4 Stages Of Management Innovation

   Have you ever stopped working at your job and wondered why the company is like this? How does a company's structure come into being? How do you define every job? Why are salaries and benefits formulated in the current way? How are the norms and norms in the organization formed? Is there any better way?

This is not a silly idea. History has proved that management innovation has greatly changed the way many organizations operate. In 1913, Ford motor introduced pipeline operation; in 1924, Western Electric Company invented statistical quality control; in 1945, TOYOTA motor launched a quality revolution which was widely responded by Japanese enterprises; in 1987, ISO quality standard and Motorola's 6 sigma control standard were born. There are also some more profound examples: the double entry bookkeeping method of Luca Pacioli was popularized in 1494; the concept of limited liability company appeared in 1856, which laid the foundation for the modern enterprise organization; cash flow analysis, capital budgeting and a little more activity-based costing have made the company's financial control capability undergo tremendous changes in the centuries.

From a historical perspective, there is no way of working that is sacred and unshakable. Management innovation happens in the organization and takes place around us. Although most of the management innovations may fail, some will play some role, and a small number of management innovations will change the history. These most valuable innovations exceed the boundaries of industry and state, are imitated by different enterprises, and have improved the productivity and social benefits of enterprises, and their advocates have also gained huge profits and lasting competitive advantages. The importance of management innovation to economic and social progress is no less than technological innovation. "The main bottleneck of progress for ADI and many other American companies is not product innovation, but management innovation," said CEO Ray Stata, a semiconductor company in Massachusetts. (ADI) CEO.

However, we find that few companies have a better understanding of management innovation, let alone manage it. Most companies do not have formal procedures for managing innovation. Many managers see management innovation in a "special way" perspective. A few companies succeed because they are faced with difficulties and have to change their existing systems.

So how does management innovation happen and helps organizations improve their management processes? We have made an in-depth study of more than 100 management innovations in the past 130 years and 11 management innovations in recent years.

What is the difference between management innovation and technological innovation? Our research confirms that the process of management innovation and technological innovation will be very similar - employees collect creative ideas and resources, seek executives' support, and use political means to overcome internal resistance to innovation. However, there are two characteristics of management innovation which are different from technological innovation. First, compared with technological innovation, the source of external innovation is more important to management innovation. External sources include management academics, consultants, management gurus and employees who have already left. They often bring inspiration, and play a guiding role in the initial stage of management innovation, and make management innovation highly interactive. Generally, management innovation occurs on the fringe of the organization rather than the core.

Second, management innovation is characterized by decentralization and gradualism, which is more uncertain than technological innovation. Most of the implementation of management innovation will take several years, and sometimes it is not even clear when the management innovation will take place.

Why is there such a difference? The difference lies in the difference between the two innovations. Most technological innovations are discontinuous and can be easily summarized. At the same time, technological innovation contains many entities and products, and it is more likely to be duplicated. Management innovation is aimed at some highly complex social systems, involving more "human" relations. In this way, management innovation is more implicit. When other organizations are copying, they need the intervention of external experts to ensure the implementation of innovation. Therefore, the implementation of management innovation is difficult to guarantee, and the result of management innovation is also difficult to be evaluated, resulting in a relatively slow and gradual process of management innovation.

Generally speaking, the four stage of management innovation involves four stages.

The first stage of management innovation is the dissatisfaction of the status quo. In almost all cases, the motivation of management innovation stems from the dissatisfaction with the company's current situation: whether the company is in a crisis, or the business environment is changing and the emergence of new competitors poses a strategic threat, or some people complain about operational problems.

For example, Litton interconnect product company is a factory that assembles the motherboard system for computers. In Glenrothes.1991, Scotland, George Black was appointed to take charge of the strategic transformation of the factory. He said: "we were a company with a bleak future. Compared with our competitors, our assembly work had no characteristics. The only solution is to adopt new ways of working and provide new services to customers. This is a deliberate overturn, perhaps risky, but we have no choice. "

Soon, Black launched a new business unit architecture. Employees in each business unit are committed to meeting all the needs of a particular customer. They learn a series of skills such as manufacturing, sales and service. This innovation has greatly improved customer response and greatly reduced staff turnover.

