It's Time to Innovate | Mark Foster | Big Think

It's Time to Innovate

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Despite the crucial cost cutting that businesses are undertaking in this economic climate, it’s also important to be thinking about tomorrow, says Accenture’s Mark Foster.

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TRANSCRIPT:

Question: What are the questions at the forefront of businesses right now?

Mark Foster: I think that our clients at the moment are trying to balance a number of conflicting contexts. First of all, they still have in the back of their mind what the world was like before the downturn and some of the global competitive pressures that were out there in terms of new markets, changing competitors, having the right competitive cost structure for a global economy.

Then of course there's the pressures of the downturn which many clients are still working their way through in terms of how they're getting the basics right in their business, manage their costs, look after their customers, and have the control over the basic business. But they're beginning to turn their minds to a third context which is the world in front of us over the next 24 months where there clearly are going to be opportunities for growth. It's going to be a constrained world still. So you have to make choices in that world and having to think about that and then beyond then as they're beginning to see the challenges of the next decade where we see major industry restructuring, the role of technology changing business again, and have to keep that context in mind as well.

So clients are balancing their way between the short, the medium, and the long term and beginning to have to make some real choices.

Question: How important is cost cutting in a time like now?

Mark Foster: Cost cutting has clearly been one of the critical agendas for clients, particularly in the downturn. Clearly they've been trying to do that cost cutting in a smart way because it's very easy to go off to the lower hanging fruit, which is obviously an opportunity in these times. It's also very easy to leverage these kinds of opportunities to frankly go off to costs and sacred cows in your organization because of the nature of the context. But in the end, the really important thing is to understand your cost structure in a strategic way, to understand how does your cost structure stack up against your competitors now and in the future. How do you look at each of the critical processes in your business and make sure that cost is now the right cost to deliver on the outcome you want from that process.

So wherever I much focus on helping our clients think about how they do cost cutting in a smart way, that delivers on their immediate requirements, but is also enabling that business for the future as well.

Question: How does innovation come into play during a downturn?

Mark Foster: In my conversations with my clients it's very clear that the theme of growth and innovation is coming back on the table. Initially, clients are focusing a lot of that innovation thinking still around probably innovating to support their cost management agenda and less about innovating in the area of products and services, but it's clear also that area of more broad based business innovation and growth is coming back to the top of their minds again. They are having to think about how they're going to compete. They can see that markets are beginning to move and unfreeze and how important it’s going to be that they're differentiation returns as part of their business strategy.

So I think we are seeing a return to innovation shifting from cost management and beginning to think about new products and services. In the end, innovation will be one of the drivers of strategic success in the period ahead.

Question: What is the role of globalization in the downturn?

Mark Foster: The pace of globalization remains I think a real focal point for leadership. It's clear that the shifts that we saw in the past around where new consumer markets are appearing, where the talent is burgeoning around the world, the haves and the have-nots of resources, where the new capital sources and innovation is going to come from in the world. All that world is still shifting and we are seeing the emergents of new centers of gravity of economic activity around the world.

It's vitally important that leaders of organizations are making sure that their organization is looking out scanning that world and beginning to make the right strategic choices and setting the right strategic options against the opportunity set and the threats that are out in a wider global economy.

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