Eating yourself for lunch, unpalatable but becoming essential

Eat yourself thinI always enjoy Steve Denning and his writing. He has been discussing the fundamental changes taking place within the management of our organizations. Just go over to the Forbes site for Steve’s articles http://www.forbes.com/sites/stevedenning/

Also just take a read of “Why Is Corporate American Eating Itself Alive?” about how Corporate America is practising self-cannibalism, triggered by Dennis Berman in an article in the Wall Street Journal with a message that resonates more and more today “isn’t it time we stop according extraordinary compensation to Corporate America’s leaders for meeting their quarterly numbers through the short-sighted tactic of self-cannibalism, and instead focus business on its true goal of adding value to customers with investments and innovation in real products and services?” More destruction as against enlightenment or simply exposing themselves to a very thin core, leaving themselves totally vulnerable?

Steve preaches radicalism simply because he sees the fundamental changes taking place, setting in train a new set of social and economic changes. He points out we are creatures of habit but being delivered more and more is his “better, faster, cheaper, smaller, lighter, more convenient and more personalized,” and we tend to say, “Hey! Yes! I want that! And not only do I want it. I want it now! In fact, not only do I want it now. “I’ve got to have it now!”

Steve points out “For customers, this is fun. Hey, wonderful new stuff! Wow! Amazing! But for producers, it can be very big and very quick and very scary and very lethal”

To manage for this significant phenomenon shift the past practices, rooted in the 20th Century management practices are in decline. They are being challenged dramatically, more outside today’s existing large, established organizations by those that have nimble, agile and responsiveness as central to their being. This radical change is tearing at the heart of many existing organisations.

Steve suggests we are heading towards an economy of continuous innovation and transformation, where delight becomes critical when it comes to serving the customer, in constantly improving their lives, looking to build new value but doing it in this highly responsive way of “quick and nimble”.

The tenets of Steve’s five simultaneous shifts that is now under-way.

These five shifts reverse everything. They consume existing doctrine, built on past established management practices and in Steve’s view, and many more in their own separate thinking and explanations of what is dramatically changing will become eventually the new system but they are mutually dependant on each of Steve’s five parts. He remarks in different articles “Setting about one or two of these ‘principles’ is not sustainable; organizations will slip back into their old ways”

The five shifts are well explained in a number of his articles but these are:

  • These shifts affect the goals of the organization,
  • They affect the structure of work within the organization.
  • They affect the way work is coordinated.
  • They affect the values of the firm.
  • They affect the way people communicate.

For me, the reason I outline this is his “step change” in organization capability, one of my principal focus areas. He argues “organizations have to become different kinds of animals, with different mindsets, attitudes, values and capabilities. It means different ways of thinking, speaking and acting in the workplace. It means change at the level of the firm’s DNA”

He finally suggests as “we grasp thinking the unthinkable” we all begin to question the fundamental assumptions of what lies at the core of our business, our societies, our institutions.

Radical and highly disruptive.

He delivers something powerful, it looks simple but is radical, it is in his words “grim and as thrilling”. Are we listening, are we preparing, are we seeing the same fundamental shifts , this “constellation of principles” that Steve argues is today’s radical management that is hurtling fast towards all of us?

Disruptive Innovation is faster, quicker and even more scary.

Somehow we all need to figure out the shifts that are taking pace at increasing speed around technology, the central gravity point of customers and what they are choosing is shifting the thinking of even Clayton Christensen’s “Innovation Dilemma. His disruptive innovation theory has possibly moved into the faster lane which was already deadly but changes were slower with competitors coming up from the bottom, steadily moving upmarket to eventually steal away the high-value customers. You had that greater time to react. Is it changing?

Today we are witnessing customers defecting en-masse where competitors are coming out of nowhere and going global extremely rapidly offering this “better, faster, cheaper, smaller, lighter, more convenient and more personalized,” and learning very fast how to scale. Knowing where and when they appear is becoming harder to predict but organizations need to shape themselves for this constant onslaught coming at them.

