By, Stuart R. Levine

As I reflect on my travels to over 20 cities in 2011, I am struck by a conversation I’d like to share with you.  Upon arriving late one evening in Las Vegas to speak at a credit union conference, I asked the cab driver “how’s business?” I heard a profoundly sad story.  His face is seared in my brain as a reflection of the impact of the contracting and de-leveraging in our country that began in 2008.  Eight years ago, he moved to Las Vegas and purchased a home for $180,000.  A global financial institution provided him with a line of credit and he proceeded to build a new deck and buy large new cars every year as his home value increased to $400,000.  Today, his home is valued at $120,000.  He is 67 year old, hopeless, with no possibility of retirement and stuck driving a cab to pay off his mortgage obligations.  His obesity is obviously being fueled by his frustration.

I am sorry to say that this contracting and de-leveraging will probably last at least another two to five years.  Despite this, I still believe there are still great opportunities if one is smart and agile enough to capitalize on them.  But it’s a very different, changed world.  Continuing to learn and developing strategic business solutions in today’s highly complex, hyperconnected and fragile environment is our biggest challenge.

Complexity, by definition, means that things don’t behave in logical patterns.  Complexity is disrupting business ecosystems and competition is coming from unexpected players.   It takes different skill sets to navigate complexity, including understanding outliers, gathering data, identifying risks over the horizon, thinking strategically and leading people who are distracted and fearful. Having the confidence to allow people to think, which ultimately increases their productivity and encourages a culture of innovation and collaboration, is hard to do, but is what’s needed to create sustainability and growth.

Redefining productivity in a world that is hyperconnected is not easy.  It’s often counter-intuitive.  In working with a global technology company, we helped them to increase innovation, by learning how to think strategically.  This required time for thinking, learning and renewal. New ways of thinking strategically led to increased collaboration of ideas and creative solutions.  Technology people, who are most often at the heart of innovative, often need to learn these new skills.  Building the characteristics of an innovative culture requires character, taking risks, the commitment to learn new things and the ability to articulate in a clear, crisp manner.

A willingness on the part of companies to invest in learning becomes a strategic weapon.  A client recently shared with us that based upon the work we did to develop clear, smart implementable strategies, succession plans for their leadership and board and best practice governance standards, they are now in a position to compete against larger entities, bigger in asset value, but lacking in this intrinsic value that they are using as a strategic weapon.  Their bench strength and culture which is articulated each day by each and every employee in their actions, provides them with the capacity to think clearly and base their decisions, whether it be to merge or acquire new companies, on the right issues that focus on value creation for customers.

Creating a culture founded on values becomes even more important in a complex world. Creating a future in a complex world requires both innovation and creativity.  By asking the right questions, new solutions and opportunities will arise.  Why do clients need you?  Why do you do what you do?  What is at the heart of what makes you unique and why do people do business with you? Our consulting firm has been in business for 16 years based upon our values as well as being value-driven.  Addressing real customer needs becomes a powerful tool and competitive advantage.  Having a moral compass while you build relationships with customers, creates long-term sustainability.  We are passionate about working with leadership who strive to exceed their customer’s needs and continue to do the right thing for their employees and the communities they serve.

With increased regulation, changing demographics and the new reality of the consumer in control, combined with this era of global contraction and de-leveraging, it’s even more critical to understand these trends.  People and organizations who adapt and embrace these new realities through learning and new ways of working together to create innovative solutions, will be the winners in this new and complex world.

Stuart R. Levine is Chairman and CEO of Stuart Levine & Associates LLC, a strategy, leadership and governance consulting firm.  He serves on the board of Broadridge Financial Solutions, Single Touch Systems, is Lead Director of J. D’Addario & Company, Inc. and director of the North Shore-Long Island Jewish Health System.