Tuesday, March 20, 2012

Want to talk about Radical Management?

Are you doing anything after work on Thursday? 

Last month, Steve Denning and I held our first online conversation on how to make your company fit for the Creative Economy, otherwise known as Radical Management. This discussion raised many interesting questions from our participants, many of which are answered here. We are pleased to repeat this event in the future, the next time on March 22.

Would you like to join Steve Denning and myself for a free, web-based conversation on at 17.00 Central European Time (12:00 noon US eastern time)? Steve and I have written a lot on our blogs about what's necessary to thrive in the emerging creative economy: continuous innovation, inspiring workplaces, and a focus on delighting customers. Now Steve and I will be hosting a conversation on Thursday. You can dial in on the web or by phone. Got a question? Tell us when you register, and we'll address it during the webinar. Like to learn more? This is your opportunity! Find out more...

Saturday, March 17, 2012

Why I like Zipcar better than Enterprise

Last week, a customer engagement took me to northern New Jersey. I took Amtrak's (almost) high speed Acela train to Newark, NJ and then got a Zipcar to drive to my final destination. To reserve the car, I went to the website and picked a model based on features, real-time availability and price. On arrival, I went to the Zipcar lot, found my car, put a smartcard on the windshield and drove away.

This is so completely different than renting from the classical car rental agencies. You can reserve a car online and it may look cheap, but the 'rental price' is only part of the story. Quasi-insurances like LDW, CDW, SLI, PAI, PEC (whatever they mean) or additional devices like GPS or EZ-Pass can easily double the daily cost of the car. If you have to talk to an agent when you pick up your car, you'll have to defend your wallet while at the counter. All you want is your car, but they want to sell you as many unneeded and overpriced services and/or upgrades as they can. And let's not forget, whichever fueling option you choose, you'll get ripped off. Either you buy gas you don't use (prefueling) or you pay egregious rates for them to fill it up afterwards. It's a horrible experience. The purpose of rental car company is to separate you from your money -- and making a car available is what they do for the privilege.

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Today, Enterprise rent-a-car is the #1 car rental company. It was the case study that launched Fred Reichheld's Ultimate Question and Net Promoter Scores. It led Steve Denning to identify Customer Delight as the ultimate goal of every company.

Oddly, Steve never included Enterprise in his case studies, saying, "I've not been delighted." Now I understand why.

While researching a case study based on Zipcar's reaction to my suggestion, I stumbled on this article about Enterprise: 9 Confessions From A Former Enterprise Rental Salesman. Despite their emphasis on customer satisfaction, Enterprise's fundamental business model is about extracting money from their customers.

I was really shocked to learn that Enterprise rent-a-car works this way too. How could the company which launched the Net Promoter Score be so disrespectful of its customers?

What is the difference between Enterprise and Zipcar? Enterprise has a transactional relationship with its customers while Zipcar has a continuing relationship with its customers.

If your focus is purely on the transaction, then 'there is no tomorrow.' So you extract as much money from your customer as you can. If your focus is on the relationship, you treat your customer with a different respect -- and your customers also treat you with a different respect!

How does this play out at Zipcar? I join for a small annual fee. For a similar annual fee, I can purchase an insurance waiver, so liability and collision damage are covered. I may commit to a certain monthly usage. If I do, I get lower rates and/or more flexibility in meeting my usage commitment. They expect that I leave the car clean and with at least 1/4 tank of gas (which gets paid on their company credit card). Some cars have E-Z passes built-in, for which there is no extra charge nor do they apply a service charge to any tolls paid on my behalf.

I have been using Zipcar now for 2 months and have had no unpleasant surprises nor I have ever felt that I have to defend my wallet against Zipcar. The only thing that wasn't so great was getting from Newark Station to the nearest Zipcar was not so great. It's not that close to the station and in a pretty run down section of town. Walking there made me at bit nervous.

What should Enterprise do? They are probably tempted to ignore Zippcar - it's car sharing, not car rental right? It's a classic disruptive innovation. Not really a threat at the moment.

But Enterprise has a bigger problem. Their system is corrupt. They claim customer satisfaction is most important. This is a lie, because what they really want to do is bring in money. Since there is a conflict between what the company says it wants and what it really wants its sales agents to do,  the real priorities eventually win out. Yes, the branches get good numbers, but can you trust the numbers?

