A colleague of mine, Robert Brands of Brands & Company (1), recently posed a question. He asked, “…so what do you think is the next big thing in innovation management?” For instance, there are concepts such as “blue ocean strategy”, “open innovation”, “lean start-up strategy” and even “big data” that have occupied much of the innovation management press. Countless books and articles tout the latest “best practice”. What will be next, Robert asked?
As I contemplated his question, I started to think that while these are all important concepts in terms of how our approach to innovation management has changed, are there in fact broader, more over-arching trends in how we manage organizations in general that might be at play? Maybe all these individual concepts fit into a bigger story, so to speak. That is the focus of this article.
When I stepped back, and thought about much of what I have been reading and experiencing in my consulting practice with companies recently, I was struck by the realization that maybe we are seeing a fundamental shift in how organizations will be managed in the future. Perhaps it is happening incrementally so it becomes hard to discern, until you look back and connect the dots. How organizations are managed today has existed since the turn of the last century during the industrial revolution. This “industrial model” of management focused on control of information and power, the organization structure, the hierarchy, and above all, efficiency and productivity. That model has held sway for over a hundred years. But I believe the walls are crumbling and out of the chaos and economic dislocation will come new models of how organizations are managed, which will have a direct impact on innovation management.
I want to focus on three specific trends that I believe help illustrate where we might be heading. First, the reason a business exists is changing. Yes, we have non-profits who exist for some benefit to society, but what about for-profit companies? These businesses exist to make a profit, right? Maybe not. Companies are finding that the “triple bottom line” as illustrated in Figure 1 is actually a better model. That is, a company exists not just to make a profit, but to be environmental friendly and socially responsible.
You see this all around today. A recent article in FastCompany entitled “Howard Schultz Doesn’t Have All the Answers” (2) speaks to this trend. While the article is focused on Starbucks, there are additional examples provided from many industries. For instance, consider how CVS Health pulled all tobacco products from its 7,800 stores in order to burnish its health-care focused brand. That certainly was not a short-term financial decision. Or how Unilever in 2009 promised to double its size but drastically reduce its footprint.
Think this is happening only in very large consumer industries? I recently purchased some products from a company called DisplayIt (www.displayit.com). This is a B2B, SME business that provides trade-show products. After taking delivery of the product, I received an email from the president thanking me for my order, and asking for my feedback on the designer who worked on my order. Two things struck me about the email. First, rather than providing a link to a survey, which is very common, the email asked for my direct input. Second, and more significantly, the request for my feedback was connected (3), so to speak, with the company’s “corporate purpose” (note, not “mission” but “purpose”…I believe there is a difference).
When I navigated to that page, it provided the company’s “purpose” as being “…to be a blessing to everyone we interact with…” including clients, vendors, the community and the team. It goes on to describe the core values including, for example, “…we don’t serve to exist, we exist to serve…”, and “…we believe the best about our teammates…”, and “…we do what is right…” So how did that affect me? Well, I can tell you that I will no doubt buy products from this company again not because I cannot get them from anywhere else, but because that company through their “corporate purpose” suddenly changed the relationship I have with them. I became engaged with them. That is powerful. More importantly it illustrates my point that the reason a business exists is morphing to something much bigger than just the bottom line. And, you can make the case that it actually helps the bottom line by building customer loyalty and employee engagement.
The second trend that I believe supports my argument is the changing ways we manage creativity, communication and teams. Since the start of the “industrial model” of organization management, the physical layout of the facility mirrored the organization chart. In other words, those who managed the business, from the CEO to other salaried workers below, all existed in individual offices, with those higher in the hierarchy having the best and biggest offices. Everyone who worked at the company basically showed up in the morning, and went home at night. Well, that has changed dramatically over the last 20 years or so. Open office space has become the norm, driven by the desire to improve communication (though many in the “cube farms” of today would argue that cost is the main driver, not enhanced communication!). The internet and improving online collaboration tools has changed many organizations into what might be termed “virtual” organizations, as many employees set foot in the “home office” only sporadically.
And this continues to change and morph. A recent book by Susan Cain entitled “Quiet: The Power of Introverts in a World That Can’t Stop Talking” (4) discusses the bias in society toward extroverts. Extroversion is celebrated in our society. Children from the time they go to school are taught that “shy” is viewed as a negative trait. There are plenty of introverts that inhabit the open office spaces of today’s modern company. The problem is that while many are well adapted to this environment, introverts in general are not (I know, I am one!). A one-size-fits-all mentality in terms of physical space is not the best way to achieve the highest level of employee engagement or productivity. So, the point is that how we manage teams, communication and creativity continue to morph and hopefully adapt to individual differences.
