1. Transforming the workplace
with
radical management
Steve Denning
Steve’s daily blog on Forbes
http://blogs.forbes.com/stevedenning/

2. Video
Radical Management
Explaining the idea in sixty seconds

4. Profit
belongs to
those who
delight
their
customers

5. Firms that
frustrate us
won’t
survive

6. All business
must
become
social

8. But
social
is
fragile

10. This was a
great
evening!

11. This was a
great It was pretty
evening! cool!

12. This was a
great It was pretty
evening! cool!

13. Money
kills
social

15. This was
wonderful
evening!

16. How much
do I owe
you for WTF!
tonight!

17. How much
do I owe € € What do
you for € you think
€
tonight!
€ € I am?
€ € € €
€ € €
€ €
€
€ € €
€ €
€ €

18. How much
do I owe € €
you for €
€
tonight!
€ €
€ € € €
€ € €
€ €
€
€ € €
€ €
€ €

19. Authority
also
kills
social

20. This was
wonderful!

21. Here are
your tasks
for the
next week!

22. Here’s your
program
for the WTF!
next week!

23. Who do
you think
you are?

24. Here’s your
program
for the
next week!

25. Three basic modes of human interaction
Social
€
€ €
Authority
€ €Money
Fiske, A. “The Elementary Forms of Sociality.” Psychological Review, 1992,

26. Three basic modes of human interaction
All All
countries Social cultures
€
€ €
Authority
€ €
Money
Fiske, A. “The Elementary Forms of Sociality.” Psychological Review, 1992,

27. Social is allergic to authority & money
Social
€ €
€
Authority
€
Money
€

28. 20th Century
management
was based on
authority &
money
€ €
€
Authority
€
Money
€

29. All business
must
become
social?

30. This doesn’t feel very social!

31. Authority

32. €
€ €€
€ €
Money
Authority

33. Expecting this… to handle this
Is like this… …trying to do this

34. This is
not a
person!
This is an ecosystem!

35. The ecosystem of traditional management
Make money
for
shareholders
Top down Managers are
commands controllers
of indivduals
Efficiency, Bureaucracy:
cost cutting rules, plans, reports

36. The ecosystem of traditional management
1. The purpose of a firm is to
make money

37. Fiveecosystem of traditional management
The planks of traditional management
2. Managers act as
controllers of individuals

38. The ecosystem of traditional management
3. Work is coordinated by
bureaucracy
Rules
plans
reports

39. The ecosystem of traditional management
4. The main value is efficiency

40. The ecosystem of traditional management
5. Communicate by directives

41. The ecosystem of traditional management
Goal
Make money
for
Communicatio
shareholders Role
ns
Top down Managers are
commands controllers
of indivduals
Efficiency, Bureaucracy:
cost cutting rules, plans, reports
Values Coordination
The elements are interlocking

42. The ecosystem of traditional management
It kills innovation
Traditional management
systematically kills
disruptive innovation

43. The ecosystem of traditional management
It kills lean manufacturing
“Only 1% of lean
initiatives meet their
goals.”
Jeffrey Liker

44. The ecosystem of traditional management
It kills Agile software development
“Only 20% of Scrum
initiatives are fully
successful.”
Jeff Sutherland

45. The ecosystem of traditional management
It kills marketing
25 ways in which
traditional management
systematically kills
great marketing ideas

46. The ecosystem of traditional management
It kills social business

47. The ecosystem of traditional management
Traditional management
systematically kills
all the creative things
in organizations
• innovation
• lean manufacturing
• Agile software
• marketing
• social business

48. 2001: Firms dying faster & faster
Source: Richard Foster Creative Destruction (2001)

49. 2009: Conclusive proof of the
failure of traditional management
Rate of return on assets and invested capital: US firms: 1965-2011
Deloitte’s Center for the Edge: The Shift Index:

50. Declines are reflected in per capita GDP

51. A new ecosystem is emerging

52. A new ecosystem is emerging
A major management discovery
“Maximizing shareholder value is the
dumbest idea in the world.
Making money for the shareholders is
the result, not the goal.”
Jack Welch, 2009

53. A new ecosystem is emerging
The key to the future
“The only valid purpose of a
firm is to create a customer.”
Peter Drucker, 1973

54. A new ecosystem is emerging
Delighting
customers

55. Radical management
Goal
Delighting
customers
Role
Communicatio
ns From controller
From command to
to enabler
conversations
Transparency From bureaucracy to
From value
Improvement Agile, Scrum, Kanban
Sustainability
to values
Values Coordination
It is a different ecosystem

56. Radical management
Is “customer delight”
a serious business proposition?
“Providing a
“Customer delight” = continuous stream of
additional value to
customers and
delivering it sooner”

57. The principle of customer delight
Is “customer delight”
a serious business proposition?
“happiness” “enchantment” “joy” “raving fans”

58. The principle of customer delight
Is “customer delight” a serious business
proposition?
• Perfectly perform
the job that the
customer wants
performed

59. The principle of customer delight
Is “customer delight” a serious business
proposition?
• “customer
success”

60. The principle of customer delight
A paradoxical discovery!
Customer delight Costs come down of
their own accord!

61. This is why the shift is inexorable …
The economics will drive it …

62. 1. NEW GOAL: delight the customers
1 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

63. 2 NEW MANAGER ROLE: from controller to enabler
2.
2. Enable
self-organizing
teams

64. 2 NEW MANAGER ROLE: from controller to enabler
2.
Controller of Enabler of self-
individuals organizing teams

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

66. 33. COORDINATION OF WORK: Dynamic linking
Short
cycles
Client
driven
Flow
Bureaucracy: Dynamic linking
Internal plans, targets, Clear line of sight to customer
reports, meetings

67. 4 4. FROM VALUE TO VALUES: radical transparency
4. From value
to
values

68. 4 4. FROM VALUE TO VALUES: radical transparency
Preoccupation Human values
with efficiency, that build trust:
cutting costs especially transparency

69. 5. INTERACTIVE COMMUNICATON: conversation
5 INTERACTIVE COMMUNICATON: conversation
5.
5. From
top-down
to
conversation

70. 5 INTERACTIVE COMMUNICATON: conversation
5.
Commands
kill
motivation

71. 5 INTERACTIVE COMMUNICATON: conversation
5.
Money
kills
inspiration

72. 5 INTERACTIVE COMMUNICATON: conversation
5.
Top-down Peer-to-peer
commands conversations

73. WHAT’S NEW: doing all at once
Delight Goal
the
Communications
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

74. 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

75. 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!

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

77. These are not little differences…

78. The opportunity for Social Business
Lead 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

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