentum is this century’s imperative.

The incredible change we’re living through doesn’t have to lead to doom and gloom. If you research a little more about the horse and buggy industry, you’ll learn that many companies actually successfully transitioned to the automotive industry.

But it wasn’t easy. Just as our forebears navigated the Industrial Revolution a century ago, it is our turn to navigate change. With the proper focus on systems, flexibility, velocity, confidence, and momentum, you can ditch the horse and buggy too.

Few organizations understand the internal dynamics that can keep them from maintaining momentum. Take the 60-second self-diagnosis survey (based on research conducted among thousands of companies) to diagnose your company’s trajectory and give you a sense of what factors are helping, or hindering, your momentum.

How do company culture and employee relations effect earnings and financial success? Jonathan Lewis leads a compelling discussion on understanding the holistic picture of your company's health during his Culture Compass workshop session at CANA’s Cremation Symposium this February 8-10 2023!

The 2023 Symposium is here to energize passion and purpose in the new year with a focus on staffing retention and efficiencies. Plus, Jonathan serves as event emcee, offering insights and activities that keep ideas and conversation flowing. See what else we have planned and register to attend: goCANA.org/ignite

This post originally appeared in the McKee Wallwork Insights blog in November 2018, reprinted with permission.

Jonathan David Lewis is the author of Brand vs. Wild, a Forbes contributor and a turnaround expert at McKee Wallwork, a marketing advisory firm that helps stalled, stuck and stale companies through tough transitions.

As president of MW+C Jonathan led his firm to be recognized by industry purveyor Advertising Age as a national leader in branding and marketing, winning the Southwest Small Agency of the Year, national B2B Campaign of the Year, and national Best Places to Work awards.

A business and branding strategist, Jonathan honed his skills during the lean years of the Great Recession, helping brands navigate today’s unforgiving new business paradigms. Jonathan’s opinions are highly sought by numerous business and marketing publications, including Forbes, Digiday, and Advertising Age, where he explores the factors that lead to stalled growth and the principles proven to help companies navigate the ambiguities and dangers of the business wilderness.