• Raymond Hofmann

MMD goes Global Peter Drucker Forum

Last month we took the Management Model Design (MMD) idea to the Global Peter Drucker Forum in Vienna. At no other conference in the world does one meet so many of the world’s best management thinkers and practitioners.

Our goal was to learn. From testing MMD with conference speakers and fellow delegates as well as from the conference sessions themselves.

Would our idea resonate with people? Would they see MMD as something that’s feasible and desirable? Why or why not? Would conference sessions provide insights that help us improve our value proposition?

The short answer is: we were overwhelmed with how much encouragement and helpful feedback we’ve received across the board: from academics, media representatives, consultants and of course practicing managers.

Yes, most people saw the difficulty of mastering the inherent complexities of management and still create a simple, powerful tool. And most were also well aware that we will have to shift the conversation regarding management. Away from management as a set of recipes and quick fixes for specific performance problems towards management as designing an organisational architecture that enables performance in the first place.

But almost universally people saw how valuable it would be if we cracked these challenges. And managed to create a tool that would help us design management models with purpose, method and direction.

We’ve also received great content feedback on early prototypes and got tons of ideas for how to make them better. We are particularly thankful for a conversation we’ve had with Alex Osterwalder (co-creator of the Business Model Canvas) which unexpectedly turned into a great tool design coaching session.

Overall the feedback was great and that in itself would have been enough for us to leave Vienna energized and eager to get back to work.

But there was even more: almost every conference session provided evidence that there is a real need for what MMD wants to achieve (and lots of ideas ideas for how to do so). The following are just a few highlights.

Asking the right questions

In the very first session, Sarah Green Carmichael used this quote from Peter Drucker to launch the discussion: “The most serious mistakes are not being made as a result of wrong answers. The true dangerous thing is asking the wrong questions.” Of course that’s exactly what MMD aims to do: help managers ask the right questions to improve the work of management.

Thomas Wedell built on this and demonstrated how the framing of a problem often severely limits the solution space. And how the quest to solve the “real” problem can be dangerous. That’s because complex problems don’t have single, linear causes (and therefore no single “real” underlying problem). So when facing a problem, instead of trying to find the “real” problem, we perhaps ought to find a “better” problem to solve. Being able to re-frame the problem then becomes important and Thomas’ insights into how to do that will certainly influence our work on MMD.

On a similar note, Roger Martin reminded us that “every model is wrong, otherwise it would no longer be a model, it would be reality”. So when someone comes along with a model that’s different from yours, your task is to create a better model, not to prove either of them wrong. It is our ambition to reflect that kind of thinking in MMD.

Feeling sorry for CEOs and using models to improve our thinking

In the very next session, Martin Reeves presented the kind of success recipe for CEOs (he called his the “8 imperatives for leaders”) which are so prevalent in the world of consulting. It is the pure antithesis to asking good questions and building better models. In fact, it suggests you already have the right answer no matter what the question is, so why bother with the question in the first place? Andrew Hill later picked up on this in a thoughtful FT article arguing he almost feels sorry for CEOs as they are “swamped by overlapping and conflicting advice [...] built around allegedly simple, bullet-pointed to-do lists for leaders”.

It is exactly what we need to get away from in management - and what MMD wants to help with.

Rita McGrath hit the nail on its head when she said: “whatever you do, please use a model for what you do”. Using models causes us to think about what we do, why we do it and how we do it. And disciplined thinking leads to better choices. Again, that’s exactly what we want to do with MMD. Not that there aren't already many useful models out there that managers can use to make better choices. Yet they tend to be specialised in nature: there are models for innovation, strategy, engagement, culture, team effectiveness or change. What’s missing is a generalist model for management as an organic whole, accounting for its polycentric and interrelated nature. And that’s where MMD comes in.

Not wasting human potential

One of the best sessions of the Forum was titled “Unleashing innovation and entrepreneurial potential in organizations”. Alex Osterwalder beautifully re-framed this challenge as “how not to waste human potential”. One possibility is to start by understanding that not all innovation is created equal. Efosa Ojomo very eloquently built on Clayton Christensen’s work and explained that there are three types of innovation: market-creating innovation (creating jobs and growth), sustaining innovation (protecting margins but neither creating jobs nor growth) and efficiency innovation (creating free cash-flow and eliminating jobs). Unfortunately, in today’s organisations (driven by today’s de facto management models) it is very easy to sell management investments in efficiency innovation, a lot harder to sell sustaining innovation and almost impossible to sell market-creating innovation. If we are going to change that, we need new and different management models. MMD will help design them.

The case for practical guidance

In a session on “new challenges for management education and research”, Heiko Hutmacher made a very strong case from the practitioner’s perspective. He argued that what companies need from business schools is not more content, but more practical guidance for how to use that content. He could also have said that what’s missing is not the latest and greatest research in strategy, marketing, corporate finance or organisational behavior. What’s missing is how you integrate all of that content into a holistic, consistent model of management that serves managers as a practical tool to make better choices on a daily basis. And that’s as good a description of MMD as any.

A new cultural revolution

Last but no least, in a stunningly beautiful closing address, Charles Handy went back 500 years and reminded us how in 1517 a German monk called Martin Luther started a massive cultural revolution when he nailed the famous 95 theses to the door of the Castle Church in Wittenberg. The Reformation marked a turning point in history and ultimately enabled the kind of scientific, economic and political progress that resulted in unprecedented levels of human prosperity. Yet since Milton Friedman declared that the only purpose of a corporation is its profits and his colleagues gave us agency theory and stock options, we’ve sort of returned to a dark age. Prosperity is once again at risk for being only for the privileged few, and not for humanity as a whole. What we need now, Charles argued, is a new cultural revolution. One that re-thinks the role of business in society and one that keeps human values safe in corporations. And he wondered: “Could Peter Drucker be the new Luther? And could Vienna be the new Wittenberg?”

Our hope is that with MMD, we will be able to contribute one small piece to making it happen.

We left Vienna with incredibly valuable feedback, tons of new ideas and full of energy. We’re now working all of that into our initial set of tools and we can’t wait to show them to you early next year!


© 2019 Raymond Hofmann Management

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