Innovation in management and organisation
Have you ever wondered whether there’s a better way than the ‘business as usual’ management style, even when everyone seems to be doing that way? You know, you need to be working on your ROI, setting stretch targets, doing appraisals, arbitrarily cutting costs and so on because most people seem to believe that there is no alternative. But the examples of truly highest performing companies shows us that’s not quite true.
According to Bain Consulting Group’s list of the most innovative companies, Apple, Inc. has been top for the last decade. Companies like Google, Tesla, Microsoft, Amazon and Toyota also have featured regularly. Apple of course is the most highly valued tech company in the world with revenues in the $215 billion range. More conventionally Toyota, the largest automotive manufacturer has revenues in the order of $236 billion. Are they doing business as usual? Probably not.
Innovation, of course, has been a major reason for Apple’s success. However, when we think of innovation it is not just in products such as smartphones that they have innovated. There are services like iTunes and the App Store. These may not be completely original to Apple, but they applied them in a way that really created value for customers.
…they applied them in a way that really created value for customers…
There are more types of innovation than just products and services. You may be familiar with innovation in business processes. What might surprise you are the two further types, firstly, business model innovation and secondly management and organisational innovation. Perhaps innovative business models might not be that surprising when thinking of companies like Amazon, Google, Spotify and Uber to name but a few. A large part of this has been due to the new possibilities resulting from the internet and the Cloud.
Innovation in management and organisation might not be immediately familiar. In many ways Toyota’s success is in many ways due to their innovative management model that some of you might know as Lean methodologies. It is not that new. They started to develop it 70 years ago! However, despite many copying their tools and techniques few have embraced the full ethos, which is really about creating value for customers that flows freely to them. It is interesting how Toyota arrived at their innovative way of working out of necessity. After World War 2 cash was tight so that minimising stock and shortening delivery times was critical.
…despite many copying their tools and techniques few have embraced the full ethos…
One example of the massive difference an innovative way of working can make is shown by research, in which Cardiff University collaborated. Whereas typically in UK manufacturing only 5% of activity adds value, in Toyota the figure is 20%! And this is not just about eliminating waste, it is achieved by focusing efforts primarily on creating value for customers and then eliminating what is unnecessary. Better still processes are designed from the outset to maximise value creation and minimise waste.
OK you may not be in the tech industry or the automotive industry. However, the principles of innovation still apply to you. And you may not need to apply Lean methodologies, but instead start with your customers, the jobs they are trying to do and the problems that they may be encountering. In particular go to the point of use, ask some open questions to get them talking and, here is the key, listen to what they say, to what their problems are.
Resources such as finance and premises are an important part of business. They represent further opportunities for innovative thinking. How might you raise finance in a different way, perhaps crowdfunding? What else? How might you go beyond team members just working from home or even in another country to go on to integrate them more fully into the business?
…there is no need to stay with 'business as usual’…
While researching and preparing our book Simply Manage my co-author and I decided to take advantage of innovation in the publishing world by using an online platform and so publish it as an ebook. Whilst it is true that one of the attractions was the different royalty model, a primary attraction was the ability to tap into a totally new and growing market for eBooks and online purchasing. We hope that this makes the book more attractive to the younger demographic. A practical advantage to us was that we could see what the book would look like as we wrote it and we could get feedback from our circle of contacts. Not only did this mean that we could develop it ‘live’, it also means that in future we can do upgrades that customers will get for free.
In conclusion, there is no need to stay with 'business as usual’, especially as there is now so much new thinking, understanding and so many alternative approaches to almost any management task. How will you innovate in your business? Which of product, service, process, business model or management and organisational innovation will you choose?
Alan Clark is a Management Development Coach, Advisor and Trainer.
WINN brings innovators together, acting as a catalyst to create connections and collaborations across the diverse business landscape of Worcestershire.
Our belief is that great things can happen when people get together.
WINN is a Worcestershire Innovation Programme formed by Worcestershire County Council and the Worcestershire LEP