BusinessWeek As we watch Capitalism version 2.0 pan out, we are acutely aware of the changing role of government, financial institutions, equity markets in the new landscape. However, look below the surface. The new dynamics are also resulting in a fast-changing kaleidoscope within, with new patterns beginning to emerge.

There is new life kicking in amidst all this talk of gloom and doom.

We are witnessing a burst of fresh entrepreneurial energy as the changing environment encourages people to step out of their comfort zones. The need to think afresh about what works and does not work in the new world is resulting in the birth of new venture ideas and the building of innovative SOHO operations in niche sectors, such as a start-up business insuring your car loan payments in case of layoff.

Across organisations, we are witnessing changing work models. There is a shift from measuring input to evaluating outcome; from rewarding effort to incentivising results. These changes, which began some years ago with the growing popularity of Robert Kaplan and David Norton’s Balanced Scorecard, are spreading further with more and more companies adapting their performance management systems to align individual goals with collective business goals.

Performance is becoming the key differentiator in these times. As a recent Business Today survey revealed, with salary increments going into deep freeze even in India—an economy that is still showing positive growth—carrots now come with sticks. It is variable pay, based directly on performance, that will now be the differentiating income.

Read the full article here.

Harvard: Emerging Patterns in the Crisis Economy
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