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The Learning Consortium for the Creative Economy January 21, 2015
The Learning Consortium for the Creative Economy
January 21, 2015
Agenda
A. What is the Creative Economy?
B. Why is the shift so difficult?
C. What is the Learning Consortium?
D. How you can help or get involved?
The Learning Consortium for the Creative Economy A. B. C. D.
2
Poll #1
The Learning Consortium for the Creative Economy A. B. C. D.
What is the Creative Economy?
(in sixty seconds)
What is the Creative Economy? A. B. C. D.
4
5
Hierarchical bureaucracy was originally a huge advance
Management solved two problems: • getting semiskilled employees to perform repetitive
activities competently and efficiently; • coordinating those efforts so that products could be
produced in large quantities.
• Roles • Rules • Plans • Reports
Boss
Individuals
What is the Creative Economy? A. B. C. D.
6
In a stable environment Strengths
Scalable Efficient Predictable Reliable average performance
Hierarchical bureaucracy had many strengths
Management solved two problems: • getting semiskilled employees to perform
repetitive activities competently & efficiently; • coordinating those efforts so that products
could be produced in large quantities.
• Roles • Rules • Plans • Reports
Boss
Individuals
What is the Creative Economy? A. B. C. D.
7
Liabilities Vertical Non-collaborative Linear plans Dispiriting to staff Customer is absent
Stable environment Strengths Scalable Efficient Predictable Average performance
In a stable environment, its liabilities didn’t matter much
• Roles • Rules • Plans • Reports
Boss
Individuals
What is the Creative Economy? A. B. C. D.
8
Then the environment became steadily more turbulent
Globalization
Deregulation
Technology, particularly the Internet
• Shifted power in the marketplace from seller to buyer.
• Made “better, cheaper, faster, smaller” the new norm
• Shifted competitive advantage from upstream to downstream
• Led to “big bang disruption” of existing businesses
What is the Creative Economy? A. B. C. D.
9
Liabilities Vertical Non-collaborative Linear plans Dispiriting to staff Customer is absent
Stable environment Strengths Scalable Efficient Predictable Average performance
In a turbulent environment, its strengths evaporated
• Roles • Rules • Plans • Reports
Boss
Individuals
What is the Creative Economy? A. B. C. D.
Turbulent environment Liabilities Complexity Inefficient Lacking agility Average = inadequate
Vertical Non-collaborative Linear plans Dispiriting to staff Customer is absent
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Economics is driving change
ROA and ROIC on US firms 1965-2011: Deloitte Center for the Edge
For more and more firms, the question is: change or die
What is the Creative Economy? A. B. C. D.
11
A fundamental rethink: the Creative Economy
Product owner
Self-organizing team Customer
What is the Creative Economy? A. B. C. D.
12
Scrum was a fundamental rethink: the Creative Economy
Product owner
Customer
What is the Creative Economy?
Creative Economy Horizontal
Self-organizing Iterative Inspiring to staff Customer is central
Traditional economy Vertical
Controlling Linear Dispiriting to staff Customer is absent
A. B. C. D.
13
Self-organizing team
Can Agile/Scrum scale?
Product owner
Customer
Sounds cute but does it
scale?
What is the Creative Economy? A. B. C. D.
14
Self-organizing team
With adjustments, the model is massively scalable
Cloud
Platform Teams Networks Ecosystems
Customer
What is the Creative Economy? A. B. C. D.
15
The new model achieves “scale without sclerosis”
Cloud
Platform Teams Networks Ecosystems
Customer
What is the Creative Economy?
Apple: 500k developers
Apple: 800 million customers
A. B. C. D.
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The model achieves “scale without sclerosis”
Cloud
Platform Teams Networks Ecosystems
Customer
Creative economy giants Apple $660 billion Google $362 billion Alibaba $240 billion Traditional economy giants GE $236 billion IBM $158 billion GM $ 54 billion
Market capitalization
What is the Creative Economy?
