10 c inetpub files00003184steve denning keynote

8/10/2019 10 C Inetpubwwwrootsystemresource Files00003184Steve Denning Keynote

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Making

The Entire OrganizationAgile

Steve Denningwww.stevedenning.com

[email protected]

These slides:http://www.stevedenning.com/slides/agile.pdf
http://www.stevedenning.com/mailto:[email protected]:[email protected]://www.stevedenning.com/


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Video

Making


Explaining the idea in sixty seconds


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http://www.youtube.com/watch?v=tTwdpRukACk
http://www.youtube.com/watch?v=tTwdpRukACkhttp://www.youtube.com/watch?v=tTwdpRukACk


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Video

Making


Explaining the idea in sixty seconds


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http://www.youtube.com/watch?v=tTwdpRukACk
http://www.youtube.com/watch?v=tTwdpRukACkhttp://www.youtube.com/watch?v=tTwdpRukACk


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President, Ford Motor Company, 1960Secretary of Defence, 1961-1968President, World Bank, 1968-1981

Robert McNamara

the smartest man I ever metJohn F. Kennedy

1978
http://upload.wikimedia.org/wikipedia/commons/1/10/Robert_McNamara_at_a_cabinet_meeting,_22_Nov_1967.jpg


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A knowledge managementprogram was launched

1996


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Why do managersact this way?

(These are highly intelligent, educated people!)

In 2008, I began exploring:


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One clue


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Within a few years, it hadbeen put on a back-burner

Not just the World Bank BP Ernst & Young IBM HP

Knowledge management

Its not just leadership storytelling!


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Lean Manufacturing

Only 1% of lean initiativesmeet their goals.

Jeffrey Liker


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Marketing

25 ways in which traditionalmanagement systematicallykills great marketing ideas



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Innovation

How managementsystematically kills

disruptive innovation



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2008

Why did managementsystematically kill al l the creative

things in organizations?

knowledge management? lean manufacturing? innovation? marketing? leadership storytelling? even Agile and Scrum

The question was broader


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Traditional

managementrests onfive interlocking

principles

Most management textbooks Most business schools


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1. The purpose of a firm is outputs

Five planks of traditional management


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2. The main goal is efficiency



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3. Customers are demand thatcan be manufactured



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4. Staff are human resourcesthat can be manipulated



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5. Communicate by directives



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Traditional managementpractices are a success



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Contrary evidence is inadmissible




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2009: Conclusive proof of the

failure of traditional management The rate of return on assets has

fallen by 75% since 1965 The l ife expectancy of Fortune500 firms down to 15 years, and isheading towards 5 years. Only 1 in 5 workers fully engaged

Sources: Deloittes Center for the Edge: The Shift Index; Kauffman Foundation

1965

Today


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Management

is broken!

Many are now concluding:

f


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We have tomanage

differently!

Implication for organizational survival:


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The shifts are self-reinforcing & interdependent

Make money

for shareholders

Managers arecontrollers

of indivduals

Bureaucracy:rules, plans, reports

Top downcommands

Efficiency,cost cutting

Single fix improvements make no impact

I li i f i i l i l


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The significant problems wehave cannot be solved at the

same level of thinking withwhich we created them.

Implication for organizational survival:

Albert Einstein

We have to think differently!


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5 big shifts( and 70+ practices)!

We know how to manage differently:

Fi bi hif


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1. New goal for the organization

2. New role for managers3. New coordination mechanisms4. Shift from value to values

5. New way to communicate

Five big shifts


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1. NEW GOAL: delight the customersfrom outputs to outcomes

1

Delight the customer Produce outputs


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1. NEW GOAL: delight the customersi.e. from outputs to outcomes

1

An epochal shift in the balanceof power in the marketplace:

The customer is now the boss!Sorryaboutthat!


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A newbottomline for

business

Delight the customer Make money


1


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Customer delightEfficiency


1


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Customer delightCosts come down of

their own accord!

A paradoxical discovery!


1


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You takewhat we

make!

We want tounderstand & help

solve your problems!


1


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21 st Century4 buttonsSimple

Easy to use

iPod

LESSIS

MORE !

20 th Century54 buttons

ComplicatedHard to use

DVDcontroller


1


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Customers are happy to getfree shipping.

They are delighted when acustomer orders by midnightEST, and gets the deliveryeight hours later.

