Am I Crazy? Or Is It The Whole Firm Where I Work?

A reader in France wrote to me yesterday:

 

“It is refreshing to see some organisations do actually 'get it' - that employees are people rather than things, or in my own organisation 'posts' to be filled or swopped around at imperial will. The 'saying / doing' gap is just so great that sometimes I despair and wonder if it is really me that has got it wrong - your blogs are a reassuring boost.”

 

What do you do, when you are talking sense and everyone around you is thinking, speaking and acting in ways that are utterly counter-productive?

A century hence, when historians come to write the history of the current age (assuming our species survives so long), they will, I believe, be puzzled as to why so many people managed—and so many more people allowed themselves to be managed—in ways that were known to be unproductive, crimped the spirits of those doing the work, and frustrated those for whom the work was being done. Why, they will wonder, did this continue for so long on such a wide scale?

One school of historians may focus on the pervasive feeling of complacency.

 

Another may marvel at the superficiality of popular proposals to deal with it, such as by contriving “a sense of urgency,” with measures like: conspiring to create “crises”, canceling luxurious perks, using consultants to force more open discussion, banning senior management “happy talk” or bombarding workers with information about opportunities.[i] These really are bandages on a cancer. It’s really “more of the same,” only doing it faster.

 

Still others may dwell on the sense of resignation felt by most of those involved—the feeling that no matter what is done, it won’t make any difference. After all, how could traditional managers avoid turning radical management into a mirror image of the very practices they were supposedly trying to change?

 

In other spheres of human activity, when we look back over history, we can see times when whole societies acted in ways that in retrospect look utterly misguided. What did someone with sense think and say during the Hundred Years War? Most wars are spasms of craziness. But when it goes on for several generations, what could reasonable people have been thinking during all that bloodshed?

 

Or during the time of slavery in the Ante-Bellum South in the US? If anyone said at the time that this was not only wrong but not a very unproductive way to run a society, the statement wasn’t exactly greeted with enthusiasm. That’s because the statement threatened a whole way of life. That way of life was about to change fundamentally, but the thought of the change was unthinkable to most of those living in that society.

The reality is that big disruptive changes are never embraced at once, no matter how sensible and rational they are. For instance, the principles of science were figured out by people like Francis Bacon in the early 1600s. But it wasn’t until a number of decades later—1660—that the Royal Society was founded in London and modern science really began to get under way. For a couple of generations, scientists couldn’t make their voice heard. The universities were the worst. They fought it bitterly, because they had such a stake in the status quo. Much of what they were teaching would have to be thrown out. Unthinkable!

 

Similarly if you go into business schools today and tell them much of what they are teaching is upside down, and leading to counterproductive results, and that almost all the management textbooks will have to be substantially rewritten, you should not expect to be greeted as a hero. Instead, you will be told, if you are listened to at all, that your heterodox thoughts will lead to chaos, or worse.

Lang Davison, a co-author of The Power of Pull (2010) was telling me recently about the workshops that were run by the Deloitte’s Center for the Edge with their startling new findings, based on a study of 20,000 companies, such as that the rate of return on assets of US companies is one quarter of what it was in 1965. The executives were unwilling to take the studies seriously. Lang told me: “We even heard executives say, in response to our findings about declining ROA, that it couldn’t be that bad if the equity markets still value corporate institutions so highly. They are living a delusion, as reflected by the capital markets. It’s all the more powerful as it’s a collective delusion.”

 

So the change won’t be easy and it may not be quick.  But the economics makes it inexorable. Firms successfully implementing radical management will be two- to four-times more productive than traditional firms, even on traditional metrics. And so the traditional firms will be steadily put out of business, even faster than they are today (i.e. life expectancy of a Fortune 500 firm is now down to 15 years, and heading towards 5 years.)

 

Where do the gains in productivity from radical management come from? One aspect is that much of what big bureaucratic firms do isn’t wanted or needed by customers: by listening more closely to customers, firms stop wasting time on things that aren’t valued. Another is that by fully mobilizing the energies and talents of people in the workforce, the firm has a lot more ideas to work with. A third is by introducing radical transparency, long-standing problems get identified and solved—something doesn’t happen in most established bureaucracies: problems can fester there for decades without getting resolved.  A fourth is that by working short cycles, the firm becomes more agile: as the marketplace changes, it can change direction at a moment’s notice. Finally, by insisting on value at the end of each cycle, the “queues” which are endemic in bureaucracy tend to be eliminated.

