Presenting the BetaCodex (BetaCodex06)
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Presenting the BetaCodex (BetaCodex06)



Introducing the BetaCodex - formerly: the Beyond Budgeting model. Here you find a short overview over the foundations of the codex.

Introducing the BetaCodex - formerly: the Beyond Budgeting model. Here you find a short overview over the foundations of the codex.



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Presenting the BetaCodex (BetaCodex06) Presenting the BetaCodex (BetaCodex06) Presentation Transcript

  • Make it real!PRESENTINGTHEBETA CODEXPutting an end to “command and control”:12 laws for defining the 21st century organizationBetaCodex Network AssociatesNiels Pflaeging & Valérya Carvelho & Silke HermannBetaCodex Network White Paper No. 06. New version Jan 2011
  • The age of management – and its inventorWhen Frederick Taylor published his landmark book“The Principles of Scientific Management“, in 1911, hesuggested ”management“ as a revolution that wouldsolve the problems of the industrial-age organization.Above all, Taylor pioneered the concept of dividing anorganization between “thinking people” (managers) and“executing people” (workers) – thus inventingmanagement as a class, and as thinking principals ofthe non-thinking “human resources”. Taylor alsopioneered the functional division of organizations.Taylors methods and concepts were soon unmasked asinhuman and non-scientific and his consulting methodsas rather ineffective. But the concept of division didnonetheless became widely adopted after his death, in1915.Management, as we know it today, is not much differentfrom what Taylor proposed, 100 years ago. In todaysdynamic and complex markets, however, tayloristiccommand and control management is proving more andmore obsolete and toxic for both organizationalperformance and human and social advancement. Wenow call tayloristic management “Alpha”.
  • The world has changed – organizations have not, by and large Industrial age ends: Knowledge economy advances: high ”Supplies have the power“, ”Customers have the power“, Evolution of mass markets: strong competition, individualized demand: Taylorism as the superior model decentralized and adaptive model is superior! Now, all these factors are equally important! Here, only efficiency Competitive mattered, really! Characteristics success factors (CSF)Dynamics 1.  Discontinuous change - Fast response and 2.  Short life cycles - Innovationcomplexity 3.  Constant pressure on prices Operational excellence - Characteristics 4.  Less loyal customers - Customer intimacy •  Incremental change •  Long life cycles 5.  Choosy employees - Great place to work 6.  Transparency, -  Effective •  Stable prices societal pressure governance •  Loyal customers   High financial -  Sustained superior •  Choosy employers expectations value creation/fin.perf. •  „Managed“ results low 1890 Most 1980 1990 2000 2010 2020 organizations still use the “alpha” organization model that was designed 2030 for efficiency, while the problem today is complexity, requiring a “beta” model. reserved 3 © BBTN – All rights
  • A movement for organizational transformation that started in 1998 founded founded 1998 2008 Stage 1: Beyond Budgeting (1998-2002) Stage 2: Beyond command and control (2003-2007) Stage 3: Beyond incremental change (2008-)
  • From: Managed pyramid To: Led, decentralized network
  • The BetaCodex: The 12 new laws of LeadershipLaw Beta - “Leadership” Alpha - “Management” (Do this!) (Not that!)§1 Freedom to act Connectedness not Dependency§2 Responsibility Cells not Departments§3 Governance Leadership not Management§4 Performance climate Result culture not Duty fulfillment§5 Success Fit not Maximization§6 Transparency Intelligence flow not Power accumulation§7 Orientation Relative Targets not Top-down prescription§8 Recognition Sharing not Incentives§9 Mental presence Preparedness not Planning§10 Decision-making Consequence not Bureaucracy§11 Resource usage Purpose-driven not Status-oriented§12 Coordination Market dynamics not Commands 6 © BBTN – All rights reserved
  • Comparing the models Technology:“Management”/Alpha Technology: “Leadership”/Beta
  • The BetaCodex is rooted in both sciences and practiceSciences: Stafford Beer Practice:Thought leaders Margareth Wheatley Industry leaders Niklas Luhmann(selected) W. Edwards Deming (selected) Kevin Kelly Ross Ashby Joseph Bragdon … Douglas McGregor Chris Argyris Jeffrey Pfeffer Complexity Reinhard Sprenger theories Industry Stephen Covey Howard Gardner Social Viktor Frankl sciences and … HR Retail Peter Drucker Tom Peters Leadership & Services Charles Handy change John Kotter Peter Senge Thomas Davenport Strategy & Peter Block Performance Governments … management & NGOs Henry Mintzberg Gary Hamel Jeremy Hope Michael Hammer Thomas Johnson Charles Horngren …
  • Industry Retail ServicesGovernmental& not-for-profit
  • The BetaCodex: It means workingon the organizational model, not in the model
  • Organizations of all kinds evolve during their lives – most have transformedthemselves at least once - moving from Pioneer phase to Differentiation phase Sustaining and deepening of the decentralized model, Evolution through generations within the decentralized model Integration (culture of empowerment phase and trust) Beta! High degree Transformation of decentralization/ through radical empowerment Decentralization of decision-making Differentiation phase Stagnation within the tayloristic model Alpha! Low degree of decentralization/ empowerment Bureaucratization through growing hierarchy and functional differentiation Pioneering phase Beta! High degree of decentralization/ empowerment Foundation Time scale: organizations age Several decades old
  • Some principles typical of a BetaCodex organization Principles & shared Market-driven sense & respond – values – not rules! not hierarchy-driven Market rules – command & control not bosses! Funcationally integrated cells – not funcationally Socially dense & based on divided departments peer pressure – not individualized bureaucracyRadically decentralizeddecision-making –not centralized command Team-based self- governance – not top-down control Extreme transparency – not information bottle- necks
  • From the tayloristic (“Alpha”) to the emerging “Beta” organizationAlpha: Traditional model (supports efficiency) Beta: New model (supports complexity) Centralized Decentralized hierarchy, network, “command and “Sense and control“ respond“ The old model is not aligned with today’s Critical success factors and it does not support ‘Theory Y’. > We need a new model to cope with Relative strategy performance complexity contracts > We must change Fixed the whole model! performance contracts Dynamic coordination Dynamic Fixed processes processes control
  • Make it real! Silke Hermann Niels Pflaeging Valérya Carvalho silke.hermann@ Wiesbaden–Berlin-New York New York-Wiesbaden São PauloGet in touch with us formore information aboutleading transformation withthe BetaCodex and profound Walter Larralde Sergio Mascheretti Chris Catto wlarralde@ s.mascheretti@ christopher.catto@change, ask us for a keynote a workshop proposal. Mexico City Bergamo/Milan Melbourne