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Gary Hamel on The Future Of Management

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Published on December 8, 2008

Author: sniukas

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A summary of Gary Hamel's "The Future of Management".
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The Future of Management Based on „The Future of Management“ by Gary Hamel Harvard Business School Press 2007

What is management innovation ? 16 March 2008 © Marc Sniukas

What is management innovation ?

The Ultimate Advantage 16 March 2008 © Marc Sniukas

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 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,… 16 March 2008 © Marc Sniukas

Management Innovation changes the way managers do what they do,…

… and does so in a way that enhances organizational performance. 16 March 2008 © Marc Sniukas

… 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 16 March 2008 © Marc Sniukas

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

„… 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!

But that‘s no excuse not to innovate!

An Agenda for Management Innovation what are the new challenges the future has in store for your company? what are the tough balancing acts your company never seems to get right? what are the biggest gaps between rhetoric and reality in your company? what are the frustrating incompetencies that plague your company? 16 March 2008 © Marc Sniukas

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

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

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

what are the frustrating incompetencies that plague your company?

Be Bold 16 March 2008 © Marc Sniukas

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. 16 March 2008 © Marc Sniukas

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 16 March 2008 © Marc Sniukas

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? 16 March 2008 © Marc Sniukas

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? 16 March 2008 © Marc Sniukas

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?

Making Innovation Everyone‘s Job Barriers Creative Appartheid Old Mental Models No Slack 16 March 2008 © Marc Sniukas

Barriers

Creative Appartheid

Old Mental Models

No Slack

Making Innovation Everyone‘s Job 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? 16 March 2008 © Marc Sniukas

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 16 March 2008 © Marc Sniukas

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? 16 March 2008 © Marc Sniukas

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 16 March 2008 © Marc Sniukas

Creating a Community of Purpose the Whole Foods Market way Freedom and Accountability Trust Equity Purpose 16 March 2008 © Marc Sniukas

the Whole Foods Market way

Freedom and Accountability

Trust

Equity

Purpose

Creating a Community of Purpose the 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 16 March 2008 © Marc Sniukas

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

Creating a Community of Purpose the Whole Foods Market way 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 16 March 2008 © Marc Sniukas

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

Creating a Community of Purpose the Whole Foods Market way 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. 16 March 2008 © Marc Sniukas

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.

Creating a Community of Purpose the Whole Foods Market way 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. 16 March 2008 © Marc Sniukas

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 16 March 2008 © Marc Sniukas

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 Democracy the 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 16 March 2008 © Marc Sniukas

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

Building an Innovation Democracy the W.L. Gore way 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 16 March 2008 © Marc Sniukas

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

Building an Innovation Democracy the W.L. Gore way 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 16 March 2008 © Marc Sniukas

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

Building an Innovation Democracy the W.L. Gore way 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 16 March 2008 © Marc Sniukas

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 16 March 2008 © Marc Sniukas

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 Advantage the 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. 16 March 2008 © Marc Sniukas

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.

Aiming for an Evolutionary Advantage the Google way 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. 16 March 2008 © Marc Sniukas

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.

Aiming for an Evolutionary Advantage the Google way 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. 16 March 2008 © Marc Sniukas

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.

Aiming for an Evolutionary Advantage the Google way 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. 16 March 2008 © Marc Sniukas

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 16 March 2008 © Marc Sniukas

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? 16 March 2008 © Marc Sniukas

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?

Putting the Principles to Work 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? 16 March 2008 © Marc Sniukas

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?

Putting the Principles to Work 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? 16 March 2008 © Marc Sniukas

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 ? 16 March 2008 © Marc Sniukas

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. 16 March 2008 © Marc Sniukas

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! 16 March 2008 © Marc Sniukas

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 . 16 March 2008 © Marc Sniukas

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 .

Need help? Get in touch... Marc Sniukas Senior Consultant     Lainzer Strasse 80 A-1130 Vienna, Austria   M +43 (0) 699 122 333 03 T  +43 (0) 1 306 33 66 F  +43 (0) 1 306 33 66 9   [email_address] www.doujak.eu 16 March 2008 © Marc Sniukas

Marc Sniukas

Senior Consultant

 

 

Lainzer Strasse 80

A-1130 Vienna, Austria

 

M +43 (0) 699 122 333 03

T  +43 (0) 1 306 33 66

F  +43 (0) 1 306 33 66 9

 

[email_address]

www.doujak.eu

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