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Date: Sunday, 26 Feb 2012 16:31

Mastering  the Paradigm Shift to Radical Managementsm

May 21-23, 2012 in Washington DC

Today’s white-water environment requires the entire organization to be agile. With the abrupt, unpredictable and simultaneous shifts in markets, customers, communications, technology, competitors, talent and regulatory frameworks, the entire organization must be nimble to survive, let alone prosper. In this three-day workshop (May 21-23, 2012 in Washington DC), you will find out how to accomplish the necessary paradigm shift in your organization.

The biggest secret in management today

Just over a decade ago, a set of major management breakthroughs occurred. These breakthroughs enabled software development teams to achieve both disciplined execution and continuous innovation, something that was hitherto impossible to accomplish with traditional management methods. Over the last decade, these management practices, under various labels such as Agile, Scrum, Kanban and Lean, have been field-tested and proven in thousands of organizations around the world. Radical managementsm distills, builds on and extends these principles, practices and values so that the entire organization can now achieve to apply the magic combination of disciplined execution and continuous innovation.

What will you learn in this workshop?

In this intensive, interactive three day Executive Education workshop, you will learn how to get beyond the rigidities of traditional management and acquire the breakthrough capabilities involved in making the entire organization agile. You will learn how to implement the elements of radical managementsm as an integrated whole so as to get extraordinary results for your organization, your customers and your workforce.

How will the learning take place?

You will receive both the theoretical grounding in the diverse principles and practices of radical managementsm and the hands-on experience of applying them to your organization. Learning through exercises, simulations, lectures, case studies and group discussions, you will emerge with a deeper understanding of the conceptual framework of Agile software development and radical managementsm and an enhanced capacity to make the necessary paradigm shift happen in your organization.

Who is right for this workshop?

Offering a career-changing experience for anyone dissatisfied with rigidities of traditional management, this leadership workshop is for

  • Agile leaders and coaches wanting to convert the entire organization to Agile,
  • business leaders needing to understand Agile management or achieve continuous innovation,
  • public sector leaders seeking the agility to “do more for less”, and
  • entrepreneurs wanting to grow their startups without losing agility.

Who is giving the workshop?

The workshop is given by:

  • Steve Denning draws on his award-winning book, The Leader’s Guide to Radical Management, his path-breaking work in leadership storytelling and long managerial background as a director at the World Bank.
  • Peter Stevens draws on deep international hands-on experience in Agile and Scrum transitions, extending the breakthrough principles of Agile management from software development to the entire organization.

This workshop is taking place on May 21-23, 2012 in Washington DC. Sign up here now http://radical-management.eventbrite.com/ and/or call Peter Stevens at 240-472-5615 to get more information and a special pricing deal (quote code SD1)

What are the workshop objectives?

In this workshop, you will learn how to take the breakthrough lessons of Agile software development and apply them systematically so as to transform the entire organization.

You will learn how organizations like your own that have figured out how to get continuous innovation, and deep job satisfaction and delighted customers, and do this sustainably, as the permanent way in which the organization runs, all at the same time

You will learn how to extract what is valuable in 20th Century management while supplementing that with the new leadership practices that are needed to operate successfully in the tumultuous world of the 21st Century.

You will undergo a voyage of discovery, in which you will learn and embody a way of thinking, speaking and acting that is radically more productive for customers, employees and the organization. You will accomplish this by learning how to operate in a world of no-tradeoffs: how to get outsized outcomes for the organization along with inspired workers and thrilled customers and stakeholders.

You will learn how to accomplish these gains while creating authenticity in the workplace, both for you, for the people you work with and for, and for the people who work for you and for the organization’s brand.

You will learn what’s happening in other organizations along with the broader global movement for management change, epitomized in the Agile Manifesto (2001) for software development and the Stoos Gathering (2012) for general management.

You will learn how to get beyond instances of agility that are usually short-lived. You will learn how to expand oases of continuous agility, particularly in software development with the advent of Agile, Scrum, Kanban and Lean and eliminate the conflicts with the general management practices within the firm as a whole.

To make the entire organization agile, you will learn than new management tools. You will learn how to put in place together the right strategic goals, the right managerial roles, the right way to coordinate work, the right Agile values and the right way to communicate.

Understanding and implementing the comprehensive array of changes involved in making the entire organization agile will help you master the paradigm shift in management that is needed to create continuous innovation, delighted customers, passionate employees, and extraordinary shareholder returns.

These shifts require more than learning a few new tools or processes. They constitute a basic change in the way think, speak and interact with each other.

What participants say

  • “Loved the exercises and activities”
  • “Really enjoyed the ideas behind it. I learned so much.”
  • “The high interaction and the moderation tools”
  • “It was great to have such variety in the different kinds of learning “I learned through leadership storytelling how to inspire desire for change”

This workshop is taking place on May 21-23, 2012 in Washington DC. Sign up here now http://radical-management.eventbrite.com/ and/or call Peter Stevens at 240-472-5615 to get more information and a special pricing deal (quote code SD1)

The principles: five fundamental shifts

This radical management workshop explores five fundamental shifts in management principles, each of which is based on many years of research and experience:

  • A shift in the firm’s bottom line from maximizing shareholder value to customer delight (in public sector organizations: it’s a shift from outputs to stakeholder outcomes)
  • A shift the role of managers from controllers to enablers.
  • A shift the coordination of work away from cumbersome bureaucracy (plans, reports, meetings) to agile linking of real work to customer outcomes.
  • A shift from solely economic value to the values that will grow your organization: transparency, continuous improvement and sustainability.
  • A shift communications from top-down commands to conversation.

A different way of measuring organizational performance

It involves a shift in measuring organizational performance from outputs to outcomes:

  • Measuring customer delight on any scale from one customer to a million customers, and using the measurement to enhance organizational results.
  • Measuring the goal of individual work teams in terms of customer delight, through user stories
  • Measuring the forgotten dimension of organizational performance: time.
  • Measuring organizational performance in real time through social media.

Although no single one of these shifts in itself is new, doing all of them together is requires a fundamental change in the way most organizations are led and managed. It’s not rocket science. It’s called radical management.

Because each of the shifts in management principles is reinforced and supported by scores of well-established management practices, the transformation is down-to-earth, practical and doable in your workplace.

Because none of the shifts individually is new, what you will learn is robust, Each is supported by years of experience and research.

How the workshop will unfold

The conduct of the workshop embodies the principles, practices and values that are being taught.

It’s a lively combination of presentation of the principles and practices along with their history and theoretical justification, an exploration of practical examples of the experiences of actual organizations and interactive exercises and conversations that will enhance experiential learning and discovery.

The participants learn from each other as well as from the instructors so that the workshop becomes a voyage of co-creation and mutual learning.

The workshop is designed to inspire learning in the deepest sense, enhancing your capacity to respond with complexity, compassion and authenticity to the daily dilemmas you face.

This workshop is taking place on May 21-23, 2012 in Washington DC. Sign up here now http://radical-management.eventbrite.com/ and/or call Peter Stevens at 240-472-5615 to get more information and a special pricing deal (quote code SD1)

Who’s giving the workshop?

Steve Denning

Steve Denning is a globally-recognized thought leader in leadership, management and innovation. His book, The Leader's Guide to Radical Management: Re-inventing the Workplace for the 21st Century (Jossey-Bass, 2010 was selected by 800-CE0-READ as one of the best five books on management in 2010.

Steve’s blog on Forbes attracts around half a million page-views per month. Read it here: http://blogs.forbes.com/stevedenning/

Steve’s article, "Rethinking The Organization" was as the Outstanding Article of 2010 in the journal Strategy & Leadership. His article, "Masterclass: The reinvention of management" was selected by the editors of Strategy & Leadership for the Outstanding Paper Award for 2011. 

From 1996 to 2000, Steve was the Program Director, Knowledge Management at the World Bank where he spearheaded the organizational knowledge sharing program. In November 2000, Steve Denning was selected as one of the world’s ten Most Admired Knowledge Leaders (Teleos).

Steve has written five other business books, including The Secret Language of Leadership (Jossey-Bass, 2007) and The Leader's Guide to Storytelling (Jossey-Bass, 2nd edition, 2011). He now works with organizations in the U.S., Europe, Asia and Australia on leadership, innovation, business narrative and most recently, radical management.

Web: www.stevedenning.com

Peter Stevens

Peter Stevens is an independent management trainer, coach, writer and community builder. His focus is on helping organizations thrive in the 21st century. Building on proven frameworks like Scrum, Radical Management, Management 3.0, and Kanban, he provides coaching and training to help you and your team manage and execute effectively while building products which delight your customers.

He writes the Scrum Breakfast blog and has been a regular contributor to the website:  AgileSoftwareDevelopment.com. His popular articles include 10 Contracts for Your Next Agile Software Project and Explaining Story Points to Management.

Peter started his career as a Software Engineer at Microsoft in 1982. He is the initiator of the Swiss Lean Agile Scrum Interest Group and works closely with leading Scrum trainers and coaches in Central Europe. Presently he is on sabbatical in Washington DC supporting the Wikispeed project and spreading the word on Radical Management.

This workshop is taking place on May 21-23, 2012 in Washington DC. Sign up here now http://radical-management.eventbrite.com/ and/or call Peter Stevens at 240-472-5615 to get more information and a special pricing deal (quote code SD1)

What specifically will you learn in this workshop?

Why 20th Century management fails

  • Why today’s business imperatives lie outside the performance envelope of today’s bureaucracy-infused management practices.
  • Why the rate of return on assets and on invested capital is today only a quarter of what it was in 1965
  • Why the workplace feels like a Dilbert cartoon.
  • Why only one in five workers is fully engaged in his or her work
  • Why executive turnover is accelerating
  • Why the topple of rate of leading firms is accelerating
  • Learn why “efficiency at any cost” went wrong 
  • Why maximizing shareholder value is the dumbest idea in the world
  • Why economies of scale contain hidden productivity traps.
  • Why reliance of ROI/NPV ratios is dangerous
  • Why your IT service provider is not delighting you
  • Why “shared value” doesn’t fix capitalism
  • Why “bad profits” can kill your business
  • Why innovation happens “despite” the system, not because of it
  • Why continuous innovation is impossible with traditionalmanagement
  • How traditional management killed manufacturing in the USA
  • Why managers have the most hated jobs in the workplace

Thriving  in the 21st Century creative economy

  • Why the customer is now the boss.
  • Why continuous innovation is the only path to survival
  • Understanding and defeating disruptive innovation
  • Why the difference between goals, results and values is critical
  • Why a firm can have only one goal.
  • Why organizational resilience depends on shifting from an inside-out mindset (“You take what we make”) to an outside-in mindset (“We want to solve your problems”).
  • Learn why and how manufacturing is coming back
  • Learn why every organization is a software organization
  • Why laughter is the acid test of radical management
  • Why leadership is more than getting  to the top.
  • Why little guys beat the giants through disruptive innovation
  • Busting the iron triangle of tradeoffs between firm, workers and customers.
  •  Learn how to draw on the power of pull, rather than push
  • How to get beyond individual management fixes and innovations don’t stick  and get enduring improvement
  •  How to run established organizations with the energy of a startup  
  • Why HR is a key driver of the C-Suit

The new bottom line: customer delight

  • How to instill innovation throughout the organization
  • How to give everyone in the firm a clear line of sight to the customer
  • What are the different mental models of innovation and why only one is best
  • How to identify your core customers and stakeholders..
  • How to get beyond temporary spikes of innovation and inspire sustained gains in productivity.
  • How to stop your brand from unraveling
  • How to craft a compelling goal for any organization, so as to inspire intrinsic motivation.
  • How to meet customers’ unrecognized desires.
  • How to aim for the simplest possible thing that will delight.
  • How to delight more by offering less.
  • How to generate more alternatives for generating delight.
  • Why defer decisions until the last responsible moment.
  • How to avoid mechanistic approaches.
  • Why focus on people, not things.
  • How to give the people doing the work a clear line of sight to the people for whom the work is being done.
  • How to lock in customer loyalty with business platforms
  • How to lock in customer loyalty with new business models.
  • How delighting the customer works in business-to-business situations
  • How to read comparative data on delighting customers: why firms do best
  • Why excellence, beauty and authenticity are making a comeback

The role of managers in creative economy

  • How to create workplaces that enable the full capacities and provide deep job satisfaction
  • How to create self-organizing teams
  • Focus on creating clear lines of sight to the customer and the removing impediments
  • Why individual management “fixes” don’t stick
  • Why treat employees as “assets” or “human resources” fails
  • Acquiring the courage to lead deep change.
  • How to transfer power to the team
  • How make the transfer of power conditional on the team’s accepting responsibility to deliver.
  • How to recognize contributions of the people doing the work.
  • How to make sure that remuneration is perceived as fair.
  • How to focus teams on customers and stakeholders and what is value for them.
  • How to identify the principal performance objective for the primary stakeholders.
  • How to defer decisions as late as responsibly possible
  • How the client participates in deciding priorities
  • How to be clear who speaks for the customer
  • How to provide coaching to encourage good team practices.
  • How to systematically identify and remove impediments to getting work done.
  • Why not to interrupt the team in the course of an iteration.
  • Why the team must work sustainable hours.
  • Why problems must be fixed as soon as they are identified.
  • Why managers must go and see what is happening in the workplace and in the marketplace.
  • How to make the entire organization agile.
  • How to combine disciplined execution with customer delight
  • How to give everyone in the organization a clear line of sight to the customer

Coordinating work without bureaucracy

  • How to make the entire organization agile.
  • How to combine disciplined execution with customer delight
  • How to give everyone in the organization a clear line of sight to the customer
  • How to organize work in short cycles with direct customer feedback.
  • How to make even chunky, seemingly indivisible work amenable to an agile approach.
  • How to systematically deliver value to customers sooner.
  • How to apply a scientific approach to innovation through the thinking of lean startups
  • How to create meaning in work and meaning at work.
  •  
  • How to spell out goals of each iteration before the iteration begins.
  • How to define user stories to define the goal of each iteration
  • Why the user story as the start, not the end, of a conversation.
  • How to keep user stories simple and record them informally.
  • How to display the user stories in the workplace.
  • How to discuss user stories with the client or client proxy.
  • How to find out more about the client’s world.
  • How to know when the story has been fully executed.
  • How to focus on finishing the most important work first.
  • How to ensure that user stories are ready to be worked on.
  • How to let the team decide how to do the work

