The Learning Consortium for the Creative Economy. January 21, 2015

The Learning Consortium for the Creative Economy January 21, 2015

The Learning Consortium for the Creative Economy A. B. C. D. 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? 2

The Learning Consortium for the Creative Economy A. B. C. D. Poll #1

What is the Creative Economy? A. B. C. D. What is the Creative Economy? (in sixty seconds) 4

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What is the Creative Economy? A. B. C. D. Hierarchical bureaucracy was originally a huge advance Boss 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. Individuals Roles Rules Plans Reports 6

What is the Creative Economy? A. B. C. D. Hierarchical bureaucracy had many strengths Boss 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. Individuals Roles Rules Plans Reports In a stable environment Strengths Scalable Efficient Predictable Reliable average performance 7

What is the Creative Economy? A. B. C. D. In a stable environment, its liabilities didn t matter much Boss Individuals Roles Rules Plans Reports Stable environment Strengths Scalable Efficient Predictable Average performance Liabilities Vertical Non-collaborative Linear plans Dispiriting to staff Customer is absent 8

What is the Creative Economy? A. B. C. D. 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 9

What is the Creative Economy? A. B. C. D. In a turbulent environment, its strengths evaporated Boss Individuals Roles Rules Plans Reports Stable environment Strengths Scalable Efficient Predictable Average performance Liabilities Vertical Non-collaborative Linear plans Dispiriting to staff Customer is absent Turbulent environment Liabilities Complexity Inefficient Lacking agility Average = inadequate Vertical Non-collaborative Linear plans Dispiriting to staff Customer is absent 10

What is the Creative Economy? A. B. C. D. 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 11

What is the Creative Economy? A. B. C. D. A fundamental rethink: the Creative Economy Self-organizing team Customer Product owner 12

What is the Creative Economy? A. B. C. D. Scrum was a fundamental rethink: the Creative Economy Self-organizing team Customer Product owner Traditional economy Vertical Controlling Linear Dispiriting to staff Customer is absent Creative Economy Horizontal Self-organizing Iterative Inspiring to staff Customer is central 13

What is the Creative Economy? A. B. C. D. Can Agile/Scrum scale? Sounds cute but does it scale? Self-organizing team Customer Product owner 14

What is the Creative Economy? A. B. C. D. With adjustments, the model is massively scalable Cloud Teams Networks Ecosystems Platform Customer 15

What is the Creative Economy? The new model achieves scale without sclerosis A. B. C. D. Cloud Teams Networks Ecosystems Apple: 500k developers Platform Customer Apple: 800 million customers 16

What is the Creative Economy? The model achieves scale without sclerosis Teams Networks Ecosystems Apple: 500k developers Cloud Platform Customer Market capitalization Creative economy giants Apple $660 billion Google $362 billion Alibaba $240 billion Traditional economy giants GE $236 billion IBM $158 billion GM $ 54 billion Apple: 800 million customers A. B. C. D. 17

What is the Creative Economy? A. B. C. D. The Creative Economy is a different ideology Boss Individuals Ideology of control efficiency predictability detailed plans internal focus 18

What is the Creative Economy? A. B. C. D. The Creative Economy is a different ideology Boss Team Customer Product owner Individuals Ideology of control efficiency predictability detailed plans internal focus Ideology of enablement self-organization continuous improvement iterative approach the customer is now central 19

What is the Creative Economy? A. B. C. D. Customer centrality isn t a little fix, like adding a marketing department. 20

What is the Creative Economy? A. B. C. D. It s like the Copernican Revolution in astronomy Sun Earth 21

What is the Creative Economy? A. B. C. D. The Copernican Revolution in astronomy Sun Earth Earth Sun The shift led to vast economic, social and political change 22

What is the Creative Economy? A. B. C. D. The Copernican Revolution in Management Customer The firm 23

What is the Creative Economy? A. B. C. D. The Copernican Revolution in management Customer Firm The firm Customer It is leading to vast economic, social and political change 24

What is the Creative Economy? A. B. C. D. The transition is under way at the team level Bureaucracy Agile/Scrum Boss Team` Customer Individuals Product owner 25

