The Innovation Mindset: A Checklist

David Maister asks:
How well does your firm stack up against these behaviors and states of mind?
– New challenges are eagerly, continuously sought out.
– The firm and its people never rely on momentum for their success, but are always seeking to build new capabilities.
– Compared to key competitors, the people in the firm are distinguished by a superior, burning passion to get somewhere new.
– The firm emphasizes and requires adaptability, flexibility, and responsiveness as key virtues.
– The firm’s strategies are created through continued and repeated experimentation.
– The firm is markedly superior in creating (not just hiring for) energy, excitement, enthusiasm, drive, determination, passion, and ambition.
– Service offerings, locations, and operating units are repeatedly assessed against the three key criteria: Do the people in the firm find this exciting? Are we making money? Are we doing something special that others are not doing?
– There is a restless refusal to accept “It’s OK.” People never settle, never give up, never coast.
– The firm sustains energy and investment actions both when things have gone badly and when things are going relatively well.
– The firm does not judge its performance by the levels of its accomplishments, but by the “relative incline”: whether or not it is improving relative to competitors on the characteristics it has chosen to compete on.
– Management is held accountable for its ability to create and sustain drive, enthusiasm, passion, ambition, commitment, and excitement, and instills these things in the individual members and groups that make up the organization. Managers who cannot do this are replaced.
Be honest! Read the entire article: “It’s Not How Good You Are, It’s How Much You Want It” >>

Chris Trimble: Building Innovation Ecosystems

The rate at which new ideas are generated is directly related to the effort invested in enriching social networks.
Says Chris Trimble in his Fast Company column:
“Entrepreneurs believe in the power of networking. Many are very good at it. They become good because they recognize that most people with interesting notions usually have only one piece of a puzzle. Often unexpected combinations of ideas, or chance meetings of people with complimentary perspectives, ignite genuine breakthroughs.
“Aspiring innovators from large companies are handicapped in the networking game — not because they lack skill, but because of the nature of their jobs. Once a business is proven and profitable, the name of the game is to make operations as efficient as possible. Employees at all levels are pulled into ever more specialized roles. Repeated tasks are joined together by rigorously documented processes. As a result, each manager’s web of connections increasingly mirrors the way today’s work is organized. Most connections are with managers with closely related specialties, who share similar perspectives, shaped by the demands of the same customers.”
There is one other point Chris – I call it the “closing of the corporate mind”. It’s not just about people being comforatble with the status quo. It’s about people hiring and surrounding themselves with their own kind. A tribal thing, perhaps? So the desis hang out with the desis, the Chinese with the Chinese, the Hicks with the Hicks, the golf-playing execs with other golf-playing execs, repugs with repugs, etc.
And as your colleague VG says, travel!
Trimble also mentions the “vast differences between communication networks and trust networks. Communication networks are the kind that are useful at the front-end of the innovation process because they enable the sharing of ideas. The back-end of the innovation process depends on trust networks, which require much heavier investments in time, energy, and goodwill.
Still boils down to people and trust, people! Put a value on that Mr. CFO Bean-Counter!

Building a Digital Business Platform

For over five years now I’ve been working on the problem of how companies can build a community for prospective customers. The question I asked myself was:
How can we get customers to collaborate with the company/companies to co-create products and services that benefit everyone involved?
I had some long discussions on this with John Hagel and the late John Rheinfrank. Here’s what we were thinking:

[click to enlarge]
Any suggestions?

P.G. Wodehouse & India

In a country where most books in English sell fewer than 1,000 copies and 5,000 constitutes a bestseller, Penguin sells up to 70,000 Wodehouses a year: part of a thriving “retro-market” that ranges from Agatha Christie to Modesty Blaise.
Why? Read the article: Why India fell for the code of Wodehouse
Let me give you a list of what we read (for fun) when we were kids at St. Columba’s (from first grade to 10th). It sure was British, beta!
– Enid Blyton’s Five Find Outers, Famous Five, Secret Seven, Malory Towers, Saint Clare’s
– Captain W.E. Johns’ Biggles
– Richmal Crompton’s William
– Frank Richards’ Billy Bunter
– Agatha Christie
– and of course, P.G. Wodehouse
We also read Tin Tin and Asterix, the usual Hardy Boys and Nancy Drew junk, and the Bobsey Twins. Add to that a weekly Commando comic, the occasional Beano, and see what a mixed-up world we grew up in!
It’s a straight line from Noddy to P.G. Wodehouse.
One more thing – we did NOT read Shakespeare, unless we had to.