Instilling the values of radical management

  • Put in place the values to extraordinary firm performance and personal authenticity.
  • Learn how to give voice to your values
  • Learn how to be radically transparent
  • How to reinvigorate the lost spirit of community
  • Why team estimates how much time work will take.
  • Why the team decides how much work to undertake.
  • Why the team’s velocity is important
  • Why the team members stay in contact with each other on a daily basis.
  • Why retrospective reviews at the end of each iteration are key
  • Why informal visual displays of progress are highly desirable. 
  • Why impediments should be identified on a daily basis.
  • Why priorities for work must be set at the beginning of each iteration.
  • How to establish a clear line of sight from the team to the client.
  • Why accountability is two-sided
  • Why teams must have the opportunity to excel.
  • How to align the team’s interests with those of the organization..
  • How to calculate the team’s velocity.
  • How to get to the root causes of problems.
  • How to share rather than enforce improved practices.
  • How to foster the formation of horizontal communities of practice.
  • How to remain systematically open to outside ideas.
  • How to instill the need for continuous improvement

Communications: command to conversation

  • Learn how to trigger your organization’s creativity
  • How to communicate meaning through leadership storytelling
  • Generate broader and deeper connections that are energizing.
  • How to challenge the system and win
  • Understand how electronic and face-to-face meetings interact
  • Learn the new management vocabulary for the 21st Century
  • Show others how to make something of their lives
  • Generate genuine connections in your organization
  • Learn how to use the power of social media
  • How to fix bad managerial habits in yourself and others
  • Why, when everything is urgent, nothing is urgent
  • How to jumpstart the transformation of management
  • Learn how to discover the core of leadership stories within you.
  • How to acquire a leadership voice
  • Learn how to lead conversations that engage
  • Learn how to generate cascades of activity, setting off chain reactions of more conversations
  • Make connections with the Stoos community and other management reform movements

Measuring performance in the creative economy

  • Why it’s still true that only what gets measured gets done
  • How to use analytics creatively
  • How to get beyond traditional ratios (ROI, NPV)
  • Why progress must be measured in terms of value delivered to clients.
  • How NPS can measure client delight and continuous innovation.
  • How to extend NPS (Net Promoters Score) to employees
  • How to understand and use relative and absolute NPS
  • How to avoid the pitfalls of NPS
  • How to decide frequency of using NPS
  • How to interpret NPS results
  • How to embed NPS thinking throughout the organization
  • How to measure time taken to deliver value to customers
  • How to measure client delight at the working team level.
  • How to measure client delight in real time through social media
  • How to deploy user stories to articulate work goals and measure whether goals have been achieved
  • When and how to measure team velocity
  • Why team velocity is important

 

How the workshop will unfold....

First day morning

Orientation and ice-breakers

Jumpstart storytelling to introduce each other
Remembering customer delight

What’s wrong with traditional management

Presentation
Interactive exercise
Participants’ learnings & celebrations

First day afternoon

Principles of radical management

Presentation
Interactive exercise
Participants’ learnings & celebrations

Principle of customer delight

Presentation
Interactive Exercise
Participants’ learnings & celebrations

Second day morning

Mmanagers: enabler of self-organizing teams

Presentation
Interactive exercise
Participants’ learnings & celebrations

Coordinating work: linking to customer delight

Presentation
Interactive exercise
Participants’ learnings & celebrations

Second day afternoon

From value to values:

Presentation
Interactive exercise
Participants’ learnings & celebrations

Coordinating work: linking to customer delight

Presentation
nteractive exercise
Participants’ learnings & celebrations

Third day afternoon

Application to the participants’ situations

Case study
Interactive exercise
Participants’ learnings & celebrations

Principles of radical implementation

Presentation
Interactive exercise
Participants’ learnings & celebrations

Third day afternoon

Coping with constraints on implementation

Case study
Interactive exercise
Participants’ learnings & celebrations

Linking with other organizations & movements

Case study
Interactive exercise
Participants’ learnings & celebrations

What you’ll take away from this workshop

  • An autographed copy of The Leader’s Guide to Radical Management
  • A copy of Steve’s award-winning articles from Strategy & Leadership: "Rethinking The Organization" (2010) and "Masterclass: The reinvention of management" (2011)
  • Advance chapters of Steve’s next book:  “Phase Change: Thriving In The Emerging Creative Economy”
  • PDFs of around 1,500 pages of Steve’s articles and commentary
  • Skills, techniques and approaches that you can apply in your organization tomorrow
  • An action plan for your organization

The smartest thing you can do in the next five minutes?

Sign up here now http://radical-management.eventbrite.com/ and/or call Peter Stevens at 240-472-5615 to get more information and a special pricing deal (quote code SD1)

What the rexperts say:

We owe our existence to innovation We owe our prosperity to innovation… We owe our happiness to innovation… We owe our future to innovation… Innovation isn’t a fad—it’s the real deal, the only deal. Our future no less than our past depends on innovation.

Gary Hamel, What Matters Now (2012)

Steve Denning is one of today’s most acute and creative critics of traditional management thinking. You would ignore the ideas at your own peril. He shows how to re-invent management based on a more accurate and effective understanding of how humans work best together.            

Larry Prusak, Working Knowledge (1998)  

Steve Denning goes to the root of the management issues confronting companies today. Focusing on seven core principles, he lays out a pragmatic roadmap for shifting the corporation from a focus on scalable efficiency to a focus on delighting the customer and each other, while achieving even higher levels of productivity. In the process, he creates a space where we all can more fully achieve our potential.
             John Hagel, Co-Chairman, Deloitte Center for the Edge,
             Co-author of The Power of Pull (2010)

I’ve spent the last 35 years of my professional life bushwhacking my way towards what I now know, thanks to Steve Denning, is the nirvana called Radical Management. It is a place where delighting customers is the religion and creativity, passion and learning are revered. Denning’s Radical Management is the antidote to the greatest disease in the workplace today, mental resignation due to lack of purpose. Radical Management should be required reading for anyone entering the work force or looking to reignite their inner bushwhacker!
             Sam Bayer, CEO, b2b2dot0

This workshop is taking place on May 21-23, 2012 in Washington DC. Sign up here now http://radical-management.eventbrite.com/ and/or call Peter Stevens at 240-472-5615 to get more information and a special pricing deal (quote code SD1)

Author: "Steve Denning" Tags: "Workshops"
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Date: Friday, 08 Jul 2011 14:18

Since January 2011, my daily blog, Radical Management, has moved to: http://blogs.forbes.com/stevedenning/

In November 2010, I reviewed a large number of books that discuss in various ways the ongoing reinvention of management and I presented my synthesis of the five interlocking principles of radical management in a twelve-part series of articles. Since then, I have been writing on a daily basis and applying the principles to a variety of current management issues. You can follow those blog posts here.

Some key articles include:

Reinventing management: key principles

Reinventing Management: Part 1: Overview

The practices to implement the five principles:

Reinventing Management: Part 2: Delighting the client

Reinventing Management: Part 3: From controller to enabler

Reinventing Management: Part 4: Coordination: From bureaucracy to dynamic linking

Reinventing Management: Part 5: From value to values

Reinventing Management Part 6: From command to conversation

Reinventing Management Part 7: Implementing the transition

Measuring implementation

Part 8:  Measuring customer delight at the organizational level

Part 9: Measuring customer delight at the working level through user stories

Part 10; Measuring customer delight: sizing and prioritizing user stories

Part 11: Measuring time as a competitive weapon

Part 12. Measuring Outcomes in real time: Social media

Other key posts include:

  • The principles of radical management enable you to see immediately what’s wrong with Google’s almost universally admired mission of “organizing the world’s information” and see why it is leading Google astray.
  • The principles reveal with stunning clarity why apparently successful exemplars of old school management like General Electric [GE] and Wal-Mart [WMT] are going down the tubes unless they change their ways.
  • The principles enable you to see why  Juniper [JNPR] is driving Cisco [CSCO] into the dust

__________________

Steve Denning’s most recent book is: The Leader’s Guide to Radical Management: Reinventing the Workplace For the 21st Century (Jossey-Bass, 2010).

Follow Steve Denning on Twitter @stevedenning

Author: "Steve Denning"
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Date: Saturday, 26 Mar 2011 21:07

You have to understand what numbers are before you can do algebra.  And you have to understand algebra before you can do calculus. It doesn’t mean when you are doing calculus that the numbers aren’t important.

Madelyn Blair, author of Riding The Current

In order to create people-centered organizations, organizations need people-centered processes. They need systems and processes that will keep the organization focused on systematically achieving people-relevant outcomes rather than merely the production of outputs. They need systems and processes that will continually push the organization routinely delight and enchant their customers and signal when this is not happening. They need systems and processes that will push the organization to automatically draw on the full talents and creativity of the people who are doing the work. The latest generation of leadership storytelling–Leadership Storytelling 3.0–accomplishes exactly that.

Covers-spingboard-storytelling-radmgt.html

Leadership storytelling: the beginning

In October 2000, I asked to meet with the director of the Smithsonian Associates in Washington DC and proposed to her a symposium on leadership storytelling. She looked at me as though the idea was absurd and asked: “Why on earth would we want to do that?” When I told her my story, she changed her mind and the symposium took place in April 2001. It marked the beginning of a great flowering leadership storytelling in the ensuing decade all around the world.

During the decade, the leadership storytelling scene was transformed. As a result of the efforts of myself and many others, it is now commonplace to find leadership storytelling discussed and promoted in even the most conservative business journals. Most leadership textbooks now have a section on storytelling. Business schools now often include segments on storytelling in their courses on leadership. Major corporations have taken it up as a central leadership theme. In broad terms, the intellectual battle to have storytelling accepted in the world of work has been won. What was once seen as absurd is now seen as obvious. In this month—March 2011—when a book on storytelling was number one in all the top lists of bestsellers,[i] it is not too much to declare that leadership storytelling has arrived into the mainstream.

Yet not everyone is aware that the storytelling has emerged in three interconnected generations.

Leadership Storytelling 1.0

In the beginning, it was simple. The story begins: “Once upon a time…” or equivalent, and we are off, traveling on the wings of the narrative imagination. It’s a story, without a care in the world or any thought as to where it might lead or what consequences might follow. Stories naturally enable us to get inside the mind of another human being. Stories expand our understanding of other people. Stories give us vicarious experience that we can obtain in no other way. These stories “in the wild” are inherently stimulating and naturally life-enhancing.

All these advantages come from the unthinking use of story. To the extent that thinking about it occurs at all, it is usually at the level of, “Gee, that’s amazing!” The subject matter of these stories might be soaring tales of accomplishment or utter disaster, or it might be mundane gossip about who did what to whom. In organizations, the stories are told in corridors, in cafeterias, around water coolers, in meeting rooms and board rooms—in fact, anywhere where human beings get together. Storytelling 1.0 involves no more than simply telling, retelling and celebrating stories as they are occur in a state of nature.

Leadership Storytelling 2.0

In the second generation of storytelling, narrative consciousness awakens, and there is an explicit recognition of the potential effects of storytelling as well as the beginnings of an explicit understanding of mechanics of narrative. My book, The Springboard (Butterworth Heinemann, 2000) tells the story of my own narrative awakening.

In this world, there is explicit awareness that one is “telling a story” as well as the development of expertise as to what sort of story is effective in which context, and how the story could be told in a way that would maximize that effect. The recognition of different narrative patterns flows from the insight that different kinds of stories are needed for different purposes.  One kind of story—a springboard story—can spring an audience to a new level of understanding and action; it enables leaders to communicate authentically and inspire enduring enthusiasm for worthy causes. Other narrative patterns relate to communicating who you are, communicating the brand, getting people to work together, transmitting knowledge or moving people into the future. Understanding the characteristics of the stories that would perform each of these functions is a key to effective leadership storytelling. These different narrative patterns are elaborated in various places, including my book, The Leader’s Guide to Storytelling (Jossey-Bass, 2nd Edition, March 2011).

The risks of Storytelling 2.0

Yet as Storytelling 2.0 has made its way into mainstream of organizations and leadership thinking, several concerns have emerged.

As always with the acquisition of new knowledge, there is sadness at the loss of innocence. Some people feel nostalgia for the simpler more naïve world of stories of the “once upon a time…” variety and lament the risk of losing the magic of an ancient and sacred art of storytelling.

A more serious concern is that Storytelling 2.0 can degenerate into manipulation, and be used to trick and deceive people. This risk doesn’t materialize where the storytellers are in an interactive relationship with their listeners and recognize that the only important stories are not the stories that the storytellers tell, but rather the stories that the listeners generate for themselves: these latter stories are the stories that will be acted upon.

An even more worrying concern is that the full potential of leadership storytelling is still not being realized. The hope that storytelling would enable leaders to transform dehumanizing workplaces, and turn them into creative and energizing experiences that uplift the human spirit has been only partially fulfilled. It is true that many battles have been won. Many organizational storytelling programs have been launched. Executive support for storytelling initiatives has often been forthcoming in major corporations. And yet the overall war is still not won. Something always seems to happen. There is a change in command among the senior executives. Or a cost-cutting drive. Or a reorganization. The result? The promising storytelling initiative is defunded, set aside, marginalized or simply crushed. As a result, attention is now turning to what is necessary to go beyond winning battles to create workplaces worthy of the human spirit and to win the war itself.

Leadership storytelling 2.0 is not enough

This has led to the development of new kinds of storytelling that embed human centered values in the very drivers of an organization so that the organization systematically and automatically focuses on human-centered outcomes.

One reason why this is possible now is the appearance of studies that show that even on its own terms, traditional management is failing. Thus the Shift Index has revealed that the rate of return on assets of US firms is only one quarter of what it was in 1965. The life expectancy of firms in the Fortune 500 is down from around 75 years half a century ago to less than 15 years. Only one in five workers is fully engaged in his or her work. We also know that these attitudes, values and practices have infected our education system which no longer provides an education that fits our children for the future. Our health system, which, quite apart from the recent health reform, is heading the country towards bankruptcy. These disastrous results create necessity of finding a better way of managing organizations.

