Management as a Liberal Art (MLA) Articles

An Unflinching Gaze: Peter Drucker's Self-Portrait Through a Fallen World

Sat, 31 Jan 2026 22:50:00 GMT

Peter Drucker’s memoir, Adventures of a Bystander, is a self-portrait of a most unusual kind. It reveals its subject not through direct autobiography, but through a series of incisive portraits of the people he encountered throughout a tumultuous life. Drucker positions himself as a "bystander," but this is no passive observer. Instead, he is an intellectual portraitist whose careful study of others becomes the very method by which he comes to understand himself and the fractured world he inhabited.

The book’s central drama is framed by a vivid scene from the summer of 1940. Karl Polanyi, a brilliant economic historian and refugee from the war engulfing Europe, was staying with the young Drucker and his family in Vermont. Tormented by the news of France's surrender and the bombing of London, Polanyi was consumed by an agonizing question: "Why did this European catastrophe happen?" Each morning, as soon as he heard Drucker's infant daughter stir in her crib, he would rush into her room and pour out his developing theories, testing his grand intellectual framework on the most innocent of listeners. This single image captures the profound urgency that animates the book. For both Polanyi and Drucker, understanding the collapse of European civilization was not an abstract academic exercise; it was an existential necessity.

To explain his unique perspective, Drucker employs the metaphor of the "bystander" as the "fireman in the theater." In old European theaters, two firemen were required to be present for every performance. They did not participate in the play, yet their presence was integral to it. From their unique vantage point, they saw the stage differently than the actors or the audience. Drucker clarifies that this viewpoint is not a simple reflection of reality. As he puts it, this kind of "reflection is a prism rather than a mirror; it refracts." In observing the world, the bystander sees reality broken down into its constituent parts, and in that refraction, he inevitably sees himself.

This analysis will follow Drucker’s prismatic gaze. We will first explore his diagnosis of a European elite intellectually trapped by the failed ideas of the 19th century. We will then examine the desperate search for an exit from this intellectual prison, as seen through his dialogues with other brilliant minds on the edge of the abyss. Finally, we will uncover the alternative vision Drucker discovered—not in a grand ideology, but in the pragmatic realities of American society and the nascent practice of management.

1 Trapped in the 19th Century: The Collapse of a Worldview

To comprehend the rise of 20th-century totalitarianism, Peter Drucker believed one must first understand the intellectual and imaginative paralysis of the European elites who preceded it. His portraits of the men and women of his youth are not mere nostalgic sketches; they are forensic examinations of a worldview in collapse. The catastrophe that befell Europe, he argues, was not caused by a sudden invasion of barbarism, but by an internal failure—a vacuum created when the continent’s leading minds became prisoners of their own history, unable to see, let alone confront, the monstrous new reality taking shape before them.

Drucker uses the haunting metaphor of a "sunken city of Atlantis" to describe the Vienna—and by extension, the Europe—of his youth. He recalls a childhood story of a city whose inhabitants, punished for their pride and greed, are forced to live as the undead, re-enacting their empty rituals in a world without sunlight. For Drucker, this was the state of the European elite. They were the living dead, trapped in the illusion of a "prewar" world, going through the motions of a life that no longer existed. This clinging to the past was, in his words, a "miasmic smog... paralyzing everybody," stifling all thought and imagination.

The Paralysis of the Liberals

The first and most prominent group of prisoners were the 19th-century liberals among whom Drucker was raised. His own father, a high-ranking government official, simply could not believe that Hitler would invade Austria or that another great war was possible. The editors at the prestigious journal The Austrian Economist, men of international perspective, dismissed 18-year-old Drucker’s warnings about the rising Nazi movement as "Nonsense," convinced that electoral politics had solved the problem. Most damningly, Drucker recounts an episode at the liberal-minded Frankfurt University. After a Nazi official delivered an ominous speech to the faculty, the university’s most celebrated professor—a brilliant scientist and archetypal liberal—was expected to offer a rebuttal. Instead, he stood up and asked only one question: "Could you please clarify... will the research budget for physiology be increased?"

For Drucker, the liberals' catastrophic failure was therefore not moral but imaginative—a cognitive paralysis rooted in their unwavering faith in a 19th-century framework that was utterly unequipped to recognize, let alone combat, a radically new form of political evil. They saw the Nazis as crude and vulgar, a temporary aberration that could be managed with the old tools, never imagining a world where their own cherished principles were no longer relevant.

The Disillusionment of the Socialists

If the liberals failed because they could not imagine a world beyond the 19th century, the socialists failed because their imagination was entirely a reaction against it, leaving them equally blind to the political realities of the 20th. They correctly diagnosed the deep flaws of the old order but were tragically naive in their proposed solutions.

Drucker tells the story of Count Traun-Trauneck, a brilliant young aristocrat who placed his faith in an international workers' movement, believing the solidarity of the proletariat could transcend national borders and prevent the coming war. His hopes were brutally shattered when that very movement was consumed by a tidal wave of nationalism, as the "workers of the world" eagerly marched off to kill one another. The Count, his faith destroyed, retreated into obscurity, a broken man.

Even more cautionary is the tale of Noel Brailsford, a British dissenter who journeyed from liberalism to socialism out of a deep compassion for the oppressed. Horrified by Nazism, Brailsford adopted the desperate logic of "the enemy of my enemy is my friend," which led him to become an apologist for Stalin's Soviet Union. He knew of the atrocities, yet out of a desire to preserve a united front against fascism, he publicly defended the indefensible. Drucker saw in Brailsford a terrible paradox: a good man whose conscience led him to "condone evil." It was a lesson in how well-intentioned idealism, when detached from political reality, can become both morally compromised and politically naive.

The Cul-de-Sac of Rationalism

Drucker identified a deeper intellectual prison that held both liberals and socialists captive: "Rationalism." He was careful to distinguish this from reason itself. For Drucker, Rationalism is the arrogant impulse to force the mysterious, non-rational dimensions of human life into a single, quasi-scientific, all-encompassing explanatory system, mistaking the map for the territory.

His prime example of this mindset is Sigmund Freud. In a masterful chapter, Drucker deconstructs three central "myths" about Freud: that he was impoverished, held back by anti-Semitism, and professionally neglected. In reality, Drucker argues, Freud was a quintessential "child of the Enlightenment." His great project was to take the dark, mysterious depths of the human psyche—the subconscious—and force them into a neat, rationalist framework. He promised a single key, sexual repression, that could unlock every human mystery. This quest for a perfect, totalizing explanation, Drucker argues, was the true intellectual disease of the 19th century.

This rationalist obsession with a single, perfect system was the poison that contaminated the wells of European thought. It created an intellectual environment where even the most brilliant minds, in their search for an escape, would propose new, equally totalizing solutions—be it the perfect statesman, the perfect social design, or the perfect technology.

2. The Search for a Way Out: Dialogues on the Edge of an Abyss

Drucker did not diagnose Europe's crisis from a detached, academic distance. His search for an answer was a lived experience, forged in intense dialogue with other thinkers who were also desperately seeking a path beyond the failed ideologies of the 19th century. In the portraits of his intellectual interlocutors—Fritz Kraemer, Karl Polanyi, Buckminster Fuller, and Marshall McLuhan—Drucker reveals a landscape of brilliant but ultimately flawed attempts to find an exit.

The 'Third German' and Legitimate Power

Fritz Kraemer was an eccentric political philosopher who provocatively advocated for monarchy, not out of nostalgia, but from a deeply held conviction that to resist the illegitimate, mob-driven power of Nazism, Germany needed a true conservatism grounded in legitimate authority and political virtue. He called for a "third German"—an "ideal Prussian"—to stand against both the corrupt "ugly German" of the establishment and the weak, ineffective "good German" of the liberal class. Drucker shared Kraemer's belief that the legitimacy of power was the central question of modern politics. Yet he ultimately diverged from Kraemer's solution, seeing it as too narrowly focused on the power of the state and overly reliant on the emergence of a "great man" to solve society's problems.

The Perfect Society and the Embedded Market

Drucker’s relationship with Karl Polanyi was one of the most formative of his life. Polanyi’s quest for an exit from the 19th-century trap was part of a larger family drama; each of his four siblings also pursued a radical alternative, from fascism and engineering a new society in Brazil to rural sociology and philosophical personalism, illustrating the sheer desperation of the search. Karl’s path was economic history. In his masterwork, The Great Transformation, he argued that the worship of a utopian "free market" was the root of social decay and proposed a "third way" in which the market would be "embedded" within social principles.

Drucker, however, saw in Polanyi’s quest another form of the 19th-century impulse for "salvation by society." Polanyi’s own historical research became a source of disillusionment; he discovered that the pre-market societies he idealized were often built on slavery and coercion. Their fundamental difference was captured in Polanyi’s friendly dismissal of Drucker’s emerging philosophy as a "tepid compromise." Polanyi was searching for the perfect society; Drucker was beginning to formulate a vision for a tolerable one.

The American Prophets and the Gospel of Technology

After moving to America, Drucker encountered two thinkers who offered a completely different exit: technology. He called Buckminster Fuller and Marshall McLuhan true "prophets" because they understood that technology was not merely a set of tools but a new, formative reality. Fuller preached a technological "pantheism," seeing it as divine harmony, while McLuhan famously viewed it as an "extension of man," altering human perception itself. Drucker recognized their genius but warned against idolizing technology as a new "Golden Calf."

To understand their difference from Drucker, one might imagine technology as a lamp. Fuller was concerned with whether the lamp's light aligned with the cosmic order of the stars. McLuhan was fascinated by how the lamp's light fundamentally altered our eyesight and perception of the world. Drucker, however, insisted on asking: Who is holding the lamp? What is the human 'work' of carrying it? And what social responsibilities does that act entail?

For Drucker, these brilliant searches—for the perfect statesman, the perfect society, or the perfect technology—all pointed to a deeper modern pathology. The quest for "salvation by society," he concluded, had turned society itself into an idol. "Society" had become the "Great Baal and Moloch of modern man," a false god to which people were willing to sacrifice themselves and others in the pursuit of a worldly paradise. This deification of the social, he believed, was the ultimate source of totalitarian temptation. His own path, therefore, would require not a new system, but a new humility.

3. The American Alternative: Society, Politics, and Management

Drucker’s escape from the European intellectual labyrinth was not just theoretical; it was geographical and experiential. In the United States, he discovered a society that, while deeply flawed, offered a living, breathing alternative to the rigid and failed ideologies of Europe. It was not a perfect society, but a functioning one, and in its functioning, he found the raw materials for a new political and social vision.

An Imperfect but Resilient Society

Drucker was struck by the profound difference in how Americans and Europeans responded to the Great Depression. In Europe, the economic collapse bred "suspicion, surliness, fear, and envy," tearing the social fabric apart. In America, he observed, the Depression was largely viewed as a "natural disaster." This perception fostered solidarity; the community "closed ranks" rather than dissolving into class warfare.

He identified a key source of this resilience in what he termed American "Tribalism." Contrary to Marxist predictions, the crisis did not produce a unified "proletariat." Instead, Americans fell back on their diverse religious and ethnic communities. Drucker acknowledged the dark side of this phenomenon, distinguishing between "discrimination against" others and "discrimination for" one's own group. Yet he argued that this flawed mechanism provided a powerful source of social cohesion that prevented total social collapse. This mosaic of particular communities was held together by an overarching "American Creed"—a set of abstract principles to which anyone could swear allegiance.

A Politics of Pragmatism, Not Perfection

This unique social structure was mirrored in what Drucker called "America's political genius": a rejection of the European obsession with ideological perfection. The core of this tradition was a concept he called "dualism": a refusal to separate the material from the ideal. For Americans, politics was neither a dirty game of power (Machiavelli) nor the deification of the state (Hegel). Instead, it was a moral and creative act of making "matter serve spirit"—using imperfect institutions to strive for ethical ends.

This pragmatic approach, Drucker saw, reflected a kind of "pre-modern," community-based wisdom that Europe, in its obsession with grand "isms," had lost. The fierce debate between individualism and collectivism, for example, was resolved through a vibrant tradition of "voluntary group action," where citizens organized from the bottom up to solve problems. This focus on concrete, community-based action over abstract theory was the political equivalent of the practical wisdom he admired in the "pre-modern" figures of his youth.

The Organization as the Locus of Freedom

Drucker's political philosophy found its ultimate practical application in an unlikely place: the modern business corporation. A two-year study of General Motors in the 1940s crystallized his thinking. He found himself in a debate with GM's legendary chairman, Alfred Sloan, who held that a corporation's only responsibility was economic performance. Drucker argued for a broader vision: in a world where traditional communities were dissolving, the large corporation had become the central social institution. As such, it had to provide workers with the social status and function that the old order no longer could.

He found an unexpected ally in GM's president, Charles E. Wilson, a self-proclaimed "socialist." Wilson championed two groundbreaking ideas: the employee pension fund, which Drucker predicted would make workers the owners of American industry, and the "self-governing plant community," a direct response to Drucker's call for granting workers more autonomy. From these observations, Drucker forged his most groundbreaking insight. Tyranny thrives in a vacuum of social status and function. The well-managed organization, therefore, is not just an economic entity; it is the primary non-governmental institution capable of providing individuals with the status, function, and community that prevent the alienation on which totalitarianism feeds. Management, understood correctly, was the concrete "alternative to tyranny."

4. The Enduring Mystery of the Person

After a lifetime spent analyzing the grand ideologies that defined the 20th century, Peter Drucker’s ultimate answer to its crises lay not in a new system, but in a return to the irreducible and mysterious nature of the human person. The ideologies had failed because they were abstractions; they forgot the messy, contradictory reality of individual human beings. The way out was to recover a form of wisdom that looked unflinchingly at people as they are.

The "Pre-Modern" Wisdom

Drucker found this wisdom embodied not in great theorists, but in "pre-modern" figures. His grandmother dismissed complex economic theories with a simple analogy: a ruler cannot change its length and then claim people have grown taller. Confronted by a Nazi, she didn't argue ideology; she poked him with her umbrella and told him his swastika was as impolite as a pimple on his face—and he sheepishly removed it.

Similarly, the dynamic salon hostess Genia Schwarzwald had a profound disdain for all "isms." Her passion was for solving concrete problems. As Drucker notes, her famous salon was not just a hub of intellectual life, but a compassionate "counter-world" she created as a refuge for the "old-time liberals" and other elites who felt trapped in the "sunken city" of a collapsing Europe. When a massive strike loomed, she forcefully intervened, knocking heads together. When accused of forcing both sides to betray their principles, she delivered a line that summarized her entire philosophy: "I have no use for principles which demand human sacrifice."

Lessons from the "Men of Action"

Drucker found further proof of this principle in the practical wisdom of the bankers and businessmen he met. The banker Ernest Freedberg insisted that any system must be "'foolproof,' because work is ultimately done by fools." The retail magnate Henry Bernheim taught him that "There are no irrational customers, only lazy merchants." Their insights were a constant reminder that effective action comes from observing people's actual behavior, not from imposing abstract models upon them.

Drucker's Ultimate Insight

Drucker’s entire intellectual journey was a movement toward this fundamental truth. As a young man, he had a startling religious insight: "The opposite of Sin... is not Virtue; it is Faith." Years later, while sitting in John Maynard Keynes's legendary economics seminar, he had a professional epiphany, realizing that everyone else in the room, including Keynes himself, was interested "in the behavior of commodities," whereas he was interested "in the behavior of people."

This focus on the human person in all their complexity led him to his most profound conclusions. He came to see the problem of slavery in America not as a mere political mistake, but as a "sin"—a deep moral and spiritual wound that could only be healed by repentance and redemption. He was shaken to his core when a Black theologian argued that true freedom for Black Americans required confronting not only the sin of white oppression but also the "guilt and mystery" of their own African ancestors' role in the slave trade.

For Peter Drucker, the bystander who had witnessed the collapse of a world, the most profound social and political problems were, at their root, moral and spiritual problems of the human heart. To escape the prisons of ideology, one must have the courage to set aside the quest for perfect systems and turn instead to the difficult, humbling, and ultimately liberating task of looking unflinchingly at the full, mysterious, and often contradictory nature of the person.

On Decisions and their “Agents”

Wed, 17 Dec 2025 02:35:00 GMT

This essay was inspired by an article recently published by Karen Linkletter and Pooya Tabesh (2025). They were in search of the meaning of “decision” in the works of Peter Drucker. To this end, they used Python to identify and locate all the times the word, “decision”, came up in Peter Drucker’s oeuvre . They then characterized the contexts (“themes”) in which the word came up. The result was a nuanced but very clear characterization of the evolution of his thinking on the topic.
Here, we will focus on a key theme for Drucker: the case where your decisions involve other people’s decisions and actions . For present purposes, we can start with their statement:
One of Drucker’s valuable contributions to the literature on decision-making is his adamance that implementation be built into the decision-making process.” (Linkletter and Tabesh 2025 8) To be clear, “…it is not a surprise that his integration of implementation of and commitment to decisions is part of his process of decision-making. He argues that a decision “has not been made until it has been realized in action.” (2025 8)
The question, therefore, is how to make this happen, how to turn an organization from an aggregate of individuals whose decisions may or may not be aligned, into an agent—an entity that makes decisions, implements them, and then ascertains that what was done was, in fact, what was decided, as we try to do when making purely individual decisions.
Let’s look at the matter more closely…
A few years ago, I read a story about a road crew that was painting a double-yellow line on a highway. In their path was a dead raccoon that had been hit by a car or truck. It was lying right in the middle of the road. The crew didn’t stop. Someone later took a picture of the dead raccoon with a double-yellow line freshly painted right over it. The picture is below. It went viral on the Internet.

Think about this for a moment. The road crew doing the painting must have either worked for a state agency or for a company large enough to do business with the state government. In either case, their organization probably had a mission statement and a strategic plan. It almost surely had formal policies and procedures, a budget, and a management hierarchy spread out over several management disciplines. If it had these things in place, you could bet it had a human resources department with hiring policies, job descriptions, and a performance management process. It probably had key performance indicators (KPIs) and watched these closely. Now, think of the total of these policies, procedures, budgetary constraints, strategic objectives, and KPIs as the “business plan” of this company or agency. You can be sure that its upper management was committed to this business plan, and that the middle and lower levels were committed, too, or at least they “bought into” it.
The reality of a business plan, from the customer’s standpoint, is in the products and services they buy from the company. The customer doesn’t care about management’s intentions or their PowerPoint presentations. The customer cares about what the operating employees produce. The thoughts and actions of these people, when they’re on the job, are the truth of the company’s business plan. The real business plan of a company is whatever it is that carry around in their heads, guiding them as they work. That’s the business plan the customer sees.
So, it is reasonable to ask what was in the minds of the operators who painted over that dead raccoon in the middle of the road? Were they understaffed that day and just didn’t see the roadkill? Or did they see it, but were afraid that if they stopped moving, their feet-per-hour metric would suffer? Or were they too busy doing something else, like texting their friends, to notice that a dead raccoon was in their path? Or did they see it, but were just too lazy to stop, thinking that they could get away with it because it wouldn’t show up on management’s radar? Maybe they saw the raccoon but just painted over it because they thought it was funny. Whatever “plans” they were carrying around in their heads, those plans enabled them to paint a double-yellow line over a dead raccoon in the middle of a highway.
You can be pretty sure that the management of their company or agency wasn’t too happy about any of this, especially since they probably found out about it the way I did—on the Internet. You can be certain that they didn’t intend any of their road crews to paint dead raccoons yellow, or any other color. Somewhere, in between the company’s mission statement and the work of the road crew, there was a “disconnect.” Something fell between the cracks. The business plan formulated by management was one thing. Its reality, as lived out by at least one road crew, was another.
Drucker understood the hazards of decision-making hierarchies. His remedy, first stated in his The Practice of Management (1954), was “management by objectives” (MBO). According to it, the objectives were to be decided by supervisors and their subordinates in a conversation where both parties enjoyed a “right to speak,” with a correlative obligation to “listen.” The idea was to get the “agent”—the organization—to commit, from top to bottom, to those decisions, and to embed them, by way of the MBO process, into the work decisions of everyone. Often enough, MBO works for managers. In the best of cases, it aligns their efforts and creates a managerial esprit de corps . I searched The Practice of Managemen t—in vain—for a reference to the possibility of pushing the conversation all the way down to the operative level. That said, it would not surprise me if the managers of that road crew all had their “MBOs.” It’s just that the series of conversations didn’t go all the way to the bottom. Perhaps if it had, we would not have had that splendid photograph to guide this discussion.
The main insight I got from reading Linkletter and Tabesh’s (2025) paper is that Drucker’s theory of decision-making did not stop with the intellectual work of transforming information and strategic principles into an output called a decision. When you’re the only one making and executing a decision, it boils down to your wanting to do it and having the resources you need to get it done. It’s simple. But when you need other people to get it done, you cannot assume that their decisions will be in line with yours. Implementation is more complicated than that. Drucker realized that the “whole thing,” which includes the execution of the decision, is an essential part of the decision-making process. He found a way to make the organization into an agent , ideally in the same sense as you and I are agents, by way of his MBO. This makes an organization more than just an aggregate of individuals whose positions and names appear on an organization chart.
In this sense, Drucker’s concept was revolutionary. It can’t just be all about a smart guy making the decisions, then telling subordinates what to do, and then following up, kicking ass and taking names…unless he’s OK with the occasional line-striped roadkill.
The reader might see the example under discussion here as extreme. It is. But how many lesser versions of line-striped roadkill are there in the world of organizations, large and small? When I was a consultant, I spent about thirty years helping my clients identify and fix the root causes of many kinds of problems, which often stemmed from the disconnect between plans made at the top and their execution at the operative level, at the level where human beings make the “last turn of the screw.” The solution usually, at least in part, involved getting the operatives actively engaged in a “business planning conversation” of sorts, in which they wound up making verbal commitments in the presence of their bosses and peers. Having done so, they exerted effort to comply with the “plan.” They did this partly because they didn’t want to “look bad” to the others in whose presence they said what they should do to make things better. Nobody likes to be called out with some equivalent of “I thought you said…” But in addition, since they “spoke” the plan, they were likely to experience it “inwardly” as a personal commitment. They were co-owners of the decision. And from this commitment came an increase in efforts to do the right things for the “good of the business.” As a precondition, they needed to see that it was also good for them . That was a key part of the “sell.”
It doesn’t matter whether the operatives are assembly workers, or software engineers, or college professors. In those roles, we are all workers. Most of us want to have a seat at the table, to be taken seriously when we share our thoughts, and to have a visible impact on decisions that affect us as we do our work. We don’t want a “sense” of participation. We want the real thing. To the extent that we get that, our organizations can become agents, not just aggregates of individuals.
 Reference Linkletter, Karen and Tabesh, Pooya. (2025) A historical evaluation of Peter Drucker’s contribution to decision-making thought. Journal of Management History . DOI 10.1108/JMH-09-2024-0140.

Paul Polman: Management, Sustainability, and Stewardship as a Liberal Art

Wed, 17 Dec 2025 02:18:00 GMT

When Paul Polman became CEO of Unilever in 2009, he did not inherit a troubled company. He stepped into a large global enterprise with familiar consumer brands that sat on shelves in cities from Amsterdam to Manila. Even with that scale and reach, the business rested on foundations that were beginning to crack. Public faith in multinational firms was fading, climate change was moving from a distant worry to a financial reality, and investors were increasingly locked into the rhythm of quarterly results that encouraged short term decisions and discouraged real strategy.

Polman’s answer was surprisingly philosophical for a leader of such a company. Rather than defend profitability as the central corporate purpose, he attempted to redefine what the company was for. His response may suggest a contemporary expression of Peter Drucker’s idea of Management as a Liberal Art. Drucker described management as a moral undertaking that must be anchored in judgment, responsibility, and service, not only in efficiency or cost control.

Redefining Corporate Purpose

Soon after taking the role, Polman stunned many investors by ending quarterly earnings guidance. He went further and encouraged investors who focused only on short term returns to place their money elsewhere (Polman and Winston, 2021). The gesture appears to have been meant to reset the company’s relationship with financial markets. Drucker consistently argued that true leadership cannot be tied to the emotional fluctuations of short term financial reporting.

By refusing to follow the ninety day cycle, Polman gave Unilever enough breathing space to think about long term issues. He also sent a powerful message inside the company. Unilever would no longer place shareholder extraction above every other consideration. Drucker might say that Polman was returning management to a place where purpose and meaning had priority. Drucker had long argued that institutions must be run for durability and social legitimacy, not just for quarterly outcomes (Drucker, 1946).

The Unilever Sustainable Living Plan

In 2010, Polman introduced the Unilever Sustainable Living Plan, which attempted to grow the company while reducing its environmental footprint (Unilever, 2010). The plan contained measurable goals for carbon emissions, water use, waste, sustainable sourcing, health, hygiene, nutrition, and economic livelihoods in the supply chain (Unilever, 2018). This was not presented as charity. It was presented as the business model itself.

This approach fits well with Drucker’s view that a company must justify its existence through contributions to the common good (Drucker, 1946). Polman noted that a company serving billions of consumers could not thrive in a world marked by climate disruption, fragile supply chains, and social instability (Polman and Winston, 2021). He reframed sustainability as a competitive requirement. There are many examples of how this mindset influenced operations, such as targeted efforts to stabilize incomes for small farming communities or reduce water dependency in detergent production. Drucker would likely describe this approach as a return to institutional citizenship, which is the idea that power involves obligation (Drucker, 1989 and 1993).

Human Dignity in Management

Drucker believed that effective management is inseparable from human dignity. He argued that organizations must offer people both identity and contribution (Drucker, 1946). Polman appeared to take this to heart. Under his leadership, Unilever pushed for higher wages, safer working conditions, and expanded training programs across its vast networks of suppliers and small scale producers (Unilever, 2018).

He also shifted language in a revealing way. Polman preferred speaking about farmers and families rather than vendors and suppliers (Polman and Winston, 2021). This change hinted at a deeper moral view of business. It positioned Unilever as a partner invested in the stability of the people who provided its raw materials. That reading fits closely with the idea of management as a liberal art, which sees leadership as an act of stewardship for the growth of people, not just the supervision of tasks (Drucker, 1989).

Climate Leadership and Ethical Risk Management

Drucker warned that management cannot be reduced to engineering efficiency. Managing also requires wrestling with consequences (Drucker, 1990). Polman pressed Unilever to treat climate risk as a direct business issue. He connected environmental damage to cost volatility, to consumer trust, and to the company’s long term future. Under his leadership, Unilever accelerated its use of renewable energy, sustainable materials, lighter packaging, and lower water use in many products (Unilever, 2010 and 2018).

Polman’s climate agenda blended science, logistics, ethics, psychology, and an understanding of global politics. Drucker described this type of synthesis as central to Management as a Liberal Art. Responsible executives, he argued, must integrate many forms of knowledge into decisions (Drucker, 1989 and 1993). Polman framed sustainability as fiduciary responsibility rather than philanthropy. His influence is still visible in the way many global firms now treat environmental commitments as strategy rather than charity. This framing closely reflects Drucker’s view that corporate social responsibility must be rooted in a firm’s core mission, capabilities, and day-to-day operations rather than treated as a separate act of goodwill. By embedding sustainability into Unilever’s strategy and value chain, Polman demonstrated Drucker’s argument that responsible management integrates social obligations into how the business competes and performs, allowing ethical action and profitability to reinforce rather than undermine one another.

Reviving Stakeholder Capitalism

Polman helped restore credibility to the idea of stakeholder capitalism. He insisted that corporations must serve employees, consumers, suppliers, communities, and the environment rather than focus only on investor returns (Polman and Winston, 2021). He also pushed Unilever to evaluate brand performance partly through its social or health impact (Unilever, 2018). Under this model, brand equity included moral equity.

This aligns with Drucker’s view that corporate legitimacy must be earned and never assumed (Drucker, 1989). For Polman, consumer trust was a survival requirement. When customers believe that a firm contributes to a worsening world, the company risks losing not just reputation but also the permission to operate (Drucker, 1990).

Moral Leadership and Institutional Courage

Polman spoke in moral terms more openly than most executives. He frequently challenged governments that fell short on climate commitments and he encouraged other business leaders to adopt fair labor standards and responsible tax behavior (Polman and Winston, 2021). Drucker argued that real authority is moral before it is positional. Polman’s conduct fits that idea well (Drucker, 1989 and 1990).

Inside the company, Polman asked employees to see themselves as contributors to social improvement and not merely as managers of brands or operations (Unilever, 2010). This practice reflects MLA. Drucker believed that people should find meaning and contribution through their work, not only wages (Drucker, 1989).

Performance, Profit, and Purpose

Some critics argue that purpose oriented leadership reduces profitability. Polman countered this by pointing to performance. During his tenure, Unilever posted steady growth, especially in emerging markets, improved margins, and delivered strong long term returns (Unilever, 2018). He argued that long term value and social value reinforce one another (Polman and Winston, 2021). Drucker had long dismissed the idea that ethical leadership conflicts with economic effectiveness (Drucker, 1999).

Even with strong performance, tension remained. Certain investors disliked the refusal to play the quarterly guidance game. Some environmental advocates believed Unilever could have moved faster on issues such as plastics. Drucker never said that Management as a Liberal Art would eliminate conflict. He said that it would give leaders a moral compass for navigating conflict in a transparent way (Drucker, 1989). Polman seemed to follow that guidance by making tradeoffs visible and by emphasizing choices that protected dignity, stability, and ecological viability (Drucker, 1990).

Building a Network of Responsible Institutions

After leaving Unilever, Polman co founded Imagine, an organization that works with senior executives to accelerate progress toward the United Nations Sustainable Development Goals (Polman and Winston, 2021). This next step reinforces the idea that sustainability for Polman is a theory of governance rather than a branding strategy.

Drucker believed that modern society relies on networks of responsible institutions. These include corporations, governments, and nonprofit organizations that understand their interdependence and act accordingly (Drucker, 1946 and 1993). Polman’s post CEO work attempts to strengthen that network. He is essentially trying to rebuild the trust and cooperation among institutions that Drucker warned could erode in a fragmented society (Drucker, 1999).

The Legacy of a Modern Druckerian

Paul Polman’s leadership at Unilever provides one of the clearest contemporary examples of Drucker’s idea of Management as a Liberal Art. He treated the corporation as a civic institution rather than a simple profit generator. He wove climate stability, labor dignity, and social inclusion into the core of strategic planning. He asked brands to earn moral legitimacy. He emphasized supply chains as human communities. He took personal risks by arguing that corporations hold responsibility for the future of the planet on which their operations depend (Polman and Winston, 2021).

