Intelligent Economy

Is "competing on analytics" a management innovation worthy of Gary Hamel's "standards"?

Let's see... in his article "The Why, What, and How of Management Innovation," Hamel says:

"A management innovation creates long-lasting advantage when it meets at least one of three conditions:

1. It is based on a novel principle that challenges the orthodoxy
2. it is systemic, involving a range of processes and methods
3. it is part of a program of invention, where progress compounds over time"

Check, check, check.

Looks like "competing on analytics" meets all three conditions.

Hamel lists a dozen of the most noteworthy management innovations from 1900 to 2000:

1. Scientific management (time and motion studies)
2. Cost accounting and variance analysis
3. The commercial research laboratory (the industrialization of science)
4. ROI analysis and capital budgeting
5. Brand management
6. Large-scale project management
7. Divisionalization
8. Leadership development
9. Industry consortia (multicompany collaborative structures)
10. Radical decentralization (self-organization)
11. Formalized strategic analysis
12. Employee-driven problem solving

Losing out are the following:

- Skunk Works
- account management
- business process reengineering
- employee stock ownership plans.

Says Hamel: "There are more recent innovations that appear quite promising, such as knowledge management, open source development, and internal markets, but it’s too early to assess their lasting impact on the practice of management."

Let's add "competing on analytics" to the list.

The Intelligent Economy is, of course, not just about management innovation. Rather, it's about the process of continuous innovation - sometimes incremental, sometimes radical - with a fundamental focus on results. Not simply measurement, but the right measurements, often in real time... Decisions made not just on data, but on data models (David Maister has one we'll ask him to share with us one of these days).

Now let's apply this notion (competing on analytics) to every field, from branding to business activity management, from communities of practice to talent development, from physical (geographic) clusters to online global ecosystems.

Tom Davenport, you have a winner.