I spent more than 20 years within a large group and for the past 4 years, I have been training or supporting executives, managers, and leaders of large companies and SMEs. NextGen, the company I founded, diagnoses and supports hundreds of teams each year.
The “old-school” management I learned in so-called “management schools” or “business schools” has evolved a lot. By the way, these schools taught me many things, but certainly not management, and even less about sales.
The major trend in global management that I observed in about thirty countries while writing my book “The Next Generation Enterprise” is moving towards more participation, more autonomy, and collaboration. By this, I mean organizational governance that decentralizes authority, develops autonomy and the accompanying responsibility, transparency, and the trust that comes with it, all in service of a common mission or purpose, the essence of “doing business”. I emphasize the “responsibility” dimension in the post-Covid era where we accept or even demand flexibility, autonomy, without always assuming the counterpart, this famous “responsibility”. I really like this dynamic of intrapreneurship at work worldwide, in a market that is becoming more fluid at a rapid pace and which combines skills based on challenges to be met, with potentially very diverse statuses. The next-generation marketplaces such as Catalant, Toptal, InnoCentive, Kaggle, and Upwork offer top-level talents. HBR reveals that “their number has increased significantly since 2009, going from about 80 to over 330 (globally). Today, almost all Fortune 500 companies use one or more”.
And to continue, “90% of the executives we interviewed, both at the management and frontline levels, believe that these platforms will be essential for their future competitiveness.” Even if salaried work remains the dominant form of work for the coming years, a growing number of freelancers consider this form of work as a long-term career choice.
As observed by Danah Zohar in her book “Zero Distance: Management in the Quantum Age,” over recent years, while large companies have seen a 44% increase in the number of their employees, the number of middle managers has surged by 100%. Most workers in companies with over 5,000 employees must navigate through eight levels of middle management! In response, Haier, the global leader in household appliances, innovated by eliminating 12,000 middle managers and decentralizing into 4,000 “micro-enterprises” (ME).
At Haier, each ME embodies principles of self-governance. They can devise strategies independently, form partnerships, hire and assign roles autonomously, and decide on salary scales and bonus distribution. This flexibility allows team members to adapt their roles based on the team’s needs, reminiscent of the versatility of subatomic particles.
However, cohesion is maintained. The management enforces standard norms, values, operational procedures, and shared key performance indicators (KPIs), directing a collective strategic vision.
The MEs categorize themselves into:
– Business-oriented units,
– “Incubator” MEs, innovating and scouting for new opportunities,
– Node MEs, providing components or services such as HR to business-oriented units.
These structures harmonize centralized coordination and independent self-organization, illustrating the wave/particle duality concept in quantum systems.
Lastly, at Haier, the customer/user is paramount. Employees are encouraged to deeply understand their users, establishing multifaceted communication channels. Together, they co-create innovations.
Organizational strength is derived from relationships. A continuous flow of knowledge and dialogues between MEs stimulate innovations. A collective spirit, emphasizing value creation for all – from users to the planet, solidifies Haier’s ethic.
Too much hierarchy, too many processes, too many rules, too many applications, too much IT, too many budgets, too many products and services, too many KPIs, too much reporting; our organizations are blocked and sorely lack agility, adaptability, and humanity.
Having become complicated machines with relentless mechanisms, most companies are now at risk of extinction, of thrombosis, due to the accumulated bad cholesterol.
No, the hierarchy, managers, processes, rules, computer applications, budgets, product and service offerings, KPIs, and reports are not going to disappear. They even have a bright future ahead of them. But next-generation enterprises are adopting radically different operating modes and embrace frugality worthy of asceticism. Design discipline has a lot to do with this. I keep in mind the legendary “less is more” or “minimum is the maximum” that distinguishes the most intuitive and user-friendly products, computer interfaces accessible to all generations.
We will no longer reason in terms of “how to execute precisely?” but “how to take the initiative to do better and innovate continuously?”, a dynamic from which we will draw elements of progress and peer sharing.
We will no longer reason with “how to defend a maximum budget?” but “how to optimize my actions within a minimum budget and find ways to do differently, increase productivity and creativity?”.
