How does innovation affect the four functions of management

Technology and product innovation, by comparison, tend to deliver small-caliber advantages. A management innovation creates long-lasting advantage when it meets one or more of three conditions: The innovation is based on a novel principle that challenges management orthodoxy; it is systemic, encompassing a range of processes and methods; and it is part of an ongoing program of invention, where progress compounds over time.

Three brief cases illustrate the ways in which management innovation can create enduring success. Unlike its Western rivals, Toyota has long believed that first-line employees can be more than cogs in a soulless manufacturing machine; they can be problem solvers, innovators, and change agents. While American companies relied on staff experts to come up with process improvements, Toyota gave every employee the skills, the tools, and the permission to solve problems as they arose and to head off new problems before they occurred.

The result: Year after year, Toyota has been able to get more out of its people than its competitors have been able to get out of theirs. As this example illustrates, management orthodoxies are often so deeply ingrained in executive thinking that they are nearly invisible and are so devoutly held that they are practically unassailable.

The more unconventional the principle underlying a management innovation, the longer it will take competitors to respond. In some cases, the head-scratching can go on for decades. While other grocery chains have been slashing costs to fend off Wal-Mart, Whole Foods has been rapidly evolving an extraordinary retail model—one that already delivers the highest profits per square foot in the industry.

Managers consult teams on all store-level decisions and grant them a degree of autonomy that is nearly unprecedented in retailing. Each team decides what to stock and can veto new hires. What differentiates Whole Foods is not a single management process but a distinctive management system. Confronted by management innovation this comprehensive, rivals can do little more than shake their heads in wonder.

Sometimes a company can create a sizable management advantage simply by being persistent. Not every management innovation creates competitive advantage, however. Innovation in whatever form follows a power law: For every truly radical idea that delivers a big dollop of competitive advantage, there will be dozens of other ideas that prove to be less valuable.

Innovation is always a numbers game; the more of it you do, the better your chances of reaping a fat payoff. A management innovation can be defined as a marked departure from traditional management principles, processes, and practices or a departure from customary organizational forms that significantly alters the way the work of management is performed. Put simply, management innovation changes how managers do what they do. And what do managers do? Typically, managerial work includes.

In a big organization, the only way to change how managers work is to reinvent the processes that govern that work. Management processes such as strategic planning, capital budgeting, project management, hiring and promotion, employee assessment, executive development, internal communications, and knowledge management are the gears that turn management principles into everyday practices.

They establish the recipes and rituals that govern the work of managers. In most companies, management innovation is ad hoc and incremental. A systematic process for producing bold management breakthroughs must include. Key changes included. Translating a novel management idea like innovation from everyone, everywhere into new and deeply rooted management practices requires a sustained and broad-based effort, but the payoff can be substantial.

I have yet to meet a senior executive who claims that his or her company has a praiseworthy process for management innovation. As with other types of innovation, the biggest challenge is generating truly novel ideas. Some of the essential components are. Chunky problems. Fresh principles. Unorthodox thinking. Wisdom from the fringe.

These multipliers of human creativity are as pivotal to management innovation as they are to every other kind of innovation. The bigger the problem, the bigger the opportunity for innovation. Nearly 80 years ago, General Motors invented the divisionalized organization structure in response to a seemingly intractable problem: how to bring order to the sprawling family of companies that had been assembled by William C.

Sloan, Jr. Thanks to this management innovation, GM was able to take advantage of its scale and scope. It takes fortitude and perseverance, as well as imagination, to solve big problems. These qualities are most abundant when a problem is not only important but also inspiring. Frederick Winslow Taylor, arguably the most important management innovator of the twentieth century, is usually portrayed as a hard-nosed engineer, intent on mechanizing work and pushing employees to the max.

Awkward, inefficient, or ill-directed movements of men, however, leave nothing visible or tangible behind them. Their appreciation calls for an act of memory, an effort of the imagination. And for this reason, even though our daily loss from this source is greater than from our waste of material things, the one has stirred us deeply, while the other has moved us but little. To maximize the chances of a management breakthrough, you need to start with a problem that is both consequential and soul stirring.

First, what are the tough trade-offs that your company never seems to get right? Management innovation is often driven by the desire to transcend such trade-offs, which can appear to be irreconcilable.

Open source development, for example, encompasses two antithetical ideas: radical decentralization and disciplined, large-scale project management. Maybe you believe that your organization has become less and less agile as it has pursued the advantages of size and scale. Second, what are big organizations bad at? This question should produce a long list of incompetencies.

Third, what are the emerging challenges the future has in store for your company? Try to imagine them: An ever-accelerating pace of change. Rapidly escalating customer power. Near instant commoditization of products and services. Ultra-low-cost competitors. A new generation of consumers that is hype resistant and deeply cynical about big business. These discontinuities will demand management innovation as well as business model innovation.

