Innovation is a term thrown around frequently and loosely. Every one realises the importance of mastering this concept but unfortunately not everyone using this term actually knows how to utilize the principles it highlights.
The last 2 decades have witnessed a great leap in technical innovation - we will soon be hitching joyrides to the moon and have personal robots to clean up after us. The human race has worked on an iterative development methodology and has continually developed greater and bigger things than were created before - we have truly stood on the shoulders of giants and ended up creating even bigger ones.
However, technical innovation is no longer a sure fire way for corporations and businesses to create a long lasting competitive advantage. For example, when Google came out with its unique method for PageRank, they were able to present a unique and innovative twist on performing meanignful searches. They reached the top of the ’search engine food chain’ and to date they have not been displaced but this does not mean that attempts are not being made to dislodge them from the top. At last count, there are 46 search engines on the web with 8 new entrants into the field just in the year 2008 - 2009.
Another relevant example of a company which leads the way in technical innovation in its industry is Toyota. They create top of the line automobiles and were one of the first auto makers to aggressively work on hybrid car technology. However now even weaker auto companies like GM, Chrysler and Ford are coming out with their own versions on environmentally friendly cars [in fact the Chevy Volt looks a lot more alluring than the Toyota Prius]. It remains to be seen if Toyota will lose its market share to competitors in the future but the fact that it cannot compete only on the basis of its technical innovation remains.
Regardless of these facts, Google and Toyota are still companies which look set for great long term growths. They constantly feature on the ‘top places to work’ list and attract the greatest and brightest minds on the planet. They must be doing something, along with constantly upping the bar in technical innovation, which keeps them at the top of the ladder.
Management Problems
The de facto standard in corporate set ups is the presence of a hierarchy which looks like a giant christmas tree. The executive at the top is also the ’star’ on top of the tree and in most cases ends up being the ’star’ of his companies success. The effort of lower ranked personnel is rewarded with a bonus and an email from upper management thanking them for their dedication. But does this kind of communication isolation between the top and the bottom foster an employees trust and loyalty for his organization ? In present times, where social networking and the spirit of communal unity has taken centre stage in the average mans life, is there more that an organization has to do to foster greater employee satisfaction and consequently greater organizational success ?
Another aspect of employee satisfaction has to do with the nature of work they perform. With the advent of the information age and the general increase in the intellect of the average man, is it acceptable or even beneficial for an employee to perform the same tasks over and over again ? Can the human potential be utilized in ways that is both beneficial to the hiring organization and personally satisfying to the employee too ?
The answer to all these questions lies in the innovation of management.
Management Innovation
Management innovation is not a new concept. It has been identified as an important and sometimes crucial step in the success of an organization. However not all organizations have tried to break the status quo of their existing ideologies regarding management techniques. Those that did, reaped the benefits and are still doing so. Companies like Google, GE, Whirlpool and Toyota have successfully broken some of the dogma around management philosophies and are continually striving to ensure that they literally engage in ‘out of the ordinary’ approaches to management.
For example, Google and Toyota have a culture of ‘Corporate Democracy’. Both companies follow a ‘For the employee, by the employee and of the employee’ principle which allows the upper management to be in constant touch with what the front line workers, engineers, programmers have to add to the innovation efforts of their companies. Such openness and interaction allows trust and a feeling of ownership to develop and provides a common reference point for all who have a stake in the organizations future success.
Companies like Google and W.L Gore promote innovation by allowing their employees to engage in creation endeavours which are not necessarily the core business strength of the company. Employees can work on pet projects for some fraction of their work time and if they come up with products that they feel can allow great profitability, they are allowed to present it to their peers and management the same way an enterpreneur would present his idea to a venture capitalist. A strong idea generates personal satisfaction for the employee encouraging him and others around him to partake more innovative projects, and also create a revenue stream for the company.
Unfortunately, not all companies behave in this manner and managers are sometimes held in their status quo due to their xenophobia. Some managers may feel that it is in their interest to keep lines of communication between the different levels of the organization as disconnected as possible or be the only person who is in charge of new initiatives. Though this secures his position but in the long run, it can [and in most cases] will prove disasterous for the company.
The Bottom Line
With the current competitive environment where companies are striving for organic growth, it is imperative for them to be constantly innovating their approach and principles. However, innovation should not be restricted to only technical domains but should be extended to include strategic and management processes.
