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