Overcoming innovation hurdles

One of the challenges to successful management or process innovation in an existing business is the array of organizational structures that are designed to keep current processes running smoothly — and, as a result, may resist changes.  In a recent blog post on The Wall Street Journal site, management thinker Gary Hamel offers a case study about an employee empowerment initiative at The Bank of New Zealand that illustrates this point well.

Hamel describes how, when the bank’s general manager for retail banking allowed one bank branch to set its own hours, word spread to other branches — and other managers soon also wanted to set their own branch opening and closing hours, to suit the needs of local markets. The general manager agreed to give the branch managers that freedom.

The challenge?  At headquarters, this change in policy resulted in concerns from HR, risk management, IT and corporate marketing. “While many of the objections [from headquarters functions] were more political than practical, some were well-grounded and soon led to policy adjustments,”  Hamel observes.  For example, to avoid objections from the bank’s union, branch managers were required to get employees’ agreement before changing a branch’s opening hours.

Hamel’s post is well worth reading, and it contains an implicit lesson for would-be management innovators in established companies: Keep in mind that, if you unleash change, institutional forces may resist it — and you may need to compromise with them and work with them.