REINVENTING MANAGEMENTProf.Dr.Aung Tun Thet
Management
• Invented to solve two problems1. Getting semiskilled employees to perform
repetitive activities competently, diligently, and efficiently
2. Coordinating efforts to enabled complex goods and services to be produced in large quantities
• Efficiency • Scale
Management
• Solution • Bureaucracy• Hierarchical structure• Cascading goals• Precise role definitions• Elaborate rules and procedures
Five Fundamental and Interdependent Shifts in Management Practice
Shifts
1. Firm’s goal shift to delighting clients2. Role of manager shift from controller to
enabler3. Mode of coordination shifts from
hierarchical bureaucracy to dynamic linking4. Shift from value to values5. Communications shift from command to
conversation
Five Shifts
• Not new• Pursued on its own, without others• Interdependent• Undertaken simultaneously• Sustainable change
Five Shifts
• Productive • Innovation• Satisfying those doing work and those
for whom work done
Five Shifts
• Productive • Innovation• Satisfying those doing work and those
for whom work done
Shift #1 Goal: From inside-out to outside in
Shift # 1
• Shift in balance of power from seller to buyer – customer in command
• From ‘inside-out’ perspective (“We make it and you take it.”)
• To ‘outside-in’ perspective (“We seek to understand your problems and will surprise you by solving them.”)
Shift # 1
• Beyond paying more attention to customer service
• Orienting everyone and everything on providing more value
• “There is only one valid definition of business purpose:
• to create a customer. . . . • The customer is the foundation of a business
and keeps it in existence.”
Shift # 1
• Customer willing to buy goods and services both today and tomorrow
• Not transaction• Forging relationship - customer more
than passively satisfied
Shift # 1
• Delight customer • Deliver happiness (Delivering
Happiness) or joy (Peak)• Do more than meet customer
expectations• Generate continuous stream of new
value to clients
Shift # 1
• Meeting needs customers not even know that they had
• Fundamental transformation in power structure of marketplace
• From shareholder capitalism to customer capitalism
Shift # 1
• From making money for shareholders • To client primacy• Making money result of delighting
customer, • Not goal
Shift # 1
• Principle of obliquity: indirect goal (delighting clients) more apt to make money than direct focus on money-making
• Continuously generating more value for customers operational goal of everyone
Shift # 1
• Apple - iPod, iMac and iPad - delighted customers and increased market capitalization
• Customize product to specific needs
Shift # 2 New role for managers: From controller to enabler
EMPLOYEES FIRST
Customer Second
Traditional Bureaucracy
• Not designed for innovation or delighting clients
• Designed to produce consistent performance from largely non-skilled workers
• Undermined key ingredient of productivity: worker morale
New level of Performance
• Empower• Facilitate • Collaboration• Rapid learning • Innovation
Role of Manager
• From controller to enabler• Not workers reporting to managers• Managers accountable to those doing
work • Removing impediments hindering work
Reversal of Polarity
• Engine of productivity, innovation and creativity resides in energy and ideas of people doing work
• Working together across boundaries• Drawing on new technology• Enabling talent unlocks passion and
energy
Managers
• Inspire• Motivate• Encourage• Collaboration • Workplace meaningful
20th Century
• Distinction between leaders (articulated goals and inspired change), and
• Managers (who got things done)
21st Century
• Distinction dissolves• Managers-Leaders• Articulate goals• Inspire change• Remove impediments• Workers - those doing work - get things
done
New Role of Mangers
• Learning and collaboration • Open platforms • Get access, attract resources and
create networks of self-organizing teams
New Role of Mangers
• Autonomy• Intrinsic motivation• Distributed, democratic, self-managing• Empowerment
Shift # 3 New coordination: From Bureaucracy to Dynamic Linkage
Shift # 3
• Bureaucracy inherently demotivating• Not good for innovation• Not agile to delight clients, cope with
social media or adjust to changes in marketplace
Shift # 3
• “Dynamic linking”• Work done in short cycles• Management sets goals which delight
client
Shift # 3
• Decisions about how work carried out responsibility of those doing work
• Progress measured by direct client feedback
Shift # 3
• Setting things up in short, consecutive waves of effort
• Foster deep, trust-based relationships among participants
• Learn, innovate and perform better and faster
Shift # 3
• Not specify activities in detail• Specify what they want to come out• Providing space for participants to
experiment, improvise and innovate
Shift # 4 From Value to Values
Shift # 4
• Traditional organization preoccupied with value, rather than values
• Encouraged firms to cut costs• Profits made at expense of customers
Shift # 4
• ‘Values’ different from ‘Value’• Deep backward- and forward-looking
quality • Providing more value to customers• Delighting client and motivating
autonomous teams
Shift # 4
• Radical transparency • Continuous improvement• Trust• Honesty• Caring for environment• Openness to outside ideas
Shift # 5 Communication: From Command to Conversation
Shift # 5
• Three elementary social relationships:1. Social norms2. Authority 3. Market pricing
Management Challenges
• Elicit energies, imagination, and creativity of workers
• Communicate predominantly through language of social norms
Social Norms
• Front and center at all times• Warmth
21st Century
• Shift in communication from command to conversation
• Adult-to-adult interactions• Human being to human being
21st Century
• Using stories, metaphors and open-ended questions
• Authentic storytelling
Bottom Line: Alignment
Alignment
• Five shifts not new • Putting all five shifts into operation at
once
Alignment
• Cannot achieve customer delight through bureaucracy
• Cannot harness creativity of autonomous teams without focus on customer delight
Alignment
• Cannot embrace customer delight and autonomous teams, without dynamic linkage
• Cannot embraces customer delight, autonomous teams, and dynamic linkage without focus on values rather than value
• Communicates values and goals through conversations not commands
Five simultaneous shifts
• Strenuous • Significant benefits• High productivity and continuous innovation • Disciplined execution • Deep job satisfaction and client delight
Five simultaneous shifts
• Gains accomplished by transition from a focus on things to focus on people
• People-centered goal• People-centered role for managers• People-centered coordination mechanism• People-centered values • People-centered communication
21st Century
• Not about things• But about people