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Inventing Management 2.0

Posted by Gary Hamel with Polly Labarre on February 17, 2011

Have you ever met a 10-year-old who dreams of growing up to be a manager? Neither have I. Chances are, though, if you’re reading this post you are one—a manager, not a 10-year-old. Somewhere along the highway of life you missed a turnoff—you sailed right by the exit for “smoke jumper,” never saw the sign for “ocean explorer,” and somehow forgot to put “fighter pilot” into your career GPS. So now you’re a manager.

To mask the regret of the road not taken, you tell yourself you’re a leader. Yet all too often, you find your inner Joan of Arc assailed by the guardians of the status quo, your inner Patton ensnarled in bureaucratic barbed wire and your inner Shackleton trapped in an ice jam of cynicism and indifference.

Like millions of other would-be leaders around the world, you are being held hostage by Management 1.0—a dense matrix of bureaucratic practices that were invented to minimize variances from plan by maximizing adherence to policy. Despite a lot of high-minded rhetoric to the contrary (often found on laminated cards that begin with “Our Values”), the management model found in your organization most likely over-weights the views of senior executives, undervalues unconventional thinking, discourages full transparency, deters initiative, frustrates experimentation and encourages an entirely unwarranted reverence for precedence. In so doing, Management 1.0 squanders the leadership talents of just about everyone apart from the CEO.

Every year, thousands of managers get sent off to “leadership development” programs of one sort or another. Typically, these sheep-dipping exercises are designed to help budding executives get better at managing their teams or business units. While words like “collaboration,” “engagement” and “entrepreneurship” always get plenty of play, there is seldom any concerted attempt to challenge the the fundamental conventions of Management 1.0—the notion that authority trickles down, that tasks are assigned, that strategy gets created at the top, that control must be imposed and so on.

In other words, leadership development almost always happens within the context of Management 1.0, and thus fails to equip prospective leaders for the most important leadership task of all—to change that context.

To use a military analogy, we train leaders to “take the hill,” but we don’t involve them in rethinking war-fighting doctrine. This would be of no consequence if that doctrine were well-suited to the realities on the battlefield; but it’s not.  And there’s the problem: Management 1.0 is no longer fit for purpose—not in a world where the winds of creative destruction are howling at gale force, where knowledge is fast becoming a commodity, where customers are omnipotent and where right-brain thinking drives value creation.

To create organizations that are fit for the future, we need to dramatically retool the management systems and processes that govern . . .

How strategies get created 

How opportunities get identified 

How decisions get made 

How resources get allocated 

How activities get coordinated

How power gets exercised 

How teams get built 

How tasks and talent get matched up 

How performance gets measured 

How rewards get shared

Management 1.0 was built to encourage reliability, predictability, discipline, alignment and control. These will always be important organizational virtues, but in most industries, getting better at these things won’t yield much of an upside.  That’s why our management systems need to be re-engineered around the goals of adaptability, innovation, engagement and accountability—which brings us back to the issue of leadership.

The apex of leadership is to proactively change the “system” in ways that help an organization tackle new and unprecedented challenges. But all too often, we assume that only leaders at the apex can lead this sort of architectural remodeling. This is, perhaps, the most debilitating assumption of Management 1.0.

But even that is starting to change: Around the world, “ordinary” managers of all sorts are starting to resist their captors. Most of these renegades aren’t HR directors, CFOs or even EVPs. Yet they are experimenting boldly with new ways of motivating, organizing, compensating and goal setting. They are reaching out to peers, taking risks, and running small-scale pilots.  They are acting first and asking permission later. Even more remarkable is the scope of their aspirations. They are not just hoping to become better leaders; they are hoping to build better organizations.  They are the harbingers of Management 2.0.

In next week’s blog you’ll meet some of these renegades and get a peek at a new online initiative that’s been designed to hasten the development of Management 2.0.

For now, dear reader, a question:  What holds you back from becoming a management rebel in your company?  What limits your ability to initiate change in your organization’s management model?

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