In Drucker’s language, Polman practiced stewardship. He demonstrated that management concerns human beings, the communities they inhabit, and the ecological systems that support them (Drucker, 1989 and 1990). In an era shaped by climate upheaval, inequality, and declining institutional trust, Polman shifted the central question. Instead of asking whether companies can afford to care, he asked whether they can survive if they refuse to care at all.

References

Drucker, P. F. (1946). The concept of the corporation. New York: The John Day Company.

Drucker, P. F. (1989). The new realities: In government and politics, in economics and business, in society and world view. New York: Harper & Row.

Drucker, P. F. (1990). Managing the non-profit organization: Practices and principles. New York: HarperBusiness.

Drucker, P. F. (1993). Post-capitalist society. New York: HarperBusiness.

Drucker, P. F. (1999). Management challenges for the 21st century. New York: HarperBusiness.

Polman, P., & Winston, A. (2021). Net Positive: How courageous companies thrive by giving more than they take. Harvard Business Review Press.

Unilever. (2010). Unilever Sustainable Living Plan. Unilever PLC.

Unilever. (2018). Sustainable sourcing and livelihoods progress report. Unilever PLC.

World Business Council for Sustainable Development. (2019). Business leadership for a net-zero economy.

From a Functional to a Free Society-- The End of Economic Man: Drucker's Diagnosis of Totalitarianism

Wed, 10 Dec 2025 19:59:00 GMT

Peter Drucker suggested that readers view his first three books as a unified body of work: The End of Economic Man(1939), The Future of Industrial Man (1942), and Concept of the Corporation (1946). These works share a common theme: politics. Drucker did not think about politics like scholars who strictly follow modern social science norms. Instead, he viewed politics as part of social ecology and understood political events through the dynamic changes in social ecology.
Despite having "corporation" in its title and using General Motors as a case study, Concept of the Corporation is indeed a book about politics. In this work, Drucker attempts to address the main issues that industrial society must resolve: the legitimacy of managerial authority, the status and function of managers and workers, and the power structure of society and organizations. In Drucker's own words, this is a book exploring the specific principles of industrial society. Corresponding to these specific social principles, Drucker had earlier attempted to develop a general social theory, which was the aim of The End of Economic Man and The Future of Industrial Man.
The subtitle of The End of Economic Man is "The Origins of Totalitarianism." The book focuses on how society disintegrates in industrial societies and how totalitarianism rises. For Drucker, the real challenge of this topic isn't explaining how Hitler and Mussolini came to power, nor the actions of Germany and Italy in government, military, and economic spheres. Rather, it's understanding why some Europeans accepted clearly absurd totalitarian ideologies, and why others seemed potentially receptive to them.
Drucker's writing style is argumentative. He clearly knew that to effectively advance his arguments, he needed to engage with popular theories of his time. Back then, there were two main explanatory approaches to Nazism and Fascism, which Drucker termed "illusions." Some viewed totalitarianism as ordinary political turmoil similar to previous historical revolutions. In their view, totalitarianism was characterized merely by cruelty, disruption of order, propaganda, and manipulation. Others considered totalitarianism a phenomenon unique to Germany and Italy, related to their specific national characters.
Drucker thoroughly refuted explanations based on "national character." He believed that any historical approach appealing to "national character" was pseudo-history. Such theories always emphasize that certain events were inevitable in certain places. But all claims of "inevitability" negate human free will and thus deny politics: without human choice, there is no politics. If the rise of totalitarianism were inevitable, there would be no need or possibility to oppose it.
Viewing totalitarianism as an ordinary revolution is equally dangerous. This thinking merely emphasizes how bad Nazis and Fascists were. But the real issue is that Europeans were not merely submitting out of fear—they were actually attracted to totalitarianism. And those attracted weren't just the ignorant masses but also well-educated intellectual elites, especially the younger generation. The world cannot defeat totalitarianism through contempt alone, especially if that contempt stems from ignorance. Understanding the enemy is a prerequisite to defeating it.
Drucker identified three main characteristics of Nazism and Fascism (totalitarianism is a social type, with Nazism and Fascism being its representatives in industrialized Europe):
1. The complete rejection of freedom and equality, which are the core beliefs of European civilization, without offering any positive alternative beliefs.
2. The complete rejection of the promise of legitimate power. Power must have legitimacy—this is a long-standing tradition in European politics. For power to have legitimacy means that it makes a commitment to the fundamental beliefs of civilization. Totalitarianism denied all European beliefs, thereby liberating power from the burden of responsibility.
3. The discovery and exploitation of mass psychology: in times of absolute despair, the more absurd something is, the more people are willing to believe it.
The End of Economic Man develops a diagnosis of totalitarianism around these three characteristics. Drucker offers a deeper insight: totalitarianism is actually a solution to many chronic problems in industrial society. At a time when European industrial society was on the verge of collapse, totalitarians at least identified the problems and offered some solutions. This is why they possessed such magical appeal.
Why did totalitarianism completely reject the basic beliefs of European civilization? Drucker's answer: neither traditional capitalism nor Marxist socialism could fulfill their promises of freedom and equality. "Economic Man" in Drucker's book has a different meaning than in Adam Smith's work. "Economic Man" refers to people living in capitalist or socialist societies who believe that through economic progress, a free and equal world would "automatically" emerge. The reality was that capitalism's economic freedom exacerbated social inequality, while socialism not only failed to eliminate inequality but created an even more rigid privileged class. Since neither capitalism nor socialism could "automatically" realize freedom and equality, Europeans lost faith in both systems. Simultaneously, they lost faith in freedom and equality themselves. Throughout European history, people sought freedom and equality in different social domains. In the 19th century, people projected their pursuit of freedom and equality onto the economic sphere. The industrial realities of the 20th century, along with the Great Depression and war, shattered these hopes. People didn't know where else to look for freedom and equality. The emerging totalitarianism offered a subversive answer: freedom and equality aren't worth pursuing; race and the leader are the true beliefs.
Why did totalitarianism reject the promise of power legitimacy? One reason was that political power abandoned its responsibility to European core beliefs. Another reason came from the new realities of industrial society. Drucker held a lifelong view: the key distinction between industrial society and 19th-century commercial society was the separation of ownership and management. The role of capitalists was no longer important. Those who truly dominated the social industrial sphere were corporate managers and executives. These people effectively held decisive power but had not gained political and social status matching their power. When a class's power and political status don't match, it doesn't know how to properly use its power. Drucker believed this was a problem all industrial societies must solve. Totalitarianism keenly perceived this issue. The Nazis maintained property rights for business owners but brought the management of factories and companies under government control. This way, social power and political power became unified. This unified power was no longer restricted or regulated—it became the rule itself.
Why could totalitarianism make the masses believe absurd things? Because Europeans had nothing left to believe in. Each individual can only understand society and their own life when they have status and function. Those thrown out of normal life by the Great Depression and war lost their status and function. For them, society was a desperate dark jungle. Even those who temporarily kept their jobs didn't know the meaning of their current life. The Nazi system could provide a sense of meaning in this vacuum of meaning—though false, it was timely. Using the wartime economic system, the Nazis created stable employment in a short time. In the Nazi industrial system, both business owners and workers were exploited. But outside the industrial production system, Nazis created various revolutionary organizations and movements. In those organizations and movements, poor workers became leaders, while business owners and professors became servants. In the hysterical revolutionary fervor, people regained status and function. Economic interests were no longer important, freedom and equality were no longer important; being involved in the revolution (status) and dying for it (function) became life's meaning. The Nazis replaced the calm and shrewd "Economic Man" with the hysterical "Heroic Man." Though absurd, this new concept of humanity had appeal. What people needed was not rationality but a sense of meaning that could temporarily fill the void.
Those theorists who despised totalitarianism only emphasized its evil. Drucker, however, emphasized its appeal. He viewed totalitarianism as one solution to the crisis of industrial society. From 19th-century commercial society to 20th-century industrial society, the reality of society changed dramatically. 19th-century ideas, institutions, and habits could not solve 20th-century problems. Capitalism could not fulfill its promises about freedom and equality, and neither could Marxism. It was at this point that totalitarianism emerged. Nazism and Fascism attempted to build a new society in a way completely different from European civilization. Drucker said the real danger was not that they couldn't succeed, but that they almost did. They addressed the relationship between political power and social power, proposed alternative beliefs to freedom and equality (though only negative ones), and on this basis provided social members with new status and function.
The war against totalitarianism cannot be waged merely through contempt. Defeating totalitarianism is not just a battlefield matter. Those who hate totalitarianism and love freedom must find better solutions than totalitarianism to build a normally functioning and free industrial society. Totalitarianism gave wrong and evil answers. But they at least asked the right questions. Industrial society must address several issues: the legitimacy of power (government power and social power), individual status and function, and society's basic beliefs. These issues became the fundamental threads in Drucker's exploration of industrial society reconstruction in The Future of Industrial Man.
The Future of Industrial Man: From Totalitarian Diagnosis to General Social Theory
Both The End of Economic Man and The Future of Industrial Man feature the prose style of 19th-century historians. Even today, readers can appreciate the author's profound historical knowledge and wise historical commentary. For today's readers, the real challenge of these two books lies in Drucker's theoretical interests. He doesn't simply narrate history but organizes and explains historical facts using his unique beliefs and methods.
In The End of Economic Man, Drucker developed his diagnosis of totalitarianism around three issues: power legitimacy, individual status-function, and society's basic beliefs. In The Future of Industrial Man, he also constructs a general social theory around these three issues. In "What Is A Functioning Society," Drucker explains three sets of tensions that exist in social ecology:

Tension between the individual and society's basic beliefs. "Society's basic beliefs" refer to two questions every society must answer: What is human? How should humans achieve fulfillment in life? Christianity provided answers to these questions, while Hinduism and Buddhism offered different answers. European society as a whole is a Christian civilization. Throughout its long history, Europeans' understanding of these two questions was shaped by Christianity. However, in different historical periods, Europeans sought their fulfillment in different social domains, leading to different "concepts of the nature of man" such as Spiritual Man, Intellectual Man, and Economic Man. Spiritual Man, Intellectual Man, and Economic Man all pursued the freedom and equality revealed by Christianity, but they sought these in entirely different domains. Thus, we have one set of tension: the tension between individuals and beliefs about human nature, with the "concept of human nature" serving as the mediator of this tension.
Tension between the individual and society, with individual status-function serving as the mediator of this tension. Traditional political philosophy often falls into debates between individualism and collectivism. Collectivism attempts to subtract the individual from society, while individualism attempts to subtract society from the individual. Drucker believes that if we use arithmetic language for analogy, the relationship between individual and society should not be subtraction but multiplication. When individuals have status-function, social life becomes meaningful. When society can bestow status-function upon individuals, it integrates social members and creates a meaningful social order.
Tension between society's basic beliefs and society itself, with power serving as the mediator of this tension. Any society needs to be organized according to specific beliefs. But beliefs alone cannot create society. What truly creates organization and order in society is power. It is real power that transforms lofty beliefs into concrete society.
The three sets of tensions interweave into a network. Within this network, each pole of tension must function for the other pole. The relationship between the two poles is a functional relationship. Their reason for existence is not themselves but the function they perform for external things. This is Drucker's basic approach to observing social ecology.
A functioning society can take many different forms because different societies uphold different beliefs. Christian societies and Hindu societies cannot be identical, but they can both be functioning societies. Regardless of how much societies differ in beliefs and appearances, a functioning society has essential elements:
Power must have legitimacy. For power to have legitimacy means that a society's dominant power (governmental power, social power) must commit to this society's basic beliefs and work according to these beliefs.
Society can bestow status-function upon individuals. Moreover, individuals' status-function aligns with society members' basic beliefs about human nature.
In a society, individuals have basic beliefs about "who am I" and "how should I exist."
A functioning society is not a "good" society or a "perfect" society. It has nothing to do with judgments like "good" or "perfect." As soon as we mention "good" or "perfect," we introduce specific value preferences. "What Is A Functioning Society" tells readers that, based on any value preference, it's possible to construct a functioning society or to make society paralyzed and disintegrate. A liberal who loves freedom, despite loving freedom, might be powerless to construct a functioning society because they cannot harness power or create visions for society and individuals.
"Free Society and Free Government" addresses how to construct a functioning free society based on belief in freedom.
Drucker's understanding of freedom belongs to the Christian tradition, not the 19th-century liberal tradition. He explains freedom from the perspective of the three sets of tensions:
Freedom exists in the tension between individuals and beliefs about human nature: "The only basis of freedom is the Christian concept of man's nature: imperfect, weak, a sinner, and dust destined unto dust; yet made in God's image and responsible for his actions." From this Christian expression of freedom, Drucker distills several elements of freedom: 1) Humans are imperfect and cannot be perfect; 2) Humans are God's creation and thus yearn for truth; 3) Humans must make choices because of their imperfection and must be responsible for their choices because they yearn for truth.
Freedom exists in the tension between individuals and society. Freedom is primarily a life experience of each individual, but individuals must live out freedom in social life. In social life, freedom is an organizational principle. Freedom as an organizational principle means allowing individuals to bear choice and responsibility. Where there is no choice, there is no freedom; where there is choice without accompanying responsibility, there is also no freedom.
Freedom exists in the tension between society and social beliefs. If a society has faith in the freedom revealed by Christianity, then the power of this society must use freedom as an organizational principle. Specifically, every society has two power centers: government power and social power. Therefore, free government and free society need to be discussed separately.
Elements of a free government: organized, legal, with defined power scope, responsible, and self-governing. Elements of a free society: In society's constructive domains, people organize actions according to the principle of "choice-responsibility." Constructive social domains refer to different social areas where people project their beliefs about freedom in different societies. In some eras, people seek freedom in religious life; in others, they seek it in economic life. Those domains that allow people to place their beliefs in them and can inspire people's courage and creativity are constructive social domains. If a society's constructive domains are organized by freedom as a principle, we can say it is a free society.
The relationship between government power and social power: A free society should have a dualistic pattern of government and society. Government is a necessary condition for society's operation. But there must be a self-governing social domain to balance it. In the 19th century, this self-governing social domain was the market. In the 20th century, Drucker believed this self-governing social domain should be commercial enterprises and social organizations.
Drucker openly acknowledges that his understanding of free government and free society derives from the Christian tradition. In his view, one crisis of political thought is that people are often unaware of the origins of their political thinking. For instance, people frequently confuse the questions of "free government" and "best government." The inquiry into "free government" stems from Christianity, while the inquiry into "best government" comes from ancient Greece. The desire to find or create the "best government" is a long-standing impulse. This idea presupposes that humans can achieve perfection. If a perfect individual or a perfect group emerges, then the government run by them would be a "perfect government." Similarly, if a perfect individual or group proposes a perfect plan or system, then a government ruling according to this plan or system would be a "perfect government."
Even in the 20th century, even in freedom-loving America, people often forget that "free government" and "best government" are two different things. Those who love democracy frequently assert that democratic government is the "best government." Of course, followers of totalitarianism also assert that totalitarian government is the "best government." Drucker says the real danger is that any obsession with the "best government" will eventually lead to enslavement. This is because illusions such as "best," "perfect," or "ultimate" deprive citizens of choice and responsibility. Freedom, however, is precisely responsible choice.
In other chapters of The Future of Industrial Man, Drucker reveals two paths to defending freedom. One path: the conservatives of 1776, starting from Christian beliefs about the human heart, explored political and social innovations in Britain and America. The other path: 19th-century liberals believed that humans could achieve perfection through their own efforts; starting from their love of freedom, they walked the path of enslavement leading to totalitarianism.
General Social Theory and Drucker's Management Science
The social ecological perspective and understanding of freedom that Drucker demonstrated in The End of Economic Man and The Future of Industrial Man run through all his political and management writings.
Key themes in his work include:
Continuously tracking new social realities, identifying decisive social powers, and exploring how to give power legitimacy.
Defending the dualistic pattern of government power and social power. Studying changes in the nature of government, answering what it should do, can do, and cannot do. Studying how to organize society, building organizational theory, and exploring the legitimacy of organizational power.
Paying attention to the interaction between social beliefs and social reality, and the interaction among technology, population, and beliefs.
Caring about individuals' status and function within organizations.
Exploring how to apply freedom as an organizational principle to organizational structure design and work design.

Drucker in the Lab: Leading Through Trust, Not Control

Sat, 15 Nov 2025 18:15:00 GMT

Last semester, two students approached me to advise their AI-based graduate projects at a time when no one else in the department was available or willing to take them on. Our department lacked sufficient faculty with software or AI specialization at the time to support the growing number of requests in this area.

I decided to take on the projects and serve as their advisor. I was honest with them from the beginning and told them that I had no prior experience in training machine learning models. Still, I said that if they were willing to put in the effort, I would learn alongside them and support them every step of the way. Both students wanted to build careers in AI, and I knew that their graduate projects could set the tone for the opportunities ahead.

I have always believed it is my responsibility to open doors for my students, even when the path ahead is uncertain.

Although I understood how the overall system architecture should be designed, I was learning the rest in real time just like them. Others advised me not to take the risk, but I believed in their determination and their right to pursue ideas they were genuinely passionate about rather than what was convenient for faculty.

Today, both students successfully demonstrated their projects, and I could not be prouder of what they had accomplished.

When I think about this experience, I am reminded of Peter Drucker’s view that leadership is not rank or privilege; it is responsibility. He often wrote that a leader’s first duty is to help others perform to the best of their abilities. That means creating conditions where people can discover what they are capable of, not directing them from above, but believing in them enough to let them try.

In this small lab moment, I saw that principle come alive. I did not have the answers, and they knew it. But leadership, as Drucker would say, is not about knowing everything. It is about doing the right thing, even when it means stepping into uncertainty.

Trust replaced control. Curiosity replaced expertise. And in that space, both students grew, and so did I.

Drucker believed the most effective organizations are those built on mutual trust, where authority is replaced by responsibility, and learning is shared across all levels. That day in the lab, I realized that education itself is one of the purest forms of management, not managing systems or people, but managing potential.

Sometimes, the best leadership lesson does not come from a management book. It comes from saying yes when it would have been easier to say no, and discovering that faith in others is the most powerful management tool of all.

Marc Benioff: Reimagining Capitalism through Management as a Liberal Art

Tue, 04 Nov 2025 01:56:00 GMT

When Marc Benioff founded Salesforce in 1999, Silicon Valley had a pretty straightforward playbook which was technological disruption at any cost. Profit, scale, and market capture dominated corporate ambition. Benioff, who worked under Steve Jobs at Apple and explored Buddhist philosophy, was not satisfied with that approach. He envisioned a company that would not only revolutionize enterprise software through the cloud but also redefine the social purpose of business itself. His leadership at Salesforce reflects Peter Drucker's concept of Management as a Liberal Art (MLA). This idea holds that management is not just about efficiency or growth, but about making work human, creating meaning, and building institutions that serve society (Drucker, 1989).

Philanthropy as Structure

From Salesforce’s inception, Benioff took an unusual approach. He instituted the “1-1-1 model”, pledging one percent of company equity, product, and employee time to philanthropy. This simple yet radical idea embedded social responsibility into the company’s DNA, ensuring that business success translated into community benefit (Salesforce, 2021).

Peter Drucker made a similar point in The Concept of the Corporation (1946). He argued that companies cannot operate as "islands of profit" detached from their communities. Benioff's model, now replicated worldwide through the Pledge 1% movement, demonstrates that corporate citizenship can be institutionalized, not just idealized.

By formalizing philanthropy as part of corporate structure rather than discretionary charity, Salesforce gave proof to Drucker’s claim that companies can serve as stabilizing social institutions.

Human-Centered Leadership

Drucker emphasized that management is a humanistic discipline requiring both knowledge and self-awareness. Benioff has consistently modeled this through self-reflection and moral grounding. As a long-time advocate of mindfulness and meditation, he integrates spiritual awareness with corporate purpose. In Trailblazer (2019), Benioff reflects on how introspection informs strategic clarity and ethical leadership.

Compassion is a core managerial value for Benioff. This aligns with Drucker’s insistence that good leaders must "engage the whole human being," acknowledging both rational capability and emotional complexity. In cultivating mindfulness as an organizational practice, Benioff turns what Drucker called “self-knowledge” into a shared institutional expectation, not a private exercise.

Stakeholder Capitalism in Practice

Perhaps Benioff’s most significant Druckerian contribution is his public challenge to shareholder primacy. As a high-profile advocate of stakeholder capitalism, he has urged fellow executives to view not just investors, but also customers, employees, communities, and the planet as legitimate stakeholders in corporate decision-making. Drucker anticipated this shift in 1999 when he argued that institutions must balance individual rights with broader social responsibilities, and that leadership must be anchored in moral purpose rather than short-term gain.

Benioff operationalized this at Salesforce by making equality, climate action, and community impact strategic priorities alongside financial metrics. Salesforce has built environmental and social-impact objectives into its leadership accountability and public reporting, positioning those outcomes as core measures of performance rather than PR exercises. In Drucker's terms, this marks a shift from a purely economic mandate to an explicitly ethical one.

Building a Meaningful Culture

At Salesforce, Benioff’s internal culture emphasizes equality, diversity, and trust. His mantra of “Ohana” a Hawaiian term for family defines the company’s social ethos. Through listening sessions, employee councils, and direct engagement with staff, Benioff attempts to cultivate what Drucker would call a functioning institution: a place where individuals are offered both status and function, and where they derive meaning through active contribution.

One concrete expression of this philosophy is Salesforce’s repeated company-wide pay equity audits. The company has publicly acknowledged compensation gaps across gender and race and then allocated millions of dollars to close them. This reflects Drucker’s view that organizations must respect human dignity and align personal fulfillment with collective mission. Benioff’s conviction that fairness can be measured and corrected turns theory into everyday management practice.

Balancing Technology and Humanity

In Post-Capitalist Society (1993), Drucker identified the rise of the knowledge worker as a defining feature of modern institutions. Salesforce, as a platform for digital collaboration across sales, service, marketing, analytics, and commerce, is organized around those workers. But Benioff’s management philosophy resists the idea that productivity can be reduced to code and dashboards. He argues that innovation begins in empathy and trust, not automation, which echoes Drucker’s warning that management cannot dissolve into technique.

At the same time, Salesforce has embraced artificial intelligence through Einstein GPT and autonomous AI agents to automate routine tasks. While this automation has replaced certain roles, Benioff has publicly insisted that human connection remains irreplaceable in high-value work such as enterprise sales, and Salesforce is simultaneously hiring thousands of additional salespeople.

By automating repetitive tasks while elevating distinctly human work, Benioff is enacting Drucker’s belief that technology must remain subordinate to judgment, responsibility, and moral purpose (Drucker, 1990). His leadership has also demonstrated Drucker’s axiom that effective management requires balancing continuity with change.

Continuity and Change

Over two decades, Salesforce has evolved from a single product - customer relationship management delivered via the cloud - to a global platform ecosystem spanning analytics, integration, AI, collaboration, and industry-specific solutions. Yet it’s core values; trust, customer success, innovation, and equality have remained remarkably consistent.

The COVID-19 pandemic highlighted this balance. Salesforce mobilized its logistics network and relationships to support public health responses, sourced and donated medical equipment, and repurposed internal systems to help governments and hospitals. Simultaneously, it accelerated digital transformation for its customers, positioning the company as both economic actor and civic partner. This is management serving society not just stakeholders.

Moral Stewardship and Systems Thinking

A key aspect of Drucker’s MLA is its interdisciplinary nature. He describes management as a liberal art because it must draw on ethics, psychology, economics, history, and even theology to exercise wise judgment (Drucker, 1989).

Benioff exemplifies this approach. He openly blends spiritual language, social justice arguments, civic activism, and technology strategy. He links corporate tax policy to homelessness and public health, climate action to fiduciary duty, and workforce equity to innovation capacity.

This is not accidental rhetoric. It is an attempt to widen the frame of what “business leadership” is allowed to talk about. And in doing so, Benioff turns the CEO role into something closer to what Drucker called moral stewardship: the active use of organizational power to strengthen society’s fabric.

A Model for the 21st Century

Drucker argued that a functioning society depends on institutions that foster responsible citizenship, provide meaningful work, and accept obligations beyond profit. Salesforce’s global initiatives illustrate this principle. Its Climate Action Plan, net-zero commitments, LGBTQ+ advocacy, and Pledge 1% expansion reinforce that corporations can be both market leaders and social institutions. Benioff sees business as a primary vehicle for delivering resources, talent, and problem-solving at scale to communities.

Marc Benioff’s work at Salesforce is one of the clearest contemporary examples of Management as a Liberal Art. Through empathy, ethical reflection, institutional responsibility, and systemic awareness, Benioff has redefined 21st century management. Like Drucker, he views organizations as moral communities’ arenas for both performance and purpose. In an era of automation, widening inequality, and environmental crisis, Benioff believes that capitalism can be rehabilitated, but only if leaders understand management not as control, but as stewardship.

The liberal art of management is not an outdated ideal; it is a living practice and essential for the legitimacy of business itself.

 References

Benioff, M. (2019). Trailblazer: The power of business as the greatest platform for change. Currency.

Drucker, P. F. (1946). The concept of the corporation. New York: The John Day Company.

Drucker, P. F. (1989). The new realities: In government and politics, in economics and business, in society and world view. New York: Harper & Row.

Drucker, P. F. (1990). Managing the non-profit organization. New York: HarperBusiness.

Drucker, P. F. (1993). Post-capitalist society. New York: HarperBusiness.

Drucker, P. F. (1999). Management challenges for the 21st century. New York: HarperBusiness.

Salesforce. (2021). Philanthropy and the 1-1-1 model. https://www.salesforce.com/company/philanthropy/

Drucker on Soft Power

Tue, 04 Nov 2025 01:53:00 GMT

What is Soft Power?

A relatively new concept in the field of leadership is soft power. The term was coined in 1990 by Joseph S. Nye, a leading architect of U.S. foreign policy for six decades. He worked for two U.S. presidents and served as dean of Harvard’s Kennedy School of Government for a decade. Nye believed that whatever helped the world helped the United States. Soft power refers to an organization’s or country’s ability to influence others through attraction rather than coercion or payment. A good example is the aid that the United States gives to other poorer nations to alleviate disease, hunger, poverty, and illiteracy. Nye also discussed “smart power,” which involves using both hard power (military or political might) and soft power. (Nye, 1990). In furtherance of a more peaceful world, the question is whether we want leaders who are oblivious to the effectiveness of soft power and instead use hard power to coerce, threaten, and force people, or leaders who use both soft and hard power to help people. In the short term, hard power typically prevails over soft power, but in the long term, soft power often prevails. Hard power is a short-term solution, whereas soft power has long-lasting results. (Nye, 2025).

Clearly, soft power can be more effective for accomplishing goals in many circumstances. However, there are times when hard power can be used in conjunction with soft power — the concept known as smart power — to be more effective in influencing the behavior of others. Sometimes people are attracted to or intimidated by threatening or bullying behavior (hard power). In this case, hard power is more effective because people fear the negative consequences of speaking out against the people in power (Tanis et al. 2025). An example of the failure of hard power can be seen in the United States’ invasion of Iraq in 2003, intended to limit terrorism. The invasion itself, along with brutal images of Abu Ghraib prison and the imprisonment of suspected terrorists in Guantanamo Bay Prison without any due process, was shown to increase the recruitment of more terrorists (Nye, 2008). Another example of potential real-life consequences of a leader choosing between hard power and soft power is reported in Foreign Policy Magazine (2025): Joseph Nye was dismayed that the new administration in Washington was using the hard power tactics of threatening, bullying, and ordering, along with canceling the soft power accomplishments of U.S. foreign aid programs. He predicted that they were ceding a United States-led world to one dominated by China, because China understands the potential of soft power. Apparently, the current administration does not.

Veteran journalist Andreas Kluth (2025) notes that the United States Agency for International Development (USAID) is one of the most effective examples of the United States' soft power. It is best known for its humanitarian efforts to combat AIDS, malaria, and starvation abroad. It is estimated that without the work of USAID, an additional 14 million deaths will occur in the next five years. Almost as bad as the deaths is that the goodwill created in numerous foreign countries will be gone. Kluth and the United States Senate Foreign Relations Committee (2025) are concerned that China will be stepping into the void of losing USAID. They warn that China now has more soft power than the United States and outspends the United States in foreign aid 40 to 1 in its pursuit of world domination (Kluth 2025). In this regard, Blanchard and Lu (2012) point out a weakening of U.S. soft power since the terrorist attacks of September 11, 2001, the US invasion of Iraq, and continuing unilateralism of the United States.

Peter Drucker

Drucker was born in Vienna, Austria, in 1909, and as a young man witnessed Europe being taken over by the totalitarian, fascist regime of Adolph Hitler starting in the mid to late 1920s and Hitler’s being elevated to Chancellor of Germany in 1933. Drucker knew firsthand that totalitarianism hurts people, and he spent much of his life analyzing its causes and cautioning people against it. According to Drucker, people will not willingly allow their country to become totalitarian if society gives all people status, dignity, respect, and a meaningful place in society. Drucker called this a functioning society. He advocated for a people-centric approach in leadership, where people were given autonomy and no one was left behind or abandoned by society.

Although Peter Drucker did not use the term "soft power," upon examining his writings and life’s work, it is clear that he preferred the use of soft power over hard power. His classic invention of Management by Objectives, which gives employees considerable autonomy, is a prime example of soft power (Drucker 1954). He felt that companies had a social dimension as well as an economic purpose (Drucker 1942). He wanted companies to treat workers as an important resource, rather than solely as a cost (Drucker 1993). Drucker would disapprove of the most powerful democracy in the world ceding its world leader status to a totalitarian country, China. The fear is that China being seen as the world leader might influence or encourage other countries to allow dictatorial and autocratic governance (Shlapentokh 2021).

Bardy et al. (2010), in their study of Peter Drucker and ethics in the United States and Europe, posit that Drucker’s good ethics in business efforts ensure that society is being served and that change efforts are successfully brought about by adhering to Drucker’s discourse and right behavior. They said that Drucker was caring and ethical in his treatment of managers and employees, much like a leader who prefers soft power. Drucker was quoted as quoting William Norris; “The purpose of a business is to do well by doing good” (p. 539). Showing his preference for doing good for people demonstrates care ethics (Coorman, 2025), which is mostly what soft power is entails.

