Seems like everyone is talking about innovation these days.
Most of the discussion centers on the need to add value to customers through innovative products and services. But according to Gary Hamel, a leading expert on business strategy, there’s more to innovation than just bringing new products to market.
In a recent Harvard Business Review article entitled, “The Management 2.0 Challenge: How Will YOU Reinvent Management in Your Organization?” Hamel identifies five different levels of innovation, including (from least to most important):
- Operational. Improvements in areas like supply chains or customer support systems.
- Product. Bringing new products and services to market.
- Strategy. Reshaping business models by reinventing how value gets delivered to customers.
- Ecosystem. Revolutionizing entire industries. For example, digital downloads have changed the entire music industry.
- Management. Reinventing the way we manage ourselves and our companies.
In his article, Hamel addresses management innovation primarily from a structural standpoint. He recommends eliminating the traditional management hierarchy and moving to small, flexible teams that allow people to come together around ideas they are passionate about.
I agree that today’s markets require nimble organizational structures that allow people to respond quickly to sudden market changes. I also think we need to address the process side of management as well. Specifically, we need to reinvent how we gather and analyze information, how we make decisions, and how we think about our customers, our markets and the world in general.
What do we need to do differently?
Stop looking only at information that aligns with your view of the world.
Typically, management looks primarily at industry information. Who are our competitors? What are they doing that we need to pay attention to? What changes are happening in our industry? But in today’s world, the competitor that puts us out of business often comes from outside our industry.
Make it a habit to seek out information beyond your normal boundaries. Subscribe to one or two magazines that have nothing to do with your business or industry. Visit web sites and watch news programs with different political views than yours. One of my favorite web sites is www.ted.com, which contains short video clips from thought leaders in a wide variety of unrelated areas.
In addition, constantly review how you seek out new data. Ask: What sources of information beyond the walls of our industry do we regularly scan? Who is looking at these sources and how often? What are we learning from this outside information? How is this information disseminated to others in the organization?
Review your decision-making processes in real time.
Don’t wait until after making a major decision or launching a new product to analyze your decision-making progress. Instead, review decisions in real time by making your thinking processes visible to others.
Before making a major decision, expose your thinking process and invite others to expose their thinking as well. “Here’s what I’m thinking about this issue and here’s why. Does anyone see it differently?” When everyone identifies the assumptions behind their thinking, you’ll be amazed at how people can see the same data and come up with very different conclusions.
Review the team process for reaching the decision. Ask: Did we thoroughly consider the issue or did we rush to consensus? Did the CEO or team leader unduly influence the decision? Were alternative points of view encouraged or shut down? Is there more than one “right” answer to this problem? What have we overlooked in our discussion?
Constantly challenge your thought bubbles.
Thought bubbles are the unconscious assumptions we make about our customers, our industry, and the world at large. We know them to be true because “they’ve always been that way” or “it’s obvious.” The problem is most of our assumptions stopped “being that way” a long time ago. Unless we examine them on a regular basis, we end up making key strategic decisions based on a world that may no longer exist.
Ask: What has changed with our customers, our markets, and our industry within the past six months to a year? What assumptions are we continuing to make simply because we “know them to be true?” When was the last time we did something in this organization that went completely against the status quo?
To overcome the brain’s natural tendency to see only what we expect to see, have a “non-expert” research your fundamental truths. For example, have your CFO look at customer data. Have your sales manager look at purchasing practices. Or have your marketing VP look at operations.
Today’s world moves unbelievably fast. To gain a sustainable competitive advantage, leaders need to become more self-aware of what we do and how we do it — and then continually improve that process.
Are you up to the challenge?