But persuading people to manage the organization differently is not enough. We need to change the very processes and systems that drive the organization. If those processes and systems remain focused on the manipulation of things—outputs, demand, human resources—those processes and systems will undermine deliberate attempts to make the organization more people-focused. If the traditional systems and processes are left in place, the organization will automatically revert to its default mode—manipulating outputs, demand, human resources—even though the leaders and managers sincerely want to operate differently and contribute strenuous efforts to make it happen.

Leadership storytelling 3.0

In order to create people-centered organizations, organizations need people-centered processes. They need systems and processes that will keep the organization focused on systematically achieving people-relevant outcomes rather than merely the production of outputs. They need systems and processes that will continually push the organization routinely delight and enchant their customers and signal when this is not happening. They need systems and processes that will push the organization to automatically draw on the full talents and creativity of the people who are doing the work.

In effect, they need systems and processes that don’t need continual adjustment to achieve people-oriented results. They need systems and processes that automatically push the organization to achieve people-oriented results.

The good news is that methodologies have indeed been developed that do exactly that.

As the methodologies are people-oriented, it should not come as a surprise that they are also story-based:

  • At the organizational level, the very goal of the firm is to generate positive outcomes for customers. This is best measured by a story: the Net Promoter Score is a methodology that enables the organization to measure whether it is delighting the customer by inviting the customer to imagine a story: “Would you recommend this product or service to a colleague or friend?”
  • At the level of the team, work is planned in the form of user stories—a special kind of story devised to formulate the goals of teams in terms of customer outcomes.
  • The user stories that are developed are then sized and prioritized using other methodologies called “story points” and “planning poker” to measure how much work is involved in making any of the user stories “come true.” In such work places, people routinely speak of “implementing stories.”
  • Value stream mapping is a tool that creates a story of the organization seen from the customer’s point of view, and helps identify any delays in delivering value to the customer. It enables the organization to manage the forgotten competitive weapon: time.
  • These story-based measures enable the firm to go further and—for the first time—calculate the productivity of a firm in terms of human outcomes rather than merely the production of things.

In this third generation of leadership storytelling, with the shift in vocabulary to NPS, user stories, story points, planning poker and team velocity, we are a long way away from the innocent world of “Once upon a time…” Are these methodologies still really genuine storytelling?

Using Madelyn Blair’s a wonderful metaphor from mathematics, Storytelling 1.0 is the equivalent of simple arithmetic. Storytelling 2.0 is the equivalent of algebra. Storytelling 3.0 is calculus. Each one provides the foundation for the other. We have to understand Storytelling 1.0 before we can do Storytelling 2.0. We have to master Storytelling 2.0 before we can cope with Storytelling 3.0. Each one builds on the other. New skills give us new capabilities.

What now becomes possible is to create organizations with systems and processes that are systematically life-enhancing.

To achieve this, we need to recognize that storytelling is more than just a tool. It is a different way of thinking, speaking and acting in the workplace. We must use it to convey meaning that reveals our deepest values, our very core, as human beings. It involves creating a state of mind that starts with a change of heart.

To learn more

My book, The Leader’s Guide to Radical Management offers a comprehensive account of the principle and practices of Storytelling 3.0.

If you would like to get together with others who are intent on using Storytelling 3.0 to master what’s involved in creating a workplace that systematically puts people at the center, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun.

Don’t delay: the early bird discount ends March 31. More details here.

Author: "Steve Denning" Tags: "Education, Leadership, Radical Managemen..."
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Date: Friday, 25 Mar 2011 21:23

I wrote yesterday about the wonderful work of Gallup in documenting the global problem of the disengaged workforce. The extent of the problem varies from country to country, but it is present everywhere. The results of the survey are summarized in a short document on the Gallup website entitled, “Employee Engagement: What’s Your Engagement Ratio?” The document is truly insightful when it comes to documenting the scale of the problem and the need to do something about it.

The document is less helpful when it gets to precisely what should be done about it. It lists the “The 12 Elements of Great Managing” as follows:

  • I know what is expected of me at work.
  • I have the materials and equipment I need to do my work right.
  • At work, I have the opportunity to do what I do best every day.
  • In the last seven days, I have received recognition or praise for doing good work.
  • My supervisor, or someone at work, seems to care about me as a person.
  • There is someone at work who encourages my development.
  • At work, my opinions seem to count.
  • The mission or purpose of my organization makes me feel my job is important.
  • My associates or fellow employees are committed to doing quality work.
  • I have a best friend at work.
  • In the last six months, someone at work has talked to me about my progress.
  • This last year, I have had opportunities at work to learn and grow.

Given the title of this post, I am not offering a prize to anyone who can spot what’s wrong with this list.

A mind-boggling omission

Once again, there is a shocking, mind-boggling omission: the customer or client (or stakeholder) is totally absent from the picture.

It’s not that the Gallup organization as a whole doesn’t know that the customer is important: they have a wonderful section on their website entitled “Customer engagement” and explain:

“What strategy does your organization use to engage its customers? And how do you know whether your efforts are paying off? World-class organizations unleash their potential for growth by optimizing their customer relationships. Organizations that have optimized engagement have outperformed their competitors by 26% in gross margin and 85% in sales growth. Their customers buy more, spend more, return more often, and stay longer.”

However when it comes to compiling a list of the twelve most important elements of “great managing”, the customer is nowhere to be seen. It’s not that the things included in the elements of “great managing” aren’t important. They are. The problem is that the most important element—the customer—is not there.

When push comes to shove, the customer is missing in action.

A pervasive mental model of management

It’s exactly the same problem that I noted last week with the popular blog post, “12 Things Good Bosses Believe”, which totally omits any explicit reference to the customer. It’s not that the author doesn’t know that the customer is important. He has written about it eloquently in his recent post, “The Power of Observing and Talking To Real Humans”.

In an intellectual sense, the Gallup organization knows that the customer is important.

I am not picking on the Gallup organization for this particular piece, which could easily be corrected.

Rather I am pointing to a pervasive mental model of management that results in the customer getting the short end of the stick in the real world of business. The mental model is defective because it omits what should be the central preoccupation of a manager: the customer It’s like having a guide to running a power plant that fails to mention electricity.

The reality is that the omission of the customer in these documents is not an accident. In fact, it reflects a mental model of “management without the customer” that is still the norm in the Fortune 500. Business schools continue to teach it. Consultants are paid large amounts of money to embed it into organizational systems and procedures. Management books continue to recommend it. And websites like these hold it up as an example for firms to follow. As a result, the Fortune 500 continue on their steep performance decline. The health sector continues on its course to bankrupt the country. The education sector increasingly fails to educate our children for the future.

A ferocious desire to delight the customer

In the age of customer capitalism, the goal of the firm, and everyone in the firm, particularly the managers, has to be that of delighting customers (or in the case of the public sector, stakeholders). The key to an enduring future is to have a customer who is willing to buy goods and services both today and tomorrow. It’s not about a transaction; it’s about forging a relationship. For this to happen, the customer must be more than passively satisfied. The customer must be delighted. To accomplish this, both managers and workers must have a ferocious desire to delight the customer.

A whole set of books that describe this way of managing is now available. It includes The Power of Pull by John Hagel, John Seely Brown and Lang Davison,  Reorganize for Resilience by Ranjay Gulati, or The New Capitalist Manifesto by Umair Haque, and Leadership in a Wiki World by Rod Collins.

My own book, The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century offers a comprehensive account of the principle and practices of customer capitalism.

To learn more: May 12-13 in Washington DC

If you would like to get together with others who are intent on mastering what’s involved in creating a workplace which continuous innovation and customer delight are truly at the center, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun.

Don’t delay: the early bird discount ends March 31. More details here.

Author: "Steve Denning" Tags: "Radical Management"
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Date: Thursday, 24 Mar 2011 15:26

I reported a few days ago on a conversation with the authors, Douglas Thomas and John Seely Brown, of the wonderful new book, A New Culture of Learning: Cultivating the Imagination for a World of Constant Change.

A colleague, Daniel Petter-Lipstein, wrote to us and asked the pertinent question: why there was no mention of progressive models of education like Montessori? He suggests that much of what is described takes place in my view in thousands of good Montessori classrooms every day, as he wrote in his marvelous article, “Superwoman Was Already Here“:

“The Montessori method cares far more about the inquiry process and less about the results of those inquiries, believing that children will eventually master–with the guidance of their teachers and the engaged use of the hands-on Montessori materials which control for error–the expected answers and results that are the focus of most traditional classroom activity.

“My daughter’s lower elementary teacher (Montessori classes are typically multi-age, lower elementary is grades 1-3 together) recently told me that a few kids in her classroom were learning about the triangle and they asked “Can a triangle have more or less than 180 degrees?” In classic Montessori style, the teacher turned the question back on them and said, “Use the hands-on geometric materials and try and make an actual triangle that is more or less than 180 degrees.” So the children have their question honored and arrive at the proper answer by themselves.

“This story also highlights the role of a teacher in a Montessori classroom as being a “guide on the side” rather than the “sage on the stage.”

John Seely Brown asked me to post the following reply:

As I am sure you have heard many times – your post is a great post.

Directionally speaking the Montessori approach is highly aligned to much of our thinking.. with our focus being more on scale and scope.. how might one build an entire educational system – not just k-12 or k-16 but a true arc of life scope that leverages the naturally occurring resources of collectives, the tools of social media with an explicit amplification of mentoring, reverse mentoring (and peer to peer mentoring) with explicit focus on cultivating imagination, not just creativity.

We also wanted to problematize experiential learning, and the roles of indwelling/collective indwelling in order to provide a better foundation of entrepreneurial learning.

As such, personally speaking, I have always been inspired by both the Montessori methods and much of Piaget’s early work on assimilation and accommodation.   But our goal was not to write an academic thesis – although that is our natural tendency – but to hopefully start a discussion around a new kind of learning platform that honors the past but scales to a new kind of future.

Author: "Steve Denning" Tags: "Education"
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Date: Wednesday, 23 Mar 2011 18:39

GuyKawasaki “I travel all the time,” says Guy Kawasaki, author of the wonderful new book,  Enchantment. “It’s the little things that get to you. I go into the hotel room and I’ve got a Macbook. And an iPhone. And an iPad. And possibly a MiFi which enables me to make my own network. That’s four devices. I put my bag down. I sit at the desk and what do I see? A power outlet with two plugs, and one is already taken for the lamp. So now I have one plug for four devices. So that means I also have to carry a power strip with multiple plugs.

“But if I didn’t bring one, I end up charging my iPhone in the bathroom where it’s going to get wet. Has anyone in the hotel management ever stayed at the hotel and asked themselves would be the first thing a business person would notice? One plug for four devices. Has anyone in management ever taken a serious look at the room?”

He continues: “Or consider this: you pay $400 to stay at a fancy hotel, and they tell you have to pay another $19 a day for wireless Internet. Meanwhile across the street at a lower standard hotel chain, it’s $80 a day and free wifi. A charge of $19 a day is not going to break me. So I sign up for it and what do I get  A 1 megabit download speed. I feel like I am back in the old dial-up days.”

Kawasaki is not enchanted.

Enchantment is now a business imperative

Kawasaki’s book defines enchantment as “the process of delighting people with a product, service, organization or idea. The outcome of enchantment is voluntary and long-lasting support that mutually beneficial.

His book is one of group of new books that recognize that businesses have to go beyond satisfying the customer. If they are going to flourish in a world where the customer is the boss, they must delight them.

“Enchantment can occur in villages, stores, dealerships, offices, boardrooms and on the Internet.  It causes a voluntary change of hearts and minds and therefore actions. It is more than manipulating people to help you get your way. Enchantment transforms situations and relationships. It converts hostility into civility. It changes skeptics and cynics into believers… When you enchant people, your goal is not to make money from them or to get them to do what you want, but to fill them with great delight.”

“Enchantment is a process,” says Kawaski, “ by which you improve your likeability, trustworthiness, the quality of your idea, product, cause, whatever. It leads to relationship that is not transaction-oriented any more. It is longer and deeper and more delightful.

Enchantment may mean doing less

Enchanting your customer may mean  that doing fewer things will enchant your customer more. If you can find out what the customer really, really wants, then you may be able to focus on that and stop doing things that the customer doesn’t really care about. “Enchanting the business person in a hotel room,” says Kawasaki, “is not about putting warm chocolate chip cookies on the pillow at night. You want to do that? God bless you. It’s a cute little thing. But when I come into a hotel room, forget the chocolate cookies and give me enough power outlets!”

Which firms are enchanting their customers?

“The relationship that people have with computer companies other than Apple,” says Kawaski,” is primarily one of transactions. By contrast, Apple has delighted people and now they have Macs, and then they buy a iPhone, and an iPad. Next thing you know, it’s iTunes, it’s iBooks, you’re standing in line waiting for this stuff. That’s enchantment.”

Virgin America is an airline he looks forward to flying on.

He also sees lots of small businesses and startups enchanting people, even though they are not household names.

One that Kawasaki likes is Kogi BBQ, which offers a combination of Korean-Mexican food. The business has about a dozen trucks and around 83,000 followers on Twitter (@kogibbq). It sends out a tweet that it will have a truck on a certain street corner at a certain time. When they show up, there are 50-100 people who are ready to buy their tacos. That’s customer delight.

How do you communicate enchantment to the C-suite?

I asked Kawasaki how he goes about communicating enchantment as a serious business proposition to CEOs, CFOs, and other senior managers, for whom enchantment could mean something about kids’ fairy tales. How does he get them out of that world and persuade them that they need to be in the business of enchantment?

“The best way is to use examples,” says Kawasaki. “Wouldn’t you like to have the evangelistic base of Apple or the likeability of Virgin America? Wouldn’t you like customers to trust you the way they trust Zappo’s, so that they will buy shoes, sight unseen? Even the most hard-core pencil-pushing bean-counter  will have to say, ‘Yeah, I wish we were Apple or Virgin America or Zappo’s! That’s not such a bad place to be.’”

