What should we look forward to in 2009? The opportunity to make necessity the mother of invention, that’s what. In 2009 it is unlikely to be a ‘steady as she goes’ kind of a year, so we’ll need to come out of the blocks running hard and thinking differently.
Get in shape
It is going to be a tough year. Euphemisms such as 'operational productivity' and 'efficiency programmes' will conceal brutal cost cutting in many organisations. Even governments will not be immune from this formula, thanks to the recommendations of the Australian Gershon Review of government ICT and the review of Defence expenditure carried out by the Boston Consulting Group. Both reviews recommended sweeping cuts to business-as-usual activities in Canberra’s agencies. State governments as well are tightening their belts, in anticipation of falling property tax and investment revenues.
The first half of the year looks set to be dominated by ruthless pursuit of a step-change reduction in operating costs. It may be unpleasant, but the trick will be to get it behind us as quickly as possible, so we can face the future with more confidence and flexibility. Think creatively about all the activities that your organisation does, then just stop doing those things that are not directly linked to creating value.
For some organisations this cost cutting will be a matter of short-term survival. For others it will be a way of repositioning for the future - freeing up resources to focus them on developing and delivering for the changed market conditions and customer or citizen expectations.
The tumultuous events of 2008 are a wake up call to complacency and habit. An alarming number of the world’s corporate emperors’ new clothes have been revealed to be figments of their, and our, collective imaginations and hubris. We should see their dramatic failures as an opportunity for some fresh thinking.
There was a lot of such thinking at the Web 2.0 Summit in San Francisco last November – the fifth year of the sell-out event that gathers the world’s internet enthusiasts. The event closely followed the election of Barack Obama. Al Gore, a former US Vice President, remarked that "the electrifying redemption of America’s revolutionary declaration that all human beings are created equal would not have been possible without the additional empowerment of individuals to use knowledge as a source of power that has come with the internet".
Heady stuff. It is evident that two big-picture trends will play out in 2009, one down and one up. The first is a continued unwinding of many of the core operating tenants of business and government as a consequence of the global credit crisis. The second is the ongoing impact and transformative opportunity of the internet. Technology is enabling an unprecedented decentralisation of information, along with the ability to mobilise the opinions and actions of the world’s citizens and customers.
Our understanding of how the internet will transform government, business and society is still in its infancy, but any sense that it is a solution seeking a problem is now over. The problems of the world are growing, and the orthodoxy of traditional corporate and government hierarchy, of power at the top, has been proved wanting. The internet enables rapid, flexible and adaptive solutions and significant shifts in the dynamics of power and influence.
Success in 2009 will require a lot more than ruthless cost cutting. The real challenge will be to change our grip on the way we see the opportunities created by the internet, by web 2.0 platforms and enterprise 2.0 collaboration technologies. We will need to harness the nervous energy of the economic crisis to more deeply embrace the opportunity of these new technologies, while learning how to apply them to achieve the step changes in performance that will keep us all employed.
Steve Hodgkinson is research director, public sector, for Ovum in Melbourne.
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