2-4 pages Business Assignment Instructions attached APA citations and References

follow directions please

Please use APA citations and References

For this paper, you will analyze how foresight, creativity, and innovation are separate, yet interrelated, concepts. To prepare for this assignment, read “Welcome to a World of Change: Life in the 21st century” (Puccio, et al, 2012) and “Moonshots for Management” (Hamel, 2009). Also consider the tensions between innovation and creativity addressed in the article “Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes”. Use this article as a foundation for evaluating creativity, foresight, and innovation within an ethical model.

Select an organization – it could be your present company or a previous company for which you worked in the past, or an organization in your personal life (professional, fraternal, charitable, social, etc.) – and describe a situation that demonstrates this organization’s foresight, creativity, and innovation within an ethical model. Some examples situations might include the development of a new product or service, a removal of a barrier to productivity, an action to improve employee productivity, a marketing/advertising campaign that induced more sales, a fund raising drive, a membership drive, etc. Your paper should:

· Provide an analysis of how the organization demonstrated each of these separate concepts (creativity, innovation, and foresight) in an interrelated and ethical way.

· Next, analyze the specific situation you have presented in light of foresight, creativity, and innovation in one of the following ways:

· Analyze how the situation you have presented reflects at least three workplace trends discussed by Puccio, et al. (2012) or,

· Analyze how at least three of the management challenges and goals discussed by Hamel (2009) helped you to understand the situation you presented.

Refer to the Week 1 Individual Reflection rubric for this assignment for specific grading elements and criteria. Your Instructor will use this Rubric to assess your work.

Guidance on Assignment Length: Your Week 1 Individual Reflection assignment should be 2–4 pages (1–2 pages if single spaced), excluding a title page and references.

References:

Puccio, G.J., Mance, M., Switalski, L.B., & Reali, P.D. (2012). Welcometo the world of change. Life in the 21st century. In creativity rising: Creative thinking and creative problem solving in the 21st century (pp. 13-20) Buffalo, NY ICSC Press

Hamel, G (2009) Moon Shots for management. Harvard Business Review, 87(2), 91-98.

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Creative Thinking and
Creative Problem Solving in the
21st Century

Gerard J. Puccio, Ph.D.
Marie Mance, M.S., M.Ed.
Laura Barbero-Switalski, M.S.
Paul D. Reali, M.S., M.B.A.

Creativity Rising: Creative Thinking & Creative Problem Solving
in the 21st Century

Authors:
Gerard J. Puccio, Marie Mance, Laura Barbero-Switalski, Paul D. Reali

Published by ICSC Press
International Center for Studies in Creativity, Buffalo, NY, U.S.A.
www.buffalostate.edu/creativity/press

All trademarks are the property of their respective owners.

ICSC Press
International Center for Studies in Creativity
Buffalo State College
1300 Elmwood Avenue, Buffalo, NY 14222
buffalostate.edu/creativity/press

Chapter 1:
Welcome to the World of Change:
Life in the 21st Century

“Everyone grumbles about the weather,” American author and

satirist Mark Twain was credited with saying, “but no one does

anything about it.”

This strikes us as analogous to how many people approach

change.

Everyone grumbles about change—“change is inevitable,” “change is

accelerating”—but no one seems to do anything about it. Or, more to the

point, few seem to know what, if anything, they can do about change.

Just deal with it, we are told. Put up an umbrella. Wear a heavy coat.

Whatever your attitude is about change, there is no denying the

force it has on our lives. Consider:

 If you are older than 20: when you were growing up, if you were

going to be late coming home, you had to go and find a

telephone, and maybe have change in your pocket to make a

call. Today, you reach into your pocket and pull out a phone

instead of a quarter.

 If you are older than 30: you grew up going to the library to get

answers and do research, with a pocketful of dimes for the

photocopy machine. Today, you stay at home and open a web

browser.

 If you are older than 40: you wrote college papers longhand and

then carefully typed them. The arrival of white-out was a kind

of miracle. Today, you press the delete key.

 If you are older than 50: you grew up with a black-and-white

television (if you had a television), and you had to walk over to

the set to change the channel, of which there were only three.

You watched programs when they were broadcast. Today, you

choose from a hundred channels, and you watch whenever you

want. And you may watch on something that’s not a TV.

 If you are older than 60: you heard the world’s news on the radio,

or when the newspaper hit your porch the next morning.

Today, you can get the news instantly through your computer,

or even on your telephone, the one that’s in your pocket.

Change, like the weather, is a natural part of life. In fact, we would

argue that change is not just inevitable, it is essential to us as humans.

The current thinking is that the primary reason the Cro-Magnon species

survived, while the Neanderthals did not, was their superior ability to

adapt to change.1

Just as we can prepare for the weather—wear the right clothes, erect

a tent for that outdoor wedding, install central air conditioning—so too

can we prepare for change. Preparation requires awareness, which

suggests that we need to recognize the distinctive feature of change in

the 21st century: the increased rate of change.

Change, Accelerating

Here are some recent trends that highlight the accelerating nature of

change.

From industrial age, to knowledge age, to innovation age.

According to business writer Daniel Pink, the affluence of the

developed nations, combined with the movement of much analytical

work to automated methods and low-cost global workers, means that

we have arrived in an age where we must become “a society of

creators.”2 Economist Richard Florida, who coined the name Creative

Class for the workers “whose economic function is to create new ideas,

new technology and/or creative content,” provides the numbers: today,

more than 30% of the U.S. population works in creative jobs; from 1900

through the 1950s, it was less than 10%.3

1 http://pagingdrgupta.blogs.cnn.com/2010/11/08/neanderthals-less-creative-than-humans/
2 Pink, D. H. (2006). A whole new mind. New York: Riverhead Books, p. 50.
3 Florida, R. L. (2002). The rise of the creative class. New York: Basic Books, p. 8, p. 74.

This is not a new or temporary phenomenon. As early as 1991, U.S.

expenditures related to information and communications

technologies—the tools of the innovation age—surpassed those for the

industrial economy, $112 billion to $107 billion.4

More frequent job changes

Children who are in school today can expect to have more than 11

different jobs between the ages of 18 and 42.5 What kinds of jobs?

How’s this for an indication of change: no one knows.

