Thursday, 11 October 2007

Requirements for organisational innovation

Gary Hamel provides some great suggestions for increasing the general level of innovation taking place in organisations (mainly supporting Rita Gunther McGrath's perspectives on entrepreneurial leadership presented at the CIPD Conference):

1. Dramatically accelerate the pace of strategic renewal to build a company that is as nimble as change itself (eg Google’s aim to be capable of evolving as fast as the web itself). Avoid:

  • Denial
  • A dearth of new strategic options
  • Allocational rigidities.

2. Make innovation everyone’s job. Avoid:

  • Creative apartheid (“If folks don’t appear to be creative at work, it’s not because they lack imagination, it’s because they lack the opportunity)
  • The drag of old mental models
  • No slack.

3. Create a highly engaging work environment that inspires employees to give their very best. Avoid:

  • Too much hierarchy, too little community
  • Too much exhortation, too little purpose.

Hamel describes a vision of management 2.0 which will enable innovation and may resemble the web, and particularly web 2.0:

  • Everyone has a voice
  • The tools of creativity are widely distributed
  • It’s easy and cheap to experiment
  • Capability counts for more than credentials and titles
  • Commitment is voluntary
  • Power is granted from below
  • Authority is fluid and contingent on value-added
  • The only hierarchies are ‘natural’ hierarchies
  • Communities are self-defining. Individuals are richly empowered with information
  • Just about everything is decentralised
  • Ideas compete on an equal footing
  • It’s easy for buyers and sellers to find each other
  • Resources are free to follow opportunities
  • Decisions are peer-based.

I think this highlights the challenge organisations have in being truly innovative while operating under the traditional management paradigm. Google, Gore and other similarly innovative companies are likely to have a clear competitive advantage for some time to come.


  1. Every system has within it inherent strengths and weaknesses. The model Gary Hamel talks about for future organizations is consistent with what has always been called "creation cultures" in which the goal is to live the dream, growth is all around, cash flows merrily and the young things play foosball in between coming up with insanely awesome ideas. To say that it is a universal model, or that it will apply to all stages of the organizational life cycle might be to claim too much for it. That much being said, John Child and myself did some research some years ago which suggested that new forms of control will emerge to replace conventional bureaucracies (which are surprisingly durable). So perhaps Hamel is giving us a glimpse into some of what that may look like.

    A bigger problem for companies at the moment in my opinion (and very relevant for HR) is that right now your middle managers are caught supporting BOTH systems - the always-on, flat, connected, networked future organization AND the hierarchical, get-the-budget-in-on-time conventional structure. I'd encourage HR managers to give some serious thought to how you help people cope with the administrative demands of two systems that both make demands, pulling people into different and incompatible directions.

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  2. Thanks very much for your comment Rita: a good challenge of Gary Hamel's perspective, which I agree can't be substantiated, but it certainly feels right for me.

    One of the points Charles HAndy makes about the S curve is that movement between different curves can take place very quickly when the right time is reached (ie the tipping point). And I do think there are signs we are approaching this...

    I also agree with your challenge to the HR function - in relation to their role supporting managers, but also in how HR itself goes about its own role.

    I think at times that HR feels it can't even talk about these types of changes in organisations without risking being seen as 'pink and fluffy'.

    HR and line managers then just put their blinkers on and ignore any signs of change. Someone needs to point out that there's this huge elephant wandering up and down the office corridors (my daughter's 5 so I always picture Elmer): the fact that bureaucratic organisations aren't working very well any more.

    I think it's HR's job to point this out. The elephant needs to be named as an elephant.

    In my view, it's only once this has been accepted that HR is going to get very far in helping managers cope with the complexity and incompatabilities you note.

    Best regards, Jon.


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