Management 3.0 – the concept

The development of management as a profession can be depicted in 3 stages (see Jurgen Appelo’s book Management 3.0):

Management 1.0 = Hierarchies

The basic idea: The boss leads. An organization is most of all a hierarchie.  People have to adopt to the organization.

This concept developed out of military traditions and emerged as management in the second industrial revolution in the early 20th century. Most of its principles and practices were developed in the US with the beginning of mass productions of automobiles.

Management 2.0 = Models

When Management 1.0 didn’t work well anymore, many add-on models were created, e.g. Balanced Scorecard, BPR, Six Sigma, Theory of Constraints, or Total Quality Management. But all these models still assume that organizations are managed from the top. And all these approaches were made for people being at the top of an organization.

Management 3.0 = Complexity

The break-through in understanding modern organizations came in the 1980’s and 90’s with the rise of systems science and complexity science. Only when you see organizations as social networks and self-organizing systems (and not machines), you can draw on the full potential of its people.

This paradigm shift has had serious consequences:

– The scientific foundation of management can be found in systems science and complexity science and not in business administration.

– A commercial company is just one special case of a “social system”. Creating viable structures means that the purpose of a company can not be seen in maximizing its profits. The purpose of any organization must relate to the environment where it is part of.

– Management is primarily about people and their relationships. To draw on people’s ingenuity and creativity organizations have to adopt to people. And not people adopt to organizations.