INTRODUCTION
An unstoppable revolution is now under way in our society, affecting almost everyone. The revolution isn''t being launched by opposition political parties, or by terrorists in secret cells, or through espionage by some obscure government department. The revolution is being conducted in plain sight by some of our largest and most respected corporations. It''s visible to anyone with eyes to see. It''s a revolution in how organizations are being run.
The revolution is very simple. Today, organizations are connecting everyone and everything, everywhere, all the time. They are becoming capable of delivering instant, intimate, frictionless value on a large scale. They are creating a world in which people, insights, and money interact quickly, easily, and cheaply. For some, the revolution is uplifting and beautiful. For others, it is dark and threatening.
Dazzling examples of the new way of running organizations are everywhere apparent. Firms like Apple and Samsung offer devices that can be tailored to meet the individual wants and whims of hundreds of millions of users. Firms like Tesla, Saab, and Ericsson are upgrading cars, planes, and networks, not by physically installing new items, but by delivering new software to the products via the Web. Meanwhile, Spotify matches billions of musical playlists to individual users'' tastes and delivers a weekly playlist tailored to each user''s preferences, while Warby Parker sells high-quality eyeglasses for a small fraction of what traditional retailers charge by using a low-friction online model. Online services like Skype, Zoom, and WhatsApp are taking tens of billions of dollars away from old-guard telecom firms by giving customers free or low-cost calls. Amazon has demonstrated what can be accomplished when customer value is pursued ahead of short-term profits: It''s not just the world''s biggest retailer--it''s bigger than all the other retailers put together. Google has become big and rich very quickly, by providing search capabilities that are offered free. The population of Facebook is bigger than that of China. Airbnb, Uber, and Lyft are showing how to unlock the value in existing assets that were previously lying idle. And so on.
At the same time, what is lifting some companies is killing others. The examples here are also abundant. "Market-leading companies," as analyst Alan Murray has written in the Wall Street Journal, "have missed game-changing transformations in industry after industry-- computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)--not because of ''bad'' management, but because they followed the dictates of ''good'' management." In effect, the "good management" that these firms were practicing had become anachronistic. It simply didn''t work anymore.
Spoiler alert. The difference between winners and losers isn''t a matter of access to technology or big data. Both the successful and the unsuccessful firms generally have access to the same technology and data, which are now largely commodities. Traditionally managed organizations also use digital technology and big data but typically get meager results. In some cases, like Kodak, it''s the firm that invented the new technology that has failed to exploit it. It''s not access to technology and data that makes the difference. The difference lies in a different way of running the organization that deploys technology and data more nimbly.
Trying to exploit technology and data with the management practices that are still pervasive in many big corporations today is like driving a horse and buggy on the freeway. To prosper in the very different world that is emerging, firms need a radically different kind of management.
Some firms are embracing the new management paradigm with alacrity. They are happy to shed the traditional management practices of manipulating both staff and customers and instead follow their natural preference to treat people as people and engage in authentic adult-to-adult conversations. Some of them are generating inspired workplaces that create meaning in people''s lives.
Other firms are getting on board more gradually. They reflect on the obvious anomalies of traditional management and feel frustrated that their efforts to fix things don''t work. They find themselves having to run faster and faster just to stay in place. Yet they can also see the extraordinary gains of firms operating in the new way and begin to wonder: "Why can''t we have what they are having?" There often follows a lengthy period of reflection and experimentation before managers finally "get it" and internalize the new mindset.
Some firms are actively resisting the change. For established organizations that have been successfully managed in a traditional fashion for many years with settled processes, routines, attitudes, and values, the new management paradigm can be difficult, even baffling. It is often at odds with the unspoken assumptions about "the way we do things around here."
Still other firms have sought to avoid the dilemma through financial engineering. They are pursuing ways of extracting value from the corporation through short-term cost-cutting, offshoring, share buybacks, tax gadgets, and other devices. While these expedients can create an appearance of prosperity for investors in the stock market, they are systematically destroying real shareholder value and genuine economic well-being.
When managers do embrace the new way of running the organization and the "Aha!" of how the new management paradigm is happening on a large scale, it can be an amazing and humanizing experience. Why would anyone consider doing things differently?
Excerpted from THE AGE OF AGILE: How Smart Companies Are Transforming the Way Work Gets Done by Stephen Denning. Copyright © 2018 Stephen Denning. Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission.
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