Australian Centre for Innovation & International Competitiveness Creating Innovative Organisations HR’s Challenge for the 21st Century presented to The Leadership Consortium by Professor Ron Johnston, FTSE Executive Director Australian Centre for Innovation 10 May 2001

Australian Centre for Innovation & International Competitiveness

What Do These Companies Have in Common? n Shell n Pacific Gas and Electric n Electrolux n Erste Allgemeine Versicherung n Distillers

Australian Centre for Innovation & International Competitiveness They all engage in systematic, collective ‘What Ifs’ n Shell anticipated the OPEC oil price hike, and the fall of Communism in Russia n Pacific Gas & Electric anticipated the California earthquake n Electrolux anticipated a range of entirely novel consumer markets n Erste Allgemeine Versicherung anticipated the fall of the Berlin Wall n Distillers anticipated the shift in alcoholic beverage consumption in Asia

Australian Centre for Innovation & International Competitiveness Historic Approaches to Change n Bureaucratic - organisations as machines n HR & OD - organisations as networks of relationships n Industrial democracy - organisations as open systems n TQM - organisations as continuous process improvement systems n Strategic - organisations as purposive competitors n BPR - organisations as collections of core competencies n NEXT?

Australian Centre for Innovation & International Competitiveness Major Drivers of the Future

Australian Centre for Innovation & International Competitiveness The Context is the Global Knowledge Economy

Australian Centre for Innovation & International Competitiveness Globalisation n Age of hyper-capitalism n Intangible assets increasingly important n Share price/net tangible assets grew by 50% in last 3 years. n Patents

Australian Centre for Innovation & International Competitiveness The critical difference between the old and the new economies is not dot.coms, nor e-commerce, nor sustained growth without inflation. It is that the old economy raised capital to invest in physical capital. The new economy raises finance to invest in ideas and innovation Knowledge Economy

Australian Centre for Innovation & International Competitiveness n Because knowledge does not wear out it is a source of super- value and super-productivity. n Knowledge alone can add value to an otherwise closed, zero- sum system.

Australian Centre for Innovation & International Competitiveness e commerce business procurement trade e-connectivity

Australian Centre for Innovation & International Competitiveness n Not just product innovation n Not business process re- Engineering n Business concept innovation Innovation

Australian Centre for Innovation & International Competitiveness Some Major Uncertainties ? ?? ? ? ? ? ? ?

Australian Centre for Innovation & International Competitiveness Beware the Sixth Extinction! Global Warming & Environmental Sustainability

Australian Centre for Innovation & International Competitiveness n smart search engines n driven by voice recognition n micro-display n specialised DNA computing n intelligent agents n automated intelligence n knowledge management New Decision- Making/Management Tools

Australian Centre for Innovation & International Competitiveness n Universal perceptions: –competition --> reduced customer service –globalisation --> reduced customer service –technology (computer systems) --> reduced customer service –economic rationalism --> increased inequity –economic rationalism --> greater unhappiness –economic rationalism --> loss of community Customer Revolt

Australian Centre for Innovation & International Competitiveness If you always do what you always did... You will always get what you always got.

Australian Centre for Innovation & International Competitiveness Challenging Questions n How can organisations be sustainable in an age of transience? n What are the requirements of leadership at warp speed? n How to achieve foster, more effective learning? n How to grow your intangibles?