How to reinvent management

Citation

Hagel, J. (2011), "How to reinvent management", Strategy & Leadership, Vol. 39 No. 3. https://doi.org/10.1108/sl.2011.26139cae.001

How to reinvent management

Article Type: The strategist’s bookshelf From: Strategy & Leadership, Volume 39, Issue 3

The Leader’s Guide to Radical Management Stephen Denning (Jossey-Bass, 2010)

As Stephen Denning points out in his provocative new book The Leader’s Guide to Radical Management, a variety of metrics suggest that business performance has been significantly eroding over the long-term. Return on assets for all public companies has collapsed, topple rates from leadership positions are rising, the rate of product innovation has declined, and there has been an erosion in brand trust.

Denning makes a strong case that this long-term secular decline is so significant and sustained that it requires us to re-examine our management approach at its roots – hence his proposed “radical management” initiative.

Denning begins by tracing out the changes in the business landscape that require such a radical reassessment. In many respects, these changes are well-known – globalization, accelerating change, the growing power of customers and the increasing importance of knowledge workers in producing and delivering value to the marketplace. Many observers have offered partial solutions – such as a specific management practice that needs to change, like the need for more active engagement with customers.

But Denning’s book ambitiously defines seven broad management principles that, if implemented together, can provide the foundation for a fundamentally different management approach, one much more suited for the new business landscape that we all confront:

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  Focus work on delighting the client.

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  Do work through self-organizing teams.

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  Do work in client-driven iterations.

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  Deliver value to clients each iteration.

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  Be totally open about impediments to improvement.

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  Create a context for continuous self-improvement by the team itself.

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  Communicate through interactive conversations.

One arena where these principles are achieving deep impact today is software development. In recent years, leading developers have adopted a dramatically different approach to management called “agile development” in some companies and “scrum development” in others.

Denning is clear that each of the seven principles of his proposed approach to radical management has been discussed and explored before, usually separately. In fact, he provides a very helpful history of each of the principles in terms of management theorists who have written about them. For example, the first principle of focusing work on delighting the client draws heavily on the path-breaking research of Fred Reichheld, who pointed to the economic impact of customer delight and developed the well-known “net promoter” score that helps to quantify this very qualitative concept.

Denning himself has been a pioneer in defining several of the principles, in particular what it means to communicate through interactive conversations in a business setting, with specific emphasis on the importance of story-telling.

But Denning’s greatest contribution goes beyond articulating the principles themselves. A key theme of the book is that these principles really derive their power by working together. For example, focusing work on delighting the client helps to provide an important context for both doing work in client-driven iterations and delivering value to clients in each iteration. In fact, in operation the principles generate a virtuous circle, with each principle becoming an important enabler of the other principles. As Denning asserts, “These seven principles form an inexorable, mutually reinforcing sequence … Each of the components adds an increment: when they are combined, the increment becomes exponential.”

Even more importantly, Denning does not stop with the articulation of the principles. He supplements each principle with an exploration of a series of practices that help to bring life to the principles and often challenge conventional wisdom. For example, under “delighting customers,” Denning urges companies, among other things, to “aim for the simplest possible thing that will delight.”

The final chapter of the book focuses on the principles of “radical change management,” offering some perspective and lessons learned in terms of how to get from where we are today to where we need to be. Denning cautions that “… you will be certain of one thing: that radical change management will not be a simple recipe that you can wrap up and take back to your organization to apply without modification tomorrow morning … ”

In reflecting on lessons learned, Denning is a champion of an organic approach to change management that starts with nurturing small pockets of initiatives and conversations wherever they occur in an organization until they become “a river of cascading conversations.” Unlike many management theorists, Denning has worked within an organization to drive major change, and he shares some of his personal lessons learned.

Denning observes that radical management is “simple to understand, difficult to implement.” The fact that many of these principles have been around in management literature for so long and yet are so rarely visible in practice suggests that there are profound mindset shifts that must occur and deep institutional resistance to these changes.

There’s reason to believe that new technology like cloud computing and social software will help breakdown this resistance. By creating new ways to connect pockets of initiative within a large enterprise and by providing access to sophisticated computing resources that creates opportunities to scale these change initiatives much more rapidly than ever before, technology can become a potent enabler of radical management.

Third parties can also become important amplifiers of change initiatives within the firm by mobilizing a broader set of resources and by becoming early test beds to demonstrate the power of new management approaches. My own experience is that the edges of firms, where there is a lot of interaction with third parties in supply networks, product innovation networks or distribution channels, can often become fertile seedbeds for change initiatives.

Denning weaves together the management building blocks of an intriguing radical management approach to dealing with discontinuity. In the end, his book provides insight regarding new ways to operate successfully, as individuals and institutions, to more effectively achieve our potential.

John HagelThe co-chairman of the Deloitte Center for the Edge. His books include The Power of Pull (2010), The Only Sustainable Edge, Out of the Box, The Social Life of Information, Net Worth and Net Gain.