Organize for Complexity - Keynote by Niels Pflaeging at Stretch Leadership & Management Conference (Budapest/HU)

1. StretchLeadership&ManagementConference, Budapest,09.12.2015 #stretchcon @NielsPflaeging

2. Culture

5. •  Fixed,individualtargets •  ManagementbyObjectives •  BudgetsandPlans •  PerformanceAppraisal •  HierarchicalPressure •  PaybyPositionorPerformance •  IncentivesandBonuses •  …

7. Dynamicpartof valuecreation Solution:Man Formalpartof valuecreation Solution: Machine

8. Localmarkets, highcustomization high dynamics

9. Localmarkets, highcustomization Spaciousmarkets, littlecompetition Sluggish/dull, lowdynamics high dynamics

10. “Outperformers”exercise marketpressureover conventionalcompanies Localmarkets, highcustomization Spaciousmarkets, littlecompetition Sluggish/dull, lowdynamics high dynamics high dynamics

11. “Outperformers”exercise marketpressureover conventionalcompanies Localmarkets, highcustomization Spaciousmarkets, littlecompetition Sluggish/dull, lowdynamics high dynamics high dynamics Dynamicpartof valuecreation Solution:Man Ageof CraftsManu- facturing IndustrialAge/ Ageof TayloristicIndustry Ageof Global Markets Formalpartof valuecreation Solution: Machine 1970/80today 1850/1900

13. Market Periphery Center

14. Market Periphery Center Isin charge! 3Decision 2Information 1Impulse 4Command 5Reaction Client

15. Market Periphery Center Servesthe periphery, ifneeded Isin charge! 2Decision 1Impulse 3Reaction Client

18. 3.Betaphase or“Integrationphase“ 1.Start-upphase or“Pioneerphase“ Transformacióntipo2: “Profundización“ Transformacióntipo1: “Burocratización“ Transformacióntipo3: “TransformaciónBeta“ 2.Alphaphase or“Differentiationphase“ Youngorganization Olderorganization

19. 3.Betaphase or“Integrationphase“ 1.Start-upphase or“Pioneerphase“ Transformacióntipo2: “Profundización“ Transformacióntipo1: “Burocratización“ Transformacióntipo3: “TransformaciónBeta“ 2.Alphaphase or“Differentiationphase“ Youngorganization Olderorganization

20. 3.Betaphase or“Integrationphase“ 1.Start-upphase or“Pioneerphase“ Transformacióntipo2: “Profundización“ Transformacióntipo1: “Burocratización“ Transformacióntipo3: “TransformaciónBeta“ 2.Alphaphase or“Differentiationphase“ Youngorganization Olderorganization

21. 3.Betaphase or“Integrationphase“ 1.Start-upphase or“Pioneerphase“ Transformacióntipo2: “Profundización“ “Deepening“ Type2transformation Transformacióntipo1: “Burocratización“ Type1transformation: “Bureaucratization“ Transformacióntipo3: “TransformaciónBeta“ Type3transformation: “BetaTransformation“ 2.Alphaphase or“Differentiationphase“ Youngorganization Olderorganization

22. Industry Retail Itispossible. Services Government/ NGOs

23. TheoryY TheoryX Attitude Peopledislikework, Peopleneedtoworkandwanttotakeaninterest init.Underrightconditions,theyenjoyit Direction Peoplewilldirectthemselves towardsatargetthattheyaccept tomaketherighteffort Peoplewouldratherbedirectedthan acceptresponsibility, (whichtheyavoid) finditboring,andwillavoiditiftheycan Peoplemustbeforcedorbribed Responsibility Peoplewillseekandacceptresponsibility, undertherightconditions Motivation Undertherightconditions,peoplearemotivated bythedesiretorealizetheirownpotential Peoplearemotivatedmainlybymoney andfearsabouttheirjobsecurity Creativity Mostpeoplehavelittlecreativity-except whenitcomestogettingroundrules Creativityandingenuityarewidelydistributed andgrosslyunderused

24. Behaviors Context Human Nature

26. … SWOTAnalysis Dresscodes Successionplanning Reportinglines SalesDepartment Orgcharts Flatstructure PerformanceAppraisal/360° StrategicPlanning Plan-Actualsvariances CasualFridays ”Meritocracy“ Investmentplanning DevelopmentCenters BusinessPartners Flexibleworkhours Holidayapplications Paidextrahours BudgetingPlanning HR PersonnelDevelopment CostManagement KeyAccounting,BusinessAreas Incentives SalesQuotas Suggestionboxes StandardCosting Controlofworkhours JobDescriptions COO Supervision MbO Individualtargets Projectmanagement Rules ”PersonnelExpenses“ Bosses/HRhire Milestones Targetnegotiation Jobtitles Trainingbudgets Joursfixes Positions Allocations PayforPerformance Travelpolicies EmployeeSurveys BonusSystems SalaryRanges EarningsGuidance Productmanagement AssessmentCenters CompetenciesManagement MatrixStructures Forecasting KnowledgeManagement

27. •  Transparency&Improvement •  Comparisonsbetweenpeers •  Comparisonswithpreviousperiods •  DialogandDissent •  Socialandgrouppressure •  Paybymarketvalue •  ResultsSharing •  … Highdynamics •  Fixed,individualtargets •  ManagementbyObjectives •  BudgetsandPlans •  PerformanceAppraisal •  HierarchicalPressure •  PaybyPositionorPerformance •  IncentivesandBonuses •  … Lowdynamics

28. Law §§1 §2 §3 §4 §5 §6 §7 §8 §9 §10 §11 §12 Freedomtoact Responsibility Governance Performanceclimate Success Transparency Orientation Recognition Mentalpresence Decision-making Resourceusage Coordination Beta Connectedness Cells Leadership Resultculture Fit Intelligenceflow RelativeTargets Sharing Preparedness Consequence Purpose-driven Marketdynamics Alpha notDependency notDepartments notManagement notDutyfulfillment notMaximization notPoweraccumulation notTop-downprescription notIncentives notPlanning notBureaucracy notStatus-oriented notCommands

33. Information Data Knowledge ?

34. FormalStructure

35. InformalStructure

36. ValueCreationStructure

37. Compliance,Power Social Work/ValueCreation FormalStructure InformalStructure ValueCreationStructure

38. IndustrialAge Mechanistic,dead Differentiated,individualizing Workthepeople Top-down,managed Inparallel,inline Efficiency-oriented KnowledgeAge Systemic,alive Integrated,team-based Workthework Outside-in,led With-each-other-for-each-other Complexity-robust

39. @NielsPflaeging nielspflaeging.com organizeforcomplexity.com betacodex.org slideshare.net/npflaeging