"Capital is being superseded by creativity and the ability to innovate."
- Klaus Schwab, Founder of the World Economic Forum
I came across this quote recently and it resonated so powerfully that I put it on our website.
And though it can be debated whether money or ideas come first in the hierarchy of building blocks on which businesses are built, there is no longer any question that you must have both in order to create sustainable competitive advantage.
Because today, there are only two business realities.
Disrupt. Or be disrupted.
Today, exceptional companies have to do more than simply meet a known need. They have to be capable of seeing the world differently.
If you look at the companies on the list of the world’s most valuable brands you’ll see an interesting trend. Only three - Coca-Cola, McDonald’s and Wal-Mart - exist to satisfy the bottom layer of Maslow’s hierarchy of needs: food; water; warmth and rest.
In other words, we’ve moved a long way past worrying about the present. Today, our energy and our money is drawn towards companies that are focused on redefining the future, rather than satisfying basic human needs.
Indeed, of the top 20 most valuable brands, nine are defined as ‘technology’ businesses, four are automotive (an industry at the epicenter of technological disruption), and two - GE and AT&T - are full-time residents of the innovation school of growth.
When where we’re going is more compelling than where we are, then the ability to innovate becomes not just a valuable business capability but a prerequisite to success. And creativity - thefuel that drives innovation - becomes an essential resource.
These are the building blocks of what is increasingly being described as, ‘The Creative Economy.’
In this environment, companies must do two things to succeed. Find a supply of creativity that is as reliable as electricity. And then apply it to solving problems that have value to today’s consumers.
Companies that do this, produce what I call, ‘Profitable Creativity.’
They also produce less bureaucracy and more empowerment; fewer rules and more exploration. They collaborate at their core, ideate and iterate rapidly and possess a greater tolerance for risk.
They are built, not by accident, but by design.
And they fill the conversations of consumers who care less about a company’s how and how much and much more about its why.
Companies like Apple, Netflix, Warby-Parker, Uber, Starbucks, Pixar, 72andSunny and Refinery29.
They are built and run by leaders who are more interested in disrupting than being disrupted. Leaders who relentlessly seek new sources of creativity, new practices that unlock it, and new ways to apply it to solving problems that have value.
These are the companies of the Creative Economy.
We’re going to spend time over the next few months writing about how to recognize these busineses, what makes them tick, and how you can apply their lessons to your business. Original articles will first appear at Fast Company, and then reposted here, supplemented from time to time with additional thoughts and analysis.
I’m going to be joined in this by the well-known ethnographer, Sudhir Venkatesh. Together, we’ll be exploring the dynamics that determine what makes these companies and their leaders disruptive and successful.
We hope you’ll join us and give us your thoughts and insights as we take this journey.