Innovation, Organisations and IT - New Views

Most organisations are continuously challenged, seeking to stay ahead through innovation. In his new book, the “The future of management”, Gary Hamel says that 20th century management thinking and practices are no longer appropriate for modern day challenges. He declares that the problem of management in the 19th and 20th centuries, efficiency, has been resolved for the most part. Efficiency is based on conformity and compliance with standards, guidelines and protocols, and as such may not generate innovation. Hamel holds that wealth is being created through innovation. Innovation requires “diversity in thought and action” rather than executing processes in a uniform fashion over and over again. In this sense, Hamel defines the task of management as amplifying individual capabilities, and aggregating them for accomplishing complex undertakings. Thus, managers are called to foster adaptability—build systems that change by themselves; innovation—bring forth the resourcefulness of people; and engagement—sustain conditions under which people can bring their capabilities to bear. Hamel thinks that information technologies, especially the communicative and collaborative applications labeled as web 2.0 will be instrumental and crucial in this context. Nonetheless, he blames the IT functions in enterprises to be obstacles to utilising technology for innovation; many IT managers are unwilling to change priorities and respond due to work overload, and changes are always put under the rigid and mandated requirements of security and controls.

Carried by similar considerations, but aiming at adaptability or agility in government, are the arguments put forward by the Victorian State Services authority in cooperation with a UK think tank. Here, the authors have become critical with the efficiency drive of the recent government reform wave of the New Public Management. They propose, similar to Hamel, to reshape organisations by “reducing hierarchy, increasing autonomy and encouraging diversity” for establishing the conditions for agility. Agility for government is made up of an outward-oriented culture, alignment of systems and policy, an adaptable workforce, timely and effective decision-making, and productive information use. The proponents of agile government are however critical regarding the function of ICT. They acknowledge the peril of information overload on the one hand, while decisions will often have to be based on incomplete information, on the other. The authors emphasise that government is inherently different from private business. Hence, agility needs to be seen within the constraints of their political-administrative environment. Governments are accountable, need to consider results across agencies and beyond, retain stability during change, and have to determine when to act and how.

Against these broad deliberations, advice given to IT managers by a company called Intelligent Business Research Services (IBRS), pales through its rather conservative view of affairs. Though the report cautions against the assumption that IT administrative systems will not bring strategic advantage, it does not seem to encourage variety and novelty. The ten exemplary features of CIOs highlighted in the report are: “focusing on core business and IT issues, having strong execution skills, attaining business intimacy, taking a long-term view, being cautiously experimental, discouraging unnecessary technology diversity, being product and service-oriented, building strong teams, using strategic vendors and scoring vendors’ performance”.

Is Gary Hamel right in his verdict of the IT organisation, or is it futile to expect visionaries and engineers to find common ground?