I asked Kawasaki what happens when he makes the sale and persuades the firm to embrace enchantment? What then?

“You need to realize,” says Kawaski,” that enchantment is like fitness. Fitness is a curve. You can be Lance Armstrong, or you can be really out of shape at the opposite end. People enter the curve wherever they are and then they can move up the curve, by better nutrition and better exercise. The same is true of enchantment. I’m not talking about ’60 days to miracle enchantment’. It’s not that easy. It starts with the CEO. If the CEO is an untrusting and untrustworthy person, you will have to overcome that CEO.”

How is the Fortune 500 doing on enchantment?

I asked Kawasaki where are companies in the Fortune 500 in the curve? He believes that most of them are towards the wrong end of the curve. That’s because they are larger. They are older. Typically the founders are long gone. Maybe a private equity firm runs the place. There are a lot of things going on, he says.

“Startups without a lot of venture capital have to enchant people,”  says Kawasaki. “Otherwise they don’t survive. By contrast, startups with a lot of venture capital can blow it continuously for quite a while. I’ve seen a lot of those. Money is often the enemy of enchantment. Even those startups that do start out enchanting people—something happens to them along the way. It’s called MBAs.”

The three pillars of enchantment

“The three pillars of enchantment,” says Kawaski, “ are likability, trust  and product. There are various companies with various degrees of each of those. Apple is great on the product side. VirginAmerica is great on the likability side. Zappo’s is great on the trustworthy side. If you had a company had all three, you would own the world.“

“It’s a process,” says Kawasaki. “And it’s takes time. Top management has to agree to it. But it’s the middle and the bottom that are customer-facing people that are going to first execute it.

Kawasaki doesn’t want to have a CEO to buy his book at an airport and then come into the firm one morning and say, “Today, we’re going to start enchanting.” The employees’ eyes will roll and they will be thinking, “O God, the CEO has just read a new book. First, it was this. Then it was that. And now it’s enchantment. This is the latest fad du jour.” It needs to be something more permanent than that.

Where to start on enchantment?

Kawasaki suggests starting at the most customer-facing place in the organization. That may be the sales force or customer service. That’s the place that has the most contact and will have the greatest short term gain. It’s there that you will get quickest realization that it works or it doesn’t. Enchantment can’t cure everything, but it is a way to improve customer relationships.

Kawasaki believes in small incremental steps. “Let’s say that the people are skeptical as they reasonably should be of any new idea. Let’s take the case of a hotel. Then one might say, ‘Let’s look at our rooms. Are we enchanting our customers?’

“It’s the little things like giving enough power outlets in the hotel room for business travelers, or dropping the extra charge for wifi connection. You proceed step by step, perhaps trying it in one department, or one store or hotel. I’m certainly not advocating a massive re-write of the employee manual.”

A user’s guide to enchantment

Enchantment is a practical, not an academic book. It’s not a view from 50,000 feet. It’s about how to do it, like blocking and tackling. Kawasaki doesn’t see himself as a consultant, or a motivational speaker. He sees himself as a business person who happens to write. He is coming from the direction of implementation. It’s part of his personal goal of empowering people. Putting practical suggestions in people’s hands so that they can get on and make it happen.

It also happens to be a beautifully produced book, with delightful black-and-white drawings and photos. Enchanting!

Guy Kawasaki: Enchantment: The Art of Changing Hearts, Minds, and Actions (Portfolio, 2011)

Author: "Steve Denning" Tags: "Book reviews, Branding & marketing, Radi..."
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Date: Sunday, 20 Mar 2011 18:43

Last night, I was at the CaveHenricks Books & Bytes party at SXSW 2011 in Austin TX with Barbara Cave-Henricks, Rusty Shelton and a host of people who love books: people who write books, who write and talk about books, people who publish books, above all, people who care about books.

Some of the discussion was along the lines of: “I like the smell of old books,” as Peter Georgescu, Chairman Emeritus, Young & Rubicam wrote recently. There’s nothing like the experience of a physical book.

For example, last night, Carol Sanford was clutching the first physical copies of her new book, The Responsible Corporation: Reimagining Sustainable and Success, like a baby. Carol  is “on a mission to create a better world, and she believes that business can and will play a major role in accomplishing that. It’s more than just a responsibility program. Responsibility will be in the DNA of the business and everyone will participate to make a real difference.” Having the physical book in hand helps make the vision real.

And yet, some of the discussion was also along the lines of Fred Allen’s recent discourse on the subject: “I never would have expected this just a couple of years ago, but I do almost all my book reading electronically now. I use the Kindle apps on my iPad and iPod Touch. I love the versatility of the devices, that I can read while standing on line at the drugstore, or in bed without bothering my wife, and the fact that I can travel with a library effortlessly, instead of lugging around the piles of books I used to haul everywhere.”

When you think of someone reading a wonderful substantive book on a Kindle or an iPad, wouldn’t it be seductive to be able to digress, and listen to an aside by the author, what he or she was thinking when this passage was written, or a conversation with one of the participants, or a set of dazzling pictures of what was under discussion? Who would be able to resist this seduction?

Isn’t this ultimately what John Hagel, co-author of the path-breaking book, The Power of Pull (2010), was really talking about when he foreshadowed the end of the era of pushing products and services at customers, and manufacturing demand, and the beginning of a new era in which the winners will be those who can can “pull” people into a different world and interact with them. It’s a world focused on outcomes rather than outputs; on relationships rather than transactions; on people rather than things.

If the new kinds of books can make the future more understandable, more transparent, more accessible, bring it on!

Author: "Steve Denning" Tags: "Leadership, Learning"
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Date: Sunday, 20 Mar 2011 18:41
Jeffrey Immelt, US conglomerate General Electr...

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I went to gym this morning, as I normally do, to work out on an elliptical machine, and decided to watch CNBC and catch up with the latest on the unfolding calamity in Japan, where the New York Times was reporting, “Japan’s nuclear crisis verged toward catastrophe after an explosion further damaged one of the crippled reactors and a fire at another spewed large amounts of radioactive material into the air.”

I watched as workers in contamination suits struggled to deal with the multiple failures of the backup cooling systems and prevent the disaster from getting any worse. A commentator noted that GE was affected because it has a nuclear energy joint venture with Japan’s Hitachi and it supplied three out of six reactors at Fukushima No. 1 plant. All six reactors have experienced differing degrees of problems since the quake and the ensuing tsunami. GE is in talks to sell nuclear reactors to India. GE’s share price has fallen 6% in pre-market New York trading this morning.

Immediately after that, an ad from GE came on on CNBC, showing among other things workers in contamination suits happily dancing to the beat of GE’s “Ecomagination”.

Was I watching the news or Saturday Night Live?

Even if GE had had nothing to do with the unfolding nuclear calamity in Japan, the ad is in the worst possible taste.

But GE is not just an innocent bystander.

GE designed and built the plant which has caused the accident. Even if nothing worse happens than has already happened, the incident has already been responsible for loss of life, injury and contamination of an unknown number of people. The risk that the incident could verge towards a massive catastrophe is still there.

What is GE saying and doing?

Newscore reported this morning: “The BWR Mark 1 reactor is the industry’s workhorse with a proven track record of safety and reliability for more than 40 years,” Michael Tetuan, spokesman for GE Hitachi Nuclear Energy, said Monday. “There has never been a breach of a Mark 1 containment system.”

Mr Tetuan’s statement may be factually accurate as far as it goes, in the same sense that it is factually accurate to say that 1500 happy passengers reached New York after the Titanic’s maiden voyage. The statement misses the whole point of what is going on.

Four days after the calamity began unfolding, GE is denying there is a problem and playing ads with dancing workers in contamination suits.

Is no one at GE watching the news or thinking about the messages it spending large sums of money to disseminate?

A symptom of deeper management issues

Two weeks ago, I wrote that GE has a problem: its share value is now roughly 50% of what it was ten years ago. This stems from a way of a managing that pushes products and services at customers, of tweaking the supply chain, of parsing and manufacturing demand, with the goal of making money of shareholders.

Continuing to play the ad with the dancing workers in contamination suits tends to show that “ecomagination” is just another product that GE is pushing at its customers irrespective of its relevance.

If GE is to become a company that that is truly concerned about the welfare of its customers, a first step would be for GE’s CEO to pull that ad with the dancing workers in contamination suits .

Author: "Steve Denning" Tags: "Branding & marketing, Radical Management"
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Date: Sunday, 20 Mar 2011 18:39
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This article is the fifth and final part in a series of posts on measuring what matters in organizations: the shift from outputs to outcomes. Today the focus is on measuring customer delight in real time: social media.

1. Measuring customer delight at the organizational level: NPS
2. Measuring customer delight through user stories
3. Measuring delight: sizing and prioritizing user stories
4. Measuring the neglected competitive weapon: time

In Part 1 of this series, I showed how to use the Net Promoter Score (NPS) to measure what has already happened to your business, in terms of client delight and outcomes. In parts 2-4 of this series, I showed how to deploy user stories to measure the inputs that will generate client delight in the future. In this part, I look at how social media can be used to measure what is currently happening in terms of client delight in your business.

Social media has changed everything. The explosion of social media from practically nothing five years ago, to over 500 millions participants has created major threats to traditional management that is focused on outputs and making money, as well as major opportunities for organizations that are committed on delighting their customers by generating positive outcomes.

The threat of social media

“Customers know everything about your company,” wrote Christopher Meyer and Julia Kirby in Harvard Business Review in April 2010. “That has changed the rules of business forever.” When customers know everything, it becomes important that management be equally informed, particularly when customers have the ability to videotape the experience and transmit it potentially to millions of other customers. Most traditionally-managed firms are just one YouTube video away from a major brand disaster.

Consider the following examples.

In 2008, when United Airlines broke Dave Carroll’s guitar, he made a singing YouTube video that told the story of the incident; the video has now been viewed by more than 8 million people.

In 2008, when a mother took offence at a commercial for the pain reliever Motrin that implied, in her eyes, that mothers were wearing baby slings simply to be fashionable, she was able to launch a “Motrin Moms” protest movement, that within two days became the most popular subject on Twitter.

In 2008, when Howard Schultz came back to be CEO of Starbucks, he woke up one morning to find around a hundred emails in his inbox. It turned out that this was the result of a sensational story in the Sun newspaper in London about a piece of equipment that Schultz had never heard of. When his phone rang and a reporter asked him to comment, Schultz replied that he had no idea what it was. The reporter advised him, “Google Starbucks real fast!” Schultz recalls: “We had a real problem. The lesson was that the world had changed. Something that happened in London had created a world-wide story that positioned Starbucks with venom and disrespect.”

These are just a couple of eye-opening illustrations of the revolution generated by sites like Twitter, Facebook and YouTube. The scale and rapidity of the ensuing public relations crises are astonishing.

The opportunities of social media

At the same time, the positive opportunities for organizations to use the power of social media for telling the story of their products and services are equally dramatic:

Procter & Gamble has used social media to reach otherwise unreachable customers when they helped create a community for teenage girls (beinggirl.com) that provides a friendly and helpful environment for them to converse and share stories, where the girls also learn about P&G’s feminine care products.

Ford has used social marketing to launch a new car—the Fiesta—without traditional advertizing by generating a massive “Fiesta Movement,” involving stories reflected in 6 million YouTube views, 740,000 views of Flickr photos and 3.7 million Twitter impressions.

In the last five years, the dynamic of marketing has been transformed. In 2005, the examples cited above could not have happened. Now social media have hundreds of million of participants, who can and do tell stories about the products and services that they use.

Unfortunately, traditional management will find itself ill-equipped to deal with these threats or take advantage of these opportunities, because its top-down command-and-control bureaucracy focused on transactions and outputs will be unable to engage in interactive conversations. To cope with social media, traditional managers will have to reinvent their management practices and commit themselves to delighting customers through interactive relationships and conversations, as discussed in an earlier post.

Using social media to measure customer delight

For those organizations that have cross the Rubicon into customer capitalism and have committed themselves to delighting their customers, social media give us the possibility of seeing what is happening in real time. The Net Promoter Score (NPS) can tell us what has happened quite rapidly, but it is still operating in terms of days and weeks. By contrast, social media can tell us what is happening in minutes and even seconds.

Social media give us the possibility of conducting controlled experiments to tackle the complex challenge of delighting customers. We can immediately see what the nature, intensity and scale of a response to an input on Twitter, Facebook, or a blog, and adjust course accordingly. We can see how many people respond to a particular input, whether the responses are positive or negative in tone, and whether the responses are passionate or lackluster. We can combine these findings with Net Promoter Scores to determine longer term trends.

As Charlene Li points out in her insightful book, Open Leadership, “having a common metric across the company provides not only a unified view but also a way to make consistent tradeoffs.” (p. 100)

However as she also points out, the ease with which we can now collect data creates the risk that we will drown in a sea of statistics. Before venturing into this territory, it thus becomes crucial to define objectives, identify the key performance indicators that bear on customer delight, identify the activities that are likely to influence those performance indicators, establish a baseline for those indicators, track the outcome of the indicators as activities are undertaken, and then adjust activities in the ensuring cycle of work.

A different way of managing

Here, as elsewhere, the individual tools that are used to measure outcomes are less important than the management mindset that deploys them. Effectively measuring time entails a wholly different way of thinking, speaking and acting in the workplace.

What we measure determines how we see the world. It enables us to see where we have come from, where we are now and where we could be heading. It’s the foundation of discovery. It expands our knowledge, defines our progress, and sparks new insights.

To learn more about the principles and practices of measuring outcomes so as to generate customer delight, read my book, The Leader’s Guide to Radical Management (Jossey-Bass, 2010) which provides a comprehensive overview of the principles and practices involved.

If you would like to get together with others who are intent on mastering what’s involved in measuring time, and creating a workplace of continuous innovation and customer delight, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun. More details here.

Author: "Steve Denning" Tags: "Radical Management, Social media, Storyt..."
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Date: Sunday, 20 Mar 2011 18:37
Time magazine + iPad + $5 (!!) = Bad Idea Jean...

