Jürgen Mohr
Agile & Management 3.0 Expert

Juergen's Blog

07. April 2018, 19:21

A Brief Opener About Management 3.0

Complexity Everywhere

We are living in an ever-increasing complex world. Stephen Hawking, one of our greatest physicists ever once said at the end of the 20th century: I think the next century will be the century of complexity. New management approaches are necessary to enable organizations to survive in those complex and ever faster-changing environments. In his book Management 3.0 published in 2010, Jurgen Appelo presents a management model of the same name that successfully addresses those challenges. Appelo's Management 3.0 model recognizes that today's organizations are living, networked systems; and that management is primarily about people and their relationships. Appelo identified six fields of management responsibilities and provides guidance on how to deal with them. At the same time Appelo provides well-proven practices and tools, which he himself successfully uses to date in his own companies. To promote his model and make it available to a broader audience Appelo founded Happy Melly, the company behind Management 3.0.

So, let’s look at the basics

Since decades organizations struggle to answer the same questions:
- How can we motivate our workers?
- How can we change the organization’s culture?
- How can we change the mindset of managers?
- How can we get teams to take responsibility?
- How can we improve teamwork and collaboration?
- How can we get managers to trust their teams?
- How can we make the business more agile?

Based on complexity and systems theory Management 3.0 successfully addresses those questions using a modern, agile management approach. Complexity and systems theory teaches us that there are no laws for dealing with change, uncertainty and complexity. Complex environments can only be addressed with adequate complex systems. Healthy organizations use a diversity of perspectives and assume subjectivity and coevolution; they anticipate, explore, and adapt; they innovate through steal and tweak; they expect dependence on context and keep their options open; they shorten the feedback cycle to quickly respond to changes; they discover the future instead of trying to control it. Management 3.0 considers all those facets and combines them in a modern management style. And yet, Management 3.0 is not another framework or process. Management 3.0 first and foremost is a mindset.

But that's not all. The Management 3.0 mindset comes along with a pool of proven practices; proven practices you can use as a starting point. Examples are the Delegation Board and Delegation Poker, Moving Motivators, Kudo Cards, the Team Competence Matrix, Storytelling, Culture Books, and the Celebration Grid. But since Cynefin we know that best practices are only existent in simple environments and good practices in complicated environments. In complex environments where we find most of today's organizations and all the work of the creative industries, practices are always emergent; you start with a practice and it evolves over time. In other words, one practice that worked well for one team must not work well for another team. This implies that adapting to change through permanent feedback rounds is essential to progress and survival. Some decades ago we talked about the first-mover advantage, today we talk about the fastest-learner advantage. Remember, Google was not the first search engine, Amazon not the first online shopping system. Their critical success factor was and is that they belong to the fastest-learner organizations world-wide.

But why is it named 3.0? What do we mean when we talk about Management 3.0?

At the beginning of the 20th century organizations were managed like machines. In this style of management, managers assume that improvement of the whole requires monitoring, repairing, and replacing the parts. In this world employees were considered as parts, too. This is what we call Management 1.0 – Doing The Wrong Thing.

In the middle of the last century top management and human resources departments started realizing that it is more effective to treat employees as humans. They started considering their employees as the most valuable asset. So, they introduced appraisal interviews, bonuses based on agreed targets, social team events, and much more. Managers became Servant Leaders. But organizations were still sticking to hierarchies. Empowerment was telling an employee that she now is responsible for something. Feedback was given from superior to subordinate only. This is what we call Management 2.0 – Doing The Right Thing Wrong.

But some smart guys soon realized that managing an organization is much more like running a community or city; all people can do whatever they want as long as it serves the common goals of the community. Feedback is now given amongst peers, and delegation is seen as empowerment, where empowerment is a synonym for distributed control. Alignment is achieved through common values that form the organizational culture. Organizational structures are a mixture of hierarchy and network. Continuous learning is inherent at all levels and in every team. This is what we call Management 3.0 – Doing The Right Thing.

Those organizations who see change as a chance for improvement will be better off in the future than those organizations who see change as an impediment. So, if your organization wants to be prepared for the future, it's not an option to look at Management 3.0, it's inevitable.


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29. September 2017, 11:02

Companies that Mimic Life Inherently Apply Management 3.0 and Belong to the Most Successful Companies

Consider the following seven companies:
- Unilever – a producer of household goods
- Nucor – a global steel producer
- United Technologies – a manufacturer of capital goods
- Novo Nordisk – a player in the global pharmaceutical industry
- Henkel – a world leader in applied chemistry and adhesives technology
- Nike – a manufacturer of athletic wear
- Westpac Banking – a bank

What do those companies have in common? Companies from different industries with different ages. What could it be that links them together? The answer is, that they all belong to the commercially most successful companies of the last 20 years. All of them have outperformed their primary competitors and global benchmark indices. Ok, this is good, but not yet something that’s special. So, what is it that makes them really special? It is their outstanding success which is based on a disruptive approach and implementation of management and leadership. They all consider organizations as living systems, in contrast to the widespread and common organizations-as-machine ideal, which was dominant for hundreds of years. They belong to those companies that are comprised under the umbrella Companies that Mimic Life.

