#7 – Whatever Happened to Management Innovation?
TL;DR: Gary Hamel’s ‘management innovation’ arrived trumpeting a revolution, but nobody came to play. Too vague, too broad, and insulting to the very execs meant to buy it, the fad was eclipsed by sexier buzzwords. Moral: Innovate all you want – just don’t threaten the customer’s ego, or they’ll ghost you.
Sometimes one wonders how a notion, model, or concept in innovation ever gets the power it does – say what you will, this is a field in which surprisingly spurious claims can have an oversize effect and considerable longevity. What is just as interesting is how sometimes a concept that seems like a home run never quite takes off, never quite becomes the popular idea it seemed to have the potential to. With regards to the latter, I have long had an interest in the notion of “management innovation” (see e.g. Hamel 2006, Birkinshaw et al. 2008), how it seemed to take the world of business thinking by storm, and just as quickly disappeared from the popular discourse. It is a concept that seemed to have it all – a recognizable name, a clear enemy it was combating, support from one of the most famous gurus in the business, and the backing of the full legitimacy apparatus of management thinking, including but not limited to Harvard Business Review and the Academy of Management. Yet with all that going for it, today the notion of management innovation is at best a marginal interest for a few academics, and few popular books have championed it in the last decade. What happened?
Like with all concepts of this type, there is a pre-history. You might say that we could go as far back as to the birth of management as a subject of study and an established body of knowledge, i.e. back to the days of Taylor and Fayol. The former’s “time and motion studies”, not to mention his followers such as the two Galbraiths and Gantt (of chart fame) introduced a number of things that might well have been called management innovation. In a similar fashion we might look to the varied ways in which the emergence of new corporate forms in the heyday of US industry begat new management techniques, and use the term about them. This, however, runs the risk of being anachronistic – the very notion of innovation was barely developed in those days. What we saw in e.g. the 1920’s or the 1950’s might be excellent examples with which to illustrate the concept today, but to understand the concept we need to look to when it was coined and introduced.
Now, it is likely that there were more than one person who talked about management innovation (or innovation in leadership) long before the term as we know it became more universally known and accepted, for this is almost always the case. Thus some might protest that they, not the US professor Gary Hamel, were the true originator of the term. I am not going to address this here, for be that as it may, it was Gary who made it popular, Gary who made it known, and Gary who put in the effort to establish himself as the ‘father’ of the concept. It all started in 2006, with a Harvard Business Review article entitled "The Why, What, and How of Management Innovation". Here Gary made his call for a revolution in management practices, with the astute observation that while everyone was focusing on technology and products, nothing much had happened in management for quite a while. Drawing upon flashy examples from places like W.L. Gore and Whole Foods, Gary was making a play for management as the next big feel to be disrupted, with him conveniently placed as the philosopher-king of this new radicalism.
Now, initially, the concept gained quite a lot about traction, with notices and write-ups both in academic journals and in the business literature. Direct critiques were relatively few (see, however, Armbruster et al. 2008, Nguyen 2021, cf. Khosravi et al. 2019), but besides some initial enthusiasm, there was never the kind of excitement that surrounded a number of other, similar concepts. In fact, after 2010 the amount of publications on the theme seems to drop off quite a lot, and as early as 2014 there is an article published bemoaning the lack of research on specifically management innovation (see Damanpour 2014). This, a pessimistic review as early as eight years (more like seven, counting the usual lag with academic publication) after the introduction of an idea, is quite uncommon – I cannot really think of another case with promise so quickly turning to ash. So, what happened?
There are many things that may have contributed to all this, and some suggestions seem to figure more often than other. One is the simple and commonsensical fact that the concept was simply too broad for its own good. Now, broad concepts are not rare in innovation talk, but often they come coupled with a clearer set of practices or nested in a hierarchy that can clarify them. Nobody really talks of technology innovation or product innovation as anything except very abstract umbrella-concepts, where the actual innovation is to be figured out in practice. In a similar way, the broad category of social innovation only signals a new perspective on innovation, with the details to be sorted out in e.g. banking, agriculture, or education. Management innovation seemed to try to be both general and specific at the same time, without really clarifying how that would be possible. Others commented on the fact that it is rather difficult to measure management innovation in anything like a reliable way. With many innovations you can at the very least point to increased sales or improved quality, but here the direct results seemed more difficult to capture. That alone might not have been a critical problem, but coupled with the fact that the concept also was highly fluid and ambiguous, encompassing both minor improvements (including ones that mainly removed stupid or toxic things) and massive rethinks of organizational forms, it quickly started seeminglike everything and nothing, all at the same time.