When Forbes looked at jobs of the future, the magazine proclaimed

that in two decades, “your job probably won’t exist, at least not in the

same form.”6 Trend-analyzer Faith Popcorn predicted in 2001 that, in

the foreseeable future, more than half of us will work in jobs that do not

exist yet.7

Shorter and shorter product life-cycles

Product obsolescence comes in many forms, including planned (“it

died”), perceived (“my interest died”), or practical (“if it goes any

slower, I’m going to die”). Whatever the cause, products today are

replaced more rapidly than ever, and industrial redesign, whether for

competitive advantage or because of rapidly changing technologies,

occurs at a much faster pace. According to two studies, products go

through fundamental redesign every 5 to 10 years, while in the

technology the rate of change is much faster, with products undergoing

redesign every 6 to 12 months.8

Consider the difference between the first digital cameras released in

1991 and today’s models—1.3 megapixels and few features, versus

more than 10 megapixels and loaded. Not to mention that before 1990

all cameras used film. Twenty years later, film cameras have all but

disappeared.

4 Trilling, B. & Fadel, C. (2009). 21st century skills: Learning for life in our times. San Francisco:
Jossey-Bass, p. 3.
5 Trilling & Fadel, p. 10.
6 Clark, H. (2006). “Jobs of the future.” Forbes.com, http://www.forbes.com/2006/05/20/jobs-
future-work_cx_hc_06work_0523jobs.html, para. 4
7 Popcorn, F. & Hanft, A. (2001). Dictionary of the future. New York: Hyperion.
8 Hunter and Schmidt (1996), Williams and Yang (1999).

Greater technological power, smaller size

In 1964, the year in which the last Baby Boomers were born, a

computer chip could hold five transistors. As Gordon Moore predicted

(in what is now known as “Moore’s Law”), this capacity doubles about

every two years. Today, a chip can hold two billion transistors.9 The

guidance computer onboard Apollo 11 in 1969 weighed 70 pounds10

and had less computing power than is in your current mobile phone,

which weighs about four ounces.

Small size leads to ubiquity. Mobile telephone subscriptions in the

U.S. increased from 160 million in 2003 to 270 million in 2008.

Worldwide, the increase was from 1.4 billion to 4 billion.11 And mobile

telephones are no longer just telephones. Most can take photographs

and send text messages; many can send and receive e-mail; and a

rapidly growing number are “smart phones” that run applications from

GPS tracking to games, from e-book readers to restaurant reviews.

Entertainment production and consumption are more democratic

In the entertainment industry control is shifting. Previously, large

corporations determined what was created, how it was distributed, and

where and how it could be consumed. For instance, consider movies.

For the most part, the same corporations that decided which films to

fund also carefully controlled the movement of the film, from first run

in a theater, then onward to the rental market, home sales, and

television. Rare was the independent film that could thrive in that

environment. Today, digital technology allows low-cost production,

and the Internet (e.g., YouTube and Hulu) provides the ability to

immediately distribute.

The same applies to music, where once the large labels controlled

everything, including the copyrights to the music. Today, an

independent artist can have an inexpensive home recording studio, and

without the hand of a record label have her work available on iTunes,

9 http://www.intel.com/technology/architecture-silicon/2billion.htm
10 http://history.nasa.gov/computers/Ch2-5.html
11 http://www.itu.int/ITU-D/ICTEYE/Indicators/Indicators.aspx

right next to Beyonce and Bruce Springsteen—and retaining all rights to

her work.

In book publishing, where the industry gatekeepers had a

monopoly on what was published, print-on-demand technology allows

anyone to produce a high-quality book in just a few days.12

These and similar technological and societal changes are not

impressive curiosities, like, say, space travel, that do not seem to affect

us individually. Change has great impact on our day-to-day lives. (And

pretty soon, you’ll be able to go into space as well.)13

In the face of change we have these options: ignore it, grow with it,

or drive it. We certainly do not recommend you stick your head in the

sand; the weather is changing, and you’re bound to get wet, wind-

blown, possibly struck by lightning. So, no: ignoring is not really an

option. That leaves the choice to grow with change or to drive change—

and the good news is, it’s both of those. In some arenas, you will roll

with the changes, and in others, you will be the driving force.

Here’s an example. Climate change (our weather metaphor writ

large) is not something that most of us have the power to address on a

global scale, but we can choose to cooperate, for instance, by electing

officials who see things our way. But on a personal and local level, we

can take initiative, perhaps by forming an organization that takes action

in our community, and by changing our own habits.

To live a healthy, productive life in the 21st century requires an

attitude and skill set that opens us up to change. We believe that

creativity and creative thinking, specifically, are the adaptive skills that

will enable us to grow with change, as well as to drive it.

Problems and Approaches to Problems

The 21st century calls on us to participate. To get a feel for the

participation level required, let’s look through a particular lens: the

types of problems we might be called on to address, and the ways in

which we might respond.

12 Writing and editing time not included. Your mileage may vary.
13 Virgin Galactic is booking seats for sub-orbital space flights: http://www.virgingalactic.com.

Problems can be sorted into two basic categories:

 algorithmic: problems with a known solution, or an established

process that leads to a single right answer

 heuristic: problems without a known solution (that is, the

solution must be created)

We can approach these problems in two ways:

 proactive: before a problem arises

 reactive: after a problem occurs

By crossing the nature of the problem (algorithmic and heuristic)

with the approach to the problem (proactive and reactive), we end up

with four different situations: formulaic problems, maintenance issues,

predicaments, and

opportunities.

Two of these situations can be

resolved through known solutions, and therefore might be considered

straightforward, while two are more complex, and therefore cry out for

creative thinking (see Figure 1).

Figure 1: Types of Problems

Source: © 2005 Puccio, Murdock, and Mance. Reprinted with permission.

Formulaic problems (Algorithmic, Reactive)

When reacting to a change that has a known solution, we simply

implement it; there is no need for creative thinking. If you get a flat tire,

you replace it with your spare or call your automobile club. If you are

on the golf course and it begins to rain, you pull out the umbrella and

waterproof pullover you keep in your bag. In an operating room, a

surgeon uses a known method for removing a gall bladder, and if a

problem arises, there is a known method for responding to it.