Image by dpstyles™ via Flickr

In a poll of management authors, Jossey-Bass asked the following question: What should a new leader do to establish his/her style and make an impact – without rocking the boat? (The question was prompted by the dismissal of Jack Griffin at Time Inc, after a mere six months on the job, ostensibly because of his ‘leadership style’.

Among the authors who have weighed in so far were:

My own answer (#8 in the series) drawing on my book, The Leader’s Guide to Radical Management, was as follows:

I have to start by saying that I have some concerns about the apparent premises that underlie the question.

At a time when the rate of return on assets of US companies is 25% of what it was in 1965, and when the life expectancy of a firm in the Fortune 500 has declined from 75 years in 1965 to less than 15 years today (and heading towards 5 years if nothing is done), and when only one in five workers is fully engaged in his or her work, a preoccupation with “leadership style” and  “not rocking the boat” needs to be replaced (in most cases) with a pre-occupation with ascertaining why the boat is sinking, identifying those who understand this, selecting the future champions who have the smarts and leadership skills to create the future of “the boat,” and quickly getting them in positions where they can get to work.

I agree with those authors who have already spoken to the effect that the focus in this endeavor must initially be on listening.

I would add however that there should be less emphasis on “establishing a leadership style” and a more single-minded focus on the substance of finding those who understand the real situation and have practical ideas and talents to refloat the boat and getting it moving forward. The focus needs to be less on “you” as a leader and your “style” and more on “the boat.”

See also my follow-up post: Let’s Celebrate Dilbert Style Management? Huh?

The series is continuing with:

9. Gary Burnison: No Fear of Failure

Other authors’ views will be posted here in coming days. Your views?

Author: "Steve Denning" Tags: "Leadership"
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Date: Sunday, 20 Mar 2011 18:33

The Dilbert Future hardcover edition front cover

Image via Wikipedia

The most popular blog post for the whole of 2010 at Harvard Business Review was Bob Sutton’s list of the “12 Things Good Bosses Believe.” From one perspective, his list presents an engaging people-centered picture of manager—someone who is sensitive to others’ feelings, who listens carefully to those who disagree, someone who strives to be humble as well as confident. The contrast to a dictatorial command-style manager no doubt helped make the post very popular.

From another perspective, however, there is one shocking, even mind-boggling, omission from the list: there is no mention of the client or the customer (or the stakeholder).

Among the “12 things good bosses believe”, any concern for the people for whom the work is being done is completely absent. Indeed the list suggests that the “good boss” pays less attention to “well-defined and ambitious goals” than to “small wins” and “a little progress every day”.  The “good boss” spends no time worrying about whether the customer is satisfied, let alone delighted, by what the organization is doing. Instead, the “good boss” spends time agonizing over such issues as striking “the delicate balance between being too assertive and not assertive enough,” avoiding “imposing my own idiocy” on “my people,” or trying to decide whether “I am acting like an insensitive jerk.” (sic)

The omission of any concern for the customer in the “12 things good bosses believe” reflects the natural habitat of hierarchical bureaucracy. This is a world that operates from an inside-out perspective, pushing products at customers, parsing and manufacturing demand, tweaking the value chain to achieve ever greater efficiencies, and concerned about outputs more than outcomes. Middle managers in this world find themselves in a squeeze between achieving ever greater efficiency and keeping the workers happy. The result is a lot of internal agonizing over such issues as striking “the delicate balance between being too assertive and not assertive enough.” It leads to a preoccupation with style over substance.

Evidence-based management?

Coming from the author of Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management, the “12 things good bosses believe” are presented as “evidence-based” and “rooted in real proof of efficacy.”

The “12 things good bosses believe” however overlook one huge mass of evidence: the comprehensive study of the productivity of 20,000 US companies from 1965 compiled by Deloitte’s Center for the Edge under the title of the Shift Index. Its conclusions? Running organizations as hierarchical bureaucracies has proved to be an utter disaster:

  • The rate of return on assets is one-quarter of what it was in 1965.
  • The life expectancy of a firm in the Fortune 500 has fallen from around 75 years half a century ago to less than 15 years, and is heading towards 5 years unless something changes.
  • The “topple rate” of leading companies is accelerating.
  • Only one in five workers is fully engaged in his or her work.

What this evidence shows is that the way of managing reflected in “12 beliefs of a good boss” hovers somewhere between a “dangerous half-truth” and “total nonsense.”

The list is right to castigate the top-down monster as a “bad boss”. That’s the dangerous half-truth reflected in his list. Yes, top-down is bad.

But what the list doesn’t reflect is that the opposite of top-down is not bottom-up: it’s outside-in.

The customer is now the boss

Fifty years ago, large corporations were essentially in control of the marketplace. No longer. The advent of global competition, customers’ access to reliable information and their ability to communicate with each other through social media means that the customer is now in command. The shift goes beyond the firm paying more attention to customer service: it means orienting everyone and everything in the firm on providing more value to customers sooner.

We are in effect now in the age of customer capitalism, as Roger Martin explains in his landmark article, “The Age of Customer Capitalism” (HBR, January 2010). This has occurred because of the monumental transition in the power balance between seller and buyer. As a result, the firm’s goal has to shift to one of delighting clients: i.e. a shift from inside-out perspective (“You take what we make”) to an outside-in perspective (“We seek to understand your problems and will surprise you by solving them”).

What the “12 things good bosses believe” fail to recognize in parsing the difference between the “good boss” and the “bad boss” is that the manager is no longer the real boss at all: the customer is now in charge. The shift goes beyond the firm paying more attention to customer service: it means orienting everyone and everything in the firm on providing more value to customers sooner. In particular, the manager.

A ferocious desire to delight the customer

In the age of customer capitalism, the goal of the firm, and everyone in the firm, particularly the managers, has to be that of delighting clients. The key to an enduring future is to have a customer who is willing to buy goods and services both today and tomorrow. It’s not about a transaction; it’s about forging a relationship. For this to happen, the customer must be more than passively satisfied. The customer must be delighted.

If the manager is spending time agonizing over such issues as striking “the delicate balance between being too assertive and not assertive enough,” avoiding “imposing my own idiocy” on “my people,” and “wondering whether I am acting like an insensitive jerk,” the customer will get the short end of the stick. And these days, when the customer gets the short end of the stick, the firm’s future is in grave jeopardy.

That’s because the customer has information. The customer has choices. If the customer is not delighted, the customer goes elsewhere. The firm dies. As the Shift Index shows, the phenomenon is happening on a wide scale.

In today’s organization, there is no place for managers who spend their time agonizing over whether they are being too assertive or not assertive enough. Instead what is needed are managers and workers who have a ferocious desire to delight the customer. Once that principle is in place, both managers and workers can be focused on accomplishing a common and uplifting goal. As the customer is a demanding boss, with good information about what is going on, and has many other options, there is no room for worrying about “whether I am acting like an insensitive jerk.” The only question is whether the firm is succeeding in delighting the customers.

“12 things good bosses believe”: the Dilbert-style manager

In fact the behavior described in  “12 things good bosses believe” describes has a long history. The “good boss” who agonizes over issues like assertiveness and sensitivity emerged because managers found themselves in a squeeze between achieving ever greater efficiency and keeping the workers happy. Dealing with that squeeze led to behaviors that were described Abraham Zaleznik in his classic 1977 HBR article, “Managers and Leaders: Are They Different?”

Managers coped with the squeeze with three particular skill sets and attitudes. First, managers focus attention on procedure and not on substance. Second, managers communicate to subordinates indirectly by signals, rather than clearly stating a position. Third, managers play for time. Amid conflicting rules and procedures of a hierarchical bureaucracy, managers have no way of knowing what the right answer is. Self-protective routines are used, up and down the hierarchy.

Zaleznik’s identification of these behaviors, which were very different from those of genuine leaders, might have led to an inquiry as to whether these were productive behaviors even in 1977. Paradoxically, the article led to the endorsement of those behaviors and to a bifurcation of management from leadership. The role of leaders was to inspire people to embrace change while managers were grimly grinding out execution while struggling to keep the workers happy.

Scott Adams picked up on the ensuing managerial behaviors and continues to depict these antics on a daily basis in his Dilbert cartoon. The behaviors dispirit workers, cripple innovation and frustrate customers.

Dilbert-style management continues to be celebrated

Over 11,000 business books are published every year. I read a lot of business books but I can’t pretend to have read more a tiny portion of those 11,000. But a good proportion of those that do come across my desk continue, like the “12 things good bosses believe” , to celebrate the behavior of the Dilbert-style manager. Business schools continue to teach it as the normal way to manage. Consultants are paid large amounts of money to embed it into organizational systems and procedures.

As a result, Dilbert-style management continues to thrive. Scott Adams gets richer and richer. The Fortune 500 continue on their steep performance decline. The health sector continues on its course to bankrupt the country. The education sector increasingly fails to educate our children for the future.

The world of customer capitalism

Yet in parallel, another world has already emerged. Unlike the world of Abraham Zaleznik’s manager, or Scott Adams’ Dilbert, or the “12 things good bosses believe”, the world of customer capitalism is one where managers bring their own personal passion for delighting clients to the workplace. They are so busy and intent on finding new ways to delight customers more and sooner, they have no time to be worried about whether they are striking “the delicate balance between being too assertive and not assertive enough,” avoiding “imposing my own idiocy” on “my people,” or whether “I am acting like an insensitive jerk.” Managers and workers are united in a common passion to deliver more value to customers.

Firms that are implementing the principles of customer capitalism, like Apple, Amazon and Salesforce.com are experiencing exponential gains in their share price, while traditional firms like GE or Wal-Mart are finding that they have to run harder just to stay in place.

A whole set of books that describe the future is now available. It includes The Power of Pull by John Hagel, John Seely Brown and Lang Davison, or Reorganize for Resilience by Ranjay Gulati, or The New Capitalist Manifesto by Umair Haque, or Leadership in a Wiki World by Rod Collins.

My own book, The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century offers a comprehensive account of the principle and practices of customer capitalism.

To learn more: May 12-13 in Washington DC

If you would like to get together with others who are intent on mastering what’s involved in creating a workplace of continuous innovation and customer delight, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun.

Don’t delay: the early bird discount ends March 31. More details here.

Author: "Steve Denning" Tags: "Radical Management"
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Date: Sunday, 20 Mar 2011 18:26

When I was young and even more naive than I am today, I used to believe that if you did good work it would get recognition. If you did something that made a contribution and were able to prove it with hard numbers, rational people would inevitably recognize your success.

I was therefore somewhat surprised when I found that most of the great knowledge management programs that I observed in large organizations around the world were eventually closed down, sidelined or shifted to the periphery. The managements of these organizations didn’t seem to appreciate great KM accomplishments right in front of their noses.

I am not talking here about badly managed KM programs, such as programs with unclear goals, or no communities of practice, or an excessive reliance on IT to address human problems. I am talking about well-run internationally-recognized KM programs.

I saw the phenomenon at BP. I saw it at IBM. I saw it at Ernst & Young. I saw it at Hewlett Packard. I watched it happen to a certain extent after I left the World Bank. These were world-class programs, with demonstrated results that were not understood appreciated by the management. In due course, they were closed down or undermined or sidelined. Why?

These great KM programs would flourish for a while, and even receive widespread recognition. But then something would happen. For instance, there would be a merger: in the name of rationalization, the KM program would be declared a success and the leadership unit of the KM program would be gutted. Or there would be a cost-cutting drive, and the KM program would be one of the sacrifices. Or the organization would decide to appoint a leader of the knowledge program who was docile and didn’t rock the boat, so that the death became a long drawn-out affair.

Why, I asked myself, did managements act this way? Why didn’t they recognize that knowledge was the very lifeblood of these organizations? Why didn’t they examine the metrics of success? Why did they take such thoughtless decisions, almost by accident, and kill something of central importance to their organization’s future?

Web seminar: slides and recording

I gave a web seminar on these issues last Tuesday for the SIKMLeaders group. You can see the slides here:

http://www.slideshare.net/SIKM/why-km-programs-fail

and listen to the audio discussion here:

http://www.divshare.com/download/14318673-1ee

You can also read an earlier blog post on the same subject here.

Options for knowledge managers

The bottom line of these discussions is that the horizontal, collaborative, value-adding principles of knowledge management are barely compatible with the top-down, bureaucratic, efficiency driven preoccupations of traditional management. Even KM programs that by all measures are doing well and enjoy significant top-management support are still at risk. In any efficiency or cost-cutting drive, knowledge management will usually be seen as “a low hanging fruit.”

The practical options for a knowledge manager in the light of this are as follows:

  • Wear a parachute at all times. One never knows who will wield the axe or when it might fall.
  • Educate yourself about the nature of traditional management and realize that there is a fundamental difference in values.
  • Make sure that your knowledge management operation meets all the metrics and responds to the efficiency concerns of traditional management.
  • Learn about how some organizations are managing themselves in a radically different way that is compatible with knowledge, as discussed in, The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century as well as other books such as The Power of Pull by John Hagel, John Seely Brown and Lang Davison, or Reorganize for Resilience by Ranjay Gulati, or The New Capitalist Manifesto by Umair Haque, or Leadership in a Wiki World by Rod Collins.
  • Join together with allies both inside your organization and outside. You may well find that there are groups already practicing radical management within your organization in software development (under titles like “Agile”, “Scrum”, “Kanban”) or in manufacturing (under the title of “Lean”).
  • Spread knowledge about radical management within your organization. We now have reliable knowledge that traditional management is leading to disastrous long-term business result. The extraordinary financial gains that come from making the shift to radical management (e.g. ten times increments in share price over ten years) will far outweigh the gains from any other knowledge that KM can disseminate.

To learn more: May 12-13 in Washington DC

If you would like to get together with others who are intent on mastering what’s involved in creating a workplace of continuous innovation and customer delight, that is compatible with the values of knowledge management, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun.

Don’t delay: the early bird discount ends March 31. More details here.

