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The Future of Management and Organisational Design

June 17, 2013

The Future of Management and Organisational Design

Lecture delivered at City University 17th June 2013


June 17, 2013

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  1. THE FUTURE OF MANAGEMENT 2 David Jensen BSc Business Computing

    Systems (Hons) Graduated 2005 @elgrom  Head of Development at Metro Newspapers (DMGT)  Manage two cross functional technical teams delivering software to hit Metro’s mobile audience and revenue targets  Recently launched Metro Play a new start up gaming business  Previously worked in businesses ranging from all stages of start up to multinational corporations WHO AM I
  2. THE FUTURE OF MANAGEMENT 3  The History of Management  The

    Rise of the Knowledge Worker  Agile  Radical Management  Organisational Design WHAT WE ARE GOING TO COVER
  3. 4 THE FUTURE OF MANAGEMENT “Tomorrow’s business imperatives lie outside

    the performance envelope of today’s bureaucracy-infused management practices” – Gary Hamel
  4. THE FUTURE OF MANAGEMENT 6 The "rst traditional manager was

    the person who designed and built the pyramids four thousand years ago WORK AS A SYSTEM OF THINGS
  5. THE FUTURE OF MANAGEMENT 7  USA, October 5th, 1841 two

    trains on the Western Railroad had a head on collision  Following a public outcry Major George W. Whistler tasked with creating an organisation to prevent this from happening again  He had two options to base his decision… FAST FORWARD 4000 ODD YEARS
  6. THE FUTURE OF MANAGEMENT 8  Steep Hierarchy  Control from the

    centre  Focused on order and certainty  Practices: » Centralisation, Coercion, Formality, Tight Rein, Imposed Discipline, Obedience, Compliance ARMY CONTROL STRUCTURE
  7. THE FUTURE OF MANAGEMENT 9  Unless people are tightly controlled,

    they might do the wrong thing  Goal is to reach optimal decisions, even if they weren’t the most rapid  Linchpin is brilliant General at the top giving directions  Communications top down, explicit and linear  Management style was directive and transactional FOUNDATIONS BASED ON MISTRUST
  8. THE FUTURE OF MANAGEMENT 10  Values established at the centre

    alongside a set of principles to be followed  Application of values and principles handled at lower levels depending on local knowledge  Self-discipline and individual initiative highly valued  Great deal of trust placed on individuals FLAT ORGANISATIONAL STRUCTURES
  9. THE FUTURE OF MANAGEMENT 11  The Roman Catholic Church  East

    India Company  British Empire  Hudson Bay Company EXAMPLES
  10. THE FUTURE OF MANAGEMENT 12  Major Whistler chose: » Central o"ces

    to be run by “managers” » Chain of command » Clear lines of authority » Clear descriptions of responsibilities DECISION TIME
  11. THE FUTURE OF MANAGEMENT 13  Out of chaos and confusions,

    it created order, workability, and predictability  The risk that such a system might limit individual initiative, #exibility, and innovation seemed less important than the goal of creating order THE APPROACH
  12. “In the past, Man has been first. In the future,

    the system must be first.” Frederick Winslow Taylor The Principles of Scientific Management (1911) 14 THE FUTURE OF MANAGEMENT
  13. THE FUTURE OF MANAGEMENT 15  Assembly Line (1913) » Sliced labour

    into tiny parts which was reconstituted as a process controlled by management » After initial revulsion from workers Ford eliminated other companies that did not adopt » Ford prospered even if the jobs were monotonous HENRY FORD
  14. THE FUTURE OF MANAGEMENT 16  Ford’s system was more productive

    for the company but not agile enough for the customers  Constantly produced too many or not enough cars. NOT AGILE ENOUGH FOR CUSTOMERS
  15. THE FUTURE OF MANAGEMENT 17  Alfred Sloan at General Motors

    (1920s) » Created decentralised divisions » Operations not seen as a top management responsibility  Executives managed by numbers: » Output, inventory, sales, margins, market share, pro#t and loss APPLYING TAYLORISM TO MANAGEMENT
  16. THE FUTURE OF MANAGEMENT 18  Top management reviewed if each

    division was performing in accordance with their plan. » If not they made adjustments  Managerial work was sliced into smaller pieces in the same way that manual work had been ACCORDING TO THE PLAN?
  17. THE FUTURE OF MANAGEMENT 19  Lack of management involvement created

    a risk that its decisions would not correspond with realities of the workplace  1950’s & 1960’s this was a minor risk due to the growing demand for goods and services and barriers to entry into the market  In a world where paying customers could be taken for granted adding more workers and managers simply equaled more pro"ts PLANNING, PROGRAMMING & BUDGETING
  18. THE FUTURE OF MANAGEMENT 20  By the 1990’s the situation

    had changed » Rise of the global economy » Global networks of partners » Escalating power of customers » Multiplications of media channels » Rise of knowledge workers CHANGE
  19. THE FUTURE OF MANAGEMENT 21  Take advantage of technology to

