Complex management

Apr 19 2006 by Robert Heller Print This Article

Do you think that life for managers is getting increasingly complicated? You're probably right. The increasing complexity of management and innovation is inevitable and has been apparent for over 40 years; doubtless it will continue indefinitely.

In one example, the internet is continuously reinventing the whole customer process, from information to after-sales care.

Amongst the many consequences, the process of change has become a great deal quicker, as a website can be changed much faster than a factory layout.

However, the high-tech tools should still be used in areas that are not new or technical. Managers still need to demonstrate good analysis and decision-making, as well as the ability to execute these decisions to make the most of a situation.

P&G are widely hailed for escaping a case of the Big Company Blues by using a new innovation model called 'Connect and Develop'. P&G discarded its fixation with internal innovation and instead sought ideas from outside of the company.

Their search centred around identifying the Top Ten consumer needs, identifying new products or concepts to help take advantage of 'existing brand equity' and using 'technology game boards' to answer key questions, such as: which key technologies need strengthening; which need to be acquired to better compete with rivals; which technologies already owned need licensing or developing further?

Answering such questions help to direct the networking with proprietary networks involving 'technology entrepreneurs and suppliers', and 'open networks' connecting P&G with many thousands of experts.

Of course, using outsiders dissipates the control usually enjoyed by the corporate centre. P&G has a vice president for innovation and knowledge with day-to-day accountability for connect-and-develop.

However, his role is overseeing initiatives that he cannot 'manage' in the traditional sense. A.G. Lafley, the CEO, set the new approach in motion and pointed to a wide goal of acquiring half of P&G's innovations from outside the company. The way the company managed itself was radically changed.

This, in turn, radically changed results and R&D productivity increased by nearly 60%. The innovation success rate more than doubled while the cost of innovation fell.

"Leadership is not defined by the exercise of power but by the capacity to increase the sense of power among those who are led. The most essential work of the leader is to create more leaders."

These wise words are courtesy of Marry Follett – way back in 1924.

Managers have struggled to catch up with her wisdom in the decades since. Follett's book was called Creative Business. Innovative creativity, like that at P&G, is where fresh approaches to management are most needed.

The entrepreneur is basically a creative innovator and he must find an unquestionable answer to the most fundamental question: why should the customer buy from him and not one of his competitors?

The P&G story demonstrates that getting the correct answer is far more complex in the complicated world.

Innovation in products and processes – including management processes – is essential to master the complex challenges. The leader must encourage and develop as many sources of ideas – both internal and external - as he can.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".