Author: "Steve Denning" Tags: "Knowledge management, Radical Management"
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Date: Sunday, 20 Mar 2011 18:23

By STEVE DENNING

The economic future of the country depends on how well we educate our children. At a time when the US doesn’t even rank in the top 30 countries in the world in education status, we are fortunate to have a new book: A New Culture of Learning: Cultivating the Imagination for a World of Constant Change by Douglas Thomas and John Seely Brown (CreateSpace, 2011).

The book is a short, clear and profound—all wonderful qualities in a book. Just as in management, we need to make a fundamental shift from push to pull, so in education, the book shows why we need to make a shift from teaching to learning and how to go about it.

I conversed with the authors recently about their exciting new book as follows:

1.  In the book, you distinguish two senses of culture. One is the culture of the classroom, where stability and predictability is the norm. The other is a culture that is analogous to what a scientist grows in a petri dish in a lab. It happens under controlled conditions, but there is very little foreknowledge of what will result. Here the whole point of the experiment is not to intervene to control the outcome, but rather let the culture grow in an organic way. In the new culture of learning, which emphasizes this second type of culture, how do you verify what students are learning?

One of the things that we believe has really been holding education back has been a very backward model of understanding assessment. When you treat education like a machine, your main concern is efficiency: Is the machine functioning smoothly? So we actually assign numbers to outcomes: 72% or 95%, As, Bs, and Cs. But if you ask anyone what their most powerful and life changing educational experience was, rarely do they say “The time I got an A in my sophomore physics class.” The moments of learning that affect us most deeply are often unanticipated and deeply surprising.

The other problem we see in the current state of education is that answers carry more weight than questions, which we believe is exactly backwards. Answers are easy to assess or verify. Questions are trickier. But of the two, questions are far more important. In turns out, however, that it is very easy to assess questions as well. And we actually can tell what students are learning by the questions they ask. In fact, maybe more so than by having them spout out answers.

In our current system, there is usually just one answer for every question. But if we reverse the priorities, it turns out there is a multitude of questions that can be raised by working on any interesting problem.

We feel the leaders of the 21st century are going to be the ones who can ask the best questions and drive things forward. The kinds of questions we are talking about lead to outcomes and those also provide a kind of verification as to whether the questions are good ones or not.

2. You say this new type of learning takes place without books, without teachers and without classrooms. Yet you are not saying classrooms are obsolete or that teaching no longer matters. What is the role of classrooms and teachers in the new culture of learning?

We very much see classrooms and teachers as a critical part of the new culture of learning, but not in their current state. The learning we see happening all around us is bypassing teachers and classrooms because those institutions are stuck in the old ways of thinking and are ill equipped to deal with a world of constant change. It is not a necessary outcome, however. As we see it, classrooms and teachers will need to play a critical role in the new culture of learning, as they are the ones that create what we discuss as a “bounded learning environment.” In that sense, both the role of the teacher and the environment of the classroom need to change, but the changes are relatively minor. The realization we came to is that it isn’t our schools that are failing: it is our theory of learning that is failing. Once we rethink what it means to learn in a way that is based on passion, imagination, inquiry and questing, it becomes easy to reshape classrooms to those goals. One of the greatest shifts for teachers is moving into a role of mentorship and guidance, which has traditionally been the role of teachers throughout history.

3. Some traditionalists would argue that there must be still be a core curriculum of math and language skills and that unless students master these basic skills, they will still be unable to cope with the future. Do you agree? Is this something that requires the old teacher/classroom approach?

A big part of what is missing in schools today is a connection to the passion and desire to learn. If you watch a small child explore the world, they don’t need to be told to study, explore, experiment or learn; they do it naturally. Schools today have been insistent on dividing work and play, holding them out as opposites and confining play to a 40 minute break in the day called “recess.” One of the things we think is the most important about the new culture of learning is that play be seen as a critical part of all learning. Learning the rules of a game is boring, tedious and time consuming if you aren’t interested in playing it. If students see those basic skills as the “rules of the game” that enable them to play, mastering them acquires a whole new meaning. We have witnessed over and over kids mastering all kinds of “basic skills” because they were being put in the service of a deeper passion.

4. Traditionalists could be skeptical as to how much students are learning by hanging out on line. You yourself distinguish between “hanging out”, “messing around” and “geeking out”, each with an increasing level of learning. “Geeking out” is the richest and most rigorous kind of the three learning experiences. How can one know which mode students are in, or even whether they ever get beyond hanging out?

The research we draw on for this section came from the work of Mimi Ito and her team at the MacArthur Foundation’s program in Digital Media and Learning. This was an amazing ethnographic project documenting what it is that kids today are actually doing with their time online. What we were trying to do was build off of that work and try to understand what kind of learning is happening in those different modes and how they embrace the idea of change.

A big part of the idea of hanging out is that this is where people gain a huge amount of information at the tacit level. When we think of a college campus, most of the benefit we get from being at a University comes from exactly that practice: hanging out. The best lectures are the ones that prompt students to continue discussions and debates after class ends. There are talks, events, organizations and clubs, and discussions. Classes are important, no doubt, but they work best as fodder for an expanded view of learning that is about immersing yourself in a culture where discussion and learning from the people around you matters too.

Hanging out is not simply relaxing and taking it easy, it is immersing yourself in a new context and understanding how that context shapes and creates meaning. Those skills are going to be increasingly important for the 21st century, so I think we need to be careful not to underestimate the importance of hanging out in the way we talk about it.

As for knowing what stage people are in, Ito does an outstanding job of analyzing and documenting those things, so they are actually very easy to identify and understand.

5. Some traditionalists would argue, “no pain, no gain;” that unless students are forced to struggle with difficult issues, they are unlikely to hone their intellect. Yet you argue that learning must be fun and playful. Is there any hard work in the new culture of learning?

There is no question that learning can be a painful experience. But we need to remember that play can be serious and challenging as well as fun and joyful. I think we err in assuming that learning needs to be painful to be effective and our current system seems to presume that learning isn’t happening if there is no suffering.

Consider two students. One dreads his calculus homework, finds it dull and tedious and painful. He works 3 hours a night solving problems that he finds pointless. The other absolutely loves math, considers it a passion and looks forward to setting aside a few hours a night to work on calculus problems, especially ones that really challenge her.

Which of those two is actually honing their intellect? You find something that a student is passionate about and they will find the difficult issues on their own, they will push themselves, and with the proper guidance and resources, they will learn how to ask the kinds of questions that will make their interest last a lifetime, not just a semester.

6. You stress the importance of cultivating the imagination. You argue in the book that inducing students to ask the right questions can be more important than having the right answers. How do you assess whether students have asked the right questions?

This turns out to be easier than it sounds. We tend to forget that the roots of modern education in the West have their start in the Socratic method, which was all about questions and seldom about answers. We all tend to know a good question when we hear one and frequently, when we are posed with one that challenges us, we will pause and acknowledge it with a statement such as “Wow! Good question!” So at a basic level, we all understand what constitutes a good question.

In a recent class, one of us (Doug) gave a quiz to his students. Instead of asking for an answer to a question, he simply posed this problem. “If you wanted to know if someone got the most important point of this book, what question would you ask them?” The remainder of the class was spent having each student pose their question for class discussion. The discussion and debate about what the best questions were was far more interesting or revealing than having them all answer the same question would have been.

Part of the point we try to make in the book is that inquiry is not about asking a “right” question, but it is a process of asking increasingly better questions. And I think we would say that the best questions are the one that ignites a student’s passion and cultivates their imagination. And it is very easy to tell when that is happening. When students have passion and enthusiasm, it is infectious and impossible to hide.

7. How ready for implementation are the ideas in the book? For instance, do we still have to figure how to measure the progress of learning in this new, less structured environment, with a lot of experimentation still needed? Or do we have an established body of experience that can be applied immediately?

What makes a new culture of learning exciting is that we are able to take the very best elements that have always existed in learning (back to the time of Greek education and the polis right up to the one room school house) and find a way to make it accessible to everyone. What we have is the idea of a one room school house that scales to a global world with an almost unlimited set of resources of “rich nutrients” to give depth that has never previously been possible in any learning environment.

Once you make a shift in thinking to putting questions first, everything else sort of spills out of the idea. One of our colleagues wrote us a note that he sat down and read the book cover to cover one night. The next day, he completely restructured his class around the principles in the book and has the best class of the semester. In that case, we are talking about less than 12 hours to put our ideas into the classroom.

There are also some real opportunities here for the development of what we describe as learning collective, which have very different properties than communities or more traditional institutions.

Another example is the opportunity for “reverse mentoring,” a process by which the students are able to take the lead and help teachers get access to information, ideas, or resources they might not even know exist. The idea of the teacher as the all-knowing expert is not something that we think can be maintained. Every good teacher knows they can learn a lot from their students if they listen to them. That skill, which used to be optional, is fast becoming necessary in today’s classroom.

8. How is your book being received in the education community?

There is a lot of excitement about the ideas in the book and we are getting quite a few anecdotal stories about educators putting our ideas into practice with fantastic results. It does require some pretty deep changes in thinking and in the roles we all play, as administrators, teachers, and students alike, so there is a natural fear that comes with abandoning the familiar. Overall, there seems to be a pretty wide recognition that what we are doing now is no longer working and the ideas in the book seem to strike most people as being headed in the right direction and that are also scalable. Moving from the world of ideas to putting these kinds of things into institutional practice is always a challenge. We hope we have accomplished the first step in helping people see the importance of play, passion and, especially, imagination.

Some of our best responses have been from a segment of the education community that is rarely considered: the students themselves. We’ve gotten quite a few students who read the book and say “This is me!” as if it is the first time they feel like someone has gotten their sense of learning. There is also a lot of excitement from parents who see the effects of our current system on their kids. As an educational movement, getting students and PTA parents on your side is not a bad place to start. One medical school student wrote to tell us she was buying a whole stack of copies to distribute to the Deans and administrators of her program!

In some ways our theory is about making room for the student, their passion, and imagination, so it makes some sense that it may have its greatest impact as a bottom-up movement.

____________________________________________

For more discussion of The Culture of Learning, read Why Lean Programs Fail — Where Toyota Succeeds: A New Culture of Learning

A New Culture of Learning: Cultivating the Imagination for a World of Constant Change by Douglas Thomas and John Seely Brown (CreateSpace, 2011).

Author: "Steve Denning" Tags: "Education"
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Date: Thursday, 03 Mar 2011 14:24

Great article by Jesse Eisinger in the New York Times: A Test Where the Banks Had the Questions and the Answers

Eisinger writes about the informal stress of US banks now under way:

Of course, banks ought to have a good idea of the results. They came up with the questions — and the answers.

The Fed gave the banks one economic assumption — a recession — to test their books against, but otherwise the measures were chosen by banks themselves. The Fed just vetted them. Seems like a low bar.

“It’s a take-home exam where you supply the math and then it’s pass/fail,” said Joshua Rosner, an analyst with the independent research firm Graham-Fisher & Company.

No prizes for guessing the outcome of this one.

Author: "Steve Denning" Tags: "Radical Management"
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Date: Thursday, 03 Mar 2011 14:20

At a conference organized by The Economist last September, Massimo d’Amore Chief Executive Officer, PepsiCo Beverages Americas, Pepsico [PEP] outlined the impact having of a female CEO. This brought to light some staggering imbalances in Pepsico’s hiring practices. It turned out that 90% of the buyers of Pepsico’s products were women, but most of Pepsico’s buyers had been men. As a result of the discovery of this mismatch, there had been massive staffing changes to Pepsico’s buyers to get more balance between the gender of the customers and the gender of the buyers. It was obvious that a wholly-male workforce of buyers would be less likely to understand the needs of customers who were 90% women. This wasn’t an issue of diversity as much as it was an issue of competence.

The incident sheds light on Women’s History Month, as the article of fellow Forbes contributor Ali Brown helpfully reminds us. The White House released a report yesterday entitled Women in America: Indicators of Social and Economic Well-Being, a statistical portrait showing how women are faring in the United States today and how their lives have changed over time.

The report reveals that women are working more than ever before and the number of women and men in the labor force has about equalized in recent years. 27% of working wives out-earned their husbands in 2008, compared with 18% in 1988. In general, shockingly, women still earn only 80 cents per dollar that men earn in comparable positions.

In her insightful article, Brown suggests three issues:

1. Women have to be given the right to work at home.

2. Women need to take their financial and families’ wellbeing into their own hands, and start businesses of their own.

3. Women need to BE the change they want to see.

The funny thing is that these are more than women’s issues: they are equally issues for men, issues for Gen-Y and above all, issues for the productivity of organizations. Organizations that don’t deal with them are going to be missing some of the best talent.

Why?

  • It makes sense to hire women ahead of Einsteins: In team building, studies show that it’s better to choose women ahead of Einsteins. That’s because the collective intelligence of a group is not strongly correlated with the individual intelligence of group members but is correlated with the proportion of females in the group.
  • It makes sense to deploy women to handle social media: Women seem to be nimbler in mastering social media. My own take is that the revolution now under way in management is partly about a shift from one-way top-down communications to adult-to-adult conversations. Women are naturally better at the latter than men and, in Western culture, they get more practice doing it. So should it be any surprise that they take to it more easily?
  • It makes sense to hire more women in startups. Do something about the stunningly low proportion of women in startups: While the number of women small business owners hovers around 50 percent, the number of women founders of hi-tech start-ups is in the low single digits. Angel investors need to wise up and realize that  having women in the workplace is a key aspect of organizational performance.

Women are increasingly the talent

On September 14, 2010, the Washington Post reported that for the first time, more women than men in the United States received doctoral degrees last year, the culmination of decades of change in the status of women at colleges nationwide.

The number of women at every level of academia has been rising for decades. Women now hold a nearly 3-to-2 majority in undergraduate and graduate education. Doctoral study was the last holdout – the only remaining area of higher education that still had an enduring male majority.

Women have long outnumbered men in earning master’s degrees, especially in education. Women earned nearly six in 10 graduate degrees in 2008-09, according to the new report, which is based on an annual survey of graduate institutions.

With these kinds of numbers, it’s not diversity that we are talking about.  We are looking a very different workplace that is emerging. It is a workplace where male enclaves will be increasingly put in question and where women can be women and bring to bear their different attitudes, perspectives and insights.

When women are 60% of talent and 90% of customers, it’s not diversity: it’s the future.