Conclusion

Peter Drucker is renowned for his ability to predict future trends in various domains, including business, economics, and society (Cohen, 2012). Currently, the world seems to be at a crossroads: Will democracy survive? Will we learn how to communicate with each other? We need to remember the wise and ethical teachings of Peter Drucker, especially on the effectiveness of using soft power. Drucker’s blend of practical management advice with profound ethical underpinnings underscores his status as a thought leader who not only understood the mechanics of management but also engaged with the moral implications of leadership within complex societal frameworks.

References

Bardy, R. & Rubens, A. (2010). Is There a Transatlantic Divide?: Reviewing Peter F. Drucker’s Thoughts on Ethics and Leadership of U.S. and European Managers. Management Decision. Vol. 48. Iss. 4. 528-540. DOI:10.1108/00251741011041337.

Cohen, W. (2012). Drucker on Marketing: Lessons from the World’s Most Influential Business Thinker. McGraw Hill.

Coorman, L. 2025. Soft Power. Master’s Thesis. Indiana University, Herron School of Art and Design. 2025. https://hdl.handle.net/1805/50513

Drucker, P, (1942). The Future of Industrial Man. Mentor Book/New American Library.

Drucker, P. (1954). The Practice of Management. Harper & Row.

Drucker, P, (1993). The Concept of the Corporation. Routledge.

Kluth, A. 2025. How the U.S. is Making China Great Again. The Week. Iss. 12. Aug 2, 2025.

Nye, J. (1990). Bound to Lead: The Changing Nature of American Power. Basic Books.

Nye, J. (2008). Soft Power. Leadership Excellence. Vol. 25. Iss. 4. April 2010.

Nye, J. 2024. Invest in Soft Power. Foreign Policy. Sept. 9. https://foreignpolicy.com/2024/09/09/us-soft-power-culture-political-values-democracy-human-rights/

Nye, J. (2025). Obituary. Los Angeles Times, 5/21/25 p. 11.

Shlapentokh, D. 2021. Marxism and the Role of the State in the Soviet and Chinese Experience. International Journal of China Studies. Vol. 12. Iss. 1. (Jun. 2021) 157-186. https://2q21dwppn-mp03-y-https-www-proquest-com.proxy.lirn.net/scholarly-journals/marxism-role-state-soviet-chinese-experience/docview/2565686898/se-2.

Tanis, F. and Emanuel, G. 2025. To Speak or not to Speak: Why Many Aid Groups are Silent about the Trump Cuts. NPR Weblog Post. August 1, 2025. https://www.proquest.com/abitrade/blogs-podcasts-websites/speak-not-why-many-aid-groups-are-silent-about/docview/3235492953/sem-2?accountid=150887

Alexis de Tocqueville and The Future of Democracy: Part III

Wed, 20 Aug 2025 02:52:00 GMT

Previously, I shared de Tocqueville’s concept of equality of condition and how it is manifesting in today’s perception that democracy has failed to deliver on its promise of economic and social equality for all. Promises of economic equality are impossible to fulfill; but democratic societies can and should offer all of their members dignity and a sense of purpose. In this final installment, I’ll share de Tocqueville’s prescriptions for shoring up the institutions of a democratic society – as well as some of his warnings about challenges that democracies face.

Tendency Towards Strong Authority

According to de Tocqueville, the love of equality found in democracies leads to a tendency towards favoring strong, centralized governmental power. As conditions become more equal, “individuals seem of less and society of greater importance” (Tocqueville, 1835, p. 290). This leads to what he refers to as “uniformity of legislation”: the belief that laws and rules should be applied uniformly to everyone across society. Nuance and complexity are lost, and individual difference is subsumed to a concept akin to Rousseau’s General Will (which Drucker treated with the utmost disdain). The United States that de Tocqueville visited was still relatively rural and homogenous in 1830, but there certainly were tensions brewing with respect to slavery, the role of women in society, and the balance between manufacturing and agriculture in the economy. Today, the United States at times stresses the importance of strong federal power, usually to assert law and order or negotiate with other sovereign nations, but at other times lauds the role of individuals having a voice in state and local matters, such as educational curriculum and budgetary control. This tension between the desire for central authority and states’ rights has a long history and continues to impact legislative and other matters.

Role of the Judiciary

De Tocqueville holds up the Constitution as an exemplary system of checks and balances to counter this tendency towards the power of the “despotic majority.” James Madison famously warned of “tyranny of the majority” in his Federalist Paper Number 10. De Tocqueville favored the system of federalism, which limited the powers of the federal government to those functions that were best suited to a central power and delegated the rest to the states. He stated that this allowed “the Union to combine the power of a great republic with the security of a small one” (Tocqueville, 1835, p. 299). De Tocqueville was particularly impressed with the power given to the judiciary in the United States. He wrote extensively on our system of trial by jury, arguing that serving on a jury was a form of legal education for everyday people, and thus an important part of understanding the workings of the legal process enshrined in the Constitution. The judiciary, he said, “check and direct the impulses of the majority without stopping its activity” (Tocqueville, 1835, p. 299).

The role of the courts in the United States today is under challenge. Recent Supreme Court decisions have ceded the power of that body over the executive branch (see Trump v. CASA and Trump v. United States). However, federal courts continue to function to “check and direct” questionable actions through injunctions. Globally, an independent judiciary is seen as crucial to counter rising authoritarianism (Satterthwaite, 2022).

The Art of Association

Alexis de Tocqueville was fascinated by Americans’ affinity for local action. As a member of the French aristocracy, this was completely foreign to him. He observed Americans participating in local government, clubs, religious congregations, and reform organizations. He used New England as a model, remarking that the system instituted under Puritan rule (which involved self-government and autonomy) fostered a strong sense of local activism: “The New Englander is attached to his township not so much because he was born in it, but because it is a free and strong community, of which he is a member, and which deserves the care spent in managing it” (Tocqueville, 1835, p. 66). Because local action bonded people to one another (in Drucker’s words, provided status and function), they feel a sense of purpose. This “art of association” that Americans demonstrated to de Tocqueville countered the tendency towards negative individualism and the despotism of the majority that he feared.

Many authors have documented the increasing atomization of society and subsequent loss of social mixing that was the hallmark of American public life (see Galbraith, The Affluent Society, Putnam, Bowling Alone, and Bishop, The Big Sort). The rise of social media has only increased this tendency. To counter this reality, radio and television commentator Michael Smerconish created “The Mingle Project”, a series of events bringing diverse groups of people together to discuss topics of interest.

Free Press

De Tocqueville is well-known for advocating for a free press. It is, in fact, one of his core tenants of a functioning democracy: “to suppose that they [newspapers] only serve to protect freedom would be to diminish their importance: they maintain civilization” (Tocqueville, 1835, p. 111). While he acknowledges the existence of “junk news”, he argues that there is much more good information than bad. De Tocqueville was particularly impressed with the wide range and number of newspapers available, particular smaller news outlets. As the primary information source of that era, newspapers allowed people to not only stay current on politics, but also to know of events they could attend. Perhaps most importantly, a free and diverse press sheds light on government, creating yet another possible guardrail against abuses of power.

There is substantial research on the impact of declining local news, showing that it contributes to political polarization, lack of voter engagement, and reduced accountability in the public sector (see The state of local news and why it matters, American Journalism Project, https://www.theajp.org/news-insights/the-state-of-local-news-and-why-it-matters/). Declining circulation and advertising revenues have resulted in the closure of thousands of local media outlets despite the fact that most Americans have positive impressions of local journalists. Furthermore, fewer Americans are paying attention to local news, and the majority prefer to get their news from online forums such as Facebook or Nextdoor (Shearer et al., 2024).

De Tocqueville’s Warnings

It is clear that de Tocqueville saw rule of law, vibrant local organizations, and a healthy fourth estate as counterbalances to the tendency towards despotic rule by the majority and centralized power in democracies. He furthermore warned against two specific threats to democracy: capitalism’s ability to create a permanent social underclass, and citizen apathy.

A Manufacturing Aristocracy

In 1830, America’s economy was beginning its transition from one based on agriculture to one driven by industry. That transition would accelerate after the Civil War, but de Tocqueville remarked on the transformation that he saw during his visit. He was most concerned, however, with industrialization’s impact on society. As manufacturing became more specialized and routinized, the work itself became more mundane and unfulfilling; de Tocqueville describes to a tee what Karl Marx and Friedrich Engels would a decade or so later describe as “alienation of labor”: “as the workman improves, the man is degraded” (Tocqueville, 1835, p. 158). Spending twenty years “making heads for pins” leaves the worker no room to exercise any curiosity or intelligence; instead, the worker is assigned “a certain place in society, beyond which he cannot go” (Tocqueville, 1835, p. 159). At the same time, manufacturing “raises the class of masters” to the point where worker and owner have nothing in common. Each fill a position that is fixed, and they are dependent upon each other. This, de Tocqueville argues, is an aristocracy. The creation of a “permanent inequality of conditions”, he claims, would spell the demise of democracy. History has shown his analysis to be sound.

The Work of Democracy

De Tocqueville described the slow delegation of decision making over everyday events from the individual to the state. People, he said, had two conflicting desires: “the want to be led, and they wish to remain free.” In order to fulfill both of these desires, they elect governments democratically but then surrender to “administrative despotism” in the form of rules and regulations that slowly erode individual decision making over matters (Tocqueville, 1835, p. 319). This is another byproduct of equality of conditions; if everyone is the same, then rules can apply to every aspect of life without considering individual circumstances. But of course, this is not the case, and so expanding limitations on judgment, de Tocqueville argues, reduces the ability of democratic citizens to think for themselves. In essence, he is warning that democratic governance requires engagement, involvement, and faith in people’s ability to govern themselves. Otherwise, democracies will simply become administrative tyrannies where the tyrants are duly elected.

Conclusion

Benjamin Franklin famously responded, when asked what kind of government the Constitutional Convention had created, “A Republic, if you can keep it.” His comment captures the fragility of this form of government, and the responsibilities it construes on its citizens. Alexis de Tocqueville’s observations and warnings send a similar message to us. We have a responsibility to ensure that fair-minded journalism, judicial equity and oversight, and meaningful social and civic engagement are part and parcel of our democratic system of governance. If we fail to pay attention to the warnings from those who were closest to the early stages of democracy’s development, we stand a fair chance to lose what we have been bequeathed.

Sources

Bishop, B. (2008). The big sort: Why the clustering of like-minded America is tearing us apart. New York: Houghton Mifflin Harcourt.

Galbraith, J.K. (1958). The affluent society. New York: Houghton Mifflin Company.

Putnam, R. (2000). Bowling alone: The collapse and revival of American community. New York: Simon and Schuster.

Satterthwaite, M. (2022). The role of an independent judiciary in protecting rule of law. Asia Pacific Justice Forum, World Justice Project, Dec. 8-9, https://worldjusticeproject.org/news/role-independent-judiciary-protecting-rule-law.

Shearer, E. et al. (2024). Americans’ changing relationship with local news. Pew Research Center, https://www.pewresearch.org/journalism/2024/05/07/americans-changing-relationship-with-local-news/.

Tocqueville, A.D. and Reeve, H. (1835). Democracy in America. London: Saunders and Otley, to 1840.

The Great Professional Recalibration: Rethinking Work in the Age of Autonomy and AI

Sat, 05 Jul 2025 20:46:00 GMT

Over the past two decades, there has been a discernible shift in the professional workforce. Increasingly, individuals have chosen to leave traditional corporate environments in favor of smaller ventures, entrepreneurial efforts, and purpose-driven careers. This migration has been fueled by a desire for greater autonomy, meaningful impact, and freedom from the rigidity of hierarchical organizational structures. As the world continues to undergo sweeping changes—economic, technological, and social—professionals are finding themselves at a crossroads. The COVID-19 pandemic only accelerated this reckoning, forcing people across industries to reevaluate their relationship with work, identity, and independence.

The professional exodus from corporate life is not a recent phenomenon, but it has intensified in recent years. Many highly skilled workers have become disenchanted with the often impersonal, bureaucratic nature of large institutions. For them, entrepreneurship and freelance work offer not only flexibility but a deeper connection to their values and aspirations. As Peter Drucker once noted, “People in any organization are always attached to the obsolete” (Drucker, 1999). Drucker was warning leaders of the dangers of complacency, yet his observation applies equally to workers who find themselves trapped in stale roles. The increasing appeal of non-traditional career paths stems from the recognition that fulfillment often comes from impact and ownership—not just a paycheck or job title.

The rise of the gig economy and remote work culture further legitimized this shift. Platforms like Upwork and Substack enabled professionals to monetize their expertise without needing corporate infrastructure. Indeed, even before the pandemic, scholars observed a growing "entrepreneurial revolution" in the workforce, driven by digital tools that made self-employment more accessible than ever before (Kuratko et al., 2015). For professionals seeking meaning and control, starting their own ventures or joining mission-driven startups has been an increasingly viable—and attractive—alternative.

Then came COVID-19, a global shock that radically disrupted labor markets and workplace norms. Millions were sent home from their offices overnight. What was initially a crisis turned into a catalyst for reevaluation. Working from home blurred the lines between professional and personal life, giving people more agency over their schedules and environments. Freed from long commutes and office politics, many professionals found a renewed sense of balance, albeit under challenging global conditions.

However, the post-pandemic “return to normal” did not unfold as many employers had expected. Calls to return to the office were met with resistance, skepticism, and in some cases, outright refusal. Workers had experienced an alternative mode of professional life—one where they could maintain productivity while also caring for families, managing personal responsibilities, and safeguarding their mental health. This prompted many to ask, “What is the value of my independence?” and “Is it worth it, professionally and personally, to return to a traditional office setting?”

These questions are not merely emotional—they are deeply strategic. As professionals assess the opportunity costs of returning to office-based roles, they are evaluating more than logistics. They are reconsidering their identities, long-term goals, and the environments in which they thrive. The desire for autonomy is no longer a fringe sentiment; it is becoming mainstream. Research has found that flexibility in where and when people work is now one of the top three factors employees consider when evaluating job opportunities. In essence, the pandemic has recalibrated professional expectations.

But this inflection point is compounded by another seismic force: the rapid advancement of technology, particularly automation, robotics, and artificial intelligence (AI). Organizations are investing heavily in these tools, not only to increase efficiency but to future-proof their operations in the face of economic uncertainty and global competition. According to Brynjolfsson and McAfee (2014), we have entered a "Second Machine Age" in which intelligent systems will increasingly complement or even replace human labor in areas once thought to be uniquely human—such as decision-making, language processing, and customer service.

The implications for professional workers are profound. Some roles will be augmented by AI, while others may become obsolete. New positions will emerge that require a different blend of technical acumen and human-centric skills such as creativity, empathy, and systems thinking. Professionals will need to engage in continuous learning and adaptation—a concept Drucker repeatedly emphasized. In his view, “the most important contribution management needs to make in the 21st century is...to increase the productivity of knowledge work and knowledge workers” (Drucker, 1999). If organizations are to remain competitive and workers are to remain relevant, both must embrace lifelong learning and agility.

However, the technological evolution also raises existential questions: If machines can do our jobs better, faster, and cheaper, what role is left for the human professional? This challenge is not just about economics or efficiency—it is about identity. For many, work is deeply intertwined with self-worth and social contribution. As technology disrupts established career paths, professionals are grappling with how to redefine themselves in a world where expertise alone may no longer guarantee stability or status.

This is where the human elements of autonomy, purpose, and adaptability come to the forefront. Drucker argued that in times of great change, continuity must be preserved—not by clinging to the past, but by reaffirming values and mission. “The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic” (Drucker, 1980). For professionals today, yesterday’s logic might mean chasing promotions, adhering to outdated career ladders, or subordinating personal needs to corporate loyalty. But these paradigms are eroding, and a new model is emerging—one that emphasizes contribution over conformity.

Balancing continuity and change is especially difficult now, as traditional structures crumble and new models have yet to fully coalesce. Work-life balance, once a fringe discussion, is now central to workforce planning and professional decision-making. Yet as personal agency expands, so too does the burden of choice. The options are plentiful—remote roles, fractional work, entrepreneurship, consulting—but each path requires trade-offs in terms of income security, community, and long-term stability.

Management scholars like Mintzberg (2009) have long argued that human development—not just economic output—should be the goal of management. In this light, the current workforce shift is not just a labor trend, but a broader cultural movement. Professionals are asking, “How can I live a good life?” not simply, “How can I make a living?” And companies, if they wish to retain top talent, must begin to answer that question too.

Moreover, as technology and autonomy redefine the contours of work, leadership itself must evolve. Traditional command-and-control models are ill-suited for managing decentralized, empowered teams. Leaders must instead become facilitators of meaning, culture, and collaboration. As Goleman (2000) demonstrated, emotional intelligence—self-awareness, empathy, and social skill—is now as important as technical ability in driving team performance and retention. The shift toward purpose-driven work, coupled with the rise of distributed teams, demands a new kind of leadership—one that is human-centered and responsive.

We are witnessing a great professional recalibration—a deep and ongoing reexamination of what work means, how it is structured, and what it should achieve. The convergence of post-pandemic recovery, technological disruption, and rising demand for autonomy has created both anxiety and opportunity. Professionals are no longer passively accepting predefined roles; they are actively shaping their careers to align with their values, lifestyles, and aspirations. As Drucker predicted, the most successful organizations—and individuals—will be those who embrace both change and continuity, leveraging technology while preserving the human essence of work. The road ahead is uncertain, but one thing is clear: the age of the autonomous professional is here, and it is reshaping the world of work as we know it.

References

Brynjolfsson, E., & McAfee, A. (2014). The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. W. W. Norton & Company.

Drucker, P. F. (1999). Management Challenges for the 21st Century. Harper Business.

Drucker, P. F. (1980). Managing in Turbulent Times. Harper & Row.

Goleman, D. (2000). Leadership That Gets Results. Harvard Business Review, 78(2), 78–90.

Kuratko, D. F., Morris, M. H., & Schindehutte, M. (2015). Understanding the dynamics of entrepreneurship through framework approaches. Small Business Economics, 45(1), 1–13.

Mintzberg, H. (2009). Managing. Berrett-Koehler Publishers.

Alexis de Tocqueville and The Future of Democracy: Part II

Sat, 21 Jun 2025 16:48:00 GMT

In Part I of this series, I gave a brief overview of Alexis de Tocqueville’s background and project of evaluating American Democracy in the early 19 ^th century. In this new installment, I’d like to share de Tocqueville’s observations about the nature of equality in America and how what he saw might help us understand some of the challenges democracies face today.

When de Tocqueville visited America in 1830-1831, the young nation was in the process of redefining equality both in social and political terms. As I noted earlier, the election of Andrew Jackson as president coincided with the expansion of suffrage to not just propertied white males, but to virtually all free white men. This was because as time passed from the founding of the nation in 1789, large property holdings were broken up and passed onto heirs (something de Tocqueville himself noted). In the younger frontier states, and even in the original colonies, governance required broader participation of the electorate. When the founders crafted the United States’ Constitution, they did not envision a democracy that involved a citizenry of the majority (and certainly not women or people of color).

While de Tocqueville has much to say about the political conditions in America, it is his commentary on the social ramifications of this changing nature of equality that is most fascinating (and, perhaps, particularly instructive for us today). As wealth was distributed from the few to the many, the concept of a wealthy propertied class began to fade away. This development was exacerbated by the growth in early industry in the East (notably textile manufacturing) which fueled a rising middle class in the cities. As de Tocqueville notes, the early landed gentry families had all but disappeared as their children became doctors, merchants, and lawyers, “commingled with the general mass.” As a result, he comments, Americans embraced a “middling standard” with respect to education and social station. We continue to see echoes of this as most Americans today would claim to be “middle class” even though it is statistically impossible for everyone to be in the “middle.”

Throughout his Democracy in America, de Tocqueville argues that the democratic obsession with equality has dramatic social and cultural consequences. What de Tocqueville refers to as “equality of condition” is not actual equality, but the belief in its primacy as an organizing principle for society. The concept of a meritocracy, where one rises or falls by one’s own efforts rather than by virtue of birth status or family heritage, was increasingly part of American culture by the 1830s; the concept of the “self-made man” was enshrined in popular culture from Benjamin Franklin’s work through the Horatio Alger stories of the 19 ^th century. De Tocqueville observed that this insistence on self-making, on individual achievement, rips at the social fabric of relationships and interconnectedness. Individualism leads a person to “sever himself from the mass of his fellows” and leave “society at large to itself” (98). As one can no longer distinguish oneself in society by position or family status, one must now achieve individual success or power in order to ‘be someone’. This is a byproduct of equality of condition, because as de Tocqueville argues, no person really wants to be the same as everyone else. Deep down, no one truly desires absolute equality on a social level. The question is: how does someone achieve, in Drucker’s terms, status and function if the old order of aristocracy and class structure is swept away? That was one of the primary questions that De Tocqueville pondered as he studied the emerging American Democracy of the early 1800s.

One of the manifestations of the desire for status and function in a society obsessed with equality of conditions is an increasing focus on material success. De Tocqueville was fascinated by the “restlessness” with which Americans lived in such prosperity. This is one of my favorite passages from Democracy in America:

In the United States a man builds a house in which to spend his old age, and he sells it before the roof is on; he plants a garden and lets it just as the trees are coming into bearing; he brings a field into tillage and leaves other men to gather the crops; he embraces a profession and gives it up; he settles in a place, which he soon afterwards leaves to carry his changeable longings elsewhere. If his private affairs leave him any leisure, he instantly plunges into the vortex of politics; and if at the end of a year of unremitting labor he finds he has a few days’ vacation, his eager curiosity whirls him over the vast extent of the United States, and he will travel fifteen hundred miles in a few days to shake off his happiness. Death at length overtakes him, but it is before he is weary of his bootless chase of that complete felicity which forever escapes him.

De Tocqueville describes what we have, in various periods of time, called “keeping up with the Joneses” or “keeping pace” – the desire to match or supersede others’ social status and lifestyles. When the old systems of class stratification disappear, economic success often becomes a marker of achievement in democratic societies. This leads to not just consumerism, but also the “disquietude” that De Tocqueville noticed. Nothing is ever good enough, because one is always measuring oneself against the prosperity of neighbors, co-workers, and associates. Time is short, and “anxiety, fear, and regret” occupy the mind as we worry about what we are missing out on and what we haven’t achieved.

As we think about current modern democratic societies, we can see how this obsession with equality of condition and its associated pressures on the need for status and function have only become more exaggerated. De Tocqueville’s work paved the way for Drucker’s argument against an “Economic Man”: a promise of equality based on either a capitalist or socialist system. Socioeconomic equality is not only impossible; it runs against human nature. Furthermore, Drucker’s theory of a knowledge society, a society based on education and knowledge as capital, makes this even more complicated. The more educated people not only make more money, but they also wield more influence politically and socially. Drucker saw this as early as the 1950s, but it is more obvious today. Now, democratic societies face the perception of an elite ruling class in government, academia, business, and other institutions. The “us” vs. “them” mentality pits this elite class against “the middle” – the average person who feels neglected and missing out, “weary of his bootless chase.” Because we have embraced equality as a passion, democracies are perceived as failures in their ability to uphold the promise of economic and social equality for all. The result is a global rise in populism, a rage against the elite establishment, and a desire to tear down institutions. We have seen this play out in political developments in Poland, Italy, Germany, and the United States.

What is the solution to this predicament? Should we not pursue equality? Drucker made the case that free societies needed to provide avenues for status and function for all of its members, which meant that economic success and educational achievement could not be the only avenues for being part of society. If a portion of society sees itself as outcasts, as unable to ‘be someone’ or contribute meaningfully, they will perceive that democratic institutions have failed them. The only way for democratic societies to function is to uphold some faith in equality of condition for all. Once the belief in fundamental principles is lost, there is little glue to hold societies together. The key is how we define “equality”; as Drucker and de Tocqueville showed us, promises of economic equality are destined for failure. But democratic societies can afford all of its members human dignity and a sense of purpose.

In the next installment, I’ll provide some of de Tocqueville’s suggestions for strengthening democratic institutions.

Sources

Tocqueville, A.D. and Reeve, H. (1835). Democracy in America. London: Saunders and Otley, to 1840.

El Emprendedor, El Emprendimiento, y La Innovación

Wed, 11 Jun 2025 20:07:00 GMT

Cada mañana, Isabel abría su pequeño taller antes del amanecer, aunque nadie aseguraba que llegaría un cliente. No heredó fortuna, solo poseía una idea: reinventar la forma de vestir a su comunidad. Mientras otros dormían, ella soñaba despierta, hilando futuro entre telas. Así comenzó su historia como emprendedora.

El emprendedor está motivado por la posibilidad de que sus productos y servicios puedan agregar valor a la sociedad. Pero también está consciente de que, para operar de manera sostenible, necesita generar ganancias. Los emprendedores tienden a reevaluar constantemente sus productos o servicios, mientras examinan el mercado en el que compiten y la forma en que producen y distribuyen sus ofertas. Ellos entienden que, para sobrevivir la intensa rivalidad y competencia que enfrentan, deben encontrar formas de innovar continuamente.

La necesidad de competir de manera efectiva conduce a que los emprendedores apuesten por la innovación, ya que esta también facilita la creación de valor. Este es el proceso denominado "destrucción creativa". Joseph Schumpeter acuñó este término para describir el proceso de cambio desordenado, donde las ideas, productos, empresas e industrias enteras son desplazadas por nuevas innovaciones. Schumpeter sostuvo que la principal contribución de los emprendedores a la sociedad es abogar por el cambio y la disrupción, y al hacerlo, ayudan a avanzar a la sociedad. Schumpeter estableció conceptualmente al "emprendedor como innovador", siendo el emprendedor una figura clave en el impulso del desarrollo económico.

Schumpeter argumentó que la innovación es un factor crítico del cambio económico. Indicó que el cambio económico gira en torno a la innovación, las actividades emprendedoras y el poder del mercado. Schumpeter afirmó que el poder del mercado originado en la innovación podría proporcionar mejores resultados que la competencia de precios y la ‘mano invisible’. Además, sugirió que la innovación a menudo crea monopolios temporales, permitiendo ganancias anómalas que pronto serían disputadas por imitadores y rivales. Explicó que estos monopolios temporales eran necesarios para proporcionar el incentivo requerido para que otras empresas desarrollaran nuevos productos y procesos.

Por consiguiente, el emprendedor introduce cosas nuevas, procesos y perspicacia empresarial con el propósito de transformar innovaciones en bienes económicos. Y el emprendedor está dispuesto a asumir el riesgo asociado con introducir el cambio. Las actividades innovadoras de los emprendedores alimentan un proceso de ‘destrucción creativa’ al causar disturbios constantes en un sistema económico en equilibrio, creando así oportunidades para generar ingresos y beneficios. Por lo tanto, el emprendimiento interrumpe el flujo estacionario del sistema económico y de esta manera inicia y sostiene el proceso de desarrollo económico. Al ajustarse a un nuevo equilibrio, se generan otras innovaciones y más emprendedores entran al sistema económico, introduciendo nuevos productos y servicios, fomentando así el progreso.

De manera similar, las empresas emprendedoras participan en la destrucción creativa y así logran captar una parte del mercado al reemplazar empresas que han fracasado en producir productos y servicios valiosos. El proceso de destrucción creativa incentiva a las empresas a desarrollar nuevos productos, servicios y procesos; de lo contrario, no sobrevivirán a largo plazo. El emprendimiento abarca la entrada al mercado de nuevas empresas, pero también respalda el desarrollo de actividades innovadoras en empresas existentes que les permiten crear valor continuo. En este sentido, la innovación puede caracterizarse como el desarrollo de un nuevo producto, servicio o proceso a medida que la empresa emprende nuevas combinaciones de los factores de producción.

La innovación es un proceso complejo y dinámico que requiere compromiso, recursos e inversión. Muchas veces, las empresas modifican su modelo de negocio existente, reorganizando la forma en que desarrollan un producto o la manera en que entregan nuevas funcionalidades o servicios a sus clientes. Las modificaciones a un proceso organizacional existente, a un modelo de negocio existente, o incluso a un método de prestación de servicios, son todos ejemplos de cómo se aprovecha la innovación para buscar una mayor efectividad.

La innovación puede caracterizarse como el desarrollo de un nuevo proceso o producto (o servicio) que satisface nuevos requerimientos y/o necesidades del mercado existentes. Drucker nos dice: “La innovación debe centrarse en una necesidad específica que satisface, en un resultado final específico que produce.” (Drucker, 1985). La innovación permite que productos, procesos, servicios, tecnologías e ideas más eficaces estén disponibles para los mercados y la sociedad. Como resultado, la innovación es utilizada por la empresa como un medio para satisfacer las necesidades de los consumidores; como una herramienta para competir con otras empresas en un mercado existente; y como un instrumento para ingresar a un nuevo mercado. Por lo tanto, la innovación incrementa conceptualmente la probabilidad de que la empresa logre eficiencia económica a corto plazo, y puede permitirle establecer una posición más competitiva a largo plazo. No obstante, la empresa se enfrenta a limitaciones internas (por ejemplo, el costo de insumos) y limitaciones externas (por ejemplo, la competencia en el mercado) que hacen que sea difícil subsistir. Además, los rendimientos marginales decrecientes influyen en la capacidad de producción de la empresa. La innovación puede considerarse esencial para el éxito de las empresas y para la supervivencia económica a largo plazo.

Según algunos académicos, la innovación puede ayudar a mejorar la supervivencia a largo plazo de una empresa, ya que puede mejorar su oferta de línea de productos/servicios al tiempo que le permite establecer una ventaja competitiva sobre otras empresas (Antonelli, 2003; Lundvall, 2007; Porter, 1990; Schumpeter, 1936; Teece y Pisano, 1994). Vale la pena señalar que la empresa que elige innovar lo hace basándose principalmente en la información que tiene sobre las preferencias, deseos y necesidades de los consumidores en su mercado. En otras palabras, la empresa innova porque reconoce la oportunidad y el valor de satisfacer las necesidades y deseos de los consumidores a corto plazo y ve la inversión en innovación como un medio para también posicionarse eficazmente a largo plazo. Drucker nos recuerda: “La innovación sistemática y con propósito comienza con el análisis de las oportunidades” (Drucker, 1985). Y dado que la empresa enfrenta competencia, la innovación se convierte en una vía a través de la cual la empresa puede diferenciar sus productos o servicios.

