In an effort to move from academic discussion of innovation and productivity to examples in the real world, I'd like to take a moment and discuss the recent reorganization of AOL. In the news on Tuesday, November 9, AOL announced some sweeping changes to its organizational structure. Three senior executives and over 700 people will lose their jobs.
Why? AOL has been critized for "moving too slowly and not doing enough to foster teamwork". That's direct from the Washington Post. Now, if an internet company that introduced one of the most significant changes in the way we live and work can become sluggish in decision making and fail to establish strong team work, any firm can catch this virus.
Jon Miller, the CEO, continued to say "We are going to try to be much crisper in decision-making." Further on he is quoted as saying the changes are aimed at facilitating faster decision making and speeder implementation of initiatives.
Good execution and productivity relies on clear lines of responsibility, fast decision making and the quick, successful implementation of ideas and initiatives. AOL has recognized that its structure and decision making has gotten in the way of productivity and innovation and is structuring itself to become lean and fast again.
The point I want to make in highlighting this story is that the need to continually improve productivity and innovation strikes not just at the "old" economy firms like manufacturers, but at all firms regardless of their "old economy" or "new economy" status.