Johanna Rothman @johannarothman www.jrothman.com Lead an Innovative Organization: From Change Management to Manage FOR Change

© 2021 Johanna Rothman @johannarothman Your organization wants innovation. How do they act? 2

© 2021 Johanna Rothman @johannarothman Common Innovation Problems • Want to “manage change” instead of embrace change • Managers work in silos • Lots of planning at all levels—too little strategy • Bureaucracy burdens workers • Mechanistic view of management • Conservators (conserve the status quo) outnumber the experimenters 3

© 2021 Johanna Rothman @johannarothman Want innovation? Innovate management/leadership practices. 4

© 2021 Johanna Rothman @johannarothman Consider These Suggestions • Define “why” for the organization • Reduce management decision time • Shorter feedback loops to reduce all planning burden • Reduce policies and procedures • Encourage change: • Make it easy for people to disagree • Make small mistakes • Eliminate performance management 5

© 2021 Johanna Rothman @johannarothman 1. “Why” for the Organization • Why is your strategy: Why does your organization (products & services) exist? • Return $ to shareholders is an outcome of satisfying customers. • Strategy answers these questions: • Why this product/service? • Why now? • Strategy has nothing to do with slogans 6

© 2021 Johanna Rothman @johannarothman 1a. Define the Organization’s Driving Force • What you offer for products and services • The markets you serve • Your unique technology • How you sell • How you distribute • Natural resources: Do you consume or save natural resources in some way? • Production capability • Organizational Size/Growth • Membership 7

© 2021 Johanna Rothman @johannarothman 1b: Use Driving Force to Identify Products & Services • Organize all products and services into these buckets: • KTLO: Keep the lights on • Grow current business • Possible transformation • Assess how many projects are in which buckets • My suggestions for an innovative organizations: • 10% KTLO; 40% Grow; 50% Transformation 8

© 2021 Johanna Rothman @johannarothman What If You’re Not a Top Leader? • Build your portfolio up from the various products and services your team(s) deliver and support • Bucket into: KTLO, Grow, Transform buckets • See if you can generate the “why” from those • Assess the percentages in each bucket 9 Strategy Deliver

© 2021 Johanna Rothman @johannarothman 2. Reduce Management Decision Time with Management Teams • Do your functional managers/leaders collaborate? • Organizations based on individual rewards: • Reduce management collaboration • Create slow decisions • Optimize too low 10

© 2021 Johanna Rothman @johannarothman Fast product experiments lead to more innovation. You need fast product development feedback loops (other two presentations) and fast management decision time 11

© 2021 Johanna Rothman @johannarothman Decisions Take Forever 12

© 2021 Johanna Rothman @johannarothman Management Teams • Senior leadership teams already exist • Many orgs have a cohort at one level • Why not have cohorts at each level? 13

© 2021 Johanna Rothman @johannarothman Resource Efficiency vs Flow Efficiency • The more managers work in flow efficiency, the faster all the work finishes • Once managers work in teams, they can also address the why for the organization 14

© 2021 Johanna Rothman @johannarothman Evolve Management 15

© 2021 Johanna Rothman @johannarothman 3. Reduce Planning, Especially Based on Estimates • Too many “plans” depend on estimates or forecasts • Those estimates or forecasts don’t take cycle time into account • The longer the cycle time, the longer everything takes—even simple things 16

© 2021 Johanna Rothman @johannarothman Reduce Feedback Loop Duration • Cliff looked at the time from T2 to T5 (cycle time) • Started at 2-5 weeks • Reduced to a few days • Projects finished inside of 6 months • Time from T0-T2 regularly a year or more • Management asked for estimates every single time they replanned 17

© 2021 Johanna Rothman @johannarothman (Mgmt) Delays Often Outweigh Work Time 18

© 2021 Johanna Rothman @johannarothman 4. Reduce Policies & Procedures • How many policies, procedures, rules, and other things that impose friction on people? • Ask for vacation or sick time • Imposed “standard” agile approach • Imposed boards and other tools • How few rules do you need? • Guidelines and constraints (as few as possible) • Delegate problems and outcomes, not tasks 19

© 2021 Johanna Rothman @johannarothman 5. Make Disagreement and Mistakes Easy • Product development requires learning • How easy is it for you to: • Disagree • Make mistakes • Work together • Mistake-proof the outcomes • Experiments create short feedback loops 20

© 2021 Johanna Rothman @johannarothman Small, Safe-to-Fail Experiments Work • Reframe “Fail Fast” to “Learn Early” • Allow safe-to-fail experiments • Need at least one hypothesis for change 21

© 2021 Johanna Rothman @johannarothman 6. Eliminate Performance Management • Performance management does not work • Ranking doesn’t work • Comparing people or teams doesn’t work • Competition doesn’t work • Feedback, especially reinforcing feedback, does work 22

© 2021 Johanna Rothman @johannarothman Create Engagement • Learn why each person works (one- on-one) and see if you can offer them opportunities • Explain the why • Encourage autonomy, mastery, purpose • Encourage flow efficiency at all levels • Create an opportunistic culture, where people discover new and interesting work, skills, collaboration, and more 23

© 2021 Johanna Rothman @johannarothman Lead an Innovative Organization • Clarify your purpose (you, team, organization). • Build empathy with the people who do the work. • Build a safe environment. • Seek outcomes and optimize for the overarching goal. • Encourage experiments and learning. • Catch people succeeding. • Exercise your value-based integrity. 24

© 2021 Johanna Rothman @johannarothman Manage for change: Optimize to learn 25

© 2021 Johanna Rothman @johannarothman Let’s Stay in Touch • Pragmatic Manager: • www.jrothman.com/ pragmaticmanager • Please link with me on LinkedIn • Modern Management Made Easy: https://www.jrothman.com/mmme 26