New Ways of Management

 Posted by on Nov 28, 2012  Add comments
Nov 282012

For nearly 20 years now, management theory has been changing. It started with single books, such as Peter Senge’s Fifth Discipline.  By the end of the 90s it had developed into several independent movements/management models. One of them was the Agile Software Development movement; others included the Beyond Budgeting movement and the Human Systems Dynamics movement.

Though each of these movements was launched from a completely different perspective (e.g., organizational development, software development) each came to a very similar conclusion: The traditional way to organize companies is well suited for industry and mass production but hinders knowledge work and is unable to adapt to the ever-growing pace of the market. Traditional companies are based on a deterministic divide-and-conquer management model that is very well suited to a stable environment. But if the environment becomes turbulent, you need to switch to a management model based on complex adaptive systems theory.

Over the last several years these new adaptive-systems-based models have begun to be adopted and we’re starting to develop an understanding of what they means for organizations. Some early-adopter organizations have demonstrated that economic organizations can be built upon these theories (though it’s not simple).

I expect that in ten years management models (and organizations) will have matured to the point where they will be embraced by the early majority. In some markets these organizations will show such a competitive advantage that they will successfully attack their respective market leaders and subsequently be recognized for the role their modern management practices played in that success.

Now is a good time to start understanding these management models and observe the field. Though we’re not far enough along the learning curve to provide off-the-shelf solutions, it may be fatal mistake to ignore what’s going on here.

[Editor’s Note: This post is part of the annual “Cutter Predicts …” series.]


  2 Responses to “New Ways of Management”

  1. I would say a simple “amen,” save for one thing. The adaptivity which you so highly prize is quashed by 19th-century government practices. Those adaptive, aggressive organizations of which you speak could readily succeed in an environment where regulatory authority was simply pushed out of the way, but I think that increased regulation (particularly on technology) in the next year will force all of these potentially powerful “square pegs” into annoyingly round holes, and back to more pedantic business models.

  2. Carl, thanks for pointing this out. We discussed this toppic last weekend during a workshop on Agile Enterprises of the Agile Alliance and also identified it as one of the key impediments. At least it is not surprising, that regulation follows the pre-dominant business models.
    On the other hand, the regulation affects mostely public companies, which are probably not among the innovaters anyhow. So chances are that successful startups and private companies gain more and more momentum until the goverments have to react – and hopefully turn the regulation into something beneficial for the societies rather than the bureaucrats. In any case some goverments will do this step sooner, others later, generating additional opportunities for their industries.

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