Share to Facebook Share to Twitter Share to Linkedin The blind leading the blind. In January 2025, the International Organization for Standardization (ISO) released ISO 56000:2025-01 which “defines terms for and establishes the fundamental concepts of innovation management.” The document, which is the product of many authors and endorsed by the standardization bodies in scores of countries, aspires to describe the concept for innovation in millions of organizations, public and private, around the world. It is said to be applicable to “all types of organizations, regardless of type, sector, maturity-level or size,” and “all types of innovations.” Its preparation is described below in Figure 4. There’s just one catch: the concepts being disseminated perpetuate the antiquated thinking of 20th century management. The concepts are already obsolete. Innovation Concepts Suitable For 1947, Not 2025 The new innovation concepts might have been a fit with the world of 1947, when ISO was founded. According to ISO 56000:2025, the role of management, particularly top management, is “to direct and control.” Innovative activities” are “often necessities.” Yet top management has no apparent role in enabling innovation. The principal reason for conducting “innovative activities” concerns “increasing revenues, growth and profitability, and reduce costs” (4.1.1), i.e. making more money for the company. In ISO 56000:2025, “addressing unmet needs and increasing the satisfaction of users, customers and citizens,” appear to be of secondary importance (4.1.1). “Supporting leaders to create a culture of innovation” is merely one of several “possible actions” (4.3.3.4). Concern for the centrality and urgency of innovation for customers is hard to detect. Ten Key Things Missing in ISO 56000:2025 Innovation Concepts Symptomatic of the innovation concepts is the astonishing fact that the internet is not mentioned, even once. Nor are “business models” and “network effects”. As a result, ISO 56000:2025-01 ignores the fact that the very meaning of management itself has undergone a paradigm shift. MORE FOR YOU Here’s Where Trump’s Government Layoffs Are—As Firings At FAA Begin How Apple’s iPhone SE Can Change Smartphones Forever Apple iPhone SE 4 Release Date: Your Final, Complete Guide To What And When Key things missing in ISO 56000:2025 include: 1. That the internet gives firms new capabilities to move faster and more nimbly. 2. That the internet enables new possibilities for innovation, 3. That the internet enables firms to generate much greater value for customers. 4. That firms must place the customer at the center. “Customer obsession” becomes obligatory, not just “a possible option.” 5. That these new capabilities require fundamentally different organizational structures: networks of competence tend to replace hierarchies of authority, as depicted in Figure 1. 6. That autonomous teams are creating more profitable and satisfying workplaces. (as shown by the results in Figure 3). thus replacing middle managers who in 20th century management directed and controlled lower level staff (as illustrated in Figure 2), 7. That the principal role of management changes fundamentally from “directing and controlling” to enabling the talents, capabilities, and creativity of those doing the work. 8. That the location of knowledge has shifted. Those doing the work are now often more knowledgeable and more competent in their area of expertise than their managers. 9. That new business models and management structures can create exponential network effects. 10. That competition has accelerated to the point where innovation no longer concerns “possible actions.” In effect, innovation within a new management paradigm becomes a requirement for organizations survival. The Only Valid Purpose Of A Business Today: To Create A Customer “There is only one valid definition of business purpose,” wrote Peter Drucker in 1954 in The Practice Of Management: “to create a customer.” Making money is a result, not the goal. For the next half century, firms paid little more than lip service to his insight. ISO 56000:2025 continues the lip service and treats customers as just another stakeholder. In the concept of innovation of ISO 56000:2025, “the purpose of innovation management is to realize value. Value is realized by the process of identifying, understanding and satisfying needs of interested parties.” (4.3.2.2) However, it is up to the top management to decide which “interested parties” are to receive value. No particular priority is given to customers. The “interested parties” receiving value could thus be the organization itself and its top executives, as in most slow-growing traditionally managed firms. By contrast, in the last quarter century, the fastest growing firms embrace generating value for customers as the