What should Zipcar do? Their response to my suggestion to put a BMW near my home seemed really out of character (even though they said yes very quickly after I tweeted it), but their business model is sound. Stay true to your values!

Zipcar should become more attractive for their members' business and vacation travel needs. For instance, they could partner with airport hotels and parking facilities so that travelers can get easy access (shuttles) to Zipcars at airport and Acela locations. How about Zipcars at your favorite beach hotel? Their model of constructive, long-term, constructive customer relationships could be really disruptive to the rental car business in a few years...

What should you do for your business? Which of these models is more sustainable? Which one would you like your business to resemble? How would your company be different if it looked like Zipcar and less like Enterprise?

P.S. If your business does not resemble the one you want it to be, you might check out our Innovative Workshops on Radical Management over the next few months...

Wednesday, March 14, 2012

Dimensions of Power: What can you influence, and how much?

How much power do you have in your organization? What dominates decisions in your company? Doing what's best or political considerations? How strong is the influence of the people doing the work vs the top managers?

I recently asked a project leader at a large organization about the weight of politics vs. substance in decision making. His response: they are of about equal importance. I wasn't really surprised. In fact, in all the years I have been coaching Agile teams, I have only once heard "It is the power of the argument rather than the positional power of the speakers which drives decisions."

OK, I work a lot with dysfunctional companies (who want to get better), but how many companies can claim that politics are substantially less important than substance in decision making?

What about the people in these organizations? The higher in the hierarchy you are, the more power you have. Does that mean as a mere employee that you have no influence? And what can people in high places really do with their power?

Certainly an influential manager can accelerate a career or make employee's life miserable, but often I get the impression that that is the limit of their power. Substantive decisions often require someone even higher up to or a lot of consensus building.

I have some theories, but before I publish them, I'd like to hear your experiences. What can you influence or decide? What can your managers decide (or not?) How important is politics in your decision making process?

Please comment or respond to my quick poll, How much influence do you have in your company?
Or better still, do both!

Tuesday, March 6, 2012

An innovative workshop on radical management

In these three days (March 19-21 in Washington DC), you will discover how to use radical management to thrive in the 21st Century creative economy and the world of continuous innovation.

If you’re a business leader
have you ever wondered how your firm could not get beyond merely satisfying your customers and clients, but delight them? And not just once or twice, but consistently day after day, year after year? Have you ever wondered how your firm is going to survive and thrive as the world economy goes through a fundamental phase change—from industrial bureaucracy to a creative economy of continuous innovation?
If you’re an Agile or Scrum coach
have you ever wondered what it would take to make the entire organization Agile? Have you ever considered how to get your Agile/Scrum teams  the support from top management that they need to be sustainable? Do you know how to powerfully communicate the essence of Agile to senior managers and inspire them to support your teams?
If you’re a public sector manager…
have you ever wondered why you keep facing across-the-board cuts, and keep being asked to watch “do more for less”, only to see this turn into “less for less”? Have you ever wondered how you could break the seemingly unchangeable cycle of cost/benefit tradeoffs?
If you’re an entrepreneur in a startup
have you ever wondered how you can grow the firm without it succumbing to deadly drag of traditional management and turn the workplace into a dreary grind? Are you concerned that the fun of launching a new business will eventually have to stop and that your dreams will turn into the world you were trying to get away from?
If you’re a middle manager,…
have you ever wondered why your great innovations and improved ways of doing things don’t seem to have any lasting traction? Have you ever wanted to know how to get your bosses on board with what you’re doing and get the whole organization in sync with your innovations, rather than be forced to trim your ideas to fit the bureaucracy?
If you’re a management consultant or executive coach
have you wondered how you could light a fire under your clients and get them to break out of defunct management practices? Have you ever wondered how to inspire your clients to avoid the lethal disease of disruptive innovation and spark their organizations with continuous innovation and high profitability?

Then just imagine...

  • Having three days of immersion in highly interactive workshop that not only answered these questions, but also embodied a process of experiential learning that is tailored precisely to the very issues that you want to learn about?
  • Having one-on-one conversations with some of the world’s leading experts in the new world of creative economy that is emerging?
  • Working on a new game plan with practical actions to respond to your goals, in collaboration with other like-minded innovators, with everyone’s mind on fire, and striking sparks from each other’s thinking?
  • Having access to the best ideas in the world about these issues and seeing how they relate to the the best ideas from the finest thinkers, including Peter Drucker, Clayton Christensen, Gary Hamel,  Roger Martin, Ranjay Gulati and many more?

