ACE INSTITUTE OF MANAGEMENT

Critical Thinking
Harvard Business Review
Deep Change
“How Operational Innovation Can Transform Your Company “Michael Hammer”

Submitted By: Subash Thapa Magar

MBAe Spring 2018

Sec: A

31st Jan 2020

Harvard Business Review
Deep Change
How Operational Innovation Can Transform Your Company “Michael
Hammer”
In the article, Michael Hammer has been able to define the importance of operations
management referring to Progressive insurance, an automobile insurer whose growth came “Not
through acquisitions or mergers” but through: Substantial innovations in everyday operations,
revealing their potential to produce significant reductions in cost, increase in productivity,
improved customer satisfaction. It explains operational innovation definitely have its effects on
business. Observing companies like Progressive, Wal-Mart and Toyota this article explains how
a company could implement operational innovation; in the end proving to be much more
valuable than the loud and exciting short term changes several companies indulge in today.

We can get the extract from the article that in today's information development era, potential to
pursue innovations lies in two areas: development and operations.
Most operational innovations in grassroots efforts began by people who care about finding
opportunities to improve processes. Offshore outsourcing, reductions in force, budget cuts—all
these provide us with incentive to search for new ways of doing business.
However, one of the limitations for operational innovation is responding to the demands of the
product release cycle deadlines. Yet, the most spectacular operational innovations come under
pressure. The ways that Hammer listed would help to discover new ways, not just better ways, of
operating are: Benchmark with companies outside your industry – a bank can learn customer
service from a hotel, identify the assumptions that constrain how you think about your work, turn
special cases into everyday actions, and rethink critical dimensions of work.
The author has discussed the best way to implement operational innovations. For instance,
because they are disruptive by nature, projects should be concentrated in those activities with the
greatest impact on enterprise strategic goals.
Operational innovation is a lasting basis for superior performance. If we understand how
operational innovation happens and understand the barriers that prevent it from happening, it can
add on to competitive edge of the company.
 Any successful operational innovation should examine following seven key dimensions
of work:
1. What results are required to be delivered?
2. Who should do the work?
3. Where the work should be done?
4. When should the work be done?
5. Does the work or all aspects of it need to be done at all?
6. What information must be provided to the performers?
7. How thoroughly does each aspect of the work need to be performed?

Innovations in operations can destroy competitor’s turnaround industries. Operational innovation

is truly deep change, affecting the very essence of a company: how its work is done.