To learn more

If you would like to learn more about creating people-friendly workplaces for both men and women, please join Madelyn Blair, Deborah Mills-Scofield and others for two days on May 12-13, 2011 in Washington DC in a workshop that is all about cool, innovative and serious fun. More details here.

Author: "Steve Denning" Tags: "Diversity, Radical Management"
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Date: Wednesday, 02 Mar 2011 21:36

The 20th Century can be seen as a determined effort to run the world as if people were things. Organizations produced outputs. Firms were run by things called human resources, which, like other resources, were to be exploited and then thrown aside. The name of the game was to make more and more money. Customers were regarded as “demand” to be “parsed and manufactured”. Bureaucratic systems and processes were put in place to make the system tick over like a boring clockwork machine.

For a while the approach seemed to be working. But then it turned out that people didn’t like being treated as things. Employees resented it and stopped giving their best efforts. Customers were bored or frustrated by it and, once they had a choice and had better information, they switched their allegiance to those who would treat them like people. There are some who are still making determined efforts to push us back into that world, like Michael Porter or Jack Walsh, but we know now that it’s a failing game.

As a result, the 21st Century is turning out to be more people-centered than one might have dared hope. Firms that are truly prospering are those who know how to treat their customers like people and delight them. They can only accomplish this if they treat their employees like people and draw on their full talents and energies. Bureaucratic systems have to be jettisoned in favor of arrangements that enable those doing the work the space to deploy their full talents. The single-minded focus on making money turns out to be less successful in making money than a values-based approach that gives the customers what they really want. Ordering the employees around as if they were things to be periodically “weeded” turns out to be less productive than having adult conversations with employees as people.

Does Watson think?

It’s therefore reassuring to learn from Sean Dorrance Kelly, professor and chair of the department of philosophy at Harvard University and Professor Dreyfus, coauthors of “All Things Shining” to learn in the New York Times that the recent victory of Watson in a game of “Jeopardy!” was a semblance of thinking, not the real thing.

Of course, there is a place for machines and automation in our lives. And where tasks are truly routine, machines should be used. But it’s reassuring to learn that the meaningful, important things of life are, at least for now, way beyond  the comprehension of an IBM machine.

Read the very interesting article here.

To learn more

To learn more about emerging people-centered practices and principles of 21st Century management, read The New Capitalist Manifesto by Umair Haque, The Power of Pull by John Hagel, John Seely Brown and Lang Davison, Reorganize for Resilience by Professor Ranjay Gulati.

The principles and practices are comprehensively described in my book, The Leader’s Guide to Radical Management (Jossey-Bass 2010).

If you would like to learn even more, please join me for two days on May 12-13, 2011 in Washington DC in a workshop that is all about cool, innovative and serious fun. More details here.

Author: "Steve Denning" Tags: "Radical Management"
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Date: Wednesday, 02 Mar 2011 16:08

Doctors-doing-operation Beyond any of the political skirmishing around the recent health reform law lies the issue of the poor performance of the US health system. Almost as frightening as its cost is how poorly it performs.

More money per person is spent on health care in the United States than in any other nation in the world, yet US life expectancy lags 42nd in the world. That’s well behind most rich nations, and after Chile (35th) and Cuba (37th). Yes, Cuba! One can debate how far the health care system itself is responsible for these shocking statistics, since access to care has been far from universal. But it is hard to argue with the death rates from medical errors.

Clayton Christensen: the analogy to the PC industry

Clayton Christensen has an interesting short video on Forbes that seeks to explain why health system reform doesn't happen. He uses an analogy with the PC industry.

Christensen begins by describing how a personal computer is made up of various parts—a keyboard, a processor, a hard drive, memory chips, a DVD player, a screen, and so on. Each part is made by a different manufacturer. Each manufacturer can optimize its individual piece of the PC, but none of them is able to optimize the whole system. That can only be done by the firm responsible for the overall PC, such as Apple [AAPL].

Similarly, he argues, the health system is made up of different parts—hospitals, insurers, doctors, nurses, primary care facilities, pharmaceutical manufacturers, and so on. Each of them can optimize their individual piece of the system. But none of them can optimize the whole system. That would have to be the responsibility of whoever is responsible for the well-being of the overall system. The problem is that there is no such entity like Apple who is responsible for the overall well-being of the health system. Hence overall reform of the health system as a whole doesn’t happen.

The argument is interesting as far as it goes. But does it get to the root cause?

The problem of “management viewed as optimization”

Christensen has written brilliantly about the phenomenon of disruptive innovation in his book, The Innovator's Dilemma (HBSP, 1997). In it, he describes how market-leading companies in industry after industry have missed game-changing transformations.

But the mistakes that were made by those companies were not the result of "bad" management. Instead, as Alan Murray has noted in his article in the Wall Street Journal, the disasters have occurred because managers were following the dictates of "good" management, when management is viewed as optimization. They studied their customers. They carefully researched the market and new technologies. They meticulously cultivated innovation. They stringently evaluated new development and weighed the cost of new investment against potential gains. And in the process, they missed disruptive innovations that opened up new customers and markets for alternative blockbuster products.

A recent example of the phenomenon is at Nokia.

If one listens carefully to Christensen’s video talk, one can hear that he is still assuming that management consists of “optimization of the parts”, whether it’s making a PC or running a health system. It’s an inside-out perspective of tweaking the value chain and searching for internal efficiencies as the main goal of management. It’s precisely the kind of management that is the root cause of the phenomenon of disruptive innovation, about which Christensen has written so brilliantly. Put another way, disruptive innovation is a symptom of traditional inside-out management.

The results of "management viewed as optimization"

The result of running private sector organizations in this fashion has been disastrous, as shown by in a comprehensive study of some 20,000 US firms by Deloitte’s Center for the Edge.

  • The rate of return on assets of US firms is one quarter of what it was in 1965.
  • The life expectancy of a firm in the Fortune 500 has declined to less than 15 years and is heading towards 5 years unless something changes.
  • Executive turnover is accelerating.
  • The topple rate of leading firms is speeding up.
  • Only one in five workers is fully engaged in his or her work: the larger the company, the lower the level of passion among the workers.

It doesn’t work for industry. There is no reason to think that it will work for the health system.

The alternative: “management that adds value to customers”

The alternative to the model of “management as optimization” is an outside-in customer-driven approach in which everyone in the organization is focused on finding ways of adding more value to the ultimate customer (or primary stakeholder) and delivering that value sooner. The approach is described by Roger Martin his classic HBR article “The Age of Customer Capitalism.” Harvard Business Review, Jan. 2010, pp. 58–65. It is also reflected in The New Capitalist Manifesto by Umair Haque, The Power of Pull by John Hagel, John Seely Brown and Lang Davison, Reorganize for Resilience by Professor Ranjay Gulati, or Leadership in a Wiki World by Rod Collins.

My own book, The Leader’s Guide to Radical Management (Jossey-Bass 2010) offers a comprehensive account of the principles and practices involved.  

In business, the task of management becomes that of delighting the customer, and providing a continuous stream of additional value and delivering it sooner. 

A “patients first” health system

Christensen is right that reform of the health system will be impossible if the players in the game are merely trying to optimize their particular part. The health system will infected with the same bureaucracy that has hamstrung the private sector and the government.

The solution however is not, as Christensen implies, to appoint some authority, or czar, to be the master designer of the overall system. Quite apart from political difficulty of setting up such an approach, it is precisely the kind of top-down thinking that has led to such poor results in industry.

Real reform in health means getting away from a system that is focused on optimization of costs and where administrators, insurance companies and health professionals are trying to optimize their particular part of the system. It means transforming the health system into one in which everyone is truly focused on “patients first”, with genuine patient-driven care. All of the players must be focused on continuously adding more value for patients, and finding ways to deliver that value sooner. In this way, the system will self-optimize for the good of the patients, without the need for any kind of health czaar.

The good news is that we know how to do this.

To learn more

If you would like to learn even more about reinventing management for both the private sector and for the health system,, please join me for two days on May 12-13, 2011 in Washington DC in a workshop that is all about cool, innovative and serious fun. More details here.

Author: "Steve Denning" Tags: "Health, Innovation, Leadership, Radical ..."
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Date: Tuesday, 01 Mar 2011 18:13

A fellow contributor on Forbes, Aman Singh, has an insightful spotting of some Jack Welch pronouncements, starting with the startling headline, “GE May Be Going Too Green”.

Her article interprets Welch’s latest message delivered at The Tulsa Business Forum hosted by Oklahoma State University’s Spears School of Business as: “The main social responsibility for a company is to win.”

Apparently, Welch is not impressed with the bevy of new alternative-energy products offered by GE [GE], which have generated some $18 billion in annual revenue. As reported by the Tulsa World, Welch said, “If it doesn’t turn green into green, it doesn’t turn out to be a helluva good business. The whole idea is to grow jobs,” adding, “The main social responsibility for a company is to win.”

“We played business like it was a sport,” Welch said of his philosophy heading up GE from 1981 to 2001. “You make a game of it; you field the best team and weed out the weakest. The weeds you’ve got to pull out if you’re going to build a beautiful garden.”

The clear implication from Welch’s talk is that if he was still running GE, the Ecomagination projects that CEO Jeff Immelt vaunts, and President Obama praises, would be high on his list of “weeds” to be pulled, because they don’t make money fast enough.

Does this make any sense?

GE has a problem

First, let’s face it. GE has a problem. Its share value is now roughly 50% of what it was ten years ago, when Jack Welch retired. He is right to point this out, even obliquely. He is also right to imply that it’s misguided to argue (like Michael Porter) that “going green” is a panacea that will by itself save either GE or the entire US economy.

When one compares GE’s performance to companies like Apple [AAPL] or Amazon [AMZN] whose share prices are now more than ten times what they were a decade ago, one can see that GE has a management problem of some kind. The question is: what kind?

GE’s problem is not in going green

Second, as Aman Singh points out, other businesses like Seventh Generation, Timberland, and Tom Shoes, are proving every day that green can be highly profitable. The question is how to achieve that kind of profitability.

Part of GE’s problem is Jack Welch’s legacy

Whatever else Jack Welch was, he was lucky. He left GE the day before September 11, 2001, thus leaving his predecessor to cope with the impact of September 11 on its business, parts of which were severely affected, e.g. its aircraft engine business.

He was also able to appear as the master of the universe by steadily growing GE’s earnings, in part through arrangements with GE Finance, which didn’t unravel until the financial crisis of 2008.

Jack Welch’s management regime looked good at the time, in part because the legacy of problems that he bequeathed to his successor didn’t appear until after he left.

GE’s main problem today is 20th Century management

GE’s main problem today is however something else: another Jack Welch legacy: 20th Century management. This is a view of the world that sees organizations as pushing products and services at customers, of tweaking the supply chain, of parsing and manufacturing demand, with the goal of making money of shareholders. It has been called shareholder capitalism and Jack Welch was its sponsor.

It was a way of managing that worked reasonably well, decades ago, when the marketplace was dominated by a few oligopolies (customers lacked both options and information about the options) and most work was semi-skilled work.

Today that world has all but vanished. The reality is that we now live in the age of customer capitalism. As a result of epochal shift of power in the marketplace from seller to buyer, the customer is now in charge. Making money and corporate survival now depend not merely on satisfying customers but delighting them. To prosper, firms must have knowledge workers who are continuously innovating and delivering a steady supply of new value to custonmers and delivering it sooner. The new bottom line of business becomes: is the customer delighted? It’s a fundamental shift from outputs to outcomes.

Firms like Apple [AAPL] and Amazon [AMZN] have grasped this transition and taken advantage of it. GE has yet to embrace it a wholesale way.

Not that GE’s declining performance is in any way exceptional. GE’s performance reflects disastrous declining trends across a wide array of firms, as shown by a comprehensive study of some 20,000 US firms by Deloitte’s Center for the Edge.

  • The rate of return on assets of US firms is one quarter of what it was in 1965.
  • The life expectancy of a firm in the Fortune 500 has declined to less than 15 years and is heading towards 5 years unless something changes.
  • Executive turnover is accelerating.
  • The topple rate of leading firms is speeding up.
  • Only one in five workers is fully engaged in his or her work: the larger the company, the lower the level of passion among the workers.

In this new world, the Jack Welch style of management involving dictatorial management, tight control, ruthlessly cutting costs and pulling out weeds, measurement of outputs and sole focus on shareholder value is no longer appropriate or effective. It’s the problem, not the solution.

Instead, managers now have to be helping focus everyone in the organization on the goal of adding value to customers and delivering it sooner, rather than merely tweaking the supply chain and searching for efficiencies.

Bottom line: don’t blame green

So yes, Jack Welch is right to point out that GE has a problem: GE does need to be making more money. But blaming green isn’t going to fix it. Instead, GE has to transform its management into something fit for the 21st Century marketplace.

GE—and Jack Welch—can learn what the new way of managing is all about from Roger Martin his classic HBR article Martin, R. “The Age of Customer Capitalism.” Harvard Business Review, Jan. 2010, pp. 58–65, or in The New Capitalist Manifesto by Umair Haque, The Power of Pull by John Hagel, John Seely Brown and Lang Davison, Reorganize for Resilience by Professor Ranjay Gulati.

The practices and principles involved are also comprehensively covered in my own book, The Leader’s Guide to Radical Management (Jossey-Bass 2010).

To learn more

If you would like to learn even more about reinventing management, please join me for two days on May 12-13, 2011 in Washington DC in a workshop that is all about cool, innovative and serious fun. More details here.

Author: "Steve Denning" Tags: "HR, Innovation, Leadership"
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Date: Monday, 28 Feb 2011 17:54

My fellow DilbertCartoon-smallForbes contributor, John Kotter, has an interesting post entitled, Corporate Culture: Whose Job Is It? He asks: who is responsible for corporate culture?

“Who raises red flags if the culture is impeding performance?  Who figures out how to change it if it is a problem, or maintain it if it is an asset?  If you ask the employees and managers of most companies, the most common answer is “the folks in HR.”  And that’s not a very good answer.  The truth is that top leadership, including the CEO, has to take responsibility if the culture is to be strong.”