Apple: 500k developers
Apple: 800 million customers
A. B. C. D.
17
Ideology of control efficiency predictability detailed plans internal focus
The Creative Economy is a different ideology
Boss
Individuals
What is the Creative Economy? A. B. C. D.
18
Product owner
Team Customer
Ideology of control efficiency predictability detailed plans internal focus
Ideology of enablement self-organization continuous improvement iterative approach the customer is now central
The Creative Economy is a different ideology
Boss
Individuals
What is the Creative Economy? A. B. C. D.
19
Customer centrality isn’t a little fix,
like adding a marketing department….
What is the Creative Economy? A. B. C. D.
20
Earth
Sun
It’s like the Copernican Revolution in astronomy
What is the Creative Economy? A. B. C. D.
Sun
21
Earth
Sun
Sun
Earth
The Copernican Revolution in astronomy
The shift led to vast economic, social and political change
What is the Creative Economy? A. B. C. D.
22
The firm
The Copernican Revolution in Management What is the Creative Economy? A. B. C. D.
Customer
23
The firm Customer
Firm
The Copernican Revolution in management
It is leading to vast economic, social and political change
What is the Creative Economy? A. B. C. D.
Customer
24
The transition is under way at the team level
Boss
Individuals
What is the Creative Economy?
Bureaucracy
Product owner
Team` Customer
Agile/Scrum
A. B. C. D.
25
Cloud
Platform Teams Networks Ecosystems
Customer
The transition is also under way at the level of the firm
What is the Creative Economy?
Traditional economy Creative economy
A. B. C. D.
26
Boss Boss Boss
Boss
Boss
Boss
Plugging Scrum teams into a bureaucracy creates friction
Product owner Team Customer
There are many partial transitions
What is the Creative Economy?
Scrum
A. B. C. D.
27
What is the Creative Economy? A. B. C. D.
Poll #2:
Questions?
What is the Creative Economy? A. B. C. D.
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B. The transition at the level of the firm is difficult
1. No established guide path 2. Partial fixes don’t stick 3. Shareholder value theory is a problem 4. Many elements reinforce the status quo 5. This is a paradigm shift (in the strict sense)
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
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1. No established guide path…
Books don’t say much about the transition
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
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1. Many books describe the shift…
… but most say little about managing the transition
The transition to the Creative Economy is more difficult than it looks
Sep 2015
A. B. C. D.
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2. Partial fixes didn’t stick For example, teams:
Boss
Individuals
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
33
2. Partial fixes didn’t stick For example, teams:
Boss
Individuals
Boss
Team
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
34
3. Partial fixes don’t stick For example, teams:
Boss
Individuals
Boss
Individuals
Boss
Team
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
35
3. Partial fixes don’t stick
Hierarchical bureaucracy is like a morphing virus
For example, teams:
Boss
Individuals
Boss
Individuals
Boss
Team
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
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Delighting customers
Goal
Role Communications From controller
to enabler
From bureaucracy to Agile, Scrum, Lean
From command to conversations
From value to values
Coordination Values
The elements are interlocking
Transparency Improvement Sustainability
The Creative Economy
Managers are controllers
of individuals
Bureaucracy: rules, plans, reports
Top down commands
Efficiency, cost cutting
Make money for shareholders
Goal
Role
Coordination
Communications
Traditional Management
Values
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
Delighting customers
Goal
Role Communications From controller
to enabler
From bureaucracy to Agile, Scrum, Lean
From command to conversations
From value to values
Coordination Values
The elements are interlocking
Transparency Improvement Sustainability
The Creative Economy
Managers are controllers
of individuals
Bureaucracy: rules, plans, reports
Top down commands
Efficiency, cost cutting
Make money for shareholders
Goal
Role
Coordination
Communications
Traditional Management
Values
The elements are interlocking
To replace one interlocking system
The transition to the Creative Economy is more difficult than it looks
You need a new interlocking system
A. B. C. D.
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3. Publicly owned firms have a special problem
Goal of the firm: maximize
shareholder value
Management: Command-and-
control.