Any problem that is pervasive, persistent, or unprecedented is unlikely to be solved with hand-me-down principles.

More recently, scientists eager to understand the subatomic world have been forced to abandon the certainties of Newtonian physics for the more ambiguous principles of quantum mechanics. That was certainly true for Visa.

The ensuing chaos threatened the viability of the fledgling business. Modern management practice is based on a set of principles whose origins date back a century or more: specialization, standardization, planning and control, hierarchy, and the primacy of extrinsic rewards. Generations of managers have mined these principles for competitive advantage, and they have much to show for their efforts. But after decades of digging, the chance of discovering a gleaming nugget of new management wisdom in these well-explored caverns is remote.

In early December, a colloquium on "Creativity, Entrepreneurship, and Organizations of the Future" is being held as part of the th anniversary celebration at the Harvard Business School. To kick off the colloquium, senior managers of 4 sizeable organizations heavily involved in innovation have been asked to pose "burning questions" to the assembled researchers and practitioners of innovation and creativity.

Given their importance for global economic health and progress, the questions are worth pondering. One highly successful Silicon Valley entrepreneur will ask whether management is a net positive or negative in fostering creativity and invention.

He will cite a growing body of evidence that suggests that bottom-up "discovery" has a superior record in comparison with "top down 'deliberate' strategies from headquarters. Another senior executive will ask whether creativity scales. Can an innovator be more productive with the substantial resources that a large organization can provide?

Or does the process work better in the loneliness of the garage with limited resources, little collective advice, and a predictably high failure rate?

Are resource-constrained entities more creative because they have to find ways of dealing with the constraints?

He should also be in a position where he understands how the company works and what the customer and the company need.

For this reason, board members and managers from the sales environment are predestined for project ownership. Like the innovation manager, the innovation project leader may encounter resistance or lack of support.

The project manager leads his project team without disciplinary responsibility and is dependent on services from other functional areas. If he does not receive the necessary support, his hands are often tied because of the lack of power. Here too, the promoter plays an important role. Together with technical and authoritarian support, it is an enabler of innovation. The bigger and more complex a company or project is, the more sensible it is to use a project steering committee in addition to the Projectowner.

The steering committee for an innovation project is headed by the project officer and consists of executives representing the most important areas such as production or sales. They support the project owner in making technical decisions. For example, it will be difficult for a project owner from sales to decide how a new product is to be manufactured. Like the Projectowner, the Steering Committee also has a promoter role in addition to its technical function.

As initially described, people are the most important resource in innovation activities. An individual can make an innovation project fail, and a great team can lead an innovation project to high performance. The success of an innovation project therefore depends above all on the quality of the support and cooperation of the important functions.

And since innovation projects are highly interdisciplinary and involve almost every area, many employees have to be involved. Thus, the project team also plays a very important role.

A well-considered team with the most important stakeholders in the sense of participants and affected parties, experts and employees who represent the interests of customers and understand the needs of the market perfectly can pave the way for innovation success. In addition to the internal innovation roles, external stakeholders are also important players in innovation management that influence the success of innovation activities. On the one hand, these include customers and users.

Nearly all innovation tasks have to be oriented towards them, because in the end they decide on the success of an innovation with their purchase or non-purchase. Particularly important is the involvement of customers to research customer needs and to test and evaluate new developments for their marketability.

Especially LEAD users, who are one step ahead of the competition in terms of customer requirements, who are mostly inventors and have a high level of solution and innovation competence, can create a high added value for innovation projects.

Thus, the integration of customers is an important key factor in innovation projects. Jones, George, Rock, Although all levels of management have responsibility in all the functions, they do not exercise these in equal amounts. First line managers, as an example, have input into the planning function but at a level quite removed from top management. Once again, a graphical illustration brings this concept more clarity.

Figure 3: Relative time spent in each function at different levels. Each function of management has a place and importance in the operation of a modern organization, be it private or public sector. The most successful organizations have strong functioning processes and people performing all four functions in the mangement field and all levels. Avolio, B. Journal of European Industrial Training,15 4.

Health Forum Journal, 41 2. Prentice- Hall, Englewood Cliffs, N. Heimrich, B. Jones, G. Kouzes, James M. Simmering, Marcia J. Spahr, Pamela What is Transformational Leadership? Author: David Johnson Management is a ubiquitous term that is applied to a range of human endeavor.

Keywords: Management, functions of management, controlling, leading, organizing, planning, levels of management Definition of Management Management, like many other terms or titles, has a few definitions depending on the orientation and knowledge of the person crafting the definition.

Function of Management Before we embark on a review of these functions it should be noted that the definition attached some quantifiable metrics to the term management, so that ideas can be compared, synthesized and contrasted.

The two concepts that help distinguish good management from poor management are efficiency, a quantitative measure, and effectiveness, a qualitative metric Organizations are efficient when they manage resources to maximize their utility in the process of producing a good or service. Planning What is to be done?