Leadership Innovation Challenge: How to Create Open and Silo-Free Organizations
Gary Hamel, the proponent of radical innovation and visionary of the future of competition, challenges us to break out of bureaucracy to build the cultures and capabilities that will make us competitive for the future.
He is not talking about failing businesses, paralyzed by bureaucracy and on the brink of extinction. He is talking about healthy, conventional, probably well-run organizations. The type of respectable organizations that lack the sense of urgency and, hence, the hunger that nurtures dramatic innovation. Hamel challenges leaders not to settle for merely “healthy” but aim at becoming “world class athletes” in order to thrive and grow in the new competition. And to rise above healthy mediocrity and compete in the Olympics, your primary challenge is to break out of bureaucratic silos and rules-driven management.
Hamel selects 3 of the 9 factors that are identified as critical to success today in a book by Scott Keller and Colin Price, Beyond Performance: How great organizations build ultimate competitive advantage.
- External Orientation
- Coordination & Control
The gist of how to break out of silos is simply building organizations for humans– tapping the intangibles of innovation, knowledge, relationships etc. rather than just products, to create value and competitive advantage; and driving to results by motivating, engaging and collaborating with others rather than controlling them.
It is a commonsensical sequence. To engender the kind of innovation that gives you a competitive edge today, you must be the kind of leader who is capable of motivating rather than “supervising” people.
To respond with the speed the market moves in, you have to dismantle everything that blocks your direct line of vision to the customer and market and enable front line individuals “to have the discretionary power to respond instantly to shifting circumstances. Rather than moving information up to those with authority, authority must be pushed down to those with real-time information.”
“The decision lags typical of large, bureaucratic organizations are becoming untenable,” Hamel says. To rise beyond bureaucracy, you must be tuned to the outside rather than drown in the governance and operational maze of conventional management.
Hamel doesn’t have answers but challenges leaders to focus on new questions as drivers of their management approach.
“How can we turn an entire organization into a sensory organ,” he asks, “ever alert to the changing dynamics of the marketplace? How can we dramatically improve the signal-to-noise ratio in environment scanning? How can we ensure that weak signals don’t get filtered out when the implications are politically uncomfortable?”