La innovación es la materialización exitosa de una idea útil, donde la idea es comercializada. La innovación también permite a la empresa reconfigurar sus recursos de manera más eficiente, y por lo tanto le permite aumentar su productividad, con la implicación de que esto puede ayudar a aumentar sus ganancias. La innovación ha ayudado a construir empresas y a hacer crecer y desarrollar industrias. Por ejemplo, hace apenas dos décadas, las empresas tenían dificultades para gestionar la gran cantidad de información y datos relacionados con sus interacciones continuas con los clientes. Desde 1999, Salesforce ha revolucionado la forma en que las organizaciones hacen seguimiento de las interacciones con los clientes y gestionan sus datos de ventas. Desde su fundación, Salesforce ha desarrollado múltiples versiones de sus productos, dando lugar a un sofisticado software empresarial basado en la nube que respalda la gestión de relaciones con los clientes (CRM). Las soluciones innovadoras de Salesforce incluyen la automatización de fuerza de ventas, servicio y soporte al cliente, automatización de marketing y comercio digital. Salesforce ha permitido a grandes organizaciones automatizar sus procesos de ventas y marketing y volverse cada vez más eficientes, al tiempo que se convierten en gestores eficaces de los datos e información de los clientes.

La innovación no es un proceso lineal. Por el contrario, es un proceso altamente iterativo de reconsiderar muchos factores internos técnicos y operativos, y factores externos, con una interpretación en constante flujo de cómo la empresa podría continuar desarrollando y ofreciendo productos y servicios. La empresa en la que se fomenta la innovación debe apoyar las diversas iteraciones, interacciones y transacciones necesarias para respaldar los esfuerzos de innovación. El emprendedor, que no le teme a la incertidumbre ni al riesgo, es capaz de gestionar este proceso dinámico.

La innovación que aborda una necesidad o deseo del mercado aporta valor a la sociedad. Sin embargo, la innovación requiere que las empresas analicen sistemáticamente las oportunidades que se presentan. Por lo tanto, el emprendedor y la empresa emprendedora deben desarrollar la capacidad de observar y percibir las necesidades cambiantes de las personas. El emprendedor debe entonces centrarse en ofrecer una solución que satisfaga un conjunto específico de necesidades o deseos. Esto implica que la innovación debe ser manejada con propósito. Y también requiere que el emprendedor no solo sea disciplinado, sino que esté dispuesto a invertir en la adquisición de conocimiento que pueda aplicarse productivamente. Tanto el emprendedor como la empresa emprendedora deben reevaluar continuamente sus productos y servicios, analizar el mercado en el que compiten y reconsiderar la forma en que producen y distribuyen sus productos y servicios. Al adoptar la innovación, abogarán por el cambio y la disrupción, y ayudarán a avanzar a la sociedad.

Referencias

Antonelli, C. (2003). The economics of innovation, new technologies and structural change: studies in global competition series. New York, NY: Routledge.

Drucker, P. (1985). Innovation and entrepreneurship: practice and principles. New York, NY: Harper Business.

Lundvall, B. Å. (2007). National innovation systems—analytical concept and development tool. Industry and innovation, 14(1), 95-119.

Porter, M. E. (1990). The Competitive advantage of nations: creating and sustaining superior performance. New York: Simon and Schuster Inc.

Schumpeter, J.A. (1936). The Theory of Economic Development, Second Edition. Cambridge: Harvard University press.

Teece, D., & Pisano, G. (1994). The dynamic capabilities of firms: an introduction. Industrial and corporate change, 3(3), 537-556.

Alexis de Tocqueville and The Future of Democracy: Part I

Tue, 13 May 2025 21:05:00 GMT

In today’s political environment, particularly in the United States, there is much discussion about the future of democracy. Globally, traditional democratic forms of government are being called into question. Is democracy no longer effective in its ability to represent “the people”? Have democratic governments been hijacked by elite, moneyed interests? Are our institutions no longer effective and in need of some kind of reset or reinvention? The increasing appeal of authoritarian regimes, driven by populist anger, has been the subject of the work of many political scientists and observers (Silver and Fetterolf, 2024, Praet, 2024, Rhodes, 2022).

Nearly 200 years ago, Alexis de Tocqueville (1805-1859) sought to understand the essence of democracy. His motivations and observations can perhaps be instructive to us today as we wrestle with the nature of democracy in the modern era.

Alexis de Tocqueville was a member of the French aristocracy in the era immediately following the French Revolution. The revolution, which began in 1789, featured the rejection of the monarchy through violent spectacle, including public beheadings via the newly developed guillotine. Alexis’s father was part of the French government and was briefly imprisoned during the Reign of Terror. Nevertheless, he was sympathetic to the revolutionary cause. In fact, many members of the aristocracy in de Tocqueville’s France understood the motivations behind the revolution and sought to ensure that subsequent governments addressed the extreme economic disparities that were exposed by the violent events of the Reign of Terror.

Alexis was educated in the aristocratic tradition, studying political philosophy and theory, history, and law. He was well-versed in the Enlightenment philosophy that influenced the framers of the American Constitution, particularly Montesquieu. Montesquieu argued for separation of powers in governance, which derived from his belief in the human capacity not only for greatness, but also for corruption. This tension between virtue and vice, which Montesquieu saw as a universal condition of humankind throughout time, required guardrails to slow down or inhibit abuse of power.

Following the establishment of the French Consulate in 1799, Napoleon rose to lead the French Empire in 1804. After his defeat in the Battle of Waterloo, France restored the monarchy to Charles X. However, this was a constitutional monarchy rather than one based on the rights of heredity. In 1830, France overthrew King Charles X of the House of Bourbon, growing critical of his broken promises for economic relief from taxation to pay off the debt of the Napoleonic Wars. Charles was replaced by his cousin, Louis Philippe, of the House of Orleans. Louis Philippe sought to reform the monarchy, recognizing freedoms such as voting rights. Referred to as the “Citizen King”, he would be one of the last kings to represent France. In essence, France was beginning to understand the inevitable: the past world of a hereditary monarch claiming absolute authority was over, and the constitutional monarchy seemingly could not deliver on the promises of egalitarianism made in 1789. But what would the new form of governance look like? This was not clear. Even though the country had a reformist government, constitutional monarchy still retained elite status/class distinctions to maintain social order.

Alexis de Tocqueville was 25 when Louis Philippe was installed as the Citizen King in the July Revolution of 1830. Believing that democracy would inevitably come to France, de Tocqueville wanted to study that form of government. What did it look like? How could it be a stable form of government? Because the United States of America was the earliest experiment in democracy, de Tocqueville petitioned the king to travel to America to study that country. In particular, de Tocqueville convinced the king to let him study the American penitentiary movement. One of the areas of reform pursued in France was prison reform (prisons in France were notoriously horrible). At the time, America was in the middle of its own reform movement, including the penitentiary system of prison reform. The concept of a penitentiary was brand new. The idea behind it was that, instead of rotting in prison forever, you would be reformed and released back into society if you were truly sorry, or penitent for, your crimes.

De Tocqueville visited America in 1831-1832. In addition to prison reform, he witnessed many remarkable developments in American democracy. It was President Andrew Jackson’s first term, which involved substantial political upheaval in America. Jackson was the first President elected “of the people.” He was not a Virginian or New England “blue blood,” like all the presidents before him had been. Jackson was from the frontier, and had built his name on a military career, most notably in the War of 1812 at the Battle of New Orleans. Jackson’s election coincided with the expansion of suffrage to most white males regardless of their property ownership. Jackson was understandably a controversial President; his election gave birth to the Whig party as a political alternative. His fight against the Bank of the U.S. placed him at odds with a rapidly developing commercial middle class.

During de Tocqueville’s visit, Americans were participating in a growing reform culture. Abolition, or anti-slavery, was building steam in the nation. William Lloyd Garrison published his first issue of The Liberator, an important abolitionist newspaper that de Tocqueville read. There were religious revivals, known as the Second Great Awakening, and urban reform movements targeting prostitution, temperance, and of course, prison reform, the purported reason for de Tocqueville’s visit. The discovery of gold on Cherokee land in Georgia in 1828 snowballed into the event eventually known as the Trail of Tears, the forced removal of thousands of Native Americans from their ancestral lands. Jackson’s 1830 Indian Removal Act made such events legal, and de Tocqueville personally witnessed the removal of the Chocktaw tribe. On a lighter note, this was also a time of incredible technological development. Railroad development and land speculation was beginning, McCormick had just patented his reaper, and de Tocqueville saw the newly opened Erie Canal.

While de Tocqueville studied the nature of America’s young democracy nearly 200 years ago, we can leverage his observations with our own experience of facing a changing world where the nature of democracy is being questioned globally. The move towards increasing authoritarianism and populist movements calls into question whether democracy is government by the people or by the elite. Can de Tocqueville’s observations help us assess how we might keep democracies intact or make them more effective?

In our next installment, I’ll look at de Tocqueville’s specific observations regarding democracy – particularly those related to the nature of equality.

Sources

Montesquieu, Charles de Secondat, baron de (1949). The spirit of the laws. New York: Hafner Pub. Co.

Praet, J. (2024). Bringing authoritarianism into the limelight: the implications for populist radical right ideology. Journal of Political Ideologies, 1-23.

Rhodes, B. (2022). After the Fall: The Rise of Authoritarianism in the World We’ve Made. Random House.

Silver, L. and Fetterolf, J. (2024). Who likes authoritarianism, and how do they want to change their government? Pew Research Center, February 28. https://www.pewresearch.org/short-reads/2024/02/28/who-likes-authoritarianism-and-how-do-they-want-to-change-their-government/

Tocqueville, A.D. and Reeve, H. (1835). Democracy in America. London: Saunders and Otley, to 1840.

On Leadership, Legitimate Power, and Influence

Wed, 23 Apr 2025 01:37:00 GMT

When we describe leaders, we often cite the importance of their ability to influence others. For decades scholars have focused their work on studying and describing how this capacity to influence works and why it tends to elicit a positive response from people, who are inspired to follow the leader’s vision.

We have read about that mystifying ability to persuade others and guide them towards a common purpose. However, when analyzing the leader there is another aspect we ought to also consider - where does their power originate from, and is this power considered legitimate? What these questions intend to imply is that when we analyze the interactions of leaders and their followers, we should contemplate how their relationship is built, and moreover, how the power of the leader is used to shape those relationships.

Let us first discuss what power is and why it is important. Power in its general sense is the capacity to influence, lead, dominate, or impact the actions of others. The German sociologist, Max Weber referred to power as the capacity to create a desired outcome within a social relationship. As such, power enables the leader to influence and lead the actions of people.

Legitimate power is often referred to as power that the person derives from formal position or office held in the organization's hierarchy of authority. And it is this notion of authority that helps legitimatize power in the eyes of the follower. For instance, a manager has legitimate power over their subordinates, allowing them to assign tasks. Teachers possess legitimate power in the classroom, enabling them to assign grades and set learning objectives. We can then surmise that legitimate power is based on the authority granted by a position or title. And individuals will comply with requests or decisions made by the person with authority because they recognize the authority of the person holding the position.

However, unlike authority, which implies legitimacy, power can be exercised illegitimately. As history shows us, there are plenty of examples where power did not originate simply from a place of authority and legitimacy, and instead flowed from coercion. Joseph Stalin and his Great Terror campaign certainly comes to mind. And although Stalin did have a position of “authority”, much of his power and influence were coercive and deceptive in nature. In fact, Stalin had used his political positions throughout his life to “remove” opponents while bolstering his image in the pursuit of greater personal power. According to biographer Robert Service (2005), Stalin took pleasure in degrading and humiliating people and kept even close associates in a state of "unrelieved fear”.

Of course, there are other instances in which coercive power is used to elicit compliance. A more common example of coercive power is a manager who uses threats of demotion or termination to get employees to comply. And so, when we consider the influence a leader (manager) has, we ought to consider the very nature and source of their power. Do people follow the leader because they are truly inspired by the leader’s vision? Or do they follow because they have no other choice?

Managers who threaten the job security of others to ensure compliance, leaders who exploit their positions for personal gain, or individuals who rise through favoritism rather than merit – are manifestations of illegitimate power. Regardless of context, illegitimate power tends to erode morale, limit creativity, and foster toxic environments where people operate out of fear rather than purpose. Illegitimate power wields influence without moral justification, ethical values, or the consent of those affected. And because this form of power often derives from manipulation, coercion, intimidation, or exploitation rather than genuine respect for people, it undermines trust, breeds fear, and corrodes the ethical foundations of organizations and communities.

Coercive leaders who use threats, punishment, or psychological pressure to force compliance, may certainly achieve short-term results, but at a significant long-term cost. Coercion strips individuals of their autonomy and creates environments of resentment and disengagement. People may comply outwardly, but internally they may withdraw, resist, or leave. Furthermore, coercive leadership discourages open dialogue and constructive feedback, which are essential for innovation, growth, and continuous improvement. When fear becomes the primary motivator, organizations and societies become stagnant, rigid, and vulnerable to collapse.

And this brings us to an important question – what does legitimate power look like? On this issue, Peter Drucker offers unique insights.

In his first book, The End of Economic Man (1939), Drucker discussed the issue of legitimate power (although he did not use the term legitimate power, but rather the justification of authority). Drucker believed that the power of rulers must possess legitimacy, a tradition that has continued in Western civilization since Plato and Aristotle.

In Drucker’s view, legitimate power involves a functional relationship between power, social beliefs, and social realities: does power commit to social beliefs? At the same time, can it effectively organize social reality based on that commitment to create order?

In his books, Concept of the Corporation (1946) and The New Society (1950), Drucker began to use both terms legitimate power and leadership simultaneously. Drucker would go on to argue that a government that commits to the well-being of its people can be said to have legitimate power. Over time, Drucker shifted his analysis of legitimate power from the political realm to social organizations. According to Drucker, if the management of a social organization (such as a company) claims that its principal purpose is to benefit employees, this particular focus would constitute an abuse of power. Instead, Drucker argued that the primary mission of an economic organization is to always achieve economic performance, thereby contributing to society – and this is in fact, the source of the legitimacy of corporate management's power. Of course, a company is also a community. For employees, management undoubtedly holds power and must exercise it. However, the legitimacy of management’s power does not come from the commitment to benefit employees, but rather from two functions:

1. Through institutional design and innovation, shaping effective community communication, thereby enabling middle-level and lower-level employees to gain an overall vision of the organization. This allows employees to have a managerial attitude.

2. By setting clear and reasonable performance standards, prompting employees to take responsibility and achieve success through effective work.

If management can perform these functions within the organization, then it is considered to exercise legitimate power. In Drucker's early works, exercising legitimate power was almost synonymous with leadership. Drucker was not enthusiastic about discussing the personal style or charm of leaders, and he was even less inclined to associate leadership with a mystifying ability to persuade others, especially if such persuasion appealed to propaganda, indoctrination, or mental manipulation. For Drucker, discussing leadership primarily meant enabling power to function effectively. Therefore, leadership is not a matter of individual leaders' techniques and styles, but rather a matter of the responsibility and function of power itself.

We can surmise from these functions that legitimate power aligns with the goals, beliefs, and aspirations of the people being led. Leaders who wield this kind of power do not need to resort to threats or manipulation. Instead, they inspire, guide, and collaborate. Their authority is accepted because it is seen as fair, earned, and beneficial to the collective. It is vital to foster leaders who operate from legitimate power—power that is granted through trust, expertise, shared values, and recognized authority.

Legitimate power is grounded in the formal authority granted to a manager through their role within an organization, but its true strength comes from how that authority is exercised. Unlike coercive power, legitimate power is perceived as rightful and appropriate because it is based on clear expectations, mutual respect, and established structures. When managers consistently act with fairness, integrity, and transparency, their authority is more likely to be accepted and trusted by their teams. This creates a healthy power dynamic where employees feel secure in leadership decisions, understand their roles, and are motivated to contribute toward shared goals.

Managers can build legitimate power by aligning their actions with the organization's values and demonstrating competence, consistency, and accountability. For instance, making decisions that reflect the organization’s mission and treating all team members equitably strengthens a manager’s credibility. Communication is also key—leaders who listen actively, provide clear direction, and explain the rationale behind their decisions foster trust and buy-in. Investing in personal growth, staying informed, and modeling a strong work ethic all reinforce the perception that a manager has earned their position and is acting in the best interest of the team and the organization.

When managers lead through legitimate power, the benefits to the organization are substantial. Teams are more engaged, morale improves, and collaboration increases because people trust the leadership and feel aligned with the organization’s purpose. This creates a positive feedback loop where employees are more likely to take initiative, innovate, and remain committed, reducing turnover and boosting overall performance. In essence, legitimate power forms the foundation of a sustainable leadership culture—one that empowers individuals, strengthens organizational integrity, and drives long-term success.

Developing leaders who influence through legitimate power requires a shift in how we define and nurture leadership. It involves prioritizing emotional intelligence, ethical reasoning, transparency, and empathy. Such leaders model integrity and authenticity, aligning their decisions with shared values and long-term visions. They create environments where people feel valued, heard, and empowered. In turn, this fosters loyalty, engagement, and a strong sense of purpose.

To build healthier workplaces and more just societies, we must champion leaders who embody legitimate power: those who influence not by fear, but by vision, credibility, and alignment with shared values. This approach not only promotes ethical leadership but also cultivates trust, innovation, and collective well-being.

References

Drucker, P. F. (1946). Concept of the corporation. New York: John Day Company

Drucker, P. F. (1939). The end of economic man: A study of the new totalitarianism. New York: John Day Company

Drucker, P. F. (1950). The new society: The anatomy of the industrial order. New York: Harper

Service, R. (2005). Stalin: a biography. Belknap Press of Harvard University Press.

Weber, M. (1965). Politics as a vocation. Fortress Press.

Helping Civilization Understand Business

Wed, 23 Apr 2025 01:30:00 GMT

In China, you can see countless interviews with successful entrepreneurs on TV, online, or in magazines. The same is true in the U.S.—probably even more so. I imagine this stylish trend must have originated in America.

These interviews often show entrepreneurs sincerely talking about childhood dreams and beliefs they’ve held for decades. They’ll share how they stayed committed to those dreams and step by step made them come true.

Over the past few years, I’ve had the chance to meet a few Chinese entrepreneurs—some of whom I had previously seen on TV or in magazines. Once we got to know each other better, they started sharing stories that were quite different from their media narratives. They admitted that their childhoods were hardly filled with grand dreams. What truly pushed them into business were hunger, poverty, cunning—or sometimes, just luck.

I am not a nihilist, nor am I trying to say that dreams and beliefs are nothing but marketing gimmicks, exposed through off-the-record conversations. What I mean is: this is a realist world. It’s entirely possible for people to achieve business success through the pursuit of profit, intelligence, hard work, and a bit of luck. Many people don’t fully understand how they even became successful—until they already are.

Of course, the world isn’t just about realism. Some people, once successful, begin to seek meaning in their lives. They want to keep doing valuable things—not just by luck, but through genuine understanding. At this point, they need to go back and reexamine what business really means.

So what does business really mean? If you asked a Chinese scholar from a thousand years ago, he would most likely say that business is linked to something like original sin. Of course, Chinese culture doesn’t contain the Christian idea of original sin, but when talking about commerce or merchants, scholars would often describe businesspeople as inherently tainted by something spiritually corrupt.

If you asked a classical economist like Adam Smith, you’d get a much more generous answer. Classical economists openly accept the profit motive as part of human nature, and they’d go further to say that this motive is a major driver of civilization. The accumulation of social wealth, improved quality of life, and progress of civilization all rely on individuals—driven by profit—to create rules, use their talents, and generate value.

After classical economics, this line of thinking became the default lens for understanding business and commercial civilization. Even though Marxism and Nazism have violently attacked the profit motive, modern commercial civilization has not only survived—it has thrived.

The great achievement of classical economics was to build a causal relationship between the pursuit of profit and the progress of civilization. But the question remains: is that all there is?

The entrepreneurs I know, who fought their way through tough business landscapes, would never doubt the role of the profit motive. But some of them also have a vague sense that business isn’t just about making money. After a few successful ventures, some start to long—consciously or unconsciously—for cleaner businesses, meaningful businesses, even beautiful ones. They may not be able to articulate this impulse, so instead, they go on TV or into magazines and talk about childhood dreams and ideals. These aren’t real memories—they’re symbolic stories.

What exactly drives commercial civilization? Peter Drucker agreed with the classical economists, but only halfway—because they only got it halfway right. Drucker never denied the profit motive. But he believed that all successful business activity is a discovery and creation of order. And that’s what makes it so important. Not only do entrepreneurs and managers need to rethink the meaning of business, but ordinary citizens in modern society do too.

Drucker’s book Managing for Results, published in 1964, is still seen by many as a hands-on business guide—and rightly so. Few of his works are as focused on practical application, packed with diagrams and terminology. But what’s truly interesting about the book is how, while walking readers through practical operations, Drucker is also helping them rethink what business actually is.

He starts right where most businesspeople do—with the desire to make money. But he warns: not every boss who makes money actually understands how they made it—or which products brought in the profit. To figure that out, they have to understand their business as a whole. But doing that means stepping out of personal ego and illusions of success. It means knowing which accounting method reveals the truth. It means identifying which products are making money—and then asking why. And the right way to find out why a product makes money isn’t to ask the product manager, engineer, or designer—it’s to understand the customer’s needs.

If the boss and the product manager are serious about understanding the customer, they’ll realize the customer isn’t buying a product—they’re buying value, value that meets a particular need. And customer needs change constantly—just like the weather. Even the smartest people can only partly predict these shifts. The wise approach is to treat change as a given and figure out how to deal with it, manage it, and adapt to it. Once they accept this truth, bosses and managers begin to see the market differently.

Results are not things created inside a company—they’re things selected by customers in the marketplace. Profit isn’t wealth created by the company and kept by it; it’s a risk buffer that allows the company to stay in the market. Innovation isn’t a CEO suddenly struck by inspiration; it’s people with entrepreneurial spirit using new combinations of resources to meet customer needs and produce performance.

A boss who’s serious about business—and honest about reality—can start out wanting to make money and end up with an entirely new perspective, and a deeper understanding of business.

At the end of Managing for Results, Drucker wrote something striking. He believed that not only entrepreneurs and managers need to understand business—they have a responsibility to help the public understand it too. They must become educators in civil society. Even today, in modern, industrialized nations with booming economies, many well-educated citizens still don’t understand business. They look down on it. Some even hate it. They don’t lack conscience—if anything, they’re overflowing with it—but they lack imagination and understanding.

They don’t see that business is actually a form of rational exchange and creative mutual benefit between people. And because they don’t understand this, they not only despise business—they become impatient with any kind of rational exchange or creative collaboration. Instead, they get used to imposing their moral preferences on others. That kind of moral arrogance keeps producing hatred and division in modern society.

Of course, Drucker didn’t believe business could solve all of society’s problems. But he did believe that the motive behind commercial civilization isn’t only about profit. He also believed that civilized business itself is a form of education for modern society. Because civilization—no matter where it appears—always involves understanding, creating, sharing, and exchanging organizational frameworks.

As he wrote:

“The economic task, if done purposefully, responsibly, with knowledge and forethought, can indeed be exciting and stimulating, as this book has, I hope, conveyed. It offers intellectual challenge, the reward of accomplishment, and the unique enjoyment man derives from bringing order out of chaos.”

Drucker often quoted the British philosopher Alfred North Whitehead (1861–1947). As far as I know, Whitehead may be the only modern philosopher—besides Drucker—who truly understood the beauty of business. In his 1925 book Science and the Modern World, Whitehead wrote something strikingly similar:

“Art is not limited to sunsets. A factory—by virtue of its machines, its community of workers, its service to the general public, its reliance on organizational and design genius, and its potential as a source of wealth for shareholders—is a living organism rich with value.”

But Whitehead also said something even more important, in The Adventure of Ideas (1933):

“Plato was right: The creation of the world—the world of civilized institutions—is the victory of persuasion over force.”

And business civilization—especially the kind that Drucker and Whitehead envisioned, one that creates order and beauty—is perhaps the most brilliant demonstration of how persuasion can triumph over conquest.

As Drucker said, it’s not just businesspeople who need to understand this. Every citizen of the modern world should too. Because even now, the opposite impulse is still alive—the desire to replace persuasion with conquest and turn business into a game of domination.

Satya Nadella and the Liberal Art of Management

Mon, 21 Apr 2025 18:00:00 GMT

When Satya Nadella assumed the role of Microsoft’s Chief Executive Officer in February 2014, the company was experiencing the early symptoms of organizational sclerosis. Though still profitable, it had lost ground to more agile competitors in the mobile and cloud sectors. Internally, Microsoft had become fragmented—defined more by turf battles than innovation. The challenges Nadella inherited resembled those Peter Drucker articulated decades earlier in his conceptualization of the Functioning Society of Institutions (Drucker, 1946). Drucker’s view—deeply shaped by the failure of social cohesion in interwar Europe—called for institutions to reorient themselves not just around efficiency, but around meaning, moral purpose, and self-development. Nadella’s Microsoft has arguably become one of the clearest corporate embodiments of Drucker’s philosophy of Management as a Liberal Art (Drucker, 1989).

Much of Nadella’s success can be attributed to his emphasis on empathy and cultural reinvention. Prior to his appointment, Microsoft was widely seen as a combative, insular organization (Lohr, 2014). Nadella moved swiftly to change this. In his internal communications and public interviews, he spoke often of empathy—not as a rhetorical flourish, but as a managerial imperative. This commitment mirrored Drucker’s belief that management must engage the whole human being, acknowledging both rational capability and emotional complexity (Drucker, 1989). Drucker emphasized that organizations ought to be places where people grow in both skill and character. Nadella’s redefinition of leadership as empathetic listening and continuous learning operationalized that belief in a modern, corporate context.

At the center of Nadella’s early cultural transformation was the introduction of a "growth mindset," a concept he borrowed from psychologist Carol Dweck (Dweck, 2006). Employees were encouraged to ask questions, seek feedback, and approach problems with humility. Drucker had long argued that a functioning institution required the cultivation of self-awareness and wisdom (Drucker, 1993). Nadella, in fostering a company-wide learning orientation, aligned Microsoft's trajectory with the MLA principle that personal development and organizational mission must progress hand-in-hand. The result was an environment that encouraged intellectual humility without sacrificing performance.

Equally important in understanding Nadella’s alignment with Drucker’s MLA framework is the redefinition of Microsoft's mission. Under Steve Ballmer, the mission had been tightly product-focused: "a PC on every desk and in every home." Nadella’s version was broader and more aspirational: “to empower every person and every organization on the planet to achieve more” (Microsoft, 2017). Drucker might have called this a shift from a narrow economic mandate to a wider societal purpose. In The Concept of the Corporation, Drucker (1946) warned against corporations existing as islands of profit, detached from community responsibilities. Nadella’s mission reframed Microsoft not just as a tech vendor but as a social actor—a stakeholder in global development.

Drucker’s emphasis on function and status within a functioning institution also finds modern expression in Nadella’s restructuring of Microsoft's performance evaluation system. The previous stack-ranking model—which pitted employees against each other—was scrapped (Wingfield, 2013). It had rewarded individual performance over team cohesion, eroding trust and stifling creativity. Nadella implemented a performance system that rewarded collaboration, curiosity, and contributions to others’ success. This pivot acknowledged Drucker’s claim that organizations succeed not when individuals compete within them, but when their actions contribute meaningfully to a shared mission (Drucker, 1989).

In accordance with Drucker’s MLA principle that organizations must exist within society—not apart from it—Nadella also led Microsoft into a new era of corporate social responsibility. Under his watch, Microsoft committed to becoming carbon negative by 2030, developed AI tools for accessibility, and began publicly advocating for ethical technology development (Microsoft, 2020). Drucker (1999) asserted that institutions must balance individual rights with societal duties. Nadella’s policies gave concrete expression to this ideal, embedding corporate ethics into strategy, not as appendages but as essential elements of long-term resilience.

Crucially, Nadella has approached leadership with the recognition that authority alone does not confer legitimacy. Drucker emphasized the importance of persuasion over coercion, process over fiat (Drucker, 1990). Nadella, rather than enforcing top-down directives, frequently invites employee participation in major shifts. Microsoft’s move into open source software—once unthinkable—was carefully socialized within the organization and presented not as an edict, but as a necessary cultural and business evolution (Miller, 2018).

The broader implications of Nadella’s leadership can be understood through Drucker’s transdisciplinary lens. Drucker saw management as a “liberal art” because it required the application of ethics, psychology, history, and even theology in decision-making (Drucker, 1989). Nadella frequently cites literature, philosophy, and biography in his public remarks. His personal reflections often involve moral and philosophical introspection, underscoring Drucker’s belief that leadership is a humanistic endeavor requiring breadth of thought and emotional depth (Nadella, 2017).

Despite Microsoft’s technological focus, Nadella’s management philosophy resists technocratic reductionism. His belief that people—not platforms—are the key to innovation affirms Drucker’s warning that effective management is not merely quantitative but judgment-based (Drucker, 1990). Microsoft’s market capitalization under Nadella has more than tripled, underscoring that an ethical, human-centered organization is not incompatible with economic success (Nasdaq, 2024).

As Drucker argued in The New Realities, leadership in a knowledge society must move beyond command structures and embrace complexity, diversity, and continual learning (Drucker, 1989). Nadella has not only embraced these values—he has embedded them into Microsoft’s organizational DNA. His leadership demonstrates that Management as a Liberal Art is more than a theoretical framework; it is a viable, proven, and necessary strategy for organizational renewal and social relevance in the 21st century.

References

· Drucker, P. F. (1946). The concept of the corporation. New York: The John Day Company.

· Drucker, P. F. (1989). The new realities: In government and politics, in economics and business, in society and world view. New York: Harper & Row.

· Drucker, P. F. (1990). Managing the non-profit organization: Practices and principles. New York: HarperBusiness.

· Drucker, P. F. (1993). Post-capitalist society. New York: HarperBusiness.

· Drucker, P. F. (1999). Management challenges for the 21st century. New York: HarperBusiness.

· Dweck, C. S. (2006). Mindset: The new psychology of success. New York: Random House.