Of course, for whatever reason, management innovation is challenging some form of organization, and it is more likely to arise at a critical moment.

The second stage: Inspiration from other sources of inspiration management innovators may come from the successful experience of other social systems, or from unproven but very attractive new concepts.

Some inspiration comes from management thinkers and management masters. In 1987, when Murray Wallace became the CEO. of Wellington insurance company in Wellington, the critical time of the crisis, Wallace read Tom. Peters's new work, Thriving on Chaos. He transformed the principle of high decentralization in the book into an operable mode, known as the "Wellington revolution". The new mode of Wallace has greatly increased the profit margin of the company.

There are also some inspirations from irrelevant organizations and social systems. In the early 90s of last century, Audi health, a hearing aid company based in Copenhagen, Denmark, launched a radical organizational model: there is no formal hierarchy and reporting relationship; resource allocation is carried out around the project team; the organization is completely open. A few years later, Audi has made huge profits growth. The inspiration came from the boy scouts movement that CEO Lars Kolind once participated in. Kolind said: "the boy scouts have a strong sense of volunteering. When they gather together, they can cooperate effectively without any hierarchical relationship. There are no intrigues and intrigues. This experience made me attach importance to setting a clear meaning for employees, which is far beyond the breadwinner. At the same time, we should establish a system to encourage voluntary behavior and self motivation. "

In addition, some inspiration comes from management innovators who have extraordinary backgrounds. They usually have a wealth of work experience. An interesting example is the Art Schneiderman, the manager of the ADI, and the prototype of the balanced scorecard is derived from his handwriting. When Sloan studied MBA in the school of management, Schneiderman was deeply influenced by the dynamic concept of Jay Forrester system. Before joining ADI, he worked as a strategic consultant for Bain consulting company for six years, and was responsible for Bain's quality management project in Japan. Schneiderman has a deep understanding of Japanese enterprises and looks at the various functions of the organization from a systematic perspective. So when ADI's CEO Ray Stata asked him to develop a production quality improvement process for his company, he quickly devised a complete array of financial and non-financial indicators.

These three examples illustrate a simple truth: the inspiration of management innovation can hardly be generated from within a company. Many companies blindly mark or observe competitors' behavior, resulting in a highly competitive industry. Only by drawing inspiration from other sources can the company's management innovators create something truly new.

The third stage: innovation, in fact, the management innovation of "flash of light" is rare in reality. Perhaps the only exception is that Schneiderman invented the balanced scorecard. "I always keep those non-financial discussions at the forefront of business meetings, and then I discuss the financial performance. But my boss, Jerry Fishman, always turns the order down. After several meetings, Jerry called me to his office: "I understand your idea, but you should also understand my arrangement." This is too inefficient. Or you can find a way to satisfy us, or do it in my own way. "

After a few days of thought, Schneiderman found inspiration. One evening when he was watching TV at home, he found an advertisement about how candy could combine two kinds of products, peanut butter and chocolate. He recalled: "I suddenly became clear, and the financial and non-financial forms to synthesize a discussion project. So I added several key financial data at the top of the scorecard, and the problem was readily solved.

But more often than not, management innovators combine various elements of discontent, inspiration and solutions. The combination is usually not done overnight, but is repeated and gradual, but most management innovators can find a clear driving event.

For example, in 1991, Hewlett-Packard Co developed its global customer management structure. This innovative key player is Alan Nonnenberg., who has worked in three continents and participated in HP's "major client program" in the United States. The decisive driving event is that Nonnenberg is authorized to plan the global customer management plan, and then he will apply it from the "main customer plan" to the global framework.

Of course, there is a small part of management innovation by accident. For example, when Sun Micosys tems Inc was preparing to release the Java language in 1995, it created the earliest software developer network. At that time, within the Sun Micosys tems Inc, few people realized what the developer's network would be like. "We don't know at all that what we have created is so great." George Paolini, the main hero of the Java release.