Why are so few leaders taking on this responsibility? Kotter’s answer is that

“we have too many managers and not enough leaders in today’s business world.  Managers focus on timelines, budgets, organizational structures, metrics, controls, and numbers.  Leaders focus on vision, buy-in, motivation, culture, and people.  Of course management is important.  But while you may get the top job by excelling at management, you thrive in the top job by excelling leadership.  Culture is always in a leader’s job description.”

The implication seems to be that strengthening the creative culture is in the job descriptioin of leaders, but not necessarily in the job description of the manager.

Responsibilities are bifurcated. Leaders inspire people, spark change and strengthen the culture, while managers organize, control work, measure outputs and get things done. The tasks involve different skill sets and attitudes. The hope is that the roles happily complement each other.

The distinction between leaders and managers

The truth is that the division of responsibilities between managers and leaders is defunct, a relic of 20th Century thinking. It’s a leftover from an era that viewed organizations pushing products and services at customers, of tweaking the supply chain, of parsing and manufacturing demand, with the goal of making money of shareholders. It has been called shareholder capitalism.

While this seemed to work well for much of the 20th Century, the results in today’s different work are disastrous, as shown by a comprehensive study of some 20,000 US firms by Deloitte’s Center for the Edge.

  • The rate of return on assets of US firms is one quarter of what it was in 1965.
  • The life expectancy of a firm in the Fortune 500 has declined to less than 15 years and is heading towards 5 years unless something changes.
  • Executive turnover is accelerating.
  • The topple rate of leading firms is speeding up.
  • Only one in five workers is fully engaged in his or her work: the larger the company, the lower the level of passion among the workers. 

The age of customer capitalism

The reality is that we now live in the age of customer capitalism.[1] As a result of epochal shift of power in the marketplace from seller to buyer, the customer is now in charge. Making money and corporate survival now depend not merely on satisfying customers but delighting them. To prosper, firms must offer a continuing supply of new value and deliver it sooner. The new bottom line of business becomes: is the customer delighted? It’s a fundamental shift from outputs to outcomes.

In this new world, 20th Century management involving tight control of workers and measurement of outputs is no longer appropriate or effective. Managers now have to be helping focus everyone in the organization on the goal of delighting customers, rather than merely tweaking the supply chain and searching for efficiencies.

As a result of the transition from semi-skilled labor to knowledge work aimed at delighting clients, the role of the manager shifts from being a controller to an enabler, so as to liberate the energies and talents of those doing the work and remove impediments that are getting in the way of work. They have to be enabling workers to achieve the goal of continuing to add value to customers and get it to them sooner, rather than tightly controlling them.

Managers have to put their primary emphasis on the new bottom line of business, i.e. whether the firm is delighting its customers, not merely whether it is making money for its shareholder. They have to be measuring customer outcomes, not merely outputs.

In effect the role of management needs to be transformed.

Why should managers be different from leaders?

Why should managers be different from leaders?

The question only arises because of the supposed distinction between the roles of leaders and managers that was articulated in Abraham Zaleznik’s classic 1977 HBR article, “Managers and Leaders: Are They Different?”  

That article argued that managers have different skill sets and attitudes. Three aspects are key. First, managers focus attention on procedure and not on substance. Second, managers communicate to subordinates indirectly by signals, rather than clearly stating a position. Third, managers play for time. Amid conflicting rules and procedures, managers have no way of knowing what the right answer is. Self-protective routines are used, up and down the hierarchy.

The origin of Dilbert-style management

The insight that traditional managers act differently from genuine leaders might have led to an inquiry as to whether "focusing on procedure rather than substance" and "playing for time" were productive behaviors even in 1977. In fact, they constitute the essence of the Dilbert-style manager, whose antics are celebrated in Scott Adams’ popular cartoon. They dispirit workers, cripple innovation and frustrate customers.

Paradoxically, Zaleznik’s article led to an acceptance of those behaviors and to a bifurcation of management from leadership. The role of leaders was to inspire people to embrace change while managers were grimly grinding out disciplined execution. Leaders and managers not only had different attitudes and skill sets: inevitably they worked at cross-purposes. As much as leaders inspired employees with new ideas, managers were dispiriting them with their Dilbert-cartoon style management.

The result of the distinction between leaders and managers is an organization in conflict with itself, with leaders inspiring people doing the work, sparking change and strengthening the culture, while managers are busily undermining everything the leaders are doing by controlling work through bureaucratic processes and measuring outputs rather than outcomes.

The alternative to hierarchy and anarchy: dynamic linking

A principal reason offered today for preserving the distinction between leaders and managers  is that it is necessary to achieve disciplined execution. We don’t want chaos. So we are stuck with traditional management. It’s not pleasant or fun. But that’s the only way to run an efficient organization.

The ongoing reinvention of management shows that there is another way. One can mesh the efforts of autonomous teams of knowledge workers who have the agility to innovate and meet the shifting needs of clients while also achieving disciplined execution. It requires a set of measures that can be called “dynamic linking”. The approach began in automotive design in Japan and has been developed most fully in software development with approaches known as “Agile” or “Scrum”.

The main elements of “dynamic linking” are that (a) the work is done in short cycles; (b) the management sets the goals of work in the cycle, based on what is known about what might delight the client; (c) decisions about how the work should be carried out to achieve those goals are largely the responsibility of those doing the work; (d) progress is measured (to the extent possible) by direct client feedback.

As The Power of Pull  (2010) notes, one proceeds “by setting things up in short, consecutive waves of effort, iterations that foster deep, trust-based relationships among the participants… Knowledge begins to flow and team begins to learn, innovate and perform better and faster.… Rather than trying to specify the activities in the processes in great detail… specify what they want to come out of the process, providing more space for individual participants to experiment, improvise and innovate.”

It’s not hierarchy and it’s not anarchy. It gets the best of all worlds. It has the decisiveness and discipline of a hierarchy but without its inflexibility or its tendency to de-motivate workers and frustrate customers. It creates an agile environment that is radically more productive for the organization, more congenial to innovation, and more satisfying both for those doing the work and those for whom the work is done. The approach has been implemented for over fifteen years in organizations large and small with great success.

Managers must also be leaders

In effect, the problem in dealing with culture is not so much that we have too many 20th Century-style managers and not enough leaders.

The problem is that we still have 20th Century style managers at all. They have no place in the 21st Century organization.

In effect, in the 21st Century organization, the distinction between managers and leaders dissolves. Leaders need to be managers. Managers nee   d to be leaders.

The central challenge for both leaders and managers today is to lead the transformation of management and so generate the creative, innovative organizations that are needed for the 21st Century.

To learn more

If you would like to learn more about the transformation of management, please join me for two days on May 12-13, 2011 in Washington DC in a workshop on “revolutionizing the world of work.” It’s all about cool, innovative and serious fun. More details here.

__________________________________________________________

[1] Roger Martin wrote about the shift from shareholder capitalism to customer capitalism in his classic HBR article Martin, R. “The Age of Customer Capitalism.” Harvard Business Review, Jan. 2010, pp. 58–65. It is also reflected in The New Capitalist Manifesto by Umair Haque, The Power of Pull by John Hagel, John Seely Brown and Lang Davison, Reorganize for Resilience by Professor Ranjay Gulati and my own book, The Leader’s Guide to Radical Management (Jossey-Bass 2010).

Author: "Steve Denning" Tags: "HR, Innovation, Leadership, Radical Mana..."
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Date: Monday, 28 Feb 2011 09:10

Tell-to-win-cover Every year over 11,000 business books are published. Only a tiny sliver of those books are what I would call “real books”, that is, books that talk meaningfully and authentically about a subject in a coherent way. (Most of them are compilations of tired business platitudes, aimed at selling the author’s consultant services.)

A real book

One of the very few business books that is also a “real book” that I have come across recently is Peter Guber’s new book, Tell to Win. It’s a book about how important storytelling has been in Peter’s life. Peter has an amazing set of stories to tell: how he grew up in New York, went to Hollywood, became a big shot producer with films like Batman, Rain Man and Gorillas in the Mist, and is now the owner of an NBA team in San Francisco.

If you looked closely this last Sunday night, you could have seen Peter and his wife at the Oscar ceremony as one of the producers of the Oscar-nominated film, The Kids Are All Right.

In telling the many stories that make up his life, Peter also tells the story of storytelling. What makes this engaging is that Peter, despite his successes, doesn’t take himself too seriously. Many of the stories in the book are less about his brilliant successes, of which there are many, and more about the illuminating stumbles that inevitably occur as one makes one’s way through life.

Meeting the King of Thailand

One of my favorites is about when he was making a film in Thailand and had to see the king in order to obtain permission for what he was doing. So he followed his own advice and practiced, practiced, practiced his story to tell to the king and when he arrived at the palace he felt he was ready. When he saw the king, he taken aback at how impressively the king was dressed. He began his spiel and felt his assistant pulling on his sleeve. He ignored this and pressed ahead with his spiel. Finally, his assistant whispered in his ear, “Peter, that’s not the king. That’s the usher.”

The emotional transportation business

Peter sees himself as being in the emotional transportation business. His book shows how success is won by telling compelling stories that have the power to move partners, shareholders, customers and employees to action. As he says, if you can't tell it, you can't sell it!

The book is already #1 on Amazon. So it doesn’t need any help from me in promoting it. But if you are interested in buying it, you can order it now and get a set of digital gifts here.

Recently I put some questions to Peter about his book and he answered as follows:

1. How has purposeful story telling been central to your career?

Both telling stories for entertainment (film, TV, miniseries, etc.) and telling purposeful stories to propel my business goals (buying and selling sports teams, new media companies, real estate ventures) have been “the secret sauce” behind my career success.  The seminal elements of what makes a story great are the same whether we’re talking about story content for a movie such as Rain Man, or story content used in the room, face to face to propel the success of a deal such as acquiring an NBA franchise, securing intellectual property rights to a great estate like Frank Sinatra, becoming CEO of a corporation like Sony Pictures Entertainment, or raising money for a university like UCLA.

2. What's your favorite example of a story well told that helped you get ahead?

 It was how as CEO of Columbia Pictures just after it was purchased by Sony, I told the story of Lawrence of Arabia to inspire my employees to reclaim their heritage and pull together.  Ironically, this was the studio that made the movie 40 years earlier.

3. In what kinds of situations in business will the power of telling a purposeful story be most useful?

In any situation that calls for you to persuade, convince or manage someone or a group of people to do something, the ability to tell a purposeful story will be your secret sauce. Telling to win through purposeful stories is situation, industry, gender, demographic, and psychographic-agnostic.  It’s an all-purpose, everyone wins tool.

4. Why has the need for telling to win increased?

In today’s roller-coaster economy, hyper-competitive, fear-based, flat and global world, convincing anyone to do anything at any time requires getting their attention, creating their intention and turning it to action.  This means you have to render an experience.  And telling purposeful stories in the room, face to face cuts through the cacophony in both turbulent and triumphant times.

5. What did your research about telling stories uncover that most surprised you?

As a guest professor with me at the graduate course at UCLA, titled Navigating a Narrative World, Marco Iacoboni, Professor of Psychiatry and Biobehavioral Sciences at UCLA, provided one of the most surprising insights behind the power of telling a purposeful story.  Iacobani is a pioneer in the research of mirror neurons.  Mirror neurons allow us to read each other, both functionally and emotionally, as if both the teller and listener are entering and living each other’s experience.  They make it possible for the teller and listener to imitate, learn, and intuit each other’s goals through feelings of empathy and connection.  Iacobani explained that when one tells a purposeful story in the room, face to face, they evoke the mirror neuron system of their listener to feel what they are feeling in their tell and thus mirror the same intentions. A truly empathetic and powerful experience!

6. What are the essential elements of a purposeful story?

Tell to Win reveals the key elements that tellers of purposeful stories utilize to engage their listener(s) and turn them into viral advocates of the tellers’ goals.  Purposeful stories have a goal, a call to action that tellers want their listeners to do.  But, before tellers motivate their listeners, the teller, him or herself, must first be motivated.  This means he or she must be authentic and congruent.  The tellers’ story must not just be interesting, but demonstrate that the tellers are interested in what is interesting to their audience if they want to capture and retain their audience’s attention.  Purposeful story tellers must engage the listener(s) in a dialog.  Telling purposeful stories is interactive. It’s not a monolog.  Ultimately, purposeful tellers must surrender control of their stories, creating a gap for the listener(s) to willingly cross in order to take ownership.  Only when the listener(s) own the tellers’ story and make it theirs, will they virally market it.

7.  What's the simplest way we can start applying telling purposeful stories to our own lives right away?

Practice.  Practice.  Practice.  You will tap into your inherent resource.  Be clear to yourself about what your intention is, that you want to be heard and felt and what you want as your goal, i.e., what you want your listener to do upon hearing and feeling your story.  Be sure to know what your audience is interested in rather than trying to be interesting, and set your content in a context that is important to them.  Let your authenticity and congruence shine through your story, turning “me to we,” in the process.  Embed the important facts and information inside your story while rendering an emotionally resonant experience.   Hits are born in the heart or gut and then migrate to the mind.  Aim there.  Only then will your listener(s) own your goal as theirs and act on it.

The meaning of storytelling

What’s interesting to me is that ten years ago, ten years ago, storytelling was nowhere on the radar of the business world. Clever people were using stories to be successful, but no one was explaining how it was done. Now you have books like Peter’s book, Tell to Win, that take you behind the screen and reveal the secrets of what it takes to tell a winning story.

As we look more broadly now at the revolution going on in management around the world, as organizations shift from traditional management to radical management, it is becoming steadily more apparent that one of the key ingredients in the revolution is an ability to communicate authentically with their customers or their employees.  Storytelling is not just a nice additional capability to have. It’s become one of the basics.

To learn more

Peter and I will be appearing together on a discussion panel at the Commonwealth Club in San Francisco on the evening of April 21, 2011, talking about his book, Tell to Win, and the second edition of my 2005 book, The Leader's Guide to Storytelling, which is also being published this month.

 

Author: "Steve Denning" Tags: "Book reviews, Leadership, Radical Manage..."
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