Actually, we don't.
However,I believe that the "3.0" number conveys the right message about thedirection that management is taking in the 21st century. The Management 3.0 name was first used by Terrence Seamon one year ago, though it hasn't been picked up yet by others. Now I think it is time for a breakthrough. Allow me to explain:
Management 1.0 = Hierarchies
Some people call it Taylorism or scientific management, while other people call it command and control.But the basic idea has always been the same: an organization isdesigned and managed in a top-down fashion, and organizational power isin the hands of the few. Those at the top of the hierarchy have thehighest salaries, the biggest egos, the biggest bonuses, and the mostexpensive chairs. Those at the very bottom have virtually nothing,little money, few responsibilities, and very little motivation to do agood job.
The shareholder value movement, promoted by top economists and business men like Milton Friedman and Jack Welch,was a perfect fit for this kind of management, because it gaveshareholders a single wringable neck: the CEO. In exchange for hisdangerous position the CEO was allowed to play with risky bonus schemesthat had far more effect on personal wealth than organizationalperformance. As a side effect, and minor inconvenience, these dangerousbonus schemes also triggered a worldwide financial implosion. Oops!
Ithink we can safely conclude that Management 1.0, even though it isstill the most widespread version, used in organizations all over theworld, has a number of serious flaws. It is old and outdated and in needof an upgrade.
Management 2.0 = Models
Plentyof smart people realized that Management 1.0 didn't work well enough onits own to produce any good results. And so they created numerousadd-on models, most of which dealt with systems thinking and process improvement. Some of these models gained a semi-scientific status, like the Balanced Scorecard, BPR, Six Sigma, Theory of Constraints, and Total Quality Management.Being add-ons to Management 1.0 the models still assumed thatorganizations were managed from the top. And so they were created tohelp those at the top of the hierarchy to better design theirorganization. Sometimes the models worked, sometimes they didn't. Somehad a flimsy affair with science, while others had more affinity withreligion.
At the same time there were different kinds of modelsthat focused not on systems and science but on craft and art. Ideas likethe 7 Habits, the 21 Laws of Leadership, and Good to Great listed basic values, principles, and guidelinesfor top managers, and then told them to practice and build experience.Again, these models were sometimes right, and sometimes not. Some modelswere created from research, others from personal experience, but theyall had one thing in common: they aimed primarily at the ones with allthe power, at the top of the hierarchy.
But working with theadd-ons of Management 2.0 means that organizations still suffer from theinherent problems of Management 1.0. The basic architecture for problemsolving has not changed. The organization is still seen as a hierarchy!
Management 3.0 = Complexity
In the 80's and 90's we saw the birth and rise of complex adaptive systems theory, or complexity science,first applied to mathematics and biology, and later to economics andsociology. It was a major breakthrough in systems thinking, bridging allsciences, and making some deep thinkers very happy. Stephen Hawking thought it was so important, that he called the 21st century the Century of Complexity. The first decade of this century saw a number of publications, like The Tipping Point, The Black Swan, and Freakonomics, all of them borrowing and popularizing concepts from complexity theory. And management researchers, including Ralph Stacey and David Snowden, found out that social complexity had some interesting things to say about organizational management.
Second, complexity theory proves that, ultimately, all models are wrong.No matter how many diagrams, lists, or figures you throw at anorganization, in the end they will always be wrong. Potentially useful,yes. But ultimately wrong. And thus, the models of Management 2.0 willalways fail. Mind you, there's no need to throw them all away! Butneither is it wise to treat any of them as scientific truths, orreligious dogmas.
Third, based on both scientific and empirical study, social complexity shows us that management is primarily about people and their relationships. Everything else in an organization pales when compared to the importance of people and their relationships!
Furthermore, we can now conclude that management is science and craft, models and experience. And we can learn that leadership is not "higher than" management. Nonsense! The job of a manager is to be leading and governing the self-organizing systems. To ensure that people are empowered and aligned.
Conclusion
Management3.0 is just a silly name. Some of you will disagree with me and argueabout version numbers. That’s ok, because version numbers are notimportant.
And many of us already knew that hierarchies are badand that networks are real. That management is about empowering people,and also giving them a direction. That models only work depending on thecontext. And that "leadership" is just a trendy name for managers doingthe right thing and doing things right.
But networkthinking adds a new dimension to our existing vocabulary. The concept ofsocial complex systems makes us realize that we are all participants in self-organizing systems. All of us have to lead and rule in some ways. We are all "3.0 managers".
Ithink it's nice to have a new name. Names and versions can be powerful.The "3.0" version indicates that management is taking charge again. Itusually takes Microsoft three versions of a product to get things rightand make their product actually usable. Thanks to social complexitymanagement has, in its third incarnation, finally found a solidscientific foundation for the future. None of the earlier models have tobe unlearned, because many of them are still usable. We just have toreplace assumptions of hierarchies with networks, and complex systemsthinking. Because the 21st century is the Age of Complexity. And Management 3.0 will be the Era of Complexity.