Is this possible?

This workshop is taking place on March 19-21, 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). Note: Other sessions will take place in April and May.

What the workshop isn’t

Well, let’s be clear.
This workshop isn’t a quick fix.
It isn’t some flaky new idea that hasn’t been tested in actual experience.
It isn’t more of the same old command-and-control management, repackaged under a different label.
It isn’t some vague subjective pie-in-the-sky chimera that can’t be measured.

What this workshop is

It’s a journey in which you learn about 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

It’s undergoing set of experiences that involving fundamental rethinking of what it takes to get things done in the tumultuous world of the 21st Century organization: the world will never look the same again.
It’s a voyage of discovery, in which you will learn and embody a way of thinking, speaking and acting that is radically different from the traditional command-and-control bureaucracy that is pervasive in organizations today.

It’s discovering 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.

It’s about creating authenticity in the workplace, both for you, for the people you work with and for, and for the people who work for you.

It’s a way of getting in touch 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.
The workshop is taking place on March 19-21, 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). Note: Other sessions will take place in April and May.

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 March 19-21, 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). Note: Other sessions will take place in April and May.

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.

The workshop is taking place on March 19-21, 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
Interactive exercise
Participants’ learnings & celebrations
First day afternoon
Principles of radical management
Interactive exercise
Participants’ learnings & celebrations
Principle of customer delight
Interactive Exercise
Participants’ learnings & celebrations
Second day morning
Mmanagers: enabler of self-organizing teams
Interactive exercise
Participants’ learnings & celebrations
Coordinating work: linking to customer delight
Interactive exercise
Participants’ learnings & celebrations
Second day afternoon
From value to values:
Interactive exercise
Participants’ learnings & celebrations
Coordinating work: linking to customer delight
nteractive exercise
Participants’ learnings & celebrations
Third day afternoon
Application to the participants’ situations
Case study
Interactive exercise
Participants’ learnings & celebrations
Principles of radical implementation
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

  • A certificate of recognition and commitment to radical management.
  • 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
There are still some spaces left for the workshop on March19-21, 2012.

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 other experts say about radical management & the creative economy:

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 March 19-21, 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). Note: Other sessions will take place in April and May.

Sunday, March 4, 2012

The Deadliest Sin of Change Leadership

InfoQ just published a wonderful interview with Sanjiv Augustine and Arlen Bankston on the 7 deadly sins of agile adoption. While I agree with everything Sanjiv and Arelen said, they missed the deadliest sin of all. Without getting this one right, you condemn your initiative to failure. Here's why I don't talk about change management and my own list of 7 deadly sins of the change process.

I like their list of sins - I've seen all them, and have probably committed a few them in my day (but that's OK - we learn from our mistakes and try to do better next time):
  1. Inappropriate scaling
  2. Lack of organizational change management strategy
  3. Lack of demand management - funnel projects to portfolio management, then bring projects to teams
  4. Lack of engineering discipline
  5. Siloed or tiered implementation
  6. Lack of tool sophistication
  7. Outdated HR policies
What did they miss? They missed a the fundamental reality of change: People don't mind changing. Most people want to learn and grow! But they hate being changed! People need to be an active contributor to the change.

What does this mean for the change agent? S/he cannot manage the change. Management implies control, like with strings on a marionette. As a puppeteer, you can make the marionette dance, but as soon as you stop pulling, what happens? The marionette stops dancing. If your change initiative is to be successful, you need your people to want to dance. In other words, you have to leave the destination open, without forgetting the purpose of the trip, so people can adopt your vision, make it their own, and carry it forward as "our" vision.

You are catalyzing the change and leading the change, but you are not managing the change. The change should take on a life of its own. This is why I call it change leadership.

