Don’t miss the thought­ful post by Steve Den­ning on Forbes.com, the one in which he speaks of “Lead­er­ship In The Three-Speed Econ­o­my”. It’s one of the best snap­shots of “where we are” (in a glob­al sense) in terms of busi­ness, soci­ety and the world econ­o­my.

Den­ning notes that, when peo­ple talk about the econ­o­my “recov­er­ing”, they need to ask, first, which econ­o­my. He iden­ti­fies three:

The Tra­di­tion­al Econ­o­my of the 20th Cen­tu­ry (Gen­er­al Elec­tric, Wal­mart and the like)

The Finan­cial Cap­i­tal­ism Econ­o­my (dom­i­nat­ed by the big banks of today)

The Cre­ative Econ­o­my (the “real econ­o­my that gen­er­ates prod­ucts and ser­vices for real cus­tomers”)

Den­ning explores the spe­cial traits of each econ­o­my, but he doesn’t mince words. He believes that the tra­di­tion­al econ­o­my is “in steep decline with a grim future”. The econ­o­my tied to finan­cial cap­i­tal­ism is, he says, frail even though it is “flour­ish­ing today”. Why so? Main­ly because this econ­o­my is pro­tect­ed by big gov­ern­ments and their cen­tral banks. Propped up by free mon­ey, the banks are not financ­ing the real econ­o­my and thus are in a kind of twi­light zone. When the real econ­o­my grows, these banks may be insu­lat­ed from that growth. All this finan­cial engi­neer­ing has pro­vid­ed banks with phan­tom val­ue.

Get CreativeThe real econ­o­my, he argues, is the cre­ative econ­o­my: “It exploits an inter-con­nect­ed con­stel­la­tion of tech­no­log­i­cal inno­va­tions and brings to the mar­ket­place dra­mat­ic reduc­tions in cost, size, time and con­ve­nience, new sys­tems of infra­struc­ture, new ways of social­iz­ing, new mean­ing as to how time is spent, and new ways of liv­ing these pos­si­bil­i­ties.” He cites com­pa­nies such as Ama­zon, Sales­force, Whole Foods and Cost­co as exem­plars of firms that are lead­ing this econ­o­my.

Den­ning has a great five-point list of “how lead­ers think, speak and act in the work­place. Where­as the Tra­di­tion­al Econ­o­my flour­ished an ethos of effi­cien­cy and con­trol, the Cre­ative Econ­o­my thrives on the ethos of imag­i­na­tion, explo­ration, exper­i­ment, dis­cov­ery and col­lab­o­ra­tion.” Make sure you take spe­cial note of his sum­ma­tion of the new lead­er­ship mod­el.

What’s been clear to me for some time is that next will only be found in the cre­ative econ­o­my. Oper­a­tional effi­cien­cy and acquis­i­tive growth — the main­stay engines of ear­li­er economies — are passé. Gen­er­at­ing nov­el insights and work­ing to con­vert those insights into actions that lead to new val­ue-cre­at­ing activ­i­ties is what firms must do to have a bright future.

Please glance again at the six questions/behaviours I list­ed ear­li­er that define the look and feel of a nextsens­ing leader. Any oth­er kind of leader is tak­ing his or her organ­i­sa­tion back­wards or, at best, keep­ing it in a hold­ing pat­tern. In this sense, Denning’s words from his clos­ing deserve empha­sis sim­ply because they are so pow­er­ful:

In man­age­ment as in sci­ence, some thought-lead­ers remain intran­si­gent and con­tin­ue to nois­i­ly defend the old par­a­digm. But the changes of the new par­a­digm are now inevitable and increas­ing­ly obvi­ous to those with eyes to see. Sacred myths are being reex­am­ined. New ques­tions are being asked of old data. In due course, the text­books are rewrit­ten and uni­ver­si­ty cours­es are revised.

Look­ing for next? Enter the cre­ative econ­o­my.

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