Leaders can deliver on two fronts. First, they can serve as role models for stakeholder management. In his view, perfect alignment is nearly impossible. Project leaders may need to assess the influence and importance of those stakeholders who push back, and, if need be, seek support for their cause from the higher-ups.
Bring all stakeholders to the table to share their perspectives and align at the early stages of the project, advises Hochfeld. Working together on this process makes all actors feel like change agents and increases the chances of buy-in later in the development cycle, she adds. Kavadias explains that alignment at the planning stage is easy; the friction comes during implementation.
Most project leaders, says Camilli, rely on their personal networks and pre-meetings to build consensus among stakeholders before review sessions, but this is unreliable and inefficient. Doing so shows where partners have differences in perception that need to be addressed.
Hochfeld says Frauenhofer advocates an approach whereby project leaders determine from the outset the milestones at which stakeholders will be looped in to discuss preliminary results and re-align their expectations.
Browse innovation courses for executives. Kate Rodriguez is a former senior career search researcher and government analyst who covers career development and higher education marketing for The Economist Careers Network.
Key changes included. Translating a novel management idea like innovation from everyone, everywhere into new and deeply rooted management practices requires a sustained and broad-based effort, but the payoff can be substantial. I have yet to meet a senior executive who claims that his or her company has a praiseworthy process for management innovation. As with other types of innovation, the biggest challenge is generating truly novel ideas.
Some of the essential components are. Chunky problems. Fresh principles. Unorthodox thinking. Wisdom from the fringe. These multipliers of human creativity are as pivotal to management innovation as they are to every other kind of innovation. The bigger the problem, the bigger the opportunity for innovation.
Nearly 80 years ago, General Motors invented the divisionalized organization structure in response to a seemingly intractable problem: how to bring order to the sprawling family of companies that had been assembled by William C. Sloan, Jr. Thanks to this management innovation, GM was able to take advantage of its scale and scope.
It takes fortitude and perseverance, as well as imagination, to solve big problems. These qualities are most abundant when a problem is not only important but also inspiring. Frederick Winslow Taylor, arguably the most important management innovator of the twentieth century, is usually portrayed as a hard-nosed engineer, intent on mechanizing work and pushing employees to the max.
Awkward, inefficient, or ill-directed movements of men, however, leave nothing visible or tangible behind them. Their appreciation calls for an act of memory, an effort of the imagination. And for this reason, even though our daily loss from this source is greater than from our waste of material things, the one has stirred us deeply, while the other has moved us but little.
To maximize the chances of a management breakthrough, you need to start with a problem that is both consequential and soul stirring. First, what are the tough trade-offs that your company never seems to get right? Management innovation is often driven by the desire to transcend such trade-offs, which can appear to be irreconcilable.
Open source development, for example, encompasses two antithetical ideas: radical decentralization and disciplined, large-scale project management. Maybe you believe that your organization has become less and less agile as it has pursued the advantages of size and scale. Second, what are big organizations bad at? This question should produce a long list of incompetencies.
Third, what are the emerging challenges the future has in store for your company? Try to imagine them: An ever-accelerating pace of change. Rapidly escalating customer power.
Near instant commoditization of products and services. Ultra-low-cost competitors. A new generation of consumers that is hype resistant and deeply cynical about big business. These discontinuities will demand management innovation as well as business model innovation. Any problem that is pervasive, persistent, or unprecedented is unlikely to be solved with hand-me-down principles. More recently, scientists eager to understand the subatomic world have been forced to abandon the certainties of Newtonian physics for the more ambiguous principles of quantum mechanics.
That was certainly true for Visa. The ensuing chaos threatened the viability of the fledgling business. Modern management practice is based on a set of principles whose origins date back a century or more: specialization, standardization, planning and control, hierarchy, and the primacy of extrinsic rewards. Generations of managers have mined these principles for competitive advantage, and they have much to show for their efforts.
But after decades of digging, the chance of discovering a gleaming nugget of new management wisdom in these well-explored caverns is remote. Your challenge is to uncover unconventional principles that open up new seams of management innovation. And what is it that imbues those exemplars with their enviable qualities? You know that in a world of accelerating change, continuous strategic renewal is the only insurance against irrelevance. Specialization, for all its benefits, limits the kind of cross-boundary learning that generates breakthrough ideas.
The quest for greater standardization often leads to an unhealthy affection for conformance; the new and the wacky are seen as dangerous deviations from the norm.
