Today there was great article in McKinsey Quarterly on Innovation Management.

Summary
In this conversation, management guru Gary Hamel and McKinsey’s Lowell Bryan discuss the need for companies to innovate management practices to better cope with and thrive in a business landscape marked by fundamental technological change and globalization.

Why Is It Relevant?

• Salesforce Ideas helps scale innovation and capture new ideas from widely distributed individuals

Gary Hamel (The Future of Management)

The outlines of the 21^st century management model are already clear. Decision-making will be more peer based; the tools of creativity will be widely distributed organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position. 

When you look at companies like Toyota, you see their ability to mobilize the intelligence of so-called ordinary workers.

Bryan Lowell (Mobilizing Minds: Creating Wealth From Talent in the 21st Century Organizations)

I would argue there’s not 1 company out of 1,000 today that has created an organization in which innovation is truly everyone’s responsibility. If you have a new idea, how much bureaucracy do you have to go through to get a small increment of experimental capital? Are you actually being measured on your innovation performance or your team’s innovation?

Every large company, even a retailer or a mining company, has a large number of thinking-intensive employees who need to collaborate with one another. The winners will be those that enable their thinking-intensive employees to create more profits by putting their collective mind power to better use.

The issue is not just raw innovation; it’s actually being able to scale the innovation through at a large company. That’s where the wealth will be created.

A colleague of mine named Nadim passed along a great write up of a recent Economist article on innovation. You can print the full article from the Economist website. Click on "Buy PDF" - it's actually free.

Summary
The Economist highlights that innovation—defined as fresh thinking that creates value—is responsible for much of the productivity growth in the world economy (vs. more capital and people). Where this is particularly relevant to CRM is that a lot of this fresh thinking comes in the form of new business models and processes. Moreover, these fresh ideas come not from centralized planning, but a variety of sources, chief among them employees, partners and customers. Corralling and prioritizing fresh ideas, therefore, is a key challenge for businesses that want to innovate and grow. The article makes a case for more open innovation models, where all ideas are out in the open, and points out that the really hard part is filtering those ideas.

Why Is it Relevant?

• Salesforce Ideas helps companies find and filter new ideas
• Salesforce.com’s CRM apps help companies adapt as they innovate processes and business models

Eric Von Hoppel (MIT)

User-driven innovation [occurs when] users who feel passionate about certain products often fiddle around with them because they fail to provide exactly what they want.

Firms should keep a closer watch on new and dissatisfied users, who are much more likely to be the source of disruptive ideas.

One of the biggest thoughts emerging from innovation research [is that] neither idea generation nor execution is as important or as tricky as the filtering process that links the two.

Larry Page (Google)

Silicon Valley doesn’t have better ideas and isn’t smarter than the rest of the world but it has an edge in filtering and executing them.