"Radical Management: Making the Workplace Safe for KM" by Steve Denning; Slides for SIKM January 19 2010.

1. Radical Management Creating A Safe Space for Knowledge Management Steve Denning Author of The Secret Language of Leadership and The Leader’s Guide to Storytelling www.stevedenning.com [email_address]

2. For several decades as a senior manager at the World Bank, I saw many good new ideas implemented. Each idea would flourish for a while, generating enthusiasm among the people doing it and benefits for the organization. Then suddenly, management would kill the idea. We would go back to business as usual. My experience at the World Bank Why?

4. “ Expectations have not been met.” “ The idea has not lived up to its promise.” “ Savings have to be made.” “ Fat has to be trimmed, and budgets cut.” “ A hard-nosed decision has to be taken.” “ The idea is out of line.” “ We are killing it for the organization’s own good.” The execution is always well intended …

5. Why do organizations act in this way? Why are the most productive, exciting and interesting activities systematically closed down? Why are so many clever, intelligent, well-educated people crushing the very things that are generating results for their organizations? For a long time, I have been wondering: why is this?

6. There must be, I thought, workplaces where things are going exceptionally well. Suppose we identify the conditions that had enabled that to happen. Suppose we then reverse-engineer those conditions. Could we create an environment that was persistently congenial to ideas that are lively, vibrant, exciting or different? Early in 2008, I began exploring: can we fix this?

7. I began by talking to people and asking them if they knew about a workplace that was really humming. I assumed that finding such experiences would be difficult—like searching for needles in a haystack. In fact almost everyone I talked to could tell me about an experience that they themselves had had. Typically, it wasn’t in their workplace of today. But in almost every case, they themselves had had an experience of this kind. My first big surprise:

8. An unusually high proportion of these extraordinary experiences were in software development. Initially, I didn’t pay this any attention. These were geeks! They spoke in a strange vocabulary. What could I possibly learn about management from from people who had gone into computing because they preferred machines to people? My second big surprise:

9. I visited some of the workplaces where software development was being managed in this different way. I met people who were managing the work and people who were doing the work. I took training. I met some of the leaders of the movement. I checked it out:

10. These people had figured out how to reproduce these peak work experiences on a routine, replicable basis. Innovation was occurring right and left Clients were being delighted. Workers were having fun. I didn’t need to invent this. It was already happening. The third big surprise: it was true!

11. It wasn’t limited to software development. It tended to spread other parts of the company, even the entire firm. It was also widespread in auto manufacture, particularly Toyota and Honda. Once I understood the principles, I started to see signs in many different sectors. The fourth big surprise:

15. Four big changes in the workplace Radical management has emerged as a result of…

16. 1. Semi-skilled work became knowledge work Traditional management was developed as a way of getting semi-skilled employees to perform repetitive activities competently, diligently and efficiently. Today the preponderance of work involves knowledge. The “workers” now include doctors, lawyers, accountants and researchers with Ph.D.’s. They are often better educated than their managers. This changes the relationship between those in charge and those doing the work.

17. 1. Semi-skilled work became knowledge work “ Workers throughout history could be ‘supervised’. They could be told what to do, how to do it, how fast to do it and so on. “ Knowledge workers cannot, in effect, be supervised. Unless they know more than anybody else in the organization, they are to all intents and purposes useless.” Peter. Drucker: Post-Capitalist Society, p. 65.

18. Percentage of workers (world-wide) fully engaged in their work: 21% “ Closing the Engagement Gap: A Road Map for Driving Superior Business Performance: Towers Perrin Global Workforce Study 2007-2008”. http://bit.ly/GTlIg 2. Workers are disengaged

19. 2. Workers are disengaged Gary Hamel: “ Initiative, creativity and passion are gifts. They are benefactions the employees choose, day by day, and moment by moment, to give or withhold. They can’t be commanded.” The Future of Management (2007) When the firm’s future depends on what knowledge workers can contribute, lack of full engagement is a serious productivity problem.

20. 3. Customers became frustrated The 20 th Century firm wasn’t sharply focused on pleasing customers. By and large, it wasn’t necessary. Customers are no longer willing to be treated as an afterthought. There is a fundamental shift in the balance of power from sellers to buyers. Now unless clients are delighted, they can—and will—go elsewhere. The firm has to change its focus from producing goods and services to an explicit goal of delighting clients.

21. 3. Customers became frustrated It’s no longer enough merely to remove defects. The bar has been raised. To turn customers into advocates and promoters of the firm’s goods and services, organizations must find new (and economical) ways to provide goods or services that are differentiated, noteworthy, surprising or remarkable. They must continuously innovate.

24. 4. Default management model has stalled The root cause is that the gains in productivity that came from conceiving work as a system of things that can be manipulated to produce goods and services has largely run its course. The productivity gains accomplished in the 20 th Century using that mental model of management were amazing. “ The system” has stopped giving. The reasons are corollaries of the other shifts.

25. Workers: Once a firm sets out to maximize the full talents, ingenuity and inspiration of its workforce, it discovers that it is interacting with people, not inanimate things that can be manipulated. Any hint of manipulation is counter-productive. Managers have to be able to inspire genuine enthusiasm for worthwhile goals. Customers : Once a firm sets its sights on the complex goal of delighting clients, it finds that it is dealing with a radically more complex challenge. Delighting clients is something that can only be approached by increasingly close approximations, but never fully attained or assured. 4. Default management model has stalled

27. Traditional management Radical management Delight clients (& stakeholders) Purpose of of the firm Produce goods and services Impact on employees Only 20% fully engaged THINGS High productivity & continuous innovation PEOPLE How managers communicate Top-down: Tell people what to do Interactive: stories, questions, conversations How work is structured Bureaucracy & hierarchy: Self-organizing teams How work is organized Single big plan: Client-driven iterations Transparency Tell people what they need to know Radical transparency:

28. Seven principles Seventy plus practices The principles are more important than the practices Focus on the principles: the practices will follow Principles and practices Implementation of radical management Delight clients Self-organizing teams Client-driven iterations Add value each iteration Radical transparency Continuous self-improvement Interactive communications

31. The meaning of radical management What is the meaning of radical management?

32. The meaning of radical management Most people enjoy delighting others. When they are in charge of their own behavior they take responsibility for it. When they are able to work on something worthwhile with others who enjoy doing the same thing, the group tends to get better. When people work in short cycles, everyone can see the impact of what is being done. When people are open about what is going on, problems get solved. Innovation occurs. Clients are surprised to find even their unexpressed desires are being met. Work becomes more fun than fun. Radical management is simple …

35. The meaning of radical management Radical management is more than a process. It is more than a system. It is more than a set of structures. It is more than a methodology. It’s a set of values, principles and practice s that spark the passion, the excitement, and the insights of the people who work there It ignites delight in those for whom the work is done. It also happens to be much more productive than traditional management.

36. Radical management Questions?

37. “ Radical Management” is a book that will be published by Jossey-Bass in November 2010 For more details, go to www.stevedenning.com Or contact Steve at [email_address]