Created by IT manager Jurgen Appelo in 2010, Management 3.0 is a collaborative and humanized management model which treats the employee as the organization’s main asset.
It’s a management format that draws from the same source as Lean and Agile. It sports a flexible hierarchy with a focus on employee autonomy and participation is decision making.
In this article you’ll understand what Management 3.0 is, what its basic principles are, and how you can start implementing it in your company today!
What is Management 3.0?
As the name implies, Management 3.0 refers to the third generation of project management models, considered more suited to current business requirements in the context of Digital Transformation – toting more agile, lean, and modern management values.
The creator of management 3.0 states that the most common reason for team failure in modern companies is the reliance on archaic management styles, ones that give employees little autonomy and decision making power. He also states that this issue occurs in even the large corporations.
One of the objectives of Management 3.0, perhaps the main one, is to leverage business through motivated, engaged, and satisfied employees.
What are the benefits of Management 3.0?
- Stimulates creativity and innovation.
- Improves productivity.
- Increases motivation and engagement.
- Reduces staff turnover.
How is it different from Management 1.0 and 2.0?
In his book, Jurgen Appelo compares Management 3.0 with previous management models that he considered outdated, such as Management 1.0 and Management 2.0.
Management 1.0 is the old-fashioned management model: strong hierarchical structure, top-down, with little decision making and creative freedom for teams.
In this model, orders are to be followed, not questioned. According to Appelo, this vertical management style, based on command, devalues employees and fails in terms of quality of life.
Management 2.0, on the other hand, would be an intermediary model. It is an attempt to solve the problems of Management 1.0, introducing more modern management tools, such as Six Sigma and Total Quality Management (TQM).
According to Appelo, although it is more efficient, hierarchy is still a determining factor in this format, making the decision-making process more bureaucratic.
What are the principles of Management 3.0?
One of the pillars of this new management style is a good relationship between the company and it’s employees.
However, for Jurgen Appelo, there are some official Management 3.0 principles listed in his work — guidelines that contribute to the successful implementation of the model.
Teams must have the ability to self-organize and, therefore, need to rely on and trust management to have sufficient autonomy and make their own decisions.
It is worth conducting one-on-one meetings so that managers can better understand the personal motivations of their employees and monitor their engagement. This makes it easier to understand employee growth paths within the company and also who is capable of taking on new responsibilities.
While predecessor management models focus on rules, Management 3.0 talks about constraints.
“Aren’t those the same thing”? No, the change is tenuous, but impactful. While rules dictate what you should do, restrictions are about limitations.
At first glance, this may seem contradictory and even more restrictive, but in a model with fixed rules, actions are all choreographed. You do it that way because them’s the rules. When you know how far you can go and what obstacles you have in your path, you gain a range of options on how to get there.
It is worth noting that the term “restriction” can still be seen as a “requirement” or even “impediment”, as in Scrum.
Although teams are self-managing, it is important that there are clear guidelines for this freer range of motion. Ensuring that this autonomy is not exaggerated and actions end up leaving management’s control.
In 3.0 management, it is important that everyone stays up to date with the latest trends on the market. It is up to the manager to emphasize the importance of the individual search for improvement and set professional development goals for colleagues.
It is also their job to provide resources to train them so that the team can learn new functions. After all, offering employees the opportunity to develop their skills, in accordance with their interests and the sector’s expectations, is an act of valuing them as professionals.
It is clear that the scalability factor, so contemporary of lean teams and popularized by startups, could not be left out of the Management 3.0 equation. After all, what is a company if not an organization that aspires to grow?
To reach the top, it is necessary to plan the composition of the teams, their dynamics, and when the time is right, which new skills to add to your corporate portfolio, according to your business objectives.
Lean teams are also interdisciplinary, with complementary and shared skills. You also need a good dose of systemic vision to avoid creating a production line. This is what makes it possible to grow without inflating your team!
In addition, Appelo draws attention to an element that is frequently mentioned when talking about project management, whether in Agile or PMBOK: communication. According to the author, communication is the “glue” that guarantees collaboration between teams, and consequently, consistent growth.
You’ve certainly heard that a satisfied employee is a productive employee, right? Therefore, for the strategy to be successful, it is necessary to ensure the team’s engagement and keep them motivated to achieve stipulated goals.
The teams’ motivation is a fundamental factor: it is the manager’s role to monitor the level of employee engagement and promote actions that keep expectations aligned.
Finally, measuring their step-by-step performance is essential to creating an improvement cycle. In this context, mistakes are opportunities for improvement – they will happen, the important thing is to learn from them and improve.
However, in order to measure these results, it is necessary to take a step back and establish objectives and goals. An interesting tool to consider here is the implementation of global, sector, and/or individual OKRs.
The resemblance to Agile is no coincidence: it’s the fluidity between these six principles that allows Management 3.0 to work so well in agile. Value-generating through frequent deliveries, something that is essential to sustainable productivity and business growth. Which generates value for customers.
Management 3.0 and Agile: what’s the difference?
If the topic of Management 3.0 interests you, then you are most likely familiar with agile methodologies. It is quite common to see these two together.
It is not uncommon for the principles of Management 3.0 to be combined with Agile and Lean in Design Thinking projects.
While these concepts are not one in the same, they do draw on each other for inspiration – the fact that Jurgen Appelo has years of software development experience is no coincidence.
So if we can’t say that Management 3.0 and Agile are the same thing, we can say that the former probably wouldn’t exist without the latter – and we can say that Management 3.0 has an inspirational relationship with the Agile Manifesto.
In summary, what differs between the two methodologies is that, while Agile is a set of methods, frameworks, and structures that aim to organize and segment work to improve deliverables, Management 3.0 essentially seeks to boost results through development and engagement, as a managerial “philosophy”.
How to start implementing Management 3.0?
There is a vast collection of literature stating that motivated and happy workers are more productive. The numbers vary, but a recent University of California study indicates that productivity growth can reach a staggering 31%.
Now think: how would this impact your profitability, and even your competitive edge, if each of your employees was 31% more productive?
OK, but how do I start implementing it?
Of course, there is no catch-all formula to boost productivity, but you can start with a simple step-by-step approach, such as:
- Create an enabling environment for employees.
- Recognize achievements and reward good performance.
- Have periodic conversations about expectation alignment.
- Make hierarchy more flexible when generating ideas and making decisions.
- Build interdisciplinary and autonomous teams.
In Management 3.0, recognizing achievements and valuing effort must be one of your main objectives. For Jurgen Appelo, valued employees are more likely to achieve high levels of productivity — and it is part of the leadership’s work scope to build this development space for employees.