primary goal of the firm. · Amazon talks of “customer obsession… long-term growth is best produced by putting the customer first:” Colin Bryar and Bill Carr in Working Backwards (2021). · Satya Nadella as the new CEO of Microsoft in 2014 set out to “build deeper empathy for our customers and their unarticulated and unmet needs.” Hit Refresh. · At Apple, “Customers rightly love Apple for the delight its products bring them:” Inside Apple. As Roger Martin wrote in his seminal 2010 HBR article: we are now in “The Age of Customer Capitalism.” Why Self-Organizing Teams Are Missing From ISO Concepts “Self-managed teams to promote creativity” are mentioned in ISO 56000:2025 as one “possible activity” but always within a context where the top management is “directing and controlling.” By contrast, once the fastest growing firms embraced the primacy of creating value for customers, it was natural that they would dis-aggregate big difficult problems into small batches and performed by cross-functional autonomous teams, working iteratively in short cycles in a state of flow, with fast feedback from customers and end-users. · As Satya Nadella explained in his book, Hit Refresh, “the key was “agility, agility, agility. We needed to develop speed, nimbleness, and athleticism to get the consumer experience right, not just once but daily.” · Amazon discovered the importance of single-threaded teams that minimizes internal -organizational dependencies. The Need For Networks Of Competence In The Concept Of Innovation Given the assumption in ISO 560000-2025 that top management directs and controls, it is unsurprising that the use of networks of competence to run an entire organization is not mentioned. In ISO 560000-2025, innovation is assumed to take place under hierarchy of authority, where the top decides what kind of innovation is to take place. There is no recognition that under the direction and control of hierarchies of authority, intrapreneurs and Agile teams tend not to thrive for long. By contrast, the fastest growing firms have mostly shifted towards networks of competence with defined interfaces among the self-organizing teams. Figure 1: Hierarchies of authority vs networks of competence Stephen Denning The Need For New Mindsets to Transform The Firm’s Processes In ISO 56000:2025, “the system” comes first, as Frederick Taylor prophesied back in 1911. ‘The system” was the basis of the gains of the 20th century economy. Careers were built on it. Business schools continue to teach it. The system, in the form of processes and methods, rule supreme. And so it is still the case in ISO 56000:2025-1, published in January 2025. By contrast, in the last quarter century, the fastest growing firms have abandoned the primacy of “the system” and deploy mindsets, values and culture to reorient and drive systems and processes. For instance: · Now the new mindsets and mental models help repurpose every process to support customer obsession and continuous innovation. · Leadership is not just the province of the top. Now everyone is a leader. · With new mindsets, HR can escape from its traditional role as a top-management controller and become a function that enables individuals to create more value for customers. · Budgeting can be rescued from its unproductive “battle among the silos” to one of enhancing value creation. A key feature the new management is its ability to achieve integrative customer outcomes, rather than limited process-driven objectives, or departmental functional goals. There is little sign of that integration in ISO 56000-2025. The New Management Paradigm Is Missing From ISO 56000:2025 The new management paradigm has demonstrated its capacity in firms of all sizes in multiple sectors to innovate more quickly, operate more efficiently, mobilize more resources, attract more talent, and use it more effectively, win over customers more readily, and raise more money for new endeavors. We as customers have mostly embraced their products and services, which have changed how we work, how we play, how we live. Although organizations are currently on different maturity levels, it is disappointing that the terminology inf ISO 56000:2025 gives no hint of what is under way in innovation in the world’s fastest growing firms, It is hard to see how firms can transition to the future if they do not have a clear picture of where they are now, and where the best performing firms are already implementing. And read also: Figure 2: The traditional concept of management in a hierarchy of authority Stephen Denning Figure 3: Networks of competence with sustained innovation Stephen Denning; Seeking Alpha Figure0 4: Preparation of ISO 56000:2025-01 Stephen Denning Follow me on Twitter or LinkedIn. Check out my website or some of my other work here. Steve Denning Editorial Standards Forbes Accolades