The fourth stage: the internal and external recognition is the same as other innovations. Management innovation also has huge risks and uncertain returns. Many people fail to understand the potential benefits of innovation, or fear that the failure of innovation will have a negative impact on the company, so they will do their best to resist innovation. Moreover, before implementation, it is difficult to accurately judge whether the cost of innovation is higher than the cost. Therefore, for management innovation personnel, a key stage is to win the recognition of others for new ideas.

In the initial stage of management innovation, it is more important to get the acceptance within the organization than to get the support from the outside. This process requires clear advocates. If a highly prestigious executive participates in the initiation of innovation, it will be of great help. In addition, the effectiveness of innovation can only be demonstrated only if the results are achieved as quickly as possible. However, many management innovations often come to fruition only after a few years. Therefore, it is very important to create a support alliance and extend innovation to the organization.

Another characteristic of management innovation is the need for "external recognition" to show that this innovation has been confirmed by independent observers. When there is no way to prove the effectiveness of management innovation through data, senior managers usually seek external recognition to promote internal change. External recognition includes four sources: first, scholars from business schools. They pay close attention to all kinds of management innovation, and summarize and summarize the practical problems encountered by enterprises, so as to apply them to research or teaching. Second, consulting company. They usually summarize and archive these innovations for other situations and organizations. Third, media organizations. They are keen to publicize innovative success stories to more people. Fourth, trade associations.

External recognition has dual nature: on the one hand, it increases the possibility of other companies to copy innovation achievements; on the other hand, it also increases the possibility of innovation. For example, when we asked Schneiderman, if it did not meet Kaplan, what would its "company scorecard" look like? He admitted that the innovation could be completely withered and died inside ADI.

How to improve the management innovation ability of managers? How can managers improve their management innovation ability? We have put forward six general suggestions: conscious management innovation. Many companies have set up R & D laboratories, or have specified innovative responsibilities for individuals. But how many companies have established a special organizational structure to nurture management innovation? To become an innovator of management, the first step is to sell ideas to the whole organization.

Create a culture of doubt and problem solving. When faced with challenges, how will employees react? Will they begin to doubt? Will they use the standard solutions adopted by competitors, or will they have a deeper understanding of the problems and try to find new solutions? Only the last way can lead the company to successful management innovation. Managers should encourage employees to solve problems rather than avoid them.

Seeking analogies and illustrations in different environments. Companies should learn from some highly flexible social systems, such as parliamentary democracy, cities, etc. If companies want to improve their motivation, they should observe and learn various volunteer organizations. Encouraging employees to work in different countries is also of great value, which broadens their vision and stimulates their thinking.

Ability to develop low risk trials. Managers of a company continue to encourage employees and teams to put forward management innovation methods. But they soon realized that in order to turn initiative into effectiveness, they could not allow all new ideas to spread throughout the organization. They stipulate that every innovation can only be carried out within limited personnel and limited time. This ensures that new ideas have the opportunity to implement and do not harm the entire organization.

Use the source of external change to explore your new ideas. When a company is capable of promoting its own management innovation, it is very useful to selectively utilize external scholars, consultants, media organizations and management gurus. They have three basic functions: the source of new ideas; as a propaganda medium, this management innovation is more meaningful; the work done by the company has been recognized more.

Continuous management innovation. The real winners are not only one or two management innovations. On the contrary, they are continuous management innovators. General Electric is an example. It is not only famous for its "teamwork" principle and boundless organization, but also has many more ancient innovations, such as strategic plan, management development plan, commercialization of research and development, etc.

　 Of course, the above six points are not strict formulas. There are always some luck and random components in management innovation. But managers keep these points in mind, which will greatly increase the chances of successful management innovation. History shows that management innovation has become an important driving factor for many companies' competitive advantages. For those companies that systematically invest in management innovation, the future returns will be limitless.