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« Ending the CEO’s Worst Nightmare: Disruptive Innovation: my article in Chief Executive Online | Main | HBR: It's official: fast forward to 1965! »

November 17, 2010


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Earl Rudolfo


Very thought-provoking ideas and concepts. Definitely agree that there needs to be transformational shifts in Management Practice. It seems to me that the old adage of "the customer is king" is resurfacing. As you mentioned it's all about focusing on delighting the customer by enhancing the customer/user experience through products and services. The organization that aligns its goals and objectives and shares the vision of doing so with its employees are the ones that are on the road to success.

Deb Mills-Scofield


You have a very powerful somewhat implicit message that may warrant making explicit. As John Hagel & John Seeley Brown point out in The Power of Pull, companies were organized around efficiency. What you're/we're discussing is that effectiveness has been either ignored or made a bit synonymous with efficiency (which is also highlighted in your post today on the HBR article about McNamara in your question to him about quality of the loans vs. quantity). In the revenue/profit equation, the focus was on efficiency which many times trumped effectiveness. What companies didn't realize was the 'soft' costs of being ineffective - they weren't as quantifiable or as easy to obtain.

As Tony Hsieh and others who run their businesses similarly point out, effectiveness can trump efficiency. Many companies are no longer on the NYSE or S&P because they very efficiently went out of business by being very ineffective! Few understand the potential costs of efficiency vis-a-vis the benefits of being effective (and I use effective to mean delighting customers).

This also gets to revisiting how we measure corporate success - short term, measuring (mostly) efficiency wins and delights The Street, long-term it leads to extinction if counter-balances of effectiveness are not truly recognized as equally, if not more, important.


Account Deleted

Thanks for bringing together ideas from all the leading books.

Especially liked the focus on Customer Delight with reference to Peter Drucker and linking it with Apple and Zappos.

Also the shift from reducing transaction costs to scalable learning was very clear.

Gave a lot of clarity about the nature of The Firm and the difference between social norms, hierarchy and markets.


Hi Steve
I listened to you yesterday at Reinvention Summit and really liked your talk, especially when you said that managers have to report to workers and not the other way round. How good have they been in eliminating impediments ?
So your article us really helpful and gives the desire to read the books I have not read in your list.
Sure, there is a massive trend (wave ?), but still a long way to go !!! You post on HBR recent reference to McNamara shows how lost many academics or practitioners are.
In the spirit of storytelling, I am surprised that you do not mention Carey & I. Getz book "Freedom, Inc" published last year, since it recounts beautiful stories of leaders and companies over the world who are serious about what you call Radical Management.
I saw that you spend some time in France appreciating our "baguette". I would be glad to discuss with you when you come over.

Thank you

Laurent Marbacher


This is an excellent summary, Steve. I stumbled a little over the idea that managers must become leaders, because, like Abraham Zaleznek's "Managers and Leaders, Are They Different?," I'm not convinced such a shift is possible. I ran a personality company 10 years ago, and some of our work was in this area. Managers and leaders have two distinctively different personalities, so it's very hard to shift one to the other.

I concur that we need leaders, people who can focus on the goal rather than the process for attaining that goal, but I'm not at all convinced we can grow those kinds of people from existing management stock.

Thanks for this wonderful summary, however. Have a great Thanksgiving.

Steve Denning

Hi Terry,

Thanks for your note.

I see that you concur that we need leaders, people who can focus on the goal rather than the process for attaining that goal, but you’re not at all convinced we can grow those kinds of people from existing management stock. Your experience in running a personality company suggests that managers and leaders have two distinctively different personalities, so it's very hard to shift one to the other.

I’m simply describing the requirements for a 21st Century manager. Whether these managers come from the existing managerial stock or elsewhere remains to be seen.

As I have written in an earlier post, Zaleznik’s article deftly defines the behaviors of a traditional manager. First, the manager focuses attention on procedure and not on substance. Second, the manager communicates to subordinates indirectly by “signals”, rather than clearly stating a position. Third, the manager plays for time. Here we have the perfect description of the Dilbert-style manager. This is a skill set that frankly we don’t need any more, and probably never did. This kind of behavior undermines innovation and productivity, de-motivates the workers and frustrates the customers.

