New problems and old solutions

“Numerous studies reveal that 79 percent of CEOs consider innovation one of the highest priorities and indicate that 94 percent of CEOs say their organizations are not very good at innovating,” says Gary Hamel. Hamel is the celebrated business consultant and book author whose works I have been following over the years.

Here is the executive summary of the three-part webinar Hamel gave at World of Business Ideas (WOBI New York) I attended a few weeks ago. All the talks now from renowned experts and speakers are conveniently beamed to my computer screen virtually.

Innovation is essential for organizations because it guarantees customer loyalty, and it is what makes them relevant. It could be said that innovation is the only hope we must successfully meet all the world’s challenges. Hamel says it is essential to ask yourself three key questions as far as innovation is concerned:

1. Does it change customer expectations?

2. Does it change the cost structure?

3. And does the way of competing for change?

He highlights some points to reflect on how to build an innovative strategy:

1. Ask yourself, what are we becoming? In what three or four ways are we going to reinvent ourselves and the world around us?

2.  You cannot create top-down strategies.

3. The best ideas often come from outside.

4. Building a unique strategy requires unique ideas.

5. You have to diverge before you converge.

6. Topics are more important than ideas.

7. Technology is a multiplier tool.

Hamel then gave his thoughts, and in my opinion, are worth the six hours and the six midnight to two in the morning sessions I invested in the learning: Hamel says that people know how to adapt, something most organizations have a hard time doing. This is a big problem in the ever-changing world we live in. We are generally forced to change when a crisis hits us. But we need to find a new way to change, transform ourselves before we are forced to do so.

One of the problems that slow down innovation in organizations is their high degree of bureaucracy. This type of organizational system profoundly affects how the company operates and is mainly characterized by misusing employees’ talent rather than embracing it. Since their autonomy and decision-making capacity is limited, it is mainly based on the mere execution of the people’s tasks at the top of the organization chart.

There is no way to build an innovative organization without redistributing power within companies. A top-down power structure reduces diversity, slows initiative, hurts speed and competition within the company. To make a 180-degree turn, Hamel recommends the following:

1. Flatten the organizational pyramid.

2. Divide large units into small ones.

3. Teach everyone to think like a businessperson.

4. Make each team responsible for bringing in results.

5. Bring decision-making closer to the client.

6. Treat each employee as essential to success.

We are at a time when we cannot solve new problems with old solutions and methods. It is necessary to challenge the beliefs of our organizations and all that they take for granted. Instead of focusing on “what is done,” it is important to focus on “how to think” to carry out significant transformations.

One of the flaws in organizations’ DNA is the belief that the people who work for them are mere resources and are hired to produce products or services, thus becoming another instrument. We must change that mentality and see workers as agents of change, capable of impacting the world and contributing to its evolution. Changes and innovations in processes, logistics, and the supply chain will be useless if this way of thinking is not changed first.

Hamel highlights seven fundamental principles to build these post-bureaucratic organizations:

1. Within the organization, unleash the entrepreneurial spirit.

2. Align influence and competition and change the structure of the organization.

3. Chart, favoring meritocracy.

4. Take advantage of collective knowledge.

5. Create a community between the people who make up the organization and establish good relationships between colleagues.

6. Turn the organization into a place where everyone is capable of evolving.

7. Being able to learn from everyone and with an open mind.

8. Establish a balance between freedom and control within the organization.

This is great stuff – a reason why I never get tired of attending WOBI and preparing myself for the next ones. We all need to be updated and upgraded by people who are in the know. For COVID-19 has placed the entire world on a reset such that Hamel says so ably: “We cannot solve new problems with old solutions and methods.” He is right, and you know he is.

(Connect with Francis Kong at www.facebook.com/franciskong2. Or listen to “Business Matters” Monday to Friday at 8:00 a.m. and 6:30 p.m. over 98.7 DZFE-FM ‘The Master’s Touch,’ the classical music station.)