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There are three main models that firms use for management innovation.
The start-up model: The company starts with a distinctive model that they gradually sustain over time.
Top-down approach: The chief executive takes a bold approach to shake things up from the top.
Bottom-up approach: A middle manager takes the initiative to try changing things from below.
Start-Up Approach to Management Innovation
Example: Google
Google is an example of a company that used a start-up model of management innovation. Here are some of the ways that Google innovated management practices:
Google encourages people to come and work long hours by making the work interesting. They also give employees generous perks, free food, and the possibility to relax and play games.
Google started an initiative called “innovation time off” where employees can work on any project they find interesting. Therefore, in addition to daily tasks, employees can spend 20% of their time working on any project. Many of Google's most successful products have come through this model.
Google uses small teams so they can work more collaboratively and efficiently.
Google has different methods for collaboration and sharing to make sure that everyone knows what colleagues are working on. For example, they have weekly meetings to discuss the company's projects and any questions that employees might have.
Top-Down Approach to Management Innovation
Example: Procter & Gamble
To become more innovative, Procter & Gamble decided to tap into the wisdom of people outside of the organization. The founder launched an open innovation initiative called “Connect and Develop”, partnering up with external suppliers to create a network of technology entrepreneurs. For example, they used Yourencore.com, a platform for retired scientists to give them an opportunity to give back to the community.
It’s important to say that it takes at least five years for a big company to make significant management innovation. Since many chief executives don’t have such long mandates, this type of change is rare in large organizations.
Bottom-Up Approach to Management Innovation
Example: Ross Smith at Microsoft
Ross Smith is the director of testing of software at Microsoft who created a system based on trust. His objective was to get people to take the initiative to figure out how to spend their time at work, what hours to work, what projects to work on, etc. He invented some creative ways to test software using game-based approaches. Instead of having a few senior managers divide up the teams and create a new structure, they did management innovation from the bottom up.
As Julian Birkinshaw explains in the Managing the Company of the Future course, innovation can be a lonely road. In fact, many corporate entrepreneurs and initiative takers run out of patience and end up choosing to leave their companies because their work is not recognized. This is why management innovation is often frustrating.
Which Is The Best Approach to Management Innovation?
We can say that the approach that often works best is a combination of bottom-up and top-down, where managers take the initiative to make changes and they have the support of senior executives who have the power to push a mandate for change.
How to Experiment New Management Systems
Focus on causes instead of symptoms
Make the hypothesis explicit
Limit the scope of the experiment
Run the new method parallely with the old one
Start at home
Use volunteers
Ask for feedback and make changes accordingly
How to Learn From Management Innovators:
The first thing to do is to make sure that the company you’re learning from is doing something that actually works. Then, you should deconstruct the management model and try to understand how and why it works and what is driving it. Finally, you will experiment with it at your company.
There are 3 ways to do this:
Observe and Apply
This method consists of simply incorporating a management innovation idea into your organization. This method is risky and often damaging because not all companies share the same values. However, it can be used in some cases.
Focus on The Principle, Not The Practice
This consists of taking the idea behind the innovation and adapting it to your organization and specific circumstances.
Improve Understanding of Current Practice
This consists of using an innovative practice to make improvements in your company.
When Are Employees Engaged and Motivated?
When the work is challenging
When their are given freedom
When it’s important
When working with good colleagues
Employees often get confusing goals, micro-management, lack of information, and limited feedback. Instead, as a manager you should give your employees intrinsic motivators. Here’s what you should give employees to keep them engaged and motivated:
A sense of direction
Freedom to find their own way
Support
Recognition
As a manager, you need to look at the world from the employees’ point of view.
More Resources about Management Innovation
Management Innovation eXchange: the largest online resource for the latest thinking in management innovation
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