The Leader's Guide to Radical Management

I just finished reading The Leader's Guide to Radical Management: Reinventing the Workplace for the 21st Century by Stephen Denning. 

I really liked most of the ideas in the book. This can probably be attributed to Confirmation Bias, because almost all the conclusions he has drawn about old-style business management agree with my own.

There were two problems I had with the book, and both of them are significant -- although both issues are about the author not going far enough. I have no problem with the ground he covered; it just seems he couldn't bring himself to draw the conclusions that his thoughts point him to.

First, the entire context of this book is founded on the idea that existing companies can change to become Radical Management companies. And yet, again and again throughout the book he gives solid examples and arguments showing why those very companies can't change. The Radical Manager is presented as an enlightened creature working within the traditional hierarchy, despite all his examples of intractable entrenchment. As I've argued elsewhere, the people in power inside traditional management hierarchies got there because they wanted power, first and foremost. Those are the very last people who are going to pave the way to their own loss of power. Denning talks about how managers need to "give" power to teams (often conditionally; anyone with experience knows a system where someone can decide to give and take power does not describe autonomous teams).

The other book I'm currently reading, about how ideas evolve, may explain why Denning seems to be stuck here. In order to create new ideas in your head, you need to have direct experience with the (witnessed) ideas that you are combining in order to make (imaginary) ideas in your head. As you get further away from the real, it becomes harder to imagine the possible. It's possible that Denning may be so entrenched in the old that -- even though he clearly sees all the problems -- he is unable to imagine anything except the evolution of the existing power hierarchy into some kind of radical-management hybrid. I can certainly sympathize with this dilemma. I'm still trying to figure out the combination of conditions that produced Open Spaces conferences, and discovering the New Organizational Structure feels like the (mental) battle of my life.

The less-complementary alternative explanation is that Denning is writing this book in order to produce Radical-Management consulting fees, so he must hold out the hope that it's possible to transform an existing company to those who have the power to write checks. Still understandable, but being tied to profits makes it even harder for him to break out of the constraints of his thinking.

The second problem is that, when it comes to the actual organizational structure of Radical Management companies, he offers little more than hand-waving. This might be because of his aforementioned inability to let go of the idea of transforming existing companies, which could prevent him from seeing anything other than a variation on the existing structure. All of my experience and study says that it is the organizational structure that is critical. It is the day-to-day practices that keep the boat afloat and headed in the right direction. For example, in Open Spaces everything happens because of the practices and processes, and one of the great things is that they are few and easy to remember, but each one is focused on and supports the goal (creating the best experience for the conference attendee -- which of course every conference will claim as their goal, but only practices and processes tell you the truth about the goal, and that's just one reason they're so important).

It's not that Denning gives you no guidelines at all. He talks about things like radical transparency and self-organizing teams, but these are presented as "things your organization should have" and there is no structure to support them, other than the idea that "management must lead the way," which relies on the very people who stand to lose the most power leading the way to the loss of that power.

Again, I really liked a lot of the book -- it was a warm, cozy cup of confirmation for me. But it would have benefitted from some editing. There are places where you start to think "have I read this already?" at which point you can start skimming and not miss anything.

Here are my highlighted passages from the book, with some additional comments.

Peter Drucker noted, “Workers throughout history could be ‘supervised.’ They could be told what to do, how to do it, how fast to do it and so on. Knowledge workers cannot, in effect, be supervised.”

The fact that current management practices prevent a full human flourishing is in itself an economic, management, social, and moral problem of the first order, built on the notion that the workplace is a system of things that is more important than the particular individuals within the system. 

Harold Geneen, the CEO of ITT, expressed the idea pithily in 1965: “The goal of management is to make individuals as predictable and controllable as the capital assets for which they are responsible.” 

In fact, a principal attraction of business process engineering was precisely that under the guise of being something entirely different, it was more of the same. It was another superficial fix to a system that was suffering from rot from within. 

The champions of business process reengineering failed to see that the activity was Taylorism under a different label. 

IBM had done research on the best way to develop software, and its conclusion was the surgical team ... 

The "chief surgeon" team was the structure touted in Fred Brooks' The Mythical Man-Month.

In 1973, Peter Drucker provided a clue as to where to look: “There is only one valid definition of business purpose: to create a customer. . . . It is the customer who determines what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods.... The customer is the foundation of a business and keeps it in existence.” 

The mathematics of optimization shows that only one variable can be maximized. Two variables cannot be simultaneously maximized unless one variable comprises the other. It is thus possible to maximize both satisfied clients and delighted clients because satisfied clients include delighted clients. It is not possible to maximize both client delight and shareholder value. You have to choose one or the other. 

