Radical Management. Steve Denning.

Size: px

Start display at page:

Download "Radical Management. Steve Denning."

Norman Jenkins
5 years ago
Views:

1 Radical Management Steve Denning

2 Video Radical Management Explaining the idea in sixty seconds

4 1978 Robert McNamara President, Ford Motor Company, 1960 Secretary of Defence, President, World Bank, the smartest man I ever met John F. Kennedy

5 A knowledge management program was launched

6 Teaching the Fortune 500 how to use the power of leadership storytelling Why doesn t it stick?

7 One clue

8 It s not just leadership storytelling! Knowledge management Not just the World Bank BP Ernst & Young Within IBM a few years, it had been HP put on a back-burner

9 It s not just leadership storytelling! Lean Manufacturing Only 1% of lean initiatives meet their goals. Jeffrey Liker

10 It s not just leadership storytelling! Marketing 25 ways in which traditional management systematically kills great marketing ideas

11 It s not just leadership storytelling! Innovation How management systematically kills disruptive innovation

12 2008 The question was broader Why did management systematically kill all the creative things in organizations? knowledge management? lean manufacturing? innovation? marketing? leadership storytelling? even Agile and Scrum

13 Most management textbooks Most business schools Traditional management rests on five interlocking principles

14 Five planks of traditional management 1. The purpose of a firm is to produce outputs that make money

15 Five planks of traditional management 2. Managers act as controllers of individuals

16 Five planks of traditional management 3. Work is coordinated by hierarchy and bureaucracy Rules plans reports

17 Five planks of traditional management 4. The main thing is efficiency

18 Five planks of traditional management 5. Communicate by directives

19 The shifts are interlocking & self-reinforcing Top down commands Make money for shareholders Managers are controllers of indivduals Efficiency, cost cutting Bureaucracy: rules, plans, reports Single fix improvements make no impact

20 the smartest man I ever met John F. Kennedy Five planks of traditional management Traditional management practices are a success

2009: Conclusive proof of the failure of traditional management 1965 Today The rate of return on assets has fallen by 75% since 1965 The life expectancy of

21 2009: Conclusive proof of the failure of traditional management 1965 Today 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 Source: Deloitte s Center for the Edge: The Shift Index

22 2009: Conclusive proof of the failure of traditional management Source: Deloitte s Center for the Edge

23 Many are now concluding: Management is broken!

24 What we have now Failing firms Dispirited employees Frustrated customers Lose-lose-lose!

25 What we have now: tradeoffs Quality Speed Efficiency The iron triangle

26 Implication for organizational survival: The significant problems we have cannot be solved at the same level of thinking with which we created them. Albert Einstein We have to think differently!

27 What is needed: win-win-win Quality Speed Efficiency No trade-offs!

28 What we need Thriving firms Deep job satisfaction Delighted customers Win-win-win!

29 We know how to achieve this: 5 big shifts ( and 70+ practices)!

customers Role From controller to enabler Radical

30 The shifts are interlocking & self-reinforcing Goal Communications From command to conversations Delighting customers Role From controller to enabler Radical transparency Values From bureaucracy to dynamic linking Accountability

31 11. NEW GOAL: delight the customers from outputs to outcomes 1. Delight the customer!

32 Practices for creating customer delight Customer delight is not a new idea: Ancient Romans e.g. Vitruvius s treatise on architecture

33 Practices for creating customer delight Is customer delight a serious business proposition? Customer delight = Providing a continuous stream of additional value to customers and delivering it sooner

34 Practices for creating customer delight Is customer delight a serious business proposition? happiness enchantment joy

35 Practices for creating customer delight Is customer delight a serious business proposition? customer success customer trust in us Net Promoter Score

36 11. NEW GOAL: delight the customers from outputs to outcomes Produce outputs Generate outcomes

37 11. NEW GOAL: delight the customers i.e. from outputs to outcomes An epochal shift in the balance of power in the marketplace: The customer is now the boss! Sorry about that!

38 11. NEW GOAL: delight the customers i.e. from outputs to outcomes The bottom line for business Make money Delight the customer

39 11. NEW GOAL: delight the customers i.e. from outputs to outcomes You take what we make! We want to understand & help solve your problems!

40 11. NEW GOAL: delight the customers i.e. from outputs to outcomes This changes the game completely Outputs Outcomes Things People

41 11. NEW GOAL: delight the customers i.e. from outputs to outcomes A paradoxical discovery! Customer delight Costs come down of their own accord!

42 11. NEW GOAL: delight the customers i.e. from outputs to outcomes The goal is: delighting the customer Making money is not the goal Being agile is not the goal. Working software is not the goal. Agile & Scrum & working software are means to achieving the goal. Everyone must focus on the goal

43 11. NEW GOAL: delight the customers i.e. from outputs to outcomes Deliver it sooner! In a bureaucracy, large amounts of work wait in queues

44 11. NEW GOAL: delight the customers i.e. from outputs to outcomes Aim for the simplest thing! LESS IS MORE! 20 th Century 54 buttons Complicated 21 st Century 4 buttons Simple Easy to use DVD controller ipod

45 11. NEW GOAL: delight the customers i.e. from outputs to outcomes Make delighting the customers explicit! The sad story of Zappos

46 11. NEW GOAL: delight the customers i.e. from outputs to outcomes Is customer delight a serious business proposition? Customer delight is measurable.

