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McDonald's modernization efforts boosted 1Q sales

McDonald's modernization efforts boosted 1Q sales

McDonald’s Corp. said its ongoing efforts to modernize its menu and its restaurants, with a little help from an extra operating day and favorable weather, drove healthy gains in same-store sales and profit in the first quarter.

For the March 31-ended period, McDonald’s net income rose 5 percent to $1.27 billion, or $1.23 per share, compared with $1.21 billion, or $1.15 per share, a year earlier.

Revenue increased 7 percent to $6.55 billion in the first quarter compared with $6.11 billion a year earlier, reflecting a 7.3-percent rise in global same-store sales.

RELATED: McDonald's: Technology, menu optimization key in near term

Same-store sales increased 8.9 percent in the United States, which McDonald’s attributed to sales of core menu items, the Chicken McBites limited-time offer, sales lifts at reimaged locations and favorable weather. During the quarter, the chain also began advertising the Extra Value Menu, a new grouping of items whose prices sit between the Dollar Menu and Extra Value Meals.

Unfavorable weather and ongoing economic challenges from austerity measures negatively affected same-store sales in Europe, which rose 5 percent in the first quarter, McDonald’s said. As in previous quarters, sales in France and Germany contributed to the continent’s results, and McDonald’s noted strong performances in the United Kingdom and Russia, the latter of which would experience its first franchise growth push, the brand previously announced.

First-quarter same-store sales rose 5.5 percent in McDonald’s Asia/Pacific, Middle East and Africa, or APMEA division. Broad-based growth in Australia, China and Japan drove APMEA’s results, McDonald’s said.

“The ongoing strength of McDonald’s results, amid persistent economic headwinds, is a testament to our customer-focused plans and our proven business model,” said chief executive Jim Skinner, who will retire June 30 and will be succeeded by president Don Thompson. “We remain committed to the global priorities that are most impactful to our customers: evolving our menu, modernizing the customer experience and broadening accessibility to our brand.”

He added that global same-store sales are expected to increase about 4 percent for the month of April.

Oak Brook, Ill.-based McDonald’s Corp. owns or operates more than 33,000 restaurants in 119 countries, including more than 14,000 locations in the United States.

Contact Mark Brandau at [email protected]
Follow him on Twitter: @Mark_from_NRN


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


The Why, What, and How of Management Innovation

Breakthroughs in your company’s management processes—such as creation of intellectual property, brand building, talent development—deliver potent competitive advantages. By perfecting the industrial research laboratory, for example, General Electric won more patents than any other U.S. company. And by revolutionizing brand management, Procter & Gamble created a product portfolio that scores $1 billion in sales annually.

Yet most companies focus their innovation efforts on developing new offerings or achieving operational efficiencies—gains competitors quickly copy. To stay ahead of rivals, you must become a serial management innovator, systematically seeking breakthroughs in how your company executes crucial managerial processes.

The keys to serial management innovation? Tackle a big problem—as General Motors did by inventing the divisional structure to bring order to its sprawling family of companies. Search for radical management principles—as Visa’s founders did when they envisioned self-organization—and created the first non-stock, for-profit membership enterprise. Challenge conventional management beliefs, which Toyota did by deciding that frontline employees—not top executives—make the best process innovators.

You can’t afford to let rivals beat you to the next great management breakthrough. By becoming a serial management innovator, you cross new performance thresholds—and sustain your competitive edge.

To become a serial management innovator:

Commit to a Big Problem

The bigger the problem you’re facing, the bigger the innovation opportunity. To identify meaty problems, ask:

What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What other “either/or’s” can we turn into “and’s”?

What is our organization bad at? For instance, do we have trouble changing before we’re forced to? Unleashing first-line employees’ imaginations? Creating an inspiring work environment? Ensuring that bureaucracy doesn’t smother innovation? Imagine a “can’t do” that you can turn into a “can do.”

What challenges will the future hold for us? For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals?

Challenge Your Management Orthodoxies

Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue. Identify beliefs held in common. Then ask if these beliefs inhibit your ability to tackle the big problem you’ve identified. If so, consider alternative assumptions that could open the door to fresh insights. Example:

In your firm, common beliefs about change might include “change must start at the top.” But this belief may be toxic to your organization. Why? It makes employees assume that they can’t influence the company’s business model or strategy. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? “Change must start everywhere in our organization.”

Exploit the Power of Analogy

Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. Example:

If you seek ideas for funding ordinary employees’ glimmer-in-the-eye projects, study Bangladesh’s Grameen Bank. It makes micro-loans to poor people with no collateral requirement and little paperwork. Borrowers—which by 2004 numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea?

Click here for printable worksheets to test your management innovation.

Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?

Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past 100 years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.

Yet strangely enough, few companies have a well-honed process for continuous management innovation. Most businesses have a formal methodology for product innovation, and many have R&D groups that explore the frontiers of science. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.

Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? Let’s start with the why.


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