Transforming the workplace with radical management Steve DenningPresentation Transcript
Transforming the workplace with radical management Steve Denning Steve’s daily blog on Forbes http://blogs.forbes.com/stevedenning/
VideoRadical ManagementExplaining the idea in sixty seconds
Profitbelongs tothose who delight theircustomers
Firms thatfrustrate us won’t survive
All business must become social
This was a great evening!
This was a great It was pretty evening! cool!
This was a great It was pretty evening! cool!
How much do I owe you for WTF! tonight!
How much do I owe € € What do you for € you think€ tonight! € € I am? € € € € € € € € € € € € € € € € €
How much do I owe € € you for €€ tonight! € € € € € € € € € € € € € € € € € € €
Authority also kills social
Here areyour tasks for thenext week!
Here’s your program for the WTF!next week!
Who doyou thinkyou are?
Here’s your program for thenext week!
Three basic modes of human interaction Social € € € Authority € €MoneyFiske, A. “The Elementary Forms of Sociality.” Psychological Review, 1992,
Three basic modes of human interaction All All countries Social cultures € € € Authority € € MoneyFiske, A. “The Elementary Forms of Sociality.” Psychological Review, 1992,
Social is allergic to authority & money Social € € € Authority € Money €
20th Centurymanagementwas based on authority & money € € € Authority € Money €
All business must become social?
This doesn’t feel very social!
€ € €€ € € MoneyAuthority
Expecting this… to handle thisIs like this… …trying to do this
This is not a person!This is an ecosystem!
The ecosystem of traditional management Make money for shareholders Top down Managers are commands controllers of indivduals Efficiency, Bureaucracy: cost cutting rules, plans, reports
The ecosystem of traditional management 1. The purpose of a firm is to make money
Fiveecosystem of traditional managementThe planks of traditional management 2. Managers act as controllers of individuals
The ecosystem of traditional management 3. Work is coordinated by bureaucracy Rules plans reports
The ecosystem of traditional management4. The main value is efficiency
The ecosystem of traditional management5. Communicate by directives
The ecosystem of traditional management Goal Make money forCommunicatio shareholders Role ns Top down Managers are commands controllers of indivduals Efficiency, Bureaucracy: cost cutting rules, plans, reports Values Coordination The elements are interlocking
The ecosystem of traditional management It kills innovation Traditional management systematically kills disruptive innovation
The ecosystem of traditional management It kills lean manufacturing “Only 1% of lean initiatives meet their goals.” Jeffrey Liker
The ecosystem of traditional managementIt kills Agile software development “Only 20% of Scrum initiatives are fully successful.” Jeff Sutherland
The ecosystem of traditional management It kills marketing 25 ways in which traditional management systematically kills great marketing ideas
The ecosystem of traditional management It kills social business
The ecosystem of traditional management Traditional management systematically kills all the creative things in organizations • innovation • lean manufacturing • Agile software • marketing • social business
2009: Conclusive proof of thefailure of traditional managementRate of return on assets and invested capital: US firms: 1965-2011 Deloitte’s Center for the Edge: The Shift Index:
Declines are reflected in per capita GDP
A new ecosystem is emerging
A new ecosystem is emergingA major management discovery“Maximizing shareholder value is thedumbest idea in the world.Making money for the shareholders isthe result, not the goal.” Jack Welch, 2009
A new ecosystem is emergingThe key to the future“The only valid purpose of afirm is to create a customer.” Peter Drucker, 1973
A new ecosystem is emerging Delighting customers
Radical management Goal Delighting customers RoleCommunicatio ns From controller From command to to enabler conversationsTransparency From bureaucracy to From valueImprovement Agile, Scrum, KanbanSustainability to values Values Coordination It is a different ecosystem
Radical management Is “customer delight” a serious business proposition? “Providing a“Customer delight” = continuous stream of additional value to customers and delivering it sooner”
The principle of customer delight Is “customer delight” a serious business proposition?“happiness” “enchantment” “joy” “raving fans”
The principle of customer delight Is “customer delight” a serious business proposition? • Perfectly perform the job that the customer wants performed
The principle of customer delight Is “customer delight” a serious business proposition? • “customer success”
The principle of customer delight A paradoxical discovery! Customer delight Costs come down of their own accord!
This is why the shift is inexorable … The economics will drive it …
1. NEW GOAL: delight the customers1 i.e. from outputs to outcomes1. New goal: “Delighting the customer” means …. a different way of running the organization. 2. New role for managers 3. New coordination mechanisms 4. Shift from value to values 5. New way to communicate
2 NEW MANAGER ROLE: from controller to enabler 2. 2. Enableself-organizing teams
2 NEW MANAGER ROLE: from controller to enabler 2. Controller of Enabler of self- individuals organizing teams
33. COORDINATION: From bureaucracy to dynamic linking 3. Dynamic linking
33. COORDINATION OF WORK: Dynamic linking Short cycles Client driven FlowBureaucracy: Dynamic linking Internal plans, targets, Clear line of sight to customer reports, meetings
4 4. FROM VALUE TO VALUES: radical transparency 4. From value to values
4 4. FROM VALUE TO VALUES: radical transparency Preoccupation Human values with efficiency, that build trust: cutting costs especially transparency
5. INTERACTIVE COMMUNICATON: conversation5 INTERACTIVE COMMUNICATON: conversation 5. 5. From top-down to conversation
WHAT’S NEW: doing all at once Delight Goal theCommunications customer Role From command to From controller conversations to enabler Radical From bureaucracy transparency to dynamic linking Values Coordination Individually, none of the shifts is new
Social conflicts with the traditional ecosystem Make money for shareholders Social Managers are controllers interaction of indivduals Efficiency, Bureaucracy: cost cutting rules, plans, reports This is not sustainable
Delighting customers means a new ecosystem “Once you introduce this, it affects everything in the organization—the way you plan, the way you manage, the way you work. Everything is different. It changes the game radically.” Mikkel Harbo VP, Systematic Software (Denmark) More than a new set of management tools!
The transition is inevitable Two- to four- times gains in productivityEconomics will drive the change!
These are not little differences…
The opportunity for Social BusinessLead the revolution! • Be the strategy (not support the strategy) • Master leadership storytelling • Educate your bosses • Join with others • Take charge of your future “Your time is limited: don’t waste it living someone else’s life.” Steve Jobs
The real voyage ofdiscovery consists not inseeking new landscapes,but in having new eyes. Marcel Proust