An interview with Jurgen Appelo, one of the most influential person in Agile and top ranked management & leadership expert, by Dominika Kantorowicz

You are the author of the hottest management concept of the last decade – Management 3.0. You are even called the guru of the global management revolution. How do you differentiate Management 3.0 from previous management methods?

I think more than other people I have tried to be inspired by systems’ thinking and complexity science, about how organisms and other complex systems survived and thrived in the fast-changing environments. I have read many books on that topic and that I found that super interesting because I recognised many things for organisations: how organisations try to survive and thrive in changing environments. I have tried to adapt a good number of ideas from systems’ sciences to management and I think that there is the main distinguishing factor that I did that more than other people. I came to similar conclusions, I don’t claim that I have anything revolutionary compared to what other people have already done before. I think I have added a little more reference pointers to the science out there.

Is Management 3.0 applicable for agile companies only? Are there industries where it works better?

I think it applies to any organisation but it depends on how much the organisation is trying to deal with change. There are some industries where not much is changing, they have been operating in the same way from decades and they can keep going on with business as usual. In those areas, there is not much that the Management 3.0 has to offer and certainly less than to other companies which that are dealing with rapid changes, like in the financial industry, mobile or transport industry. Some many things have changed in the last ten years and trying to keep up with all these changes requires the intelligence and the enthusiasm of all the employees of the company and that means the different management style.

Is Management 3.0 designed for every generation of employees? Do Millennials and the generation Z perform better within this kind of management?

I don’t think so, because any references that I have to psychology and sociology apply to all kind of people, no matter what generation you are. We are all human beings. Different generations indeed have slightly different needs, it seems like it is well known that the younger generations seek more purpose in their job than the previous generations where it was a bit more about making money and having a career. But I think those are subtle differences, because if you ask people, then you hear that also older people prefer to have jobs that have purpose and meaning. They admit that making a lot of money is nice, but it comes to second place after having a meaningful job. Humans are motivated by having a meaningful contribution to the world, so it doesn’t matter if they are eighteen or eighty years old. Thus, I think the differences are small between generations.

Your insight that “paying people for work without destroying their motivation is one of the most difficult challenges for management”, sounds controversial, especially when you still believe that money is the best motivating factor. Could you tell us more about the merit system which you promote?

I do think that money is an important contributor to motivation because we can simply look around us and see that many people do their job for money. If you want to check what happens when you stop paying people salaries then I am pretty sure you will find out that most people stop working. Thus, money is a part of people motivators because they have to feed their families, they have hobbies they want to pay for, they have a roof over their head and all these basic needs for which they need money. But for some point, when you have paid for everything and you live a good life, then money becomes less important than purpose and meaning and the social aspect of having great people to work with, etc. Then money is only one of the multiple things in the equation. I have offered merit money as an example of how you can compensate people differently. It is based on an actual example of companies that have experimented with that. It is about asking people to reward each other for great contributions to the company.

How does the merit system work technically?

Every person in the team or the organisation gets the number of points and they have to give these points to other people for the great things that they did. For instance, ten points to you for helping me out yesterday when I was stuck, five points to you for the nice cake or delicious croissants that you brought to the office or fifty points to you for solving the problem that nobody else was able to solve. By doing that you tap into the intelligence of the entire crowd of all the employees because the manager can never see everything that happens on the workflow. There is much more that happens around, things that you haven’t control over and that you can’t see as the manager. I think it is healthy to have other people, everyone decides who deserves a pat on the back, who deserves some credits for something that they did. You would be surprised how people appreciate each other for things you would never expect. The idea of the merit money is that people collect those points that they have received from other people and everyone can exchange those points for real money. There is actual money basically that you have earned from other people, for the good behaviours that you showed. It is a sort of bonus, which you have to keep small but enough. The salary should be still much more important than this small bonus. I have experimented with the merit system with various team members and they used it for years and they loved it. They think it is a great way to recognize each other.

