The Future Of Management Hay

The Future of Management

Based on „The Future of Management“ by Gary HamelHarvard Business School Press 2007

What is management innovation?

16 March 2008© Marc Sniukas2

The Ultimate Advantage


„Management innovation is anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by doing so, advances organizational goals.“

Gary Hamel

Management Innovation changes the way managers do what

they do,…


… and does so in a way that enhances

organizational performance.


From Management Innovation to Competitive Advantage

3 conditions, the innovation is…

a novel management principle, challenging some long-standing orthodoxy

systemic, encompassing a range of processes and methods

part of an ongoing program of rapid invention where progress compounds over time


„…management innovation follows a power law: for every truly radical idea that forever changes the practice of management there are dozens that are less valuable and less influential.“

Gary Hamel

But that‘s no excuse not to innovate!

An Agenda for Management Innovation

1. what are the new challenges the future has in store for your company?

2. what are the tough balancing acts your company never seems to get right?

3. what are the biggest gaps between rhetoric and reality in your company?

4. what are the frustrating incompetencies that plague your company?


Be Bold


Some inspiration

Dramatically accelerating the pace of strategic renewal in organizations.

Making innovation everyone‘s everyday job.

Creating a highly engaging work environment that inspires employees to give the very best of themselves.


Building a Resilient Organization

Challenges

Overcoming denial for the need of a strategic reboot

Developing a diverse portfolio of non-incremental strategic options

Achieving flexibility in resource allocation


Building a Resilient Organization

Challenges

How do you ensure that discomforting information isn‘t ignored or simply „explained away“ as it moves up the hierachy?

How do you build a management process that continually generates hundreds of new strategic options?

How do you accelerate the redeployment of resources from legacy programs to future-focused initiatives?


Making Innovation Everyone‘s Job

A few questions

How have you been equipped to be a business innovator? What training have you received? What tools have you been supplied with?

Do you have access to an innovation coach or mentor? Is there an innovation expert in your unit who will help you develop your breakout idea?

How easy is it for you to get access to experimental funding? How long would it take you to get a few thousand dollars in seed money? How many levels of bureaucracy would you have to go through?

Is innovation a formal part of your job description? Does your compensation depend in part on your innovation performance?

Do your company‘s management processes – budgeting, planning, staffing, compensation, etc. – and structures support your work as an innovator or hinder it?



Barriers

Creative Appartheid

Old Mental Models

No Slack



Challenges

How can you enroll everyone within your company in the work of innovation, and equip each one with creativity-boosting tools?

How can you ensure that top management‘s hallowed beliefs don‘t straitjacket innovation, and that heretical ideas are given the chance to prove their worth?

How can you create the time and space for grassroots innovation in an organization that is running flat out to deliver today‘s results?


Creating a Company Where Everyone Gives Their Best

Barriers

Too much management, too little freedom

Too much hiearchy, too little community

Too much exhortation, too little purpose


Creating a Company Where Everyone Gives Their Best

Challenges

How can you broaden the scope of employee freedom by managing less, without sacrificing focus, discipline, and order?

How can you create a company where the spirit of community, rather than the machinery of bureaucracy, binds people together?

How can you enlarge the sense of mission that people feel throughout your organization in a way that justifies extraordinary contribution?


Management Innovation in Action


Creating a Community of Purpose

the Whole Foods Market way

Freedom and Accountability

Trust

Equity

Purpose


Creating a Community of Purposethe Whole Foods Market way

Lessons learned

Principles matter: unique management system based on a nexus of distinctive management principles: Love. Community. Autonomy. Egalitarism. Transparency. Mission.

The biggest obstacle to management innovation may be what you already believe about management: are management practices consistent with your principles?

Inspired management innovation can help to resolve intracable trade-offs



Lessons learned

How do you empower people by managing less while retaining discipline and focus?

Give employees a large dose of discreation

provide them with the information they need to make wise decisions

hold them accountable for results



Lessons learned

How do you create a company where the spirit of community binds people together?

Manage as if you really believe that the interests of stakeholders are interdependent

create a high degree of financial transparency

and limit compensation disparities.



Lessons learned

How do you build an enlarged sense of purpose that merits extraordinary contributions?

Make the pursuit „Whole Foods, Whole People, Whole Planet“ as real and tangible to employees as the pursuit of profits.


Building an Innovation Democracy

the W.L. Gore way

A lattice, not a hierachy

No bosses, but plenty of leaders

Sponsors instead of bosses

Free to experiment

Commitments, not assignments

Energizing and demanding

Big yet personal

Focused, but no core business

Tenacious, and risk averse


Building an Innovation Democracythe W.L. Gore way

Lessons learned

Management innovation often redistributes power.

In the short run, the costs of management innovation may be more visible than the benefits

Don‘t be timid



Lessons learned

How do you enroll everyone in your company as an innovator?

Do away with hierachy

continually reinforce the belief that innovation can come from anyone

colocate employees with diverse skills to facilitate the creative process



Lessons learned

How do you make sure that management‘s hallowed beliefs don‘t strangle innovation?

Don‘t make „management“ approval a prerequisite for initiating new projects

minimize the influence of hierachy

use a peer-based process for allocating resources



Lessons learned

How do you create time and space for innovation when everyone‘s working flat out?