47 11. NEW GOAL: delight the customers i.e. from outputs to outcomes Customer delight is the firm s new bottom line Making money is the result of the firm s actions, not the goal. By focusing on delighting the customer, Apple & Amazon make more money than they would if they set out to make money.

48 Why it is inexorable It makes much more money

49 11. NEW GOAL: delight the customers i.e. from outputs to outcomes 1. 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

50 22. NEW MANAGER ROLE: from controller to enabler 2. Enable self-organizing teams

51 22. NEW MANAGER ROLE: from controller to enabler Bureaucracy can produce outputs Bureaucracy cannot generate outcomes

52 22. NEW MANAGER ROLE: from controller to enabler Controller of individuals Enabler of selforganizing teams

53 22. NEW MANAGER ROLE: from controller to enabler Diversity defeats intelligence! The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies by Scott E. Page

54 22. NEW MANAGER ROLE: from controller to enabler Hire Forget IQ: The Emerging Science of Collective Intelligence women, not Einsteins! (Or female Einsteins) When women are 60% of talent and 90% of customers, it s not diversity: it s the future.

55 33. COORDINATION: From bureaucracy to dynamic linking 3. Dynamic linking

56 33. COORDINATION OF WORK: Dynamic linking Short cycles Client driven Hierarchical bureaucracy Dynamic linking

57 33. COORDINATION OF WORK: Dynamic linking Dynamic linking: work in short cycles Even lumpy work! E.g. Quadrant Homes Naval radar system Polaris submarines

58 33. COORDINATION OF WORK: Dynamic linking Progress is measured by direct client feedback The case of Eric Ries: Most changes make things worse for the customer the missing button

59 33. COORDINATION OF WORK: Dynamic linking Define work goals in the form of user stories Joie de Vivre hotels: customer outcomes vs outputs As a hotel guest, I want a unique room that I have a home away from home. Work = making the story come true

60 33. COORDINATION OF WORK: Dynamic linking Managers role: Give employees a clear line of sight to the customers E.g. writing a book

61 44. FROM VALUE TO VALUES: radical transparency 4. From value to values

62 4 4. FROM VALUE TO VALUES: radical transparency Just do it Alan Mullaly CEO, Ford

63 4. FROM VALUE TO VALUES: continuous improvement Get the product out 1 million improvements each year 63

64 55. INTERACTIVE COMMUNICATON: conversation 5. From top-down To conversation

65 55. INTERACTIVE COMMUNICATON: conversation Commands kill motivation

66 55. INTERACTIVE COMMUNICATON: conversation Money kills inspiration

67 5 5. INTERACTIVE COMMUNICATON: conversation Top-down commands Peer-to-peer conversations

68 The shifts are interlocking & self-reinforcing Delighting customers From command to conversations From controller to enabler Radical transparency From bureaucracy to dynamic linking

69 WHAT S NEW: doing all at once From command to conversations Delighting customers From controller to enabler Radical transparency From bureaucracy to dynamic linking Individually, none of the shifts is new

70 Agile has focused on part of the agenda Delighting customers From command to conversations From controller to enabler Agile Radical transparency From bureaucracy to dynamic linking Agile has downplayed touchy feely stuff

71 Agile has focused on part of the agenda Delighting customers The driver From command to conversations From controller to enabler Agile Radical transparency From bureaucracy to dynamic linking Agile has downplayed touchy feely stuff

72 Agile has focused on part of the agenda The oil Delighting customers From command to conversations From controller to enabler Agile Radical transparency From bureaucracy to dynamic linking Agile has downplayed touchy feely stuff

73 Without all five pieces. Top-down commands Making money for shareholders From controller to enabler Agile Radical transparency From bureaucracy to dynamic linking an organization is at war with itself

74 The transition is inevitable Two- to four-times gains in productivity Economics will drive the change!

75 Change is inevitable

76 The opportunity for Scrum and Agile Lead the revolution! Embody the change Be the strategy (not support the strategy) Master leadership storytelling Challenge management to join the future Encourage others who share the vision Take charge of the future Let s move to the front of the bus!

77 The transition won t be easy The world s best plant: Ford s Hermosillo plant in Mexico 1990s: Ford s Romeo plant in Michigan : The new CEO, Allan Mullaly, embraces it

78 Reinventing management requires systemic change 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!

79 The real voyage of discovery consists not in seeking new landscapes, but in having new eyes. Marcel Proust Everything is different!

THE DEATH & Steve Denning REINVENTION OF MANAGEMENT WHY DO GREAT KM PROGRAMS FAIL?

THE DEATH & Steve Denning REINVENTION OF MANAGEMENT WHY DO GREAT KM PROGRAMS FAIL? THE DEATH & REINVENTION OF MANAGEMENT WHY DO GREAT KM PROGRAMS FAIL? Steve Denning www.stevedenning.com steve@stevedenning.com These slides are available at: http://www.stevedenning.com/slides/kmi-dec2010.pdf