Book Review: The Leader's Guide to Radical Management
Steve Denning has just published his latest book - The Leader's Guide to Radical Management: Reinventing the Workplace for the 21st Century. He contends that management today is in need of a radical makeover - existing practices are not adequate to meet the needs of the modern high-speed world, and to support todays workforce who are motivated by inspiring leadership rather than command-and-control authority. He draws on the changes that are happening as a result of the application of Agile methods and shows how they are influencing organisations beyond the information technology space.
A sample chapter from the book can be downloaded from here.
1. The book is titled Radical Management - why does management today need a radical makeover?
Organizations today face a crisis. The crisis is of long standing and its signs are widespread. Remarkably, the return on assets for U.S. firms has steadily fallen to almost one quarter of 1965 levels. Only 20 percent of workers are fully engaged in their work. Executive turnover is increasing. Consumers are becoming less loyal to brands. The rate at which big companies lose their leadership positions is increasing. The reality is that traditional management which served us well for much of the 20th Century is no longer a good fit for the economic context today. A fundamentally different kind of management is needed.
2. What is the problem that you have set out to solve with this book?
The book describes a way of managing that is suitable for the 21st Century. It resolves fundamental problems that traditional management hasn't been able to resolve, specifically accomplishing four goals simultaneously:
- In a world of rapid and constant change, management needs to be good at continuous innovation throughout the entire organization.
- In a knowledge economy, the organization must be able to mobilize the full talents and energies of those doing the work.
- In a marketplace in which the balance of power has shifted from the seller to the customer, the firm must be agile in responding to customers and clients.
- Finally, management must achieve all this without jeopardizing the levels of disciplined and scalable execution that traditional management was good at.
3. You make a strong point that traditional management doesn't work in today's workplace, what has changed to make radical management necessary?
Accelerating economic and social change in the global economy, the consequent imperative for ever faster innovation, the emergence of global networks of partners, the rapidly growing role of intangibles, which can't be controlled like physical goods, the increasing ownership of the means of production by knowledge workers, the escalating power of customers in the marketplace, and the burgeoning diversity in both the workplace and marketplace—all these forces have transformed the workplace. They will drive organizations to implement radical management as a necessary competence. Mastering this radically different context has become a requirement for organizational survival.
4. Why is it called "radical" management?
I have called this different way of managing "radical management" because it goes to the root of what makes things happen in the world. The workplaces that it creates are drastically different from traditional management. It implies fundamental shifts in how we think, speak, and act at work.
5. You talk about the seven principles of radical management - please can you briefly describe them?
The seven inter-locking principles of continuous innovation are: focusing the entire organization on delighting clients; working in self-organizing teams; operating in client-driven iterations; delivering value to clients with each iteration; fostering radical transparency; nurturing continuous self-improvement and communicating interactively. Together, the principles comprise a new mental model of management.
6. You link the principles to specific practices - why are these so important, and please can you describe some of them?
These principles comprise the seven most important elements of radical management. At the end of each chapter, I describe a large number of practices—more than seventy of them in total—that offer some of the ways to go about implementing the principles. Some practices support more than one principle.
The principles are more fundamental than the practices. Practices such as doing retrospectives or measuring the velocity of the team are important, but they are not as important as the principles which they support. If you think enough about the principles of radical management, you should be able to deduce the practices from them. If you keep the seven principles steadily in mind, you shouldn't go too far wrong.
Thus, in implementation, it's important to focus on the spirit of radical management and not get lost in the fine print. Even if you're not doing all of the seventy-plus practices yet are living the seven principles, that's still radical management. However, if you are doing lots of the practices but not living some of the principles, then you should probably ask yourself whether you still have at least one foot in the land of traditional management.
7. What benefits will organisations gain by adopting the principles of radical management?
The most important benefit is that the organization might survive. The life expectancy of firms in the Fortune 500 has declined from around 60 years to around 15 years. According to Deloitte's Center for the Edge, it is heading towards 5 years, unless something changes.
More specifically, radical management leads simultaneously to gains in productivity, continuous innovation, deep job satisfaction for those doing the work and client delight.
