Field NotesInnovation from Within

Romi Mahajan

In his bookThe Future of Management, renowned management guru and business strategist Gary Hamel argues that long-term comparative advantage stems from the creation of an innovation culture that is itself a product of the evolution of management technologies. Whereas along many axes, industry has innovated and reinvented itself countless times, most companies still are steeped in a hierarchical management culture. This prevents any truly innovative culture from emerging simply because it does not yield decent returns on human creativity and capital.

Such hierarchies are anathema to innovation; and human creativity, when unleashed, is the core fuel for long-term innovative comparative advantage. When human creativity is constrained, upwards of 80 percent of workers are not engaged in what they do. Hamel believes this is not only a business failure but a moral one as well.

At a very basic level, this should be a clarion call to industry to banish excessive hierarchy. At its essence, the argument is fundamentally anti-bureaucratic. Decision-making power should not be reposed with out-of-touch managers and rich executives.

Hamel argues that management, not IT, is the source for innovation. IT, after all, can be commoditized and, therefore, how can it render comparative advantage? If IT is not the source of innovation, and if productivity gains, uptime, reliability, quick on-boarding of new applications and single sign-on (and their ilk) can't render comparative advantage, then what indeed are we all so busy worrying about?

Are you willing to look deep into the soul of your IT organizations and your companies as a whole to see if, just perhaps, Hamel has a valid point? How can you make sure that IT is not considered a commodity?

In incorporating the best of Hamel's concepts and using them to help IT organizations secure their future as hubs of innovation, I've developed a theory called Innovation from Within. The optimal use of both human creativity and capital is the key to sustained comparative advantage, and great organizations must make innovation intrinsic to their function. Organizations must embrace community, not bureaucracy. And, most significant, management too often stands in the way of real innovation—only when management evolves is true innovation possible.

Let's look at IT organizations. IT staff members tend to be intelligent, dedicated, and keen to make an impact. Often called upon to do more with fewer resources, they spend most of their time performing their core jobs, leaving little time for innovation.

My concept of Innovation from Within applies Hamel's theory to the field of IT. The core principles are:

• Given the inherent creativity of IT staff, it's in our best interest to ensure an IT management model that utilizes this potential.
• Innovation comes from the systematic and irreverent process of thought-trial-error-revision, a process that is inherent in IT.
• When community is embraced deeply and openly, technical solutions emerge. IT can lead the way here, starting with itself!
• In IT, people are the only source of comparative advantage.
• IT management needs to evolve from a focus on project and budget to a new and exciting focus on innovation management.
• IT should not be about cost containment, but rather about the creation of great outcomes.

Are you ready to believe in this theory? Can we apply the concept of Innovation from Within and demonstrate that IT organizations are the right place to conduct this grand experiment? Are managers ready to divest power and to embrace their own communities? Is management ready to give up its power and embrace our collective brilliance?

Romi Mahajan is Chief Marketing Officer of Ascentium Corporation. Before joining Ascentium, he spent more than seven years at Microsoft, where his last role was as Director of Technical Audience and Platform Marketing. Romi is widely published in the areas of technology, politics, economics, and sociology.