Here is my list of change leadership sins:
  1. Not activating the people involved to co-create the change
  2. Considering the change process to be a defined route from A to B. 
  3. Change leaders themselves investing insufficient time and presence in the transition
  4. Training people to apply a framework before creating desire for the framework
  5. Focusing on practices without embracing the underlying values and principles
  6. Trying to apply the change too quickly with too little support from experienced practitioners of the new approach
  7. Relying too heavily on external coaching to fix leadership failures at the operational level.
Number 1 is the deadliest sin of all. If you do not activate the people involved to co-create your change, your change will fail. How can you activate them? Invest time and effort in the marketing process. Engage in adult to adult conversations, rather than issuing top down directives. Leave the outcome open (even if the vision is crystal clear). Get the people to figure out how to realize the vision themselves and give them room to adapt it to their needs. 

How can you tell if you change initiative is going well? Ask the concerned people the Net Provider Score question: On a scale of 0 to 10, how likely are you to recommend a friend or colleague to apply our approach? If your net promoter score is negative, you will probably fail. If it is +50% or more, you are probably in good shape. The closer you get to 100% the more likely your change is going to be a lasting improvement!

Friday, March 2, 2012

Skip the Budgeting Process?

There was one last question at our webinar on Radical Management that still needs answering.

Dan DiCamillo asked: Have you found a suitable replacement for (or a pitch to delay) yearly budgeting and planning, to give a little breathing room to start customer delight based practices?

I passed this question to Franz Röösli, Director of the Beyond Budgeting Roundtable and co-Initiator of the Stoos Network. This is his response:
Very interesting, in my view the question indicates the relatedness and interplay that exists between Radical Management and Beyond Budgeting (BB).

It is not easy to answer the question without having any context. Furthermore I would suggest to the person to get familiar with Beyond Budgeting (e.g. via the The Leader's Dilemma) to really be able to relate his question in the light of the BB model. That is not done with a few sentences (just as you needs some time to really get an understanding of Radical Management).

Nevertheless, as a very short but certainly improper abbreviated answer I would like to mention that BB companies do not have this fixed yearly budgeting and target setting process. That’s why they have the breathing room to create customer delight by their very systems design. So going BB could be an answer to solve the problem that this persons is seeing to start with Radical Management/customer delight . (That’s another reasoning why the two concepts (RM and BB) have such a strong fit and do support each other in my view).
So here is the trade off: flexibility and the ability to respond to new challenges and opportunities vs. predictability. An management model which emphasizes predictability suffers from long lead times and high overhead costs.

If we were talking about physical inventory, it would be pretty obvious that having stuff sitting in a warehouse is bad thing. It costs money, rots, gets damaged, gets lost or stolen....  The market tastes can change, and so the risk of having to write off the investment in stuff increases. With intangibles, e.g. new product designs, new software, and other intellectual property, it's harder to see the waste because the inventory doesn't require any new space. But it still costs money, binds resources, and makes the company inflexible and unresponsive.

A phase driven development framework compounds the problem, because the way people are allocated to projects tightly couples projects to each other. Changing course after a project has started could mean throwing away work in progress for a zero return on investment. Not good.

So here is a radical approach to budgeting and financial controlling:
  • If you need a total number for R&D expenses, plan that on a yearly basis, but don't go down to the level of budgeting individual projects. Be prepared to revise that number up or down once or twice per year.
  • Focus on just a few projects at once. Prioritize primarily by sequencing, not by resource allocation. You'll be much more productive.
  • Plan your projects so that you get a minimum useful version of whatever you're creating within a few months. Strive never to more than one month away from a deliverable state there after. 
  • Never forget that customer delight is more important than the output itself. If you can't deliver something monthly, how can you delight your customer on a monthly basis?
  • Bring stakeholders together as it becomes clear that capacity is available. Answer the question, 'what should we do next?' Another way to phrase this is, 'what is the most valuable new capability that we should have three months from now?'

Thursday, March 1, 2012

Questions and Answer from our Webinar on Radical Management

Yesterday, Steve Denning and I hosted a discussion about Radical Management. We had many more questions than we had time to answer, so here are answers to more of the questions:

Tom Mellor asked
: Robert Quinn in his book Change the World wrote "[deep change] requires letting go of control.  It means facing the unknown, walking naked into the land of uncertainty.  We spend most of our lives striving to avoid that prospect. When faced with the choice between uncertainty and conformity, we usually choose conformity."   How do we help our firms choose deep change?

