Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company management pioneer? Has it invented novel approaches to management that are the envy of its competitors?
Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.
Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar decree of diligence to the kind of innovation that matter most: management innovation.
Why is management innovation so vital? What make it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators"? Let's start with the why.
Why Management Innovation Matters
General Electric. DuPont. Proctor & Gamble. Visa. Linux. What makes them stand out? Great products? Yes. Great people? Sure. Great leaders? Usually. But if you dig deeper, you will find another, more fundamental reason for their success: management innovation.
In the early 1900s, General Electric perfected Thomas Edison's most notable invention, the industrial research laboratory. GE brought management discipline to the chaotic process of scientific discovery and, over the next 50 years, won more patents than any other company in America. Much of GE's current competitive prowess can be traced to that extraordinary accomplishment.
DuPont played a pioneering role in the development of capital-budgeting techniques when it initiated the use of return on investment calculations in 1903. A few years later, the company also developed a standardized way of comparing the performance of its numerous product departments. These innovations, among other, helped DuPont become one of America's industrial giants.
Procter & Gamble's preeminence in the packaged goods industry has its roots in the early 1930s, when the company began to formalize its approach to brand management. In the decades since, P&G has steadily built upon its early success in creating value out of intangible assets. P&G's product portfolio includes 16 brands that have produced $1 billion-plus in sales every year.
Visa, the word's first near-virtual company, owes its success to organizational innovation. When Visa's founder banks formed a consortium in the United States in the early 1970s, they laid the groundwork for on of the world's most ubiquitous brands. Today, Visa is a global financial web that links more than 21,000 financial institutions and more than 1.3 billion cardholders.
Linux, the computer operation system, is the best-known example of a recent management innovation: open source development.
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"The Why, What, and How of Management Innovation", Gary Hamel, Harvard Business Review, February 2006. Visit us at http://www.cjps-enterprises.com.
