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IS MANAGEMENT THEORY LACKING INNOVATION?

Posted by Mark Davies 18 January 2017 Innovation Consultancy

Management theory has been around for decades, but it has recently been argued that this has caused it to become stagnant, unoriginal and repetitive. Is management theory lacking in innovation? Could it benefit from some idea generation tips to shake up its established practices? 

THE CRISIS OF MANAGEMENT THEORY

British weekly magazine The Economist recently suggested in its Schumpeter column – which focuses on all things business and is named after the economist Joseph Schumpeter – that ‘management theory is becoming a compendium of dead ideas’ and needs a shake-up of religious proportions.

Referencing Martin Luther’s radical break from the Catholic church almost half a millennium ago, the column argues that management schools have become the ‘cathedrals of capitalism’, speaking their own jargon-filled language and offering quick fix solutions to every business need. It is argued that ‘the gurus have lost touch with the world they seek to rule’, and that all this means the time is ripe for a management theory ‘Reformation’. 

The Economist suggests that the four oft-repeated ideas of management theory; 1) that business is more competitive than ever, 2) that we live in an age of entrepreneurialism, 3) that business is getting faster and 4) that globalisation is both inevitable and irreversible, are not in fact true of the current business and economic world.

It is argued that although these theories were highly relevant to the 1980 to 2008 period in which they were created, evidence of slowing productivity, a backlash against globalisation and a move from competition to consolidation of businesses, all of which characterise the post-financial-crash-context means new ideas and new dialogues must be sought to deal with the challenges posed for business.

HOW COULD INNOVATION CONSULTANCY HELP? 

The crux of The Economist’s argument is that management theory is lacking in the foresight, capacity and creativity needed to tackle the challenges it faces.

Reporting on the same article by The Economist, Forbes contributor and management consultant Steve Denning argues that the first step to take towards reforming management theory is to recognise the scope and heart of the problem. Denning argues that the challenges being faced are in fact interconnected, and by tackling bureaucracy and taking a holistic approach to the challenges, the industry can begin to move forward.

The parallels between this and innovation consultancy strategy are striking. If ‘tackling bureaucracy’ is understood as seeking to confront organisational inefficiency in order to streamline processes and discover alternative, fresh ways of doing more with less, it seems that management theory could benefit from a little outside the box thinking and creative problem solving.

Denning also argues that ‘it’s not lack of knowledge as to what needs to be done’ that is stopping management theory from adapting to the times, but a paralysis of those involved that is preventing them from even beginning the ominous and colossal task of implementing change.’

That organisations often suffer from not having a foothold to begin changing their processes is often a barrier to innovation, and one that is lifted through road mapping and visualisation with the help of a trained consultant. By breaking down the task into manageable chunks, with clear goals at each milestone, the initialisation of change can seem far more attainable.

 BRINGING IDEAS TO THE TABLE

One element of beginning this process is idea generation and selection. It is never simply enough to have a good idea or even several, if this idea never moves beyond such theoretical musings. How do you magic an innovative idea from thin air? If you have, how do you know your idea will work? How do you ensure that once you have generated those ideas, you choose the right one?

These are all questions that innovation consultancy seeks to tackle, and for business management theory could prove useful to bring about a radical rethinking of its position and replace it within the context of the world that surrounds it.

That a preoccupation with ideas can bring about meaningful, measurable change in theory is epitomised in the Charles Koch Institute, an American think-tank which challenges traditionally accepted management theories of hierarchy, wage rise and productivity. Although its founder and patron Mr Koch has attracted controversy for his role in conservative American politics, his fascination with, and belief in, the value of ideas has led him to challenge business orthodoxy, and has been hailed by The Economist as a rare skill that should be imitated by others seeking to advocate new pathways. 

Though management theory is still relied upon by many a business owner and entrepreneur, the sense that times are changing is rife. When theory doesn’t keep up with reality, its ethos ceases to be of value in informing the very world it sets out to discuss. Yet just as with organisations large and small, a good dose of problem solving, a holistic approach to reducing inefficiency and a sound idea selection strategy could prove just the innovative antidote that management theory needs.

As global innovation specialists we aim to help and encourage people and organizations to become more nimble, boosting their ability to generate ideas. We bring pace and focus to your innovation initiatives using our unique innovation techniques, which are constantly being developed by our professional licensees. If you’re interested in becoming a licensee for the think team, contact us here.

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