An unholy alliance
Since making money for shareholders is an uninspiring goal, tight command-and-control is needed to enforce it.
“Delighting customers” often gets lost in this shuffle.
This is another reason why “partial fixes” don’t work.
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
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4. Many elements reinforce the status quo
• C-suite compensation from boards of directors reinforces shareholder value, not customers
• Business schools teach managers how to manage the status quo
• Financial markets, hedge funds and activist shareholders applaud short-term gains in the share price and punish deviations.
• Regulators, politicians and lobbyists reinforce the status quo
It’s not just the C-suite
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
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5. This is a paradigm shift (in the strict sense)
Thomas Kuhn: The Structure of Scientific Revolutions (1957)
Phase 1: “Normal science” proceeds, on agreed assumptions
Phase 2: Anomalies appear, and “fixes” are introduced
Phase 3: Forward thinkers recognize need for fundamental change
Change is strongly resisted by the powers-that-be
Long-standing attitudes, values, assumptions support the status quo
Phase 4: The new paradigm is generally accepted
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
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5. This is a paradigm shift in the strict sense Thomas Kuhn: The Structure of Scientific Revolutions:
Phase 1: “Normal science” proceeds, on agreed assumptions
Phase 2: Anomalies appear, and “fixes” are introduced
Phase 3: Forward thinkers recognize need for fundamental change
Change is strongly resisted by the powers-that-be
Long-standing attitudes, values and assumptions support the status quo
Phase 4: The new paradigm is generally accepted.
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
42
5. This is a paradigm shift in the strict sense Thomas Kuhn: The Structure of Scientific Revolutions:
Phase 1: “Normal science” proceeds, on agreed assumptions
Phase 2: Anomalies appear, and “fixes” are introduced
Phase 3: Forward thinkers recognize need for fundamental change
Change is strongly resisted by the powers-that-be
Long-standing attitudes, values and assumptions support the status quo
Phase 4: The new paradigm is generally accepted.
We are now in the middle of Phase 3 of the Copernican shift in management
The transition to the Creative Economy is more difficult than it looks A. B. C. D.
43
Boss
Individuals
Product owner
Team` Customer
Agile/Scrum
The transition to the Creative Economy is more difficult than it looks
It is difficult to dislodge mental models based on long experience
A. B. C. D.
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Boss
Individuals
Product owner
Team` Customer
Agile/Scrum
The transition to the Creative Economy is more difficult than it looks
It is difficult to dislodge mental models based on long experience
It wasn’t until 1822 that the Roman
Catholic Church lifted the ban on discussing
heliocentrism
A. B. C. D.
45
The transition to the Creative Economy is more difficult than it looks
But economics is driving this transition forward
ROA and ROIC on US firms 1965-2011: Deloitte Center for the Edge
The question is not whether, but when
A. B. C. D.
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Poll #3
What is the Learning Consortium? A. B. C. D.
C. How can firms learn how to make this difficult transition?
One suggestion:
A Learning Consortium
What is the Learning Consortium? A. B. C. D.
48
What is the goal of the Learning Consortium?
What is the Learning Consortium?
To work together to enable each member to succeed on their journey to the Creative Economy by sharing
resources, experience and trust.
A. B. C. D.
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The need for a Learning Consortium
What is the Learning Consortium?
1. The business need for the transition is clear, but even for committed companies it is difficult.
2. Firms benefit from open and transparent exchanges among practitioners on what is working, and what isn’t.
3. No other convenient way of having these exchanges
4. Firms that are further along on the journey deserve recognition.
A. B. C. D.
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Experience with Learning Consortia
in other fields
What is the Learning Consortium? A. B. C. D.
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How the Learning Consortium will work
What is the Learning Consortium?
We are inviting up to 30 firms to join the Consortium by end-February 2015.
Members will share their progress on the shift to the Creative Economy
Members will select the five most interesting firms for site visits.
Site visits will take place from April through September 2015.
An on-line conversation space for members will be established.