· Lohr, S. (2014, February 4). Satya Nadella, Microsoft’s new chief, is a company man. The New York Times. https://www.nytimes.com/2014/02/05/technology/satya-nadella-named-chief-of-microsoft.html

· Microsoft. (2017). Our mission. https://www.microsoft.com/en-us/about

· Microsoft. (2020). Microsoft will be carbon negative by 2030. https://blogs.microsoft.com/blog/2020/01/16/microsoft-will-be-carbon-negative-by-2030/

· Miller, C. C. (2018, October 22). How Satya Nadella remade Microsoft as an open source company. The New York Times. https://www.nytimes.com/2018/10/22/technology/microsoft-open-source.html

· Nadella, S. (2017). Hit refresh: The quest to rediscover Microsoft’s soul and imagine a better future for everyone. Harper Business.

· Nasdaq. (2024). Microsoft Corporation (MSFT) stock performance. Nasdaq.com. https://www.nasdaq.com/market-activity/stocks/msft

· Wingfield, N. (2013, November 12). Microsoft alters employee review process. The New York Times. https://www.nytimes.com/2013/11/13/technology/microsoft-alters-employee-review-process.html

Freedom, Responsibility, and Worldview: Understanding Drucker

Wed, 02 Apr 2025 15:24:00 GMT

One can use Drucker’s ideas to understand the political and social scene in China today.

Let’s start with a story. Fyodor Dostoyevsky published his novel The House of the Dead in 1862. Dostoyevsky actually spent time in a Siberian prison camp, and drew on that experience as he depicted prisoners in the novel. These prisoners were seen as hardened criminals, and go through an incredible transformation at Christmastime. They are permitted to put on a play. Suddenly, these hardened criminals are bursting with creativity. They’re writing, directing, designing costumes, an entire production process involved in creating this theatrical play. A completely different side of them comes out.

This story illustrates a point that is at the heart of Drucker’s work. This is the idea that no system, no matter how restrictive or oppressive, can completely destroy our humanity. Even within a place as terrible as a prison, there is still room for agency, for choosing how we respond to our circumstances. Even with limitations, they found a way to express themselves. The prisoners find a way to carve out a space for freedom. It makes one think about those times when we are boxed in by expectations, or stuck in a rut. Maybe there is always a way to break out. This ties in perfectly with what Drucker always talked about in terms of individual responsibility. It’s not about waiting for someone to give you permission, or for the perfect situation to magically appear. It’s about realizing that we always have choices, and those choices make us who we are.

So these prisoners are finding freedom in this highly unlikely place! But we can see how this links to Drucker’s thoughts on societal order. Think about it: Are we all prisoners in some way? This is where Drucker’s own experiences in 20 ^th -century Europe become incredibly relevant to our own lived experience today. He saw the rise of totalitarian regimes firsthand. He likened them to “beehives” and “anthills” where individual freedom was crushed by the weight of the state. Like everyone is marching in line; there is no room for being different. Let us think about this: even in societies that aren’t explicitly totalitarian, we can still build those same kinds of structures: prisons of conformity and control, where everyone is expected to be the same. Drucker saw this as the complete opposite of the chaos of disorder. A healthy society has to find that balance. You need a middle ground of diversity, this multi-layered system where individuals can find meaning without being crushed by a large, powerful authority. Walking a tightrope between too much order and too much chaos. Too much order represents the beehive model. Too much chaos creates the jungle, where it is everyone for himself. Finding the middle ground is a challenge. It’s the balance between individual freedom, and a sense of order.

In many ways, Chinese society places value on order and control. But Drucker’s ideas about personal responsibility and gives one a choice to exercise individual freedom even within a system of constraints. How do we find those little spaces for freedom within those constraints? You can’t change the system, but you can make choices that allow you to exercise your own agency, and align your actions with your beliefs.

That brings us to one of Drucker’s most mind-blowing ideas: it’s what he called the “mechanistic world view.” He thought that seeing the world as a giant machine with humans as cogs in the system disrupts how we see the concepts of freedom and responsibility. Imagine a factory with an assembly line, where each worker has their one specific job. They do this over and over again, with no room for creativity, no sense of ownership. That’s the essence of the mechanistic world view: we all become robots, following a program. Freedom, in this word view, becomes chasing simple pleasures, like comfort. There is no sense of purpose. One just goes through the motions. The focus is on efficiency and output, not the human factors that go into work. Responsibility is reduced to following orders rather than making thoughtful choices.

If the mechanistic world view is the problem, what is the alternative? Drucker gives us an alternative: the teleological world view. This is the view that the universe is not a static machine, but rather a dynamic system where everything is connected from atoms to humans. Everything contributes to create a new order. In this world view, freedom isn’t doing what you feel like, or feels good, but developing your potential as a human being and using that to contribute to something bigger than yourself. Responsibility isn’t about following rules, but understanding the impact your choices have.

Thinking back to the prisoner story we began with: their decisions had impacts. They tapped into their potential, and found a shared purpose.

This resonates with Eastern Philosophical ideas of individual cultivation and harmony with the cosmos. Drucker’s ideas, while grounded in Western traditions, transcend cultural boundaries.

How much of our lives, regardless of culture, are actually run by this mechanistic mindset? In work, school – are we really encouraged to think for ourselves? Or to contribute to some bigger purpose? Even in systems that feel very mechanistic, there will always be ways to find pockets to express freedom – places where we can make a choice and do something meaningful. It may not be easy, but it is always there. It starts with recognizing that we have a choice. We can be cogs in the machine. Or we can choose to be creative agents of change.

We are reminded of where we began, with Dostoyevsky, who said “man is created for freedom.” Even when things are difficult, we are hardwired for expressing ourselves and deciding our own path. It’s all about finding those stages within the prison walls. The limitations exist in Chinese society; but that doesn’t mean that we can’t have a free existence. Drucker’s ideas, while Western, have resonance in other cultures. Freedom is not just a large, abstract concept. It’s also about the everyday choices we make within our specific cultural contexts. The little ways we express ourselves and choose to build something new instead of accepting the status quo. Making things more beautiful and meaningful, even if it’s just in our own small world.

Which brings us back to Drucker’s definition of freedom. For him, freedom involved responsible choice. It is not right as much as responsibility. It is not something given to us. It’s something we must work for and earn. And we choose it every day through our actions.

One final thought: If life is a stage, what role would you play? What kind of performance are you giving to the world? Are you building prisons? Or are you building stages? Are you choosing freedom and responsibility? Or are you just going through the motions? This is not about easy answers. It’s about finding a world where freedom and responsibility can coexist and thrive.

The Children of the American Dream

Sat, 15 Mar 2025 14:07:00 GMT

Stories of travels from a distant land to a new start, a land of opportunity, have always been my favorite. My friends come from exotic countries like Syria, Yemen, Portugal, Mexico, Guam, Kuwait, and India. Countries rich with culture and history, but they came to leave behind poverty, lack of education, war, so much war, to be in America. It is the American Dream, the thread that all of our families whose origin stems from migration at some point in time share.

We all come from other lands in search of a new beginning just at different times. My friends came between the ages of 10 and 19, and started as ranch hands, deli shop workers, students working retail, and farmers. Decades later they are a restaurant owner, chief engineer, gas station owner, retired military, and doting grandma. These hard-working individuals are exemplifying the American Dream.

First-generation born American descendants of immigrants face a unique challenge. Though the average mantra of a teenager is ‘my parents wouldn’t understand what it is like’ has been heard by many, especially educators, it is believed and demonstrated in the behaviors of first-generation U.S. born children from immigrant families.

Research states that ethnic minority males are most likely to become affiliated with gangs (McDaniel, 2012). Different research posits that the likelihood of gang affiliation has to do with the “composition of the neighborhood” (Herbst, 2013). With that being said, I need to point out that ethnic minorities new to the country tend to live in community together, so one does not negate the other. This generation believes their parents only know of the ‘old country’ and are out of touch with American ideology. Therefore, they look for people who are in the know. Many do not fall into this trap of gang life, but more do from the first-born generation than any other. It is disheartening to know friends and acquaintances have come to this country to create a ‘better life’ for themselves and their offspring only to have a child choose the gang life over family.

Social Responsibility and Global Corporate Citizenship

Why is this a topic of a business journal, you may ask. We who have come before, who have a foundation here, can support newcomers in their individual growth and family support. Social responsibility, specifically Corporate Social Responsibility (CSR), ‘global corporate citizenship,’ and ‘stakeholder management practices’, work on the premise that the welfare of all can be supported by the decisions of businesses (Windsor, 2001). There is an economic, environmental, and social responsibility that organizations have to the general public. Businesses need to have societal benefits in mind because governments do not always do so.

Corporate Social Responsibility can be demonstrated in many ways which benefit society. Palacios (2004) posits business can be the positive context of changes in employee citizenship and ‘non-territorial forms of national identity’. As individuals increasingly create self-identity through the workplace and other organizations, it is understandable that societal needs and ‘common concerns’ such as “social equity, human rights and environmental preservation” (p.386) be shared through the business platform (Palacios, 2004). Therefore, education on the prevention of youth affiliation with gangs would be fitting in this context. Gang affiliation negatively affects the health of youth and organizations can have a positive impact. The National Gang Center (NGC) shares risk factors and strategies of intervention and prevention. NGC (2025) posits that youth are enticed by the social activities of a gang or show a range of risk factors, typically 7 or more, that push the individual away from home culture and toward a gang. These risk factors include violence in the home, early dating, academic struggles at school, limited belief in self-success at school, negative labeling by in-groups, concern for safety, community conditions, individual characteristics, peer-group influence, and abuse both physical or sexual (NGC, 2025). Individual characteristics include:

“antisocial beliefs, early and persistent noncompliant behavior, early onset aggression/violence, few social ties, high alcohol/drug use, impulsivity, lack of guilt, life stressors, low intelligence, low perceived likelihood of being caught, neutralization, medical/physical condition, mental health problems, poor refusal skills, victim and victimization, family poverty, high parental stress/maternal depression, parent proviolent attitudes, poor parental supervision, poor parent-child relations or communication, sibling antisocial behavior, unhappy parents.”

These characteristics are not an exhaustive list and do not include the special circumstance of being a first USA-born child of an immigrant family. Nor do all children with some of these characteristics become gang members. Studies show there is no exact or repeating pattern for why some children and teens chose gang membership, but having 7 or more factors does increase the risk of membership by 13% (NGC, 2025). Researchers indicate that most want to join a gang for socialization, which must be alluring to youths of immigrant families that want to belong to the American culture.

Gang Prevention

Preventions and interventions include reaching students between 5th and 12 ^th grades and include positive home, school, neighborhood and community interactions such as extra-curricular activities that build self-esteem and the belief of educational and life fulfillment. A key factor is instilling positive feelings between children and their parents. Positive school factors include improving academic performance, positive and safe school climate, and a positive relationship with key personnel on the campus.

Prevention includes a moderate level of parental involvement, which involves warmth and control, the ability to react well to conflict, and positive connections with adults outside of the family unit as explained by McDaniel (2012). Immigrants that I have met are active parents who are actively involved in their children’s education and extracurricular activities, but these parents are combatting an additional issue. Their teens assume their parents do not have knowledge relevant to success in America even though they have proved their ability. McDaniel (2012) states that ethnic minority male children make up the largest percentage of gang members. Their children become friends with gang-affiliated minors who seem more knowledgeable of American current events than immigrant parents from a teen’s perspective.

Community involvement in social interventions and gang suppression will lead to organizational change according to the National Gang Center (2025). Organizations presenting risk and protective factors to all employees increases the likelihood of gang prevention and, hopefully, can create willing volunteers to be positive role models in children’s lives for those moments when they don’t listen to their parents. Businesses sharing this knowledge with stakeholders provides support for individuals, organizations, and society. As the numbers of at-risk youth diminish, so do the negative impacts of gangs. This can be achieved through organizations willing to see their social and global influence.

Dedicated to A.S. who lived a difficult and short life riddled with the strife of trying to get away from the gang life, which proved easier than getting away from the drugs he was introduced to by that ‘gang family’. To his family and two children who remain.

References

Dima, J. (2008). A Stakeholder Approach to Corporate Social Responsibility: A Fresh Perspective into Theory and Practice. Journal of Business Ethics : JBE; Dordrecht 82(1) 213-231.

Herbst, E. (2013). The likelihood of gang membership: Immigrant generational differences among hispanic youth. A thesis for Graduate College of Bowling Green State University.

McDaniel DD. (2012). Risk and protective factors associated with gang affiliation among high- risk youth: a public health approach. Inj Prev. 2012 Aug;18(4).253-8.

National Gang Center. (2025). Comprehensive Gang Prevention, Intervention, and Suppression Model. US Department of Justice. Retrieved from

https://nationalgangcenter.ojp.gov/spt/Programs/53

Palacios L., J.J. (2004). Corporate Citizenship and Social Responsibility in a Globalized World. Citizenship Studies 8(4). 383–402

Windsor, D. (2001), The future of corporate social responsibility, The International Journal of Organizational Analysis, 9(3). 225-256

Foundations of CSR: Truly Sustainable

Sat, 15 Mar 2025 14:01:00 GMT

I had thought that the concept of Corporate Social Responsibility (CSR) was a fairly recent development based on my experience in business and business education. Though two social reformers did not use the term CSR, their actions showed that all stakeholders are responsible for making a positive impact on society. My familiarity with the work of management and social theorist Peter Drucker, who actively published from 1939 to 2005, led me to the conclusion that organizations have a vital role in society. While Drucker may not have used the term CSR, he certainly advocated much of what encompasses this concept. Drucker’s work includes references to the need for social responsibility in business (Drucker and Maciariello, 2008).

While recently sitting in a church service, I listened to a recitation of the work of the English theologian John Wesley, who died in the year 1791. Wesley was a social reformer with striking similarities to Drucker. That experience motivated me to look more into the parallels between Wesley and Drucker, and to see the connections of both men’s thoughts to what we now term Corporate Social Responsibility. It seems that this concept is perhaps far older than I thought, showing the sustainability of this idea.

A Definition and Use of Corporate Social Responsibility

Corporate Social Responsibility can be defined as follows:

Corporate social responsibility (CSR) is a business practice that involves integrating social, ethical, and environmental concerns into a company's operations. CSR can also be defined as a company's commitment to respecting the interests of its stakeholders (Google Search, 1-27-25).

Examples of CSR include ethical leadership and management techniques, environmental involvement, and being fiscally sound and transparent within reason. It is evident that consumers value CSR activities such as limiting carbon footprint and supporting environmentally friendly fabrication solutions. Lately, some have been selecting products based on that business’ social platform. Society has shown through consumer choice and social media that CSR inspired behaviors are preferred. Many consider CSR as a 21 ^st century concept, but let’s see how earlier social theorists articulated this concept – one in an era before corporations existed.

John Wesley (1703-1791)

John Wesley, the ‘Founder and Father of Methodism,’ was a priest for the Church of England who later left this denomination to start his own (GCAH, 2025). In 1727, Wesley was given a fellowship at Lincoln College (Vickers, 2003). Westley became a failed missionary in 1735 and three years later began to speak out against predestination doctrine, arguing that grace and redemption were available to all. He began journaling and sharing his evangelical works through ‘field preaching’ (GCAH, 2025; Vickers, 2003). These actions led to speaking out against corruption in the churches of the day and the need for social reform, including abolition of slavery (Vickers, 2003).

According to GCAH (2025), he established Methodist Societies and created their charter in 1784. The Methodists continued based on his writings. Murray Norris (2017) concludes that followers of John Wesley did not separate work life from personal religious development. Wesleyans included charitable donations of volunteerism and finances, high work ethic, and greater outreach as part of their religious outpouring. This early form of social responsibility stemmed from Wesley’s work on economics, politics, and social issues such as workplace safety, prison reform, and education (Nutt & Wilson, 2010; Lunn, 2010).

Lunn (2010) states that Wesley was focused on the well-being of the individual worker. Instead of relying on organizations to change society, he supported individuals who were champions of social improvements. Wesley grounded his work in the theology that each person is made in God’s image. Even though the majority of the work was for and with individuals, Stranger’s Friend Societies and some private entities supported Wesley’s efforts to equalize the status of individuals regardless of social class (Murray Norris, 2017; Lunn, 2010).

Peter Drucker (1909-2005)

Peter Drucker, often called the Father of Management, was primarily interested in society, communities within society, and polity according to A Functioning Society published in 2003. Drucker (2003) posits that management is a knowledge-based social function that influences society and economy (p.11). His first book involving corporations was Concepts of Corporation in 1946 though he did not use the phrase Corporate Social Responsibility (Drucker, 2003).

Drucker was raised in Austria and went to Germany for both work and education (2003). He was introduced to the issues of a totalitarian dictatorship when Hitler came to power. Drucker worked for a newspaper in Frankfurt at the time and faced first-hand the censorship of the Nazi party. His experiences brought forth the book The End of Economic Man (1938-1939) and later The Future of Industrial Man (1942). Peter Drucker saw that “social institutions” were “power centers within industrial society” (Drucker, 2003, p.11).

Later, Drucker focused on the influence management has on the individual worker as well as on individuals themselves. Unlike Wesley, Drucker supported social change through and with organizations in balance with individuals. Concepts he created teach managers to be people-oriented instead of task-oriented and to consider investment in workers to be a pillar of good business. He found that many organizations had the primary drive of financial stability. Though a business must be stable monetarily to be a functioning organization, it is not the only pillar of ‘good business.’ Rao (2021) reminds us that Drucker posits that “people are our greatest asset” (p.6). Time must be spent on investing in employee development. Another example of how Drucker viewed the balance between society/organizations and the individual is the concept of status and function, a term he learned combing the library in Hamburg, Germany at the age of 18 (Drucker, 2003).

Status and function is defined by Drucker in terms of how an individual fits within a social group and what that person’s purpose is independent of any social labels or groupings (Drucker, 1942). This is because status defines where an individual fits within the group as an in-group or out-group member and the role given to that person. Function is how an individual sees themselves with respect to life’s purpose and whether the purpose of society fits within a person’s individual viewpoint. There is a symbiotic relationship between status and function (Drucker, 2003). Status and function can be self-defined or group-generated and is tied to social responsibility and discussed above as CSR.

Drucker's emphasis on integrity, social responsibility, and ethical behavior ties leadership decisions and actions in these areas to an organization’s sustainability. Drucker points out the need for sustainability in Managing the Non-Profit Organization and the necessity to balance mission, vision, financial stability, resources and marketing (Drucker 1990). One can conclude that these are of equal importance to a for-profit organization as well.

Connections between Wesley and Drucker Related to CSR

Wesley focused on “slavery, economics and ethics, his work on aid to the poor, prison reform, and education beyond his scriptural teachings” (Lunn, 2010). Drucker held that individuals and organizations needed to lead the standards of society. These two activists spoke to the issues of the time, and people paid attention. Average people began considering the strategies suggested to alleviate concerns, prevent future negatively impacting events, and create better work environments. These gurus of social responsibility pointed out deficits, gave direction, and inspired others. We stakeholders of today’s society need to continue this work.

Uses for CSR Today

As we continue to shift from the industrial age to knowledge-based work and work in the service industries, we need to maintain balanced organizations that consider social problems in similar regard as they do business issues. Activities that have been categorized with CSR include organizational ethics, environmental issues, philanthropy, ethical responsibility, charitable global giving, community engagement, economic responsibility, and healthy workplace culture (IBM, 2023). I can see connections between these categories and both Drucker and Wesley. Through similar methods, these social reformers created a sustainable societal norm that created a better environment for individuals in the workplace and society as a whole. We need to maintain these ideals by fostering differences in management and organizational climate and culture. Currently, CSR has been associated with job satisfaction, high performance, and employee trust within organizations that are engaged in social responsibility activities (Brieger, 2019). The benefits of CSR go beyond creating equitable workspace.

How do we keep these positive behaviors in the forefront of future organizations and constituents?

Sustainability

Wesley focused on making safe and ethical workplace conditions a priority. Drucker posits that organizations must measure how well they create and maintain work cultures that support the needs of all stakeholders, status and function, financial stability, innovation, and environmental impact.

Organizations that create and maintain a focus on CSR topics such as healthy workplace and environmental issues promote a better society while keeping clientele who share the same interests and concerns. This concept of social responsibility goes far beyond corporations. It lends to sustainable organizations.

My question is, who will make sure these concepts are carried into the future?

We will.

References

Brieger, S. A. (2019). Too Much of a Good Thing? On the Relationship Between CSR and Employee Work Addiction. Journal of Business Ethics. Springer Nature B.V.

Drucker, P. (2003). A Functioning Society. Transaction Publishers

Drucker, P. (1990, 2010). Managing the Non-Profit Organization. Harper-Collins, e-books.

Drucker, P. (1942). The future of industrial man. Translation Publishers

GCAH, Jan 2025. General Commission on Archives & History: John Westley.

https://gcah.org/biographies/john-wesley/

Google Search (Jan, 2025). Definition of Corporate Social Responsibility

IBM, Dec 2023. What is Corporate Social Responsibility (CSR)? Found at https://www.ibm.com/think/topics/corporate-social- responsibility#:~:text=Corporate%20social%20responsibility%20is%20the,impact%20is %20measured%20or%20quantified.

Murray Norris, C. (2017). Chapter 9 Education, Welfare, and Missions. Oxford Academic. https://doi.org/10.1093/acprof:oso/9780198796411.003.0010

Nutt, P.C. & Wilson, D. C. (2010). Handbook of decision making. Wiley-Blackwell

Lunn, J. (2010). Religion & Liberty: John Wesley's Social Ethic. 3.6. Action University.

Rao, M.S. (2021). Peter Drucker’s Principles, Philosophies, and Practices. The Journal of Values-Based Leadership. 14.2.

Swaminathan, S. (2009). Wesley, John (1703–1791), Methodism, and Social Reform. 1-2. Wiley. https://doi.org/10.1002/9781405198073.wbierp1559

Vickers, J. A. (2003). John Wesley at 300. Historian, (79), 28-33. https://2q21e1s6o-mp01-y- https-www-proquest-com.proxy.lirn.net/scholarly-journals/john-wesley-at-300/docview/275037337/se-2

Sustainable Leadership: Here to Stay, Even When Politicians Say Otherwise

Sat, 15 Mar 2025 13:54:00 GMT

Despite current political pressures that may seem at odds with sustainable leadership initiatives, the importance of sustainability remains underscored by robust scientific evidence. Research on stakeholder theory consistently shows that sustainable practices not only mitigate environmental degradation but also enhance long-term economic performance and societal well-being (Parmar et al., 2010).

Sustainable leadership involves understanding the long-term impacts of organizational decisions on social, environmental, and financial sectors, emphasizing a holistic approach to value creation. In this regard, boardrooms in recent years have implemented an ESG (environment, social and governance) framework for evaluation of organization’s sustainability (Greenbaum, 2022). In the fast-changing global environment today, effective leadership must continue to go beyond the tried-and-failed models that prioritize short-term gains over enduring sustainability. The traditional focus on immediate profits has long given way to a more integrated approach, where long term success is achieved through balancing economic performance with environmental stewardship and social responsibility.

In today’s political environment, while some organizations and their leaders appear to have adjusted their language and policies to align with prevailing political sentiments, these changes often reflect a superficial response rather than a genuine shift in strategy. Many organizations remain acutely aware of the scientific consensus on sustainability and continue to integrate these principles into their core operations, recognizing that the long-term benefits of sustainable practices outweigh short-term political pressures.

In conclusion, while political landscapes may shift, the imperative for sustainable leadership remains unwavering. Leaders who ground their strategies in this well-established understanding not only navigate political changes effectively but also champion practices that generate long-term economic prosperity and societal well-being for all stakeholders.

References

Parmar, B. L., Freeman, R. E., Harrison, J. S., Wicks, A. C., Purnell, L., & De Colle, S. (2010). Stakeholder theory: The state of the art. The Academy of Management Annals, 4(1), 403-445.

Greenbaum, K. (2022), The Importance Of Sustainable Leadership. Forbes, https://www.forbes.com/councils/forbeshumanresourcescouncil/2022/09/07/the-importance-of-sustainable-leadership/

Rethinking Motivation: The Key to Sustainable Performance

Fri, 07 Mar 2025 04:26:00 GMT

Motivation and performance in the workplace have been the subject of extensive research, yet a comprehensive understanding of their complexities remains elusive. While many organizations recognize the importance of motivation in driving employee performance, a significant number still approach motivation through simplistic, linear models that fail to capture its depth. Traditional methods, such as annual performance reviews with occasional praise or monetary bonuses, may have some impact, but they are often insufficient in fostering long-term employee engagement and sustained productivity. The relationship between motivation and performance is intricate, requiring a more nuanced and strategic approach from organizations.

Motivation plays a crucial role in organizational sustainability. When employees are motivated, they exhibit higher levels of productivity, creativity, and commitment, all of which contribute to an organization’s long-term success (Ryan & Deci, 2000) and sustainability. However, many organizations continue to rely on outdated methods that focus primarily on the provision of extrinsic rewards. While financial incentives, such as salary increases and bonuses, can have a positive impact, research indicates that their effect on motivation is often temporary (Deci, Koestner, & Ryan, 1999). Once the external reward is removed, motivation levels tend to return to their previous state, highlighting the limitations of this approach.

In contrast, organizations, and more specifically managers who have invested in fostering an environment that develops genuine engagement and trust, thus increasing motivation within their teams, have recognized the importance of intrinsic rewards. Intrinsic motivation, which arises from within the individual, is driven by factors such as personal growth, job satisfaction, and a sense of purpose (Pink, 2009). Employees who find meaning in their work and feel a sense of autonomy are often more engaged and perform better than those who are solely motivated by external incentives. This aligns with Self-Determination Theory, which emphasizes the role of autonomy, competence, and relatedness in fostering motivation (Deci & Ryan, 1985). Moreover, this also is consistent with the philosophy of Management as a Liberal Art which highlights the importance of independent decision-making.

Despite the emphasis on extrinsic rewards, research suggests that human beings are only driven by them to a certain extent. Herzberg’s Two-Factor Theory (1959) highlights this by distinguishing between hygiene factors (such as salary and job security) and motivators (such as achievement and recognition). While hygiene factors can prevent dissatisfaction, they do not necessarily lead to increased motivation. Instead, true motivation stems from intrinsic factors that align with an individual's values, aspirations, and personal goals. Not every employee seeks to climb the corporate ladder; some may find fulfillment in mastering a specific skill, contributing to a meaningful project, or maintaining a healthy work-life balance.

As a result, managers must move beyond a one-size-fits-all approach and develop a deeper understanding of the psychology behind motivation. Recognizing individual differences and tailoring motivation strategies to align with employees’ unique needs can lead to greater job satisfaction and improved performance (Gagné & Deci, 2005). This means fostering a work environment that promotes autonomy, provides opportunities for growth, and acknowledges employees’ contributions in meaningful ways.

Organizations should also consider the long-term implications of their motivation strategies. Rather than merely offering short-term incentives, they should invest in creating a workplace culture that values intrinsic motivation. This can be achieved through leadership development programs, mentorship opportunities, and fostering a sense of community within the organization. When employees feel valued and supported (and listened to), their motivation is more likely to be sustained, ultimately benefiting both the individual and the organization as a whole.

One effective strategy is providing employees with opportunities for continuous learning and professional development. Organizations can offer training programs, workshops, and tuition reimbursement to help employees acquire new skills and expand their expertise. When employees see that their company is invested in their growth, they are more likely to remain engaged and committed to their work. Furthermore, providing employees with challenging yet attainable goals can foster a sense of accomplishment and reinforce their intrinsic motivation.

Additionally, fostering a culture of recognition and meaningful feedback is essential. While monetary rewards can provide temporary satisfaction, genuine appreciation and acknowledgment of employees' contributions create a lasting impact. Managers can implement regular check-ins, peer recognition programs, and public acknowledgments of achievements to make employees feel valued. When employees receive positive reinforcement for their efforts, they are more likely to stay motivated and take pride in their work.

While financial incentives and extrinsic rewards have their place in workplace motivation, they are not a panacea for enhancing performance. Motivation is a complex and deeply personal phenomenon that requires organizations to adopt a more holistic approach. By understanding the interplay between intrinsic and extrinsic motivation and recognizing the unique aspirations of employees, organizations can create an environment that fosters sustained motivation and long-term success. Investing in the psychological and professional well-being of employees is not just a moral imperative but a strategic necessity for organizational sustainability.

References

Deci, E. L., Koestner, R., & Ryan, R. M. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin, 125(6), 627-668.

Deci, E. L., & Ryan, R. M. (1985). Intrinsic motivation and self-determination in human behavior. Springer Science & Business Media.

Gagné, M., & Deci, E. L. (2005). Self-determination theory and work motivation. Journal of Organizational Behavior, 26(4), 331-362.

Herzberg, F. (1959). The Motivation to Work. John Wiley & Sons.

Pink, D. H. (2009). Drive: The surprising truth about what motivates us. Riverhead Books.

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68-78.

The Animated Movie, Inside Out 2, Can Help Leaders Better Comprehend and Internalize Emotional Intelligence

Wed, 26 Feb 2025 22:41:00 GMT

In 1995 Daniel Goleman published a groundbreaking book which introduced the leadership/management discipline to emotional intelligence.The book is Emotional Intelligence: Why it can matter more that IQ (Bantam 1995). Over the last 30 years more than 20 book and hundreds of papers have been published on emotional intelligence (abbreviated as EQ) extolling its effectiveness as a leadership concept. Many of the books were authored by Goleman with his co-writers Richard Boyatzis and Annie McKee.

Given the current political climate in the United States and the world, the concept of EQ may be even more relevant today than it was 30 years ago. EQ shows an incontrovertible link between a leader’s emotional maturity and their performance as a leader. In the words of Daniel Goleman, “The research on EQ shows that the ‘good guys’—emotionally intelligent men and women—finish first” (Goleman, et al. p.169. 2001).

Just as Peter Drucker’s insistence on self-knowledge and the knowing of one’s strengths and weaknesses is the starting point in his essay, Managing Oneself (1999), EQ starts with knowing yourself, including your weaknesses and strengths, and especially your emotions. Drucker also talked about values and manners. Manners is all about people working in close contact with each other and therefore naturally causing friction. He said that workers must be able to cooperate and treat each other with courtesy and respect. In order to do this, they must look inward to make sure they use words like thank-you and please and they know their co-workers’ names and even the names of their family members. He didn’t specifically use the word emotions but was writing about a basic form of emotional intelligence.

Goleman, et al. (2001) lists the four components of emotional intelligence in action:

1. Self-awareness: The ability to read your own emotions. Knowing how your moods are affecting others.

2. Self-management: The ability to control your emotions. Don’t let bad moods seize the day; leave them outside the office.

