Hamel talks about the "Hierarchy of innovation".Hamel suggests revamping every management concept -- from how employees use their time to how funding is allocated to projects so that managers may inspire workers, identify the most promising business ideas and marshal the resources to execute them in his new book: The Future of Management
IT organizations will play a critical role in two ways:
first, by building systems that companies will use internally to facilitate innovation and
second, by identifying how companies can use new technologies to upend established business models and deliver new products and services.
"The Internet is doing exactly what management is supposed to do. It's amplifying and aggregating human capabilities. It's democratizing the tools of creativity, from digital cameras to blogs to the ability to do mash-ups. The Net is also surprisingly good at aggregating human capability. Linux is the fastest evolving piece of software that human beings have ever created.
The three big challenges for companies over the next generation are going to be: Adaptability -- how you build things that can transform themselves. Innovation -- how you mobilize the imagination of every single person in your organization. Engagement -- how you create organizations that are so engaging emotionally and intellectually that people want to bring their capabilities to work. What's the most adaptable innovative and engaging thing on the planet? The Internet.
Think about the insights that people need to be innovative, the insights they need into customers, into technology, into competitors."
At the bottom is operational innovation, the kinds of things that companies do to run leaner or be quicker or deliver 24/7 customer service.
A step up from that is product innovation that delivers the next wonderful flat-screen television.
A level up from that you have business model innovation. Dell, at one time, was a business model innovator.
And a level up from that you have what I'd call architectural innovation. This is when you get a whole industry thinking differently -- what Apple did with iTunes to get all these music companies to agree to a new digital rights management system.
At the top you have management innovation. All of my research suggests that it's management innovation that has created the most enduring source of competitive advantage.
"If I were a CEO, the first question I'd ask in every budget meeting and in every review meeting with my CIO would be what percentage of our total budget and time is going into projects that will allow us to do something unique in our industry"
Where does Innovation come from?Number one, innovation comes from challenging industry dogma.
Number two is understanding the early warning signs of big shifts in demographics, technology, regulation or whatever it may be that most of the industry simply isn't paying attention to.
The third kind of personal competence you need to innovate is a deep empathy with the hidden or unarticulated needs of your customers.
I think the last competence as an innovator you need today is you can't think about your company in terms of what it makes and what it does. You have to think of it in terms of what it owns and what it knows -- its strategic assets.
Bottomline:
Hamel is on the money when it comes to driving creativity and innovation at today's business. The key insight is management driving innovation or at most times coming in the way. According to Hamel, it is really upto the management to create the processes that unblock creativity and innovation, enable ways to find innovation, and execute. How can companies really mobilize the imagination of every single person in the organization and create lasting wealth? To find out more, first read his interview below, and then the book.
References:
Can't innovate? Blame management
q&a Leading business strategy expert Gary Hamel talks to us about what it takes to get ahead in today's enterprise environment. It turns out we're consistently solving the same problems while ignoring the bigger ones around the corner
by Elana Varon
