Tuesday, November 11, 2014

THE NEW RULES OF INNOVATION IN BUSINESS MANAGEMENT



by Emmanuel Kuehn

I have got this pet theory of either looking at business through a microscope or a telescope. Before I kick off, let's first define the difference between these two engaging instruments and their usefulness.

A microscope has the power to take an object or policy and to scrutinize parts of the whole close up. It has the power to magnify. A telescope on the hand has the power to bring someone up close, but only something, which is far away and perhaps not visible to the naked human eye. Call this a type of global overview.

Now, let's apply this principle to business professionals. There are two kinds of people: One type enjoys examining minutiae and the small details. The other personality type enjoys looking at much bigger objects or projects from a distance in hopes of drawing the object or project closer for inspection. Both perspectives are valid and indeed, complimentary.

In business the close up snap shot is vital to root out problems. The other perspective relies on a establishing a helicopter point of view before delivering an analysis. Prior to the wave of social media and micro-management of branding and ideas, business ownership were perhaps more concerned or focused on their own organizations than a "global" market and its impact on operations and profitability. Multinationals grew to gigantic proportions across markets and in essence wound up replicating job functions across national or regional markets.

Control was portioned out according to the business practice and specialists were appointed to manage "their" practices in product development, marketing production, logistic, sales finance, IT and so forth.

The end result made the internal organization so complicated that even the senior management could not really control and command, let alone empower people in the decision making process.

This lead to large organizations calling in the McKinseys" of this world to conduct an audit of the organisation and to restructure its activities to be more cost effective and efficient.

These external trouble-shooters would look at the company from the inside by zooming in to more closely examine the details to get a better understanding of the situation. Management consulting exercised in this capacity is certainly the "microscopic" approach to orgainsational management analysis.

Senior management of the organisation would continue to view their firms through the lenses of their hired management consultants. The more complex an organisation, the more difficult it was to understand how it operated with awareness. Complexity clearly demanded closer scrutiny. The only problem here is that if you stare too long at details, you begin to forget the bigger picture. Both market environments and the competition move on whether your firm does or not. This can create an uncomfortable dilemma.

Recent business "history" has shown us what the consequences can be when this happens. Large firms disintegrate, break up or even disappear. The cliché, "too large to fail" comes immediately to mind.

The catalyst to further intensive change has clearly kicked in with the onslaught and continued growth of social media. Today, there is no or little "lag time". Results and changes take place in seconds. Procedures are on hyper-drive and this can also cause further confusion.

Spending too much time organizing and re-organizing a company internally using a microscope creates a huge gap between what the assets the company may have and the reality of the market potential and its requirements.

Since 2000, the market place has drastically changed. You do not need to be a rocket scientist or a Nobel Prize winner in economics to see this. "Mammoth" organizations were so complex that to survive, they were in a word forced to streamline their operations. This was done using the "proverbial" microscope to get deep within the company's structure and operational processes.

Some organizations, clearly suffered and others did manage to become more cost effective, in line with the market requirements. A quick analysis of the automobile industry in the USA will bring a few stirring case studies.

A remedy to these shortsighted strategies was forthcoming and it was when senior management recognized that to "win" an entrepreneurial mindset and action plan was obligatory. React fast, think globally and get a helicopter view of the situation. Here the "telescope" metaphor becomes more poignant.

Examining business organizations today compared to those ten years ago and you will see the forces, which propelled these shifts. Today's business is an interaction of people and companies. I like to think of this as a "web of satellites".

A company no longer acts as if it operated on an island. Inter-connectivity is the key and social networks have provided the fuel to accelerate these changes. Both the firm and its customers appreciate the added value above and below the line. Think of this as innovation in business management. This has become so important that these processes are now instituted within major business schools across the world at the graduate degree levels.

(The above article is Part 1 of a Special Report on the impact of innovation in the workplace.)


About The Author

Emmanuel Kuehn is a Management Consultant, Leadership Coach & Trainer for both corporate organizations and individuals.
"Business Iis a matter of People!"
Emmanuel Kuehn | WisePoint B.V.

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