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Management 3.0


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Table of Contents

Forewords xix

Acknowledgments xxv

About the Author xxvii

Preface xxix

1 Why Things Are Not That Simple 1

Causality 2

Complexity 3

Our Linear Minds 5

Reductionism 7

Holism 8

Hierarchical Management 9

Agile Management 11

My Theory of Everything 12

The Book and the Model 13

Summary 14

Reflection and Action 14

2 Agile Software Development 17

Prelude to Agile 17

The Book of Agile 19

The Fundamentals of Agile 22

The Competition of Agile 24

The Obstacle to Agile 28

Line Management versus Project Management 28

Summary 30

Reflection and Action 31

3 Complex Systems Theory 33

Cross-Functional Science 34

General Systems Theory 35

Cybernetics 36

Dynamical Systems Theory 37

Game Theory 37

Evolutionary Theory 38

Chaos Theory 38

The Body of Knowledge of Systems 39

Simplicity: A New Model 41

Revisiting Simplification 44

Nonadaptive versus Adaptive 45

Are We Abusing Science? 46

A New Era: Complexity Thinking 48

Summary 50

Reflection and Action 50

4 The Information-Innovation System 51

Innovation Is the Key to Survival 52

Knowledge 54

Creativity 56

Motivation 58

Diversity 60

Personality 62

Only People Are Qualified for Control 64

From Ideas to Implementation 65

Summary 66

Reflection and Action 67

5 How to Energize People 69

Creative Phases 69

Manage a Creative Environment 72

Creative Techniques 74

Extrinsic Motivation 75

Intrinsic Motivation 78

Demotivation 79

Ten Desires of Team Members 80

What Motivates People: Find the Balance 83

Make Your Rewards Intrinsic 86

Diversity? You Mean Connectivity! 87

Personality Assessments 89

Four Steps toward Team Personality Assessment 90

Do-It-Yourself Team Values 92

Define Your Personal Values 94

The No Door Policy 95

Summary 97

Reflection and Action 97

6 The Basics of Self-Organization 99

Self-Organization within a Context 99

Self-Organization toward Value 101

Self-Organization versus Anarchy 102

Self-Organization versus Emergence 104

Emergence in Teams 106

Self-Organization versus Self-Direction

versus Self-Selection 107

Darkness Principle 108

Conant-Ashby Theorem 110

Distributed Control 111

Empowerment as a Concept 112

Empowerment as a Necessity 113

You Are (Like) a Gardener 115

Summary 117

Reflection and Action 118

7 How to Empower Teams 119

Don't Create Motivational Debt 119

Wear a Wizard's Hat 121

Pick a Wizard, Not a Politician 122

Empowerment versus Delegation 123

Reduce Your Fear, Increase Your Status 124

Choose the Right Maturity Level 125

Pick the Right Authority Level 127

Assign Teams or Individuals 131

The Delegation Checklist 132

If You Want Something Done, Practice Your Patience 133

Resist Your Manager's Resistance 134

Address People's Ten Intrinsic Desires 136

Gently Massage the Environment 136

Trust 138

Respect 141

Summary 144

Reflection and Action 144

8 Leading and Ruling on Purpose 147

Game of Life 147

Universality Classes 149

False Metaphor 150

You're Not a Game Designer 151

But...Self-Organization Is Not Enough 152

Manage the System, Not the People 154

Managers or Leaders? 156

Right Distinction: Leadership versus Governance 156

Meaning of Life 158

Purpose of a Team 160

Assigning an Extrinsic Purpose 163

Summary 164

Reflection and Action 165

9 How to Align Constraints 167

Give People a Shared Goal 167

Checklist for Agile Goals 170

Communicate Your Goal 172

Vision versus Mission 174

Examples of Organizational Goals 176

Allow Your Team an Autonomous Goal 177

Compromise on Your Goal and Your Team's Goal 178

Create a Boundary List of Authority 179

Choose the Proper Management Angle 180

Protect People 181

Protect Shared Resources 183

Constrain Quality 185

Create a Social Contract 186

Summary 188

Reflection and Action 188

10 The Craft of Rulemaking 191

Learning Systems 191

Rules versus Constraints 193

The Agile Blind Spot 196

