CHAPTER 1

[check] The Power of Management Innovation

The opening years of the 21st century have provided great opportunities forcompanies that understand and respond to their new marketplaces and globalrequirements. These years have also shaken companies that have been slow torecognize and deal with the fundamental changes in the economic and socialforces that have created these opportunities.

Many companies have continued to develop as powerful agents of businessimprovement. Some have declined in growth and profitability.

Two basic characteristics stand out in the companies that are most successful inleadership and management: their quality of management and what we call theirmanagement capital.

Quality of management involves the leadership passion, the populism, and thedisciplined responsibility for sustaining and accelerating business growth andprofitability, particularly in the following ways:

• Customer value leadership including product and service that's a lock on thefuture

• Operating cost leadership for a company's economic strength

• Empowering a company culture of superior performance

Management capital is a company's overarching theme for effectivelyrecognizing, developing, accumulating, deploying, and measuring the capacity andeffectiveness of its total resources—hard assets and soft assets—toachieve these results in sustaining and accelerating growth and profitability.

One of the primary characteristics of this new 21st-century management is itsemphasis on innovation. This is characterized by theinstitutionalization, through infrastructure and integration, of constantmanagement innovation, which is also a necessary condition forsuccessful product and service research and development. The emphasis onsuccessful business innovation in pacesetter companies positions those companiesfor further innovation.

These 24 keys are intended to convey the essentials and the importance ofinnovation in driving business success in the 21st century, as presented in ourbook, The Power of Management Capital. We wrote our book to express andrecognize the modern field of management as a body of leadership, technological,behavioral, economic, and multinational knowledge. The application and value ofmodern management extend far beyond its origins in industrial businessoperations. Modern management is now also recognized as essential inorganizational performance ranging from education, government, and medicine tointernational bodies and technology. And smart innovation leads to success inall of these areas.

Our emphasis is on the application of new ways to improve results in anenormously demanding and brutally competitive economic, social, political, andinternational environment.

The Power of Management Innovation is intended for the men and women whoare responsible for the performance of their organizations, large andsmall—the people who can lead the drive for innovation.

"The opening years of the 21st century have been a shattering experience forcompanies that have been slow to recognize and deal with the fundamental changesin the economic and social demands but it has been a continuing opportunity forthose organizations that make management innovation a foundation of theirbusiness."

[beginstrikethrough]Innovate now and then]/endstrikethrough]

[check] Innovate constantly