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The Evolution of Management Success
Management innovation has been a key driver of human progress. Over decades, organizations have successfully adapted their practices to meet emerging challenges, creating unprecedented prosperity and advancement. While many organizations continue to operate with industrial-era practices focused on hierarchical control and short-term financial metrics, pioneering institutions are demonstrating that a different approach is not only possible but delivers superior results.
Today’s landscape demands further evolution: geopolitical shifts, environmental pressures, AI advancement, changing work patterns, and demographic transitions are creating new complexities. These challenges require management approaches that can harness human potential while leveraging technological capabilities. Forward-thinking organizations are showing how this can be done, transforming traditional management practices into more dynamic, human-centric systems that deliver both business success and societal value.
The Next Management: Building on Success
The Next Management (TNM) represents a natural progression in management thinking and practice. It builds on proven approaches, while adapting to emerging realities. As Peter Drucker reminded us, management is the “organ” of society, responsible for creating conditions that enable organizations to perform across private, public, and civil sectors.
TNM is a dynamic, holistic leadership approach that aligns business prosperity with societal progress and purpose. Strong anecdotal evidence from pioneering organizations shows that when implemented thoughtfully, this approach creates more value, not less.
Successful implementations share common characteristics:
- Significant reduction in management layers, with leaders becoming coaches rather than controllers
- Decision-making pushed to the front lines, with workers making the vast majority of operational decisions
- Dynamic performance cycles, e.g., quarters, replacing annual planning
- Broad-based ownership and employee participation systems that align interests across the organization
- Strong mission orientation that transcends traditional profit or employment preservation goals
- Genuine concern for the human being in organizations
- Decision-making carefully balanced between data-driven rationality and heuristics based on practical wisdom.
Importantly, TNM is not about discarding past wisdom but about building on it in line with Drucker’s requirement to balance continuity and change. It invites practitioners and scholars—across current and future generations—to contribute to the evolution of management thinking and practice in the spirit of continuous improvement and innovation. By acknowledging and leveraging the foundations laid by others, TNM aspires to guide thoughtful evolution grounded in purpose and meaning.
The Next Management Practice is Guided by Simple Principles
The TNM framework emphasizes the logical progression of Assumptions → Guiding Principles → Management Practices. Based on the assumptions above, TNM is guided by seven principles, and each of these—alone or in interaction with others—give rise to management practices that make sense in their specific contexts.
Innovation, more than efficiency
Building on Success: Organizations have long excelled at optimizing operations and improving productivity.
Next Level: TNM enhances this foundation by making innovation a core function, recognizing it as a key source of growth and competitive advantage. Organizations can demonstrate this by empowering small, mission-focused teams, shorter planning and execution cycles, and continually developing “frontier skills” that combine technical expertise with creative problem-solving.
Ecosystems, more than single institutions
Building on Success: Organizations have developed strong partnerships and supply chains.
Next Level: TNM extends collaboration into dynamic ecosystems that tackle complex challenges. Progressive organizations show how breaking down traditional boundaries enables faster innovation and more comprehensive solutions, how creating cross-industry platforms helps innovation, and develop shared measurement systems for ecosystem performance.
Long-term, more than short-term focus
Building on Success: Organizations balance quarterly results with annual planning.
Next Level: TNM expands the horizon to encompass sustainable value creation. Leading organizations demonstrate that long-term focus enhances short-term performance by building more resilient business models, and how incentive systems can be designed to reward sustainable value creation.
Human augmentation, more than automation
Building on Success: Organizations effectively leverage technology to improve efficiency.
Next Level: TNM focuses on technology that enhances human capabilities and creativity. Pioneer organizations show how this approach leads to both higher productivity and increased employee engagement, creating environments where people and technology thrive together, and developing leadership capabilities for human-AI synergy.
Management as an art, more than a science
Building on Success: Organizations value both analytical and interpersonal skills.
Next Level: TNM emphasizes adaptability, empathy, and practical wisdom in leadership. Leading organizations demonstrate this by transforming traditional management roles into coaching positions, reducing management layers while enhancing leadership effectiveness, and creating space for creativity and intuition— serious play—in management.
Reality grounded, more than ideology
Building on Success: Organizations use data and evidence in decision-making.
Next Level: TNM promotes pragmatic approaches adapted to context and reality. Forward-thinking organizations show how empowering front-line teams with real-time information leads to better decisions and faster adaptation, how flexible strategies are more responsive to changing conditions, and develop feedback mechanisms that capture ground reality.
Radical reform, more than revolution
Building on Success: Organizations continuously improve existing processes.
Next Level: TNM encourages fundamental rethinking while preserving valuable practices. Successful organizations demonstrate that transformation doesn’t require disrupting everything—it’s about building new capabilities while maintaining operational excellence. They manifest cultures of continuous learning and adaptation, and how to build internal capacity for self-renewal.
The transformation of these principles into practices will differ by context, because TNM will assume that best practices depend on who practices them, where, how, and when across private, public, and social organizations. This approach requires humility, nimbleness, and pragmatism.
The Imperative of Societal Value Creation
Anecdotal evidence from pioneering organizations shows that this approach delivers superior results across multiple dimensions. Organizations embracing TNM principles find they can attract and retain the best talent, innovate more effectively, and build more resilient business models. Perhaps most importantly, they demonstrate that shareholder value becomes a natural consequence of doing the right things in the right way with motivated workforces. As Peter Drucker emphasized, “Free enterprise cannot be justified as being good for business. It can be justified only as being good for society.”
The transformation extends beyond individual organizations. Public sector institutions are beginning to adopt similar principles, particularly at city and regional levels where direct connection to citizens enables more dynamic approaches. This cross-sector evolution suggests the potential for broader societal transformation.
Moving Forward Together
The evolution to TNM is already underway, but scaling these changes requires collective effort. The Vienna Center for Management Innovation, rooted in Vienna’s rich intellectual tradition and integrated with the Drucker Forum, serves as a convener and catalyst for this progression.
This isn’t just about private sector transformation. The principles of TNM offer valuable insights for public sector renewal as well. By sharing insights, experiences, and learning from examples in different sectors and contexts, we can build more effective institutions across society.
TNM provides a pathway forward, building on collective wisdom while adapting to tomorrow’s challenges. It’s not about discarding what works, but about evolving management as responsible for creating conditions that enable organizations to perform across private, public, and civil sectors to meet the demands of our time.
This blog represents thoughts in progress, inspired by ongoing dialogue with scholars and executives in the Drucker Forum and Vienna Center ecosystem, reflecting our shared commitment to advancing management thinking for societal benefit.
About the author:
Johan Roos Executive Director, Vienna Center for Management Innovation (VCMI) think tank; Presidential Advisor, Hult Internat. Business School.
Join Johan on November 13 at the workshop: The Nexus of Knowledge Work – Opportunities and Challenges, 15 CET, MV AG, Sky Lounge, Trabrennstraße 6-8, 1020 Vienna. Please register here: https://www.druckerforum.org/special-pages/ws-3-nov-13-2024/
He will be at the Global Peter Drucker Forum on panel 6: Unleashing Scientific Innovation
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