What's Important: Craftsmanship 198

Positive Feedback Loops 200

Negative Feedback Loops 201

Discipline * Skill = Competence 204

Diversity of Rules 206

Subsidiarity Principle 208

Risk Perception and False Security 209

Memetics 211

Broken Windows 215

Summary 216

Reflection and Action 217

11 How to Develop Competence 219

Seven Approaches to Competence Development 221

Optimize the Whole: Multiple Levels 223

Optimize the Whole: Multiple Dimensions 224

Tips for Performance Metrics 227

Four Ingredients for Self-Development 229

Managing versus Coaching versus Mentoring 231

Consider Certification 233

Harness Social Pressure 235

Use Adaptable Tools 237

Consider a Supervisor 238

Organize One-on-Ones 241

Organize 360-Degree Meetings 242

Grow Standards 245

Work the System, Not the Rules or the People 246

Summary 247

Reflection and Action 248

12 Communication on Structure 249

Is It a Bug or a Feature? 250

Communication and Feedback 250

Miscommunication Is the Norm 253

Capabilities of Communicators 254

Network Effects 258

Tuning Connectivity 260

Competition and Cooperation 262

Groups and Boundaries 264

Hyper-Productivity or Autocatalysis 266

Pattern-Formation 268

Scale Symmetry: Patterns Big and Small 270

How to Grow: More or Bigger? 272

Summary 274

Reflection and Action 274

13 How to Grow Structure 275

About Environment, Products, Size, and People 275

Consider Specialization First... 278

...And Generalization Second 279

Widen People's Job Titles 281

Cultivate Informal Leadership 283

Watch Team Boundaries 284

The Optimal Team Size Is 5 (Maybe) 286

Functional Teams versus Cross-Functional Teams 288

Two Design Principles 290

Choose Your Organizational Style 292

Turn Each Team into a Little Value Unit 294

Move Stuff out to Separate Teams 295

Move Stuff up to Separate Layers 299

How Many Managers Does It Take to Change an Organization? 301

Create a Hybrid Organization 302

The Anarchy Is Dead, Long Live the Panarchy 303

Have No Secrets 305

Make Everything Visible 307

Connect People 308

Aim for Adaptability 308

Summary 309

Reflection and Action 310

14 The Landscape of Change 313

The Environment Is Not "Out There" 313

The Fear of Uncertainty 315

Laws of Change 317

Every Product Is a Success...Until It Fails 319

Success and Fitness: It's All Relative 321

How to Embrace Change 321

Adaptation, Exploration, Anticipation 322

The Red Queen's Race 325

Can We Measure Complexity? 327

Are Products Getting More Complex? 328

The Shape of Things: Phase Space 331

Attractors and Convergence 332

Stability and Disturbances 334

Fitness Landscapes 335

Shaping the Landscape 337

Directed versus Undirected Adaptation 339

Summary 340

Reflection and Action 341

15 How to Improve Everything 343

Linear versus Nonlinear Improvement 345

Know Where You Are 347

Travel Tips for Wobbly Landscapes 348

Change the Environment, Summon the Mountain 350

Make Change Desirable 353

Make Stagnation Painful 354

Honor Thy Errors 355

The Strategy of Noise 356

The Strategy of Sex 359

The Strategy of Broadcasts 360

Don't Do Copy-Paste Improvement 362

Some Last Practical Tips for Continuous Change 364

Keep on Rolling 366

Summary 367

Reflection and Action 367

16 All Is Wrong, but Some Is Useful 369

The Six Views of Management 3.0 369

Yes, My Model Is "Wrong" 371

But Other Models Are "Wrong," Too 373

The Fall and Decline of Agilists 376

The Complexity Pamphlet 377

Summary 380

Reflection and Action 380

Bibliography 381

Index 393

About the Author

Jurgen Appelo is a writer, speaker, trainer, developer, entrepreneur, manager, blogger, reader, dreamer, leader, and freethinker. And he's Dutch, which explains his talent for being weird.

After studying software engineering at the Delft University of Technology, and earning his Master's degree in 1994, Jurgen busied himself either starting up or leading a variety of Dutch businesses, always in the position of team leader, manager, or executive.