What is the Creative Economy? A. B. C. D. The transition is also under way at the level of the firm Traditional economy Creative economy Cloud Teams Networks Ecosystems Platform Customer 26

What is the Creative Economy? A. B. C. D. There are many partial transitions Plugging Scrum teams into a bureaucracy creates friction Boss Boss Boss Scrum Boss Boss Boss Team Product owner Customer 27

What is the Creative Economy? A. B. C. D. Poll #2:

What is the Creative Economy? A. B. C. D. Questions? 29

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 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) 30

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 1. No established guide path Books don t say much about the transition 31

The transition to the Creative Economy is more difficult than it looks 1. Many books describe the shift A. B. C. D. Sep 2015 but most say little about managing the transition 32

The transition to the Creative Economy is more difficult than it looks A. B. C. D. For example, teams: 2. Partial fixes didn t stick Boss Individuals 33

The transition to the Creative Economy is more difficult than it looks A. B. C. D. For example, teams: 2. Partial fixes didn t stick Boss Boss Individuals Team 34

The transition to the Creative Economy is more difficult than it looks A. B. C. D. For example, teams: 3. Partial fixes don t stick Boss Boss Boss Individuals Team Individuals 35

The transition to the Creative Economy is more difficult than it looks A. B. C. D. For example, teams: 3. Partial fixes don t stick Boss Boss Boss Individuals Team Individuals Hierarchical bureaucracy is like a morphing virus 36

The transition to the Creative Economy is more difficult than it looks A. B. C. D. Traditional Management Top down commands Communications Efficiency, cost cutting Values Goal Make money for shareholders Role Managers are controllers of individuals Coordination Bureaucracy: rules, plans, reports Communications Transparency Improvement Sustainability The Creative Economy From command to conversations From value to values Values Goal Delighting customers Role From controller to enabler From bureaucracy to Agile, Scrum, Lean Coordination The elements are interlocking

The transition to the Creative Economy is more difficult than it looks A. B. C. D. Traditional Management Top down commands Communications Efficiency, cost cutting Values Goal Make money for shareholders Role Managers are controllers of individuals Coordination The elements are interlocking Bureaucracy: rules, plans, reports Communications Transparency Improvement Sustainability The Creative Economy From command to conversations From value to values Values Goal Delighting customers Role From controller to enabler From bureaucracy to Agile, Scrum, Lean Coordination The elements are interlocking To replace one interlocking system You need a new interlocking system 38

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 3. Publicly owned firms have a special problem An unholy alliance Goal of the firm: maximize shareholder value Management: Command-andcontrol. 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. 39

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 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 40

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 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 41

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 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. 42

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 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 43

The transition to the Creative Economy is more difficult than it looks A. B. C. D. It is difficult to dislodge mental models based on long experience Boss Agile/Scrum Team` Customer Product owner Individuals 44

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. Boss Agile/Scrum Team` Customer Product owner Individuals It wasn t until 1822 that the Roman Catholic Church lifted the ban on discussing heliocentrism 45

The transition to the Creative Economy is more difficult than it looks A. B. C. D. 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 46

What is the Learning Consortium? A. B. C. D. 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 48

What is the Learning Consortium? A. B. C. D. What is the goal of 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. 49

What is the Learning Consortium? A. B. C. D. The need for a 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. 50

What is the Learning Consortium? A. B. C. D. Experience with Learning Consortia in other fields 51

What is the Learning Consortium? A. B. C. D. How the Learning Consortium will work 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 52

What is the Learning Consortium? A. B. C. D. Who can join 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 53

What is the Learning Consortium? A. B. C. D. What are the benefits of joining the 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 54

What is the Learning Consortium? A. B. C. D. Who is the core team of 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. 55

How can you help? A. B. C. D. How can you get involved? 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: learningconsortium@scrumalliance.org 56

How can you help? A. B. C. D. How do you want to be involved? 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. 57

How can you help? A. B. C. D. Poll #4 58

What is the Learning Consortium? A. B. C. D. How can you help 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 59

What is the Learning Consortium? A. B. C. D. How can you help 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: learningconsortium@scrumalliance.org 60

What is the Learning Consortium? A. B. C. D. Questions? 61

Thank you for attending The Learning Consortium for the Creative Economy January 21, 2015