Tag Archives: Gary Hamel

The “Innovator’s Dilemma” Applies To Management, As Well As Technology – Insight From Alan Murray (WSJ)

Here is some terrific, and challenging, insight from Alan Murray from the Wall Street Journal:  The End of Management: Corporate bureaucracy is becoming obsolete. Why managers should act like venture capitalists. The entire article is definitely worth reading.  Here are key excerpts:

“Modern” management is nearing its existential moment.

When I asked members of The Wall Street Journal’s CEO Council, a group of chief executives who meet each year to deliberate on issues of public interest, to name the most influential business book they had read, many cited Clayton Christensen’s “The Innovator’s Dilemma.” That book documents how market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of “bad” management, but because they followed the dictates of “good” management. They listened closely to their customers. They carefully studied market trends. They allocated capital to the innovations that promised the largest returns. And in the process, they missed disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products.

“The single biggest reason companies fail,” says Mr. Hamel, “is that they overinvest in what is, as opposed to what might be.”

The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband.

Can the 20th-century corporation evolve into this new, 21st-century organization? It won’t be easy. The “innovator’s dilemma” applies to management, as well as technology. But the time has come to find out. The old methods won’t last much longer.

A Management Problem Should Be Easy To Fix, Right? – Reflecting On BP’s Failure

Management: Organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives.

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It is hard to escape news about the BP Oil Disaster.  It is omnipresent, as it should be.  But part of this week’s news has to do with the judge’s decision to block the Obama ordered 6-month moratorium on drilling.

In a Christian Science Monitor article on the decision, we find this note:

“This is not an engineering problem, it’s a management problem, and it’s BP’s management that screwed up,” says Bruce Johnson, a professor emeritus of oceanic engineering at the Naval Academy in Annapolis, Md. The moratorium “penalizes the whole industry for the mistakes of” BP management, he adds.

Here’s my thought:  since it’s a “management problem,” then the solution should be that we make sure there are no more management problems.  How confident do we feel about this actually happening?

In fact, I spoke to a group of 200-300 hundred at a conference this week, and asked this question:  “how many of you have ever seen a management failure that created problems for your organization?  Practically every hand went up.

In other words, we have not yet learned how to manage with enough precision and effectiveness to insure all desirable outcomes – to assure “achievement of clearly defined objectives.”

Thus we know that management failure does not have an easy fix.  And we know that there have been many major problems caused by management failures in major corporations/companies/organizations over the last few years.

Gary Hamel points out part of the problem in his book The Future of Management. Here’s an excerpt:

Unlike the laws of physics, the laws of management are neither foreordained nor eternal…  Whiplash change, fleeting advantages, technological disruptions, rebellious shareholders – these 21st- century challenges are testing the design limitations of organizations around the world and are exposing the limitations of a management model that has failed to keep pace with the times.

Part of the problem of “these times” is the difficulty of managing all of the complexity (like drilling down nearly 5 miles below the surface of the ocean).  The challenges of such complexity require near flawless management practices.  And we have attained nothing like such near-flawlessness.

When the problem is small, management failure is survivable.  When the problem is massive, like the BP management failure, the consequences can be almost more than we can bear.

Malcolm Gladwell is #2 on the list of the Business Top 50 Thinkers

CK Prahalad -- #1 on the list

CK Prahalad -- #1 on the list

I’ve just become aware of the current listing of the Thinkers 50 (The definitive listing of the world’s top 50 business thinkers), which lists the most influential business thinkers by ranked order of importance and influence, based on 10 measures:

The Measures:

1. Originality of Ideas:  Are the ideas and examples used by the thinker original?
2. Practicality of Ideas:  Have the ideas promoted by the thinker been implemented in organizations? And, has the implementation been successful?
3. Presentation Style:  How proficient is the thinker at presenting his/her ideas orally?
4. Written Communication:  How proficient is the thinker at presenting his/her ideas in writing?
5. Loyalty of Followers:  How committed are the thinker’s disciples to spreading the message and putting it to work?
6. Business Sense:  Do they practice what they preach in their own business?
7. International Outlook:  How international are they in outlook and thinking?
8. Rigor of Research:  How well researched are their books and presentations?
9. Impact of Ideas:  Have their ideas had an impact on the way people manage or think about management?
10. Guru Factor:  The clincher: are they, for better or worse, guru material by your definition and expectation?