An informal advisory panel will be available for consultation by members.
A conference will be organized later in 2015.
A report on findings of the consortium will be prepared in consultation with members
A. B. C. D.
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Who can join the Learning Consortium?
What is the Learning Consortium?
Any organization can join that is:
• Wanting to accelerate its journey towards the Creative Economy
• Keen to learn from other practitioners on the same journey
• Willing to share its experience with other practitioners
• Able to pay an administrative fee (expected to between $10k-$20k)
• Willing to accept the Code of Ethics, which includes:
No selling of services in the course of the Consortium
No solicitation of staff by means of the Consortium
A. B. C. D.
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What are the benefits of joining the Consortium ?
What is the Learning Consortium?
Member Direct benefits
1. Peer-to-peer learning on site visits
2. A forum for trusted conversations in a safe space
3. Informal learning from other participants
4. On-line learning in real-time
5. The Learning Consortium conference and report
Indirect benefits
1. Member-determined agenda
2. Access to core-team and the informal advisory panel
3. Assurance of state-of-the-art expertise
4. Brand recognition as an innovative company
5. Enhanced personal networks in management innovation
A. B. C. D.
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Who is the core team of the Learning Consortium?
What is the Learning Consortium?
• Steve Denning is a board member of Scrum Alliance and combines several decades of management experience at the World Bank with many years of consulting and research on leadership and management issues. He now writes for Forbes.com. He is the author of eight books, including The Leader’s Guide To Radical Management (2010) and The Leader’s Guide To Storytelling (2010).
• Jay Goldstein is an adjunct lecturer in entrepreneurship at McCormick School of Engineering at Northwestern University. He teaches Entrepreneurial Selling and Scaling with the application of advanced Agile mind-sets and methods; he is a serial entrepreneur and was a founding partner in Jabbok River Group, which invests in early-stage companies to accelerate innovation and growth.
• Michael Pacanowsky is the director of the Center for Innovative Cultures at the Bill and Vieve Gore School of Business at Westminster College in Salt Lake City, Utah. He is also the Gore-Giovale Chair in Business Innovation at Westminster College. He worked for several decades with W. L. Gore and Associates.
A. B. C. D.
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How can you get involved?
How can you help?
Join. As a member organization. Have your company become one of the 30 members.
Interact. As an agile professional. The Scrum Alliance desires to interact more with organizations, and the front-line Scrum practitioners doing the work helping organizations change.
Enlist. In the army of change agents. Remain involved with the 3,000 people who registered for this webinar and others who together are potentially a huge army of change agents.
Inform. Let us know what we can we do to help catalyze your involvement in this movement and accelerate the transition to the Creative Economy.
Contact: [email protected]
A. B. C. D.
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How do you want to be involved?
How can you help?
Do you want kept informed about progress of the Learning Consortium?
Do you want to participate in a series of webinars on the Creative Economy?
Do you want to participate in an (asynchronous/threaded) online group discussion?
Do you want to participate in a "community of practice" devoted to mobilizing aspects "the Creative Economy"?
Would you be interested in establishing and leading such a community of practice?
Such communities of practice could be organized (a) by sub-theme or (b) by industry or (c) by geography or (d) any of the above.
A. B. C. D.
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Poll #4
How can you help? A. B. C. D.
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How can you help the Learning Consortium?
What is the Learning Consortium?
All types of companies need to be involved. Members are… Geographically diverse, including:
In US In Europe In Asia
In different sectors, including: Software Manufacturing Finance Distribution/Retail
And are diverse in age and in scale
A. B. C. D.
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How can you help the Learning Consortium?
What is the Learning Consortium?
You could help us identify more member candidates Is your firm
On a journey towards the Creative Economy? Interested in learning from other practitioners? Willing to share its experience?
Let us know. We would love to talk with you. Contact: [email protected]
A. B. C. D.
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Questions?
What is the Learning Consortium? A. B. C. D.
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Thank you for attending
The Learning Consortium for the Creative Economy
January 21, 2015