Jurgen's most recent occupation was CIO at ISM eCompany, one of the largest e-business solution providers in The Netherlands. As a manager, Jurgen has experience in leading software developers, development managers, project managers, quality managers, service managers, and kangaroos, some of which he hired accidentally.

He is primarily interested in software development and complexity theory, from a manager's perspective. As a writer, he has published papers and articles in many magazines, and he maintains a blog at As a speaker, he is regularly invited to talk at seminars and conferences.

Last but not least, Jurgen is a trainer, with workshops based on the Management 3.0 model. His materials address the topics of energizing people, empowering teams, aligning constraints, developing competence, growing structure, and improving everything.

However, sometimes he puts all writing, speaking, and training aside to do some programming himself, or to spend time on his ever-growing collection of science fiction and fantasy literature, which he stacks in a self-designed book case that is four meters high.

Jurgen lives in Rotterdam (The Netherlands)-and sometimes in Brussels (Belgium)-with his partner Raoul. He has two kids and an imaginary hamster called George.


" I don't care for cookbooks, as in `5 steps to success at whatever.' I like books that urge you to think-that present new ideas and get mental juices flowing. Jurgen's book is in this latter category; it asks us to think about leading and managing as a complex undertaking-especially in today's turbulent world. Management 3.0 offers managers involved in agile/lean transformations a thought-provoking guide how they themselves can `become' agile."

- Jim Highsmith, Executive Consultant, ThoughtWorks, Inc.,, Author of Agile Project Management

" An up-to-the-minute, relevant round-up of research and practice on complexity and management, cogently summarized and engagingly presented."

-David Harvey, Independent Consultant, Teams and Technology

" Management 3.0 is an excellent book introducing agile to management. I've not seen any book that comes near to what this book offers for managers of agile teams. It's not only a must read, it's a must share."

-Olav Maassen, Xebia

" If you want hard fast rules like `if x happens, do y to fix it' forget this book. Actually forget about a management career. But if you want tons of ideas on how to make the work of your team more productive and thereby more fun and thereby more productive and thereby more fun this book! You will get a head start on this vicious circle along with a strong reasoning on why the concepts work."

-Jens Schauder, Software Developer, LINEAS

" There are a number of books on managing Agile projects and transitioning from being a Project Manager to working in an Agile setting. However, there isn't much on being a manager in an Agile setting. This book fills that gap, but actually addresses being an effective manager in any situation. The breadth of research done and presented as background to the actual concrete advice adds a whole other element to the book. And all this while writing in an entertaining style as well."

-Scott Duncan, Agile Coach/Trainer, Agile Software Qualities

" Don't get tricked by the word `Agile' used in the subtitle. The book isn't really about Agile; it is about healthy, sensible and down-to-earth management. Something, which is still pretty uncommon."

-Pawel Brodzinski, Software Project Management

" When I first met Jurgen and learned he was writing a book based on complexity theory, I thought, `That sounds good, but I'll never understand it.' Books with words like entropy, chaos theory, and thermodynamics tend to scare me. In fact, not only did I find Management 3.0 accessible and easy to understand, I can [also] apply the information immediately, in a practical way. It makes sense that software teams are complex adaptive systems, and a relief to learn how to apply these ideas to help our teams do the best work possible. This book will help you whether you're a manager or a member of a software team".

-Lisa Crispin, Agile Tester, ePlan Services, Inc., author of Agile Testing

" This book is an important read for managers who want to move beyond `managing by hope' and understand the underpinning of trust, motivation, and the complexity that exists in nearly every team out there."

-Cory Foy, Senior Consultant, Net Objectives

" This book is a very accessible compendium of team management practices based on scientific research. It's not only the tremendous value in each page of this book, but also Jurgen's typical sense of humor that turns this book into a pleasant read."

-Ruud Cox, Test Manager, Improve Quality Services

" The very heart of software development is to get people to recognize they are in a complex system that should be managed accordingly. Management 3.0 addresses both the recognition and the concomitant transformative aspects. By so doing, Jurgen Appelo provides a bridge between theory and practice that has so far been considered too far away."

