Inventing the Future of Management

How can we maximize human potential to make the world a better place? How can we make work more fulfilling–whether in a business, a school, or a government agency?

For the past two days, I’ve been attending a high-powered conference here in Half Moon Bay, California, hosted by Gary Hamel (Wall Street Journal’s “top business guru” and author of The Future of Management). Our goal: to use the latest management research to re-design organizations to release the full potential of their employees, and to generate maximum innovation, adaptability, and engagement. Our starting point is the observation that management today–whether businesses, government agencies, or educational systems–is deeply flawed (think of Dilbert’s cartoons and you’ll know what we’re trying to fix).

C. K. Prahalad, Peter Senge, Gary Hamel (standing), Eric AbrahamsonMost of the 40 or so in attendance were thought leaders, authors of best-selling business books and/or professors (The photo shows, from left to right, C. K. Prahalad of University of Michigan, Peter Senge from MIT, Gary Hamel (standing), and Eric Abrahamson of Columbia).

But the high point, for me, were the presentations by a few CEOs, representing innovative styles of management: Gore, Google, Whole Foods, and IDEO, all companies I describe at length in my book GROUP GENIUS.

Tim Brown, IDEO

Representing Gore was CEO Terri Kelly; Whole Foods, CEO John Mackey; and IDEO, CEO Tim Brown (in the photo). If you’ve read my book GROUP GENIUS you know that all of these companies represent a new sort of management technology, one that is designed to tap into the power of collaboration.

A high point of the event was when Eric Schmidt, CEO of Google, answered questions from the audience about Google’s unique organizational culture (sitting at the right of Gary Hamel in the photo). I haven’t written as much about Google, simply because that company has been so widely reported in the media already; but, like Gore, IDEO, and Whole Foods, Google is a company that maximizes the collaborative potential of its employees.

Gary Hamel and Eric Schmidt

“Inventing the Future of Management” was designed to be a beginning, so we didn’t come up with concrete advice so much as challenges, obstacles, and important issues. But I was delighted to see that the consensus emerging from this group is directly aligned with my message in GROUP GENIUS: that innovation can’t be forced in a command-and-control organizational design. Innovation always emerges from the bottom up, in teams that form spontaneously and interact improvisationally. In the future, we need organizations that enhance the power of collaboration, managers that facilitate the unpredictable creative work of everyone.

Attendees: Eric Abrahamson, Chris Argyris, Julian Birkinshaw, Tim Brown, Lowell Bryan, Bhaskar Chakravorti, Yves Does, Alex Ehrlich, Gary Hamel, Linda Hill, Jeffrey Hollander, Steve Jurvetson, Kevin Kelly, Terri Kelly, Ed Lawler, Andrew McAfee, John Mackey, Tom Malone, Marissa Mayer, Lenny Mendonca, Henry Mintzberg, Vineet Nayar, Jeff Pfeffer, C.K. Prahalad, J. Leighton Read, Keith Sawyer, Peter Senge, Rajendra Sisodia, Tom Stewart, Jim Surowiecki, Hal Varian, Steve Weber, David Wolfe, Shoshana Zuboff.

Professional improvisers

I’ve just returned from presenting a keynote address at a conference at the University of Padua, in Padua, Italy: the title of the conference was “Improvisation: Between Technique and Spontaneity.”  The core idea of the conference was that the tension between technique and spontaneity is found in just about all expert and professional activity.  Professionals are “experts” because they’ve mastered a large set of routines and “cookbook” solutions to problems.  But that, alone, isn’t enough.  To be a master, you have to be able to improvisationally respond to the unexpected, to weave new cloth out of known solutions and routines.

Jazz musicians know this better than just about everyone.  To play jazz at a high level requires years of hard work and practice.  It’s a myth that jazz improvisation means “anything goes”–the technique, the routines, the shared cultural norms and communication practices are what allow the genius of the group to exceed the brilliance of any one individual.  That’s why the Padua conference had a strong jazz emphasis.  And, unusual for an academic conference, it was collaboratively organized by three different departments: education, philosophy, and linguistic, communication, and performing arts (I know, that last department name is a mouthful!)

In my talk, I described how experienced teachers also blend technique and spontaneity in the classroom.  I cited research that has discovered that experienced teachers improvise more than novice teachers; but, paradoxically, they also have mastered more standard routines than novice teachers.  Professional expertise, like jazz improvisation, requires both mastery of standard solutions and routines as well as improvisational ability.