We will no longer think of “how to add an IT solution or app to manage such activity?” but “if I add an application, which two others should I delete?”.
We will no longer think “which product or service to add to our catalog to meet a new identified need?” but “which new offer could significantly increase the company’s turnover and allow me to remove all offers below 1% of turnover?”.
We will no longer think “which metrics are missing from the dashboard” but “which KPIs do we irreducibly need and for what purpose?”.
We will no longer reason with “which rule or process can we implement to precisely describe our operating modes?” but “which essential rule or process is necessary to describe value creation within the organization or a policy regarding areas of responsibility?”.
Lastly, we will no longer think in terms of “adding additional managerial levels” that disconnect the vital forces of the project from the management but in terms of “operation of small teams in a network and team hierarchy”.
These ways of thinking and the explicit behaviors that result are rooted in beliefs diametrically opposed to those commonly held in today’s large organizations. While today’s battles are for status, budget, hierarchical level, additional tools, scopes of authority, and abundant and green reporting dashboards, the next-generation enterprise will develop an entrepreneurial mindset. The latter will seek clear roles regardless of hierarchy, will try to reduce costs whenever reasonably possible and constantly reallocate investments in favor of the company project, will systematically limit hierarchical levels, complexity, the number of indicators, and information systems.
Modern organizations can pretty much revisit and question everything. Those that don’t do this proactively will be crushed by the competition. Much of middle management finds itself detached from operations and customers and merely “passes the buck”, making itself indispensable “by design.”
The accumulation of hierarchical layers provides a perspective on the company’s evolution over time and its growing rigidity, its concern to “maintain control.” Control, or risk prevention, has led to the accumulation of hundreds of rules and micro-processes on all subjects, much like in French law. Employee turnover doesn’t maintain a lively understanding of this maze of rules; on the contrary, the underlying meaning gets eroded in favor of an “authoritative” adherence to “what should be done in this case.” Employees then reflexively say things like, “It’s not my fault,” “You’ll have to speak with my superiors,” or “I’m not responsible.” These signs unmistakably characterize an organization gradually paralyzed by its own decisions.
Rules are strictly necessary for the optimal functioning of organizations, for team empowerment, the development of intrapreneurship, initiative-taking, and innovation, but on one condition: fewer rules for better rules. In this regard, minimalism is a condition for success.
It seems essential today to shift from a vertical management in favor of a more horizontal organizational structure, moving towards a constantly evolving network of teams, supported by frameworks like teal and OKR. However, the human side of leadership cannot be quantified by mere data or assessments. The tools and data introduced during the pandemic, aiming to compensate for the lack of remote control, cannot capture the frustration they have generated. No metric can measure the creative potential of a free mind.
While rules and procedures are indispensable, their effectiveness lies in their subtlety. An organization stands out by its achievements and the commitment of its members, not by procedure manuals. A written rule does not guarantee its understanding or application. Engagement is even stronger when one has contributed to the formulation of the rules.
Taylorism, the foundation of modern management theory, is inspired by the Newtonian physics of the 17th century, seen as a vast machine. Taylor thus recommended that organizations operate like machines, structured in separate divisions, centrally controlled, with clear bureaucratic rules. In contrast, “Quantum Management” is inspired by quantum physics and its organizational mode. It sees the organization as a living, biological system.
Living quantum systems, or “Complex Adaptive Systems” (CAS), are studied by complexity science, itself born from the quantum paradigm. CAS are holistic, constantly evolving through internal and external co-creative dialogue. They are self-organized; any attempt at external or hierarchical control harms their creativity.
Ancient Greek philosophy, notably Aristotle, spoke of a “Final Cause” or purpose for each action. But Taylorism, influenced by Newtonian physics and the Cartesian separation between mind and matter, sees the company as a machine designed to generate profit. On the other hand, quantum physics questions this separation. Thus, a “quantum” business leader asks, “What is our purpose? Our values?” This purpose, while aiming for profit, is rooted in moral and ethical concerns, emphasizing the company’s responsibility towards its employees, customers, and the environment.
Author : Luc Bretones, Founder at NextGen
