How To Transition To The ‘Next Management’
by Stephen Denning, Heidi Musser and Hugo Lourenco 

We need to follow Peter Drucker’s advice “to look outside the window and see what’s visible but not yet seen.”

What will be involved in enabling the next management to become a noble calling that helps create a worthy society? In his HBR article of June 2024, Richard Straub suggested that it should include at least seven aspirations, as shown in Figure 1.[1]

Figure 1: Straub, R. “The Next Management,” HBR, June 2024

How then do we get to the ‘next management’? To figure out what comes next, one useful step would be to ask: what have we already got? Being clear on the content and quality of our current management and its complaints may help us get a better handle on the nature, length and difficulty of the journey towards the ‘next management’, as well as to better plan our navigation towards it.

What Is Management Today?

What then is management today? Definitions vary. On March 27, 2024, Drucker Forum president Richard Straub suggested: “Management is the whole set of rules and tools by which organizations are professionally run.” [2]

Professor Gary Hamel’s recent definition is similar: ““Management is simply the tools, methods, processes, and structures that we use as human beings to do together what we couldn’t do alone. “ [3]

Our own research confirms that these definitions broadly reflect the type of management that is common in around 80% of major public corporations today.[4]

Is The ‘Next Management’ Simply A Better Set Of Methods, Processes, And Tools?

If management is a set of methods, processes, tools, and structures, then is the ‘next management’ simply a better set of methods, processes, tools, structures that might help us make progress towards the seven “aspirations” of the next management? Some discussions of the ‘next management’ have seemed to adopt such an approach, even though it could amount to a drastic narrowing of the scope for enhancing management. 

That’s because an excessive focus on methods, processes, tools, structures could be the source of many perceived problems with our current management practices. Thus, at the March 2024 meeting of the “next management” initiative, Professor Tammy Erickson said that the journey to the next management implied “upending the way we think about management.” In effect, we need to get beyond merely a better set of methods, processes, and tools.  We need to think about the ‘next management’ in a fundamentally different way.

Upending Our Thinking About Management By Putting Human Concerns At The Center 

One way of upending our thinking about management is to follow Peter Drucker’s advice “to look outside the window and see what’s visible but not yet seen.” If we were to do that, we would notice that the fastest growing public companies of all sizes (around 20% of public firms) are not being managed primarily by a set of methods, processes, tools, and structures.

Instead, these firms have often found ways to enable human concerns to drive and transform the methods, processes, and tools that they do use. As a result, they have been able to detect and adapt to change, grow much faster and generate exponentially more value for their stakeholders than the other 80% of firms. They have also made significant progress on some of the seven “aspirations,” particularly innovation, ecosystems, long-term focus, self-renewal and customer value.  No firm is perfect: all firms need to continue to make progress.

The terminology used by different firms varies. Microsoft talks about ‘mindset’, ‘empathy’ and ‘values.’ Apple talks of a different ‘culture’. Amazon describes its ‘leadership; principles and “customer focus”.’ Some firms talk of ‘mental models’ and ‘narratives.’ At LVMH, CEO Bernard Arnault talks of giving designers ‘freedom without limits’.[5] Among smaller firms, e.l.f. Beauty drives “a culture of inherent curiosity” and collaboration in all their staff and customers.

Whatever the terminology, a new breed of firm is using subjective, human concepts to drive their business methods, tools, and processes. These subjective mindsets, goals, and values are the very things that traditional management tended to dismiss in principle as secondary or irrelevant. 

This shift in the way firms think about management changes everything in the firm. It’s not that methods, processes and tools disappear. But in these firms. mindsets, values, and culture drive and transform the methods and processes, rather than vice versa, resulting in a culture where employees thrive and create value for customers in new and innovative ways.

Nor are the firms in the fast-growing 20% without flaws. They all need to make continued progress towards meeting more fully the seven “aspirations” and avoid falling back to the old ways. 

Lessons For Others 

Understanding how these fast-growing firms are being managed would already be an important step forward for the 80% of firms that are still being managed by yesterday’s methods and processes.

Having a clearer understanding of how the fast-growing firms are being managed could also be helpful to regulatory agencies that are exploring whether and to what extent the fast-growing tech firms have acted illegally in achieving their gains or and/or whether different kinds of regulation are needed.

Note: To learn more about these ideas on making the transition to the ‘next management, join our workshop in Vienna on the day before the Drucker Forum, November 13, 2024 from 2.30 pm 

About the authors:

Stephen Denning is a Senior Contributor at Forbes.com and a director of the SD Learning Consortium.

Hugo Lourenço, founder of The Agile Thinkers, and co-founder of the World Management Agility Forum, is a leading global voice in Agile practices, dedicated to innovation and transformative organizational and management change, and commitment to human factors in team performance – NTECH skills.

Heidi Musser is an accomplished Board member, Board advisor, and C-level executive who advises and leads businesses on modern ways of working, sustainable innovation, and enterprise agility to achieve competitive advantage in this next economic revolution.

Further aspects of the proposed approach are discussed in these articles:
240125 The Management Paradigm Driving The World’s Most Valuable Firms
https://www.forbes.com/sites/stevedenning/2024/01/25/the-management-paradigm-driving-the-worlds-most-valuable-firms/
240211 How Mindsets Drive Processes In The World’s Most Valuable Firms
https://www.forbes.com/sites/stevedenning/2024/02/11/how-mindsets-drive-processes-in-the-worlds-most-valuable-ofirms/
240317 How The World’s Most Valuable Firms Are Upending The Concept Of Management
https://www.forbes.com/sites/stevedenning/2024/03/17/how-the-worlds-most-valuable-firms-are-upending-the-concept-of-management/