Accelerating Management Innovation Alan Matcham Executive Director MLab 2 nd July 2007

A joint venture with London Business School good timing? “ Alongside the challenges (of globalisation and technology) are significant new opportunities, with the greatest rewards for those nations with the highest levels of innovation and skills….” Gordon Brown June 29 th 2007

A joint venture with London Business School

a unique way of working with companies We do not bring ready-made solutions – we co create approaches to solve big problems combining a set of special tools and deep insight. work at arms-length – we work intimately with company employees to ensure the knowledge created is embedded propose all-or-nothing changes - we execute rapid experimentation and prototyping to validate proposed solutions just do theory – we interplay theory/practice – practice/theory Ref: Julian Birkinshaw

We do not

bring ready-made solutions – we co create approaches to solve big problems combining a set of special tools and deep insight.

work at arms-length – we work intimately with company employees to ensure the knowledge created is embedded

propose all-or-nothing changes - we execute rapid experimentation and prototyping to validate proposed solutions

just do theory – we interplay theory/practice – practice/theory

we seek volunteers in companies who…. are prepared to experiment early and often don’t underestimate the potential of small innovations don’t wait to be told what to do challenge perceived wisdom display some the following traits; have broad work experience they network have outside interests have persistence and tenacity make their own luck are restless with the status quo something of a romantic

are prepared to experiment early and often

don’t underestimate the potential of small innovations

don’t wait to be told what to do

challenge perceived wisdom

display some the following traits;

have broad work experience

they network

have outside interests

have persistence and tenacity

make their own luck

are restless with the status quo

something of a romantic

what we mean by “management” management practices resources - accumulating and allocating activities - coordinating and controlling knowledge - acquiring and applying objectives - setting and programming effort - motivating and aligning relationships - building and nurturing management processes capital allocation strategic planning training and development project review and monitoring hiring and promotion performance reviews product development knowledge management internal communications Ref: Gary Hamel

management practices

resources - accumulating and allocating

activities - coordinating and controlling

knowledge - acquiring and applying

objectives - setting and programming

effort - motivating and aligning

relationships - building and nurturing

management processes

capital allocation

strategic planning

training and development

project review and monitoring

hiring and promotion

performance reviews

product development

knowledge management

internal communications

target the core to accelerate management we focus on the very DNA of management thinking and behaviours.

to accelerate management we focus on the very DNA of management thinking and behaviours.

managements DNA specialization standardization hierarchy planning & control extrinsic rewards limits learning breeds conformance ignores other ideas illusion of predictability ignores self organisation and volunteerism Ref Gary Hamel

specialization

standardization

hierarchy

planning & control

extrinsic rewards

limits learning

breeds conformance

ignores other ideas

illusion of predictability

ignores self organisation and volunteerism

our overall approach diagnostic phase core issues blockers constraints big problems creative phase use of various tools, frameworks, examples from related settings, to identify possible solutions implementation phase prototyping and review of proposed solutions Ref: Julian Birkinshaw

creative phase in more detail take a BIG problem challenge orthodoxies search for new principles experiment, learn and adapt

take a BIG problem

challenge orthodoxies

search for new principles

experiment, learn and adapt

1 - take a BIG problem

World Bank’s development marketplace objective : reduce global poverty quicker biggest blocker : bureaucratic fund approvals process - could take years. solution : small scale, innovation market places involving all the banks talent. Sellers of ideas meet buyers with funds $3m seed funding into 11 projects. Expanded into bigger and more market places. $35m into 800 poverty fighting projects.

objective : reduce global poverty quicker

biggest blocker : bureaucratic fund approvals process - could take years.

solution : small scale, innovation market places involving all the banks talent. Sellers of ideas meet buyers with funds

$3m seed funding into 11 projects. Expanded into bigger and more market places. $35m into 800 poverty fighting projects.

2 - challenge orthodoxies “ Every act of creation is first of all an act of destruction.” Pablo Picasso 1881-1973

who says “it’s written in stone”? work and leisure call upon different values share options motivate managers to act as owners change is always difficult and takes a long time the best companies have the most talented people monetary incentives drive corporate performance effective leaders are in control of their companies stock markets have a short term bias Based on Pfeffer & Sutton: Hard Facts, Dangerous Half-Truths and Total Nonsense

work and leisure call upon different values

share options motivate managers to act as owners

change is always difficult and takes a long time

the best companies have the most talented people

monetary incentives drive corporate performance

effective leaders are in control of their companies

stock markets have a short term bias

Best Buy management “let go” objective : being resilient in a dynamic marketplace biggest blocker : old retail dogmas e.g. physical presence equals productivity solution : series of management innovation “Jams” to engage employees in experimental projects several hundred people involved, six projects established e.g.- employees set their own work hours as long as they meet productivity goals - the revolutionary notion of an “Ebay for HR” was set up. Matching people up with interesting projects.

objective : being resilient in a dynamic marketplace

biggest blocker : old retail dogmas e.g. physical presence equals productivity

solution : series of management innovation “Jams” to engage employees in experimental projects

several hundred people involved, six projects established e.g.- employees set their own work hours as long as they meet productivity goals - the revolutionary notion of an “Ebay for HR” was set up. Matching people up with interesting projects.

3 – search for new principles

where do you find coordination without a controller? compliance without a regulator? prediction without a prophet? direction without a leader? organisation without an architect? design without a creator? management without managers? MARKETS “ my word is my bond” – TRUST the STOCK MARKET flocks of BIRDS a BEHIVE evolution of LIFE FORMS SELF-DIRECTED teams Ref Jules Goddard

coordination without a controller?

compliance without a regulator?

prediction without a prophet?

direction without a leader?

organisation without an architect?

design without a creator?

management without managers?

MARKETS

“ my word is my bond” – TRUST

the STOCK MARKET

flocks of BIRDS

a BEHIVE

evolution of LIFE FORMS

SELF-DIRECTED teams

objective : performance downturn so “50% of innovation must come from outside P&G” biggest blocker : innovation is an internal activity solution : Inspiration from art, chaos & network theory and other industries. growth from 15% to 50% of ideas now originating outside P&G over 250 products introduced generating $bns in sales. P&G connect and develop

objective : performance downturn so “50% of innovation must come from outside P&G”

biggest blocker : innovation is an internal activity

solution : Inspiration from art, chaos & network theory and other industries.

growth from 15% to 50% of ideas now originating outside P&G

over 250 products introduced generating $bns in sales.

4 – experiment, learn and adapt

"In order to understand something, one should purposefully try to change it." William H. Starbuck, ITT Professor of Creative Management Stern School, NYU

"In order to understand something, one should purposefully try to change it."

William H. Starbuck,

ITT Professor of Creative Management

Stern School, NYU

in our experience management innovation is driven by an interplay between external and internal agents there is no “ultimate origin” – every management innovation builds on / steals from previous innovations management innovation is never easy: the process takes a long time scepticism can be expected most management innovators are initially viewed as mavericks

management innovation is driven by an interplay between external and internal agents

there is no “ultimate origin” – every management innovation builds on / steals from previous innovations

management innovation is never easy:

the process takes a long time

scepticism can be expected

most management innovators are initially viewed as mavericks

to become a serial management innovator... create a questioning, problem solving culture seek out analogies and exemplars from unusual environments. encourage mavericks build a capacity for low risk experimentation create a dedicated process speak to a member of the MLab team!

create a questioning, problem solving culture

seek out analogies and exemplars from unusual environments.

encourage mavericks

build a capacity for low risk experimentation

create a dedicated process

speak to a member of the MLab team!