8. How important is it that organisations embrace all seven principles - can they adopt them in a "mix-and-match" style?
While adopting any one of the principles may lead to some benefit, the full benefit will only come from adopting all the principles as a package. That's partly because the principles are mutually reinforcing and partly because the principles are incompatible the Dilbert style bureaucracy that is now prevalent in many established organizations. Thus a decision to focus on delighting clients could have benefits, but it cannot be implemented effectively by a bureaucracy. Rule-based behavior doesn't delight clients. The goal of delighting clients requires a different kind of management—self-organizing teams—to support that goal.
9. What are the anti-patterns of radical management - are there things that will prevent organisations from achieving the benefits you talk about?
For most established organizations, radical management is a paradigm shift. A paradigm explains the world to us and helps us predict behavior. When we are in a paradigm, it is hard to imagine any other world. It is simply the way things are.
Traditional management is one such paradigm, with an interlocking set of assumptions, values and practices. It comprises a characteristic way of managing: top-down bureaucracy. Once the firm sees itself in the business of producing goods and service, i.e. things, a command-and-control bureaucracy becomes the logical way to structure and manage it. Work is carried out by following a plan devised by management, communications are conducted on a need-to-know basis, and productivity gains are made by downsizing and outsourcing. Traditional cost accounting supports traditional management and focuses primary attention on reducing costs.
Radical management is a different paradigm. It begins with the different goal—delighting clients. Immediately , bureaucracy ceases to be a viable organizational option. Instead the firm will naturally gravitate toward some variation of self-organizing teams as the default model for organizing work. That's because it is only through mobilizing the full energy and ingenuity of the workforce that the firm is likely to have any chance of success at generating the continuous innovation needed to delight clients. Once the firm adopts self-organizing teams aimed at delighting clients, downsizing and outsourcing are seen in their true light as counterproductive to everything the firm is trying to accomplish. Instead, doing work in an iterative fashion and providing value in each iteration are the norm. Radical transparency between managers and workers becomes a necessary principle for achieving the goal. Happily, when firms get into this mode, continuous self-improvement is a normal and natural way in which self-organizing teams evolve toward high-performance.
These are two radically different ways of thinking, speaking and acting in the workplace. Managerial habits change slowly. Traditional practices linger in people's minds as the default mental model of how to behave. The intent to do things differently may be present, but entrenched policies, procedures, and structures act as a drag. Deep-seated values and worldviews that shape people's lives help preserve the status quo. Business schools and textbooks continue to teach outdated methodologies. Traditional cost accounting methodologies cement the old ways of acting in place.
Nevertheless the change will happen. Economics will drive it. When firms practicing radical management are two- to four-times are seen to be more productive than traditional management, the change will happen inexorably.
10. Can anyone be a radical manager or does it need a specific skillset or personality?
Radical management is how most people would act naturally if traditional management hadn't taught them some very bad habits. People do best what they do for themselves in the service of delighting others. When they are in charge of their own behavior, they take responsibility for it. When they are able to work on something worthwhile with others who enjoy doing the same thing, the group tends to get better. By working in short cycles, everyone can see the impact of what is being done. When people are open about what is going on, problems get solved. Innovation occurs. Clients are surprised to find that even their unexpressed desires are being met. Work becomes more fun than fun. These natural human behaviors don't need any particular skillset.
However the principles are not so easy to implement in established organizations. That's mainly because radical management is very different from traditional management. It's a different way of thinking, speaking, and acting in the workplace. It has different goals. It involves different ways of looking at things, different ways of organizing, and different ways of interacting with people. Everything, in fact, is different.
11. You talk about the influence of Agile practices in Information Technology - why have these been effective and can they really be applied beyond the bounds of the IT department? (examples will be great here)
Agile practices in information technology can be seen as a subset of radical management, just as the management practices at Toyota can be seen as another subset of radical management in auto manufacture. When companies see the impact of Agile practices in software development, with higher productivity, great innovation, improved client satisfaction and deep job satisfaction, then smart managers naturally start to ask themselves: why just software development? Why not do this throughout the organization.
