Accelerating the Evolution of Management TM

What is management innovation? In simple terms management innovation changes the way managers do what they do. So what do managers do?

MLab’s research indicates that most management activity revolves around:

  • Setting and programming objectives
  • Motivating and aligning effort
  • Coordinating and controlling activities
  • Developing and assigning talent
  • Accumulating and applying knowledge
  • Amassing and allocating resources
  • Building and nurturing relationships
  • Balancing and fulfilling stakeholder demands

To be a little more precise, 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 so doing, advances organisational goals.

MLab focuses on what we believe to be the real source of competitive advantage. What is it that allows some companies to steal a march on their competitors not just for a few months but for many years or even decades?

Two of the world’s leading business thinkers, Gary Hamel and Julian Birkinshaw, and their research team, began examining these issues in 2004. As a starting point, they looked at historically-successful companies as well as current stars. Familiar names and best practices cropped up. They found enlightened human resource practices, disciplined financial management, impressive customer focus and charismatic leadership.

Read more about these historically-successful companies and current stars

But one surprising phenomenon caught their collective eyes: management innovation, a company’s ability to effect fundamental changes in its own internal way of working. Management innovation was a critical factor — sometimes the critical factor — in a whole host of the exceptional organisations the research team looked at. And yet, its importance was largely overlooked.

How can companies become management innovators?

At the heart of innovating management principles, practices and processes is a belief that we’re all confronted by the blindness of our assumptions about the nature of the way things are. Almost by definition, management innovation is hard to do. We are all prisoners of the same calcified management systems that shape the way we behave and even the way we talk, so it is hardly surprising that we find it difficult to imagine an alternative set of structures, tools or techniques that might replace them.

To make matters more challenging, there is no play-book, no set of golden rules for management innovation. But, the research found that there are several vital ingredients that always come together when management innovation happens.

These are:

  • A distinctive and novel point of view on the future
  • A clearly-articulated problem or challenge that needs resolving
  • A core group of heretical thinkers and action takers who push the new idea through the organisation
  • A deep understanding of the traditional orthodoxies that need to be overcome