For formulaic problems, there is no need to invent a solution,

especially when the existing approach works perfectly well. (Which,

perhaps, explains the popularity of duct tape.)

Maintenance issues (Algorithmic, Proactive)

There are changes we can anticipate, and we respond proactively to

prevent them. The solution is known, and we need only to implement

it. To protect the engine in your car, you change the oil every 5,000

miles. To keep your feet dry when it rains on the golf course, you apply

waterproofing spray to your shoes at the beginning of the season.

Relationships deteriorate if we do not tend to them, but we don’t need

to re-imagine the rules: we buy gifts for our significant others, listen to

them, and share meaningful time—all well-known approaches.

For maintenance issues we merely need to stay alert and anticipate

the appropriate time to implement known procedures that have proven

effective in the past. And if we do not know the proactive steps we can

take, we have only to seek out the answers from a reliable source.

(Which, perhaps, explains the popularity of Dr. Phil.)

Predicaments (Heuristic, Reactive)

Change sometimes occurs for which we do not have a ready

answer—and known solutions do not seem to fit. Your competitor

introduces a breakthrough product that makes yours obsolete. Your

son’s performance in school suddenly falls, but you are not sure why.

You lose your job without warning. The newness of the situation and

its unique conditions render any known approaches ineffective.

What is the solution when there is no solution? We’re glad you

asked: you apply creative thinking, which helps you to create a new

solution path.

Opportunities (Heuristic, Proactive)

With change comes opportunity. Not all problems are negative; a

problem is any puzzle in search of a solution (Sudoku, anyone?) The

“problem” here is to identify the future opportunity, and to find a way

to get there.

Opportunities sometimes present themselves to us. ”Look! Here I am!

Now what?” We can take this stimulus and imagine what might be—or

not. An adhesive that wouldn’t adhere led to an opportunity known as

the Post-it note. A chocolate bar that melted in a scientist’s pocket led to

the microwave oven. Boredom while playing Scrabble led to the

invention of a new, fast-paced word game called Bananagrams that has

sold millions.14 (Don’t get us wrong, we love Scrabble. But imagine how

many snail-paced Scrabble sessions did not lead to the invention of an

award-winning word game.)

Other opportunities require that an individual or organization

understand the present situation and trends as a launching point for

new opportunities. The existence of cassette tapes—music in a small

format—led to the creation of the Sony Walkman. Same industry, years

later, the existence of digital data—music in an electronic format—led

to the creation of MP3 players such as the Apple iPod.

All creative-thinking efforts start as a response to a situation. In

some cases, you are reacting to a predicament that has presented itself,

such as the newspaper companies that are trying to survive in a world

in which people are increasingly getting their news through the

internet. In other cases, you see an opportunity emerging, such as when

Amazon.com recognized a future in digital books and released the

Kindle e-book reader. Note that they did not release the first e-book

reader, and they did not choose to simply sell e-books; instead, they did

14 http://www.nytimes.com/2010/06/10/business/10nathanson.html

something unprecedented for the company: the created their own

product.

We intentionally chose how the digital world is impacting

newspapers and booksellers to make this point: that the same general

circumstances can serve as a predicament for some, while an

opportunity for others. In this instance, the movement to digital sources

seems to be helping some while harming others. But is that a matter of

fact or a matter of perception? Consider: people are reading more digital

content and less printed content. In the book world, that translates to

people buying more e-books and fewer printed books. In the

newspaper world, it means that more people are reading the news

online, and fewer are paying to subscribe to the printed paper. Here’s

the point: Amazon chose to see this as an opportunity, while the

newspaper industry chose to see this as a predicament. (And if that

were not a clear enough of the pace of change, here’s another: the

dedicated e-book reader was quickly challenged by tablets such as the

Apple iPad, which are e-book readers and much more.)

When facing a predicament or an opportunity, it is an awareness of

the situation that serves as a catalyst to creative thinking. In the case of

predicaments, lack of awareness may result in a catastrophic situation;

eventually the problem cannot be ignored. In the case of opportunities,

lack of awareness means missing out. How many times have the

leaders of a company thought, “Why didn’t we think of that!”

Amazon’s bookselling competitors now have their own e-book readers,

but they were reactive, not proactive, and they are now far, far behind

in that race.

Creating change is proactively looking for places to bring about

new solutions and approaches. For example, climate change (since we

can’t seem to resist talking about the weather) is an unknown realm—

we don’t know enough about what’s coming to provide an algorithmic

response—but that means it is an extraordinary creative opportunity.

And there are many more. Face the fronts that are approaching—an

aging population, a future oil shortage, ubiquitous high-speed live

video streaming, and others—and ask: what opportunities do they

create? Again, creative thinking is the way to exploit these

opportunities.

Moving Forward

When we consider the rapidly changing 21st century, we find

ourselves on the border between two worlds: one we recognize, and

one we do not. Certainly, much of what is to come is within our

experience. For those issues, we know the correct responses; we know

what will work. But there is much ahead that is new and unknowable.

For those many situations, there is one common denominator: human

creativity.

Change originates in creative thought. Creativity is a unique human

characteristic that allows us to better respond to external changes, such

as technological advances and social developments. Further, creativity

allows us to imagine and then to create the kind of world we will live

and work in—that is, to initiate change. To make our own weather.

www.hbr.org

H B R

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Moon Shots for
Management

by

Gary Hamel

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Included with this full-text

Harvard Business Review

article:

Idea in Brief—the core idea

1

Article Summary

2

Moon Shots for Management

What great challenges must

we tackle to reinvent

management and make it

more relevant to a volatile

world?

Reprint R0902H
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01/06-04/26-PT2 at Laureate Education – Walden University, 2020.

http://hbr.org/search/R0902H

http://www.hbr.org

H B R

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Moon Shots for Management

page 1

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“Modern” management, much of which
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To lay out a road map for reinvention, a
group of scholars and CEOs has created
25 ambitious challenges.

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Unless management innovators tackle
those issues, companies will be unable to
cope with tomorrow’s volatile world.

This document is authorized for use only by Phenekia Morgan in MGMT-6635-2/MMSL-6620-2/COMM-6505-2/WMBA-6020-2/WMBA-6020B-2-Foster a Culture of Innovation2020 Spring Sem
01/06-04/26-PT2 at Laureate Education – Walden University, 2020.

