When Adam Smith wrote The Wealth of Nations in 1776, he described the characteristics and benefits of a free market, in which wealth was transferred between the producers of raw materials, manufacturers, and consumers of refined goods.
Smith argued that a free market would ensure competition that resulted in higher quality goods at lower prices. The underlying presumption was that manufacturers would always have to create or respond to changes in the market to ensure their viability and success. In Smith’s era, however, change came at a glacial pace; it would take years, sometimes decades, before change rippled across global markets.
The modern economy–global, domestic, and local–however is fast and dynamic; it’s in a constant state of change. And so the greatest overarching challenge facing leaders and their organizations today is to be able to quickly respond to market change; they must be the catalyst of organizational change that will guide their businesses to market leadership.
The pressure for change requires enterprises to maintain the following qualities:
Able to bounce back from setbacks.
Able to push the envelope and develop new products, services, and methodologies that advance beyond the competition.
Able to act nimbly to seize opportunities.
Able to sustain innovation through repeatable processes and organizations that ensure advancements happen due to planning, not happenstance.
As an analogy, think of the Internet. In 1973, the U.S. Defense Advanced Research Projects Agency initiated a research program to investigate techniques and technologies for interlinking packet networks of various kinds.
The objective was to develop communication protocols, which would allow networked computers to communicate transparently across multiple, linked packet networks.
The Internet’s creation made communications ubiquitous; yet it does so much more: the Internet allows organizations to be agile–to be able to act nimbly to seize opportunities. It has been the enabler of endless innovation in business models, processes, and global collaboration.
In the same way, an organization that is adaptable–agile and resilient–will be equipped to experience sustained success, meaning it’s continuous and evolutionary. Sustainable innovation and growth involves solutions to problems that reflect a commitment to economically, environmentally, and socially sound business practices.
The connection among these concepts should not be surprising. Innovation, after all, is doing something new that creates value in the marketplace. Agility and resilience imply the ability to react to something new.