Why management is quackery.                                                     Niels PflaegingAnd what leadership for the...
?!     Typical questions about     work & organizations
?!     Together, we are kind of dumb.     But why?
Not much healing going on here.But still a great business
ThinkingDoing
The dependence model –inherited from theindustrial ageLooks like a grid.No coincidence.
There could be intelligent life inthe lower part of the pyramid…
Complicated/many rules >                  Stupid behaviorSimple/few principles >Complex behavior              Don´t do evil.
An organization
Most organizations are obsessed with individual performance.But individual performance is a myth, actually.
We know that everyone in an organization is interconnected.So performance and success are complex things…
Complexity and its consequences forwork and leadership
The impact of complexity on work:Value creation has two parts                                     Dynamic part –          ...
high dynamicDynamic part   of value   creationSolution: man                    Age of                 crafts manu-        ...
high dynamic         sluggishness/low dynamicDynamic part   of value   creationSolution: man                    Age of    ...
high dynamic         sluggishness/low dynamic             high dynamicDynamic part   of value   creationSolution: man     ...
Guess where in this “Taylor bathtub” timeline interdependence becomes vital!Dynamic part   of value   creationSolution: ma...
“Socially dense market organization”. Is that possible?              Command,                               Radical transp...
Industry                            RetailIt is possible                               Services                 Government...
But…We have to build consensus about human nature.What are people like?
McGregors critical distinction                                Theory X                         Theory Y                   ...
Behavior                                                Context                                 Human NatureWe have an obs...
Power to the teams
Social density, or “peer pressure”
Success is not a zero-sum gameLow, or average performance   High, or superior performance
Central coordination is luxury.One you cannot afford in complexity
Product                                  Sales         Back Office   Management                                           ...
Everybody knows this kind of structure.Disadvantage: It´s not actually real.
?!                               Structure No. 2Structure No. 1                   ?!             Structure No. 3
This one is also well-known. Much more real
But this?
2 Informal Structure1 Formal Structure                     3 Value Creation Structure
Now, this is real!
Market     PeripheryCenter
Market     PeripheryCenter
Market     PeripheryCenter
Market                                                Periphery                               !                           ...
Market                                            !                           !                      Periphery            ...
Market (very powerful today)Organization & teams
When markets lead, it´s good to have a periphery that´s in charge.Decentralized decision-making becomes a question of surv...
Periphery:roles, influence…
Center: roles, influence…
“Help the center lose its arrogance”.Because it´s hard
Practice. Practice. Practice
The dependence model -   The in(ter)dependence model:nice illusion            Where everyone can think. And               ...
Transparency & ImprovementPeer team comparisonsComparisons w/previous periodsDialogue & dissentPay by market valueResult s...
The 10.000 hour principleFor mastery and learning.Pretty important
Winning: only together, not individually.Celebrate results. Not meeting targets.
Independence at work:Leadership means working on the system.Not on people.
Organizing the work requires a new codex: based on scientific insight.understanding of complexity & human natureLaw       ...
.!     .     Let´s bring independence to work.     It works.
!!                                                                        Niels Pflaeging,                                ...
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Why management is quackery. Keynote by Niels Pflaeging at HFU Business School (Villingen-Schwenningen/D)

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Why management is quackery. And what leadership for the 21st century must really look like - keynote at HFU Business School, Villingen-Schwenningen, December 2013

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Transcript of "Why management is quackery. Keynote by Niels Pflaeging at HFU Business School (Villingen-Schwenningen/D)"