It is an impressive list, and one that I think most of our readers will agree with.  Among the authors in the top 20 that we have chosen for presentations at the First Friday Book Synopsis are:

Malcolm Gladwell -- #2 on the list

Malcolm Gladwell -- #2 on the list

Malcolm Gladwell (#2), W Chan Kim and Renee Mauborgnew (#5), Bill Gates (#7), Gary Hamel (#10), Ram Charan (#13), Marshall Goldsmith (# 14), Jim Collins (#17), Tom Peters (#19), and Jack Welch (#20).

The #1 Thinker is CK Prahalad, the author of the book:  The Fortune at the Bottom of the Pyramid:  Eradicating Poverty through Profits.  This book is one that I am aware of, but have not read and presented.

For a brief slideshow of the top 15, go to the Huffington Post article The Top 15 Business Thinkers: Thinkers 50.  For the complete list of the 50, click here to go the web site for the Thinkers 50.  You will find a video interview with CK Prahalad, and profiles of all of the rest on the list.

(By the way, check out the post by our blogging team member Bob Morris:  Q#147:  Who were the most influential business thinkers in the 20th century?)

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You can order our synopses for many of these books, with audio + handout, at our companion web site, 15minutebusinessbooks.com – including all three of Gladwell’s books, The Tipping Point, Blink, and Outliers, W Chan Kim and Renee Mauborgnew’s Blue Ocean Strategy, Charan’s Execution (and other titles), and Collins’ Good to Great (and soon, Collins How the Mighty Fall – we have presented it, and it will be available on the web site soon) — plus other titles by some of these leading business thinkers.

The Throes of Change – and the Unsettledness of an Era

throes: A condition of agonizing struggle or trouble

Last night, at a business gathering, a woman said to me, in the context of the upheaval of our era, that she thinks we are living in the end times.  She admitted that other generations have felt the same way, but she really thinks this is it.

Yes, this is the feeling of many people in many different generations.  And I know too much history, and so I’m a little reluctant to jump on that bandwagon.

But do you get the feeling that everyone seems a little insecure, maybe more than a little nervous – as though we are in the midst of, in the throes of, some kind of wrenching, agonizing change?  I do.

The Future of Management

The Future of Management

In The Future of Management, Gary Hamel hints at such unease:

Unlike the laws of physics, the laws of management are neither foreordained nor eternal…  Whiplash change, fleeting advantages, technological disruptions, rebellious shareholders – these 21st- century challenges are testing the design limitations of organizations around the world and are exposing the limitations of a management model that has failed to keep pace with the times.

I think he is right.  There is a great inadequacy of models – management models, governing models…  The models we have seem to be lacking, and seem to not be working.  It all seems so unsettling.

Recently, on one of the many blogs I read (this one a political blog), I read this quote.  The author is Daniel Quinn from his book Beyond Civilization.  Here’s the quote:

No paradigm is ever able to imagine the next one.  It’s almost impossible for one paradigm to imagine that there will even be a next one.  The people of the Middle Ages didn’t think of themselves as being in the ‘middle’ of anything at all.  As far as they were concerned, the way they were living was the way people would be living to the end of time.  Even if you’d managed to persuade them that a new era was just around the corner, they would’ve been unable to tell you a single thing about it – and in particular they wouldn’t have been able to tell you what was going to make it new.  If they’d been able to describe the Renaissance in the fourteenth century, it would have been the Renaissance.
We’re no different.  For all our blather about new paradigms and emerging paradigms, it’s an unassailable assumption among us that our distant descendants will be just exactly like us.  Their gadgets, fashion, music, and so on, will surely be different, but we’re confident that their mindset will be identical – because we can imagine no other mindset for people to have.  But in fact, if we actually manage to survive here, it will be because we’ve moved into a new era as different from ours as the Renaissance was from the Middle Ages – and as unimaginable to us as the Renaissance was to the Middle Ages.

I think we are in the throes of an agonizing change:  a shift, a true shift.  We think we know some of the causes, but we may be fooling ourselves if we think we know where it is all going.  But – I think the shift is coming.  Don’t you?

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You can purchase my synopsis of The Future of Management, with audio + handout, at our companion web site, 15minutebusinessbooks.


The Unpredictable Future – Forecasting the Unpredictable

Get There Early

The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew. (Abraham Lincoln, 1862 Annual Message to Congress).

I just re-watched Joel Barker’s newest version of his video, The Business of Paradigms.  (See Bob’s interview with Joel Barker from our blog here).  His example of a company that was “sent back to zero,” thus lost out in the midst of a paradigm shift, was Motorola, which switched from analog to digital a few moments too late, and Nokia took over the cell phone market.  The video is a little dated — and now Blackberry, and of course the iPhone, are creating the most buzz, though Nokia is still quite healthy.  Who will lead five years from now?  No one knows for sure.  The life span of a product’s success and dominance has never been as potentially short as it is today.