Open Source Collaboration: The Flu Wiki

The purpose of the Flu Wiki is to help local communities prepare for and perhaps cope with a possible influenza pandemic. This is a task previously ceded to local, state and national governmental public health agencies. Our goal is to be:
– a reliable source of information, as neutral as possible, about important facts useful for a public health approach to pandemic influenza
– a venue for anticipating the vast range of problems that may arise if a pandemic does occur
– a venue for thinking about implementable solutions to foreseeable problems
This is how the Internet is democratizing society… collaborative problem-solving in public health. Public health is too important to leave to the bureaucrats… Remember Katrina?
See their avian influenza outbreak maps.
This level of detailed information is what we want from our public institutions, but you can bet we won’t get it- for several reasons- political, economic, and sadly, policy.

Weep, Deming, Weep: Why US Automakers Can’t Learn

Is Deming crying?
It seems like the US Auto industry is intent on destroying itself. See for example, Doug Smith’s “Removing The Deck Chairs From The Titanic”. Smith says:
“GM still doesn’t ‘get it’ when it comes to the value side of it’s products. As previously noted, GM invested heavily in product design and manufacturing flexibility — that is, the capacity to move quicker to provide new products. It can now bring 15 new products to market quicker than ever before. And, what are the deck chair managers doing with this flexibility. 13 of the new products will be re-designs of full size SUVS.”
What is wrong with these people? What happened to Deming’s 14 points? It was Deming who said: “If you want to ruin a company, send it American management”
So what’s going on? IndustryWeek‘s John Teresko talks about the Toyota Way, and asks two questions:
1) How does Japan’s leading automaker keep getting better?
2) What keeps competitors from emulating that performance?
While U.S. manufacturers in many sectors have used practices from the Toyota Production System (TPS) to boost performance substantially since the mid-’80s, they have used it improperly, experts say. Instead of embracing TPS as an overarching philosophy, they have used it piecemeal as a toolbox. These companies’ leaders must revive their strategies to mimic Toyota’s in order to compete, which means reversing the popular notion that lean and other TPS-derived concepts are tools to be used selectively to achieve departmental milestones.
Read the whole thing. Look for this fun quote: “cost reduction is not a strategy unless you want to commoditize or go out of business.”
P.S.- For those of you who have forgotten Deming, here are his 14 points:
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6. Institute training on the job.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8. Drive out fear, so that everyone may work effectively for the company (see Ch. 3).
9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
– Eliminate work standards (quotas) on the factory floor. Substitute leadership.
– Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
13. Institute a vigorous program of education and self-improvement.
14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

Who Won the Superbowl Ad Contest? Let the Brains Decide…

So who won this year’s Superbowl ad-wars?
This year, at the UCLA Ahmanson-Lovelace Brain Mapping Center (don’t you love that name), Marco Iacoboni and his group used functional magnetic resonance imaging (fMRI) to measure brain responses in a group of subjects while they watched the Super Bowl ads. The way fMRI works is relatively simple: different levels of cerebral blood oxygenation have different magnetic properties. Moreover, changes in blood oxygenation correlate with changes in neural activity. Thus, without using any contrast agent, fMRI can measure how much brain areas are activated during sensory, cognitive and motor experiences.

