Spark the Change Toronto, 09.06.2016 @NielsPflaeging

How our organizatio

ns

will become ag

ile, radically d

ecentralized

and networked

. Sooner than w

e think

Complexity is like the weather.

Culture

•  Fixed, individual targets •  Management by Objectives •  Budgets and Plans •  Performance Appraisal •  Hierarchical Pressure •  Pay by Position or Performance •  Incentives and Bonuses • …

Formal part of value creation Solution: Machine

Dynamic part of value creation Solution: Man

high dynamics

Local markets, high customization

Sluggish/dull, low dynamics

high dynamics

Spacious markets, little competition

Local markets, high customization

Sluggish/dull, low dynamics

high dynamics

high dynamics

Spacious markets, little competition

“Outperformers” exercise market pressure over conventional companies

Local markets, high customization

Formal part of value creation Solution: Machine

Dynamic part of value creation Solution: Man

Sluggish/dull, low dynamics

high dynamics

high dynamics

Age of Crafts Manu- facturing

Industrial Age/ Age of

Tayloristic Industry

Age of Global Markets

1850/1900

Spacious markets, little competition

“Outperformers” exercise market pressure over conventional companies

Local markets, high customization

1970/80 today

Periphery

Market

Center

1 Impulse 4 Command

3 Decision

2 Information

5 Reaction

Center

Market

Periphery

Client

Is in charge!

1 Impulse 2 Decision

3 Reaction

Center

Market

Periphery

Client

Serves the periphery, if needed

Is in charge!

3. Fase „beta“ o “fase de integración“

2. Fase „alpha“ o “fase de diferenciación“

Transformación tipo 2: “Profundización“

Transformación tipo 1: “Burocratización“

Transformación tipo 3: “Transformación Beta“

Young organization Older organization

1. Start-up phase or “Pioneer phase “

3. Fase „beta“ o “fase de integración“

Transformación tipo 2: “Profundización“

Transformación tipo 1: “Burocratización“

Transformación tipo 3: “Transformación Beta“

Young organization Older organization

1. Start-up phase or “Pioneer phase“

2. Alpha phase or “Differentiation phase“

Transformación tipo 2: “Profundización“

Transformación tipo 1: “Burocratización“

Transformación tipo 3: “Transformación Beta“

Young organization Older organization

1. Start-up phase or “Pioneer phase“

2. Alpha phase or “Differentiation phase“

3. Beta phase or “Integration phase“

1. Start-up phase or “Pioneer phase“

2. Alpha phase or “Differentiation phase“

Type 2 transformation “Deepening“

Type 1 transformation: “Bureaucratization“

Type 3 transformation: “Beta Transformation“

3. Beta phase or “Integration phase“

Young organization Older organization

Indústry

Retail

Servicies

Government/ NGOs

It is possible.

Theory X Theory Y

People need to work and want to take an interest in it. Under right conditions, they enjoy it

People dislike work, find it boring, and will avoid it if they can

Attitude

Direction

Responsibility

Creativity

Motivation

People will direct themselves towards a target that they accept

People will seek and accept responsibility, under the right conditions

Under the right conditions, people are motivated by the desire to realize their own potential

Creativity and ingenuity are widely distributed and grossly underused

People must be forced or bribed to make the right effort

People would rather be directed than accept responsibility, (which they avoid)

People are motivated mainly by money and fears about their job security

Most people have little creativity - except when it comes to getting round rules

Behaviors

Context Human Nature

”Meritocracy“ Budgeting Planning

Control of work hours Job Descriptions

Competencies Management

Incentives Individual targets

Performance Appraisal/360°

Salary Ranges

Training budgets Personnel Development

Org charts

Target negotiation

Holiday applications

”Personnel Expenses“

Suggestion boxes

Assessment Centers

Knowledge Management

Pay for Performance

Paid extra hours

Bonuses

Sales Quotas

Dress codes

Job titles

HR

Allocations

Cost Management

Plan-Actuals variances

Forecasting

MbO

Development Centers

Bosses hire

Strategic Planning

Travel policies Jours fixes

Earnings Guidance Matrix Structures

Key Accounting, Business Areas

Business Partners

SWOT Analysis …

•  Fixed, individual targets •  Management by Objectives •  Budgets and Plans •  Performance Appraisal •  Hierarchical Pressure •  Pay by Position or Performance •  Incentives and Bonuses • …

•  Transparency & Improvement •  Comparisons between peers •  Comparisons with previous periods •  Dialog and Dissent •  Social and group pressure •  Pay by market value •  Results Sharing • …

Low dynamics

High dynamics

Law Beta 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

Data Information Knowledge ?

Formal Structure

Informal Structure

Value Creation Structure

Compliance, Power Social Work/Value Creation

Formal Structure Informal Structure Value Creation Structure

Knowledge Age Systemic, alive Integrated, team-based Work the work Outside-in, led With-each-other-for-each-other Complexity-robust

Industrial Age Mechanistic, dead Differentiated, individualizing Work the people Top-down, managed In parallel, in line Efficiency-oriented

@NielsPflaeging nielspflaeging.com

organizeforcomplexity.com betacodex.org

slideshare.net/npflaeging

How our organizatio

ns

will become ag

ile, radically d

ecentralized

and networked

. Sooner than w

e think