- IsraelGat, Founder, The Agile Executive, author of The Concise Executive Guide to Agile

" If you really want to know about Agile management, read Jurgen's book. He explains why looking for results is key to involving the team and for a great outcome. As Jurgen says, management is not simple and this book explains why. With humor and pragmatism, Jurgen shows you how you can think about management."

- Johanna Rothman, Consultant, Rothman Consulting Group, Inc., author of Manage It!

" In this book, Jurgen does a great job of explaining the science behind complexity and how Agile management methods have arisen from the need to manage in complex, dynamic, and unpredictable circumstances. If you're leading Agile development teams and interested in developing your management skills, this book is a must-read."

-Kelly Waters, Blogger, Agile Development Made Easy!

" I firmly believe that Management 3.0 will become the `Bible' of Agile management books in the decade ahead."

- Ed Yourdon, IT Management/Software Consultant, Nodruoy, Inc., author of Death March

" This book is not written for those who want a quick fix. This book is written for serious students who have a passion and love for management. This book is written for management craftsmen."

-Robert C. Martin, Owner, ObjectMentor, Inc., author of Clean Code

" Every 21st century Agile (or non-Agile) manager needs to read Jurgen Appelo's Management 3.0. With an engaging and accessible style, Appelo outlines current theories from complexity science, management, leadership, and social systems [and] then pulls them all together with practical examples. Then he throws in reflective questions to assist managers in applying it all to their current situations. Whenever I work with a manager, executive, or leadership team, I'll recommend this book."

- Diana Larsen, Consultant, FutureWorks Consulting LLC, co-author of Agile Retrospectives

" Jurgen takes his readers on a wide-ranging romp through system theory, complexity theory, management theory-and distills it for practical application. His book will help managers think about their work differently and expand their options for effective action in the workplace."

- Esther Derby, Consultant, Esther Derby Associates, Inc., co-author of Behind Closed Doors: Secrets of Great Management

" Jurgen managed to write a book that links the tons of books he has read. Although there were a few moment I did not agree with him, I loved the way this book challenged my thinking. This is the perfect book if you want to know how to create your own answers in this complex world."

-Yves Hanoulle, Agile Coach,

" Management 3.0 brings together the best thinking in the fields of complex adaptive systems, Agile management, and Lean product delivery to suggest a pragmatic framework for effective management in the 21st century. To be successful in the face of rapidly changing market conditions, we must create organizations that enable our people to adapt, with a minimal amount of oversight and direction. Management 3.0 gives us a roadmap for leading teams in the face of profound uncertainty. Jurgen has made a significant contribution to the field of Agile management and leadership."

-Mike Cottmeyer, Agile Coach, LeadingAgile

" Too many Agile practitioners ignore the realities of the real world. But in the real world Agile projects must be managed, directed, and moved forward. This benefits both the company and the team, and Jurgen has done a great job of bringing those practices into focus in a real and practical way. If you're involved with Agile software in a shop of any size, or if you're a manager (or executive) who's seen the benefits of Agile and want to bring them into your shop, you owe it to yourself to read this book."

-Jared Richardson, Agile Coach, Logos Technologies, co-author of Ship It!

" I had felt quite well-equipped to manage teams adopting an Agile software development approach, having read works like Managing Transitions, Leading Change, and Behind Closed Doors, until I began to read Management 3.0. Appelo's compendium works at a variety of levels: It helps novice managers with a diverse collection of easy-to-apply models, it helps experienced managers see what they need to unlearn, and I assume it will help even expert managers adapt to contemporary styles of leadership and governance. Management 3.0 has opened my eyes to the vast world of modern-day management whose surface I see I have only scratched so far, and I look forward to Appelo's work guiding me along as I learn."

-J.B. Rainsberger, Consultant, Coach, Mentor,, author of JUnit Recipes

" Software projects are complex living systems; knowledge loss happens as soon as you manage them. Make your life easier, minimize the loss: Read this book!"

-Jacopo Romei, Agile Coach, co-author of Pro PHP Refactoring

" For people who `get' the message, this book may prove to be as valuable as Darwin's book On the Origin of Species."

-Florian Hoornaar, Entrepreneur, Octavalent

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