The term Thinking Corporation applies to any organisation that accepts the basic truth that all people
have the ability to create their own futures. In accepting this, they provide for everyone to be successful
in the realisation of their own vision through culture, systems and processes that facilitate the
implementation of employee generated ideas." - From the book, "The Thinking Corporation" by David
Why Make the Change?
Many of the developed economies are struggling with low growth and unemployment. Countries that
used to lead the world are ranking between 130 to 160 in GDP growth and many of their citizens are
trying to adapt to a lifestyle to suit their new income, or lack of it. So we see from these two examples
that the current system is no longer working and needs to be adjusted.
There are many academics, politicians, business leaders and members of the public that view innovation
as a way to move forward, start clearing the debt and generate a better life for all. The issue to date has
been to answer the question, how. How do you successfully generate, capture, process and implement
The benefit of becoming an organization that is capable of answering this question is not only helping
with the big economic picture, but also accrues its own benefits. Such as:
Growth through innovation/ creativity
Rather than be constrained by the ideas for new products, services and new markets coming from just a
few people, A Thinking Corporation can tap into the creativity of all employees. This means that it has a
never-ending flow of ideas from which to select those that best fit the strategic plan.
Having the ability to harvest new ideas, the corporation will experience an increase in profits following
sales from new ventures. Naturally, the organization must allow for the lead-time for new ideas to make
the transformation from cost to profit. Given a continuous flow of ideas, the issue of managing the
lead-time is only an issue in the early stages as momentum takes care of the longer-term.
Higher entity values
The hard link between profits and entity values means that the moment a corporation creates a new
sustainable level of profit, the entity value follows. This provides a real opportunity for public companies
to provide long-term shareholder value and private companies to create wealth for owners and
Lower staff turnover
A Thinking Corporation will provide employees with fair and reasonable remuneration for their
implemented ideas. This combined with the culture that must exist for innovation and creativity to
flourish, means that employees will be both attracted to the organization and stay longer.
Staffing costs can be reduced because many employees will be far more productive than they were
previously. They will be more productive because of the increased motivation and enthusiasm that
comes from planning and implementing their own ideas. Of course, this does not apply to every
employee, only those that chose to be part of the opportunity that this new generation of corporate
culture and behaviour presents to them.
Steps to Becoming A Thinking Corporation
The management of any corporation that is considering making this transition must genuinely value
employees and the contributions that they are capable of making. Senior management must also be
open to the view that the organization is not receiving the full value of what employees have to offer
because the work environment is not one that encourages innovation and creativity.
One of the first steps is to understand exactly where the organization currently fits along a continuum
for each of seventeen criteria that need to be present for organizations to successfully generate and
process innovation. This diagnosis provides the data to customize the transformation for each
The very next step is one of education. That is ensuring that all people within the organization have the
same understanding of what the new way of working will be, including the reasons for the change and
how it will be executed. Along with this education program comes the changes in culture that will create
the working environment within which people will be happy to part with their precious ideas.
Some structural changes may also be necessary to ensure that the right people are in the right jobs and
that work groups are effective. According to the results of the diagnostics phase, it may also be
necessary to close some departments if they are not directly producing results, or supporting those that
Finally, the corporation will install methods to capture, process and implement new ideas and carry out
the training that goes along with this phase.
Transformation of the current form of corporations into A Thinking Corporation requires senior
managers, Directors and owners of businesses to question the validity of some long-standing business
paradigms. These are the reasons for resistance.
Management is better at thinking than employees
As ridiculous as it sounds, most corporations are still structured around this paradigm. This is despite the
fact that employees are entering the work-force with high levels of tertiary training and therefore have
minds that are geared to investigating, interpreting and recommending. Also, the relationship between
thought, action and results is becoming much better understood within the majority of the population.
All Intellectual Property (I.P.) is the property of the Corporation
This is a real sticking point to employees parting with their ideas and corporations being prepared to
acknowledge some degree of ownership. Corporations will generally consider that all ideas that come
from employees are the property of the organization. No wonder they do not receive too many ideas.
Only a small percentage of people would part with an idea that is capable of producing significant
results under these circumstances.
Only the most senior people can earn large incomes
Although it is not uncommon to find executives who earn in excess of $1 million, it would be extremely
rare to find a person in a normal functional role with anywhere near this level of income. This is fine
providing that the executives are producing the results for the organization. What about the case where
a warehouse employee saves the company $25 million per annum in costs through new ideas on
material handling? What about the Account Manager that creates a whole new product line that added
$40 million in gross margin from one year to the next? Could there be more cases like this if people
received fair and reasonable remuneration for implemented ideas?
The case for corporations to change is quite strong. Apart from the economic reasons, we hear cries for
corporate responsibility in relation to large-scale accidents and their attitude towards our environment.
The population is growing tired of seeing huge salaries, payouts and profits when so many people are
Corporations have the infrastructure, resources, access to capital and global presence to really make a
difference. Within their ranks they have people who are busting with ideas and are contained within an
environment that is pro conformity, rather than encouraging brave, entrepreneurial innovations. Yet,
we hear managers openly stating that innovation is the answer.
If the changes that are required to assist individuals, economies and our environment also produce
increased profits and entity values, why not make those changes. For some it will be the issue of
mentally overcoming the key resistance factors. For others it is realizing how to go about it with minimal
risk and disruption to the organization. One thing though is definite and well stated by Albert Einstein
when he said "We can't solve problems by using the same kind of thinking we used when we created