Their success is not just based on gut feeling, but on hard statistically significant facts. In 1995 Joseph H. Bragdon created a learning lab of companies. Companies that place a higher value on living assets (people and Nature) than on nonliving capital assets. These learning lab companies, where the mentioned seven ones are part of, practice something Bragdon calls living asset stewardship (LAS); they nurture people and Nature instead of exploiting them; they maximize the speed of learning and adaptation; they aim to radically lower their global ecological footprint. In addition, these learning lab companies comprise the Global Living Asset Management Performance (LAMP) Index that Bragdon introduced in 1996. As of today this index consists of 60 companies who all adhere to LAS. What makes this index so special is that between 1996 and 2015 the LAMP index has outperformed three of the most commonly used global equity benchmarks, namely the MSCI World Index, the FTSE World Index, and the S&P Global 100 Index. But that’s not the whole story. As good as this sounds, the learnings through the lab go much deeper. For example, one more outcome is that the more a company adheres to LAS the more profitable it becomes.

But what is the powerful secret? What is it that makes up this outstanding performance? Which factors lay behind LAS? It’s something that’s easy to understand but apparently hard to implement. The companies’ extraordinary success is due to the following six critical lifelike qualities, identified by Bragdon, that are present in all life, from single-cell organisms to large ecosystems:
- Decentralized, self-organizing networked structures
- Regenerative life strategies
- Frugal instincts
- Openness to feedback
- Symbiotic behaviors
- Consciousness

All of these qualities are in some kind apparent in the LAMP index companies. Now, if we look at the six critical lifelike qualities from a management perspective this sounds very familiar to people who know Management 3.0. Management 3.0 is packed by the systems and complexity theory. From systems and complexity theory we know that the increasing complexity and fast-changing environments cannot be handled or controlled though a complicated model or framework. There are no laws for dealing with change, uncertainty and complexity, only guidelines we can follow. In his famous book Management 3.0 published in 2010, Jurgen Appelo presents a management model of the same name that successfully addresses those challenges. Appelo's Management 3.0 model recognizes that today's organizations are living, networked systems; and that management is primarily about people and their relationships. Grounded on the complexity and system theory Appelo identified six areas of management responsibilities and provides guidance on how to deal with them. Those areas are as follows: Energize People; Empower Teams; Align Constraints; Develop Competence; Grow Structure, Improve Everything.

But what’s really impressive with Management 3.0 is that the six critical lifelike qualities defined by Bragdon are inherent in the Management 3.0 model. Let’s look at them one by one.

# Decentralized, self-organizing networked structures
From complexity theory we know that a complex environment cannot be controlled through a central authority. Decisions need to be delegated to the parts of the system. Organizations need to empower their teams and employees, they need to decentralize decision-making to be able to survive in those fast-changing business environments. Self-organizing teams at the frontline ensure the effective treatment with challenging situations. Network structures ensure fast temporary reorganizations necessary to deal effectively with challenges while distributing information from end-to-end effectively. Like a blade of grass in the wind, bending with the wind in a storm, but standing upright again when the storm is gone, network structures will reshape according to challenges and afterwards resume the previous structure. Decentralized, self-organizing networked structures are a central point of the Management 3.0 model.

# Regenerative life strategies
Regenerative life strategies are especially expressed in learning and information gathering in companies. Creating a culture that enables employees to permanently learn and improve strengthens a firm’s survival. Regenerating the lived interactions between people leads to new strategies best addressing the constantly changing business environment companies live in.

# Frugal instincts
Frugal instincts addressed at the point where things happen lead to fast and effective corrective actions undertaken by empowered employees. Frugal instincts are also an ingredient of servant leaders, superiors who act as coach and mentor instead of being bossy.

# Openness to feedback
Openness to feedback is the foundation to improve everything. Without openness and transparency organizations will not be able to find ways to improve. Openness is also key to delegate decisions to the frontline teams, to develop competence, to energize people, to align values and culture, and to grow the organization.

# Symbiotic behaviors
High performance, self-organized teams inherently exhibit symbiotic behavior. Without cooperation and trust in each other they would not achieve their great success. The symbiotic behavior of teams is the DNA that leads to excellent, outperforming results and delivers the flexibility to deal effectively with unforeseen and unexpected challenges.

# Consciousness
Consciousness is a fundamental property of all human beings. And people and their relationships is the core principle behind all aspects of the Management 3.0 model. Consciousness is the foundation of a living Management 3.0 organization.