The reality is that the sell-by date of this Dilbert-style skill set has expired. So the managers with this skill sets need to evolve into leaders or move into a non-managerial role.

People Departments (or what were formerly called HR Departments) will have to find the new managers wherever they are.

My hunch is that it isn’t going to be too difficult to find people who want to become (genuine) leaders, as opposed Dilbert-style managers.

Happy Thanksgiving to you too.

Dave Duggal

Hi Steve,

I really enjoyed your post. The synthesis underscores a general disaffection for how business, government and society organizes to deliver value. It seems to be driven, at least partly, by increased expectation from our wired world, it’s as if we are half-liberated. We can see something is better ahead, were not exactly sure what it is, but there is a growing frustration with progress in getting there – we’re on the cusp.

A couple of thoughts -

I wonder if Outside-in, enablment, dynamic linking, value to values, and command to conversation represent a single shift from scientific management to emergence (with several implementation challenges).

There seems to be some overlap between some of the items.
Shift #4 (From Value to Values) seems to be a subtext of Shift #1 (From inside-out to outside in). Both reference the shift in goal, which is achieved by embedding customer-centricity in the mission. “The principle of obliquity” reveals that the motive for this shift is not self-less. In the spirit of the 21st century, let’s keep it real, these are not really social values per se, they are just enlightened self-interest in a new business context.

Likewise, I find that Shift #3 and #5 could be consolidated. Enablement is made possible of a loosening of the command and control structure that allows work to become dialog. This is a shift from exception management to managing highly-variable work and delivering mass customization.

While current automation systems now represent physical structures that constrain change, I believe it is next generation adaptive systems that will facilitate a more dynamic and innovative future (‘just-enough’ glue to hold things together, flexible where possible, procedural where necessary).

I look forward to reading the article when it comes out.


James Strock

Hi Steve--Just discovered you and your excellent post via post from the invaluable John Hagel. Your observations are spot-on, imho.

Steve Denning

Hi Dave,

Great comment! In philosophical terms, I agree with you. This is really about one integrated shift. At the end of the article, I call it "a shift from a focus on things to a focus on people," although "from scientific management to emergence" would be another way of expressing it. But in practical terms, people need to have things spelled out in more detail to get the gist of it.

I will write another post on this fascinating subject.


Dave Duggal

Thanks Steve. I agree with you, the clinical understanding of the problem is different than the communication of the cure/treatment to the patient - it requires a story teller that can engage and enlighten without threatening.

Bryan Murphy

Steve , Well done in bringing these together. I would ask are these interdependent in the same way an organism is not an organism unless it functions as a complete whole ? On the question of values, or what is important is vital. Have you explored the question of complex eqivalence ? Do people really understand what values are and that a value has a different complex meaning for each individual.

Pete Tansey

I liked the thread of your article - especially the first 2 topics they rally captured my imagination and helpfully articulated a lot of my experience. I was a little suprised at the briefness of the last 3 points Steve and wondered if there is more to be developed here to get it to the same level of usefulness for the readers. Cheers pete

Steve Denning

Hi Pete

Thanks for your comment. The amount of space devoted to the last three shifts is determined by the overall space for the article. If I add more to those shifts, then I will have to take out stuff from the first two.

It's not that I don't have more to add on these three shifts. My new book in fact devotes around 110 pages and around 50 different practices in support of those three shifts. So the article is really the briefest of summaries of a deeper stream of thought, for which there is no room in the article.

As some readers have already commented, the fourth shift--from value to values--may be the most important. It is discussed in more depth in the book.

The article points the way. It doesn't purport to be a complete guide.


Steve Denning

Hi Bryan,

What a fascinating way of expressing it! "Are these [shifts] interdependent in the same way an organism is not an organism unless it functions as a complete whole?"

That really captures the sense of interdependence that I am trying to articulate.


Brigitte Boussuat

Dear Steve
I appreciate your post and the valuable synthesis you make. (also comfortable to read for french people...). As consultant in management, i can feel this changes and the need to define new goals. Changes coming like a deep and strong wave !!

Phil Faidley

Well presented argument Steve and an interesting, novel approach that varies from the "doom doom doom" in management literature.

