The Future Of Innovation: Overcoming The Design Flaws In Management

Dr Julian Birkinshaw

Innovation will continue to be one of the key strategic imperatives for commercial and not-for-profit organisations through the downturn and for the years ahead. I see two important trends. One is a much greater emphasis on the “soft” side of innovation management – the skills, values and culture that support new product or service innovation. Decades of research has shown there is no silver bullet, no formula for success. Formal structures for managing development projects can help, but they can also drive out genuinely new ideas. Access to seed funding, and slack time for working on new projects, can be a blessing or a curse depending on how they are offered. Incubators designed to protect new business ideas often become orphanages for unwanted ventures.

This research has led me to realise that innovation management is an oxymoron. You cannot manage innovation any more than you can force a person to succumb to a religious belief. Rather, the challenge is one of managing for innovation. If the right set of conditions are put in place, and they are sustained over a period of several years, the odds of generating worthwhile innovative outputs go up dramatically. So it will be the firms who build the appropriate skills, values and culture that will be most successful.

The other important trend is a broader perspective on the nature of innovation. Many managers view innovation narrowly in terms of technological advances, new product introductions or process improvements. But research is increasingly showing the value of a broader definition. For example, one line of research has shown how business model innovation can generate firm-level competitive advantage. Another, of great interest to me, is the increasing interest in management innovation, defined as the implementation of a management practice, process or structure that is new to the state of the art and is intended to further organisational goals. Well-known historical management innovations include Du Pont’s development of capital budgeting techniques and Toyota’s investment in the problem-solving skills of its line employees. More recent examples are Procter & Gamble’s “Connect and Develop” open innovation model and Motorola’s Six Sigma quality methodology. Because of its systemic and hard-to-copy nature, management innovation offers firms the potential for competitive advantage in ways that product and process innovation do not. Indeed, it has been argued by Gary Hamel that “over the past 100 years management innovation, more than any other type of innovation, has allowed companies to cross new performance thresholds”.

Research conducted by myself and my colleagues at the Management Innovation Lab (MLab) shows that management innovation is difficult to do. We are all prisoners of the same calcified management systems that shape the way we behave and even the way we talk, so it is hardly surprising that we find it difficult to imagine an alternative set of structures, tools or techniques that might replace them. To make matters more challenging, there is no play-book, no clearly-understood rules for management innovation. But our research suggests there are several vital ingredients that always come together when management innovation happens. These include: adistinctive and novel point of view on the future, a clearly-articulated problem or challenge that needs resolving, A core group of heretical thinkers and action takers who push the new idea through the organisation, and a deep understanding of the traditional orthodoxies that need to be overcome. By bringing together these ingredients, companies can increase the likelihood that they will accelerate the process of management innovation.

Article © 2009 Dr Julian Birkinshaw. All rights reserved.

about the author...

Dr Julian Birkinshaw

Dr Julian Birkinshaw

affiliation:   London Business School

position:  Professor and Deputy Dean, co-founder of MLab

country:  United Kingdom

area of interest:  Management Innovation

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