Companies that mimic life, that place a higher value on living assets (people and Nature), inherently apply the Management 3.0 model. Considering Bragdon’s learning lab and Global Living Asset Management Performance Index, we can conclude that Management 3.0 applied leads to higher profits with happier employees while at the same time preserving our earth for and the future of our children.


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26. Juni 2017, 16:12

Happiness Research and Agility- Two Sides of the Same Coin

We are all experts in the field of agility, at least to some point. We know that agility is first and foremost a mindset change. It changes our view on how we develop software or build products. It conflicts with the ways traditional organizations are used to work. Especially Scrum, which comes along without any hierarchy. There are only three roles, none is superior to the other. Introducing such a framework in a strong, long-established hierarchical organization inevitably leads to clashes. Managers need to rethink their role and duties. They must become something called a Servant Leader. Companies need to rethink their organizational structures. They need to find a balance between hierarchy and network structures. All this has led to a new understanding of management that’s nowadays known under the name Management 3.0.

But agility is also spreading over. It’s no longer related only to IT departments or organizations. Take eduScrum as an example where Scrum is used in schools and universities. Students learn their subjects using Scrum as methodology. Another example is Wikispeed, a group of people that produces cars using the Scrum framework. And even in military, agility is used. David Marquet was assigned the command of a nuclear-powered submarine, but was trained for a different submarine. What he found there was poor morale, poor performance, and the worst retention rate in the fleet. He then introduced agile principles and practices and skyrocketed from worst to first in the fleet.

Summing up, agility embraces a new understanding of management, challenges existing hierarchical organizational structures and finds its way into non-IT organizations. But what has all this to do with Happiness Research?

If one asks humans, what is the one thing that is closest to their heart, what they finally expect from live, happiness and content come first. Exactly this is where Happiness Research enters the scene. Happiness Research investigates what it is that makes people happy and content. To clarify, when we talk about happiness we mean the subjective well-being of people. Although Happiness Research has been part of the discussions amongst the economists since the 1970th, it just became an official science around the turn of the millennium. It is an interdisciplinary science covering philosophy, psychology, sociology, economics, and neuroscience. Especially the breakthrough in neuroscience and related medical devices, that enabled scientists to measure the brain waves, boosted the spreading of the science Happiness Research. One of the pioneers of Happiness Research is Lord Richard Layard. His studies laid the ground for the science and many other psychologists and sociologists jumping on that train of well-being. So now, what is it all about?

Let’s look at two figures, the real income per head and the percentage of people very happy. Research has revealed that in the US the real income per head has steadily increased since 1945. In contrast, the percentage of people that are very happy with their live has been a straight line. This trend is not special for the US, instead it was found likewise in all industrial countries. This means that even though people were getting richer they did not become any happier. Money alone doesn’t make people happy! But why? Why don’t people get happier even though they become wealthier?

Let’s consider three different research results from Happiness Research. First, studies all over the world have shown that the wealthier one is, the less is the impact of additional money on one’s happiness. Up to an income of 10.000 US-$ GDP per head per year there is a strong correlation between an increase in income and an increase in happiness. This is mostly due to the satisfaction of one’s existential basic needs like food, living, clothing, security, sex, and education. This correlates with the two bottom levels of Maslow’s Hierarchy of Needs – Physiological and Safety needs. Between 10.000 US-$ and 20.000 US-$ GDP per head per year the correlation is still there but getting weaker. Above 20.000 US-$ GDP per head per year the correlation nearly no longer exists. So, this means: One secret of happiness is to distribute income equally!

Now imagine you get an increase in salary. Well, this definitely makes you happy. But for how long? After a while the more money gets integrated into your daily live and the good feelings have diminished. To become happy again you need another increase in salary. The same is true for books. When I receive a book that I bought I get a feeling of overwhelming contentedness. But a few days later these happy feelings disappear. So, I buy more books to become happy again. And then I need even more, and more, and more. Meanwhile one needs a guide when walking through my library because all the bought but unread books are lying around the floor. This behavior is also true for cars, clothes, postcards, shoes, … every material stuff. The act that someone needs always more and more to satisfy his happiness, like a drug-dependent junkie, is called hedonistic treadmill. So, this means: Another secret of happiness is to choose positive things one does not get used to!

Let’s look at two studies Richard Layard and other researchers have performed.

In a first study, they asked students to answer the following question. Imagine you could choose in which of the two following worlds you want to live.
A) In the first world, you earn 50.000 Euro per year, while the average earning of your fellow men is 25.000 Euro per year.
B) In the second world, you earn 100.000 Euro per year, while the average earning of your fellow men is 250.000 Euro per year.
Question: Imagine, the prices in both worlds are the same. Which world would you choose?

The findings show that the vast majority of students had chosen the first world A. This means that people rather abstain from earning more money in favor of looking better than their fellow men.