Elaborate planning-and-control systems lull executives into believing the environment is more predictable than it is. A disproportionate emphasis on monetary rewards leads managers to discount the power of volunteerism and self-organization as mechanisms for aligning individual effort. Deference to hierarchy and positional power tends to reinforce outmoded belief systems.
So where do you look to find the design principles for building a highly adaptable organization? You look to systems that have demonstrated their adaptability over decades, centuries, even aeons. For more than 4 billion years, life has evolved at least as fast as its environment. Nature inoculates itself against the risks of environmental change by constantly creating new genetic material through sexual recombination and mutation. Variety is one essential principle of adaptability.
Markets, too, are adaptable. Over the past 50 years, the New York Stock Exchange has outperformed virtually every one of its member companies. Competition is a hallmark of both markets and evolutionary biology. On the NYSE, companies compete to attract funds, and investors are free to place their bets as they see fit.
Decision making is highly distributed, and investors are mostly unsentimental. As a result, markets are very efficient at reallocating resources from opportunities that are less promising to those that are more so. In most companies, however, there are rigidities that tend to perpetuate historical patterns of resource allocation.
Executives, eager to defend their power, hoard capital and talent even when those resources could be better used elsewhere. Legacy programs seldom have to compete for resources against a plethora of exciting alternatives. The net result is that companies tend to overinvest in the past and underinvest in the future.
Hence, competition and allocation flexibility are also important design principles if the goal is to build a highly adaptive organization. Constitutional democracies rank high on any scale of evolvability.
In a democracy, there is no monopoly on political action. Social campaigners, interest groups, think tanks, and ordinary citizens all have the chance to shape the legislative agenda and influence government policy.
Whereas change in an autocratic regime comes in violent convulsions, change in a democracy is the product of many small, relatively gentle adjustments. If the goal is continuous, trauma-free renewal, most large corporations are still too much like monarchies and too little like democracies. To reduce the costs of change in your organization, you must embrace the principles of devolution and activism.
Whatever big management challenge you choose to tackle, let it guide your search for new principles. For example, maybe your goal is to build a company that can prevail against the steadily strengthening forces of commoditization—a problem that certainly demands management innovation.
Around the world, companies are outsourcing and offshoring business processes to vendors that provide more or less the same service to a number of competing firms.
Businesses are collaborating across big chunks of the value chain, forming partnerships and joining industrywide consortia to share risks and reduce capital outlays. Add to this a worldwide army of consultants that has been working overtime to transfer best practices from the fast to the slow and from the smart to the not so clever. As once-distinctive capabilities become commodities, companies will have to wring a whole lot of competitive differentiation out of their ever-shrinking wedge of the overall business system.
Surprisingly, scholars have paid little attention to the process of management innovation. First we identified significant management innovations from to To whittle this list down to the most important advances, we evaluated each innovation along three dimensions: Was it a marked departure from previous management practices?
Did it confer a competitive advantage on the pioneering company or companies? And could it be found in some form in organizations today? In light of these criteria, here are a dozen of the most noteworthy innovations.
To beat back the forces of commoditization, a company must be able to deliver the kind of unique customer value that can only be created by employees who bring a full measure of their initiative, imagination, and zeal to work every day.
The machinery of bureaucracy was invented in an age when human beings were seen as little more than semiprogrammable robots. Bureaucracy puts an upper limit on what individuals are allowed to bring to their jobs.
Where do you find organizations in which people give all of themselves? You might start with Habitat for Humanity, which has built more than , homes for low-income families since Share a beer with a few of the part-time hackers who have churned out millions of lines of code for the Linux operating system.
Each of these organizations is more of a community than a hierarchy. People are drawn to a community by a sense of shared purpose, not by economic need. From our experience, nowadays most companies perform some sort of innovation activities. Unfortunately, we only rarely see a clear alignment between strategy and innovation. This results in innovation projects that inevitably fail to gain traction and support from leaders within the business. A bunch of innovation activities that do not produce any tangible outcomes.
For this reason, we developed the Strategic Guidance Framework. To help senior leaders communicate, how they would like innovation to align with the company's strategic goals. Our framework helps leaders define where to play, what is in, and what is out.
Ideally, innovation projects should show they fit the vision, culture, and image of the company. To ensure they get leadership support and the resources required to do their work. After developing your strategic guidance, it is important to try and share it widely within the organization. In our experience, companies that do this well have leaders who communicate the strategy on a regular basis.
Whether it be during important meetings or communications throughout the whole organization.
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