Examples of Agile practices spreading beyond include such diverse organizations as:
- Total Attorneys, a provider of services to small law firms in the Chicago area
- OpenVenture Partners, a venture capital firm in Boston.
- Thogus Products Company, a manufacturing firm in Cleveland.
- Systematic, a software firm headquartered in Denmark.
In the course of my research, I also found that organizations can't simply take the IT version of Agile and apply it without change in non-IT settings. Adaptation is needed in several areas:
- Terminology: The terminology needs adaptation to the context of general management: for example, "working software" -a key concept of the Agile Manifesto—doesn't apply outside IT.
- Nature of the work: substantive adaptation is needed for different kinds of work. Whereas software development is inherently divisible into iterations, many other types of work are inherently lumpy, like building houses or submarines. For Agile to be more generally applicable, there is a need to show it can be applied to these different kinds of work.
- Prioritization: Agile implementation in software development has given rise to a very large number of concepts, principles and practices. For Agile to be easily understood by general managers, there is a need to distill the essential principles, and distinguish those principles from practices that are desirable in some contexts but not essential everywhere.
- Reconciliation with traditional management practices: When Agile practices are taken beyond software, they are in conflict with the attitudes, values and practices of traditional management, which is entrenched in most established organizations. For Agile to be successful in general management, there is a need for a comprehensive and integrated view of what managing an organization in an Agile fashion looks like, including its benefits, costs and risks, and how it can be reconciled with traditional management thinking.
- Updating the Agile Manifesto (2001): There is the need to learn from experience i.e. to apply "inspect and adapt" to the Agile Manifesto itself. Thus although the Agile Manifesto was a conceptual breakthrough in 2001, now nine years later, some aspects need updating to include success factors from the most advanced Agile implementations, particularly:
- Putting more emphasis on delighting clients as the goal of all work:
- Focusing more on clients' needs than on "working software" per se.
- Providing a rationale for the use of self-organizing teams:
- Strengthening the emphasis on transparency:
- More explicit emphasis on interactive communication
12. Is there any key message you would like to give to the InfoQ readers (IT, Agile practitioners)?
I spent the first four decades of my life gazing at the vast and somber edifice of the Soviet Union. Grim, impregnable, and despotic, it seemed destined to last forever. Yet economically it was rotting from within. When the Berlin Wall came down, the edifice abruptly collapsed. Now dictatorships are an endangered species around the world. Those few that do remain feel obliged to put on a semblance of democracy with rigged elections and phony votes. Even they know that the world has changed. Human beings are no longer willing to live under tyranny.
The vast and somber edifices of the traditional corporation still stand. Grim and impregnable, they also seem destined to last forever. Yet they are also rotting from within: the return on their assets is only a quarter of what it was just a few decades ago. Their life expectancy is already startlingly brief—no more than two decades on average, even based on past experience. The despotic management practices that are causing the decline are anachronisms from a former era. It is only a matter of time before they come to be seen as uneconomic and intolerable as despotism in the political sphere.
Radical management is thus part of a larger story, an emerging process of societal change, in which the structures that we build are adjusted to enhance rather than strangle the living part of our lives.
Through Agile and Scrum, many software developers became early adopters of radical management. It is now time to spread the word to every area of management.
13. Publisher and publishing date?
Stephen Denning: The Leader's Guide to Radical Management: Reinventing the Workplace for the 21st Century. A book to be published by Jossey-Bass on October 25, 2010.
14. Will an ebook will be available?
About the author
Stephen Denning's new book, The Leader's Guide to Radical Management (Jossey-Bass, 2010), describes the practices associated with seven management principles that promote continuous innovation (firstname.lastname@example.org). He is also the author of The Leader's Guide to Storytelling (Jossey-Bass, 2005) and The Secret Language of Leadership (Jossey-Bass, 2007), which was selected by the Financial Times as one of the best books of 2007.
A long-time executive at the World Bank, where he was director of knowledge management from 1996 - 2000, he now consults with organizations around the world on leadership, innovation, storytelling and radical management.