How to reignite the creative spark
Innovation isn't about operational efficiency. According to Hamel, it needs a different management DNA.
By Indrajit Gupta and Vikas Kumar, TNN |
MUMBAI: Professor Gary Hamel is working on a new book, which will be launched in autumn this year. It seeks to explain why companies across the world struggle to continuously innovate. It's an issue that is likely to resonate well with most CEOs. By now, all of them are well aware of why innovation is crucial to their firm's survival. They also know that it is far too important to be left to just a few folks inside the organisation — or something that happens almost by accident. Yet not many have been able to light the creative spark inside their corporation that allows radical ideas to bubble up from the bottom and see the light of day.
Hamel, the reigning guru of strategy, believes he has some of the answers. Last year, he set up a unique lab inside the London Business School, where he teaches as visiting faculty, to study how companies can develop a methodology to evolve a more systematic process to manage innovation. Just days before his first management seminar in Mumbai and Delhi, being organised by Indiatimes later this month, Hamel shared some of the new ideas with ET in an exclusive one-on-one interview over the phone from the US.
Hamel says there's a simple reason why most companies continue to struggle on their innovation agenda. The foundation of every large company was based on a set of certain principles of standardisation, specialisation, hierarchy, planning and control and the use of financial rewards to motivate people. These, says Hamel, were part of a simple credo of efficiency or the ability to do the same thing over and over again with precision.
“So if you think, standardisation is wonderful in a manufacturing process, when you start to standardise mindsets, then innovation and thinking dies. Specialisation is a critical function because it helps people to do processes over and over again. But, innovation requires you to cross boundaries, to put different kinds of people and skills together, all of which comes from different points of view and different perspectives,” says Hamel.
Innovation needs a different set of processes from the ones that were created for driving operational efficiency. It also calls for a very different management DNA — something that continues to elude most large corporations. (This probably explains why new wealth over the last 40 years has been created by relatively newcomers, and not by the incumbents.)
For one, Hamel argues that a hierarchical, top-down leadership strategy and management is antithetical to building innovation as a capability. Today, technology makes it possible for companies to put the tools of creativity in the hands of every employee. For in-stance, it is entirely possible for every employee to have access to a database of customers, competitors and technology insights that they can use to drive their own innovative thinking.
Yet most of the times, tech-nology insights are held in R&D, marketing insights are held by the marketers. “I believe that you have to create a database where every single employee in the world has access to the building blocks through in-novation. These building blocks are the fundamen-tally new insights of the un-articulated needs of custom-ers, technology discontinui-ties, about changes in life-style, about competitors and industry maps. In most companies, employees do not have access to that. To me, it is scandalous but I think, much of the problem is that it is the legacy of an industry, which binds us to the assumption that power and the wisdom lead us to the top of the organisation,” says Hamel.
Yet that's what is striking about the truly innovative companies: they tend to be much more broadly dis-tributed and employees get much more freedom in ex-perimenting. Like Whirl-pool, which no one say as an innovating firm 10 years ago. Today, it is seen as the most innovative company in the world. With Hamel’s help, they have trained 35,000 people to be innova-tors, who in turn have gen-erated 7,500 ideas. Some of these ideas were for setting up new businesses, while most were much more modest. But as many as 350 ideas have gone into ex-perimental phase. About 50 or 60 have already hit the marketplace. The bottom-line: there’s an enormous difference between giving everyone in an organisation the skill and tools to be an innovator versus having a few people in a specialised department work on inno-vation, avers the strategy guru.
(For a fuller version of the Gary Hamel interview, watch out for the Corporate Dossier issue of September 15)
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