(2022-11-27) Denning Why Business Survival Requires Brand New Management

Steve Denning: Why Business Survival Requires Brand New Management. Most of today’s major corporations are suffering from a lethal disease. The disease is industrial-age management

Strategy gets set at the top, many layers above the customer. Power trickles down. Big bosses appoint little bosses. Individuals compete for promotion. Compensation correlates with rank. Tasks are assigned. Managers assess performance. Rules limit discretion. Significant innovation goes unfunded,

This is the operating system for most major corporations today. It isn’t usually written down. It doesn’t need to be.

Meanwhile, there is another, more productive, more enduring, and more profitable way to run a company. It’s not a recent idea: Peter Drucker enunciated the core principle back in 1954: (Figure 2).

Today, customer-driven management is the modus operandi of the largest and fastest growing firms in history. Its exponents are the well-known firms shown in Figure 4. These 14 firms that are worth around $9 trillion—that’s trillion, not billion.

Figure 4 Firms practicing customers captialism

The first difficulty in discussing the new way of managing is what to call it. It has acquired various names as shown in Figure 5.

Figure 5 different labels for digital age management. (businesss agility)

It is not just an abstract framework: it is something that people live.

Figure 6 principles of industiral and digital age management

None of the firms mentioned in Figure 4 are perfect exemplars of these principles and processes

As a result, most firms see the writing on the wall and recognize in varying degrees that the old way of operating can’t cope with today’s economy. Most are pursuing digital transformations from the old to the new at various speeds and intensities. Yet most of these efforts are being grafted on top of industrial-era management

It is difficult for firms to grasp what is involved in the transition from industrial-era management to digital-age management without a comprehensive understanding of the many different dimensions that need to change.

A diagnostic tool as shown in Figure 9 can help firms understand where they are currently,, and what would be involved in making a change

Figure 9 diagnostic tool

Unless the firm understands where it is today, it will never get to where it wants to go.