Other highlights of the conference included talks by Andy Hamilton (a philosopher at Durham University), Tord Gustavsen (an internationally known jazz pianist and now a doctoral student at Oslo University), and Frank Barrett (at the business school at the Naval Postgraduate University).  And later that night, the Tord Gustavsen trio performed to a sold-out crowd of 600 people in the beautiful Auditorium Pollini.

Thanks to Marina Santi, the lead organizer, for this wonderful event!

Is Innovation a “Business Process”?

I just returned from giving a keynote talk at the Business Process Management Conference. Business Process Management, or “BPM” for short, emerged in the early 1990s as a trend best exemplified by the 1993 book Reengineering the Corporation by Michael Hammer and James Champy. The basic idea sounds like common sense to me: instead of focusing on the structure of your organization–the divisional lines and functional areas–focus on the core processes that create and deliver value (like the order process, supply-chain management). Although “conventional wisdom” has it that BPM was a short-lived fad, in fact the core of the message lives on in widely used management techniques, including six-sigma, and information technology management tools such as ITIL and COBIT.

I worried over my keynote presentation. After all, is innovation a “process”? I think so, and in fact my talk’s title was “the innovation process”. All businesses manage processes of incremental innovation (six sigma might even fall in that category) and new product development (with stage gate approaches). But I don’t think breakthrough innovation can be managed like other business processes. It’s more of an anti-process. By that, I mean breakthrough innovation is not linear; it doesn’t have identifiable stages; the participants and organizational units are unclear. As I say in my book Group Genius, breakthrough innovation is improvisational–it emerges, unpredictably, from a long series of small sparks of ideas. No single one of those ideas determines the final form of the innovation that will later emerge.

In the famous words of the immortal guru Peter Drucker: “When a new venture does succeed, more often than not it is in a market other than the one it was originally intended to serve, with products and services not quite those with which it had set out, bought in large part by customers it did not even think of when it started, and used for a host of purposes besides the ones for which the products were first designed.” (1985)
Yes, innovation is a process.  But you can’t manage it like any other business process; it requires a new vision of management.  After you finish my book Group Genius, I recommend The Future of Management by Gary Hamel.

The Innovation Exchange

Today’s conference at Washington University, called the Innovation Exchange, brought together top scholars and business leaders to think collaboratively about fostering innovation.  It was hosted by our new Institute for Innovation and Growth.  Keynote speakers included:

Bill Peck (former Dean of Washington U. Medical School and founder of Innovate St. Louis)

Carliss Baldwin (Professor at Harvard Business School and an expert in the relations between design and the economy)

Christoph Loch (Professor of Corporate Innovation at INSEAD, possibly the best business school in Europe)

Jeff DeGraff (Dean of Innovation at the Competing Values Company and a professor at University of Michigan)

Key insights that emerged included:

* The need to transform business school education to teach for innovation

* The desire for managers and innovation champions to have a forum where they can exchange problems, issues, and solutions

* The need for managers and staff to be educated about how innovative companies work, and how they can make their own organizations more innovative

Watch this blog in the coming year, as this new Institute for Innovation begins to take shape.

Innovation = Learning

Innovation is the flavor of the month; has been for more than a few months now.  Organizational learning is another management trend–it refers to the ability of an organization to learn–to become more effective over time, to develop new knowledge and retain it to respond to future situations.  What both innovation and learning have in common is adaptability and improvisationality.

In an article in the Fall 2007 issue of Sloan Management Review, Joaquín Alegre and Ricardo Chiva studied organizations high in organizational learning capability (OLC) and identified five core features of high OLC companies: experimentation, risk taking, interaction with the external environment, dialogue and participative decision making.  This is fascinating because in my research, I’ve found that these five characteristics also hold true of organizations that use the power of collaboration to generate innovation.

(1) Experimentation, as defined by these authors, produces a flow of new ideas that challenge the established order.  (2) Risk taking is just what it sounds like: the tolerance for ambiguity and errors.  And as I’ve found, innovative organizations foster idea generation and tolerate failure.

(3) Interaction with the external environment is what I call “collaborating with customers” and is associated with innovative networks that I call collaborative webs in my book Group Genius.  Deborah Ancona, in her 2007 book X-Teams, has likewise discovered that successful teams have an outward focus, and strong social network ties with people outside of their team.

(4) Dialogue and (5) participative decision making are what I call improvisation–a style of communication and an organizational culture that is egalitarian, open to flows across status levels.  Improvisational organizations excel at a type of dialogue that opens up possibilities, a style of conversation in which new and unexpected ideas emerge.

I firmly believe that organizations high in learning ability are more likely to be innovative organizations, and I’m delighted to read of this fascinating study confirming the link.