H B R

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Moon Shots for
Management

by Gary Hamel

harvard business review • february 2009 page 2

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What great challenges must we tackle to reinvent management and

make it more relevant to a volatile world?

Management is undoubtedly one of human-
kind’s most important inventions. For more
than a hundred years, advances in manage-
ment—the structures, processes, and techniques
used to compound human effort—have helped
to power economic progress. Problem is, most of
the fundamental breakthroughs in manage-
ment occurred decades ago. Work flow design,
annual budgeting, return-on-investment analy-
sis, project management, divisionalization,
brand management—these and a host of other
indispensable tools have been around since the
early 1900s. In fact, the foundations of “modern”
management were laid by people like Daniel
McCallum, Frederick Taylor, and Henry Ford, all
of whom were born before the end of the Amer-
ican Civil War in 1865.

The evolution of management has traced a
classic S-curve. After a fast start in the early
twentieth century, the pace of innovation grad-
ually decelerated and in recent years has
slowed to a crawl. Management, like the com-
bustion engine, is a mature technology that
must now be reinvented for a new age. With

this in mind, a group of scholars and business
leaders assembled in May 2008 to lay out a
road map for reinventing management. (For a
list of attendees, see the sidebar “Building an
Agenda for Management Innovation.”)

The group’s immediate goal was to create a
roster of make-or-break challenges—manage-
ment moon shots—that would focus the ener-
gies of management innovators everywhere.
The participants were inspired in part by the
U.S. National Academy of Engineering, which
recently proposed 14 grand engineering chal-
lenges—such as reverse engineering the
human brain, advancing health informatics,
and developing methods for carbon sequestra-
tion—for the twenty-first century (to see the
full list, go to engineeringchallenges.org). Why,
we wondered, shouldn’t managers and man-
agement scholars commit to equally ambitious
goals?

New Realities, New Imperatives

Although each of us had our own particular
frustrations with management-as-usual, one

This document is authorized for use only by Phenekia Morgan in MGMT-6635-2/MMSL-6620-2/COMM-6505-2/WMBA-6020-2/WMBA-6020B-2-Foster a Culture of Innovation2020 Spring Sem
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Moon Shots for Management

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harvard business review • february 2009 page 3

belief united us: Equipping organizations to
tackle the future would require a manage-
ment revolution no less momentous than the
one that spawned modern industry.

Management was originally invented to
solve two problems: the first—getting semi-
skilled employees to perform repetitive activi-
ties competently, diligently, and efficiently; the
second—coordinating those efforts in ways
that enabled complex goods and services to be
produced in large quantities. In a nutshell, the
problems were efficiency and scale, and the so-
lution was bureaucracy, with its hierarchical
structure, cascading goals, precise role defini-
tions, and elaborate rules and procedures.

Managers today face a new set of problems,
products of a volatile and unforgiving environ-
ment. Some of the most critical: How in an age
of rapid change do you create organizations
that are as adaptable and resilient as they are
focused and efficient? How in a world where
the winds of creative destruction blow at gale
force can a company innovate quickly and
boldly enough to stay relevant and profitable?
How in a creative economy where entrepre-
neurial genius is the secret to success do you
inspire employees to bring the gifts of initia-
tive, imagination, and passion to work every
day? How at a time when the once hidden
costs of industrialization have become distress-
ingly apparent do you encourage executives to
fulfill their responsibilities to all stakeholders?

To successfully address these problems, exec-
utives and experts must first admit that they’ve
reached the limits of Management 1.0—the in-
dustrial age paradigm built atop the principles
of standardization, specialization, hierarchy,
control, and primacy of shareholder interests.
They must face the fact that tomorrow’s busi-
ness imperatives lie outside the performance
envelope of today’s bureaucracy-infused man-
agement practices.

Second, they must cultivate, rather than re-
press, their dissatisfaction with the status quo.
What’s needed is a little righteous indignation.
Why, for example, should it take the blunt in-
strument of a performance crisis to bring
about change? Why should organizations be so
much better at operating than they are at inno-
vating? Why should so many people work in
uninspiring companies? Why should the first
impulse of managers be to avoid the responsi-
bilities of citizenship rather than to embrace
them? Surely we can do better.

Finally, anyone who cares about manage-
ment needs the courage to aim high. Whether
it’s putting a man on the moon, unraveling the
human genome, or building a SuperCollider
that can reveal the secrets of the universe,
great accomplishments start with great aspira-
tions. The same is true for management. All
too often, scholars have been content to codify
best practice instead of looking beyond it. Prac-
titioners have been more inclined to ask “Has
anybody else done this?” than “Isn’t this worth
trying?” What’s needed are daring goals that
will motivate a search for radical new ways of
mobilizing and organizing human capabilities.

The Moon Shots

Emboldened by these thoughts, our renegade
brigade of academics, CEOs, consultants, en-
trepreneurs, and venture capitalists asked
themselves: What needs to be done to create
organizations that are truly fit for the future?
What should be the critical priorities for to-
morrow’s management pioneers? The 25
moon shots that emerged are neither mutu-
ally exclusive nor exhaustive. The current
management model is an integrated whole
that can’t be easily broken into pieces. That’s
why many of the challenges overlap. However,
each moon shot illuminates a critical path in
the journey to Management 2.0. There was
general agreement that the first 10 are the
most critical.

Ensure that the work of management serves
a higher purpose.

Most companies strive to
maximize shareholder wealth—a goal that is
inadequate in many respects. As an emotional
catalyst, wealth maximization lacks the power
to fully mobilize human energies. It’s an insuf-
ficient defense when people question the legit-
imacy of corporate power. And it’s not specific
or compelling enough to spur renewal. For
these reasons, tomorrow’s management prac-
tices must focus on the achievement of so-
cially significant and noble goals.

Fully embed the ideas of community and
citizenship in management systems.

