Editor's note: This is Part 2 in IndustryWeek 's two-part conversation with business strategist and author Gary Hamel. To read Part 1, click here.
In today's hypercompetitive, web-enabled global economy, Gary Hamel believes that most companies have figured out that "the difference between being irrelevant and being relevant is going to be innovation."
But despite all the lip service that companies pay to innovation in their mission and value statements, Hamel sees few firms actually managing innovation "as a companywide priority."
When CEOs call in Hamel to help with their firms' innovation strategies, Hamel typically visits front-line workers and asks three questions to "separate the rhetoric from the reality."
- "How have you been trained as a business innovator? Has the company made an investment in your innovation skills?" Contrary to what many companies believe, innovation is a teachable skill. "That doesn't mean that every person is going to have a game-changing idea everyday," Hamel says. "But you can dramatically increase the odds that innovation actually happens at organizations."
- "If you have an idea, how much bureaucracy do you have to go through to get a few hundred or a few thousand dollars and a bit of time to actually start to experiment with that idea?" Many firms might not like the answers from their workers. "In a lot of organizations, you find that front-line people have no clue where you really go with an idea," Hamel says. "They certainly don't know how to get the experimental capital. They often have to fight their idea up the chain of command through executives and supervisors who are mostly interested in simply making this quarter's numbers."
- "Does anybody care whether you innovate? Is innovation measured? Does the unit you operate in have clear innovation goals? Does innovation influence your compensation?" This set of questions aims to get at the heart of whether innovation really matters at an organization, harkening to the continuous-improvement mantra, "What gets measured gets done."
"When you ask people these questions, what you typically find is, 'No I haven't been trained,' 'No, I have no idea where I'd really go to get time and capital to experiment with an idea,' and, 'No one seems to particularly care whether I innovate or not,'" Hamel says. "So I think there's a lot of work to be done here. Because you're either innovating or you join the race to the bottom, where the whole game is just to access the world's lowest factor cost.
"That's a battle that U.S. companies are not going to win."