According to the brain-waves, “the overwhelming winner among the Super Bowl ads is the Disney – NFL ‘I am going to Disney’ ad. The Disney ad elicited strong responses in orbito-frontal cortex and ventral striatum, two brain regions associated with processing of rewards. Also, the Disney ad induced robust responses in mirror neuron areas, indicating identification and empathy. Further, the circuit for cognitive control, encompassing anterior cingulate cortex and dorsolateral prefrontal cortex, was highly active while watching the Disney ad. We consider all these features positive markers of brain responses to the ad. In second place, the Sierra Mist ad, activated the same brain regions but less so than the Disney ad.”
Great. Disney? Give me a break. That said, I know someone (a famous business guru) who is visiting Disney this week, so maybe the ad worked after all!
Here’s the one I picked as the winner. (Doug Smith agrees!) >>

Anyway, read all about the brain wave theory of advertising effectiveness here >>

The Death of the Newspaper

Joseph Epstein in Commentary:
“To begin with familiar facts, statistics on readership have been pointing downward, significantly downward, for some time now. Four-fifths of Americans once read newspapers; today, apparently fewer than half do. Among adults, in the decade 1990-2000, daily readership fell from 52.6 percent to 37.5 percent. Among the young, things are much worse: in one study, only 19 percent of those between the ages of eighteen and thirty-four reported consulting a daily paper, and only 9 percent trusted the information purveyed there; a mere 8 percent found newspapers helpful, while 4 percent thought them entertaining.
“From 1999 to 2004, according to the Newspaper Association of America, general circulation dropped by another 1.3 million. Reflecting both that fact and the ferocious competition for classified ads from free online bulletin boards like, advertising revenue has been stagnant at best, while printing and productions costs have gone remorselessly upward. As a result, the New York Times Company has cut some 700 jobs from its various papers. The Baltimore Sun, owned by the Chicago Tribune, is closing down its five international bureaus. Second papers in many cities have locked their doors.
“This bleeding phenomenon is not restricted to the United States, and no bets should be placed on the likely success of steps taken by papers to stanch the flow. The Wall Street Journal, in an effort to save money on production costs, is trimming the width of its pages, from 15 to 12 inches. In England, the once venerable Guardian, in a mad scramble to retain its older readers and find younger ones, has radically redesigned itself by becoming smaller. London’s Independent has gone tabloid, and so has the once revered Times, its publisher preferring the euphemism “compact.”
I agree, in principle, with Epstein’s solution:
“My own preference would be for a few serious newspapers to take the high road: to smarten up instead of dumbing down, to honor the principles of integrity and impartiality in their coverage, and to become institutions that even those who disagreed with them would have to respect for the reasoned cogency of their editorial positions. I imagine such papers directed by editors who could choose for me—as neither the Internet nor I on my own can do—the serious issues, questions, and problems of the day and, with the aid of intelligence born of concern, give each the emphasis it deserves.
“In all likelihood a newspaper taking this route would go under; but at least it would do so in a cloud of glory, guns blazing. And at least its loss would be a genuine subtraction. About our newspapers as they now stand, little more can be said in their favor than that they do not require batteries to operate, you can swat flies with them, and they can still be used to wrap fish.”
Read the entire article here >>

Wal-Mart vs. Target vs Walgreens vs Costco

From a NYTimes article:
Though Wal-Mart is three times larger than its next biggest retail rival, Mr. Scott appears to be preoccupied with competitors whose individual store sales are growing faster than Wal-Mart’s — namely Target and Walgreens.
Asked about Wal-Mart’s stock price, which has fallen 11 percent in the last five years. Mr. Scott said: “You cannot have Target or Walgreens beating you day after day after day.” Mr. Scott wrote that one reason Wal-Mart’s same-store sales were growing more slowly than Target’s was that Wal-Mart’s customers earn less and have been squeezed worse by soaring fuel prices.
“Wal-Mart’s focus has been on lower income and lower-middle income consumers,” he wrote. “In the last four years or so, with the price of fuel being what it is, that customer has had the most difficult time. The upper-end customer got a tremendous number of tax breaks about four years ago. They have been doing very well in this economy.”
He said having to pay $50 to gas up a car did not change anything for rich customers, but did for those who didn’t earn a lot. “It changes whether or not you go to the movie, whether or not you buy new sheets, whether or not you go out to eat.”
At several points, Mr. Scott addressed criticisms that Wal-Mart health plan was too stingy toward its employees. He said that Wal-Mart’s health plan “stacks up very, very competitively” with other retailers. In a knock at companies that provide more generous benefits, Mr. Scott wrote: “One of the things said about General Motors now is that General Motors is no longer an automotive company. General Motors is a benefit company that sells cars to fund those benefits.”