“Whenever a customer feels misled, mistreated, ignored or coerced,” Reichheld writes, “then profits from that customer are bad. Bad profits come from unfair or misleading pricing. Bad profits arise when companies save money by delivering a lousy customer experience. Bad profits are about extracting value from customers, not creating value. When sales reps push overpriced or inappropriate products onto trusting customers, the reps are generating bad profits. When complex pricing schemes dupe customers into paying more than necessary to meet their needs, those pricing schemes are contributing to bad profits.” 

This helps explain why some companies that appear to be financially flourishing suddenly run into trouble: they have been mining their long-term customer relationships with bad profits to prop up the bottom line. 

In radical management, the values are reversed: performance is given priority over predictability. If the client is delighted in surprising ways, so much the better. The bottom line is client delight, not a predictable outcome for the system. 

Note: the complexity of some of his practices comes in the attempt to transfer power rather than building the structure from scratch.

This includes an array of actions, including identifying team members who share a passion for the goal; getting the right mix of skills and challenge; giving employees a voice in whether they want to join the team as well as giving the members the ability to determine who else is on the team; getting a team that is the right size; getting a proper location, preferably colocation; and systematically identifying and removing impediments to getting the work done.

The habits of managers who have worked in a sequential push fashion for decades are set and embedded in the culture of most large companies. It is common sense, obvious, and logical to do the requirements, then design, then implement. It gives the impression of an orderly, accountable, and measurable process with simple, document-driven milestones. It is a natural marriage with hierarchical bureaucracy. It ties in with thinking built on the economies of scale, mass production, and mass marketing. There is only one problem: in a complex dynamic environment and where competitive survival depends on being able to delight clients, it doesn’t work. 

By making decisions at the last responsible moment, the team has the best information to make informed decisions. It avoids wasting resources by making unnecessary inventory or early decisions that will have to be undone. 

as the new generation of people joining the workforce are increasingly looking to the quality of working life as a key factor in deciding which firms to work for, hiring the best people will be a force for change. 

The willingness of management to encourage the identification of such impediments and take action to remove them is one of the make-or-break aspects of radical management. 

Nontransparency has always been the norm for communications in hierarchical bureaucracies. That’s because a hierarchical bureaucracy is a hermetically sealed container, whose continued existence depends on the participants’ speaking consistently with the underlying assumptions of the power structure, even when they are at variance with external reality. By contrast, radical management is an open system that depends on the ascertainment of truth—what will delight clients—in order to achieve its goals. 

It’s difficult because the implicit respect for workers is the direct opposite of traditional management in which the system is seen as more important than people and quality is the responsibility of overseers. 

Traditional management sets a limited goal of “good enough” quality, which translates into an acceptable number of defects and an acceptable range of standardized products that, it is hoped, meet customer requirements.

Traditional managers speak to employees as employees, and power is the currency of the communication. These managers present themselves as the superior of the subordinates, although out of feigned politeness, traditional management refrains from calling subordinates “inferiors.” 

In reality, the subordinates may be superior to their “superior” in many respects: knowledge, skills, courage, integrity, or something else. As a result, traditional managers are continuously involved in exaggerations and mystifications to preserve a facade of superiority. It is in this facade that traditional managers place their hopes of getting things done. Yet in the world of knowledge work, it is perceived for what it is—a facade. As a result, if traditional managers mention or allude to social norms in such a setting, they sound fake because the relationship is hierarchical. 

One way of drawing on that memory is to have the team members tell each other stories of their own experiences of high-performance groups that they have experienced in the past. This may enable the group members to start to see each other as people who have had such experiences. 

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?

Note: traditional companies hire when they have a space, not when the best talent appears.

First, the impetus will begin with a single individual.
Second, the change will happen organically.
Third, a small high-performance team will be needed to inspire and guide implementation.
Fourth, the change will happen quickly or not.
Fifth, the change idea itself will steadily evolve.
Sixth, the change process will run on human passion.
Seventh, it will be focused, disciplined passion. There will be freedom to create, but within clearly delineated, adjustable limits.
Eighth, outside help will be used but not depended on.
Ninth, the top of the organization must support it and be supported.
Finally, the idea will be more important than any individual.

If you’re not hearing laughter, it’s a sign you’re still in the land of traditional management.
By contrast, my encounters with traditional management were always deadly serious. Jokes about the hierarchy were not tolerated. That’s because laughing at the hierarchy puts the power structure in question. In traditional management, the power structure is no laughing matter. In radical management, jokes about the hierarchy are possible. People are doing what they are doing because they believe in it, not because of the power structure. 

Traditional managers live in dread of the unpredictable. Surprise brings traditional management to a halt, and the world no longer corresponds to the plan. The plan must be revised so that the future can be a copy of the plan! 

It is now as impossible for us to think that we could do no work and be happy as it was impossible for Aristotle to think that we could be both employed and free. Finding meaning in work and at work has become part of what it means to be human.

I wonder if this somehow corresponds to or arises from the idea of romantic love.

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.