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In search of creative ideas

Creative ideas for new businesses should emerge from every level of a company, says Gary Hamel, author of Leading the Revolution.

Hamel works with companies on instilling a capacity for what he calls "radical innovation." He also is the author, with C.K. Prahalad, of a business classic, Competing for the Future.

Following are excerpts from a recent interview:

Q: Your earlier book was directed at the company. This one is directed at the individual. What happened?

HAMEL: The first book was really aimed for a rather senior audience, strategic planners and so on. This book is aimed at any individual anywhere who has a passion for creating something new.

Probably what has changed in my thinking is really two things. First, a realization that despite all the aphorisms to the contrary, change does not start at the top. As I began to look at how some really large companies had dramatically changed their identity and their sense of direction, more often than not it was not something that started at the top. It was started by people low down who lacked any kind of formal power.

And, second, there was a sense that many people in organizations had become cynical, frustrated, even angry, at the sense of not being in control. We've gotten an ever-greater gap between rhetoric and reality inside large companies. We no longer call employees "employees." We call them "associates" and "members" and so on, and yet they're more expendable than ever.

So the goal was to see if we couldn't begin to turn back the estrangement and cynicism so aptly symbolized by Dilbert.

Q: Your book talks about Silicon Valley, but not about start-ups. Aren't they revolutionary?

HAMEL: I think we've drawn a false dichotomy between old economy and new economy, which is not very helpful. Every new economy company is busily working to adopt the virtues of old economy companies. They're all trying to learn how to build a global infrastructure, how to build a world-class brand, how to achieve operational excellence, how to build up scale and size. Those are all things companies have been doing for the last hundred years.

On the other hand, all those old-economy companies are being forced to learn to continually reinvent themselves, to exploit the imagination of every employee, to substitute markets for hierarchies, and so on. Where we're headed is a synthesis between the virtues of new economy companies and old economy companies.

Q: You say innovation is everyone's challenge. How so?

HAMEL: If you went back to the 1950s and asked somebody where does quality come from, they would have said either from the artisan or from the inspector. It either came from somebody with magical hands making luxury goods or from somebody at the end of a production line weeding out the bad products.

Dr. Deming (W. Edwards Deming, an industrial consultant who theorized about quality control and emphasized teamwork and communication over competition) and a few others in the mid-'50s said it doesn't have to be this way. We can make quality everyone's job and improve quality enormously. It is hard to understand how radical that thought was.

I remember a meeting with Deming when he was presenting his ideas to the top management of one of America's big car companies. And the audience there literally thought he was nuts. They said: "Now tell us again, we're going to take people with eight years of formal education and teach them statistical process control? We're going to let employees stop a billion-dollar production line?" And of course now we take that for granted, but that would be radical at the time.

And today the challenge is not quality; the challenge is innovation. So we need to do for innovation what we did for quality.