3. Social awareness: The ability to sense other people’s emotions and show that they care. Understand how your words and actions affect other people and be able to change them when their impact is negative.

4. Relationship-management: The ability to build strong personal bonds and use these skills to spread their enthusiasm and solve disagreements, often with humor and kindness.

It should be noted that Diamantidou et al. (2024) found a strong link between emotional intelligence and transformational leadership that translates to a positive organizational culture and thus increased organizational effectiveness.

In late 2024, Pixar released an animated movie, Inside Out 2. It is a sequel to the movie Inside Out. It is already the highest grossing animated movie in history. The movie is based on emotional intelligence. Daniel Goleman praised the movie and said, it is clever and moves the field of social-emotional learning forward. The leadership literature cites many examples of the value of using films to teach leadership. Wiliams (2006) posits that because films are memorable and a catalyst for thought and discussion, there is always rich dialogue generated, and a better understanding of the concept being taught after watching the movie.

The characters in the movie are Riley (the human) and Joy, Sadness, Anger, Fear, Disgust, and Anxiety (the emotions). Chatbot (2024) explains that watching the movie can help leaders by dramatically showing how emotions influence both personal and social interactions. The movie also depicts such emotional intelligence concepts as self-awareness, self-management, building empathy, the power of vulnerability, leading by example, and the benefits of transparency.

REFERENCES:

Chatbot, H. How Inside Out 2 Can Improve Your Leadership Skills. Entrepreneurial Leadership. July 30, 2024.

Diamantidou, V., Kaitelidou, D., Kalakairinou-Anagnostopoulou, A., and Galanis, P. Organizational Culture, Transformational Leadership and Emotional Intelligence. Journal of International Caring Services Vol. 17 (2). May/August 2024. 1190-1196.

Drucker, P. Managing Oneself. (1999) In HBR book, On Managing Yourself. pp. 13-32.

Goleman, D., Boyatzis, R., and McKee, A. (2001). Primal Leadership: The Hidden Driver of Great Performance. In HBR book, On Managing Yourself. pp. 169-188.

Wiliams, J. Pirates and Power: What Captain Jack Sparrow, His Friends, and His Foes Can Teach Us About Power Bases. Journal of Leadership Education Vol. 5 (2). Fall 2006.

Innovation and its Impacts

Tue, 25 Feb 2025 18:28:00 GMT

Drucker’s claim that “reliance on the expert to predict the outcomes of technology is born out of hubris” (Drucker, 1969, p. 524) still holds and will likely continue to be the same. Each development is caused by and leads to several factors, “each independent in its origins,” with the “outgrowth of a separate discipline with its own experts” (Drucker, 1969, p. 524). Aristotle’s syllogisms (a kind of logical argument) are the reason ChatGPT exists today. The statement above sounds bizarre, but Boolean logic was invented in the 1800s to mathematically represent syllogisms. Claude Shannon, in 1937, demonstrated the use of Boolean algebra in designing electrical circuits, which paved the way for GPUs, programming, digital computers, and AI systems like ChatGPT. Claude Shannon could not have predicted that his design of electrical circuits would someday contribute to the fragmentation of human interaction (social media), digital overload and decision fatigue (social media), erosion of creativity through AI-assisted writing, and increased energy consumption and pollution (large AI models lead to high electricity usage and carbon emissions from data centers). This indicates that “the impacts of technology are often quite indirect and by-products rather than main products” (Drucker, 1969, p. 524). Sometimes, even the most direct use cases of modern technology have unintended adverse consequences, leading to “the cost being more than the worth” (Drucker, 1969, p. 523).

The Computerized Provider Order Entry (CPOE) systems in healthcare were designed to reduce medical errors and improve the quality of patient care. However, studies have shown unintended net adverse effects due to clinicians’ overreliance on this technology and diminished critical thinking. CPOE systems with inbuilt clinical decision support (CDS) help clinicians by providing “notifications of drug-drug interactions, warnings about allergies, recommendations for clinical guideline compliance, and more” (Campbell et al., 2007, p. 96). For example, anticoagulants and aspirin are usually not prescribed together. However, this combination is often used for heart protection benefits in coronary care. In this context, using these two drugs together would be helpful, but the CPOE system would trigger an alert warning the clinician. If the clinician relies exclusively on CPOE, they may remove one of the two drugs from the therapy, increasing the potential risk to the patient (Campbell et al., 2007).

Going back to the previous example, even if Claude Shannon could foresee all the negative impacts of technological advancements stemming from his invention, he would not have stopped his development, as there were foreseeable immediate and long-term net-positive outcomes, too. As Drucker puts it, in this new age of technology, we need new decision-makers and decision-making processes built on understanding the history and dynamics of technology instead of focusing on predicting the outcomes of technology or determining what is right or wrong (Drucker, 1969).

 References

Drucker, P. F. (1969). Comment: Is Technology Predictable? Technology and Culture, 10(4), 522-527. https://doi.org/10.2307/3101571

Campbell, E. M., Sittig, D. F., Guappone, K. P., Dykstra, R. H., & Ash, J. S. (2007). Overdependence on technology: an unintended adverse consequence of computerized provider order entry. AMIA Annual Symposium Proceedings, 2007, 94-98.

La Gestión Como Arte Liberal

Tue, 11 Feb 2025 01:50:00 GMT

Peter Drucker escribió extensamente sobre las funciones y responsabilidades de los gerentes y sobre los principios que podrían ayudar a mejorar el desempeño organizacional. En sus obras, Drucker infiere que los individuos que conforman la organización deben cultivar el autoconocimiento, la autoconciencia y desarrollar sus habilidades a través de la aplicación.

Aprendemos por primera vez sobre el concepto de la gestión como arte liberal en el libro de Drucker, "The New Realities". En este texto, Drucker se refiere a la gestión como arte liberal: "La gestión es, por lo tanto, lo que la tradición solía llamar un arte liberal - 'liberal' porque trata con los fundamentos del conocimiento, el autoconocimiento, la sabiduría y el liderazgo; 'arte' porque trata con la práctica y la aplicación. Los gerentes recurren a todos los conocimientos e ideas de las humanidades y las ciencias sociales - en la psicología y la filosofía, en la economía y la historia, en las ciencias físicas y la ética. Pero deben enfocar este conocimiento en la efectividad y los resultados." (Drucker, 1989)

Drucker argumentó que debemos reconocer que la naturaleza humana es imperfecta, pero que, a través de la observación y la contemplación, y mucha, mucha práctica, la toma de decisiones puede mejorarse. Con el tiempo, a medida que las personas practican la gestión de manera ética y responsable, la comunidad en general se beneficia de las decisiones tomadas en organizaciones responsables y socialmente conscientes.

La gestión como arte liberal es un concepto que caracteriza una filosofía, una que se basa en los elementos del conocimiento, el autoconocimiento, la sabiduría y el liderazgo. Esta filosofía implica que cualquier individuo tiene el potencial de crecer y desarrollarse, y convertirse en un gerente efectivo, siempre y cuando este individuo se tome el tiempo para reflexionar, desarrollar habilidades y conocimientos, y adquirir continuamente experiencias que enriquecerán su perspectiva sobre cómo liderar eficazmente a otras personas.

Sin embargo, Drucker reconoció que el interés propio interrumpe y, en los peores casos, impide y restringe los esfuerzos de los demás. Como tal, el gerente debe desarrollar la capacidad de observar lo que está ocurriendo dentro y fuera de la organización. Al mismo tiempo, la persona debe desarrollar la autoconciencia y la capacidad de reflexionar sobre su propio comportamiento y las decisiones que toma. Esto incluye analizar cómo las decisiones pueden influir en las acciones y el comportamiento de los demás.

Es a través de la autorreflexión y la conciencia que podemos notar lo que ha funcionado, lo que no y lo que podríamos hacer de manera diferente la próxima vez que surja otra situación. Un gerente puede desarrollar inteligencia emocional, utilizando el concepto de Daniel Goleman. Y en el contexto de la gestión como arte liberal, esto es lo que llamaríamos autoconocimiento.

Un gerente puede volverse más efectivo y llegar a apoyar el crecimiento y desarrollo de los demás, siempre que aprenda a valorar a las personas por quienes son, y les permita espacio para ser ellos mismos. Pero para hacer esto, el gerente debe aprender a escuchar a los demás, respetarlos y reconocer sus preocupaciones y necesidades. También es importante aprovechar las ideas y sugerencias de las personas para ayudar a encontrar soluciones. Esta es un axioma importante dentro de la gestión como arte liberal.

Otro elemento clave de la gestión como arte liberal es la noción de que el individuo debe construir conocimiento. Como tal, la persona debe buscar activamente información, datos, hechos e historias que puedan ayudar a aumentar el conocimiento. Además, podemos mejorar nuestras habilidades gerenciales y decisiones aplicando una perspectiva transdisciplinaria para resolver problemas.

La perspectiva transdisciplinaria proporciona al individuo una visión integrada y más holística que combina diferentes puntos de vista de las artes, las humanidades y la ciencia. Drucker postuló que podemos aprender leyendo historia, filosofía y economía, y que la reconciliación de ideas de múltiples disciplinas puede ser beneficiosa para determinar el mejor curso de acción. Drucker sugirió que la consideración cuidadosa de diferentes alternativas y efectos posteriores, contingencias y resultados potenciales, mejoraría las decisiones y permitiría que el individuo se convierta en un tomador de decisiones más efectivo.

Según la gestión como arte liberal, es importante que consideremos cómo nuestras acciones influirán en los demás y que asumamos la responsabilidad de nuestras acciones. La gestión como arte liberal postula que las personas se definen a sí mismas (y sirven a la sociedad) a través de la acción responsable. Esto significa que los gerentes efectivos actuarán de manera responsable y con ética, y utilizarán su estatus y poder para promover el bienestar de la organización y su gente. Esto infiere que el individuo actuará con el mejor interés de la organización (y sus partes interesadas) en mente. Actuar con buen juicio, tener lucidez y una mejor comprensión de las situaciones y contextos es lo que llamaríamos ejercer la sabiduría.

Para involucrar a las personas y construir mejores organizaciones, y en última instancia contribuir a lo que Drucker llamó una "sociedad funcional", es vital que tratemos a todas las personas dentro de la organización con respeto y dignidad. Y que ayudemos a las personas a crecer y desarrollarse y a encontrar significado en lo que hacen. Así es como se construyen las grandes organizaciones. Esto es lo que llamaríamos liderazgo.

Y los líderes dentro de la organización deben ser conscientes de que el mundo evoluciona y que algunas cosas deben cambiar, mientras que otras deben mantenerse. Esto significa equilibrar el cambio y la continuidad y reconocer qué proceso o actividad necesita ser renovado, y cuál otra práctica necesita ser preservada.

La gestión como arte liberal está arraigada en la práctica y la aplicación, en la autorreflexión, en tratar a las personas con dignidad y respeto, y en usar un lente transdisciplinario para ayudar a mejorar las decisiones. Se necesita tiempo para lograr resultados y construir grandes organizaciones. Pero se puede lograr. Y las organizaciones cuyos gerentes pueden practicar y aplicar, y reflexionar y aprender continuamente de sus acciones, tienen más probabilidades de ayudar a construir una mejor comunidad y una sociedad funcional y próspera.

Referencias

Drucker, Peter F. (2003) A Functioning Society (Routledge, London and New York)

Drucker, Peter F. (1989) The New Realities: in Government and Politics, in Economics and Business, in Society and World View (New York: Harper & Row)

Goleman, Daniel. (2007) Emotional Intelligence. 10th ed., Bantam Books.

Part II: Knowledge Work in a Post-Capitalist Society

Fri, 07 Feb 2025 23:53:00 GMT

“What does ‘Capitalism’ mean when Knowledge governs – rather than Money? And what do ‘Free Markets’ mean when knowledge workers – and no one else can ‘own’ knowledge – are the true assets?” (Peter Drucker, 1999). This issue of my newsletter focuses on features of today’s knowledge work, and what knowledge work might look like in the future. In part one, I discussed some of the challenges associated with measuring knowledge worker productivity. In this installment, I’ll take up Drucker’s concept of “Post-Capitalist Society” and what it might mean for knowledge work in the 21st century.

Fear not; this will not be an academic treatise on Marx or Marxism. But central to an understanding of our knowledge-based society is some sense of how previous industrial society was configured and structured. As I argued in the last installment of this newsletter, part of our difficulty with measuring knowledge worker productivity is that we still use the language of industrial capitalism: we measure productivity in terms of output, particularly in quantity. We lack a more modern understanding of what productivity looks like. Why?

Marx and Capitalism

Marx saw capitalism as a stage in history, as part of a larger pageant of human conflict. In The German Ideology (1845), Marx critiques the idealism of German philosophy as locked in the realm of thought instead of material reality. It is time, he argues, for German philosophers to stop simply criticizing each other regarding implications of spiritual matters (the nature of knowledge, etc.) but rather to address the realities of material life. Marx was reacting to the decline of Hegelian thought, and transformed Hegel’s spiritual dialectic model into dialectical materialism. For Hegel, human development was a process of conflict at the spiritual level, when human understanding is challenged by contradicting experiences and events, leading to a new level of awareness, all guided by “Geist”. Marx took this out of the spiritual realm and grounded it in worldly events; his dialectic model was still one of human transformation and development, but it morphed into a model of class conflict. Dialectical materialism involved observable conflicts in social conditions and economic status that would then be acted upon to create a new social order.

Like Drucker, Marx was a social theorist, and was reacting to the dramatic changes he saw happening in his time. Marx and his associate Engels observed the transformation from a rural to an industrial society and the associated social upheavals. Marx and Engels focused on the shift from an economy where value was derived from labor to one that relied on machines and money (capital) to produce the material needs of human beings. The culmination of their efforts was Marx’s massive work, The Capital (Das Kapital), published in three volumes in 1867, 1884, and 1894. The work is an intricate analysis of capitalism as an economic system as well as a social structure. There is no substitute for actually reading the text, but, for our purposes here, Marx had several key points that are germane to our discussion of today’s knowledge society:

1. Labor theory of value : Marx challenged utilitarian viewpoints of value, stating that the value of products lies not in their satisfaction of human wants, but in the human labor used to produce them. Value is in production, not in the end-user’s perception of value.

2. Ownership of means of production : In earlier rural societies (at least those with free labor), labor owned the means of production (its own work). Under capitalism, a ruling class owned the machinery and financial instruments (the capital) necessary to production. They also, in fact, own the labor, as workers no longer have a say in their hours, working conditions, etc. Owners derive unearned income from the labor of workers who are under their control.

3. Alienation: The process of industrial production involves an increasing deskilling of work, meaning workers have less of an association with the larger purpose of the process or output. As labor is divided into more specialized functions, there is increased alienation.

4. Dialectical materialism : As capitalism increases social conflict (class conflict), it sows the seeds of its own demise. It is part of Marx’s historical theory of capitalism as one stage in human development. Eventually, socialism will replace capitalism, and workers will own the means of production, ushering in a new social order.

Post-Capitalist Society

In 1993, Drucker published Post-Capitalist Society, a book that advances a bold argument about Marx’s theories and the trajectories of history. It was one of his more successful books, and I think he left us with much to think about as we navigate the waters of the new or next knowledge society.

Drucker looks back on Marx’s evaluation of capitalism with an historical view, much like Marx looked at Hegelian and other assessments of society in his time. In this sense, Drucker follows in the tradition of European theorists critiquing the ideas of the past, using an historical argument. According to Drucker, the manufacturing economy framed the conversation around society, economics, and politics from the late 1800s to the 1950s. Marx’s labor theory of value dominated discussions, as workers competed to have equal power and voice with owners (capitalists). However, as Drucker argues, the owners of capital (the financial titans of industry) peaked by the First World War, and were replaced by professional managers by the 1950s. The classic dialectic between labor and capital was no longer relevant by the 1950s, as “capitalists” no longer existed. Drucker posits that by the 1970s, “capital” would be in the hands of the workers themselves in the form of pensions, mutual funds, and other collective methods of corporate ownership.

According to Drucker, the factors of production were no longer labor or capital, but knowledge by the mid-20thcentury. Knowledge workers owned the capital (pension funds, and later 401ks) and also owned the means/tools of production (knowledge). This perspective upended not only traditional notions of capitalism as viewing labor and capital as the primary inputs for production, but also upset the social order. Moreover, we faced a new economic challenge of measuring productivity in a new way (related to knowledge) but also a social challenge as the old service (manual labor) workers would be left behind. Furthermore, we would face a dichotomy between intellectuals and managers. Both of these conflicts are akin to what Marx alluded to in his reference to dialectical materialism. In essence, while highly critical of Marx, Drucker used a version of Marxist theory to postulate the existence of a “post-capitalist society.”

Drucker was no fan of Marx but uses an historical argument and similar language about analysis of inputs (labor and capital, but in Drucker’s case, knowledge). The difference is that Drucker is not engaging in a dialectical process (and not one focused on material concerns alone). According to Drucker, one of the primary reasons that Marx’s worldwide proletarian revolution failed to materialize was the inadequacy of his model of “economic man” (his sole emphasis on material satisfaction as an indicator of society’s wellbeing). Drucker rejected this model of society, arguing for an industrial model of society where the manufacturing plant community provided meaning to the worker. Crucial to defeating the forces of totalitarianism (and Marxism, for that matter) was providing individuals in society with status and function . Status gives people a place in the social structure, whereas function provides individuals with a purpose. Economic meaning was not enough; people needed this larger sense of individual and community meaning. In the early twentieth century, because of the incredible gains in manufacturing productivity, capitalism emerged as the dominant system. However, as society moved away from industrial employment towards knowledge work, this new post-capitalist society presented new challenges – including the possibility for social disorder.

Thus, Drucker turned to understanding the “ knowledge society ”, a new stage in human development. According to his analysis, what were the new challenges inherent in this new knowledge society? As we saw in the previous installment of this issue, knowledge worker productivity and its measurement represented one such challenge – one we still face. Drucker also wrestled with questions of worker motivation, social disorder, and compensation disparities. In our next installment, we’ll expand on Drucker’s concerns and see how they might help us understand where we are with our current knowledge society and the challenges we face.

Peter Drucker’s Philosophy on Business Sustainability as Applied to Proctor and Gamble

Fri, 07 Feb 2025 23:41:00 GMT

One cannot manage change. One can only be ahead of it…In a period of

upheavals, such as the one we are living in, change is the norm.

To be sure, it is painful and risky, and above all, it requires a great deal of

very hard work. But unless it is seen as the task of the organization

to lead change, the organization…will not survive.

Peter Drucker in Management Challenges for the 21 ^st Century (2001)

Alan George Lafley was the CEO of Proctor and Gamble (P&G) from 2000 to 2010 and 2013 to 2016. The Proctor and Gamble Company is a consumer goods corporation headquartered in Cincinnati, Ohio. It was founded in 1837. Today, Proctor and Gamble is healthy and is ranked 55 ^th in the Forbes Global 2000.

In 2000, just before Lafley was appointed CEO, P&G stock dropped by almost 30% in one day, and the next week, it dropped another 11%. P&G lost $85 billion in market capitalization a few months later. Lafley described it as a crisis of confidence; inside the organization, employees were blaming each other, and outside the organization, market analysts and investors were surprised and angry. Retirees were angry over losing half of their profit-sharing nest eggs.

The news media used headlines such as “P and G Investor Confidence Shot”, “Trouble in Brand City,” and “Does P&G Still Matter?” It appeared that a major, almost 200-year-old company, was in danger of going out of business.

Fortunately, Lafley had the advantage of being familiar with Peter Drucker’s writings and was able to talk with him in person. What follows is an accounting of Lafley's actions using his own experience (P&G was his first CEO job) along with Peter Drucker’s writing and personal advice on sustainability.

· One of Drucker’s last works was answering the question, “What is the work of the CEO?” Lafley realized that the CEO is singularly held accountable for the performance and results of the company and acted accordingly.

· Trust is needed for sustainability. Trust at P&G had evolved to mean that employees could rely on the company for lifetime jobs. Lafley redefined it as consumers’ trust in the company’s brands and shareholders’ trust in its value as a long-term investment.

· The consumer is boss. This mindset was emphasized to all employees. Another more famous Drucker Quote is, “The purpose of a business is to create a customer.” Lafley turned around the company-wide habit of losing touch with customers by emphasizing employees at all levels getting closer to customers.

· Lafley listened to Drucker that a company must decide what business you are in (or not in). Lafley took the advice and after careful analysis caused P&G to keep some products and businesses, eliminate some products and businesses, and add some products and businesses. This was also the advice Drucker gave to Jack Welch, General Electric CEO, a few years earlier about streamlining the company by focusing on where to compete and where not to compete. Lafley expanded Drucker’s advice by adding his own statement on sustainability; “We must work on the present to earn the right to invest in the future.”

· As published in the Wall Street Journal in January 2005 (The American CEO)

Drucker observed that we don’t completely understand the unique role of the CEO; What is the work that only they can do and that they must do? The CEO has the power and the ultimate responsibility for business sustainability. The CEO is the link between the inside of the organization and the outside of the organization. He or she alone experiences the meaningful “outside” the organization and is responsible for understanding it, interpreting it, advocating for it, and presenting it in a way that enables sustainable sales, profit, and total shareholder return. For Lafley, “meaningful outside” can include several stakeholder classes, but it emphasizes the idea that the “Consumer is Boss.”

Lafely saw that over the years, P&G employees had been drawn to internal interests, and inward focus is the enemy of growth. It is the CEO’s job to deal with outside stakeholders and have a deep understanding of their competing interests, as well as how those interests correspond with the capabilities and limitations of the organization. And Lafley went to work on reinvigorating focus on “outside the organization stakeholders” while keeping in mind that employees are a company’s most valuable asset. Strengthening relationships with analysts and investors resulted in a better understanding of their wants and needs.

· Drucker said that effective CEOs make sure that the performing people are allocated to opportunities, rather than only problems. Lafley took this advice to heart and also reiterated the importance of succession planning.

· Avoiding complacency in an organization is a must. The CEO should always ask, “Are we winning with those who matter most and against the very best?” The CEO should ensure that the company’s values, purpose, and standards stay relevant for the present and the future and for the businesses the company is in.

CODA

When looking at overall company sustainability, the difference in governance between Jack Welch of General Electric and A.G. Lafley of Proctor and Gamble is dramatic This is a potential subject for further research on sustainability.

In the leadership literature Lafley is generally rated as a hands-on people person who consistently strived to develop leadership in his employees. He was respectful of employees and valued listening to them. He could be described as a servant leader or a follower of Peter Drucker’s management as a liberal art leadership style.

Welch was very competitive and was also described as having a combative and aggressive personality. He stressed shareholder value and the absolute necessity of financial performance. In the name of cost-cutting, he would occasionally order massive layoffs, which caused employee resentment and mistrust. His mantra of “Win at Any Cost” has been said to damage the ethical behavior of employees.

When Lafley and Welch were CEOs of their respective companies, the companies thrived. When Welch left GE in 2001 the company had “disappointing results for 2 decades.” When Lafley left P&G in 2016 the company continued to thrive and is still highly rated.

Bibliography

Silva, A. 2015. What Can We Learn from Great Business Leaders? Journal of Leadership Studies. 23 January 2015.

Donlon, J. 2007. Proctor and Gamble. Chief Executive. Iss. 30. December 2007. 58-62.

Lafley, A. G. (2009) What Only the CEO Can Do. Harvard Business Review, May 2009

A Tribute to Charles Handy (1932-2024)

Mon, 06 Jan 2025 20:23:00 GMT

On December 13, 2024, we lost a seminal management philosopher and theorist: Charles Handy. Like Peter Drucker, Handy was a social thinker and management theorist who emphasized the human side of work as more important than profits and valued individual growth and development in organizations.

Handy was born in Ireland and studied at Oxford. In 1956, he went to work for Shell, working in Borneo, where he met his future wife, Elizabeth Hill. Disillusioned by corporate life, Handy left Shell in 1962 to study management at MIT in their executive program. Inspired by their humanistic approach, he returned to London in 1967 to start the London Business School.

Handy knew Drucker and was a regular keynote speaker at the Global Drucker Forum in Vienna. The two men had much in common in terms of their approaches to management and social theory. Like Drucker, Handy became an author (although, unlike Drucker, Handy was a corporate executive before he turned to writing). Handy wrote not just on business but also society, serving as much as a social ecologist as Drucker was. In his pivotal book, The Age of Unreason (1989), Handy argued for the disruption of discontinuity – resulting in a new world of business, education, and work that was highly unpredictable. He rejected shareholder capitalism and saw the organization as a place for human purpose and fulfillment, based on trust. Like Drucker, Handy advocated federalism in organizations, disseminating authority and responsibility to the lowest possible levels. He also saw “the future that had already happened.” Handy coined the term “portfolio life,” where knowledge workers would increasingly work remotely and for multiple organizations. In the 1980s, he posited that society consisted of “shamrock organizations”: those that had three integrated leaves: full-time employees, outside contractors, and temporary workers. Handy thus foresaw the new “gig economy” and increasingly autonomy of knowledge work. Finally, like Drucker, Handy had a life partner who not only supported his career but was an independent woman with her own interests. Liz Handy, like Doris Drucker, was an entrepreneur who ran an interior design business, and later was a professional photographer and Charles’s business agent.

Minglo Shao, founder of CIAM, remembers Handy as a warm man who made several important contributions to what we see as the fundamentals of Management as a Liberal Art. We are thankful for Handy’s contributions to management theory and social thought, and for his legacy at the Global Drucker Forum in the form of the Charles and Elizabeth Handy Lecture Series.

Treasures from the Charles Handy Drucker Forum legacy

Sun, 29 Dec 2024 00:41:00 GMT

For 15 years, Charles Handy did us the enormous honor of choosing the Drucker Forum as a privileged platform for delivering his message to the world, and particularly to the younger generation in which he had such faith. Following up on our initial announcement of Charles’ passing Charles Handy (1932–2024) , we are honored to share a selection of his key contributions to the Forum with our wider community.

Charles’ brilliant keynotes at the Drucker Forum have become legendary. Normally accessible only to members of the Drucker Society, from today they are available as recordings to the wider public for a period of 30 days. At the first centennial Forum in 2009, Charles talked about his debt to Peter Drucker while outlining his own fundamental management concepts that he had developed over the years. Two years later, he touched on the ideas of Adam Smith and demonstrated how much more to them there was than the celebrated “invisible hand” of self-interest. In his landmark closing address in 2017, pursuing a thread developed in his 2015 book The Second Curve, he called for a management reformation that would turn it into a tool for the common good – thus drawing the first contours of what we would announce six years later as the Next Management . We took to heart his exhortation not to wait for great leaders but “to start small fires in the darkness, until they spread and the whole world is alight with a better vision of what we could do with our businesses”. Management’s "second curve" will be the focus of the “Charles and Elizabeth Handy Lecture Series” in 2025.

Following the loss of his beloved wife Elizabeth in 2018 and a severe stroke, Charles was much reduced in mobility in his last years – but not in his determination to continue spreading his message of hope to the world. He couldn’t participate in person in the Drucker Forum 2022, but he participated in a moving online interview with his son Scott, who directed young actors in a short performance of Beckett’s Waiting for Godot by Beckett to illustrate some points.

Charles also contributed valued digital articles for our blog and for Drucker Forum partners. Even during the most difficult period of his life he continued to write and develop his ideas in weekly columns for the Idler magazine. This entailed first memorizing the article, then dictating it and finally reviewing it by having someone it re-read to him – a remarkable feat of memory and determination. The article is a jewel and most appropriate for Christmas and the season of self-reflection.

Have a wonderful Christmas, happy holidays and a healthy and prosperous New Year.

The Future of Knowledge Work: What Drucker can teach us

Tue, 19 Nov 2024 17:04:00 GMT

Interview with Karen Linkletter at the 16th Global Peter Drucker Forum 2024

Video Interview

As we consider the concept of knowledge work today, we are faced with several challenges. How do we motivate increasingly independent workers to be part of an organization or a team? How do we measure and evaluate knowledge worker productivity? How do knowledge workers face the ever-changing landscape of AI and associated technologies? Although he has been gone for almost 20 years, Peter Drucker identified the shift towards knowledge work, and left us some very sound advice for navigating the rough waters we now confront.
Peter Drucker used the term “knowledge work” to describe the shift in the American economy from industrial manufacturing to service sector organizations. In America’s industrial society of the first half of the 20th century, technological advances were driven by the needs of production. Knowledge was applied to work. By the end of the twentieth century, the nature of work had changed. Manufacturing employment was declining, and Drucker’s “knowledge work” was ascending. People were using their education and minds, not just their bodies, to produce. This resulted in a shift from applying knowledge to work to applying knowledge to knowledge. The new knowledge workers were no longer employees needing direct supervision. Instead, they were independent, possessing specialized knowledge in areas outside of management’s expertise. Knowledge work was self-contained and portable.
Drucker recognized that knowledge worker motivation and productivity were the primary challenges facing us in the 21st century. Workers in many ways are even more independent than in Drucker’s era, as they possess technologies and skills that allow them to work almost anywhere and collaborate with others outside a centralized workspace. In many cases, contemporary knowledge workers no longer need access to organizations to be effective; the portability of Drucker’s knowledge worker (in the form of changing jobs) has morphed into the entrepreneur who can run her own business as a consultant.
How do we motivate knowledge workers to be part of our team? Drucker wrote a lot about this! He argued that, unlike manual labor, knowledge work typically was motivating in and of itself; knowledge workers needed little motivation to actually perform their work. However, the challenge was to align knowledge work with the organizational mission and to prevent siloing of specialized knowledge areas. Thus, while knowledge workers may motivate themselves to perform tasks, they may not necessarily do the work that the organization needs to further its goals, unless they understand the larger organizational mission.
We see this playing out today. Knowledge-worker motivation in the 21st century has become increasingly delicate as organizations face phenomena such as “quiet quitting”, where some employees put in the minimum effort required as a backlash against hustle culture. Particularly after the experience of remote work during the COVID 19 pandemic, some knowledge workers are reassessing the importance of work-life balance and resisting efforts to increase their workload. In response to the phenomenon of disengagement at work, some managers have increased their level of supervision, calling for more meetings and in-person gatherings. As a result, many knowledge workers feel that their productivity has suffered and that they are being micromanaged. The need to provide knowledge workers with a sense of meaningful individual contribution, as well as a feeling of being part of something larger than themselves, has never been greater. This is directly aligned with Drucker’s challenge to organizations to align work with mission.
With the rise of remote and hybrid work, knowledge-worker productivity is today a primary concern for organizations. Drucker called knowledge-work productivity the greatest challenge facing organizations in the 21st century. We are still muddling through this challenge. The pandemic has forced organizations to re-evaluate the nature of knowledge work and productivity. While human connection is important, many knowledge workers are indeed more productive when they are freed from restrictive scheduling demands and constant check-ins. Knowledge-work productivity continues to be an area where we need improvement. The trajectory that Drucker discussed has continued, but technology has made knowledge work even more challenging to measure and motivate. How does AI impact questions of motivation and productivity in relation to knowledge work? Does it unleash creativity, freeing knowledge workers from mundane tasks? Does it allow people to explore new areas of thinking? Or is it a monster that will take over human potential, eliminating creativity and originality? Drucker challenged us to consider every innovation as a product of human history, culture, and society. We should view AI through the same lens.
So, while Drucker did not experience the COVID-19 pandemic or witness the growth of AI, his thoughts on the productivity and motivation of knowledge workers, as well as the impact of technology on people, continue to resonate.

