What is Management Model?

Over the past three years, I worked at iFood focusing on Management Model – a generic term often used by consultants, yet seldom studied in business schools worldwide, and one of iFood's distinctive competitive advantages.

Recently, I had the opportunity to join Prosus, the parent company of iFood. One of the key initiatives brought by the new CEO – who also came from iFood – is the implementation of this "Management Model". Many people here have asked me what it is, and while it has a simple definition, understanding how it works in practice isn't trivial for those who haven't experienced it firsthand.

So, what is a Management Model?

“A Management Model represents the choices made by a company's senior executives regarding how they set objectives, motivate effort, coordinate activities, and allocate resources.” - MIT Sloan Management Review

In short: it’s how you plan and execute to achieve results.

The challenge is that between Planning, Execution, and Results, there are gaps that need to be closed:

Knowledge Gap: This gap arises when I don't have all the information needed to create my plan, such as economic uncertainties or unpredictable competitor moves.

Alignment Gap: You've created a well-crafted plan, but for some reason, people aren't executing as planned. There are 5 main possible reasons for this:

• People didn’t understand the plan, or they understood it but don't believe in it.
• People lack the capability to execute – whether it’s skills or capacity.
• The team lost focus amid too many competing priorities.
• There isn't a clear owner for the delivery, leading to a diffusion of responsibility.
• Incentives are not aligned.

Effectiveness Gap: You had the information, designed the plan, people executed it, but the results didn’t follow. Why?

• Your strategy wasn’t the best from the start.
• Your strategy was initially good, but circumstances changed along the way, and the plan wasn't adapted.

The 2 Management Model styles:

The goal of the Management Model is to close these gaps to achieve results. This can be done in various ways, but they can be broadly categorized into two main approaches:

Command and Control: Based on Frederick Taylor's Scientific Management, this approach focuses on closing the gaps through detailed analysis, exhaustive planning (typically for the next 5-10 years), and strict adherence to the plan. Control mechanisms are put in place to ensure this – such as standard operating procedures, numerous audits, and processes to verify adherence. Taylor’s model is based on three assumptions: 1. You can know everything needed to plan, 2. Planning and doing are separate tasks carried out by different people, 3. There is only one right way to do things, and the organisation's leader knows what that way is. In short, it’s about creating perfect plans.

Alignment and Autonomy: A more modern school of thought suggests that in a constantly changing world (VUCA), the best way to achieve results is to plan as far as you can see, then draw a clear direction beyond that and communicate it extensively while empowering the team to figure out how to get there. Leadership articulates WHAT needs to be achieved, and teams determine HOW they will achieve it. The key principles here are: 1. Plan only what you can foresee, and treat your strategy more like an intention than a detailed plan. 2. Communicate what needs to be achieved and why. 3. Give people the space and support to adapt as needed.

Another way of looking at this division is the one Andrew McAffe proposes in his book "The Geek Way", where he studies so-called "Tech" companies like Amazon, Google, and Uber. however, McAffe writes that today, almost every company needs to be "Tech," which means using technology to rethink how they operate, or risk becoming obsolete.

For McAfee, the key to the success of these companies lies in their operating model, which is more about a "Geek Culture" than merely using technology. This model is characterized by speed, ownership, science, and open communication. Essentially, their management model has evolved from command and control to a new way of doing things that empowers autonomy while ensuring alignment.

But in the rush to implement this model of empowerment and autonomy, many companies go astray. The three most common pitfalls are:

1. Autonomy for People Without Capability: Autonomy demands critical thinking, adaptability, and emotional intelligence. Not everyone is prepared for this. Amazon, Google, and other big-tech companies can provide autonomy because they have strong, capable teams. Granting autonomy to those who lack the capability is a recipe for disaster.
2. Autonomy Without Alignment: People may assume that alignment and autonomy are opposites – that more alignment requires less autonomy. In reality, they are distinct axes of a graph. Alignment without autonomy kills ownership, while autonomy without alignment leads to chaos. The solution is to provide clear strategic directions while allowing individuals to determine how to achieve them.

Lack of alignment and clear direction leads to a cycle like this:

The results don’t come -> More initiatives are launched -> Confusion increases because there's too much to do -> There’s so much that it's unclear who should do what -> Accountability/ownership becomes blurred -> People don’t execute -> Then command and control proliferates -> No autonomy at the base -> Things slow down -> You are back in Command and Control model.

3. Autonomy Without Clear Ownership: Have you ever been in a situation where a project requires multiple departments, but those departments want to move in different directions? No one feels responsible enough to make a decision because it involves another area, and as a result, the project stalls. It becomes a case of "I'll let someone else handle it." Or it takes so long to make a decision that, before you know it, six months have passed. Goodbye to the "Speed" of the Geek Way.

The solution to fix this is simple: Establish one owner for each company goal. One owner, not two. There is no "but this needs two areas equally." It might work occasionally, but it fails far more often than it succeeds. The goal owner must involve the impacted areas, consider different perspectives, but at the end of the day, ONE person must make the decision.

The saying fits well here: A dog with two owners ends up starving.

What Does a Management Model Team Do?

A Management Model team ensures the proliferation of a functional, effective model in the company, avoiding common pitfalls. The team addresses the Knowledge, Alignment, and Effects gaps:

• Knowledge Gap: This is addressed through Strategic Planning support and frameworks that help executives structure their thinking. A market intelligence team can be instrumental here.
• Alignment Gap: The team ensures the strategic direction is cascaded effectively, everyone understands it, and capacities are aligned. It also helps clarify roles, prioritize initiatives, and align incentives to strategy.
• Effects Gap: The team stays vigilant to environmental signals and helps leadership adapt plans when circumstances change, avoiding the knee-jerk reaction of reverting to command and control, which can stifle autonomy and slow execution.

A Management Model is about closing gaps, but also about creating a culture of clear direction, empowered teams, and focused execution, enabling companies to succeed in a fast-changing world.