Niels Pflaeging argues that traditional management structures are becoming dispensable due to increasing complexity in work and organizations. He outlines how value creation has two parts - a dynamic part requiring human solutions and a formal part solved by machines. As dynamics increase, independence and self-organization become vital. Pflaeging proposes moving from a dependence model of hierarchy to an interdependence model of transparency, social density, and group pressure. This involves distributing leadership throughout organizations by empowering teams and decentralizing decision-making.
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How Complexity Is Causing a Leadership Revolution
1. Independence at Work Niels Pflaeging
Why management is dispensable.
How complexity is causing a leadership revolution
Keynote at Phaesun Workshop 2012 Memmingen/Germany, 5 October 2012
Illustrations used with kind permission by Jurgen Appelo
2. ?!
Typical questions about
work & organizations
12. The impact of complexity on work:
Value creation has two parts
Dynamic part –
solution: man
Formal part –
solution: machine
13. high dynamic
Dynamic part
of value
creation
Solution: man
Age of
crafts manu-
facturing
Local markets,
high customi-
zation
Formal part of
value creation
Solution:
machine
1850/1900 t
14. high dynamic sluggishness/low dynamic
Dynamic part
of value
creation
Solution: man
Age of Age of
crafts manu- tayloristic
facturing industry
Local markets,
Spacious markets,
high customi-
little competition
zation
Formal part of
value creation
Solution:
machine
1850/1900 1970/80 t
15. high dynamic sluggishness/low dynamic high dynamic
Dynamic part
of value
creation
Solution: 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
zation
Formal part of
value 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.
16. Guess where in this “Taylor bathtub” timeline independence becomes vital!
Dynamic part
of value
creation
Solution: 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
zation
Formal part of
value creation
Solution:
machine
1850/1900 1970/80 today t
17. “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
18. Industry
Retail
It is possible
Services
Governments
& NGOs
19. But…
We have to build consensus about human nature.
What are people like?
20. McGregor's 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
Responsibility
People 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 underused
Source: Douglas McGregor, ‘The Human Side of Enterprise’, 1960
21. Behavior
Context
Human Nature
We have an observation problem.
43. The dependence model - The in(ter)dependence model:
nice illusion Where everyone can think. And
everyone has to!
44. Transparency & Improvement
Peer team comparisons
Comparisons w/previous periods
Dialogue & dissent
Pay by market value
Result sharing
…
Fixed & individual targets
Management by Objectives
Budgets & Plans
Performance appraisals
Pay by Position
Pay for Performance
Incentives & Bonuses
…
45. The 10.000 hour principle
For mastery and learning.
Pretty important
48. In complexity, organizing the work requires a new codex
Law 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
49. .!
Let´s take people and work off the grid.
Let´s bring independence to work.
It works.
50. !!
Niels Pflaeging,
www.nielspflaeging.com
All illustrations: Jurgen Appelo www.noop.nl and Niels Pflaeging www.betacodex.org