Carve out 10% of staff time for projects that would otherwise be „off budget“ or „out of scope“

allow plenty of percolation time for new ideas


Aiming for an Evolutionary Advantage

the Google way

a formula for innovation. 70-20-10

a company that feels like grad school

the chance to change the world

a bozo-free zone

dramatically flat, radically decentralized

small, self-managing teams

the freedom to follow your nose

rapid, low-cost experimentation

differential rewards

a continous companywide conversation

an expansive business definition


Aiming for an Evolutionary Advantagethe Google way

Lessons learned

The internet itself may be the best metaphor for 21st-century management.

Experienced mangers may not make the best management innovators.

Management innovations that humanize work are irresistible.



Lessons learned

How do you guard against the dangers of hubris and denial?

Open up the strategy process – make sure it isn‘t dominated by the old guard

keep the hierachy flat – don‘t insulate top management from the views of front-line employees who are in the best position to see the future coming

encourage dissent.



Lessons learned

How do you create a steady flow of new strategic options?

Make it easy for folks to experiment with new ideas – the give them time and minimize the number of approval levels

build a „just try it“ culture – emphasize „test and learn“ instead of „plan and execute“

create outsized rewards for individuals who up with game-changing ideas; don‘t truncate the business definition.



Lessons learned

How do you accelerate the reallocation of resources from legacy projects into new initiatives?

Encourage people to work on „out of scope“ projects – formalized with the 70-20-10 rule

give people the freedom to do market experiments so they can build a solid case for their ideas.


New Principles

Variety

– Experimentation beats planning– All mutations are mistakes– Darwian selection doesn‘t need

SVPs– The broader the gene pool, the

better Flexibility

– Markets are more dynamic than hierachies

– Build a market and the innovators will come

– Operational efficiency ≠ strategic efficiency

Activism

– Leaders are accountable to the governed

– Everyone has a right to dissent– Leadership is distributed

Meaning

– The mission matters– People change for what they care

about Serendipity

– Diversity begets creativity– You can organize for serendipity– Pigeonholes are for pigeons, not

for people


Putting the Principles to Work

Nominate a process and ask the following questions:

Who owns this process? Who has the power to change it?

What purpose does this process serve? What contribution is it supposed to make to business performance?

Who gets to participate in this proces? What voices get heard?

What are the inputs to this process? What data gets considered?

Whose opinions get weighted the most heavily? Who has final decision-making authority?

What decision tools get used? What kind of analysis gets done?

What are the criteria for decision making? How are decisions justified?

What events or milestones drive this process? Is it calendar-driven or real-time?

Who are the „customers“ of this process? What work does it most directly impact?



Variety: How would you introduce a greater diversity of data, viewpoints, and opinions into this process? How would you design the process so that it facilitates, rather than frustrates, the continual development of new strategic options and encourages relentless experimentation?

Flexibility: How would you redesign this process so that it exploits the wisdom of the market, rather than just the wisdom of the experts? How might this process be used to help speed up the reallocation of resources from legacy programs to new initiatives? How could we make it easier for innovators to get the resources they need to advance their ideas?

Activism: How would you change this process so that it encourages, rather than discourages, dissenting voices? How would you make this process more responsive to the needs and concerns of those working on the front lines? How do we give folks on the ground a bigger voice in shaping policy and strategy?



Meaning: How would you use this process to help focus attention on the higher order goals our company claims to serve (or should be serving)? How could this process help employees to identify and connect with the goals they care about personally?

Serendipity: How could this process be redesigned in a way that would help our company to become an even more exciting and vibrant place to work and a magnet for creative talent? How could this process be used to facilitate the collision of new ideas?


Challenges for Finding the Fringe

How do you create an organization where everyone‘s voice gets heard and ideas compete solely on their merits? How do you build a democracy of ideas?

How do you turn ordinary employees into extraordinary innovators? How do you amplify human imagination?

How do you accelerate the redeployment of capital and talent? How do you dynamically reallocate resources?

How do you ensure that decisions fully reflect the collective knowledge of the organization? How do you aggregate collective wisdom?

How do you keep top management‘s out-of-date beliefs from impeding strategic renewal? How do you minimize the drag of the old mental models?

How do you turn an army of conscriptts into a community of volunteers? How do you give everyone the chance to opt in?


Lessons Learned

To tackle a systemic problem, you need to understand it‘s deep roots.

It‘s easier to augment than supplant.

Commit to revolutionary goals, but take evolutionary steps.

Metrics are essential.

Keep at it.

Minimize your political risk.

Start with volunteers.

Make it a game. Keep it informal.

Run the new process in parallel with the old.

Iterate.


Well folks…that‘s it!

All you‘ll have to do now is getting started!


Want more…?

Visit www.sevenprophets.com for more resources on management innovation, strategic innovation and download a complete guide to the theory and practice of strategic innovation, reinventing your business and creating new growth businesses.

To learn about Marc visit www.sniukas.com.


http://www.sevenprophets.com/

http://www.sniukas.com/

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Marc SniukasSenior Consultant

Lainzer Strasse 80A-1130 Vienna, Austria M +43 (0) 699 122 333 03T +43 (0) 1 306 33 66F +43 (0) 1 306 33 66 9 [email protected]

16 March 200844 © Marc Sniukas

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The Future Of Management Hay