    minimise hando$s and enable smaller teams to work on tasks from start to "nish  Managers were not required to change their behavior  Technology introduced did little to address root causes  Experts often didn’t understand work requirements BUSINESS PROCESS REENGINEERING
  20. THE FUTURE OF MANAGEMENT 22  Processes changed were introduced without

    basic changes in behavior of the managers or the workers  The problems caused by those behaviors continued #FAIL
  21. THE FUTURE OF MANAGEMENT 23 In the past 25 years

    start-ups have created 40 million jobs in the USA, established "rms created none.  Economies of scale evaporating  Barriers to entry eroded  Competition has intensi"ed  Increasingly disloyal customers THE CRISIS WORSENS
  22. “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 affect be supervised” – Peter Drucker 27 THE FUTURE OF MANAGEMENT
  23. THE FUTURE OF MANAGEMENT 28  Knowledge workers are employees who

    have a deep background in education and experience and are considered people who "think for a living.”  What di$erentiates knowledge work from other forms of work is its primary task of "non-routine" problem solving that requires a combination of convergent, divergent, and creative thinking  Knowledge workers spend 38% of their time searching for information THE RISE OF THE KNOWLEDGE WORKER
  24. THE FUTURE OF MANAGEMENT 29  Analyzing data to establish relationships

     Assessing input in order to evaluate complex or con#icting priorities  Identifying and understanding trends  Making connections  Understanding cause and e$ect  Ability to brainstorm, thinking broadly (divergent thinking)  Ability to drill down, creating more focus (convergent thinking)  Producing a new capability  Creating or modifying a strategy KNOWLEDGE WORKER BENEFITS
  25. “Equipping organisations to tackle the future would require a management

    revolution no less momentous than the one that spawned history.” Gary Hamel 30 THE FUTURE OF MANAGEMENT
  26. THE FUTURE OF MANAGEMENT 32  Early software development » Always late

    » Over budget » Plagued by problems  In 1993 Je$ Sutherland asked the question… “Is there some way that I can transform a group of fairly ordinary developers into something extraordinary?” SOFTWARE DEVELOPMENT TRANSFORMED
  27. THE FUTURE OF MANAGEMENT 33  Self-organising teams used in a

    crisis had proven to be the best model for handling innovation » Clear goal that was viewed as something important » Deadline based » Space to get the work done » Cross-functional » Less that eight or nine people » Output completely done by the deadline HIGH PERFORMING TEAMS
  28. THE FUTURE OF MANAGEMENT 34 The role of management was

    to set direction, eliminate anything that was preventing the team from performing at an extraordinary level and then get out of the way. ROLE OF MANAGEMENT
  29. THE FUTURE OF MANAGEMENT 35  1995 Je$ Sutherland and Ken

    Schwarber presented a paper called SCRUM Development Process at a software conference  2001 The Agile Manifesto was signed in Snowbird, Colorado AGILE WAS BORN
  30. THE FUTURE OF MANAGEMENT 36  We have come to value:

    » Individuals and interactions over processes and tools » Working software over comprehensive documentation » Customer collaboration over contract negotiation » Responding to change over following a plan THE AGILE MANIFESTO
  31. THE FUTURE OF MANAGEMENT 37  Our highest priority is to

    satisfy the customer through early and continuous delivery of valuable software.  Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.  Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale. 12 PRINCIPLES OF AGILE
  32. THE FUTURE OF MANAGEMENT 38  Business people and developers must

    work together daily throughout the project.  Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.  The most e%cient and e$ective method of conveying information to and within a development team is face-to-face conversation. 12 PRINCIPLES OF AGILE
  33. THE FUTURE OF MANAGEMENT 39  Working software is the primary

    measure of progress.  Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace inde"nitely.  Continuous attention to technical excellence and good design enhances agility. 12 PRINCIPLES OF AGILE
  34. THE FUTURE OF MANAGEMENT 40  Simplicity--the art of maximizing the

    amount of work not done--is essential.  The best architectures, requirements, and designs emerge from self-organizing teams.  At regular intervals, the team re#ects on how to become more e$ective, then tunes and adjusts its behavior accordingly. 12 PRINCIPLES OF AGILE
  35. THE FUTURE OF MANAGEMENT 42  Focus work on delighting the

    client  Work in self-organising teams  Work in client driven iterations  Deliver value to clients at each iteration  Be totally open to impediment to improvement  Create context for continuous self-improvement  Communicate through interactive conversations SEVEN BASIC PRINCIPLES
  36. THE FUTURE OF MANAGEMENT 43  Where the work is best

    done alone  Where work has a small knowledge component  Where a public sector organisation must be neutral WHERE THIS DOESN’T WORK
  37. THE FUTURE OF MANAGEMENT 44  Net Promoter Score » How likely

    are you to recommend these goods or services to someone else? » Apple’s key metric  One unhappy customer can now tell millions through social media  “United Breaks Guitars” by Canadian singer David Carroll now has been viewed over 13 million times on YouTube DELIGHT YOUR CLIENTS
  38. THE FUTURE OF MANAGEMENT 45  When we collaborate with people

