When I say the word “innovation”, what pops into your mind? Great products like the iPhone or iPad? Breakthroughs in scientific drug research? Social-media platforms like Twitter or Facebook? Maybe others.
But I doubt the eight-hour workday, popularised by Henry Ford in 1914, or the Management by Objectives concept, coined by Peter Drucker in the mid-1950s, comes to mind. They have been around so long that we take them for granted.
In fact, we rarely think of management — the practices of work, how we organise and mobilise people, and allocate resources — as an area that could be ripe for innovation.
Mr Gary Hamel, Professor of London Business School and one of the leading management gurus of our time, calls this “management innovation” — the next area of competitive advantage. Product innovation, service innovation and even process innovation are areas that can be easily copied by competitors. But, with the speed at which markets are changing, the rise of globalisation and digitisation, and shrinking product life cycles, even the most innovative organisations rarely stay ahead for very long.
Many organisations are finding themselves in a bit of a conundrum. On one hand, they have been built for efficiency and effectiveness, with the management processes that support these objectives. Yet, they are facing rapid discontinuities and uncertainties, and finding many forms of traditional management not adaptive enough to address present and future realities. So what is required?
REWIRE FOR CREATIVITY
As leaders and managers, we need to challenge the assumptions on which we make decisions, and really think about whether a management practice will help our organisation be agile and responsive to change.
We also need to question whether, in today’s fast-moving environment, efficiency and effectiveness are enough, and what we may need to do to rewire our firms for creativity and growth. How we manage, and the legacy, beliefs and assumptions we hold, could be preventing us from addressing the challenges of the 21st century.
When I set up the Entheo Network seven years ago, we experimented with new ways of working. Some were very successful; some weren’t. We ditched the term “office” and called it a “space”, which was just that — a versatile space for collaborating on and sharing about projects. The furniture had multiple functions — white boards were cupboard doors, while work surfaces for computers were stationed along the edges of the room, leaving the central space free for creative collaboration.
Work became something we did, not somewhere we went. While some were non-believers in the high levels of personal freedom and trust, people were encouraged to take their work to cafes and parks or work at home.
Everyone knew what they needed to achieve and each had a personal mission statement that supported organisational goals. Performance management became about value contribution, where both the individual and the collective assessed each other’s contributions to the business.
Granted, we are an Innovation Company, so it came with the territory.But it was more than just putting a couple of brightly coloured bean bags in the corner and making it a fun place to work. As we experimented, and challenged conventional wisdom, more and more of our work became about how we could help our clients innovate in their management practices and corporate culture to free up room for creative thinking and enable level of responsiveness to change.
FROM GOOGLE TO GORe-TEX
But what about larger organisations experimenting with their management thinking and ways of working?
You may have heard about the 25 per cent rule at Google: To encourage experimentation, 25 per cent of a person’s working week is freed up to allow tinkering on projects that are non-work-related. Is it enforced? No.
I had dinner with a director at Google a few years back and asked about this rule. She said the beauty of it is that it sends the message to people that they are free to experiment and create. From this personal time, whether during the work week, evening or weekend, new ideas would emerge that could add value to the Google business. But then, that is Google — we sort of expect it.
Among other interesting examples and case studies of organisations innovating in this area, Mr Hamel, in his book The Future of Management, talks about the story of Gore-Tex.
Founded in 1958 (not a young company), with thousands of employees in multiple sites around the world, Gore-Tex is best known for breathable, waterproof outdoor fabric and clothing. Its founder, Bill Gore, dreamed of building an organisation where imagination and creativity would flourish and, to do that, he knew he would have to rethink how the organisation would be led and managed.
One principle, rooted in the fabric of Gore-Tex’s culture, is that of “natural leadership”, whereby individuals, including the CEO, are voted into position. How? Associates, the term given to Gore-Tex staff, are asked to pick someone they are willing to follow.
With a policy like this, executive power is not taken for granted. Associates are also responsible to teams, rather than an individual boss, and are hired for broad roles instead of narrowly defined jobs. Pay is determined by individual contribution, as assessed by a group of peers, not seniority.
Radical stuff, yes. A different way of thinking, indeed. While not all firms need to emulate Gore-Tex, the fundamental principle is: Are we questioning how we manage and lead people, how we allocate resources and build teams and, more fundamentally, our belief about how people contribute their skills and talent to organisational success?
If innovation is the creation of value out of new or novel ideas, maybe, besides our products, services and processes, we need to blow the dust off our management theories and practices, look at them afresh and see where new thinking is required. Management itself needs innovation.