What Gary Hamel Talks About:
Innovation from Everyone, Every day
Every human being has within them a creative spark, yet our organizations harness only a fraction of that latent imagination. While 79% of leaders rank innovation as a top priority, 94% say their organizations aren’t as innovative as they need to be. What gives? If innovation is so important, why do most companies struggle with it? Because few of them have taken a systematic approach to making innovation instinctive for every individual and intrinsic to the organization itself.
For innovation to become a genuine core competence, organizations must:
- Build creative capital. While most people have creative instincts, it takes practice to learn to think like a game changer. You wouldn’t expect someone to hit a golf ball 200 yards down the fairway without a bit of training. So it is with innovation. The quickest way to increase the innovation output of any company is to teach everyone how to upend conventional thinking, intercept emerging trends and invent novel solutions to deep customer needs.
- Re-tool the management model. Over the past decade, many companies re-engineered their operating model for speed and efficiency. Few, though, have retooled their management model for innovation. This is now an imperative. Every management system—planning, resource allocation, performance management, compensation and training—must facilitate rather than frustrate innovation. Companies that fail to take a systematic approach to this challenge will soon find themselves preempted by their competitors and abandoned by their customers.
Over the past three decades, Gary Hamel has taught hundreds of thousands of individuals how to imagine and build the future. He has also helped many of the world’s most admired companies design and build innovation-friendly
management practices. The result: boldly creative teams and billions of dollars added to the top line.
Building An Evolutionary Advantage
The winds of creative destruction are howling. Change is exponential and unrelenting. In this environment, the most important question for any organization is, “Are we changing as fast as the world around us?” Sadly, for many organizations the answer is no. Today, there are many who expect the old guard to lose. After all, in a hyper-kinetic world, resources count for less than resourcefulness, and companies that fall behind tend to stay behind.
Building an evolutionary advantage requires more than new practices—it also requires new principles. Most organizations were built on the principles of standardization, formalization, specialization, alignment and discipline. These are fine principles, but now we must embrace new principles: experimentation, openness, meritocracy, freedom and audacity. These cannot be mere buzzwords, but must be embedded deeply in structures, systems and behaviors.
Busting Bureaucracy, For Good
If you want to win in a world of nimble, hungry upstarts, bureaucracy has to die. Young companies are bold, flexible and quick. Big companies, not so much. Research suggests that an excess of bureaucracy—too many layers and too many rules—costs OECD economies $9 trillion each year in lost economic output. Nevertheless, most struggle to imagine an alternative. Bureaucracy seems essential for achieving the control, coordination and consistency that allow large organizations to function. For decades that was true. Now it is not.
A growing number of vanguard companies are proving it is possible to buy the benefits of bureaucracy duty-free. On average, these post-bureaucratic trailblazers enjoy a 30-50% productivity advantage over their peers, and are far more fleetfooted. Svenska Handelsbanken, the world’s most consistently profitable bank, has three management layers. Nucor, the highly innovative steel-maker has no central R&D and a head office of fewer than 100 individuals. Haier, a global leader in the appliance industry, has turned itself into a “plagorm” of 4,000 highly autonomous “micro-enterprises.” Turns out you can be big and fast, efficient and supple, disciplined and courageous.
For more than a decade, Gary Hamel has been helping progressive-minded organizations “uninstall” bureaucracy. Doing so requires three things…
- Motivation: Organizations get serious about busting bureaucracy when they start to measure its hidden costs. Every organization needs to calculate its BMI —“Bureaucracy Mass Index.”
- Models: It’s hard to begin a journey when you can’t imagine the destination. Luckily, the post-bureaucratic pioneers help point us in the right direction.
- Migration: You don’t build a post-bureaucratic organization with a grand, top down change program. Instead, you must build migration paths by launching many small, yet radical, experiments designed to test and refine new, “post-bureaucratic” practices. The payoff: an organization that is flat, open and free.