Point: Inventing new management techniques offers big paybacks.

Story: What’s more valuable than a new product or service innovation?  An innovation in a management technique, said business strategy expert Gary Hamel at the Spigit Innovation Summit last week. Innovations in management techniques have far-reaching impact.

Consider Thomas Edison. He’s credited with 1093 patents, but one underlying invention is what made such a multitude of patents possible: the invention of the corporate R&D lab. Edison was the first to bring management discipline to research & development to enable a more powerful method of invention than the lone inventor of the past. Edison’s 1093 patents had less to do with technological genius and more to do with management genius: creating and managing an R&D lab that could efficiently and effectively crank out new inventions.

So, what steps can you take to innovate the management of innovation? Management is the effective control of resources to execute tasks that achieve goals. What, then, does effective management of innovation look like? Hamel talked about the need for a combination of freedom and discipline: the freedom to come up with ideas but also the discipline to find the best ideas, refine them, and channel them into something that creates value for the firm. He posed it as a paradox, which is always a clue to generative potential.

As you think about improving the management of innovation, think about the recent inventions that you can draw on. For example, in my previous post, I wrote about how social media tools support innovation processes. These tools let you invite ideas from across the whole organization and provide a way to refine, track and vote on those ideas. Other advancements, like open sourcing and open innovation (see earlier post), help you tap into almost-free resources. Furthermore, widespread adoption of smartphones changes the fundamental equation of management in terms of reach and timeliness. All these technologies support new approaches to management, especially the management of innovation.

Action

• Take a step back from inventing and innovation to think about how to improve the management of innovation
• Ask: how can we generate new ideas more effectively with available resources? (freedom)
• Ask: how can we develop and validate new ideas more effectively with available resources? (discipline)
• Create coherent processes that balance resources between freedom and discipline

Further information:

Gary Hamel’s book, The Future of Management and his blog

I enjoyed hearing Gary speak and having the opportunity to ask him questions. If you’d like to do the same, consider joining me at the World Business Forum October 6-7, 2009 in New York City. Gary will be one of the speakers, along with former president Bill Clinton, Jack Welch, George Lucas, Paul Krugman and others. You can see the full agenda here.

Point: Jump in and create, don’t worry about getting it right the first time

Story: My friend Joel wanted to write a novel. He took classes. He turned in assignments. But, he just inched along because he tried to perfect each piece. Then he heard about “National Novel Writing Month.” The goal: write a 175-page novel during the month of November. Sounds intimidating — 50,000 words — but it comes down to 1666 words a day.

My first reaction was, “but would the novel make sense?” Joel pointed out that the rationale was not to have a publisher-ready novel in a month. “The point is practice,” he said, “and to have much more material to work with than you’d have otherwise.”

To meet the fast pace of the challenge, Joel had to give up his inner critic and just crank out some writing every day. Now he’s got the draft of a novel. He’s got some gems, and he’s got material to refine.

This process applies to writing business plans, marketing collateral, sketching new product ideas and other daunting tasks.

Action: The first step is to set a goal with a deadline. Then commit to making some progress every day. Rolling up your sleeves and jumping into a task creates momentum. The result is something tangible that you can refine.

Point: Measure innovation from a variety of lenses, not just one

Story: The Information Technology and Innovation Foundation (ITIF) conducted a 40-country study of innovation, ranking countries on competitiveness. The ITIF used 16 metrics grouped into 6 categories:

1. Human Capital
   * Higher Education Attainment
   * Science & technology Researchers
2. Innovation Capacity
   * Corporate Investment in R&D
   * Government Investment in R&D
   * Share & Quality of World’s Scientific and Technical Publications
3. Entrepreneurship
   * Venture Capital
   * New Firms
4. Information Technology Infrastructure
   * E-Government
   * Broadband Telecommunications
   * Corporate Investment in IT
5. Economic Policy Factors
   * Effective Corporate Tax Rates
   * Ease of Doing Business
6. Economic Performance
   * Trade Balance
   * Foreign Direct investment Inflows
   * GDP per Working-Age Adult
   * Productivity

Action: Translate these country-level metrics to your organization. For example, Human Capital metrics: the education level of your employees, the skills employees must have to meet customer needs; Innovation Capacity: how much do you invest in R&D or in innovation? How well do you understand your industry, technology and the specific markets where you compete? Entrepreneurship: do you encourage employees to suggest ideas? Do you have processes in place to evaluate and fund those ideas? IT Infrastructure: do you invest in IT and software to let your employees communicate and collaborate easily? Economic Policy: do you minimize barriers to innovation, like bureaucracy and silos? Economic Performance: how many innovations do you have per employee?

For more information, see the ITIF’s report The Atlantic Century: Benchmarking EU & US Innovation and Competitiveness