Gary Hamel defines management innovation as a marked departure from traditional management principles, processes, and practices (or a departure from customary organizational forms that significantly alters the way the work of management is performed). He deems it the prime driver of sustainable competitive advantage in the 21st century.

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Innovating Management
Olivier Serrat
2016

2. A Century of Management
The Economist's Guide to Management Ideas and Gurus enumerates
103 management concepts that have impacted companies over the
past century and the 56 more influential people behind them. The
Guide to the Management Gurus honors 45 key thinkers. There are
many other handbooks on the topic: in The Handy Guide to the Gurus
of Management, the British Broadcasting Corporation offers students
a pithy and accessible selection of a dozen important figures.
Even so, Gary Hamel argues provocatively in The Future of
Management that management is a maturing technology that has
witnessed few genuine breakthroughs since Frederick Winslow Taylor
and Max Weber set the ground rules 100 years ago in the wake of the
upheaval caused by the industrial revolution and subsequent need for
rationalization. This presentation showcases his work on
management innovation.

3. The Poverty of Management
The paucity of significant breakthroughs in management
should not surprise: it was invented to solve the problem
of inefficiency in organizations and, to this day, operates
primarily through routine functions, e.g., planning,
organizing, commanding, and controlling, mainly by:
Setting goals and objectives and laying out plans;
Amassing and allocating resources;
Identifying, developing, and assigning talent;
Motivating and aligning effort;
Coordinating and controlling activities;
Acquiring, accumulating, and applying knowledge;
Building and nurturing relationships; and
Understanding, balancing, and meeting
stakeholder demands.
So, most
innovations
have been
first and
foremost in
operations,
then in
products and
services, and
to a far lesser
extent in
strategies.

4. Claiming the Lion's Share
The typical
processes for
planning,
organizing,
commanding,
and controlling
that claim the
lion's share of
attention—and
were
themselves
management
innovations—
are:
• Strategic planning,
• Return on investment analysis and capital
budgeting,
• Project management,
• Research and development,
• Brand management,
• Leadership development,
• Recruitment and promotion,
• Learning and development,
• Internal communications,
• Knowledge management,
• Periodic business reviews, and
• Employee performance assessment and
compensation.

5. Limits of Management 1.0
• Organizations are being tested as never before. They
face rapidly increasing competition, pace of change,
and globalization. Organizations that survive will be
those that adapt. And yet, organizations rarely change
as fast as the world around them. Many find it easier
to do things the way they have always been done.
Inertia—Too little
experimentation
• Radical and repeated innovation is rare in established
companies. They rely on easier, more measurable,
short-term results and fail to institutionalize the
mindset and values, as well as provide the resources,
for a culture of creativity to thrive.
Incrementalism—
Too little freedom,
time, and resources
in the organization
• Nearly every industry faces the challenge of
commoditization. The knowledge economy is rapidly
being replaced with the creative economy. Companies
require employees who are proactive, inventive, and
passionate. Yet Management 1.0 systems are
dampening creativity rather than unleashing it.
Disempowerment—
Hypocrisy, bad
measurements, and
unhelpful
perspectives

6. Sparking Management Innovation
Gary Hamel
defines
management
innovation as
innovation in
management
principles ,
processes,
and practices
(or customary
organizational
forms) that
changes what
managers do
and how they
do it.
Driven by the Internet, globalization, and workforce
demographics, essential steps are to:
Become a conscious management innovator;
Evolve principles;
Deconstruct management orthodoxies;
Create a questioning, problem-solving culture;
Commit to big problems;
Build a capacity for low-risk experimentation;
Seek analogies and exemplars from different environments;
and
Make use of external change agents to test the organization's
new ideas.

7. Principles of Management 2.0
Openness
Community
Meritocracy
Activism
Collaboration
Meaning
Autonomy
Serendipity
Decentralization
Experimentation
Speed
Trust

8. Moon Shots to Management 2.0
Mend the Soul
• Ensure the work of
management serves
a higher purpose
• Fully embed the
ideas of community
and citizenship in
management
systems
• Humanize the
language and
practice of business
Unleash Capability
• Reduce fear and increase
trust
• Reinvent the means of
control
• Further unleash human
imagination
• Enable communities of
passion
• Expand and exploit diversity
• Dramatically reduce the pull
of the past
Foster Renewal
• Share the work of setting
direction
• Reinvent strategy making
as an emergent process
• Create internal markets
for ideas, talent, and
resources
• De-politicize decision
making
• De-structure and
disaggregate the
organization

9. Moon Shots to Management 2.0
Expand Minds
• Retrain managerial
minds
• Retool management
for an open world
• Reconstruct
management's
philosophical
foundations
Distribute Power
• Eliminate the pathologies of
formal hierarchies
• Redefine the work of
leadership
• Create a democracy of
information
• Expand the scope of
employee autonomy
• Empower the renegades
and disarm the
reactionaries
Seek Balance
• Develop holistic
performance measures
• Better optimize trade-
offs
• Stretch executive
timeframes and
perspectives

10. Further Reading
• ADB. 2009. Harnessing Creativity and Innovation in the
Workplace. Manila. www.adb.org/publications/harnessing-
creativity-and-innovation-workplace
• ——. 2010. Sparking Innovations in Management. Manila.
www.adb.org/publications/sparking-innovations-
management
• ——. 2010. Design Thinking. Manila.
www.adb.org/publications/design-thinking
• ——. 2010. Sparking Social Innovations. Manila.
www.adb.org/publications/sparking-social-innovations
• ——. 2012. Business Model Innovation. Manila.
www.adb.org/publications/business-model-innovation

11. Further Reading
• ADB. 2012. Innovation in the Public Sector. Manila.
www.adb.org/publications/innovation-public-sector
• ——. 2012. On Knowledge Behaviors. Manila.
www.adb.org/publications/knowledge-behaviors
• Gary Hamel. 2006. The Why, What, and How of Management
Innovation. Harvard Business Review. Vol. 2, pp. 72–84.
• ——. 2007. The Future of Management. Harvard Business
School Press.
• ——. 2009. Moon Shots for Management. Harvard Business
Review. Vol. 2, pp. 91–98.

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