A final trend supporting my argument is the impact the Millennials will have on how organizations are managed. An excellent treatment of this subject can be found in “When Millennials Take Over” by Jamie Notter and Maddie Grant (5).
The Millennial generation are those who were born between 1981 and 1999. The youngest of this cohort is 16 and the oldest, 34. So, they are basically the youngest workers entering the workforce today. Figure 2 illustrates their impact on the workforce. Companies by and large are run by Baby Boomers (born 1946-1964) and the older of the GenX’ers (born 1965-1980). The authors posit that the previous two generations, including Baby Boomers and GenX’ers (and even maybe further back to the Traditionalist born from 1900-1945) are more similar to one another then compared to the Millennials. For instance, the Millennials are the first generation to have grown up in the all-digital age. It has been during the lifetime of the Millennials that the pace of change in technology has accelerated compared to the period from WWII through the 1970’s.
The authors were interested in how the management of organizations might change as Millennials flow into the work force. Their research focused on 1) companies with strong cultures who attracted engaged employees and had high levels of customer loyalty, and 2) how Millennials view organization management practices. Based on their research, they identified four organizational capacities that will be key going forward. These illustrate a fundamental shift in how organizations will be managed, and thereby will influence innovation management.
The four organizational capacities were termed “Digital”, “Clear”, “Fluid” and “Fast”. Digital means that Millennials expect organizations to leverage the digital technologies, like the internet, at the individual level, not just at the senior management level. They are used to having access to information. They will demand that access. Clear relates to their desire for increased and more intelligent flow of information and knowledge that supports innovation and problem solving. Examples of trends that support this notion of Clear include for instance the growing use of open source software and Wikipedia. Another good example is a software enabler I use in my consulting practice for portfolio management (6). Portfolio management traditionally has been the responsibility of a small group of managers. The tool I employ with my clients encourages wide collaboration across the entire organization using a cloud-based software product that is easy to use and scale across the organization. The bottom line is that Millennials are confused by organizations that tightly control information at the top.
The third is termed Fluid. This is all about expanding and distributing power in a dynamic and flexible manner. The old “industrial model” of management emphasized centralized control vs. a decentralized approach valued by Millennials. Today’s environment requires companies to be nimble and adapt quickly. Product life cycles are becoming shorter. The concept of the “lean startup” movement illustrates this organizational capacity. It is all about putting systems in place that allow all levels of the organization to think, act and learn quickly. Millennials do not buy the concept that only senior leadership thinks and decides and the lower levels implement. Fluid organizations serve customers better and more effectively. The example of the company DisplayIt I used earlier in the article might well be a good example of this capacity.
The final capacity is called Fast. In the old industrial model, “fast” focused on getting more out of the process. It was about efficiency and productivity. In the new model, fast is about systems that can learn and adapt quickly while retaining efficiency and productivity. I am always amazed when I consult with clients that invariably senior management tries to treat innovation management just like every other process in the business. The emphasis seems to be “how can we make our innovation process more efficient?” That’s the wrong question. It should be “how can we become more effective”. I believe that’s what this capacity is really all about.
In summary, the old “industrial model” of management is being demolished. In its place are new ways on how companies are managed. Those who change will thrive and grow. Those who do not will die. The three over-arching trends that I believe support my premise include 1) the changing nature of the purpose of a business, 2) changes in how we manage creativity, communication and teams, and 3) the influence of the Millennial generation that will be dramatically different than previous generational impacts. I believe concepts such as “blue ocean strategy”, “open innovation” and many others that we see in innovation management fit into this larger narrative. They reflect the changes in the fundamental management model.
Are there other trends that you believe support my argument? What changes do you see in how your business is managed that support or contradict this argument? Do you think any business is immune to these undercurrents? Why or why not?
- Robert Brands is a friend and colleague. You can learn more about Robert at innovationcoach.com. Robert has written an excellent book called Roberts Rules of Innovation. I collaborate with Robert on the Innovation Coach Workshops.
- Carr, Austin. 2015. Howard Schultz Doesn’t Have All The Answers. FastCompany July/August, 2015.
- For this what I mean is that basically part of their corporate purpose is to delight customers, so they wanted my feedback.
- Susan Cain, Quiet: The Power of Introverts in a World That Can’t Stop Talking. (New York, NY: Broadway Books, 2013)
- Jamie Notter and Maddie Grant, When Millennials Take Over. (Interpress Publishing, 2015)
- For information on Nupe, see nupe.com. Also for a case study, see: Online Portfolio Management Tool: A Case Study.
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