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

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

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  1. Whymanagementisquackery. Andwhatleadershipforthe21stcentury mustreallylooklike NielsPflaeging KeynoteatUniversityVillingen-Schwenningen Villingen-Schwenningen/Germany,19December2012 IllustrationsusedwithkindpermissionbyJurgenAppelo

  2. ? ??? Typicalquestionsabout work&organizations

  3. ? ??? Together,wearekindofdumb. Butwhy?

  4. Notmuchhealinggoingonhere. Butstillagreatbusiness

  5. Thinking Doing

  6. Thedependencemodel– inheritedfromthe industrialage Lookslikeagrid. Nocoincidence.

  7. Therecould beintelligentlifein thelowerpartofthepyramid…

  8. Complicated/manyrules> Stupidbehavior Simple/fewprinciples> Complexbehavior Don´tdoevil.

  9. Anorganization

  10. Mostorganizationsareobsessedwithindividualperformance. Butindividualperformanceisamyth,actually.

  11. Weknowthateveryoneinanorganizationisinterconnected. Soperformanceandsuccessarecomplexthings…

  12. Complexityanditsconsequencesfor workandleadership

  13. Theimpactofcomplexityonwork: Valuecreationhastwoparts Dynamicpart– solution:man Formalpart– solution:machine

  14. highdynamic Dynamicpart ofvalue creation Solution:man Ageof craftsmanu- facturing Localmarkets, highcustomi- zation Formalpartof valuecreation Solution: machine 1850/1900 t

  15. highdynamic sluggishness/lowdynamic Dynamicpart ofvalue creation Solution:man Ageof tayloristic industry Ageof craftsmanu- facturing Localmarkets, highcustomi- zation Spaciousmarkets, littlecompetition Formalpartof valuecreation Solution: machine 1850/1900 t 1970/80

  16. highdynamic sluggishness/lowdynamic highdynamic Dynamicpart ofvalue creation Solution:man Ageof tayloristic industry Ageof craftsmanu- facturing Ageof global markets Outperformersexercise marketpressureover conventionalcompanies Localmarkets, highcustomi- zation Spaciousmarkets, littlecompetition Formalpartof valuecreation Solution: machine 1850/1900 t 1970/80today Thedominanceofhighdynamicsandcomplexityisneithergoodorbad. It‘sahistoricalfact.

  17. Guesswhereinthis“Taylorbathtub”timelineinterdependencebecomesvital!Guesswhereinthis“Taylorbathtub”timelineinterdependencebecomesvital! Dynamicpart ofvalue creation Solution:man Ageof tayloristic industry Ageof craftsmanu- facturing Ageof global markets Outperformersexercise marketpressureover conventionalcompanies Localmarkets, highcustomi- zation Spaciousmarkets, littlecompetition Formalpartof valuecreation Solution: machine 1850/1900 t 1970/80today

  18. “Sociallydensemarketorganization”.Isthatpossible? Radicaltransparency, socialdensity, grouppressure Frame:values, principles,roles, sharedobjectives Command, control Problems, information Frame:rules, responsibilities, jobdescriptions

  19. Industry Retail Itispossible Services Governments &NGOs

  20. But… Wehavetobuildconsensusabouthumannature. Whatarepeoplelike?

  21. McGregor'scriticaldistinction TheoryY TheoryX Attitude Peopledislikework, Peopleneedtoworkandwanttotakeaninterest init.Underrightconditions,theyenjoyit Direction finditboring,andwillavoiditiftheycan Peoplewilldirectthemselves towardsatargetthattheyaccept Responsibility Peoplemustbeforcedorbribed tomaketherighteffort Peoplewillseekandacceptresponsibility, undertherightconditions Motivation Peoplewouldratherbedirectedthanaccept responsibility, (whichtheyavoid) Undertherightconditions,peoplearemotivated bythedesiretorealizetheirownpotential Creativity Peoplearemotivatedmainlybymoney andfearsabouttheirjobsecurity Mostpeoplehavelittlecreativity-except whenitcomestogettingroundrules Creativityandingenuityarewidelydistributed andgrosslyunderused Source:DouglasMcGregor,‘TheHumanSideofEnterprise’,1960

  22. Behavior HumanNature Context Wehaveanobservationproblem

  23. Powertotheteams

  24. Socialdensity,or“peerpressure”

  25. Successisnotazero-sumgame Low,oraverageperformance High,orsuperiorperformance

  26. Centralcoordinationisluxury. Oneyoucannotaffordincomplexity

  27. Product Management Sales BackOffice Businessteam2 Businessteam1 Functionaldivision:abadidea Businessteam3

  28. Everybodyknowsthiskindofstructure. Disadvantage:It´snotactuallyreal.

  29. ? ??? StructureNo.2 StructureNo.1 ? ??? StructureNo.3

  30. Thisoneisalsowell-known.Muchmorereal

  31. Butthis?

  32. 2InformalStructure 1FormalStructure 3ValueCreationStructure

  33. Now,thisisreal!

  34. Market Periphery Center

  35. Market Periphery Center

  36. Market Periphery Center

  37. Market Periphery ! ! Center ! ! ! 3Decision 2Information 4Command 1Impulse 5Reaction Customer

  38. Market ! ! Periphery ! ! ! ! Center Serves theperiphery, ifneeded ! ! ! ! ! 2Decision 1Impulse 3Reaction Customer

  39. Market (verypowerfultoday) Organization&teams

  40. Whenmarketslead,it´sgoodtohaveaperipherythat´sincharge. Decentralizeddecision-makingbecomesaquestionofsurvival

  41. Periphery: roles,influence…

  42. Center:roles, influence…

  43. “Helpthecenterloseitsarrogance”. Becauseit´shard

  44. Practice.Practice.Practice

  45. Thedependencemodel- niceillusion Thein(ter)dependencemodel: Whereeveryonecanthink.And everyonehasto!

  46. Transparency&Improvement Peerteamcomparisons Comparisonsw/previousperiods Dialogue&dissent Paybymarketvalue Resultsharing … Fixed&individualtargets ManagementbyObjectives Budgets&Plans Performanceappraisals PaybyPosition PayforPerformance Incentives&Bonuses …

  47. The10.000hourprinciple Formasteryandlearning. Prettyimportant

  48. Winning:onlytogether,notindividually. Celebrateresults.Notmeetingtargets.

  49. Independenceatwork: Leadershipmeansworkingonthesystem. Notonpeople.

  50. Organizingtheworkrequiresanewcodex:basedonscientificinsight. understandingofcomplexity&humannature Law TheIn(ter)dependence model–Beta Connectedness Cells Leadership Resultculture Fit Intelligenceflow RelativeTargets Sharing Preparedness Consequence Purpose-driven Marketdynamics TheDependence model–Alpha notDependency notDepartments notManagement notDutyfulfillment notMaximization notPoweraccumulation notTop-downprescription notIncentives notPlanning notBureaucracy notStatus-oriented notCommands §1Freedomtoact §2Responsibility §3Governance §4Performanceclimate §5Success §6Transparency §7Orientation §8 Recognition §9Mentalpresence §10Decision-making §11Resourceusage §12Coordination

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