This article first appeared in Forum, The Edge Malaysia Weekly on November 13, 2017 - November 19, 2017

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” — William Pollard, English clergyman, 1880

In 1994, two professors — Gary Hamel and C K Prahalad — co-wrote a book, Competing for the Future, that had a profound impact on how companies all over the world thought about and prepared for their futures.

While the book presented a radically different way of thinking about strategy and competition, the heart of its message, and its appeal, was hope — in a process they called Advantage Creation. The book caught the imagination of management-types all over the world and has since been translated into more than a dozen languages.

Hamel and Prahalad believed then, as we do now, that it is possible for a company to move beyond incremental growth to creating a broad and enticing new horizon. Management’s strategic goal, according to the authors, was to fundamentally reinvent existing competitive space, or invent entirely new competitive space, in ways that amaze customers and dismay competitors.

Industry leadership, according to the learned professors, was more than restructuring and re-engineering the company. To build leadership, a company must be able to reinvent its industry; to rebuild leadership, a company must be capable of regenerating its core strategies. In this sense, it was not enough to get leaner and better — a company must also have the capacity to become different.

Although it has been more than 23 years since its publication, Competing for the Future deserves a rereading by Malaysia’s corporate leaders. Despite claims that Malaysian companies are doing better than before, I have a sinking feeling that most of them are content to take their industry structure as a given, seldom challenging the prevailing conventions.

These managers seem content to worry about how to position their companies in existing competitive spaces (INSEAD professors W Chan Kim and Renee Mauborgne called it the “Red Ocean” space) rather than spend time creating fundamentally new competitive spaces.

As you read the business pages, look at the issues that are preoccupying local senior management. Identify the criteria and benchmarks by which progress is being measured and look at the track record of new business creations. Look towards the future and ponder our companies’ ability to shape their future and regenerate success again and again in the years to come.

Now, ask yourself, do most Malaysian senior managers have a clear and broadly shared understanding of how their industry may be different 10 years in the future? Are their “headlights” shining farther out than those of the competition? Are they innovating to be the first in their industry? Are they?

Already, every economy — local, national, regional or global — is deeply affected by innovation and the impact is refreshing. Old, routine jobs have been made extinct and new ones are being created in real time.

The Innovation Economy is a term reintroduced by American futurist James Canton in 2007. It is a fusion of innovation, economics and entrepreneurship, and it is creating global wealth, prosperity and power like never before.

No longer based solely on governance, capital, talent, population and natural resources, the Innovation Economy is based on one thing more — access to innovation.

Without radical innovation, traditional factors that determine the success of an economy — such as productivity, progress and growth — will not be enough. Leaving the “Red Ocean” for the “Blue Ocean” is no longer a choice.

Prof David Ahlstrom of the Chinese University of Hong Kong asserts: “The main goal of business now is to develop new and innovative goods and services that generate economic growth while delivering benefits to society.”

I write to exhort Malaysian companies to get ready to navigate the opportunities of the Innovation Economy. It is a must, as innovation has and will continue to change the nature of work, jobs, capital, competitors, markets and customers. It is I believe, Job#1 in this extremely competitive global environment.

The dinosaurs who once ruled the earth were not replaced by creatures larger or fiercer. They were succeeded by creatures more nimble, more able to adapt, more capable of evolving — in sum, more innovative — at a time of rapid, radical change. This story illustrates a future we all face, one in which we will need to evolve, to be nimble and adaptive, or face the sorry consequences.

There is much to be said for being realistically gloomy about the future, and not much to be said for being irresponsibly cheerful. If you are gloomy, you are unlikely to be proved wrong by history and you can also feel that you have done a useful service by shocking society into mending its ways in order to avoid the looming disaster. Yet, I believe the future will be positive and perhaps, even marvellous if we develop our propensity to evolve and adapt.

Zakie Shariff sits on the boards of two local universities and has a deep interest in developing strong corporate leaders

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