OK. Let’s get this straight:
1) Wal-Mart is targeting lower income and lower-middle income consumers, i.e. its employees.
2) Wal-Mart won’t pay its employees a decent salary w/ benefits.
3) Wal-Mart says its same-store sales are growing more slowly than Target’s is because Wal-Mart’s customers earn less and have been squeezed worse by soaring fuel prices.
Sounds like one of those destructive cycles brought about by narrow-thinking from upper-management…
Let’s look at two other alternatives: Costco and IKEA.
Wake up Wal-Mart. Get some values.

Aligning HR with the Business

Now that HR has decide that they need to be perceived as strategic, they’ve decided to put start measuring the ROI of HR. How? Human-Capital Metrics.
The problem with HR is HR. In a majority of companies, business and HR are not in alignment.
Why? Because most businesses treat their employees as costs, not investments. As long as that’s the prevailing attitude, all attempts to measure the value of HR using metrics will be in vain…
There are exceptions – see Laurence Haughton’s interview– especially the part about IKEA.

Ad Agencies Face Accountability

Google may be diversifying offline into radio, print and potentially TV advertising sales, but its plan is to utilize its powerful online backchannel to measure results of those deals.
If successful, the initiative could provide a new, empirical way of proving the ROI of traditional media advertising deals. In an interview with MediaDailyNews, Google’s Director of Advertising Strategy Patrick Keane said the plan relies on techniques already being utilized by some advertisers who use an online component of their media strategies to measure the effects of traditional media in their mix.
One straightforward strategy, he said, would be driving readers or listeners back to the online realm and measuring them there.
“The smart advertisers have been coming up with linked campaigns for a while,” Keane noted. “They’re no longer conceiving of advertising campaigns that are limited to the various silos–just print, just radio, or just Internet, and so on.”
As an example, Keane noted how marketers might include a unique URLs in text ads, allowing advertisers to measure by site visits the number of visitors who interacted with the text ad. He suggested advertisers could cast an even wider net by including an old direct response technique–the unique 1-800 number–in print campaigns and radio advertising. As aficionados of late-night TV know, 1-800 numbers are old hat; in this system, the studio selling albums, for example, pays out to the broadcaster based on the number of phone inquiries they receive.
Another approach might include econometric modeling, which uses sophisticated statistical analyses to determine the effect offline advertising has on driving consumers to online activity and vice versa.
This is good news for everyone except the ad agencies. They certainly don’t want accountability!
BTW, this approach isn’t new. David Ogilvy talks about it in “On Advertisisng” as does the late Claude Hopkins in his book on scientific advertising…
I’ve been proposing this approach to my clients for over five years now: every ad, no matter the media, must have a web-based call to action, period. Either that or a 1-800 number with a promo code…

What Global Warming?

The current wave of “warming” is the longest in 1,200 Years. According to the researchers:
“We found that between [A.D.] 890 and 1170, there was statistically significant widespread warmth corresponding approximately to the so-called Medieval Warm Period… However, the most widespread warmth was found not in the Middle Ages but during the 20th century.”
Here’s the article.
The researchers believe that “this latest paper might be the nail in the coffin for the small minority of very vocal climate change denialists who continue to challenge the conclusion that the recent warming of the Earth’s surface is out of the ordinary.”
Dream on, scientists. The people who deny global warming don’t believe in science. They believe in money. And the money says there is no global warming. They won’t believe it even if they see it… Right, Texxon?