    di$erent to us we begin see the world through their eyes  False assumptions are much quicker to be discounted  However »  Problem must complex »  Group must be cognitively diverse »  Group must given responsibility »  Must be focused on solving the problem SELF-ORGANISING TEAMS
  39. THE FUTURE OF MANAGEMENT 46  Clear focus on client allows

    better decisions to be made quicker  Prioritisation based on clients value ensures that they are delighted sooner  User stories best way of capturing requirements, these are the beginning of the conversation rather than the end CLIENT DRIVEN ITERATIONS
  40. THE FUTURE OF MANAGEMENT 47  Constantly delivery helps to keep

    client delighted  Encourages work to be broken down into smaller pieces  Ensures that feedback can be incorporated into the process as early as possible DELIVER VALUE IN EACH ITERATION
  41. THE FUTURE OF MANAGEMENT 48  Daily meeting where everyone shares

    what they are working on and any impediments  When an impediment is raised they must be dealt with e$ectively  Visual displays of simple information that anyone can understand are a requirement RADICAL TRANSPARENCY
  42. THE FUTURE OF MANAGEMENT 49  Retrospective meetings at the end

    of every iteration  Requires and open and honest environment  Requires a willingness to have change as a constant  Actually "nding the root cause of a problem is not always straight forwards CONTINUOUS SELF-IMPROVEMENT
  43. THE FUTURE OF MANAGEMENT 50  Authentic narratives, open-ended questions and

    conversations  Communications based on stories are much more e$ective than abstractions  This is how people naturally think and allows everyone to engage in the process INTERACTIVE COMMUNICATION
  44. THE FUTURE OF MANAGEMENT 51  Adapt practices to your context

     Form a nucleus for change  Proceed through conversations  Establish a beachhead  Begin in a safe place  Use common terminology  Let ideas evolve HOW TO ACHIEVE CHANGE
  45. THE FUTURE OF MANAGEMENT 52  Converted from traditional to radical

    practices over three months in 2007 » 94% more features delivered in year 1 » 38% more features per developer » 500% more value to customers delivered SALESFORCE


    Dir Team Lead CTO VP Eng Dir Team Lead CMO VP Marketi ng Dir Team Lead EXTREME HEIRARCHY

    Fin1 Fin2 Fin3 CTO Eng 1 Eng 2 Eng 3 CMO Mar 1 Mar 2 Mar 3 http://www.slideshare.net/JoaquinVRoca/killing-hierarchy-2

    Consumer Enterprise Sales Business Development Engineering SMB Non-Prof

    Drive Document Storage/Retrieval Document Creator Spreadsheet Search YouTube
  51. THE FUTURE OF MANAGEMENT 60 MATRIX CEO Design Sales Engineering

    Norway USA Germany Functional Presidents Country Presidents
  52. THE FUTURE OF MANAGEMENT 62  Have all the skills and

    tools needed to design, develop, test, and release to production  Self- organizing team and decide their own way of working  Have a long-term mission  Experts in their area  10% of their time on “hack days”  No formal leader  “Think it, build it, ship it, tweak it”.  Mini startup SPOTIFY - SQUADS
  53. THE FUTURE OF MANAGEMENT 63  Collection of squads that work

    in related areas  Physically located in the same o%ce  “incubator” for the squad mini-startups  Tribes hold gatherings on a regular basis » Demos, New Tools, Techniques   Designed to be smaller than 100 (Dunbar Number) SPOTIFY - TRIBES
  54. THE FUTURE OF MANAGEMENT 64  Allow some economies of scale

    without sacri"cing too much autonomy  Chapter »  A chapter is people having similar skills and working within the same general competency area, within the same tribe. » Line management is done via chapter  Guild »  A Guild is a more organic and wide-reaching “community of interest”, that want to share knowledge, tools, code, and practices » Guild usually cuts across the whole organization »  Share knowledge continuously and meet regularly to collaborate on the high level organizational improvement areas SPOTIFY - CHAPTERS AND GUILDS
  55. THE FUTURE OF MANAGEMENT 66  Organisations should not blindly adopt

    a future, but they should clearly articulate their vision, and then actively grapple with the implications of that vision, on every dimension. Successful execution is not about the most e%cient individual transactions, but about sustaining the organisation over the long term. Only by empowering a culture that clearly places current work in the context of longer-term goals does the current work becoming meaningful—and that context is now multilayered, no longer just about a company and its employees, but about the entire ecosystem of relationships, from partners to contractors, to employees and customers.  http://www.cisco.com/en/US/prod/collateral/ps10680/ps10683/ ps10668/C11-657924_design_org_next_WP.pdf FINAL THOUGHTS
  56. THE FUTURE OF MANAGEMENT 68  Large parts of this slide

    deck are from: » The Leaders Guide to Radical Management – Steven Denning REFERENCES
  57. THE FUTURE OF MANAGEMENT 69  What Matters Now – Gary

    Hamel  The Lean Startup – Eric Reis  The Power of Pull - John Hagel, John Seely Brown and Land Davison  Agile Project Management with Scrum – Creating Products that Customers Love FURTHER READING