Management Innovation – is this an oxymoron?

A recent article by Gary Hamel, titled ‘The Why, What and How of Management Innovation‘, intrigued me, but I wasn’t sure what it meant. I’m familiar with product, process and service innovation but management innovation? In my opinion there’s a word missing – the article is really talking about management process innovation, but obviously that’s not as strong a title.

So what’s the message?

Hamel says that “A management breakthrough can deliver a strong advantage to the innovating company and produce a major shift in industry leadership. Few companies, however, have been able to come up with a formal process for fostering management innovation. The biggest challenge seems to be generating truly unique ideas”.

He suggests a series of questions to uncover whether our management processes are supporting or exacerbating big organisational problems and whether they are supporting or limiting big organisational opportunities.

This links to another HBR article by Bower & Gilbert – Whose Strategy is it? The authors have observed that the “carefully-crafted strategies of senior management” can be derailed by the decisions of middle and front line managers. They rightly observe that “every time a manager allocates resources, that decision either moves the organisation into or out of alignment with its intended strategy”.

So, taking asset allocation as a management process, we can apply Hamel’s thinking and ask “How we can innovate the system to ensure it delivers asset allocation decisions in line with the desired strategy?”. In a wider sense, both articles refer to the typical management issue of how to innovate the personal choices that all managers and employees make about where they allocate their time and efforts – which is the province of the Personal Efficiency Program that Paul is licenced to run.

Hamel argues that “a management innovation creates long-lasting advantage when it meets at least one of three conditions: It is based on a novel principle that challenges the orthodoxy; it is systemic, involving a range of processes and methods; or it is part of a program of invention, where progress compounds over time.”

To identify whether and how to innovate the process, he poses a series of questions that managers can ask:

Who owns the process?

What are its objectives?

What are the metrics for success?

What are the decision-making criteria?

How are decisions communicated, and to whom?

After managers have documented these details, Hamel suggests getting the people involved with the process to weigh in and explore the potential in the process. This exploration may reveal opportunities to reinvent your management processes.

Hamel also suggests that two of the four components that can help in generating truly unique ideas are:

– creative principles, or paradigms that can reveal new approaches and

– examples and analogies that help redefine what can be done.

Ralph Kerle and other creative colleagues at the Creative Skills Training Council are working on the former and I am using sporting analogies with a company this week to help them imagine how to ‘break down their silos’ and create more of a ‘running game’ so that the ‘play’ can move towards their goals. More on this later – I’m keen to share analogies, especially organic ones.

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