In to-
morrow’s interdependent world, highly col-
laborative systems will outperform organiza-
tions characterized by adversarial win-lose
relationships. Yet today, corporate governance
structures often exacerbate conflict by pro-
moting the interests of some groups—like se-
nior executives and the providers of capital—
at the expense of others—usually employees

Gary Hamel

(gh@managementlab
.org) is a visiting professor of strategic
and international management at Lon-
don Business School and the director
of The Management Lab, a Silicon Val-
ley–based nonprofit research organi-
zation that focuses on management
innovation. Hamel’s latest book (with
Bill Breen) is

The Future of Management

(Harvard Business Press, 2007).

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mailto:gh@managementlab.org

mailto:gh@managementlab.org

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and local communities. In the future, manage-
ment systems must reflect the ethos of com-
munity and citizenship, thereby recognizing
the interdependence of all stakeholder groups.

Reconstruct management’s philosophical
foundations.

Tomorrow’s organizations must
be adaptable, innovative, inspiring, and so-
cially responsible, as well as operationally ex-
cellent. To imbue organizations with these at-
tributes, scholars and practitioners must
rebuild management’s underpinnings. That
will require hunting for new principles in
fields as diverse as anthropology, biology, de-

sign, political science, urban planning, and
theology.

Eliminate the pathologies of formal hierar-
chy.

While hierarchy will always be a feature
of human organization, there’s a pressing
need to limit the fallout from top-down au-
thority structures. Typical problems include
overweighting experience at the expense of
new thinking, giving followers little or no in-
fluence in choosing their leaders, perpetuat-
ing disparities in power that can’t be justified
by differences in competence, creating incen-
tives for managers to hoard authority when it

Building an Agenda for Management Innovation

What is it about the way large organizations are managed, structured

,

and led that will most imperil their ability to thrive in the decades
ahead? What sorts of changes will be needed in management princi-
ples and practices to build companies that are truly fit for the future?
These were the questions put to 35 management scholars and practi-
tioners who met for two days in California to debate the future of
management. The conference, organized by The Management Lab
with the support of McKinsey & Company, included a diverse mix of
veteran academics, new-age management thinkers, progressive CEOs,
and venture capitalists.

The conversations were spirited and occasionally combative. Yet
through it all, no one lost sight of the ultimate goal: to develop a bold
agenda that would spur the reinvention of management in the twenty-
first century. As we struggled with this task, we were cognizant that
management experts have often suffered from ambition-deficit disorder.
What, we asked ourselves, was management’s equivalent to unpacking
the human genome, inventing a cure for AIDS, or reversing global
warming?

After the event, a subgroup synthesized a master list of challenges
from the materials generated during the conference. Our goal wasn’t to
condense the list into a handful of meta-challenges but to present a rel-
atively comprehensive catalog that honored the varied and often subtle
viewpoints of those who had participated. In the end, the conference it-
self wasn’t as important as the mission that brought us together: to pro-
vide encouragement, direction—and a little air cover for management
renegades everywhere.

The Renegade Brigade

Eric Abrahamson

, Columbia Business School

Chris Argyris

, Harvard University

Joanna Barsh

, McKinsey & Company

Julian Birkinshaw

, London Business School

Tim Brown

, IDEO

Lowell Bryan

, McKinsey & Company

Bhaskar Chakravorti

, Harvard Business School

Yves Doz

, Insead

Alex Ehrlich

, UBS

Gary Hamel

, The Management Lab

Linda Hill

, Harvard Business School

Jeffrey Hollender

, Seventh Generation

Steve Jurvetson

, Draper Fisher Jurvetson

Kevin Kelly

,

Wired

Terri Kelly

, W.L. Gore & Associates

Ed Lawler

, USC’s Marshall School of Business

John Mackey

, Whole Foods Market

Tom Malone

, MIT’s Sloan School of Management

Marissa Mayer

, Google

Andrew McAfee

, Harvard Business School

Lenny Mendonca

, McKinsey & Company

Henry Mintzberg

, McGill University

Vineet Nayar

, HCL Technologies

Jeffrey Pfeffer

, Stanford University

C.K. Prahalad

, University of Michigan’s Ross School of Business

J. Leighton Read

, Alloy Ventures and Seriosity, Incorporated

Keith Sawyer

, Washington University in St. Louis

Peter Senge

, Society for Organizational Learning and MIT

Rajendra Sisodia

, Bentley University

Tom Stewart

, Booz & Company

James Surowiecki

, author of

The Wisdom of Crowds

Hal Varian

, University of California, Berkeley

Steven Weber

, University of California, Berkeley

David Wolfe

, Wolfe Resources Group

Shoshana Zuboff

, Harvard Business School (retired)

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should be distributed, and undermining the
self-worth of individuals who have little for-
mal power. To overcome these failings, the tra-
ditional organizational pyramid must be re-
placed by a “natural” hierarchy, where status
and influence correspond to contribution
rather than position. Hierarchies need to be
dynamic, so that power flows rapidly toward
those who are adding value and away from
those who aren’t. Finally, instead of a single hi-

erarchy, there must be many hierarchies, each
a barometer of expertise in some critical
arena.

Reduce fear and increase trust.

Command-
and-control systems reflect a deep mistrust of
employees’ commitment and competence.
They also tend to overemphasize sanctions as
a way of forcing compliance. That’s why so
many organizations are filled with anxious
employees who are hesitant to take the initia-

Management’s Grand Challenges

1: Ensure that the work of management

serves a higher purpose.

Management, both
in theory and practice, must orient itself to
the achievement of noble, socially significant
goals.

2: Fully embed the ideas of community and

citizenship in management systems.

There’s a need for processes and practices
that reflect the interdependence of all stake-
holder groups.

3: Reconstruct management’s philosophical

foundations.

To build organizations that are
more than merely efficient, we will need to
draw lessons from such fields as biology, po-
litical science, and theology.

4: Eliminate the pathologies of formal hier-

archy.

There are advantages to natural hier-
archies, where power flows up from the bot-
tom and leaders emerge instead of being
appointed.

5: Reduce fear and increase trust.

Mistrust
and fear are toxic to innovation and engage-
ment and must be wrung out of tomorrow’s
management systems.

6: Reinvent the means of control.

To tran-
scend the discipline-versus-freedom trade-off,
control systems will have to encourage con-
trol from within rather than constraints from
without.

7: Redefine the work of leadership.

The no-
tion of the leader as a heroic decision maker
is untenable. Leaders must be recast as so-
cial-systems architects who enable innova-
tion and collaboration.

