The workplace needs more than a little "tweaking." Customers are frustrated, brands are unraveling, executive turnover is accelerating and workers are disgruntled.
Now more than ever according to award-winning author Stephen Denning, what we need now is a radically different kind of management.
In The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century, Denning says management needs to be re-invented.
Managers must change how they think, speak and act in the workplace and they need to do it immediately.
As Denning sees it, four major changes have contributed to the crisis:
- Work has shifted from semiskilled to knowledge work
- The organization needs the commitment (engagement) of the workforce
- The customer takes charge – they know they have choices now, and we as companies should delight them
- The system has stopped delivering
Radical management comprises seven key principles:
- Focus work on delighting the client
- Do work through self-organizing teams
- Do work in client-driven iterations
- Deliver value to clients with each iteration
- Be totally open about impediments to improvement
- Create a context for continuous self-improvement by the team
- Communicate interactively with stories, questions, and conversations
Radical management is a fundamental re-think of what’s involved in creating a workplace where those doing the work are enabled to contribute their best on a daily basis so as to add a stream of continuous new value for clients.
THE LEADER’S GUIDE TO RADICAL MANAGEMENT is a practical primer that offers practical advice and compelling insight to help meet the challenges of the 21st Century.
"THE NEW BOTTOM LINE OF BUSINESS"
Guest Author Blog: The New Bottom Line of Business: Customer Delight by Stephen Denning author of The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century
What’s the true bottom line of any business?
In the 20th Century, firms got by on profits. In today’s more competitive world, profits can vanish overnight with the entry of a new product or service into the marketplace.
Making profits is obviously required for survival, but if profits are all a firm has, it faces a precarious future. The true bottom line of any business—and the key to an enduring future—is whether customers are delighted. Delighting customers means continuously providing new value for customers sooner, so that they are willing to buy the firm’s goods and services not just today but also tomorrow. It’s goes beyond mere transactions; it’s about forging relationships. For this to happen, it’s not enough that customers are passively satisfied. That’s just the price of admission to the marketplace.
Today, customers must be delighted.
How do you delight customers?
1. Target. Identify your core market of primary clients; if you can delight this group, you will have a resilient client base. Trying to satisfy everyone practically guarantees average products and services that will not delight anyone.
2. Focus. Aim for the simplest possible thing that will delight buyers. Don't load products down with features that most people won't use and that make the product hard to operate. For instance, my DVD controller made by Sony has 54 buttons, most of which no one in our house knows how to use; it delights no one. By contrast, my iPod by Apple has just four buttons and delights everyone.
3. Read their minds. Meet buyers' unrecognized needs. “The world wasn't asking Apple to make cool-looking MP3 players or arrange an easy, cheap way to download music online. People didn't know they wanted iPods or easy music download services until Apple invented them,” says Chip Conley, author of Peak. Apple did some mind reading with respect to what their customers (or potential customers) would love, but didn't know could be available. And Apple keeps surprising us. For example: the iPad.
4. Innovate in stages. Launch the product or service with the key features that primary clients want, and then add selectively through upgrades. Apple’s iPhone initially lacked many features of existing Smartphones, but it delighted its core group of customers—young users who wanted a cool mobile phone; the other features were added later.
5. Evaluate. Don’t just add features. Following every customer suggestion can lead to a client-driven death spiral. As more and more customer requests are met and features are added, the product can become unlovable or even unusable. Make sure that each upgrade really does delight.
"It’s not enough that customers are passively satisfied. That’s just the price of admission to the marketplace. Today, customers must be delighted.""
6. Customize.Harley-Davidson isn’t merely building reliable motorcycles. It aims to fulfill the dreams of its customers through the motorcycle experience. If that means going beyond the signature full-throated roar of their Harley and enabling the Harley owners to embellish their vehicles with grassroots folk art, the company will help them do it.
7. Partner with customers. Companies can enhance delight by partnering with buyers. For example, Quadrant Homes, a division of Weyerhaeuser , doesn’t build homes and then try to sell them; Quadrant sells homes before building them and involves buyers in each step of the design. The customer can choose from multiple footprints and floor plans. The result is high demand in a weak market and strong word-of-mouth advertising.
8. Empower. To please customers, make sure frontline workers have the power to make decisions on the spot. Issues are resolved faster. Everyone in the organization must be inspired to think all day and every day: what can I do to give more value to the customer sooner?
9. Measure. You can’t manage anything unless you can measure it, and customer delight is no exception. Fortunately, Fred Reichheld has shown us how with the Net Promoter Score discussed in The Ultimate Question. In most situations, asking a single question—how likely is it that you would recommend this product or service to a colleague or friend?—gives an accurate reading on whether the customer is being delighted.
10. Radical management. Delighting customers implies fundamental changes in the way most established organizations are managed. That’s because traditional command-and-control bureaucracy is constitutionally unsuited to delighting customers. It’s too slow, insufficiently agile and too internally focused to be responsive to customer needs. Once a firm commits to the goal of constantly increasing the value of what it offers to its customers, it needs to become more agile. It will, like Southwest Airlines or Starbucks , naturally gravitate towards the seven principles of radical management—focusing the entire organization on delighting clients; working in self-organizing teams; operating in client-driven iterations; delivering value to clients with each iteration; fostering radical transparency; nurturing continuous self-improvement; and communicating interactively.
Do the benefits of radical management warrant the cost of the transition? The most important benefit is that the firm may survive. The life expectancy of firms in the Fortune 500 has declined to around 15 years, and, according to Deloitte’s Center for the Edge, it’s heading towards five years, unless traditional management is transformed. More specifically, focusing the firm on customer delight through radical management leads simultaneously to major gains in productivity, continuous innovation and deep job satisfaction for those doing the work. It is only when these keys are in place that a firm is really in control of its true bottom line.
About the Author:Stephen Denning is the author of The Leader’s Guide to Radical Management: Reinventing the Workplace for the 21st Century, which describes the seven principles of radical management, as well as more than 70 supporting practices. His other books include the award-winning The Secret Language of Leadership and The Leader's Guide to Storytelling. The former program director of knowledge management for the World Bank, Denning consults with organizations in the US, Europe, Asia, and Australia in the areas of leadership, management, innovation, and business narrative and radical management. To learn more, visit the author's website at: http://www.stevedenning.com