Zappos runs its warehouse24/7

This is not an efficient way to

run a warehouse


1


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1

Outputs Outcomes

Things People


1

This changes the game completely


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1

This changes the game completely

Outputs Outcomes

Simpl e Complex


1


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1

The goal is: delighting the customer Making money is not the goal Being agile is not the goal. Working software is not the goal. Agile & Scrum & working software

are means to achieving the goal .

Everyone must focus on the goal


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1

Is customer delight a serious business proposition?

joyenchantmenthappiness


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1

Is customer delight a serious business proposition?

Customer delightismeasurable.


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2. NEW MANAGER ROLE: from controller to enabler2

Controller of

individuals

Enabler of self-

organizing teams


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3. COORDINATION OF WORK: Dynamic linking3

Clientdriven

Shortcycles

Hierarchical bureaucracy Dynamic linking


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4. FROM VALUE TO VALUES: radical transparency

Alan Mullaly CEO, Ford

4

Just do it


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Get the product out

4. FROM VALUE TO VALUES: continuous improvement4

The status quo is

never good enough


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5. INTERACTIVE COMMUNICATON: conversation

Command andcontrol

5

Adult-to-adult conversations

The shifts are self-reinforcing & interdependent


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The shifts are self reinforcing & interdependent

Delightingcustomers

From controllerto enabler

From bureaucracyto dynamic linking

From commandto conversations

Radicaltransparency

WHATS NEW d i g ll t


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Individually, none of the shifts is new

Delightingcustomers




Radicaltransparency

WHATS NEW: doing all at once

WHATS NEW d i g ll t


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Delightingcustomers




Radicaltransparency

Principal focus of Agile/Scrum

Agile

WHAT S NEW: doing all at once

WHATS NEW: doing all at once


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Delighting customers is pivotal

Delightingcustomers




Radicaltransparency

Agile

The lynch pin

WHAT S NEW: doing all at once

The transition is inevitable


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The transition is inevitable

Two- to four-times

gains in

productivityEconomics will drive the change!

Firms that delight their customers


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Six-year share price 2004-2011

Firms that delight their customers,

are also HUGELY PROFITABLE



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Ten-year share price 2001-2011

g ,


Firms that delight their customers


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While the other firms


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STRUGGLE just to STAY IN PLACE



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STRUGGLE just to STAY IN PLACE

Th i i b


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1990s: Fords Romeo plantin Michigan

The worlds best plant:Fords Hermosillo plant

in Mexico

The transition wont be easy

1990

2006: The new CEO,Allan Mullaly, embraces it

Thehugeopportuni tyforScrum


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The huge oppor tuni ty for Scrum

Educate yourselves!

Educate your managers!

Become leaders of the new movement: inspire!

Disseminate the Shift Index Disseminate the books that show how

Master the principles and practicesof radical management

Theopportuni tyforScrumandAgile


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Lead the revolution! Embody the change Be the strategy ( not support the strategy) Master leadership storytelling Challenge management to join the future Encourage others who share the vision Take charge of the future

The opportuni ty for Scrum and Agile

Lets move

to thefront ofthe bus!

Reinventing management requires systemic change


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Once you introduce this,it affects everything in theorganization the way youplan, the way you manage,

the way you work.Everything is different. It

changes the game

radically .Mikkel Harbo

VP, Systematic Software (Denmark)

Reinventing management requires systemic change

More than a new set of management tools!


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The real voyage ofdiscovery consists not inseeking new landscapes,but in having new eyes.

Marcel ProustEverything

isdifferent!

Reinventing Management Requires Systemic Change


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Managers areenablers of self-organizing teamsManagers provide clear line of sight tocustomers and remove impediments

Interactive communications :

The firms goal is todelight customers

Making money is a resultof delighting customers

The firms goal is tomake money for shareholders

Customers are demandto be parsed & manufactured

Managers arecontrollers of individuals

Employees are human resourcesto be manipulated with carrots & sticks

Dynamic linking:Teams work in short cycles withdirect feedback from customers

Bureaucracy :Work is coordinated byrules, plans and reports

Values that delight customers :Radical transparency &

continuous improvement

Economic value:Single-minded focus on

efficiency, economies of scale

One-way communication:

Traditional management Radical management

New Role

Communications

New Goal

Newcoordinationmechanisms

Value vs Values

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