, Entrepreneur, influencer, management exorcist, change curator, thought innovator, speaker, author, globally working advisor on leadership transformation. Former Beyond Budgeting Round Table director. Founder of the BetaCodex Network.
at nielspflaeging., BetaCodex Network
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. ?! Typical questions about work & organizations
3. ?! Together, we are kind of dumb. But why?
4. Not much healing going on here.But still a great business
6. The dependence model –inherited from theindustrial ageLooks like a grid.No coincidence.
7. There could be intelligent life inthe lower part of the pyramid…
10. Most organizations are obsessed with individual performance.But individual performance is a myth, actually.
11. We know that everyone in an organization is interconnected.So performance and success are complex things…
12. Complexity and its consequences forwork and leadership
13. The impact of complexity on work:Value creation has two parts Dynamic part – solution: man Formal part – solution: machine
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. 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. 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. 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. “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. Industry RetailIt is possible Services Governments & NGOs
20. But…We have to build consensus about human nature.What are people like?
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. Behavior Context Human NatureWe have an observation problem
23. Power to the teams
24. Social density, or “peer pressure”
25. Success is not a zero-sum gameLow, or average performance High, or superior performance
26. Central coordination is luxury.One you cannot afford in complexity
27. Product Sales Back Office Management Business team 2 Business team 1Functional division: a bad idea Business team 3
28. Everybody knows this kind of structure.Disadvantage: It´s not actually real.
32. 2 Informal Structure1 Formal Structure 3 Value Creation Structure
33. Now, this is real!
34. Market PeripheryCenter
35. Market PeripheryCenter
36. Market PeripheryCenter
37. Market Periphery ! Center ! 2 Information ! 3 Decision 4 Command1 Impulse 5 ReactionCustomer
38. Market ! ! Periphery ! Center Serves the periphery, ! if needed ! !1 Impulse 2 Decision 3 ReactionCustomer
39. Market (very powerful today)Organization & teams
40. When markets lead, it´s good to have a periphery that´s in charge.Decentralized decision-making becomes a question of survival
41. Periphery:roles, influence…
42. Center: roles, influence…
43. “Help the center lose its arrogance”.Because it´s hard
44. Practice. Practice. Practice
45. The dependence model - The in(ter)dependence model:nice illusion Where everyone can think. And everyone has to!
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. The 10.000 hour principleFor mastery and learning.Pretty important
48. Winning: only together, not individually.Celebrate results. Not meeting targets.
49. Independence at work:Leadership means working on the system.Not on people.
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. .! . Let´s bring independence to work. It works.