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