The Innovation Game

Innovation seems to be the watchword for some 500 top business executives gathered from around the world for the New York Forum.

“The challenge right now is that businesses need to innovate and society needs for them to innovate,” said Rich Lesser, chairman of North and South America for the Boston Consulting Group, which has been brought in by event organizer Richard Attias to help design the program for this global gathering which runs through today.

The forum, which kicked off Tuesday evening, is shot through with topics surrounding changing business models from coming up with new products to reinventing how businesses operate. That emphasis on innovation is likely to come through in the white paper members of the conference will deliver to the gathering of leaders from G-20 big economies Saturday.

Attias, who worked with Bill Clinton on the Clinton Global Initiative and helped organize the annual Davos gathering of economic leaders, said his goal in putting together the New York conference was to help start the ball rolling toward economic recovery, growth, and innovation throughout the world.

Attendees at the two-day event range from the richest man in the world, Carlos Slim, the Mexican telecom mogul, to young entrepreneurs. Sixty percent come from the United States and 40 percent from other countries. Among its sponsors is the China Chamber of Commerce.

“I always defined the New York Forum as a call for action,” Attias said at a press conference kicking off the event. “We don’t have more time to address these issues. The public opinion is scared. People continue to lose their jobs. We have no magical solution, but we have to try to find some…beginning.”

And that beginning begins, if you will, with innovation. Topics at the conference are shot through with questions of reinventing businesses and, on a larger level, capitalism itself.

But change could begin with individual businesses themselves, from the smallest to the largest.

“One of the crying needs right now is to recognize that the world has changed,” Lesser said in an interview with Portfolio.com prior to the conference. And that change doesn’t dictate that businesses come up with better widgets. They have to become better businesses—more attuned to market needs and their own strengths, right down to such questions as what you have to own and what you can outsource.

“We’re in a really rich vein of issues facing business leaders right now,” Lesser said.

For one thing, said Cathleen Black, president of Hearst Magazines, the old top-down model of business leadership no longer works. She said leaders need to be more creative about getting employees to help create and buy into a company’s vision.

“The top-down theory, it’s not the model that works anymore,” Black said at the forum's kickoff event Tuesday evening. “You need a collective army with you.”

Business models will also have to change radically to keep up with the technological changes that are transforming the world into one that is more mobile—and more connected.

Rupert Murdoch, CEO of News Corp., and Philippe Camus, Chairman of Alcatel-Lucent, both talked about the huge changes they expect their businesses to see because of increasingly powerful mobile devices.

For Murdoch, the invention of such devices as the iPad give the media a second chance to get new business models right, in part by charging for the content provided on the devices.

“We have now an iPad,” he said. “That is a fantastic invention. It combines the ability to present all forms of media to all people, from three-year-old children to 100-year-old men. I believe that within five years there will be many hundreds of millions of iPads or iPad-like devices.”

Camus said he expects huge changes in networking that will transform Alcatel-Lucent and other companies like it.

“Job creation will come from innovation,” Camus said. “We have to devote the resources we have to innovation.”

And here’s the dark side if you’re a business that ignores the call to reinvent yourself on a regular basis. You could be left behind.

Mike Deimler, also with Boston Consulting Group, told Portfolio.com his team had plotted changes in top companies’ position over several decades. Thirty years ago, those changes at the top seemed to go at a glacial pace. Now, a company like Google can come in and in less than a decade create a whole new business model and dominate, shoving incumbents aside.

“There’s been a stunning increase in the changes in leadership positions within industries,” he said. And what that means is that everyone has to innovate, from the small entrepreneur with an idea that could turn into a giant business to the giant business trying to hold onto its position at the top.

“What that implies is the durability of advantage is no longer nearly as much as it used to be,” Deimler said. “You better presume that your leadership position is going to be attacked and that your leadership position is at risk.”

That kind of landscape—where upstarts are constantly changing the game—could make for a lot of nervous CEOs throughout the world. But it could also unleash the very changes to business and society that Attias is hoping his forum will help bring about.

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Kent Bernhard Jr. is News Editor of Portfolio.com