In a second study, they asked students to answer the following question. Imagine you could choose in which of the two following worlds you want to live.
A) In the first world, you have two weeks’ vacation per year, while your fellow men have only one week vacation per year.
B) In the second world, you have four weeks’ vacation per year, while your fellow men have eight weeks’ vacation per year.
Question: Which world would you choose?

The findings show that the vast majority of students had chosen the second world B. This means that people want to have as much leisure time as possible, despite that their fellow men have much more leisure time.

Both studies reveal that there is a difference in people’s behavior when comparing money, or material things, on the one side, and leisure time, or immaterial things, on the other side. This social envy regarding the material or monetary side is another reason why people are unhappy with their lives. So, this means: Another secret of happiness is to not orientate oneself with people who are more successful than oneself!

Let’s summarize the three secrets of happiness.
1. Income should be distributed equally.
2. Choose positive things you do not get used to.
3. Do not compare yourself with other people who are more successful.
But what does this mean? What can we draw out of these findings? What has all this to do with agility? Let’s have a look at how these findings relate to people and organizations.

1. Distributing income equally is synonym to the declining worth money offers for employees. Especially creative workers can’t be motivated with money. For them other things are more important. Their work needs to be meaningful, they are looking for a purpose in their daily work, they value freedom of choice, self-organization, and to carry their life in their own hand. Empowerment gets more and more important. New motivational methods are indispensable. All those measures are expressions of the low value money plays and that money should better be distributed equally.

2. Choosing positive things, one does not get used to, is a concept that is mirrored in the importance of social contacts in work environments. People prefer having good relationships with their teammates, instead of being compensated with money. People like to work in teams, have fun, and share their knowledge and experience. Team coherence is more important than monetary compensation. In addition, people are looking for meaningful and varied tasks. All things that one can’t get used to, even after month of existence.

3. Do not compare yourself with other people who are more successful than oneself, is expressed in different ways. The ones who do not compare themselves with others turn towards their own needs. They focus on their personal growth and search for self-actualization, they like pair-working and sharing experience. The team takes center stage. Everything is secondary compared to one’s own life and happiness and the team performance.

Creative workers cannot be motived with money, thus new motivational approaches are required. Furthermore, more and more research studies from fields like neurobiology, psychology, and economics prove, that content and happy employees lead to better business performances. Happy employees accomplish more than unhappy ones in the long run. They come to work more regularly, are less often ill, are more successful, more engaged, more innovative, much more loyal, and they attract alike people. Happy employees are the best organizations can wish for. Organizations on the other hand become more productive, more effective, more efficient, more resilient, respond with faster reactions, and are much better economically viable. Taking all this together we can conclude that people need to be in the center of organizations. Organizations must focus on their employees’ needs. This requires a totally new understanding of management that changes the perception of roles and organizational structures.

OK, so let’s put the things together. As we all know from experience, agility changes organizations, it changes the mindset about what management means and hence the role of managers and organizational structures. This in turn changes people and influences our society. People strive for a happy, motivating and engaging workplace. On the other hand, we now have seen that Happiness Research revealed that the one thing that is closest to people’s heart is a happy and content live. And this not only holds true for their private lives but spreads into the workplace. People living to the core findings of Happiness Research exhibit behavior and expect work environments that require a completely new understanding of management, roles and organizational structures. Happiness Research influences the society and therefore people and organizations. Both, Happiness Research and Agility reinforce each other. They are two sides of the same coin.


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15. Mai 2016, 18:11

You want to find accepted group decisions very fast

Try using Systemic Consensus

Until now I have attended a lot of meetings where for example people were struggling to select one out of multiple proposals, to select the X topmost proposals, or to decide for a date for a regular meeting. In such situations people often fight for their own proposal, trying to convince others that their own proposal is the best one and even devaluating the proposals of other group members. Sometimes people even go too far, dissing other people personally. You may imagine that this leads to aggressive and tense atmospheres, igniting conflicts between individuals. Conflicts that even survive the end of the meeting and will harm the team spirit, cooperation and collaboration further on in the project.

Systemic Consensus changes this situation completely. Systemic Consensus focuses on choosing the proposal with the least resistance in the group. This is achieved through not voting for proposals but by counting the against votes. Every group member attaches a value between 0 and 10 to every proposed solution – the resistance vote. A value of zero means that the person has no obstacles against the proposal. A value of ten means fully denial of the proposal. A value of 1 to 9 lies somewhere in between. After voting the resistance votes are summed up and the proposals are ordered in increasing resistance vote count. At the top you will then find the proposal with the least resistance – or the other way round, with the highest acceptance.

Since I introduced Systemic Consensus in our Scrum team the cooperation and collaboration improved remarkably. Having in mind that the other group members will vote against one’s own proposal, everyone needs to take into account the views of the other group members. This boosted the sense of community. The team spirit went through the roof.


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