I Work with Fools

The stupidity of business – exposed.
Why is it that stores don’t let you surf the Internet in the store? [I know they’re scared I’ll compare prices… but aside from that?]
Recently I needed some information to make a purchase, so I asked the store manager if they had an Internet connection where I could look up my information. “Sorry, you can only visit one site, ours…” he smirked.
I went home to get my info, and the company lost about $500.00 in sales, because I couldn’t stand the attitude.
The customer is not content to sit in a box any longer…

The War on Science: Politicizing NASA

From the New Your Times. This made me so mad, I posted the entire thing:
February 4, 2006
NASA Chief Backs Agency Openness
A week after NASA’s top climate scientist complained that the space agency’s public-affairs office was trying to silence his statements on global warming, the agency’s administrator, Michael D. Griffin, issued a sharply worded statement yesterday calling for “scientific openness” throughout the agency.
“It is not the job of public-affairs officers,” Dr. Griffin wrote in an e-mail message to the agency’s 19,000 employees, “to alter, filter or adjust engineering or scientific material produced by NASA’s technical staff.”
The statement came six days after The New York Times quoted the scientist, James E. Hansen, as saying he was threatened with “dire consequences” if he continued to call for prompt action to limit emissions of heat-trapping gases linked to global warming. He and intermediaries in the agency’s 350-member public-affairs staff said the warnings came from White House appointees in NASA headquarters.
Other National Aeronautics and Space Administration scientists and public-affairs employees came forward this week to say that beyond Dr. Hansen’s case, there were several other instances in which political appointees had sought to control the flow of scientific information from the agency.
They called or e-mailed The Times and sent documents showing that news releases were delayed or altered to mesh with Bush administration policies.
In October, for example, George Deutsch, a presidential appointee in NASA headquarters, told a Web designer working for the agency to add the word “theory” after every mention of the Big Bang, according to an e-mail message from Mr. Deutsch that another NASA employee forwarded to The Times.
And in December 2004, a scientist at NASA’s Jet Propulsion Laboratory complained to the agency that he had been pressured to say in a news release that his oceanic research would help advance the administration’s goal of space exploration.
On Thursday night and Friday, The Times sent some of the documents to Dr. Griffin and senior public-affairs officials requesting a response.
While Dr. Griffin did not respond directly, he issued the “statement of scientific openness” to agency employees, saying, “NASA has always been, is and will continue to be committed to open scientific and technical inquiry and dialogue with the public.”
Because NASA encompasses a nationwide network of research centers on everything from cosmology to climate, Dr. Griffin said, some central coordination was necessary. But he added that changes in the public-affairs office’s procedures “can and will be made,” and that a revised policy would “be disseminated throughout the agency.”
Asked if the statement came in response to the new documents and the furor over Dr. Hansen’s complaints, Dr. Griffin’s press secretary, Dean Acosta, replied by e-mail:
“From time to time, the administrator communicates with NASA employees on policy and issues. Today was one of those days. I hope this helps. Have a good weekend.”
Climate science has been a thorny issue for the administration since 2001, when Mr. Bush abandoned a campaign pledge to restrict power plant emissions of carbon dioxide, the main heat-trapping gas linked to global warming, and said the United States would not join the Kyoto Protocol, the first climate treaty requiring reductions.
But the accusations of political interference with the language of news releases and other public information on science go beyond climate change.
In interviews this week, more than a dozen public-affairs officials, along with half a dozen agency scientists, spoke of growing efforts by political appointees to control the flow of scientific information.
In the months before the 2004 election, according to interviews and some documents, these appointees sought to review news releases and to approve or deny news media requests to interview NASA scientists.
Repeatedly that year, public-affairs directors at all of NASA’s science centers were admonished by White House appointees at headquarters to focus all attention on Mr. Bush’s January 2004 “vision” for returning to the Moon and eventually traveling to Mars.