8: Expand and exploit diversity.

We must
create a management system that values
diversity, disagreement, and divergence
as much as conformance, consensus, and
cohesion.

9: Reinvent strategy making as an emer-

gent process.

In a turbulent world, strategy
making must reflect the biological principles
of variety, selection, and retention.

10: De-structure and disaggregate the orga-

nization.

To become more adaptable and in-
novative, large entities must be disaggre-
gated into smaller, more malleable units.

11:

Dramatically reduce the pull of the past.

Existing management systems often mind-
lessly reinforce the status quo. In the future,
they must facilitate innovation and change.

12: Share the work of setting direction.

To
engender commitment, the responsibility for
goal setting must be distributed through a
process in which share of voice is a function
of insight, not power.

13:

Develop holistic performance measures.

Existing performance metrics must be recast,
since they give inadequate attention to the
critical human capabilities that drive success
in the creative econ

omy.

14: Stretch executive time frames and per-

spectives.

We need to discover alternatives
to compensation and reward systems that en-
courage managers to sacrifice long-term
goals for short-term gains.

15: Create a democracy of information.

Companies need information systems that
equip every employee to act in the interests
of the entire enterprise.

16: Empower the renegades and disarm the

reactionaries.

Management systems must
give more power to employees whose emo-
tional equity is invested in the future rather
than the past.

17: Expand the scope of employee auton-

omy.

Management systems must be rede-
signed to facilitate grassroots initiatives and

local experimentation.

18: Create internal markets for ideas, talent,

and resources.

Markets are better than hier-
archies at allocating resources, and compa-
nies’ resource allocation processes need to re-
flect this fact.

19: Depoliticize decision making.

Decision
processes must be free of positional biases
and should exploit the collective wisdom of
the entire organization and beyond.

20: Better optimize trade-offs.

Management
systems tend to force either-or choices.
What’s needed are hybrid systems that subtly
optimize key trade-offs.

21: Further unleash human imagination.

Much is known about what engenders
human creativity. This knowledge must be
better applied in the design of management
systems.

22: Enable communities of passion.

To max-
imize employee engagement, management
systems must facilitate the formation of self-
defining communities of passion.

23: Retool management for an open world.

Value-creating networks often transcend the
firm’s boundaries and can render traditional
power-based management tools ineffective.
New management tools are needed for build-
ing and shaping complex ecosystems.

24: Humanize the language and practice of

business.

Tomorrow’s management systems
must give as much credence to such timeless
human ideals as beauty, justice, and commu-
nity as they do to the traditional goals of effi-
ciency, advantage, and profit.

25: Retrain managerial minds.

Managers’
deductive and analytical skills must be com-
plemented by conceptual and systems-think-
ing skills.

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tive or trust their own judgment. Organiza-
tional adaptability, innovation, and employee
engagement can only thrive in a high-trust,
low-fear culture. In such an environment, in-
formation is widely shared, contentious opin-
ions are freely expressed, and risk taking is en-
couraged. Mistrust demoralizes and fear
paralyzes, so they must be wrung out of to-
morrow’s management systems.

Reinvent the means of control.

Traditional
control systems ensure high levels of compli-
ance but do so at the expense of employee cre-
ativity, entrepreneurship, and engagement. To
overcome the discipline-versus-innovation
trade-off, tomorrow’s control systems will
need to rely more on peer review and less on
top-down supervision. They must leverage the
power of shared values and aspirations while
loosening the straitjacket of rules and stric-
tures. The goal: organizations filled with em-
ployees who are capable of self-discipline.

Redefine the work of leadership.

Natural
hierarchies require natural leaders—that is, in-
dividuals who can mobilize others despite a
lack of formal authority. In Management 2.0,
leaders will no longer be seen as grand vision-
aries, all-wise decision makers, and ironfisted
disciplinarians. Instead, they will need to be-
come social architects, constitution writers,
and entrepreneurs of meaning. In this new
model, the leader’s job is to create an environ-
ment where every employee has the chance to
collaborate, innovate, and excel.

Expand and exploit diversity.

Diversity is not
only essential for the survival of a species, it is
also a prerequisite for long-term corporate via-
bility. Organizations that don’t embrace, en-
courage, and exploit a diversity of experiences,
values, and capabilities will be unable to gen-
erate a rich variety of ideas, options, and ex-
periments—the essential ingredients of strate-
gic renewal. Future management systems
must value diversity, disagreement, and diver-
gence at least as highly as they do conform-
ance, consensus, and cohesion.

Reinvent strategy making as an emergent
process.

In a turbulent world, prediction is dif-
ficult and long-range planning of limited
value. Management processes that seek to ar-
rive at the “one best strategy” through top-
down, analytical methods must give way to
models based on the biological principles of
variety (generate lots of options), selection
(use low-cost experiments to rapidly test criti-

cal assumptions), and retention (pour re-
sources into the strategies that are gaining the
most traction in the marketplace). In the fu-
ture, top management won’t make strategy
but will work to create the conditions in which
new strategies can emerge and evolve.

De-structure and disaggregate the organi-
zation.

To intercept opportunities that come
and go at lightning speed, organizations must
be able to quickly reconfigure capabilities, in-
frastructure, and resources. Unfortunately, in
many organizations, rigid unit boundaries,
functional silos, and political fiefdoms hamper
the rapid realignment of skills and assets.
Large organizational units that encompass
hundreds or thousands of employees pose an-
other danger, as they often lead to groupthink
on a grand scale. To become more adaptable,
companies must reorganize themselves into
smaller units and create fluid, project-based
structures.

Dramatically reduce the pull of the past.

Management processes often contain subtle
biases that favor continuity over change. Plan-
ning processes reinforce out-of-date views of
customers and competitors, for instance; bud-
geting processes make it difficult for specula-
tive ideas to get seed funding; incentive sys-
tems provide larger rewards for caretaker
managers than for internal entrepreneurs;
measurement systems understate the value of
creating new strategic options; and recruit-
ment processes overvalue analytical skills and
undervalue conceptual skills. While continuity
is important, these subtle, baked-in prefer-
ences for the status quo must be exposed, ex-
amined, and, if necessary, excised.

