Management innovation: the next big breakthrough?

May 27 2009 by Robert Heller Print This Article

Have you heard of Aptera 2e, BYD F3DM, or The Volt? What about Ener1 or A123 Sytsems? There's also Quantum Technologies, Altair Nanotechnologies, Tesla Motors, Ener Del and Acta Cellconsolation.

All these trendy-sounding names are pioneers and would-be leaders in the infant electric car industry and, more specifically, in the electric battery technologies.

Here, the successes and failures in management innovation will determine the ownership and wealth that will inevitably burgeon as the infant grows into a giant.

Make no mistake about this: 'It now appears that nearly every car on the planet will eventually be electrified'. The writer of these words, Paul Keegan, goes on to advise readers of Fortune that 'Investors could hardly ask for a bigger incentive.'

The issues surrounding the new auto industry begin and for the moment end with battery technology. An optimist will see the electric car race as an opportunity for the US car companies to build or regain power, success and reputation.

Keegan, though, believes that, 'For America the ultimate irony is also the ultimate humiliation, and worse. Just as the electric car is finally arriving to save Detroit, the US is poised to swap our dependence on foreign oil for a dependence on foreign batteries.' The only ray of hope comes from 'tiny precocious firms' which are betting on a miraculous comeback.

The hunt for a viable way of building and then running an all-electric car is on. But new types of car will require new styles of manager, too.

Henry Ford I and his fellows would not have understood government intervention. But they would have clearly seen the need for management innovation right across the board.

The legendary names like Bill Gates, Andy Grove and Steve Jobs have led revolutions in technology and management practice that, no less then Henry Ford, have changed the world Ė everybody's world. Is there really no American out there who can achieve the same result in a second automotive revolution?

According to the late, great Peter Drucker, 'The CEO is the link between the inside that is "the organisation" and the outside of society, economy, technology, markets and customers. Inside there are only costs. Results are only on the outside.'

Writing for Harvard Business Review, Procter & Gamble chief executive A.G. Lafley explains how he turned this definition of the CEO's work into a dynamic tool. Anybody can do the same if they get the right answers to four questions, all many times repeated:

  • What is my meaningful outside?
  • What business are we in; what are we not in?
  • Where is our balance between sufficient yield in the present and necessary investment in the future?
  • What are my values and standards for the business?

Using these four questions, Lafley led P&G from serving two billion world customers in 2000 to an amazing 3.5 billion (over half the market) in 2009. That surge gives better understanding of the coming job of leading the best company through the auto revolution.

The meaningful outside is the driver and the driven, together with their servants in the auto services. The business is the electrification of every motor vehicle worldwide. Investment in the future is more important than present returns. The essential value is customer satisfaction and the standard is proof that this is truly being obtained.

So whether it's the Americans, Chinese or Japanese, the veterans or the new kids on the block, that's how the winning CEOs will win.

more articles

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".

Older Comments

Specific to the auto industry; I would think that Shai Agassi is meeting the challenge.

With to regards to business and industry in general; I am sure there are some innovators. However, can they shift the paradigm of not only the customer but of the financial industry is the question.