Starting early in 2004, directives, almost always transmitted verbally through a chain of midlevel workers, went out from NASA headquarters to the agency’s far-flung research centers and institutes saying that all news releases on earth science developments had to allude to goals set out in Mr. Bush’s “vision statement” for the agency, according to interviews with public-affairs officials working in headquarters and at three research centers.
Many people working at Goddard Space Flight Center in Greenbelt, Md., and the Jet Propulsion Laboratory in Pasadena, Calif., said that at the same time, there was a slowdown in these centers’ ability to publish anything related to climate.
Most of these career government employees said they could speak only on condition of anonymity, saying they feared reprisals. But their accounts tightly meshed with one another.
One NASA scientist, William Patzert, at the Jet Propulsion Laboratory, confirmed the general tone of the agency that year.
“That was the time when NASA was reorganizing and all of a sudden earth science disappeared,” Mr. Patzert said. “Earth kind of got relegated to just being one of the 9 or 10 planets. It was ludicrous.”
In another incident, on Dec. 2, 2004, the propulsion lab and NASA headquarters issued a news release describing research on links between wind patterns and the recent warming of the Indian Ocean.
It included a statement in quotation marks from Tong Lee, a scientist at the laboratory, saying the analysis could “advance space exploration” and “may someday prove useful in studying climate systems on other planets.”
But after other scientists at the Jet Propulsion Laboratory queried Dr. Lee on the statement, he e-mailed public-affairs officers saying he disavowed the quotation and demanded that the release be taken off the Web site. His message was part of a sequence of e-mail messages exchanged between scientists and public-affairs officers. That string of messages was provided to The Times on Friday by a NASA official.
In his e-mail message, Dr. Lee explained that he had cobbled together the statement on space exploration under “the pressure of the new HQ requirement for relevance to space exploration” and under a timeline requiring that NASA “needed something instantly.”
The press office dropped the quotation from its version of the release, but in Washington, the NASA headquarters public affairs office did not.
Dr. Lee declined to be interviewed for this article.
According to other e-mail messages, the flare-up did not stop senior officials in headquarters from insisting that Mr. Bush’s space-oriented vision continue to be reflected in all earth-science releases.
In the end, the news release with Dr. Lee’s disavowed remark remained up on the NASA headquarters public affairs Web site until The Times asked about it yesterday. It was removed from the Web at midday.
The Big Bang memo came from Mr. Deutsch, a 24-year-old presidential appointee in the press office at NASA headquarters whose résumé says he was an intern in the “war room” of the 2004 Bush-Cheney re-election campaign. A 2003 journalism graduate of Texas A&M, he was also the public-affairs officer who sought more control over Dr. Hansen’s public statements.
In October 2005, Mr. Deutsch sent an e-mail message to Flint Wild, a NASA contractor working on a set of Web presentations about Einstein for middle-school students. The message said the word “theory” needed to be added after every mention of the Big Bang.
The Big Bang is “not proven fact; it is opinion,” Mr. Deutsch wrote, adding, “It is not NASA’s place, nor should it be to make a declaration such as this about the existence of the universe that discounts intelligent design by a creator.”
It continued: “This is more than a science issue, it is a religious issue. And I would hate to think that young people would only be getting one-half of this debate from NASA. That would mean we had failed to properly educate the very people who rely on us for factual information the most.”
The memo also noted that The Associated Press Stylebook and Libel Manual specified the phrasing “Big Bang theory.” Mr. Acosta, Mr. Deutsch’s boss, said in an interview yesterday that for that reason, it should be used in all NASA documents.
The Deutsch memo was provided by an official at NASA headquarters who said he was upset with the effort to justify changes to descriptions of science by referring to politically charged issues like intelligent design. Senior NASA officials did not dispute the message’s authenticity.
Mr. Wild declined to be interviewed; Mr. Deutsch did not respond to e-mail or phone messages. On Friday evening, repeated queries were made to the White House about how a young presidential appointee with no science background came to be supervising Web presentations on cosmology and interview requests to senior NASA scientists.
The only response came from Donald Tighe of the White House Office of Science and Technology Policy. “Science is respected and protected and highly valued by the administration,” he said.
Dennis Overbye contributed reporting for this article.