 

So for all these reasons, a new world is being born, willy-nilly. Radical management is coming to your organization. The only question is when, not whether. You can help it along by spreading the word!

To learn more about radical management, go here:

http://www.stevedenning.com/Books/radical-management.aspx

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[i] Kotter, J. A Sense of Urgency. Boston: Harvard Business School Press, 2009.  

Comments

[Vic Williams]

'They' will take Radical management and paint 12-step-program traffic lines up to it, group-reducing it to another fad. Some, more and more I hope, are going a bit off-road, doing it, and spreading the word and the way.

[Jordan 1]

I'd like to share your beautiful blog! But the way I feel is weak! Would like to have the person help me

[Martijn Linssen]

Excellent post Steve! Indeed it is baffling to see talent and energy wasted at current scales just to uphold the status quo

I'd love to see that 5-year prediction come true. On the other hand, I think traditional enterprises will see these movements and counterreact: because they "don't want to be caught in the middle" they'll enforce current strategies and tactics even more, wanting to move up and out of the "threat from below"

The inside-out thinking will continue for very long I'm afraid. I just recently heard of an innovation where personnel files and were fully digitised: you could even scan the paper on the copier and send it to the electronic system! What a waste of time, money and energy if you look at the ROI of this.
Work assignment on the other hand, something that happens a thousand times a day in stead of once a year, is still a "human process" involving lots of email back and forth

I shared my own thoughts on the clash of E1.0 and E2.0: http://www.martijnlinssen.com/2010/08/social-achilles-and-troj-enterprise.html - maybe that's how it will go?

[Rickladd]

I don't find it all that strange to see this happening, actually. Although terribly wasteful, it's obvious power doesn't give up its privileges very easily. We have had an organizational structure built on chains of command-and-control, metrics and measurements still serving the needs of Frederick Taylor, and a rigid, analytical, detached scientific methodology that removes everything from its proper context and fragments it into incomprehensibility. Couple this with careers and fortunes made on top of what has evolved into a bloated, loathsome, and moribund infrastructure, and you've got a wee bit of inertia. The intersection of economics and politics doesn't make meaningful change all that easy either.

Nevertheless, I agree with you, Steve. It is inevitable or, nearly inevitable. Not as inevitable as, say, a devastating earthquake along the San Andreas in the next 500 years, but pretty likely to occur . . . and I'm not a gambling man. Your list of where this change will manifest itself is both prescient and very interesting. I especially like your first point, in part because I think it encompasses all the others. It seems it's in the nature of most of today's big, bureaucratic firms to "know" exactly what it is that will make them successful, and they'll be damned if they'll let any interlopers like, oh, their customers and employees to interfere with their notions of openness, transparency, accountability, collaboration, and all that other hippie nonsense.

Speaking of which, I'm growing quite fond of the concept of Hippie 2.0, as put forth by folks like Luis Suarez (@elsua), Jay Deragon (@jderagon), and others at http://hippies20.com/. I see this beast as the engine(s) that will lead those gains in productivity you write of. Perhaps slowly, and in fits and starts but, as you point out, coming to an enterprise near you soon. It's clear we need a new philosophy of not only how work can, and should, get done, but also why, and for whom, it should be done. As Russ Ackoff used to say (not verbatim, of course) It's not enough to be excellent problem solvers, we need to be able to solve the right problems. What I think you, I, and others see is the beginning of the best and most useful way to identify what those problems are, or to inform a change of direction when we turn out to be wrong.

Thanks for a wonderful post. In this world, I find it valuable to encounter some assurance this kind of thinking may be a bit more prevalent than it at some times seems.

[Steve Denning]

Hi Jordan, We all feel weak when faced with power structures that demean the human spirit. But you are not alone. Millions of people in workplaces around the world are facing similar dilemmas. If everyone capitulates, then the status quo continues. If people begin to stand up for what they believe, then a new world can begin to be born. This is about having the courage to be, to live a life worth living. It's a choice for all of us.
Steve

[Steve Denning]

Hi Vic, Of course "they" will try to turn this into a 12 step program, but "we", being aware of what is afoot, will be able to distinguish the real thing from the counterfeit. This is about organic change, people to people, both employees and clients. Above all, there should be laughter. If people aren't laughing, something is seriously wrong: we are back into traditional management. This is about cultivating the fire of the human spirit.
Warmly
Steve