Another thing that worked against the concept were the times it was launched in. Although we might now look to the early aughts as a somewhat frothy time when a lot of ideas were pitched, some that have survived better than others, it was also quite an exciting time. Open innovation (Chesbrough 2003) and crowdsourcing (Howe 2006) had only recently become big talking points when management innovation was introduced in 2006. Hamel’s sometime writing buddy (and, according to some, the brain of the two) C.K. Prahalad had in 2004 gotten a lot of attention for his ideas about “the bottom of the pyramid” (Prahalad 2004). Whilst not directly an innovation concept, “blue ocean strategy” had become a juggernaut of a buzzword in 2004 (Kim & Mauborgne 2004), and there were already rumblings about ideas such as “business model innovation” (Osterwalder & Pigneur 2010) and “design thinking” (Brown 2008). Could it thus have been nothing more than a case of bad timing, being lost in a plethora of new ideas?
To me, this is quite unlikely, if only for the fact that so many of the other ones did far better on the marketplace of ideas! It would have been more likely that the ideas fed off each other, as arguably e.g. blue ocean strategy and open innovation did. A more convincing argument might be that with so many well-branded concepts, management innovation simply wasn’t cool enough to stand out. Further, where many of the others introduced quite novel perspectives (if not always in a reflective manner), or had other things going for them, management innovation sounded rather flat. For some people, management isn’t so much a thing to innovate as it is something to be abolished. For others, it’s not so much innovations in management we need, but rather better management, period. The concept was thus to some overwrought, and to others too mired in traditional thinking, and failed to win over either camp.
What is perhaps most notable in the case of management innovation might be something else entirely. I, for instance, would contend that it didn't work because it didn't consider the customer – which is interesting, seeing as it came from people who had been obsessively talking about customers for much of their careers. Yet here came a crux, one still often ignored today. Who are the customers of innovation ideas? Well, by and large, it's management. It's management who can afford the consultants, who can bulk-purchase the books, who can order up large-scale innovation projects. By stating that the problem with innovation did not lie with operations or with the openness of the firm, but instead with managers and their ways, Gary Hamel massively misread his audience. He was saying to the people he needed buy-in from that the problem wasn’t with someone else, it was with them! Now, this might have been both a fact and an astute observation, but it was not what his audience, the executive class, wanted to hear.
So, how should we understand this strange concept, and the manner it itself failed as an innovation? First, it is important that new innovation notions actually deliver when it comes to execution. Management innovation proved to be too big of a beast to consistently innovate in, and a surprising amount of hyped attempts failed in the end. Second, innovation initiatives often flounder if there’s no clear image of what innovation actually means. We can (and should) laugh at the tendency of always pointing to the iPhone to illustrate innovation, but at least it is a clear example. For management innovation, this often seemed to end up in exhortations to be a bit better, and that doesn’t really cut it, exposition-wise. Third, your audience matters. The trouble with management innovation was that it required for people who had everything to lose to ensure they started losing things – power, status, control, incentives, and so on. Whilst this wasn’t necessarily a bad idea, and why we may yet see AI do some of the work of management innovation for the aforementioned executive class, the concept simply could execute on this level.
Now, just so I don’t get misunderstood, I am not claiming that management innovation is dead. Far from it. Many things that were suggested in those few years when the concept was riding high emerged at some point, even though many others are still as un-innovated as ever. We also do not know what the future, or AI, may bring about in this field. Who knows, the golden days of management innovation may be ahead of us still. That said, what we do know is what we can see right now, and that isn’t uninteresting either. The somewhat sorry tale of how management innovation came to the market guns blazing, only to fizzle out in but a few years (in the blink of an eye, considering the languid pace of academic concepts), is a story with a moral. It tells us that no matter how big you are, and Hamel was plenty big, or how big the forces behind you are, such as HBR, if there isn’t an audience for something, it will fail.
Oh, Hamel’s management innovation, we hardly knew ye!
References
Armbruster, H., Bikfalvi, A., Kinkel, S., & Lay, G. (2008). Organizational Innovation: The Challenge of Measuring Non-Technical Innovation in Large-Scale Surveys. Technovation, 28(10), 644–657.
Birkinshaw, J., Hamel, G., & Mol, M. (2008). Management Innovation. Academy of Management Review, 33(4): 825-845.
Brown, T. (2008). Design Thinking. Harvard Business Review, 86(6): 84-92.
Chesbrough, H. (2003). Open Innovation: The New Imperative for Creating and Profiting from Technology. Harvard Business School Press.
Damanpour, F. (2014). Footnotes to Research on Management Innovation. Organization Studies, 35(9): 1265–1285.
Hamel, G. (2006). The Why, What, and How of Management Innovation. Harvard Business Review, 84(2), 72-84.
Howe, J. (2006). The Rise of Crowdsourcing. Wired, 14.06.
Khosravi, P., Newton, C., & Rezvani, A. (2019). Management Innovation: A Systematic Review and Meta-Analysis of Past Decades of Research. European Management Journal, 37(6), 694-707.
Kim, W. Chan & Mauborgne, R. (2004). Blue Ocean Strategy. Harvard Business Review, 82(10): 76–84.
Nguyen, L. A. (2021). Management Innovation: A Critical Review. Journal of Organisational Studies and Innovation, 8(1), 31–42.
Osterwalder, A. & Pigneur, Y. (2010). Business Model Generation. Wiley.
Prahalad, C.K. (2004). The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Wharton School Publishing.