Marshall Goldsmith: The Need to Win

“One of the most common challenges that successful people face is a constant need to win.”
Marshall Goldsmith says that the more we achieve, the more we tend to want to “be right.”
At work meetings, we want our position to prevail.
In arguments, we pull out all the stops to come out on top.
Even at supermarket checkouts, we scout other lines to see if there’s one that’s moving faster.
He has a very, very good point.

Gary Hamel on Management Innovation

Gary Hamel’s back. This time he’s looking at “management innovation” in his latest HBR article titled – “The Why, What, and How of Management Innovation.”
A management innovation, says Gary Hamel, creates long-lasting advantage when it meets at least one of three conditions:
1. It is based on a novel principle that challenges the orthodoxy
2. it is systemic, involving a range of processes and methods
3. it is part of a program of invention, where progress compounds over time
Few companies have been able to come up with a formal process for fostering management innovation, says Hamel. The biggest challenge seems to be generating truly unique ideas. (No duh!)
Hamel gives us three examples of management innovation:
1. Harnessing employee intellect at Toyota.
2. Building a community at Whole Foods.
3. Growing great leaders at GE.
This time Hamel doesn’t mention Enron… (like he did in his first edition of Leading the Revolution) 🙂
So what is management innovation?
A management innovation can be defined as a marked departure from traditional management principles, processes, and practices or a departure from customary organizational forms that significantly alters the way the work of management is performed. Put simply, management innovation changes how managers do what they do.
And what do managers do? According to Hamel, managerial work includes:
• Setting goals and laying out plans
• Motivating and aligning effort
• Coordinating and controlling activities
• Accumulating and allocating resources
• Acquiring and applying knowledge
• Building and nurturing relationships
• Identifying and developing talent
• Understanding and balancing the demands of outside constituencies
Says Hamel:
“In a big organization, the only way to change how managers work is to reinvent the processes that govern that work. Management processes such as strategic planning, capital budgeting, project management, hiring and promotion, employee assessment, executive development, internal communications, and knowledge management are the gears that turn management principles into everyday practices. They establish the recipes and rituals that govern the work of managers. While operational innovation focuses on a company’s business processes (procurement, logistics, customer support, and so on), management innovation targets a company’s management processes.”
“A systematic process for producing bold management breakthroughs must include:
1. Commitment to a big management problem
2. Novel principles that illuminate new approaches
3. A deconstruction of management orthodoxies
4. Analogies from atypical organizations that redefine what’s possible”
Not too bad, eh? But how does one get managers to overcome their fear of failure? Most leaders in the Fortune 500 did not get to the oxygen-deprived board room on their talent for risk taking. I feel most got there for NOT taking risks, but rather for simply obeying orders and executing well on given tasks. Hamel does not address this problem, which I believe plagues all (ok, 99%) large companies.
While Hamel looks for management innovation, I’m still looking for innovative managers (now that’s an oxymoron).
Still, this is an article worth reading twice. And Hamel is back. I can’t wait to read the “forthcoming book.”
Almost forgot, Hamel also gives us a toolkit (a powerpoint slide set) you can download here >>
One last thing:
Hamel lists a dozen of the most noteworthy management innovations from 1900 to 2000.
1. Scientific management (time and motion studies)
2. Cost accounting and variance analysis
3. The commercial research laboratory (the industrialization of science)
4. ROI analysis and capital budgeting
5. Brand management
6. Large-scale project management
7. Divisionalization
8. Leadership development
9. Industry consortia (multicompany collaborative structures)
10. Radical decentralization (self-organization)
11. Formalized strategic analysis
12. Employee-driven problem solving
Adds Hamel:
“Losing out are Skunk Works, account management, business process reengineering, and employee stock ownership plans. There are more recent innovations that appear quite promising, such as knowledge management, open source development, and internal markets, but it’s too early to assess their lasting impact on the practice of management.”