Digital Shift & Accelerated Disruption. Episode 3: Management 3.0, a mindset revolution from the C-Suite to every level

In a previous article about applying a Minimum Viable Product approach from a startup environment to established companies contexts, I opened the subject at the end of the article on the issue of decision-making in established companies and how it could be a challenge to go fast. So let’s talk this time about this issue of decision-making, hence management.

Going digital means a lot of things, from technological to business transformations, impacts on processes, organizations, etc… What is the bottom line for any company which takes the path of digital transformation? It’s to survive by adapting and having the capacity to move as fast as its competitors, especially disruptive newcomers who have the advantage of “no legacy” to slow them down. Speed is key, in an uncertain and complex environment, and this is a whole new challenge for management of large organizations: if your organization scales up to 1000, 10 000 or 100 000 people and has 5, 10, 15 or more levels of management, how can you ensure that decisions taken at the top level management will be taken into account… especially if these decisions may need to change rapidly to cope with accelerated changes on the market? Well, you can not.

 There’s inevitably a latency for decisions to spread through all levels of management, not mentioning that at each level the decision will be interpreted in different subjective ways, putting at risk the capacity of your organization to adapt rapidly. It turns out that the most common mode of management, known as pyramid management, where everything is decided at the highest level then transmitted down to every level for execution, is showing its limits in uncertain and fast-moving environments. Furthermore, the “command & control” organizations come from the period of the Industrial Revolution, where factories were filled with people with little education coming from the countryside. In that context, companies set up strict processes to be followed without having to explain why, as they were judging that the workers didn’t need to know more than to execute repetitive tasks and were not qualified to be able to understand the big picture behind them. In our 21st society, people at work are much more educated, some of them having high diplomas. In that context, who can think that they would accept to work in a “command & control” environment where the philosophy is “do what I tell you and shut up”? Or they will accept it, but will come to work while being disengaged, just to make a living, and will use their energy elsewhere than work.

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That’s how the idea of Management 3.0 came up a few years ago. Theorized by Jurgen Appelo (http://jurgenappelo.com/about/), its ambition is to bring back the energy and happiness of people at work for their benefits and the organization’s benefit, and turn the whole organization agile by transforming the way management is done, and thus transforming the role of managers, turning them more in a coaching position than a “command and control” position. In a world of uncertainty and accelerated disruptions, the key for companies to survive is to adapt rapidly. The principle of Management 3.0 is that, not matter how efficient your processes are, no matter how strong your production systems are, a pyramid organization structure is bound to fail if the outside environment is constantly changing at a fast pace: top management or middle management become the bottleneck of decisions, employees lose their engagement by having the feeling that decisions keep changing all the time without knowing why, execution of a given decision is outdated by the time it has reached the lower level and started to be implemented, etc… This poses a challenge to the whole organization, and especially to managers, where the “command and control” posture at all levels turns out to be counter-productive. Management 3.0 was thus developed along with a whole set of tools and behaviors, starting from the managers, to become as agile and flexible as an Octopus. Hence the picture you may already have seen, featuring everything a manager of the future should be capable of… Well, if you see the not so attractive picture, you may wonder if you still really want to become a manager :).

Following the path of Management 3.0 is of course about new skills to acquire for managers at every level of course, but above all a question of mindset, especially at CxO level. For an existing organization that has always operated in a “command & control” mindset, it is quite challenging to change its way of working. In management more than anywhere else, people acquire new skills and new postures by being inspired by what they see on a day to day basis. It does help a lot if the CEO of the company is willing to turn the organization of the company agile, and sticks to some behaviors that will prove by the fact that even him, the highest manager in the organization, is consistent with what he advocates. Being exemplary himself will facilitates the change at all management levels, starting with other CxOs, directors… as this is a big shift for all managers, who will have to work on their ego. At all management levels, a progressive change in behavior is the best way to enable change throughout the organization: be less involved in some day to day decisions, letting the teams make some (not risky) mistakes and make them learn from these mistakes, show empathy and support to personal initiative while still driving people with a high level of excellency…

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All these changes in behavior don’t come naturally, it also depends on each manager’s personality and on his/her representation of powership. Training managers in courses like Management 3.0 is a must, and ideally this training may be followed with coaching of a group of them whose actions may bring an impact. Typically, a group of Directors, coached on a one-year term, taking one day per month to share and work on concrete management issues together with a coach is a formula I found really powerful when being part of it myself.

There are of course different approaches given the context of each company, the bottom line being to change the mindset from the “manager as a chief” to “manager as a coach, a servant leader” having the skills to empower the people and the teams while ensuring at a high level that they are aligned throug time with the company’s vision so that through better committment, more autonomy and responsibility, execution on the projects and required adaptation improves dramatically. If well executed, this kind of change at management levels turns out to be appreciated even more by managers who will find that they are respected by their employees not through fear but through motivation (at least I think for people who have a real sense of management, as too often, you find people in management positions who just happened to be there because it is the only path to recognition in the company when expertise is not valued… but this will be the subject for another article).

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For people who may want to go at an even higher level, I strongly recommend reading the excellent book “Freedom Inc” (http://freedomincbook.com,) describing the concept of “liberating companies” with concrete examples in different industries and how the companies which succeeded manage to perform over their market through time. Another very useful and pragmatic book is “The Leader’s Guide” by Eric Ries, which is a return on experience of many leaders and companies which took the path to apply lean startup principles in their companies to go beyond the theory (and misleading shortcuts).

As a senior director, I found these books both inspiring and useful on an operational basis, with the description of different frameworks and approaches to use and adapt to the specific context you’re working for.

While writing this article, it reminded me of an article wrote by an Asian scrummaster desperate about bringing agile to Asia because of culture. Would his arguments also apply on Management 3.0, making it impossible to develop in countries such as in Asia? This will be the subject of my next post to think whether agile, management 3.0, etc.. is just a thing from the West or not.

Thanks for reading and do not hesitate to comment and share with me your thoughts!