He starts: “Here is a paradox. In the financial markets, investment information is rapidly and efficiently diffused. New product and service innovations, be they junk bonds, new forms of options, or debt securities that allocate and price risk in an innovative fashion, get rapidly copied by competitors. But, in the “managerial knowledge” marketplace, there is little evidence of much diffusion of ideas or innovative business models and management practices.
Although there is rapid diffusion of language – the language of quality or six sigma, empowerment or putting people first, employee and customer loyalty and so forth – in many cases, not much actually changes in terms of what occurs on a day-to-day basis and in fundamental organisational models.”
|photo credit: AComment|
He discusses a couple of examples. Southwest airlines has seen profitability for over 20 years in an industry that is losing money. Their organisation has been widely described in articles, cases and books. There were no secrets to what they were doing. It was decades before others began to imitate the Southwest model.
Another well known example is Toyota (excepting events of the last few months). Toyota for a decade was the automotive byword for quality and productivity. Toyota would regularly give plant tours to its competitors – but those managers came home and repeated what they were already doing – perhaps mentioning some six sigma concepts once in a while to give credibility to their positions.
The task for HR? Human Resources must be concerned with the mental models of the people in the company, particularly its leaders. The role of the company’s execution leaders is to ensure that these mental models turn into disciplined action.
Why does management innovation take so long to spread? What role do Business Schools have in accelerating this process?