Share the work of setting direction.

As the
pace of change accelerates and the business
environment becomes more complex, it will
be increasingly difficult for any small group of
senior executives to chart the path of corpo-
rate renewal. That’s why the responsibility for
defining direction must be broadly shared. In
addition, only a participatory process can en-
gender wholehearted commitment to proac-
tive change. Foresight and insight, rather than
power and position, must determine share of
voice in setting corporate direction.

Develop holistic performance measures.

Existing measurement systems have many
flaws. They tend to overemphasize the
achievement of some goals, like hitting short-
term profit targets, while undervaluing other

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important objectives, like building new growth
platforms. They often take no account of the
subtle, yet critical factors that drive competitive
success, like the value of customer-driven inno-
vation. To overcome these limitations, compa-
nies will need to create more holistic measure-
ment systems.

Stretch executive time frames and perspec-
tives.

Compensation and incentive systems
often truncate executive time horizons and
skew perspectives. For instance, research sug-
gests that most executives wouldn’t fund a via-
ble new initiative if doing so reduced current
earnings. Building new incentive systems that
focus executive attention on creating long-
term stakeholder value must be a critical pri-
ority for management innovation.

Create a democracy of information.

Mana-
gerial power has traditionally depended on
controlling information. Yet increasingly,
value creation takes place at the interface be-
tween first-level employees and customers.
Those on the front lines must be informed and
empowered so they can do the right thing for
customers without having to ask permission.

Resilience also depends on information
transparency. In volatile environments, em-
ployees need the freedom to act quickly and
the data to act intelligently. If they have to
refer decisions upward, adaptability suffers.
That’s why the costs of information hoarding
are becoming untenable. To make timely deci-
sions that reflect the best interests of the entire
company, grassroots employees need to be
some of the best-informed individuals within
the organization. Companies, therefore, must
build information systems that give every em-
ployee a 3-D view of critical performance met-
rics and key priorities.

Empower the renegades and disarm the re-
actionaries.

Sitting monarchs don’t usually
lead revolutions. Yet most management sys-
tems give a disproportionate share of influence
over strategy and policy to a small number of
senior executives. Ironically, these are the peo-
ple most vested in the status quo and most
likely to defend it. That’s why incumbents often
surrender the future to upstarts. The only solu-
tion is to develop management systems that re-
distribute power to those who have most of
their emotional equity invested in the future
and have the least to lose from change.

Expand the scope of employee autonomy.

People at the bottom and middle of organiza-

tion pyramids often feel powerless to initiate
change. Rigid policy guidelines, tight spend-
ing limits, and a lack of self-directed time limit
their autonomy. Companies must redesign
management systems so they facilitate local
experimentation and bottom-up initiatives.

Create internal markets for ideas, talent,
and resources.

Funding decisions in corpora-
tions are usually made at the top and are
heavily influenced by political factors. That’s
why companies overinvest in the past and un-
derfund the future. By contrast, resource allo-
cation in a market-based system like the New
York Stock Exchange is decentralized and apo-
litical. While markets are obviously vulnerable
to short-term distortions, they’re better in the
long run than big organizations at getting the
right resources behind the right opportunities.
To make resource allocation more flexible and
dynamic, companies must create internal mar-
kets where legacy programs and new projects
compete on an equal footing for talent and
cash.

Depoliticize decision making.

The quality
of top-level decision making is often compro-
mised by executive hubris, unstated biases, and
incomplete data. Moreover, the number of vari-
ables that must be factored into key decisions
keeps growing. In deciding to spend millions of
dollars to enter a new market or back a new
technology, senior leaders seldom seek the ad-
vice of rank-and-file employees. However, those
on the ground are often best placed to evaluate
the issues that will make or break a new strat-
egy. Companies need new decision-making pro-
cesses that capture a variety of views, exploit
the organization’s collective wisdom, and are
free of position-influenced biases.

Better optimize trade-offs.

Organizational
success in the years ahead will hinge on the
ability of employees at all levels to manage
seemingly irreconcilable trade-offs—between
short-term earnings and long-term growth,
competition and collaboration, structure and
emergence, discipline and freedom, and indi-
vidual and team success. Traditional systems
rely on crude, universal policies that favor cer-
tain goals at the expense of others. Tomor-
row’s systems must encourage healthy compe-
tition between opposing objectives and
enable frontline employees to dynamically op-
timize key trade-offs. The aim is to create orga-
nizations that combine the exploration and
learning capabilities of decentralized net-

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harvard business review • february 2009 page 8

works with the decision-making efficiency and
focus of hierarchies.

Further unleash human imagination. We
know a lot about how to engender human cre-
ativity: Equip people with innovation tools,
allow them to set aside time for thinking, des-
tigmatize failure, create opportunities for ser-
endipitous learning, and so on. However, little
of this knowledge has infiltrated management
systems. Worse, many companies institutional-
ize a sort of creative apartheid. They give a few
individuals creative roles and the time to pur-
sue their interests while assuming that most
other employees are unimaginative. Tomor-
row’s management processes must nurture in-
novation in every corner of the organization.

Enable communities of passion. Passion is
a significant multiplier of human accomplish-
ment, particularly when like-minded individu-
als converge around a worthy cause. Yet a
wealth of data indicates that most employees
are emotionally disengaged at work. They are
unfulfilled, and consequently their organiza-
tions underperform. Companies must encour-
age communities of passion by allowing indi-
viduals to find a higher calling within their
work lives, by helping to connect employees
who share similar passions, and by better
aligning the organization’s objectives with the
natural interests of its people.

Retool management for an open world.
Emerging business models increasingly rely on
value-creating networks and forms of social
production that transcend organizational
boundaries. In these environments, manage-
ment tools that rely on the use of positional
power are likely to be ineffective or counter-
productive. In a network of volunteers or le-
gally independent agents, the “leader” has to
energize and enlarge the community rather
than manage it from above. Success therefore
requires developing new approaches to mobi-
lizing and coordinating human efforts.

