Why KM Programs Fail
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Why KM Programs Fail

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    Why KM Programs Fail Why KM Programs Fail Presentation Transcript

    • The Reinvention of Management
      Why do great KM programs fail?
      Steve Denning
      www.stevedenning.com
      http://blogs.forbes.com/stevedenningsteve@stevedenning.com
      1
    • 1996-2000
      Knowledge management
      By all indicators, an apparent success
      “A world leader in KM”
      2
    • 2000-2008
      Knowledge management
      By all indicators, an apparent success
      Put on a back burner
      Not just the World Bank
      • BP
      • Ernst & Young
      • IBM
      • HP
      Within a few years, it had been put on a back-burner
      3
    • In 2008, I began exploring:
      Why do managers act this way?
      (These are highly intelligent, educated people!)
      4
    • 2008
      It’s not just KM
      Why did management systematically kill all the creative things in organizations?
      • knowledge management?
      • lean manufacturing?
      • innovation?
      • marketing?
      • leadership storytelling?
      5
    • 1978
      A second clue …
      Robert McNamara
      President, Ford Motor Company, 1960
      Secretary of Defence, 1961-1968
      President, World Bank, 1968-1981
      “the smartest man I ever met”
      John F. Kennedy
      6
    • Most management textbooks…
      Most business schools …
      Traditional management rests on seven shaky principles
      7
    • 7 planks of traditional management
      1. “The purpose of a firm is outputs”
      The firm produces “things”, i.e. goods or services
      World Bank
      = loans
      Today, customers have choices.
      Rapid change  firm makes wrong “things”
      People want: outcomes, not outputs.
      8
    • 7 planks of traditional management
      2. “Management’s main job: improve efficiency”
      Focus on squeezing costs:Getting bigger cost reductions Economies of scale
      Result is declining returns
      Today: we need organic growth
      Efficiency focus kills innovation
      9
    • 7 planks of traditional management
      3. “The customer can be manipulated”
      The World Bank will make more loans, whether countries want them or not.E.g. we prepare the loans for the countries
      Michael Porter: “Parse and manufacture demand”
      Today, the buyer is the boss
      Instant information available to all.
      Customers have choices.Customers communicate with each other
      10
    • 7 planks of traditional management
      4. “Staff are human resources that can also be manipulated”
      External incentives: carrot and sticks.
      Today, most work is knowledge work:Disengaged workers don’t produce their best.
      11
    • 7 planks of traditional management
      5. Communicate by directives
      Tell people what to do
      Knowledge workers don’t perform well when they are ordered around
      12
    • 7 planks of traditional management
      6. “Traditional management practices are self-evident”
      Management reflects timeless truths of the universe.
      Evidence of management dysfunction is inadmissible.
      Bad managers? Yes!Management itself is bad? Impossible!
      13
    • 7 planks of traditional management
      7. “Managers don’t ask questions”
      A. Zaleznik: Managers & Leaders: Are They Different? 
      1977 HBR
      The source of the Dilbert manager
      Managers focus attention on procedure, and not on substance.
      Managers communicate to subordinates indirectly by signals, rather than clearly stating a position.
      Managers play for time.
      14
    • The assumptions are interlocking
      Management principles are self-evident
      Management function is to squeeze out costs
      Managers don’task questions
      Purpose of a firm is to produce outputs
      Demand can be manufactured
      Communicate through commands
      “Human resources” can be manipulated
      The mental model is impervious to challenge!
      15
    • 2008
      Q. Why were allthe creative things in organizations systematically killed?
      • knowledge management?
      • lean manufacturing?
      • innovation?
      • marketing?
      • leadership storytelling?
      A. Management did it!
      16
    • 2009: Conclusive proof of the failure of traditional management
      • The rate of return on assets has fallen by 75% since 1965
      • The life expectancy of Fortune 500 firms down to 15 years, and is heading towards 5 years.
      • Only 1 in 5 workers fully engaged
      • In 1980-2005, established firms created zero net new jobs.
      1965
      Today
      Sources: Deloitte’s Center for the Edge: The Shift Index; Kauffman Foundation
      17
    • 2010
      Many writers are concluding:
      Management
      has failed!
      18
    • Although KM often makes temporary gains, eventually …
      Management kills KM
      KM isa low hangingfruit!
      • systematically
      • relentlessly
      • through business schools
      • through cost-cutting drives
      • despite claims to the contrary
      COO
      CFO
      19
    • What we have learned
      Our hope in 1996
      Traditional management culture: Top-down, authority based
      Traditional managementculture: Top-down, authority based