I recently presented a synopsis of the book Get There Early (Get There Early:  Sensing the Future to Compete in the Present; Using Foresight to Provoke Strategy and Innovation by Bob Johansen, Institute for the Future) to an association of Grantmakers meeting in Sante Fe.  Their world has been greatly effected by the economic downturn.  And one thing was clear – the better you can prepare for the unpredictable future right around the corner, the better you will be able to weather the storm.

Here are some key quotes from this thought-provoking book:

• In today’s marketplace, we have little buffer time between our decisions and their impacts.
• The most intense pain that leaders experience, the pain that keeps them awake at night, is caused by not being able to solve problems…  Every profession has become a dangerous profession – every leader is at risk, and the range of risk is growing.
• For corporations, get there early means finding new markets, new customers, and new products ahead of your competitors…  For non-profits, get there early means anticipating the needs of your stakeholders and sensing emerging issues before they become overwhelming or before others who don’t agree with your issues have taken a commanding position.  Get there early means seeing a possible future before others see it.  Get there early also means being able to act before others have figured out what to do.

Johansen does not claim that we can predict the future.  In fact, he argues that we cannot do so.  But he does strongly recommend forecasting the future.  Here’s another quote:

• A forecast is a plausible, internally consistent view of what might happen.  It is designed to be provocative…  We don’t use the word prediction…  A prediction is almost always wrong… A forecast doesn’t need to come true to be worthwhile.

Johansen recommends a three step approach – foresight, insight, and action.  He includes a number of examples.  Here’s one about Wikipedia:

The Story of Wikipedia’s Encyclopedia for the World

• Foresight:  Much of the world will have limited access to knowledge
• Insight:  The world needs a free, open-source encyclopedia
• Action:  Create Wikipedia

His (Jimmy Wales) ambitious goal is to include “all human knowledge.

I have read (and presented) other books that deal with possible futures coming around the next corner, especially The Extreme Future by James Canton.  He wrote:

Everyone needs to think differently about the future, a future that is riddled with change, challenge, and risk.  It is a new kind of future, not the steady plodding of progress from one moment to the next, punctuated by brief bursts of innovation that characterizes much of history.  Now we face a post-9/11 future.  The future of our lives, of our work, of our businesses – and most of all, the future of our world – depends on us gaining a new understanding of the dizzying changes that lie ahead.  I call this future-readiness.

But the warnings about the potential dangers are everywhere around us in the business book universe.  Gary Hamel in The Future of Management reminds us:

Every business is successful until it’s not.  What’s disconcerting, though, is how often top management is surprised when “not” happens.

And, of course, Nicholas Talib in The Black Swan warns us that there is always another Black Swan waiting to be revealed:

Just imagine how little your understanding of the world on the eve of the events of 1914 would have helped you guess what was to happen next.

So, back to Johansen.  His advice:  forecast!  Create future scenarios, or use some other technique to paint a picture in order to think about the future.  The more possible futures you can imagine and prepare for, the better you will be able to survive that unexpected future that will most assuredly arrive.

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• You can order synopses of my presentations for The Black Swan, The Extreme Future, and The Future of Management, at our companion web site, 15 Minute Business Books.  I hope to add the synopsis for Get There Early to the site soon.

(The Woes of MySpace) The Future is Utterly Predictable — it is a Future of Constant Innovation

Boy, those old staid companies sure do get in trouble because they fail to innovate.  Yes, the times are changing, and companies better learn how to stay fresh, keep improving, keep changing.  When they’ve been around forever, it is awfully easy to get set in their ways, and watch the competition sweep right on by them.

Take that old venerable company known as MySpace.  It has been around forever.  It was way back in August, 2003 when they launched.  Times were different then.  And what they set in place back in those long-gone days just doesn’t seem to work anymore.  So the CEO Owen Van Natta, in a letter to his employees in which he announced and explained the decision to lay off 30% of their workers (400 workers), included this sober assessment:  “We need to become a more innovative company.” (read about the layoffs here, and the entire letter from the CEO here).  (Here’s a little more of his letter:  “The future success of MySpace is dependent upon us operating as a nimble and entrepreneurial company with the adaptive mentality of a start-up…  I believe this is the first difficult step toward a major turnaround – a step that will not only shore us up in the short term, but position us for long term success. We need to become a more innovative company.  Becoming more innovative is an ongoing responsibility for all of us, not a one-time effort”).

It does sound a little ludicrous, doesn’t it?  I mean, I can understand that a company as old and established as GM might get a little behind in the innovation contest.   But MySpace?  This company is only six years old.  It’s been less than six years ago that you could not have built your own MySpace page.  And yet, here it is in stark, sobering words:  “We need to become a more innovative company.”  Competitors like Facebook, and now Twitter, have just swept right on by MySpace because they are more innovative.  Who would have thought?