One wonders whether the degradation of Management (big M) has been a result of pull (not push), conversation (not direction), and increasing levels of demand for democracy from employees (or should I say "high-performance team members"?)
The 50-fold increases in productivity referred to pre-dated the rise in worker empowerment to a large extent. Maybe this was coincidental.
I dont imagine large-scale individual empowerment, buy-in and flexibility suit many of the case studies encapsulated in this article. I might have missed something.
Also, there seems to be a lack of addressing the immediacy of today's marketplace.
Is the notion of customer retention an outmoded approach, given that any product is available anywhere at any time from any supplier?
Once noble points of difference between suppliers of goods and services (customer-centric approach, service life improvements, value-based consumerism) are probably less valued today and will continue to be so as consumerism results in a "disposable product" economy.
This in turn results in diminishing product life, economies of scale determined from acceptable disposabiliy, and less of a need for high-powered, oracle-like management.
Management as a whole isnt dead. Yes it needs reinventing, and there will be fewer and fewer Managers (with a big M) and more and more drones in factories.

Imelda McGrattan

Steve excellent concise article as always. Life is simple and business is simpler, we have complicated it by over analysing and computing everything right down to the very people who are the life blood of a company ... Business is about people serving people. We are a consumerist society but too many consumers are being served by robotic companies filled with bureauracy and administration coupled with poor customer relations. As we become more removed from our own Human Natures we lose the natural way of dealing with relationships and it is a sad reflection of society today that people have to re-learn these basic skills .... When businesses remove autonomy from it's people they take away their ability to think and do .... they may as well have a machine .... it is easy to identify the successful companies who build relationships with its employees who then quite naturally build them with the customer....

Steve Denning


Beautifully said. When you put it like this, why does anyone think this is difficult?


Eustoquio R.García

An excellent job, Steve. congratulations. I might like to suggest the inclusion of some ideas on organizational members' participation in assessing the present and envisioning the desired future.

Eutoquio R. García
Caracas, Venezuela

Graeme Roberts

I appreciate the summary, Steve. It is very useful.

Since you are seeking feedback, and obviously very responsive to it, I would suggest breaking this very long article into sections. I may have attention problems, but I find it exceptionally hard to maintain concentration and follow a logical flow in a narrow column that I must constantly scroll.

Section 4 From Value to Values seems slight and needs more work.

Sections 2 Manager - Control to Enable and 5 Communication - Command to Conversation seem to overlap, and might even be combined.


Excellent job! We really lost our desire to be managed once we understood that there was no pay-off for putting up with insane behaviours.

In fact we now see that giving ourselves over to blind acceptance has disastrous consequences for the company and its brand too

You have created a discussion worth following!

SM Forsman

In the following quote you highlight a new aspect of management: "...Enabling talent unlocks passion and energy. This means that managers must inspire, motivate, encourage collaboration and make the workplace meaningful..."

I would like to add that this needs to be accompanied by a major shift in compensation - perhaps where managers are less highly paid (base pay) and must earn additional through the innovation of the team collaboration.

Unless your "new" model takes better care of employee contribution financially, it is simply patching the old broken system.

Steve Denning

Hi SM,

You are quite right about executive pay. I've talked elsewhere about the egregious excesses, some of which verge on obscene. Those excesses look even more problematic when you look at the performance of the organizations they are managing. How can you pay a CEO so much when the life expectancy of firms in the Fortune 500 has declined to around 15 years and is heading towards 5 years? It makes no sense at all. So, yes, rethinking executive pay has to be part of the equation.


Chris Busck

Hi Steve, Great summary. Led me to wonder why we don't talk of delighting employees as well as customers and if that's because we haven't made the shift totally and this is reflected in some reticence in expression. You draw the parallel well; this would just take it a notch further. It figures though; you could say that how you are with yourself is how you are with your staff is how you are with your customers.

Steve Denning

Hi Chris,
The reason I don't speak about so much about delighting employees as I do about delighting customers, is that delighting customers is the goal. Delighting employees is an important means for delighting customers. You can have firms that delight the employees and the employees are having a great time pleasing themselves. This is a quick road to bankruptcy. It is key to develop employees who get their kicks from delighting customers. It's an other-regarding perspective, rather than a self-regarding perspective, both at the level of the firm, and at the level of the individual manager or person doin the work.

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