Peter Stevens: Deep Question! When I work with command and control managers, they are often afraid of losing control, because they are also accountable. So I think part of the process is helping managers understand that how their control is going to change, that results will still be important, and how accountability is different but still present. For instance in Scrum, accountability is achieved through the Daily Scrum and the Sprint Review, the latter often with stakeholders present, making what has happened transparent to all. This gives people important assurances that they are not engaging in dangerous 'Blind Trust'

Furthermore, I think Storytelling plays an important role. Telling stories can convey a vision of the future, guide people to solutions (or perhaps just reassurance) by considering similar solutions in the past. Listening to stories can help people understand each other and identify commonalities between they are and where they are going. I am particularly fond of the 'Remembering Heaven' exercise: by remembering and sharing success stories from the past, the future you are proposing no longer looks so strange to them. Storytelling improved the effectiveness of my Scrum coaching enormously!

I also teach Jurgen Appelo's Management 3.0 course. This is about giving middle managers tools for dealing with their departments in a radical or agile world. For example, his Delegation Poker game is very helpful to managers who want to understand their roles and how they should interact with other people. So in summary, I think the big issue is taking away the fear of change - as people start to see how the pieces fit together and what they have to do, the new world no longer looks so strange, comfort levels rise and people become more willing to try out and accept new ideas.

Adrian Leu asked: Doing something innovative in IT in healthcare in UK very often hits the problem of badly implemented, legacy systems for anything that needs to have a larger cover than just localized solutions. Is a radical solution the best one to apply? How do you sell this to the stakeholders?

Peter Stevens
: Three big questions here! 1) What to do with your old, difficult to maintain IT systems?  2) How to manage the process of whatever you decide to do to fix them? And 3) how do you convince your stakeholders to do the right thing?. The first question is really a question for your IT people. They are the experts. I would trust them to come up with good alternatives. On how to manage the process: Several radical approaches, most notably Scrum and Kanban were developed in an IT context, so chances are good a radical approach will work well in this context. The introduction itself needs to be 'radical' - that is with the consent, desire and participation of all the people involved. If you're getting resistance to some change, you have not gotten the necessary support from the people implementing that change. In this case, you need go back a few steps and do some marketing of your ideas.

Your last question, How do I sell it to stakeholders, is a big one. I've been planning to write a blog entry on it for some time and people have written books on the subject! There are many patterns for making change happen, 'Fearless Change' by Rising and Mann has an excellent collection (though it does not include storytelling!). Steve has several books on Leadership Storytelling.

Change like this cannot be sold. The people have to buy it, or more precisely, buy in to it. So you have to market it. AIDAA - Awareness -> Interest -> Desire -> Action -> Ability is a useful pattern. Start with Awareness and work forward.  A good place to start is with the stakeholders themselves. Get them to tell their stories: what is their pain and why? Ask them about their successful projects in the past. Look for attributes in those stories that you would like to have in the future and ask 'wouldn't it be great if our projects today were like that?' Now you can talk about your proposed solution and get permission to try out a next step.

I usually get involved when a champion has gotten enough awareness and interest among the stakeholders that they are willing to listen to an expert. You still have to build awareness, interest and desire among all the people who will be involved, but this is enough to get the ball rolling. I would not go straight into training (Ability) at this point, but continue to build interest and desire until you have something close to consensus that the radical approach is the way forward. Then you can start with the training and the first project. Usually coaching his helpful as well.

This is a very short answer to a very long question, but I hope it gets you started! Please feel free to email me for more info...

Margaret Clark asked: How to deal with it when leadership plays lip service to innovation, collaboration, yada yada, but doesn't actually do anything.

Peter Stevens: Hmm - this could be a lot of things. Where are they in the AIDAA process? It might just be lack of ability, which can be fixed by training and coaching. It might be a lack of lack of engagement and commitment. These are a classic failure patterns. Showing presence and determination are success patterns. If management hasn't really Decided to go this direction, you probably need to back up and build awareness, interest and desire to solve this problem.

Some people seem prefer to becoming a statistic rather than changing course! If an otherwise intelligent and rational manager does something which seems counter-productive, then her bonus probably depends on some consequence of her chosen course. I think your best chance is to find out the real reason why the people involved are doing the rational thing. It might have something to do with the focus on the bottom line rather the delighting the customer. I would work on enlightenment of the people concerned. And consider the answer to the previous question. You are trying to change their mindset, so they need to go through this AIDAA process in their own minds.

