Technological Innovation Forecast (Updated 6/6/2009, Original 3/2/2009 by TQM Doctor)
The rate of technological innovation increases with every generation (Cetron & Davies, 2008). Change is no longer the standard; rather the increasing rate of technological change is now the rule. The forecast of technological innovation is that future generations will experience more rapid change than the current generation. Gary Hamel, London Business School visiting professor and Management Innovation Lab director, asserts that change is happening faster than organizations can adapt (Collins, 2008). Since specific changes are difficult to predict, the prudent plan for organizations is to ensure they not only can withstand unpredictability but can also profit from change.
Organizations will face unique challenges where traditional management responses prove ineffective (Barsh, 2008). Successful responses will require reorganization of talent and new management models to encourage innovation at all levels of the company. Therefore, the improvement of management methods required to cope with the rapid rate of technological innovation will encourage changes in organizational behavior and relationships.
Innovation as an Organizational Capability
Two issues exist that prevent organizations from instilling an innovative capability (Hamel, 2003). The first is that most management possess too narrow of an understanding of what constitutes innovation. The most common understanding of innovation relates to products and services rather than all parts of the organization (Hamel). The second issue is that most organizations focus on maintaining or optimizing “what is” rather than “what could be.”
Compartmentalized innovation is the concept of change behavior made within predefined processes and groups or departments (Hamel, 2003). A common interpretation is that the marketing department must establish customer requirements and the engineering department must deliver the expected “innovation.” For example, if a product improvement idea came from outside the predefined interrelationship of marketing and engineering, management will likely reject the idea because it did not originate from the proper location. Hamel refers to these compartmentalized interrelationships as innovation ghettos and suggests new organizational architectures preventing such bias.
Most organizations focus on the reality of “what is” rather than of possibility of “what could be” (Hamel, 2003). Powerful groups form within all levels of the organization that are more comfortable with the understanding of what they are rather than what the company is becoming. In these environments, innovations are those miracles that occur despite, rather than encouraged by, the current systems (Hamel). For example, a common statement would be, “We answer most of our phone calls everyday despite the system.” Management must create innovative systems and architectures encouraging the pursuit of “what could be.”
For true innovation to exist, management must recognize that many different variables characterize their business concept (Hamel, 2003). Examples of these variables include the value proposition, method of market entry, definition of market served, and the organizational core competencies. Management must understand how each piece of the organization fits together, continually relearn the element and its place within the whole, and challenge each element in a never-ending learning loop (Argyris, 2002; Hamel).
Management Innovation
Management innovation is the development and implementation of new and original management practices, structures, systems, or methods for the pursuit organizational goals (Birkinshaw, Hamel, & Mol, 2008). External or internal influences should initiate a four-step management innovation process (Birkinshaw et al.). The general stages of the process are: (a) recognition of a problem or threat, (b) formation of a new idea or practice, (c) experimentation, and (d) implementation.
Hamel served as keynote speaker during the Financial Times conference held in November 2007 in London. During his speech, Hamel argued that management innovation is the most durable and justifiable form of innovation since it has led to most performance advances in the U.S. (Collins, 2008). Hamel blamed the lack of innovation on the current management model originating from the 19th century command and control concept (Collins). The command and control model assumes a generally uneducated workforce, which the current reality contradicts.
Hamel suggests that management innovation must tackle the large issues first, like growing at twice the GNP or getting all employees involved with innovation (Collins, 2008). A common method of implementing management innovation involves new organizational architectures dealing with specific problems or otherwise aimed and improving efficiency (Birkinshaw et al., 2008). Top management also strategically modifies architectures with the goal of addressing quality issues, improving customer satisfaction, lowering costs, and improving efficiency (Birkinshaw et al.). The phrase strategic architecture refers to the infrastructure required for the allocation of resources that consistently supports an organizational culture encouraging: (a) teamwork, (b) the ability to change, (c) a readiness to share resources, (d) the protection of proprietary technologies, and (e) the ability to work towards long-term goals (Prahalad & Hamel, 1990 as cited in O'Shannassy & Hunter, 2009).
Summary
Organizations will spend time and resources developing or otherwise pursuing the next emerging technology. Unfortunately, the pursuit most often occurs with far from certain knowledge that corporate efforts are not wasted. The most trustworthy technological innovation forecast is that organizations will experience more innovative change tomorrow than they do today (Cetron & Davies, 2008). Therefore, leadership must ensure their organizations are forward-looking focusing on the “what could be” rather than the “what is” (Hamel, 2003). Management must implement strategic organizational architecture that promotes productive interrelationships and intra-relationships breaking the molds of existing innovation ghettos (Hamel, 2003).
References
Argyris, C. (2002). Double-loop learning, teaching, and research. Academy of Management Learning & Education, 1(2), 206-218. Retrieved 2/25/2009, from Business Source Complete database.
Barsh, J. (2008). Innovative management: A conversation with Gary Hamel and Lowell Bryan. McKinsey Quarterly (1), 24-35. Retrieved 2/25/2009, from Business Source Complete database.
Birkinshaw, J., Hamel, G., & Mol, M. J. (2008). Management innovation. Academy of Management Review, 33(4), 825-845. Retrieved 2/25/2009, from Business Source Complete database.
Cetron, M. J., & Davies, O. (2008). Trends shaping tomorrow's world. Futurist, 42(3), 35-50. Retrieved 3/25/2008, from MasterFILE Premier database.
Collins, L. (2008). Firms ride innovation's emotional rollercoaster. Paper presented at the Financial Times Conference, London.
Hamel, G. (2003). Innovation as a deep capability. Leader to Leader, 2003(27), 19-24. Retrieved 2/25/2009, from Business Source Complete database.
O'Shannassy, T., & Hunter, P. (2009). Management consultant's guide to how strategic architecture can improve an organisation's "bottom line". Singapore Management Review, 31(1), 33-47. Retrieved 2/25/2009, from Business Source Complete database.