Where do we look for inspiration when building highly adaptive organisations? This is something many of us have had to wrestle with.
When Gary Hamel, Professor at the London Business School and Director of its Management Lab was asked this question, he replied “You look to systems that have demonstrated their adaptability over decades, centuries, even aeons.“
For more than 4 billion years, life has evolved at least as fast as its environment. Nature inoculates itself against the risks of environmental change by constantly creating new genetic material. This bubbling fountain of genetic innovation is the key to nature’s capacity for adaptation, and the greater the diversity of the gene pool, the more likely it is that at least a few organisms will be able to survive in a dramatically altered landscape. Variety is one essential principle of adaptiveness.
In a recent issue, we looked at what an extraordinary moment we are living in, as a range of technologies quickly advance. In the words of Futurist Nancy Giordano, we are only ‘1% in’. What is less known is that the return on technological innovation is not keeping pace. In fact, research published by Accenture’s research unit in 2019 showed that although businesses continue to increase their innovation spend, return on investment has declined 27% by over the preceding five years. There are a number of reasons for this (some self-inflicted), but the data points to a declining trend. Looking at it differently, the returns on technological innovation are normalising – and that is a good thing for the vast majority of firms who are, by and large, technology users.
To realise better returns on our innovation spend (which continues to rise), we must look to opportunity areas which are less travelled. To back up Gary Hamel on his ground-breaking research, we find similarly in our work that management innovation, one which challenges management orthodoxy, breaks down bureaucracy and liberates human creativity at work, can create a long-lasting advantage. To draw on a popular management term, management innovation is found more in the Blue Ocean space than in the Red ocean.
Management innovation can create enduring success – but let’s not take that for granted. Several factors must come together to sustain its development and adoption in organisations. Ask yourself these questions:
Are you fully harnessing your people’s abilities – not to complete the jobs they were hired for but as creative problem solvers, innovators and change agents? If your first and immediate response was a Yes, let me ask…How would you know? What data is available as evidence of this? And do we know when perhaps this is not regular practice at our places of work?
Does your management model enable or hinder communities of innovators to grow, even when faced by management processes and practices which require adherence and reward efficiency?
Do you know which management innovations in your organisation are succeeding and which are not? We have seen in recent years breakthroughs in management processes such as strategic planning, capital allocation and budgeting, leadership development and employee engagement and communication, just to name some of the key areas. Which management ideas in your organisations are becoming innovations? What impact could they have, if nurtured and allowed to scale across organisational boundaries and levels?
In an age of diminishing returns from technological innovation, we must find new areas of opportunity – to discover, innovate and make an impact.