Humanize the language and practice of
business. The goals of management are usu-
ally described in words like “efficiency,” “ad-
vantage,” “value,” “superiority,” “focus,” and
“differentiation.” Important as these objec-
tives are, they lack the power to rouse human
hearts. To create organizations that are almost
human in their capacity to adapt, innovate,
and engage, management pioneers must find
ways to infuse mundane business activities
with deeper, soul-stirring ideals, such as

honor, truth, love, justice, and beauty. These
timeless virtues have long inspired human be-
ings to extraordinary accomplishment and can
no longer be relegated to the fringes of man-
agement.

Retrain managerial minds. Management
training has traditionally focused on helping
leaders develop a particular portfolio of cogni-
tive skills: left-brain thinking, deductive reason-
ing, analytical problem solving, and solutions
engineering. Tomorrow’s managers will require
new skills, among them reflective or double-
loop learning, systems-based thinking, creative
problem solving, and values-driven thinking.
Business schools and companies must redesign
training programs to help executives develop
such skills and reorient management systems
to encourage their application.

Transcending Trade-Offs
Making progress on these moon shots will
help de-bureaucratize organizations and un-
shackle human capabilities. The goal, though,
is to overcome the limits of today’s manage-
ment practices without losing the benefits
they confer. It would make no sense to find a
cure for insularity and inertia, for example, if
the side effects were imprudence and ineffi-
ciency. Organizations must become a lot more
adaptable, innovative, and inspiring without
getting any less focused, disciplined, or perfor-
mance oriented.

Resolving this paradox will require making a
clear distinction between ends and means. Ex-
ecutives often defend timeworn practices be-
cause they can’t imagine less bureaucratic ways
of accomplishing goals. For example, many
companies have detailed policies governing
business travel. Employees must get permis-
sion before embarking on a trip, abide by strict
spending limits, and submit travel expenses for
approval. Few would argue with the goal of
keeping travel costs in check, but there may be
less bureaucratic ways of doing that. One ap-
proach might be to publish every employee’s
expense report on the company’s intranet and
rely on peer pressure to rein in profligate
spenders. Transparency is often just as effec-
tive as a rigidly applied rule book and is usu-
ally more flexible and less expensive to admin-
ister. Remember the public furor in September
2008 when AIG executives blew $440,000 at a
posh resort days after the insurance company
received an $85 billion bailout from the U.S.

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harvard business review • february 2009 page 9

government? AIG’s executives are unlikely to
be so lavish again.

Nevertheless, anyone who stood slack-jawed
as the flames of greed consumed the investment-
banking industry last year can be forgiven for
wondering if the problem wasn’t too little bu-
reaucracy. After all, the machinery of bureau-
cracy—detailed operating procedures, narrowly
defined roles, close supervision, and clear ap-
proval criteria—keeps employees in check. Un-
doubtedly, everyone would be better off today if
bonus-chasing bankers had been kept on a
shorter leash.

Control is critical, but all too often it
comes at the cost of initiative, creativity, and
passion—the essential building blocks of or-
ganizational success. In dynamic environ-
ments, like the hair-trigger world of modern
finance, decision-making authority has to be
distributed, so control has to come mostly
from organizational norms, not sclerotic
review procedures.

Centralization and draconian controls are
probably not the best ways of tackling injudi-
cious risk taking in the long run. Those on the
front lines—the “rocket scientists” who create
and sell exotic financial instruments—must be
accountable for the impact of their actions on
balance sheet risk and banks’ medium-term
profitability. In recent years, though, they have
been responsible for little more than shoveling
products out the door. Bankers need incentives
that require them to take a longer-term view of
success. They must see themselves as stewards,
responsible for safeguarding the interests of all
those who put trust in them, rather than as
mercenaries, motivated only by million-dollar
payouts. Control from within rather than from
without, time frames that extend beyond the
next 12 months, serving a higher purpose, the
ethos of community—these moon shots will
be the key components of any long-term alter-
native to the binge-and-purge cycle that has
characterized the U.S. financial services indus-
try for most of the last century.

• • •
Not all the moon shots are new; many address
problems that are endemic in large organiza-
tions. The purpose of highlighting them is to in-
spire new solutions to long-simmering prob-
lems. The Gates Foundation has devoted itself
to eradicating malaria, which is hardly a new
goal. Yet the people leading the charge believe
that new ideas, new therapies, and new delivery

systems will eventually yield historic gains. In
like vein, new minds unencumbered by old be-
liefs and new tools of the sort that have pow-
ered a social revolution on the web may help us
escape the limitations of tradition-encrusted
management practices.

The aim of Management 2.0 is to make
every organization as genuinely human as the
people who work there. People are adaptable:
Every day, thousands of individuals cross conti-
nents to take on new jobs, go back to school to
acquire new skills, start fresh careers in midlife,
or navigate their way through family crises.
People are innovative: Every day, there are mil-
lions who post new blog entries, invent new
recipes, write poems, or redecorate their
homes. People are community minded: Think
of all the folks you know who volunteer at
their kids’ schools, help at local hospitals,
coach junior-league sports teams, or do the
shopping for housebound neighbors. Tragi-
cally, the technology of management fre-
quently drains organizations of the very quali-
ties that make us human: our vitality,
ingenuity, and sense of kinship. What compa-
nies once regarded as merely a moral impera-
tive—creating organizations that are genu-
inely human—has become an inescapable
business imperative.

This is a daunting challenge, but take heart.
The first management pioneers had to turn
freethinking, bloody-minded human beings
into obedient, forelock-tugging employees.
They were working against the grain of human
nature. We, on the other hand, are working
with the grain. Our goal is to make organiza-
tions more human—not less. McCallum, Tay-
lor, and Ford would envy us this opportunity.

Note: Visit vovici.com/wsb.dll/s/1549g38fd2 on
the HBR website or managementlab.org/future
at The Management Lab website, and you will
find a list of the 25 challenges. Click on them,
and you can help decide how important it is that
organizations make progress on each challenge.
You can also rate the progress that your organi-
zation has already made and identify the most
significant barriers to making further progress.
Join us in inventing the future of management.

Reprint R0902H
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This document is authorized for use only by Phenekia Morgan in MGMT-6635-2/MMSL-6620-2/COMM-6505-2/WMBA-6020-2/WMBA-6020B-2-Foster a Culture of Innovation2020 Spring Sem
01/06-04/26-PT2 at Laureate Education – Walden University, 2020.

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