Take a read about this in a recent book by Larry Downes and Paul Nunes in how they explain this in their book, Big Bang Disruption: Strategy in the Age of Devastating Innovation (Penguin, 2014). Big bang disruption is large-scale fast-paced innovation that can disrupt stable businesses very rapidly. Also you can read an article on this here

Will leaders of organizations that are today’s incumbents’ recognize how radical this is or will they simply dismiss it.  Are today’s leaders and managers aware of the growing need for more radical change and getting ready for make the transformation?

Step changes that are so radical they are gut wrenching.

Are we in a place where it will it be left to others to prise their leaders fingers currently hanging grimly onto the controls and levers within our organization away, those not recognizing it is all about a new management of ‘flying-by-wire’ that is constantly picking up signals and adapting to these? A constant feeding those signals into this “adaptive and agile” organization where they are needed to respond quickly and nimbly to rapid changing conditions and deliver to these changing customer needs, before others do.

Do you equally ‘sense and see’ this economic and social change going on? A movement of an often fickle market place where this “better, faster, cheaper, smaller, lighter, more convenient and more personalized,” is constantly moving and hunting for new feeding grounds? Our organizations are like the buffalo in past days, roaming across the plains but eventually being chased and harried like never before in this quest for more of less. The difference is that today’s organization can choose to adapt to its changing habitat before it is too late.

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2 thoughts on “Eating yourself for lunch, unpalatable but becoming essential

  1. As much appreciation as I have for the insights that Steve Denning inspires, it’s an enormous stretch that would somehow connect his endorsement of ‘radical’ approaches to not paying CEOs as much because they’re doing precisely what they’re hired to do. Share repurchase has a great number of motivations, one of which is the rather beneficial stabilization of EPS over time (bit.ly/N3Ng9I). Then somehow from Denning’s observation that ‘shift happens’ (really now?) to Christensen who has told us time and again that better, faster, smaller, cheaper, lighter are all vestiges of SUSTAINING innovation rather than Disruptive Innovation (entirely the opposite of what’s claimed here) then to Nunes’ Big Bang theory which has far more in common with the arcane and outdated notions of Porter (linkd.in/1kUWVux) having much more in common with the 20th Century management practices which even here are verified as being “in decline” (I’d say obsolete)… and all of this to express the thought that we should “change or die” without providing any real idea of what to change -to- or -how-, or even why, other than for the fear of imminent – what, disaster?

    There is no impending disaster, Paul – only a changing of the guard from those that don’t understand, accept, and support the changes in the way we do things to those who do. Indeed the value systems are changing (yet again) and will have changed even more than we might probably imagine once all is said and done, but not paying your CEO and prohibiting firms from practicing earnings management to enhance overall price stability (and thus discourage maverick activist shareholders from creating more distraction than is warranted or useful) is NOT the answer, and I suspect that the ebullient and illustrious Mr Denning would agree. And if the shareholder concept of corporate ownership has in fact, become outmoded, then Disruptive Innovation will take place in that venue as well, inevitably and much in the same way as anywhere else we have outmoded practices. Perhaps it already is moving in that direction and the practices you point to as being detrimental are in fact leading us there. (Dell had to take his firm entirely private, which is the most extreme expression of share repurchase to eliminate the truly deleterious annoyance coming from Carl Ichan. Are we also claiming that this also was uncalled for or unneeded and that perhaps Dell is the amateur?)

    I think it would be good to have some additional thought and understanding of why the rather skilled people we hire to do what we ask them to do rather than second guess them from the amateur armchair before we assume the role of worlds-greatest-business-advisor, after all, knowing something about org theory doesn’t make one a CEO, but being a CEO will surely teach one what one needs to know about org theory – at least in the part of the world that counts.

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  2. Nice set of observations- plenty to move back and forth in your comments but you are right on much, I certainly like the final paragraph. Also the changing of the guard is certainly pointing to a lasting solution that is more in tune with many of the issues.Nice thoughts Rick.

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