Why aren’t we funding management innovation?

surpriseAfter meeting with a client yesterday, I was reminded of this quote:

“Semco has no official structure. It has no organizational chart. There’s no business plan or company strategy, no two-year or five-year plan, no goal or mission statement, no long-term budget. The company often does not have a fixed CEO. There are no vice presidents or chief officers for information technology or operations. There are no standards or practices. There’s no human resources department. There are no career plans, no job descriptions or employee contracts. No one approves reports or expense accounts. Supervision or monitoring of workers is rare indeed… Most important, success is not measured only in profit and growth.” – Ricardo Semler

This scares the hell out of everyone and so no one believes this is possible (it is). And because no one believes it, they will never try.

For those who are looking for a sustainable competitive advantage, doesn’t it occur to you that, compared to technology, it is more difficult to do and therefore copy, an innovation in management? While you’re fighting for patents, management innovators are fighting for the betterment of people. Guess who wins?

When will we see venture capitalists fund startups that operate by a different set of rules (not just business model but management model)? I’m not saying “let’s copy Semco”. I’m saying when will we start funding management innovations over technology? If this were to happen, we’ll see companies that are going to shape the human element of work: happiness and productivity at work.

And when this happens, purpose over profit will become a real principle that others strive for. A redefinition is in order…

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  • A post that has inspired my quest or ‘pilgrimage’. It is a fascinating question that you pose Jorge. When you look at the definition from the Management Innovation Exchange (MIX): “Management Innovation refers to anything that changes the way work gets done or who does it” it is hard to fathom that companies remain apathetic. All organisations bellow their desire for innovation but only few have the resilience to see the holistic journey through.

    I am amazed that in my numerous conversations with CEO’s the definition off innovation resides in the domain of product (“if only we could invent the next i-pod”) yet ignore the logic of Innovation being a team sport. One company that has taken the team approach is Whirlpool. In 1999 its innovation pipeline was a modest $10 million. In 2005 the pipeline was a very healthy $760M. Today it is bursting at the seams beyond $4B! There has been no i-pod’s launched just an amazing focus on delivering the vision of ‘innovation from everyone, everywhere.

    The Whirlpool example underlies the challenge. It takes 10 years. It takes an undertaking to train 36k employees and 2k ‘blackbelts. It takes a broadening of the definition of innovation beyond ‘product’ to the realm of holistic (leadership, strategy, structure, skills, people, process, philosophy etc). It is hard but what Corporate would refuse a $4B pipeline!

    It is why that whilst I adore the ‘usual suspects’ such as Apple, Amazon et al; I hold my awe for the ‘resilient’ ones such as Cemex, Wholefoods, P&G & Gore who are not ‘sexy’ yet espouse the mantra of Management Innovation!

    As the venerable Gary Hamel states: “If we are going to improve engagement we have to start by admitting that if employees aren’t as enthusiastic, impassioned and excited as they could be, it’s not because work sucks: it’s because management blows”

    • Hi Mark,

      You made a laser focused observation: many believe innovation is just about products.

      You and I know this is a short-sighted view. And because of this, many don’t accept and therefore understand a two very simple principles:

      > Dare to look where others don’t

      and then

      > Do what others can’t or won’t.

      IMO, it is here where an organizations and person’s ability to pull a rabbit out the hat lies.

      Anyway, that is how I felt yesterday after that meeting.

      BTW, have you read Mavericks at Work? That’s another good one!

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