Talking about motivation, you are known for the precipitate that we don’t need KPI to motivate people. Shall we use OKR – Objectives and Key Results – instead? Or maybe, we should find how to motivate people without setting targets, without bonuses and punishments? 

I think there is nothing wrong with targets if people set them for themselves. I set targets for myself all the time, but because they are my targets, they motivate me, because I think I can achieve something. I set the targets for myself and then I do my best to achieve them or not. Things go wrong when other people, like managers and top managers give you a target and then tell you if you reach it, you get some kind of bonus. That has proven to lead to all kind of dysfunctional behaviours in companies because people are not motivated by the targets, they are motivated by the bonus. They will figure out the shortest path to get the bonus without really do a good job, sometimes it is even faking things. There are many famous examples of that of companies almost been destroyed basically by the behaviours of the employees because they have been motivated by bonuses through targets. I think athletes with their coaches are a good example, they set the targets for themselves, they know what they are capable of. They want to achieve something more next month, so they set the targets and they train and then they perform. I think that this is healthy kind of target, but no sports federation would give the athlete a target for something and say you get the bonus if you reach the target or not, it doesn’t work like that with professionals.

Fot. Przemek Getka (organizer Superskrypt) Jurgen Appelo at the AgileByExample 2019 conference in Warsaw

What are the challenges for people management in the future? Is Management 3.0 the answer for them? Or maybe it will be necessary to refresh the approach to people management again?

I am pretty sure that in the future we won’t use the term Management 3.0 anymore, but the thinking will remain the same. I would compare it with the word cyberspace. That was a very popular term twenty years ago or more when the Internet was still a bit new for many people in the world and this strange thing was called cyberspace by some people.

Now we have cyberspace everywhere and nobody is calling it cyberspace anymore, it is a bit an old term. I think the same applies to the management, I think we will keep evolving how we do management, people management with Management 3.0 ideas but also ideas from other writers and experts and they will keep going in the same direction. In 20, 30 years from now, some people will say “you remember that in 2020 we called that the Management 3.0. Nowadays it is normal, that’s the normal way of doing things”, I look forward to the future like this.

You have solid management experience behind you. How did you develop the qualities of a good manager? Was there anyone who was an example for you?

I have great respect for people who try things and run experiments. Who are not afraid to fail and share what they learned from the experiments. This is very scary for many managers actually, because they try to do everything right and fear to make a decision that might turn out to be the wrong decision because they don’t get the results that they hope for. I have never really been afraid to run experiments. I have the greatest respect for managers who lead by example by showing people that it is OK to try things and fail, but then to share the learning what you have learned from your failure that everyone becomes smarter as well. I don’t have specific names of people on my mind, it is just the behaviour that I have seen in the number of managers around me that I appreciate very much and I also try to have myself.

In your next best-seller Managing for happiness, you describe happiness as “a path to choose, not a destination to arrive at” and you share with 12 steps to happiness which raise this path. Should we work with the to-do list separately? Or maybe should we apply it somehow within the organisation to have happier people at work?

I think the 12 steps to happiness are organization-wide. Because not every step works well for every person. One of the steps is meditation and mindfulness that has been proven to work well with people in general, but I tried it and it is just not something that resonates with me. This is nothing wrong with that. What I do like, is exercise. I run every day and I don’t listen to music when I am running because I am just trying to enjoy the outdoors and the city or nature where I am running. For me, that’s a sort of mindfulness to enjoy for half an hour or one hour a run every day. That’s another item on the 12 steps to happiness – to exercise. For me, exercises work better than mindfulness, but for other people, it might be the other way around. Don’t think that 12 steps should apply to every person. It is just the generic advice, these 12 steps are good for the entire organization and then each person should figure out what works best for him. For some it is social context – having friends, for others – the purpose and the meaning might be the one that triggers them the most. It should be a bit of custom-made per person.

Fot. Przemek Getka (organizer Superskrypt) Jurgen Appelo at the AgileByExample 2019 conference in Warsaw