Christy Wendell  asked: Since IT Managers ""hate"" their jobs ... how can the companies that live and die by IT (e.g. video gaming company, service providers, etc.) best manage when 95% of their employees are IT types?

What does deep demotivation prophecise about the future of the company?  The consequence of demotivation on productivity and customer service is known to all. Only 20% of workers worldwide a fully engaged in their jobs (and the percentage is much lower in India and China!). Paying attention to staff happiness is an emerging best practice. If you inquire about staff happiness and don't like the answers, you should do something about it!

Daniel Timberlake  asked: How can you encourage collaboration and influence change when you don't hold all the cards?

Peter Stevens: Good question! Everybody has influence -- few people, even at the top, really have control. I would suggest you start by building a community in your company of people who share your ideas and interests. This can be a very informal group at the beginning, meeting at lunch or after work. You can share ideas and experiences with each other. Your meetings can also be a place where newcomers can find out about your approach. I used this pattern when I started doing Scrum. No one had ever heard of Scrum, much less published a job posting for a Scrum Master when I started doing Scrum. So I started the Scrum Breakfast, and every month, people came who wanted to find out about Scrum. This help spread the word, built acceptance for Scrum, and had the pleasant side effect of creating a market for Scrum related services.

Chuck Phipps asked whether it makes sense to go stealth to get RM in a traditional-management organization.

Peter Stevens: This is a common pattern in IT, in which agile practices (e.g. Scrum) are applied to improve the productivity. Eventually the Scrum projects run into conflict with the command and control structures of classical management and the day of reckoning comes. A Ford plant in Mexico was the leanest, most efficient automobile plant in the world in the 1980s. But rather than adopting those practices in the rest of the company, Ford chose to bring the plant back into the fold of doing things the Ford way, which was not good for their efficiency nor for Ford's health as a company. Stealth may be the only way to get started. But I would think about your "coming-out": How are you going to deal with your management when they tell you, 'you're doing great work, but we need you to improve your bottom line'. Zappos had this dilemma and ended up 'firing' their board of directors by getting the company sold to Amazon. I would strive to get permission early for what you are doing, even if it is 'just a limited experiment.'

Joel Bancroft-Connors asked what is middle management's place in the new era of self empowered teams?

Peter Stevens: Middle management most definitely has a role! The purpose of middle management is to hold the company together -- that will not change. Some of the duties will not change either. For example, someone will have to allocate people to teams or projects.

The tools of middle management will change, in some cases dramatically, because many of the old tools are ineffective or counterproductive. Middle managers will concentrate on achieving outcomes rather than merely producing outputs or controlling inputs. They will look more outward to the customer and less upwards to the boss or sideways to their peers and rivals. They will focus more on managing the system and less on controlling individuals. They will focus on creating an environment where their people can work effectively. When impediments arise which prevent work from being done effectively, they will use their influence and position to get the problems fixed. Most importantly, they will be on the front line of living, promoting, and protecting the radical management mindset within the organization.

Kim Fehring asked: Working remotely/having team members in different offices is still a struggle. How can we apply all this remotely?

Working remotely is a challenge - the people don't see each other often. It is easy to focus on 'your' view of the problem and it is harder to build trust between the individuals or organizations involved. As working remotely can cover anything from telecommuting to off-shoring, I would ask you to explain your context and we can look for a better answer.

Alicia Korten asked:  What to do to make the workplace more fun, innovative and agile?

Steve Denning wrote that laughter is the ACID test of Radical Management, and this is so true! In my experience, laughter is the side effect of respectful conversations, a sustainable pace, a focus on results instead of punch-clocks, and the culture of fearless trust that is often seen in radically management teams. Creating the basis for innovation is much harder to generalize. Ideas are very fragile. Few companies have been willing to cannibalize an existing product to go after a new opportunity. (Here are two counter-examples: IBM, who learned the hard way that protecting the System 3X series from their PC's was a bad idea; Apple who risked the iPod to bring out the iPhone. Both of these companies learned the hard way. Here's a topic for a management workshop: "How can we structure our management so that no one person can kill a good idea or keep a bad idea alive?"

Did I miss your question? Send me a tweet or drop me a line, and I'll be happy to answer it. Or, if you want to get deeper into it, check out our workshop on Radical Management: 3 dates this spring in Washington, DC!