Nike, Inc.: A Review Through the Lens of Management as a Liberal Art (MLA)

paul@paullonglee.com (Paul Lee) — Tue, 12 Nov 2024 23:52:40 GMT

Introduction

Nike, Inc. is one of the world’s leading sportswear and athletic footwear companies, known for its innovative designs, global reach, and powerful brand. This review examines how Nike’s management aligns with the principles of Management as a Liberal Art (MLA) , focusing on people-centered practices, ethical leadership, long-term thinking, and more. It also highlights areas where Nike has room to improve its alignment with MLA values.

1. People-Centered Management

Nike places a strong emphasis on empowering athletes and promoting an inclusive workplace, but it has faced criticism over labor practices in its supply chain.

Examples of People-Centered Management at Nike:
Nike offers competitive benefits, flexible work arrangements, and employee support programs, especially at its headquarters in Beaverton, Oregon (Nike, Inc., n.d.-a).
Nike’s recent initiatives focus on creating a more inclusive workplace, including Diversity, Equity, and Inclusion (DEI) programs and commitments to increase representation in leadership roles (Nike, Inc., 2020).
Area for Improvement : Nike’s supply chain practices have been scrutinized, with reports of low wages and poor working conditions for factory workers. These practices may detract from its commitment to a people-centered approach (Greenhouse, 2013).
Conclusion : While Nike demonstrates a people-centered approach within its corporate offices, improving labor practices in its supply chain would better align with MLA’s focus on prioritizing all people connected to the organization.

2. Ethical Leadership and Responsibility

Nike has taken strides toward ethical leadership through sustainability initiatives and transparency in some areas but has encountered challenges in other ethical domains.

Examples of Ethical Leadership:
Nike is committed to transparency in sustainability, regularly publishing its environmental impact reports and setting ambitious goals to reduce its carbon footprint (Nike, Inc., 2022).
Through its “Move to Zero” initiative, Nike aims to achieve zero carbon and zero waste across its global supply chain, reflecting a commitment to environmental responsibility (Nike, Inc., n.d.-b).
Area for Improvement : Nike has faced ethical criticisms related to its endorsement deals with athletes and the perceived inconsistency in upholding ethical standards, as seen in some high-profile controversies (Huddleston, 2018).
Conclusion : Nike’s focus on sustainability aligns with ethical leadership, but strengthening its consistency in ethical decision-making across all aspects of its business could enhance its alignment with MLA principles.

3. Alignment with Social Purpose

Nike’s mission, “To bring inspiration and innovation to every athlete in the world,” reflects a commitment to empowering individuals, though its alignment with broader societal benefits could be improved.

Examples of Social Purpose:
Nike’s community engagement programs, such as the “Made to Play” initiative, focus on expanding access to sport for children worldwide, promoting physical health and social well-being (Nike, Inc., n.d.-c).
Nike’s social impact strategy includes funding programs that empower marginalized communities, promote physical activity, and enhance youth engagement.
Area for Improvement : Nike’s alignment with social purpose could be broadened by addressing issues in its global labor practices, as unresolved labor concerns may undercut its social impact (Locke, 2013).
Conclusion : Nike’s social purpose initiatives in youth and community sports align with MLA principles, but addressing labor conditions in its supply chain could help Nike realize a broader social responsibility.

4. Integration of Multiple Disciplines

Nike incorporates various disciplines, including technology, psychology, and environmental science, into its management and product development strategies, reflecting a multidisciplinary approach.

Examples of Multidisciplinary Integration:
Nike uses cutting-edge technology to develop sustainable materials, such as Flyknit and recycled polyester, which reduce waste and improve product durability (Nike, Inc., n.d.-d).
The company invests in sports science research, supporting athlete performance through biomechanics and physiology insights to create products that enhance athletic capability.
Conclusion : Nike demonstrates strong multidisciplinary integration, aligning well with MLA’s principle of combining diverse fields to drive innovation and sustainable growth.

5. Long-Term Thinking and Sustainability

Nike’s sustainability efforts reflect long-term thinking, though consumer demand for fast-fashion products may limit the environmental benefits of these initiatives.

Examples of Long-Term Thinking:
The “Move to Zero” campaign reflects Nike’s goal to reduce waste and lower carbon emissions in its operations and supply chain, positioning Nike as a leader in sustainable practices (Nike, Inc., n.d.-b).
Nike has pledged to use 100% renewable energy in its owned-and-operated facilities by 2025, underscoring its commitment to sustainable operations (Nike, Inc., 2022).
Area for Improvement : Nike’s emphasis on high turnover fashion, while profitable, conflicts with its long-term sustainability goals and may contribute to environmental strain (Green & Datta, 2020).
Conclusion : Nike’s long-term sustainability goals align with MLA principles, but balancing environmental impact with fast fashion demands presents an opportunity for improvement.

6. Fostering Community and Relationships

Nike builds relationships through partnerships, community programs, and customer engagement, fostering a sense of community around sports and fitness.

Examples of Community Engagement:
Nike collaborates with local and international organizations to promote sports access, including partnerships with community centers and schools (Nike, Inc., n.d.-c).
Nike’s “Community Impact” fund supports local nonprofits in providing sports and physical activity programs for youth (Nike, Inc., 2021).
Conclusion : Nike excels in community engagement, aligning well with MLA’s focus on fostering relationships, though further inclusion of worker welfare in supply chains could deepen its commitment.

7. Adaptability and Learning

Nike’s history shows adaptability to market trends, technological advances, and consumer demands, demonstrating MLA’s adaptability principle.

Examples of Adaptability:
Nike’s transition to digital retail and e-commerce accelerated during the COVID-19 pandemic, showing the company’s agility in response to changing market conditions (Levy, 2020).
Nike invests in digital platforms like Nike Training Club, adapting its approach to meet the needs of customers and athletes worldwide (Nike, Inc., n.d.-e).
Conclusion : Nike exemplifies adaptability and continuous learning, a critical component of MLA, by embracing new technologies and shifting strategies to meet evolving market demands.

8. Stewardship for the Greater Good

Nike positions itself as a steward for the environment through its sustainability goals, but some practices raise questions about its stewardship commitment.

Examples of Stewardship:
The company’s “Move to Zero” initiative reflects its commitment to reducing its environmental impact (Nike, Inc., n.d.-b).
Nike’s involvement in community and youth programs shows its commitment to social stewardship, although areas such as labor practices may need further attention to align fully with MLA.
Area for Improvement : Nike has been criticized for labor practices and lack of transparency in certain regions, suggesting room to improve its stewardship across all aspects of its global operations (Greenhouse, 2013).
Conclusion : Nike’s environmental stewardship initiatives are commendable, yet strengthening its labor practices would more fully align with MLA’s call for stewardship for the greater good.

Final Assessment

Nike, Inc. demonstrates alignment with several Management as a Liberal Art principles, particularly in community engagement, multidisciplinary integration, and sustainability initiatives. However, areas like labor practices in its supply chain and alignment with long-term sustainability goals show opportunities for improvement. By addressing these areas, Nike could enhance its commitment to MLA and further exemplify management practices that benefit both business and society.

References

Green, M. & Datta, K. (2020). The fast fashion industry and the impact on sustainability . Environmental Research Journal, 55(3), 45-58.
Greenhouse, S. (2013). Nike acknowledges poor working conditions. The New York Times . Retrieved from https://www.nytimes.com/nike-poor-conditions
Huddleston, T. (2018). Nike’s controversies and how it’s shaping up. CNBC . Retrieved from https://www.cnbc.com/nike-controversies
Levy, S. (2020). Nike's digital transformation strategy during COVID-19. Forbes . Retrieved from https://www.forbes.com/nike-digital-transformation
Locke, R. (2013). The promise and limits of private power: Promoting labor standards in a global economy . Cambridge University Press.
Nike, Inc. (2020). Diversity, Equity, and Inclusion report . Retrieved from https://www.nike.com/dei-report
Nike, Inc. (2021). Community Impact Fund . Retrieved from https://www.nike.com/community-impact
Nike, Inc. (2022). Sustainability and climate goals . Retrieved from https://www.nike.com/sustainability
Nike, Inc. (n.d.-a). Employee benefits. Retrieved from https://www.nike.com/employee-benefits
Nike, Inc. (n.d.-b). Move to Zero. Retrieved from https://www.nike.com/move-to-zero
Nike, Inc. (n.d.-c). Made to Play initiative. Retrieved from https://www.nike.com/made-to-play
Nike, Inc. (n.d.-d). Flyknit and sustainable materials. Retrieved from https://www.nike.com/fly

Patagonia, Inc.: A Review Through the Lens of Management as a Liberal Art (MLA)

paul@paullonglee.com (Paul Lee) — Tue, 12 Nov 2024 21:10:10 GMT

Introduction

Patagonia, Inc. has earned a reputation as one of the world’s most socially responsible companies, consistently prioritizing environmental stewardship and ethical practices. In this review, we examine how Patagonia’s management approach aligns with the core principles of Management as a Liberal Art (MLA) , focusing on people-centered management, ethical leadership, social purpose, and more. We will also highlight areas where Patagonia might have opportunities for improvement in aligning fully with MLA principles.

1. People-Centered Management

Patagonia places high importance on the well-being of its employees, reflecting the MLA principle that management should prioritize people over profits.

Examples of People-Centered Management at Patagonia :
Patagonia offers competitive benefits, flexible work schedules, and on-site childcare at its headquarters, supporting employee work-life balance and well-being (Patagonia, n.d.-a).
The company encourages employees to pursue environmental activism, even allowing paid time off for volunteering for environmental causes (Patagonia, n.d.-b).
Area for Improvement : Patagonia’s environmental activism stance may sometimes place pressure on employees to engage in activism even if they are not personally interested, which could affect individual autonomy.
Conclusion : Patagonia excels at people-centered management by focusing on employee satisfaction and aligning work with personal and societal values, though it could offer more balance for employees less inclined toward activism.

2. Ethical Leadership and Responsibility

Ethical leadership is at the heart of Patagonia’s business philosophy. The company demonstrates a commitment to ethical decisions that prioritize environmental and social responsibility over short-term profits.

Examples of Ethical Leadership :
Patagonia publicly champions environmental activism, often taking bold stances on issues like public land preservation and climate change (Patagonia, 2022).
The 2011 “Don’t Buy This Jacket” campaign encouraged customers to consider the environmental impact of consumption, even at the cost of potentially lower sales (Patagonia, n.d.-c).
Conclusion : Patagonia’s leadership demonstrates strong ethical responsibility, though at times it may risk alienating customers who might not align with its environmental stance.

3. Alignment with Social Purpose

A strong alignment with social purpose is one of Patagonia’s defining characteristics. The company’s mission, “We’re in business to save our home planet,” reflects a deep commitment to environmental causes that resonates with the MLA principle of contributing to societal welfare.

Examples of Social Purpose :
Patagonia donates 1% of its sales to environmental nonprofits and encourages other companies to do the same through its “1% for the Planet” initiative (1% for the Planet, n.d.).
The company is involved in various environmental campaigns and encourages its customers to consider the environmental impact of their purchases.
Conclusion : Patagonia excels in aligning with social purpose, though it might benefit from expanding its mission to address other social concerns beyond environmental issues, to reflect a broader societal responsibility.

4. Integration of Multiple Disciplines

Patagonia’s management draws on insights from environmental science, economics, and social psychology to create a well-rounded approach to its business practices.

Examples of Multidisciplinary Integration:
The company collaborates with scientists and environmental experts to develop sustainable materials and production methods (Chouinard, 2016).
Policies on employee welfare and activism reflect an understanding of social and psychological principles, which foster a cohesive, mission-driven culture.
Conclusion : Patagonia demonstrates multidisciplinary integration but could enhance this by involving experts in community and social welfare to expand its societal impact.

5. Long-Term Thinking and Sustainability

Patagonia’s approach to management emphasizes long-term sustainability over short-term profit—a key principle in MLA.

Examples of Long-Term Thinking :
Patagonia invests in sustainable materials, even when these choices increase production costs (Patagonia, n.d.-d).
The Worn Wear program encourages customers to repair and reuse products, reducing waste and environmental impact (Patagonia, n.d.-e).
Area for Improvement : Some critics argue that while Patagonia promotes sustainable practices, it still relies on consumption-based revenue, which could be at odds with true environmental minimalism (Patagonia, n.d.-f).
Conclusion : While Patagonia emphasizes sustainability, it could explore alternative revenue models that rely less on product sales and more on services to reinforce its commitment to environmental impact.

6. Fostering Community and Relationships

Patagonia actively cultivates relationships with employees, customers, and the broader community. The company’s commitment to community-building is fundamental to its business model.

Examples of Community Engagement:
Patagonia holds events and campaigns that bring together environmental advocates, customers, and employees (Patagonia, n.d.-g).
The company fosters a sense of belonging and shared purpose among employees, supporting teamwork and mutual engagement with environmental causes.
Conclusion : Patagonia demonstrates strong community-building practices aligned with MLA, though it could diversify its outreach to communities beyond the environmentally focused demographic.

7. Adaptability and Learning

Patagonia’s management approach includes a commitment to continuous learning and adaptation, especially in response to environmental challenges.

Examples of Adaptability :
Patagonia has evolved its manufacturing processes to incorporate sustainable technology and materials, minimizing its environmental footprint (Patagonia, n.d.-h).
The company adapts its activism strategies to address emerging environmental issues, reflecting a commitment to learning and responsiveness.
Conclusion : Patagonia’s adaptability aligns well with MLA, though expanding its adaptability focus to address broader social issues could increase its societal impact.

8. Stewardship for the Greater Good

Patagonia operates as a steward for the environment, prioritizing societal benefit over maximizing shareholder value, which is a key aspect of MLA.

Examples of Stewardship :
In 2022, Patagonia’s founder transferred ownership to a trust dedicated to environmental causes, ensuring the company’s profits fund environmental protection indefinitely (Patagonia, 2022).
Patagonia often advocates for policy changes and supports organizations working toward environmental sustainability (Patagonia, n.d.-i).
Conclusion : Patagonia exemplifies stewardship, yet it may benefit from a more balanced approach that considers social causes beyond environmental activism.

Final Assessment

Patagonia, Inc. demonstrates many core principles of Management as a Liberal Art across its management practices, from people-centered approaches to ethical leadership and social purpose. The company is a model for MLA, though it does have areas for improvement, particularly in expanding its focus beyond environmental concerns to broader societal issues.

By balancing its strong environmental focus with additional efforts in community welfare and social inclusivity, Patagonia could further strengthen its alignment with MLA principles. Overall, Patagonia provides a powerful example of how companies can integrate MLA philosophies while achieving success.

References

1% for the Planet. (n.d.). About. Retrieved from https://www.onepercentfortheplanet.org/
Chouinard, Y. (2016). Let my people go surfing: The education of a reluctant businessman. Penguin Books.
Patagonia. (n.d.-a). Environmental and social responsibility. Retrieved from https://www.patagonia.com/environmental-and-social-responsibility/
Patagonia. (n.d.-b). Patagonia activism policy. Retrieved from https://www.patagonia.com/activism-policy/
Patagonia. (n.d.-c). Don’t buy this jacket. Retrieved from https://www.patagonia.com/dont-buy-this-jacket/
Patagonia. (n.d.-d). Environmental footprint. Retrieved from https://www.patagonia.com/environmental-footprint/
Patagonia. (n.d.-e). Worn Wear: Better than new. Retrieved from https://www.patagonia.com/worn-wear/
Patagonia. (n.d.-f). Criticisms of sustainable fashion brands. Retrieved from https://www.patagonia.com/criticism-sustainable-brands/
Patagonia. (n.d.-g). Community involvement and events. Retrieved from https://www.patagonia.com/community-events/
Patagonia. (n.d.-h). Innovative materials and processes. Retrieved from https://www.patagonia.com/materials-innovation/
Patagonia. (2022). Patagonia founder transfers ownership to fight climate crisis. Retrieved from https://www.patagonia.com/climate-crisis/

The Specifics of Management of the Knowledge Worker

Thu, 07 Nov 2024 23:33:00 GMT

Nowhere is management theory demanded more than in managing the knowledge worker, and yet nowhere is management theory more inadequate in addressing a field’s issues than in knowledge work. This is the point Peter Drucker posited in his work Management Challenges for the 21st Century (1991), and to resolve it he came up with six factors that determine the productivity of the management worker. Among these, his final point that management workers “must be treated as an ‘asset’ rather than a ‘cost’” by any given organization is an important concept1. While it only gradually emerged within management theory over the century, it is crucial for any employer and any government to understand and apply if they are to retain a competitive advantage going into the future.

Historically, management theory has been about improving the output of the worker through banal efficiency: how to increase the production of steel per head, how to increase the production of cars per hour, how to minimize deficient products, etc. In all these considerations, the worker is a disposable resource. When he is hired, he is set to a particular task that is typically repetitive and thus easily taught, and when he is not needed because of shortcomings in his work, company difficulties, or automation, he is laid off. Referred to as “dumb oxen”, workers were seen in management theory as machines to have productivity squeezed out of.

The shift from a majority manufacturing to service-based economy during the first half of the twentieth century changed this dynamic to some extent. The American postwar economic boom introduced the office worker as a common source of employment. This trend continued throughout the conglomerate era of the 1960s and was helped by the decline of the American manufacturing industry in the 1970s.

Now in a stage dominated by service and knowledge work, the American economy must approach management differently. The aforementioned cost-asset shift is a demonstration of why this is so, as Drucker’s emphasis on the knowledge worker’s autonomy means that they wield control, not only within their job but over who they should work for as well. This in addition to the high-capital nature of knowledge workers means that the old management theory approach to labor as disposable will backfire catastrophically for any company that tries it with their knowledge workers.

It is also important to remember the demographic trends of the United States, and more so the world, in considering why the cost-asset shift is vital. For all of human history until some fifty years ago, population was considered to be in tandem with economic power, given larger populations yielded larger labor forces and consumer markets. Economic growth was thus also correlated with population growth, demonstrated by the historic development of Europe and the United States and the more recent examples of the developing world. Consequently, the worldwide decline in fertility rates, and the decline in population numbers in some developed countries, signals economic decline for the future. In the labor market, smaller populations mean fewer jobs that produce for and service fewer people. Although the knowledge worker has grown in proportion to the total labor market, these demographic declines will affect knowledge workers as well, meaning employers will have a vested interest in retaining their high-capital labor. To enforce this, the cost-asset shift will have to come into play.

The wants and needs of the knowledge worker pose a unique challenge in the field of management. Autonomy, for the first time, can be regarded as a significant factor affecting all other aspects of this labor base. What good does a large salary provide a knowledge worker if they don’t feel that they are welcome at an institution? How would they perceive that their work is not being directed towards productive pursuits at their corporation, especially given the brain work and dedication given to it? Of course, the fruits of one’s labor has been a contentious issue in management ever since compensation and workers’ rights became a universal constant with the Industrial Revolution, but this is augmented by the knowledge worker’s particular method of generating value. Given that Drucker poses their largest asset and source of value as their own mind, they will intrinsically have a special attachment to their work almost as their brainchild.

Incentivizing the knowledge worker is also only one part of this picture. Per Drucker, the knowledge worker’s labor does not follow the linear relationship between quantity invested and returned. The elaborate nature of knowledge work makes it heavily dependent upon synergy: the right combination of talent can grow an organization by leaps and bounds, while virtually incompatible teams or partnerships can render all potential talent useless. And the human capital cost of the knowledge worker, both in their parents and the state educating them and in cost to their employers, is astronomical compared to all previous kinds of labor.

In conclusion, the needs and wants of the knowledge worker must be met adequately, especially in the field of management. Management must almost undergo a revolution to adapt to this novel challenge, for the knowledge worker is the future of economic productivity in the developed world. Those employers that successfully accommodate the demands of this class of talent will eventually reign over those that do not accept that this is the direction economic productivity is headed.

References

Drucker, P. F. (1991) Management Challenges for the 21st Century. Harper Business.

The Wisdom and Continuing Relevance of Peter Drucker

Thu, 07 Nov 2024 23:28:00 GMT

What is wisdom? The dictionary says it is knowledge of what is true and right coupled with just judgment as to action. Jennifer Rowley reports that it is the “ability to act critically or practically in a given situation. It is based on ethical judgment related to an individual's belief system.” (Rowley 2006 p. 255). So, wisdom seems to be about deciding on or doing an action based on moral or ethical belief in helping other people. This clearly describes Peter Drucker and his often prescient ideas

For the 100 ^th anniversary of Peter Drucker’s birth, Harvard Business Review dedicated its November 2009 magazine to Drucker. In one of the articles about Drucker by Rosabeth Moss Kanter (2009 p. 1), What Would Peter Say? Kanter posits that,

Heeding Peter Drucker's wisdom might have helped us avoid—and will help us solve numerous challenges, from restoring trust in business to tackling climate change. He issued early warnings about excessive executive pay, the auto industry’s failure to adapt and innovate, competitive threats from emerging markets, and the perils of neglecting nonprofit organizations and other agents of societal reform.

Meynhardt (2010) calls Drucker a towering figure in Twentieth Century management. He says no other writer has had such an impact. He is well-known to practitioners and scholars for his practical wisdom and common sense approach to management as a liberal art.

Drucker believed that there is no how-to solution for management practice and education. Doing more of “this” and less of “that” and vice versa is not how Drucker suggests managers do their work. Rather, Drucker relies more on morality and the virtue of practical wisdom to solve problems related to organizations. The virtue that Drucker talks about cannot be taught. It must be experienced and self-developed over time. A good example of this is Drucker’s Management by Objectives (MBO). Drucker does not give technical advice on how to initiate MBO. Rather he wisdomizes his moral convictions that integrating personal needs for autonomy with the quest of submitting one’s efforts to a higher principle (helping people) ensures performance by converting objective needs into personal goals. (Meynhardt, 2010).

Peter Drucker published thirty-eight articles in the Harvard Business Review (HBR) and seven times won the McKinsey Award presented annually to the author of the best article published during the previous year in HBR. No other person has won as many McKinsey awards as Drucker

The former editor-in-chief of Harvard Business Review, Thomas A. Stewart, quotes Peter Drucker; “The few of us who talked of management forty years ago were considered more or less deranged.” Stewart says that this was essentially correct. Harvard Business Review's very mission is to improve management practice. Stewart says this mission is inconceivable without Drucker’s work. Drucker’s work in management planted ideas that are as fruitful today as they ever were. Stewart posits that each year, managers discover extraordinary and immediate relevance in articles and books that were written before they were born or even before their parents were born.

Stewart (2016) tries to answer the questions: Why does Drucker’s work endure? and Why is Drucker still relevant?

First, was Drucker’s talent for asking the right questions. He had an instinct for being able to not let the urgent drive out the important, for seeing the trees, not just the forest. This allowed him to calmly ask pertinent questions that encouraged clients to find the proper course to take.

Secondly, Drucker was able to see whole organizations. Instead of focusing on small particular problems. Ducker had the ability to find the overarching problem as well. Stewart uses Drucker’s 1994 HBR article, The Theory of the Business to make this point. Many people were trying to analyze the problems of IBM and General Motors by looking for root causes and trying to fix the blame. Drucker, on the other hand, argued correctly that the theories and assumptions on which they had managed successfully for many years were outdated. This article is as relevant today as it was in 1994 because Drucker took the “big picture view.” And no one else has ever been so skillful at describing it.

Thirdly, starting in 1934, Drucker spent two years at General Motors with the legendary Alfred P. Sloan, immersed in the workings of the automaker and learning the business from within. This allowed him to talk with authority, but he has always stayed “street smart and wise.” This mentoring

helped give Drucker the gift of being able to reason inductively and deductively. He could infer a new principle or a theory from a set of data or being confronted with a particular problem; he could find the right principle to apply to solve it.

Drucker’s first article published in HBR, Management Must Manage, challenged managers to learn their profession not in terms of prerogatives but in terms of their responsibilities, to assume the burden of leadership rather than the mantle of privilege. Many in the management/leadership field probably found Drucker to be “deranged,” but in 2024, this is important advice for leader (Stewart 2006).

Just a few more of Drucker’s ideas that seemed well outside the mainstream when he proposed them but are standard practice today include: Managing Oneself, Privatization, Decentralization, Knowledge Workers, Management by Objectives, Charismatic Leadership Being Overrated, CEO Outsize Pay Packages, and Enthusiasm of the Work of the Salvation Army (Rees, 2014).

Clearly, Drucker remains relevant!

References:

Kanter, R. 2009. What would Peter say? Harvard Business Review. November, 2009.

Meynhardt, T. 2010. The practical wisdom of Peter Drucker: Roots in the Christian tradition. Journal of Management Development Vol. 29. No. 7/8.

Rees, M. 2014 The wisdom of Peter Drucker. Wall Street Journal. Dec. 12, 2014.

Rowley, J. 2006. Where is the knowledge that we have lost in knowledge? Journal of Documentation. Vol. 62, Iss. 2. 251-270.

Stewart, T. 2006. Classic Drucker. Editor Thomas A. Stewart. Harvard Business School Publishing Corporation.

Revolutions in Labor Hierarchies

Thu, 24 Oct 2024 15:54:00 GMT

A specter is haunting the world – though this time, the dynamics of labor have shifted to the point where this specter cannot resemble a communist force. If Drucker’s works have been any indication, the rise of the knowledge worker is a first in the history of human productivity. This first has, among many other things, overturned the traditional labor hierarchies that have existed since the rise of agriculture.

For much of history, societal hierarchies and their subsequent conflicts have been demarcated by the fine line between ruler and ruled – master and slave, lord and serf, bourgeois and proletariat, and so on. The commonality between each of these relationships has been that authority and autonomy has been largely allocated to one side – the ruling – and that the literal toil of labor has been the leverage of the other – the ruled. The rulers instructed the ruled on where to direct their labor, while the ruled prevented their rulers from siphoning too much of their earnings. Such a delicate balance, established in the first agrarian civilizations, was often upset, as shown by history’s account of countless peasant revolts and eradicated kingdoms.

In his 1966 essay “The First Technological Revolution and its Consequences”, Drucker established that currently recognizable human lifestyles trace much of their origins back to this first agrarian revolution in affairs. This includes the aforementioned labor hierarchy, which has dictated government policy even into the industrial age. Even through the various industrial revolutions, the evolution of labor only affected the organization of workers, with unions and labor groups giving mass labor a platform to negotiate less violently against their employers. The base demands of labor – better wages, better working conditions – as well as the demands of their employers – more output per head, more efficiency – still belonged to the old ruler-ruled hierarchy, despite the emergence of supposedly modern fixtures of economy like the union.

The rise of the knowledge worker threatens to upend this paradigm. Drucker laid out some basic facts about the knowledge worker that are relevant to dealing with this revolution. First, the knowledge worker is far more autonomous than any other kind of worker in history. Management of labor has depended on power resting largely with authority. Autonomy of the worker significantly shrinks the need for this hierarchy. Second, the knowledge worker’s output is augmented by information technology. Drucker identified this as the computer in his time, but artificial intelligence fits this role as well. In previous times, any labor-altering advancements in technology only created more jobs through economic expansion. The Luddites’ archnemesis, the textile machines dominating Britain and the United States in the early nineteenth century, created a plethora of employment through an explosion of demand for consumer goods. The assembly line that threatened the monopoly of high-cost artisans generated jobs for countless factory workers. All these phenomena were driven by the mechanization of work – repetitive work, that is. Even the replacement of the artisan was the simplification of each step of their work into a repetitive task that any unskilled laborer could replicate. However, all these technologies simply made existing manual labor more efficient by subdividing it - an early application of management theory, but one that still required mass labor regardless.

The development of the computer and AI poses a distinct form of technological automation, in tandem with the rise of the knowledge worker. For the first time, true automation has become a reality. Drucker noted that the computer, and now AI, can dictate and execute decisions that before would have required a human to do. Pairing this with the autonomy of the knowledge worker, we witness the creation of a system that foregoes the historic one-way direction of command for a more reciprocative structure where workers contribute as much feedback to their institutions as their bosses and the only defining difference in authority between either is the extended foresight required to direct the entire company forward.

The United States is in a mixed position to deal with this shift in hierarchy. Historically, it has prescribed all its citizens to be equal and free, however different reality may have been. Individual liberty has been baked into the country’s persona beginning with the Founding Fathers and spanning the defining moments of American history, from the Civil War to the Frontier Thesis of 1890 to the civil rights movement of the 1960s. Thus, the American psyche is better adjusted to welcome the knowledge worker; the view that an American peasant never existed doesn’t exist for nothing. However, other contradictions, such as the centuries-long establishment of slavery and the historic disenfranchisement of particular groups within the United States, will contribute to friction in the transition. If not for being at direct odds with the loosening of hierarchy, these facts will at the very least create tension for the many facets of American society left behind in the deepening dependency on knowledge workers, as has recently been observed with the rise of populism on both wings of the American political spectrum.