      Knowledge Management: horizontal, collaborative knowledge-based culture
      Knowledge Management: horizontal, collaborative knowledge-based culture
      The reality of 15 years in KM
      20
    • Break for discussion
      21
      Do you recognize the world of management I have just described?
      KM isa low hangingfruit!
      Yes?
      No?
      Not sure?
      COO
      21
      CFO
    • Implication for KM & organizational survival:
      We have to generate a culture of continuous innovation
      22
    • Five big shifts…and 70+ practices
      New goal for the organization
      New role for managers
      New coordination mechanisms
      Shift from value to values
      New way to communicate
      23
    • 1
      1. NEW GOAL: from outputs to outcomes i.e. delight the clients and stakeholders
      Deliver more value to customers sooner
      Shareholder Capitalism Tweak the supply chain Make money for shareholders
      The Age of Customer Capitalism
      We are entering
      Customer Capitalism
      Delighting customersThe customer becomes the bossMaking money is result, not goal
      Roger Martin, HBR Jan 2010
      24
    • 1
      1. NEW GOAL: from outputs to outcomes i.e. delight the clients and stakeholders
      Deliver more value to customers sooner
      Inside-out perspective Tweak the supply chain
      We are entering
      Outside-in perspective
      Understand the customer
      Solve the customer’s problems
      25
    • 1
      1. NEW GOAL: from outputs to outcomes i.e. delight the clients and stakeholders
      Not just satisfy them: Delight them!
      We are entering
      Everyone in the organization is focused on generating a continuous stream of added value sooner
      26
    • 1
      1 NEW GOAL: from outputs to outcomes i.e. delight the clients and stakeholders
      The convenience of “the system”
      Public sector equivalents of “delighting clients”
      Education: “students first”Health: “patients first”
      27
    • 1
      1 NEW GOAL: from outputs to outcomes i.e. delight the clients and stakeholders
      This changes the game completely
      Outcomes
      Outputs
      Complex
      People
      Simple
      Things
      28
    • 2
      2. NEW MANAGER ROLE: from controller to enabler
      • Control can’t delight customers
      • You can’t control knowledge work
      • Work is done in networks ofself-organizing teams
      • Teams are empowered to decide.
      • Teams report to clients, not managers
      • Managers: set goals, remove impediments
      29
    • 3
      3. COORDINATION OF WORK: Dynamic linking
      Boss driven
      Hierarchical bureaucracy
      Big plan
      Start
      Finish
      Shortcycles
      • Specify the goal, not how the work is done
      • Work in short cycles: reduce risk & increase agility.
      Client driven
      • Deliver value to clients each cycle (not reports).
      30
    • 4
      4. FROM VALUE TO VALUES: radical transparency
      Bureaucracy
      Make the numbers, come what may!
      Radical transparencyFacing the brutal reality
      Get to root causes
      31
      Alan Mullaly CEO, Ford
    • 4
      4. FROM VALUE TO VALUES: continuous improvement
      Bureaucracy = get the product out
      The status quo is never good enough
      Enable continuous improvement
      • Systematically identify impediments
      • Fix problems immediately
      • Identify and remove root causes
      32
    • 5
      5. INTERACTIVE COMMUNICATON: conversation
      Command and control
      • Adult to adult conversations
      • Storytelling
      • Open-ended questions
      • Springboard stories
      • User stories
      33
    • Two different mental models of management
      34
    • The shifts are self-reinforcing & interdependent
      Focus all work on delighting customers
      From command to conversations
      From controller to enabler
      From bureaucracy to dynamic linking
      Radical transparency
      35
      WHAT’S NEW: doing all at once
    • Where did these shifts begin?
      In 1980s, the approach began spreading among auto manufacturers (“Lean”)
      In mid-1990s, the approach began spreading to software development (“Agile”)
      You can see current exemplars in firms like Apple, AmazonandZappos
      36
    • The transition is inevitable
      Two- to four-times gains in productivity
      Economics will drive the change!
      37
    • The transition is inevitable
      Traditional management0% to -50%
      Radical management+1,000%
      Ten year share price
      38
    • The opportunity for KM
      Educate yourselves
       
       
      • Master the 5 principles and 70+ practices of radical management
      Spread the word
      • Disseminate the Shift Index
      • Disseminate the books that show how
      Become leaders of the new movement: inspire!
      39
    • The opportunity for KM
      Lead the revolution!
      • Embody the change yourself
      • Make your KM world a model
      • Learn to tell authentically true stories
      • Capture people’s imagination
      • Join with those who share the vision
      • Encourage and support them in their work
      40
    • Hang out with fellow revolutionaries:
      2 day workshop May 12-13, 2011
      Washington DC
      “Revolutionizing the world of work”
      “Join us to help reinvent the Fortune 500, government, & the health and education sectors”
      41