  1. 1. Why management is quackery. Niels PflaegingAnd what leadership for the 21st centurymust really look likeKeynote at University Villingen-Schwenningen Villingen-Schwenningen/Germany, 19 December 2012 Illustrations used with kind permission by Jurgen Appelo
  2. 2. ?! Typical questions about work & organizations
  3. 3. ?! Together, we are kind of dumb. But why?
  4. 4. Not much healing going on here.But still a great business
  5. 5. ThinkingDoing
  6. 6. The dependence model –inherited from theindustrial ageLooks like a grid.No coincidence.
  7. 7. There could be intelligent life inthe lower part of the pyramid…
  8. 8. Complicated/many rules > Stupid behaviorSimple/few principles >Complex behavior Don´t do evil.
  9. 9. An organization
  10. 10. Most organizations are obsessed with individual performance.But individual performance is a myth, actually.
  11. 11. We know that everyone in an organization is interconnected.So performance and success are complex things…
  12. 12. Complexity and its consequences forwork and leadership
  13. 13. The impact of complexity on work:Value creation has two parts Dynamic part – solution: man Formal part – solution: machine
  14. 14. high dynamicDynamic part of value creationSolution: man Age of crafts manu- facturing Local markets, high customi- zationFormal part ofvalue creation Solution: machine 1850/1900 t
  15. 15. high dynamic sluggishness/low dynamicDynamic part of value creationSolution: man Age of Age of crafts manu- tayloristic facturing industry Local markets, Spacious markets, high customi- little competition zationFormal part ofvalue creation Solution: machine 1850/1900 1970/80 t
  16. 16. high dynamic sluggishness/low dynamic high dynamicDynamic part of value creationSolution: man Age of Age of Age of crafts manu- tayloristic global facturing industry markets Local markets, Outperformers exercise Spacious markets, market pressure over high customi- little competition conventional companies zationFormal part ofvalue creation Solution: machine 1850/1900 1970/80 today t The dominance of high dynamics and complexity is neither good or bad. It‘s a historical fact.
  17. 17. Guess where in this “Taylor bathtub” timeline interdependence becomes vital!Dynamic part of value creationSolution: man Age of Age of Age of crafts manu- tayloristic global facturing industry markets Local markets, Outperformers exercise Spacious markets, market pressure over high customi- little competition conventional companies zationFormal part ofvalue creation Solution: machine 1850/1900 1970/80 today t
  18. 18. “Socially dense market organization”. Is that possible? Command, Radical transparency,Problems, control social density,information group pressure Frame: values, Frame: rules, principles, roles, responsibilities, shared objectives job descriptions
  19. 19. Industry RetailIt is possible Services Governments & NGOs
  20. 20. But…We have to build consensus about human nature.What are people like?
  21. 21. McGregors critical distinction Theory X Theory Y Attitude People dislike work, People need to work and want to take an interest find it boring, and will avoid it if they can in it. Under right conditions, they enjoy it Direction People must be forced or bribed People will direct themselves to make the right effort towards a target that they accept ResponsibilityPeople would rather be directed than accept People will seek and accept responsibility, responsibility, (which they avoid) under the right conditions Motivation People are motivated mainly by money Under the right conditions, people are motivated and fears about their job security by the desire to realize their own potential Creativity Most people have little creativity - except Creativity and ingenuity are widely distributed when it comes to getting round rules and grossly underusedSource: Douglas McGregor, ‘The Human Side of Enterprise’, 1960
  22. 22. Behavior Context Human NatureWe have an observation problem
  23. 23. Power to the teams
  24. 24. Social density, or “peer pressure”
  25. 25. Success is not a zero-sum gameLow, or average performance High, or superior performance
  26. 26. Central coordination is luxury.One you cannot afford in complexity
  27. 27. Product Sales Back Office Management Business team 2 Business team 1Functional division: a bad idea Business team 3
  28. 28. Everybody knows this kind of structure.Disadvantage: It´s not actually real.
  29. 29. ?! Structure No. 2Structure No. 1 ?! Structure No. 3
  30. 30. This one is also well-known. Much more real
  31. 31. But this?
  32. 32. 2 Informal Structure1 Formal Structure 3 Value Creation Structure
  33. 33. Now, this is real!
  34. 34. Market PeripheryCenter
  35. 35. Market PeripheryCenter
  36. 36. Market PeripheryCenter
  37. 37. Market Periphery ! Center ! 2 Information ! 3 Decision 4 Command1 Impulse 5 ReactionCustomer
  38. 38. Market ! ! Periphery ! Center Serves the periphery, ! if needed ! !1 Impulse 2 Decision 3 ReactionCustomer
  39. 39. Market (very powerful today)Organization & teams
  40. 40. When markets lead, it´s good to have a periphery that´s in charge.Decentralized decision-making becomes a question of survival
  41. 41. Periphery:roles, influence…
  42. 42. Center: roles, influence…
  43. 43. “Help the center lose its arrogance”.Because it´s hard
  44. 44. Practice. Practice. Practice
  45. 45. The dependence model - The in(ter)dependence model:nice illusion Where everyone can think. And everyone has to!
  46. 46. Transparency & ImprovementPeer team comparisonsComparisons w/previous periodsDialogue & dissentPay by market valueResult sharing…Fixed & individual targetsManagement by ObjectivesBudgets & PlansPerformance appraisalsPay by PositionPay for PerformanceIncentives & Bonuses…
  47. 47. The 10.000 hour principleFor mastery and learning.Pretty important
  48. 48. Winning: only together, not individually.Celebrate results. Not meeting targets.
  49. 49. Independence at work:Leadership means working on the system.Not on people.
  50. 50. Organizing the work requires a new codex: based on scientific insight.understanding of complexity & human natureLaw The In(ter)dependence The Dependence model – Beta model – Alpha§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
  51. 51. .! . Let´s bring independence to work. It works.
  52. 52. !! Niels Pflaeging, www.nielspflaeging.com www.betacodex.orgAll illustrations: Jurgen Appelo www.noop.nl and Niels Pflaeging @NielsPflaeging
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