Here’s an excellent ppt presentation, where Steve Denning gives the background and rationale for why the world must change from traditional to radical management.
A few tidbits from the presentation:
“tradidional management was deployed as a way to getting semi-skilled workers to perform repetitive activities….”
“… [today’s workers] are often better educated than their managers…”
“The 20th century firm wasn’t focused on pleasing customers”
“it’s no longer enough merely to remove defects. The bar has been raised”
In essence, we are now entering the third era of capitalism, “Customer Capitalism“, where the lessons learned during the two previous era’s, “Manegerial capitalism” and “Shareholder capitalism”, are quickly becoming obsolete. The purpose of a firm is no longer serving its owners, but its customers, and if you fail to do so, you life expectancy as a business will be short.
Unfortunately, the transition to real “Radical management” will most likely prove to be extremely hard for most large corporations, because of corporate inertia and the fact that all existing executive compensation packages are based on the “shareholder focus” era thinking, where profit and earnings-per-share are the only factors that count for steering the business. In our short term focused business of today, the easiest way to drive profit margins and EPS is to reduce costs and cut investments, which is what most if not all firms are vigorously pursuing today. While that strategy can produce spendid numbers short term to delight Wall Street, as well as boosting executive bonuses, in longer term it leads to corporate starvation and disastrous future business outlook.
[thanks to the Prof for the pointer]