We should have known it was coming.  We’ve been warned.  The business books of the last 12 years have all said it, loud and clear.  The future is coming, and it’s going to be different from the past.  Constantly different.  Perpetually innovating.  The world is changing faster and faster and faster…  Here’s just a sampling of quotes:

“If it seems like your world has been topsy-turvy over the past few years…  Consider what’s coming…  Technology is not kind.  It does not wait.  It does not say please.  It slams into existing systems, and often destroys them – while creating a new system.”  (Juan Enriquez, As the Future Catches You).

“It’s finally happened.  I’ve seen a company where I can imagine working!”  Innovation is it, for the foreseeable future…”  {Tom Peters, from the foreword}.  (Tom Kelley, The Art of Innovation:  Lessons in Creativity from IDEO, America’s Leading Design Firm).

“You want to wake up your organization to the need for a strategic shift and a break from the status quo.”  (W. Chan Kim and Renée Mauborgne,  Blue Ocean Strategy:  How to Create Uncontested Market Space and make the Competition Irrelevant).

“Even the world’s “most admired” companies aren’t as adaptable as they need to be, as innovative as they need to be, or as much fun to work in as they should be…  To put it bluntly, management innovation pays…  Remember the old saw about the tendency of generals to refight the last war rather than the one at hand?”  (Gary Hamel, The Future of Management).

“The premise of this book is a simple one:  that breakthrough innovations come by recombining the people, ideas, and objects of past technologies.  The implication, recalling William Gibson, is that the future is already here – it’s just unevenly distributed.”  (Andrew Hargadon, How Breakthroughs Happen:  The Surprising Truth About How Companies Innovate).

“When it comes to thriving in a hypercompetitive marketplace, “playing it safe” is no longer playing it smart…  the more you do something, the more important it is to challenge the assumptions and habits that built your success so as to generate a wave of innovations to build the future…  Remember, the most effective leaders are the most insatiable learners. (William C. Taylor and Polly LaBarre,  Mavericks at Work:  Why the Most Original Minds in Business Win).

“To change is to take a risk – to give up a current state in an attempt to reach a potentially more desirable one.  We tend to resist change…  In this new (postmodern or post-Web corporate world) hypercompetitive environment, market transitions are a lot faster, and the cycle of innovation has gotten increasingly shorter…  new products and services started appearing more and more frequently, resulting in even more competition.  (including:  real-time information).  Reengineering found itself outdated.”  (Benham N. Tabrizi, Rapid Transformation:  A 90-Day Plan For Fast And Effective Change).

“I held only positions that did not exist before I had them…  Conceptualizers see the future.”  (Robert Greenleaf, Servant Leadership:  A Journey into the Nature of Legitimate Power and Greatness).

Everyone needs to think differently about the future, a future that is riddled with change, challenge, and risk.  It is a new kind of future, not the steady plodding of progress from one moment to the next, punctuated by brief bursts of innovation that characterizes much of history.  Now we face a post-9/11 future.  The future of our lives, of our work, of our businesses – and most of all, the future of our world – depends on us gaining a new understanding of the dizzying changes that lie ahead.  I call this future-readiness…  The coming Innovation Economy will herald an age of rapid, dramatic change, one in which ideas that create value, offer solutions, and fulfill needs will thrive, sweeping into the recesses of memory the comparatively primitive ideas, products, services, and processes that came before.  Innovation will be the prime source of productivity, prosperity, competition, and potentially even peace.  Innovation will be recognized as an empowering force that will drive individual prosperity and global competition.  (James Canton, Ph.D., CEO and Chairman, Institute for Global Futures, The Extreme Future:  The Top Ten Trends That Will Reshape the World for the Next 5, 10, and 20 Years).

“Never get comfortable with where you are.  Anticipate the inevitability of having to modify or change how you do business to meet your customers’ needs…  Organizations that refuse to change their methods to meet demands are likely the same stubborn organizations that are slowly going out of business.  Change is never over, said Jack Welch.”  (Ron Hunter Jr. & Michael E. Waddell, Toy Box Leadership:  Leadership Lessons from the Toys You Loved as a Child).

So, let’s all let the MySpace story be an object lesson for us all.  If we are not constantly innovating, the competition will simply pass us by.  Remember the warning from Gary Hamel:”  Every business is successful — until it’s not.”

(To purchase my synopses of many of the books quoted, with handout + audio, go to our 15 Minute Business Book site).