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A Paradigm Shift in the ‘Management Model’ based on Agile and Scrum:
The principles of scientific management were first developed by Frederick Taylor over 100 years ago. The underlying assumption was that the firm was in business to make money for the shareholders. To achieve this fundamental goal, managers directed and controlled the workers in an effort to maximize profits. Most of the development of management principles since then has continued to focus on improvements in efficiency, quality and productivity.
In the last decade we have experienced diminishing returns on profitability and return on investment from continued application of these management principles. A 2011 Deloitte study (Shift Index) shows that the return on assets and on invested capital for 20,000 US firms has steadily fallen from an average of about 5% to 1.5% from 1965 to 2011. This erosion has happened not because of ‘bad’ management but in spite of applying the best practices of ‘good’ management. According to Steve Denning in his Oct. 31, 2012 on-‐line post on Forbes, the cause of this decline is due to a shift in power in the marketplace from seller to buyer.
(to read the article, follow this link: http://www.forbes.com/sites/stevedenning/2012/10/31/dont-‐diss-‐the-‐paradigm-‐shift-‐in-‐management/?utm_source=topic-‐leadership&utm_medium=rss&utm_campaign=20121101)
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He goes on to point out a number of large successful companies that have focused on the customer have had explosive three digit growth. Among these are Apple, Amazon and SalesForce.
These companies that have put the customer ahead of the shareholders have adopted a paradigm shift in management theory. He accredits the development of this new conceptual framework to software engineers and the Agile Manifesto of 2001. Based on extensive research of recent management and leadership books, he has laid the groundwork for a new ‘management model’.
In a series of seven articles titled ‘The Death – and Reinvention – of Management’, Steve Denning summarizes the new management paradigm. The link to the first article is: http://stevedenning.typepad.com/steve_denning/2010/11/the-‐deathand-‐reinventionof-‐management-‐a-‐draft-‐synthesis.html
The PMO Branch Flyer – Issue Number 8 December 2012 PMO Branch
Organization Structure Chair: Parveen Nath Vice Chair: David Giles Portfolio Leads –Communications: Tom Harasti, Marketing: Natalia Boyko Finance: Ricardo Alvarez
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Come and join us in The PMO Branch Fast
Lane
Program Management Office (PMO) Branch
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According to Denning, in reinventing management, five fundamental and interdependent shifts need to occur:
1. The first shift stems from a monumental transition in the power balance between seller and buyer: to management's astonishment, the buyer is now in the driver’s seat. As a result, the firm’s goal has to shift to one of delighting clients, i.e. a shift from inside-‐out (“You take what we make”) to outside-‐in (“We seek to understand your problems and will surprise you by solving them”).
2. The second shift stems from the first transition, as well as the epochal transition from semi-‐skilled labor to knowledge work. Again to management's astonishment, traditional hierarchy suddenly doesn’t work anymore. The role of the manager has to shift from being a controller to an enabler, so as to liberate the energies and talents of those doing the work and remove impediments that are getting in the way of work.
To support and sustain those two shifts, three other shifts are necessary:
3. The mode of coordination shifts from hierarchical bureaucracy to dynamic linking, i.e. to a way of dynamically linking self-‐driven knowledge work to the shifting requirements of delighting clients.
4. There is a shift from value to values, i.e. a shift from a single-‐minded focus on economic value and maximizing efficiency to instilling the values that will create innovation and growth for the organization over the long term.
5. Communications shift from command to conversation: i.e. a shift from top-‐down communications comprising predominantly hierarchical directives to communications made up largely of adult-‐to-‐adult conversations that solve problems and generate new insights.
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January 9 2013 - Incorporating Regulatory and Audit requirements in the PMO: Bruno Melo (1.5 PDU)
While regulatory requirements are highest in the banking and financial/insurance sector, they apply to many other industries as well. The need to incorporate regulatory and audit requirements into the plans and structure of a PMO is a way to reduce risk and disruption. It is a way to acknowledge the regulatory expectations, build in risk mitigation and close the gaps in the program.
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Borrowing from the Scrum methodology, Denning has come up with the following list of core practices that we should take to heart as program or project managers:
1. Organize work in short cycles: 2. The management doesn’t interrupt the
team during a work cycle. 3. The team reports to the client, not the
manager: 4. The team estimates how much time
work will take: 5. The team decides how much work it
can do in an iteration: 6. The team decides how to do the work
in the iteration: 7. The team measures its own
performance: 8. Define work goals before each cycle
starts: 9. Define work goals through user stories: 10. Systematically remove impediments:
Tom Harasti - Communications - PMO Branch SOC.
Current PMO Team & Volunteers: Parveen Nath, David Giles, Tom Harasti, Natalia Boyko, Ricardo Alvarez, Luis Sanchez, Kate Psaltis, Ashok Selukar.