Drucker was receptive to such potential reverberations, evidenced by his concerns expressed in his work “The New Productivity Challenge” (1991). He acknowledged that however much of a role knowledge and higher service work would contribute to the American economy, the majority of the population would inevitably be outside this ecosystem, especially given the lack of concentrated education and training available to them. In that particular work he proposed that increases in productivity were crucial in maintaining the economic prosperity to generate the social stability that had prevented the oft-violent revolutions of the past. In consideration of the aforementioned hierarchical shift brought to light, the relationships between employer and employee within management theory are also important in defusing any grievances the denied populace has towards their exclusion from high-concentration work. Although service work has progressed in “employee feedback” since the mid 20th century, dissent among lower-paid service workers has risen, leading to unionization conflicts like those at Amazon and Starbucks as well as large waves of “quiet quitting” that came right after the Covid-19 pandemic.

Given the prevalence of phenomena like these, management theory should heed Drucker’s warnings in advance and evaluate existing practices in employer-employee hierarchies, not only in the knowledge-worker field but in the wider service worker field as well. For if neglected, this issue shall likely boil over and erupt just as the Revolutions of 1848 manifested the specter of the labor crises sweeping Europe. As the modern maxim goes, institutions must truly adapt to having their employees “be their own boss” more than before, for the benefit of employer, employee, society, and the economy.

References

Drucker, P. F. (1966) The First Technological Revolution and its Consequences. Johns Hopkins University Press.

Drucker, P.F. (1991) The New Productivity Challenge. Harvard Business Review.

The Specifics of Management of the Knowledge Worker

Tue, 15 Oct 2024 19:06:00 GMT

Nowhere is management theory demanded more than in managing the knowledge worker, and yet nowhere is management theory more inadequate in addressing a field’s issues than in knowledge work. This is the point Peter Drucker posited in his work Management Challenges for the 21st Century (1991), and to resolve it he came up with six factors that determine the productivity of the management worker. Among these, his final point that management workers “must be treated as an ‘asset’ rather than a ‘cost’” by any given organization is an important concept ¹ . While it only gradually emerged within management theory over the century, it is crucial for any employer and any government to understand and apply if they are to retain a competitive advantage going into the future.

References

Drucker, P. F. (1991) Management Challenges for the 21st Century. Harper Business.

The Computer’s Relevant Companion - the Knowledge Worker

Mon, 07 Oct 2024 18:32:00 GMT

Peter Drucker wrote extensively on the computer as both the symbol and the tool of the digital revolution. His contexts, however, emphasized its effects on the economy and workforce rather than on society and populations as a whole. In fact, there is a two-way relationship between the introduction of the computer as a standard tool of industry and the effects of demographic shifts on the importance of quality over quantity. In tandem with the knowledge worker, the computer is the driving force of the future, whether in terms of society or economics.

Drucker’s reasoning for emphasizing the computer was a result of this shift in human lifestyles. If families are to have fewer children and if societies are to decline in populations as a result, the computer, or at least the iteration of technology it symbolizes, is the perfect tool to preserve economic growth and stability in the face of this predicament. Moreover, the shift is not one-way. The reason rearing children has become far more of an expense is also itself due to the nature of the economies these children will be entering upon maturity, especially in the most developed nations. Rather than menial farm or industrial work like before, these children are being prepared for service work, office work, “white-collar” work that involves increasing proportions of brainpower. This is observable in the development of the United States over the past century. Beginning with the 1920 census, which recorded the outright transition from a rural-majority to urban-majority America, the nation’s psyche became enraptured with the trappings of an industrial-service society from the rise of consumerism and credit to the automotive assembly lines of Ford and GM that employed much of the now-prospering working class6. It is not merely a coincidence that Taylorism reached its apex in the American mind around this time, as this was the first era where scientific principles could be developed and widely applied to entire industries to accentuate efficiency. While not applicable to artisans and craftsmen of the past, whose guilds and exclusivity hampered productivity and output, scientific approaches to management were finally able to be applied to a working base whose labor itself was based on scientifically derived outputs. However, most production around this time still focused on mostly menial toil and was linearly proportioned with growth in the human base that made it possible. An assembly line worker could be trained to maximize the number of wheels he could fix to a chassis per hour, but he couldn’t be trained to design new cars or to identify points of improvement in existing ones. As such, for the factory owners of this time, the fixture for economic growth rested upon hiring more workers to speed up the process.

As time passed, however, the American economy gradually shifted towards being composed of service jobs, with this transition having been solidified in the public mind with the flight of the automotive industry from the now-labeled Rust Belt to East Asia, particularly Japan, in the 1980s. This weakened the relationship between population and economic growth, but the new service jobs as well as the remaining manufacturing jobs still retained a semblance or more of training and outright repetition. Even at the peak of the American conglomerate phenomenon in the late 1960s, taking Boeing’s dominance in the aerospace industry in Southern California for example, most employees were still assemblers, engineers, and office workers who were hired and designated to do a specific task within their company. At this point, the only people who were delegated the task of independent and spontaneous decision making were management, a growing yet still small segment of the workforce.

The employment landscape now has been radically altered. Drucker already predicted it in his time, but the rise of the knowledge worker has marked a departure from all other previous forms of labor. For practically the first time in history, a significant and growing proportion of the workforce is both autonomous and a common asset in their own right. Unlike the artisans of the agrarian age who required wealthy patrons for their services to be of use and unlike the scientists of the industrial age who required direction from laboratories for their research, the knowledge worker is able to utilize both traits in such a manner and on such a scale that they have already began shifting the patterns of the American workforce, and to that extent American social life. During the Covid-19 pandemic, the widespread emergence of remote workers was in significant part due to the proliferation of knowledge workers in the nation’s service-based economy, and the continuation of this trend even after all pandemic precautions had subsided has given the corporate employee far greater leverage in employment than before. Much of this has only become a reality in due part to the computer. As well as performing the office grunt work that Drucker had observed in the 20th century, the computer has now also taken on the role of a presence augmenter, hastening communication far past what telephone or fax could ever have done with email and video calls.

Looking past the immediate implications of the computer itself on society, the subsequent shifts in workforce patterns can be argued to have as much if not more of a dramatic impact on societal constructs. Given a newfound leverage over their employment, knowledge workers have the ability to individually bargain with their employers over matters like payment incentives to the extent that only a union was capable of before. Their advent also collides with the concept of unions, which have traditionally relied on member numbers and a grasp over the “human toil” of companies that is now increasingly being replaced with machinery. The aspect of human quantity is now especially important given current demographic trends. The developing world can no longer expect the benefit of increasing populations nor the agrarian settings to stimulate such effects in the long term. Given that economic development has nearly ubiquitously been linked with simple growth in things like population, these trends will initiate steep declines in the prosperity of countries with shrinking populations. It is in this context that the value-concentrated knowledge worker will begin to play a primary role, as their autonomous nature renders them independent of the quantity-growth economic relationship. This combined with the fact that their value lies with their mind, a nearly infinite source of ideation, will mean that their presence within the workforce will likely become the new economic driver of a country, even without growth in terms of quantity.

Coming back to the computer, it is the very augmenter of productivity that separates the quantity-based output of yesteryear from the concentrated production that will dominate the future. However, its functions are limited to simple automation without its counterpart in the Digital Revolution: the knowledge worker. The synergy between the two is something governments and corporations alike must quickly understand if they are to retain their competitive edge, and it will be the subject of discussion in works succeeding this one.

Drucker, Peter. (1942) The Future of Industrial Society (1942)

Human/Technology Collaboration: Tomorrow's Knowledge Society

Mon, 07 Oct 2024 18:27:00 GMT

Welcome to the last installment of this blog series, where we bring knowledge, wisdom, and technology together. How can human wisdom and technology, specifically AI, collaborate to redefine knowledge, knowledge work, and a knowledge society?

As we saw in the first installment, the nature of knowledge has long been a topic of discussion. Peter Drucker was concerned with the relationship between knowledge and power, and the changing nature of knowledge, particularly related to technology. In his twentieth century era, new technology in the form of atomic weapons unleashed knowledge that contained the power to destroy humankind. With this kind of technological knowledge came enormous responsibility. Technological advances related to computing in Drucker’s time carried with them fears of economic and social turmoil. Would automation of manufacturing processes and the introduction of the computer to knowledge work result in the elimination of jobs and a massive restructuring of the economy? In Drucker’s view, automation was part of a larger process of seeing production as a whole rather than a series of small parts. The new technology would cause disruption, but this was part of the long history of technological advancement in societies. The computer itself was an order taker, a human creation that was an instrument for efficiency and more productive use of knowledge work.

Today, we still wrestle with the same questions of knowledge and power and the potential for social disruption due to technological advancement. New knowledge still wields enormous power – now to influence emotions, attitudes, and beliefs, undermining the very nature of truth and trust in institutions. Rather than the physical destruction of nuclear weapons, deep fakes, data breeches, and financial scams using AI and targeted algorithms can call into question the essence of reality. Can we trust our own ears and eyes, much less the dominant institutions of society? Drucker’s order-taking computer, the “moron” of his writing, is now capable of generating material, not just computing. Generative AI is rapidly producing increasingly sophisticated texts, images, and music as it refines its use of available information and its relationship with the user.

As was discussed in previous installments, effective use of knowledge, or conversion of information into useful knowledge, involves wisdom and judgment. Here is where the differentiation between generative AI and human beings lies, and how we can better understand ways in which people and technology can collaborate effectively. Drucker often remarked that the key to effective problem solving was asking the right question, in essence, framing the problem itself. This was more important than finding the “right” answer; finding the” right” answer to the “wrong” question results in wasted time (and perhaps even more problems than the one you tried to solve).

Simply put, AI is not designed for this function. In its most basic form, AI responds to information with a limited menu of options (chatbots for customer service, for example). In its more sophisticated iterations, it is designed to fulfill goals that are predetermined by humans. If we delegate a decision to an algorithm, there are parameters that have been set by humans. Algorithms are designed to execute; even more sophisticated tools, such as ChatGPT, require human instruction. They are designed to solve problems. They are not designed to decide which questions to ask to solve the problem (although one function they can serve is to help guide people in figuring out possible questions to ask). In this sense, even today’s AI reflects Drucker’s view of computers as order-takers.

In our discussion of wisdom, we acknowledged the human problems of misinformation, narrow focus, filtering flaws, and bias as barriers to good judgment. If we are to partner with technology in the form of AI, we need to be even more cognizant of our own flaws as human beings. We are the ones driving the technology and its use. How does the delegation of decision making to algorithms perpetuate the flaws that already exist in our own judgment? What are the consequences? At what point does the decision to delegate knowledge work to a machine that has no wisdom create more social problems than it generates benefits? These are the questions we need to be asking. This requires higher order thinking that, dare I say, Drucker proposed in his concept of Management as a Liberal Art. With his pillars of knowledge, self-knowledge, wisdom and leadership, Drucker gave us valuable tools and lessons for navigating our new world of knowledge work.

So, how can we effectively collaborate with AI to create an effective knowledge society for tomorrow?

· Understand the limitations of technology: AI will reflect the quality of the information it uses. To use a tired phrase, “garbage in, garbage out.” Algorithms are also susceptible to the cultures, biases, and limitations of human beings that create them. Technology is a human creation. It is not something outside of us. Drucker told us this beginning in the 1950s!

· Understand the limitations of human beings: People will use technology to do work if they don’t want to do it. Students will use ChatGPT to write papers. People will use deep fakes and other techniques to advance their causes. This does not mean the technology is bad. It just means we need to learn how to regulate and monitor its use. Drucker used the concept of Federalism to discuss the need for guardrails and checks/balances. Our global society is having these conversations about AI now.

· Know how to leverage wisdom and judgment: Leaders need, more than ever, to emphasize skills that used to be referred to as “soft.” In a world awash with data and technology, we are increasingly in need of people well-versed in emotional intelligence, the ability to discern and make judgments in times of rapid change, and who can connect honestly with their team members. As we make decisions about delegating decisions to non-humans, the need for human connection will only increase. Our new knowledge society needs people who understand people, not just technology and data. But it also needs people who can use their wisdom and judgment to know when to rely on technology. In the words of Scott Hartley, we need both the “Fuzzy” and the “Techie.”

Rather than seeing AI as a threat to our humanity, as competition to knowledge work, we should see it as a development that allows us to think deeply about our role as human beings in our new knowledge society. In her book, In AI We Trust, Helga Nowotny, Professor Emerita of Science and Technology Studies at ETH Zurich, argues for the importance of “cathedral thinking,” the ability to appreciate the value of shared, inherited practices that are constantly being reevaluated and realigned. It includes the kind of interdisciplinary, critical thinking I discussed in the previous installment, but it also involves connecting the past with both the present and the future. In Nowotny’s words: “Wisdom consists in linking the past with the future, advising what to do in the present. It is about rendering knowledge retrievable for questions that have not yet been asked” (Nowotny, 2021). I think Nowotny makes a clear case for the relevance of Drucker’s work today. We may be frightened by new knowledge and technology, the power it has, its impact on our lives. But this is the reaction of people who are ill-equipped for facing the reality of change, change which bears the possibility of not just disruption but also opportunity. As Drucker wrote almost 100 years ago, humans have survived technological change as part of the natural order of things. The key to understanding today’s technological change is to see it as a matter of collaboration, not competition. This is the trajectory of our new knowledge society: where human wisdom and judgment augment the power of AI. AI can help us understand our own limitations and flaws, which can, in turn, make us better as people.

Agrawal, A., Gans, J., Goldfarb, A. (2023). How large language models reflect human judgment. Harvard Business Review, June 12.

Drucker, P.F. (1967). The manager and the moron. McKinsey Quarterly, 1 December. In Drucker, P.F. (1970). Technology, Management and Society. New York: Harper & Row.

Hartley, S. (2017). The fuzzy and the techie: Why the liberal arts will rule the digital world. Houghton Mifflin.

Jarrahi, M.H. (2018). Artificial intelligence and the future of work: Human-AI symbiosis in organizational decision making. Business Horizons, 61 (4).

Moser, C., den Hond, F., Lindebaum, D. (2002). What humans lose when we let AI decide. MIT Sloan Management Review, 63 (3), 11-15.

Nowotny, H. (2021). In AI we trust: Power, illusion, and control of predictive algorithms. Polity Press.

A Fourth Revolution in the Use of Resources

Tue, 01 Oct 2024 19:57:00 GMT

When is a resource especially useful? The answer often varies based on the technological advancement of the society in question. Human capital is especially susceptible to this variable, as it is only as useful as its carrier’s tools are. In this Fourth Industrial Revolution, the knowledge worker’s debut is the consequent shift of human capital owing to information technologies such as the computer and artificial intelligence. Just how monumental this shift may be is to be analyzed.

Historically speaking, few resources aside from hard currency like bullion and necessities like water have maintained a constant degree of usefulness. Clearly, an abundance of fossil fuels offers a different meaning to a hunter-gatherer tribe and an industrialized nation just as a plentiful supply of spices means different things to a medieval European kingdom and any country today. More often than not, though, these differences in meaning can be attributed to differences in technology. A hunter-gatherer society has no means and no purpose to exploit fossil fuel technology, while any industrial nation will demand (at least for now) a constant supply of non-organic energy due to lighting systems that require the energy from fuels. Even the disparity in significance of spices can be attributed to technology, however indirectly. The medieval European kingdom was at the mercy of the Italian merchants, Ottoman sultans, and Indian planters to attain expensive spices, especially without any technologies in the fields of preservatives, cultivation, or transport. By contrast, today’s globalized trading network, mixed with extensive advancements in preservatives and wider spice cultivation have reduced salt and pepper from the most expensive commodity on a continent to a kitchen counter constant. Typically, changes in the usefulness of resources go in tandem with shifts in the technologies that put them to use. The introduction of steam power in the Industrial Revolution, for example, necessitated the use of coal and other fossil fuels. Great Britain’s vast underground coal reserves, thus, suddenly became a valuable asset to the country in propelling it to industrial powerhouse. These shifts can also go the other direction. With the rise of oil- and diesel-powered combustion machines in the 20th century, those same coal reserves declined in significance, reducing Britain’s industrial advantage.

Human capital is not exempt from these shifts in usefulness. Engineers became of great use whenever the technologies to develop siege weapons (as well as the capital and organization to build them) became available to states; Roman and Chinese armies of antiquity employed great numbers of siege engineers. Similarly, architects were commissioned whenever the means of building elaborate structures became available; the Renaissance abounds with examples of this.

Thus, the Fourth Industrial Revolution (or more aptly the Digital Revolution) will enact unique shifts in the usefulness of workers and resources alike, thanks to the nature of the technology involved: the computer. Though Drucker passed away in 2005, he foresaw the rise of artificial intelligence within his predictions about the computer in “What the Computer Will be Telling You” (date unknown), calling out its potential to analyze data akin to what artificial intelligence does nowadays.

This brings meaningful shifts for all levels of human labor. The combination of computing with robotic technology and affordability has made it possible for unskilled labor to be replaced en masse, reducing the use for unskilled labor. Even lower-level white collar jobs like clerks and accountants face stiff competition given their work is repetitive at a digital level and liable to be replaced by artificial intelligence. The one field of employment that is expanded as a result of these technologies is the knowledge worker. Partially born from the growth of computing technology, partially an existing beneficiary of said technology, the knowledge worker performs their work on the premise that the grunt work of crunching numbers and calculating growth metrics can be easily done by the tools at their disposal.

In an economy where physical production is a linear metric of economic performance, the knowledge worker has limited use. In such an economy that furthermore relies on a chain of human calculators and analog communication, the knowledge worker is extremely limited in capability and is thus not a significant factor in economic output. Hence why the knowledge worker has only risen to prominence within postindustrial economies.

Thus, the American economy is especially susceptible to shifts in usefulness as one of the most postindustrial economies on the planet. This has significant consequences for its future economic prospects. For one, it was able to reach its status as a global powerhouse due to the growth of its giant manufacturing base, which took place between the Civil War and World War II. Its further investment in STEM education, priority on innovation, and corporate dominance during the Cold War allowed it to keep its top position throughout the 20th century. However, the Fourth Industrial Revolution has introduced some subtle changes to the economic calculus that necessitate reform of the current system.

For one, even though the American economy is already heavily service-based, the automation of tasks at the lower level combined with the augmentation of capabilities in the office means the labor shift is geared towards prioritizing higher educated workers as primary human factors of economic output. Given much of the service sector is not necessarily aligned with knowledge work, the usefulness of the service sector in general is skewed upwards in terms of human capital.

For another, the productivity of the knowledge worker rests with both production and mentality. Drucker stressed the autonomy of the knowledge worker as one of their defining characteristics, made possible by the powers of computing and AI. Because the complex calculations are automated by these technologies, that leaves the decision-making up to the human. Of course, the knowledge worker must still be trained in the technical skills required to use the tools at their disposal. However, the decision-making facilities of the knowledge worker, including foresight and rationality, matter greatly if they are to efficiently perform their job.

The future competitiveness of the American economy, and by extension many other economies, is dependent upon this. In its manufacturing heyday, the United States was the world’s superpower due to its towering advantage in scale over its European counterparts and the absolute lack of industrialization elsewhere in the world. During the Cold War, the United States once again strode the world economically due to sheer scale, concentration of capital, and worker efficiency. Now, however, economic disparities in the world have narrowed. After rapid industrial development in the twentieth century, East Asia has caught up to America in terms of economic development and has even surpassed it in certain fields like semiconductors. Developing nations, most notably the BRICS countries, have become manufacturing leaders. China in particular has bridged being both the “world’s factory” and a center of highly educated talent. What this all means is that the United States cannot rely on simple scale and the virtue of being the earliest as it did in the past. The combination of knowledge workers requiring extensive high-quality rearing and the dilapidated nature of American institutions like education and infrastructure puts the country at risk of losing its economic edge in the world.

However, the American economy is not consequently destined to decay. Its national culture of pursuing individual advancement and success is well-fitted for the world of the knowledge worker. It already possesses a well-educated population that has been used to living in a developed economy for a century. It holds the largest concentration of financial capital in the world. While this by no means encourages complacency, it simply means the country must pursue a different utilization of its resources in order to keep its current economic position in the world. It cannot compete in human numbers, for India and China boast populations far larger and countries like Indonesia and Nigeria are quickly catching up. It cannot compete in manufacturing, as Brazil and China are now the biggest producers of the commodities that America dominated over a century ago. Even in higher-tech industries like semiconductor chips, countries like South Korea and Taiwan have demonstrated that small populations can easily and quickly trounce less-prepared competitors many times their sizes, as the United States has learned of late. So ultimately, the United States ought to perceive that through the synergy of its relative strengths in all the aforementioned fields with investment into cultivating a robust knowledge worker base, it will be best positioned to retain its premier status as a global economic leader.

In conclusion, the American economy will have difficulties adjusting to this new reality in spite of its current advantages in education and economic maturity. What matters most - not only for the United States but for the other economies of the world - is that with the Fourth Industrial Revolution, the usefulness of labor will play a defining role in each country’s economic standings. Those that grasp this concept will prosper, while those that neglect it will fall behind. The use of the knowledge worker, and subsequently the highest level of human capital, will become top priority.

References

Drucker, P. F. (1995) “What the Computer will be Telling You” – in People and Performance (Routledge)

The Value of Interdisciplinary Thinking

Tue, 01 Oct 2024 00:42:00 GMT

Welcome to the fourth blog post in this series. We’ve covered debates about the nature of knowledge, the concept of knowledge work and its evolution, and the wise use of knowledge and information. In this issue, I’d like to focus on the importance of transdisciplinary knowledge in critical thinking in all organizations.

We don’t have to be experts in a given field to use the skill sets and expertise that different disciplines can teach us. The field of history is an excellent example of how to use interdisciplinary thinking in exercising judgment.

For instance, what can the discipline of history teach managers and practitioners who make decisions in today’s organizations?

Different kinds of evidence : Historians are trained to understand the importance of evidence. First-hand sources are crucial to gaining a sense of what happened from multiple perspectives. These are accounts from people who witnessed events as they happened. Secondary sources are filtered through someone’s viewpoint. John Dean, an American attorney, served as Richard Nixon’s White House counsel during the Watergate scandal. Dean played a significant role in the coverup of the administration’s attempts to illegally obtain information from the Democratic National Committee during Nixon’s 1972 re-election campaign. Dean’s statements and testimony regarding events during the Nixon administration would be considered primary evidence. Journalist Garrett Graff’s 2022 book, Watergate: A New History, is a secondary source, analyzing the historical event using multiple sources, including public records. While Dean’s statements reveal his own perspective of events, the Graff work presents his analysis of multiple sources, including many primary sources. We need both the evidence of people who were “in the room” and those who are more removed. Lincoln famously assembled a cabinet that was a “team of rivals,” consisting of people who would have reason to disagree with him or challenge his decisions. Drucker discussed the importance of dissenting opinions/perspectives in decision making. As leaders, we need to watch for our tendency to listen to or consider sources that seem comfortable and familiar to us.

Understanding bias : When I taught history, students often resorted to the argument that all sources were biased, and therefore unreliable. I told them that if their life project was a search for an unbiased source, they would be unfulfilled. Human beings are, by nature, filled with implicit and other biases. The sooner we realize this, the better. As historians, we deal with this all the time as part of the context of our sources. A slaveholder during the debates on the Constitution would obviously have favored maintaining slaveholding states. The fact that we find this position abhorrent today is irrelevant; the debates regarding the validity of slavery were a real part of American history, and economic interests played a pivotal role in arguments for maintaining the system of bondage. Today, a major oil and gas landholder will obviously be “biased” against legislation that is unfavorable to her position. Those who favor more affordable housing will be “biased” towards legislation that forces rent controls, low-income housing construction, and accommodations for unhoused people. The problem is with the word “bias” and its negative connotations. Advocates for a particular position will advance arguments that give more weight to their viewpoint. They may be paid to do so, or they may do so as part of an organizational mission and vision. The more interesting questions lie in our unrecognized biases. Every individual needs to be held accountable for considering their own implicit biases. Are there people that I, for some reason, view in a negative light? Is it because of their economic status? Political leanings? Speech patterns? Appearance? The more we engage with interdisciplinary thinking, the more we are forced to confront our own state of knowledge, its basis on assumptions, and our blind spots that result from a lack of exposure to different modes of analysis.

Importance of context : Decisions and judgments are not made in a vacuum. Local, regional, and international events can impact even small decisions. Rosa Parks did not sit in the white section of a public bus because she was old and tired. She was a political activist capitalizing on a change signaled by a Supreme Court decision (Brown vs. Board of Education). In this context, a single individual’s decision was driven by a shift in attitudes about race in the United States that had been building since the early 1900s and exploded after the end of the Second World War. Sometimes, the timing of a decision involves understanding the temperature of society, not just the room. If you have a major change to implement in your organization, is now really the time to do it (even if you want to do it now, or the budget calendar pushes you to do it, or whatever other internal force is driving that decision)? Look at some of the corporate blunders that involved a failure to read the room (Bud Light’s transgender promotional campaign for example). The “culture wars” in the United States over what is acceptable in popular culture and advertising has created a mine field for marketers seeking to cultivate customers in various demographics.

Importance of ‘why’ : We spend a lot of time on “what” decisions (what to do, what to buy, etc.). But do we think about why? I’ve always felt that it was my obligation as a person in any leadership position to explain the why behind anything: why are we taking on a new activity, spending money, bringing on people, applying for a grant, cutting a program, instituting a policy, etc. We should think a LOT about why more than what, and we should spend a LOT more of our time discussing why with people we work with. History gives us examples again. Why were George W. Bush and so many Americans convinced that Iraq would welcome a democratic program of nation building in that country? Why are we surprised when some decisions we make end up going in a completely different direction than expected?

Open mindedness : Historians don’t just deal with organizing facts. They deal with making sense of those facts. And, sometimes, that involves new interpretations of old facts. Some really innovative and fresh historical scholarship has involved looking at old material with a new view. Historians have taken revered figures, such as Martin Luther King, Jr., and depicted them as real people with faults and character flaws. Similarly, they have rehabilitated people that have been depicted as shallow villains, such as Benedict Arnold, as more complicated actors. While such nuanced views of people might require effort to understand, it reflects the reality of our world, which is not black and white with easy answers to complex problems. Thinking of new ways of looking at “what we all know” is an important skill that Drucker excelled at.

We face incredible challenges with respect to exercising judgment and wisdom. It is too easy to fall into habits ingrained by our disciplines. If we are quantitatively inclined, we tend to rely on data to make decisions for us. But this discounts the importance of phronesis – the marriage of wisdom to action. We all have biases related to experience, culture, upbringing, and a multitude of other factors. Are we fuzzy or techie, and do we appreciate both? Do we lack experience, or have too much of the wrong kind of experience? Drucker’s admonition that management as a liberal art involves self-knowledge and wisdom indicates that we need to constantly think about challenging ourselves as decision makers.

Next time, in our final installment of this issue, we bring knowledge, wisdom, and technology together: How can human wisdom and AI collaborate to redefine knowledge, knowledge work, and a knowledge society?

Graff, G.M. (2022). Watergate: A new history. Simon & Schuster.

Hartley, S. (2017). The fuzzy and the techie: Why the liberal arts will rule the digital world. Houghton Mifflin.

AI as an Enabler of Management as a Liberal Art

Tue, 01 Oct 2024 00:32:00 GMT

What is MLA?

Management as a Liberal Art (MLA), a concept championed by Peter Drucker views management not only as a technical practice focused on performance but as a humanistic discipline focusing on people, values, and the common good. In a previous blog post , I introduced the three knowledge pillars of MLA by proposing that the knowledge of individual and societal characteristics is as important as the knowledge of organizational drivers of performance. Therefore, I concluded that managers practicing MLA need to acquire and maintain a good understanding of individual-level, organization-level, and society-level factors that impact business operations. In that post, I also discussed how knowledge of various disciplines such as psychology, history, and political science, among others, can lead to a better understanding of these three pillars of MLA.

In this blog post, my goal is to discuss how recent developments in Artificial Intelligence (AI) can enhance effective implementation of MLA by facilitating the access, interpretation, and maintenance of multi-disciplinary knowledge pertaining to individual, society, and organization.

What is AI?

AI (Artificial Intelligence) refers to the use of computational systems that simulate human cognitive functions, such as learning, reasoning, and decision-making, to collect, process, and interpret vast amounts of data. It can transform raw data into actionable insights by identifying patterns, making predictions, and suggesting solutions. While the term AI was coined around 1956, it only recently gained significant popularity due to the confluence of data proliferation, algorithmic advancement, and enhanced computational capacity and storage.

AI and MLA

At first glance, AI and MLA might seem at odds. MLA emphasizes human judgment, ethics, and values, while AI is often associated with data-driven efficiency and automation, which could be perceived as undermining the human elements central to MLA. However, these approaches are not inherently conflicting. Instead, AI can complement MLA by enhancing human-centered decision-making and supporting value-based aspirations.

AI can play a significant role in enabling managers to put the MLA philosophy into practice. Recent AI developments facilitate the effective and efficient collection and analysis of individual, societal, and organizational data in ways that were not possible before. While predictive AI tools have existed for decades to facilitate analysis of technical organizational and industrial data, the recent advancements in natural language processing (e.g., large language models) and generative AI have opened new horizons for interpretation and analysis of existing knowledge in the realm of social sciences. In other words, generative AI enables a fast acquisition and interpretation of written information from knowledge sources that were not easily accessible decades ago. In essence, summarization of existing written knowledge about specific topics in philosophy, history, or other social sciences can take place in a matter of seconds. Therefore, gaining fundamental technical information about individual and societal factors that impact management is less costly or time consuming than before. Similarly, advanced AI tools and systems can collect and analyze large amounts of data from a variety of sources in real time to offer managerial insights.

Below, I explore AI’s role in helping managers gain a deeper understanding of organizational-level, individual-level, and society-level influences. Although individuals are embedded within organizations and societies, examining these entities separately offers a clearer view of how AI transcends different levels of analysis.

AI Helping Managers Understand the Organization

AI’s predictive capabilities allow managers to analyze internal data to identify problems and to predict potential financial and operational risks directly relevant to organizational performance. This leads to more proactive decision-making and strategic planning within the organization. Similarly, AI-powered tools facilitate better internal communication and collaboration by analyzing interaction patterns, identifying communication bottlenecks, and suggesting ways to improve information flow throughout the organization. As another example, AI can automate routine reporting tasks and dashboards, giving managers real-time insights into how various parts of the organization function.

AI Helping Managers Understand Individuals

Organizations monitor employee performance, measure productivity, and provide personalized recommendations for professional development. AI tools can take the quality of these recommendations to the next level by considering employee characteristics (e.g., personality) or other outcomes (e.g., job satisfaction). AI-based tools, such as the ones built on psychometric tests, can analyze language patterns and behavior to infer personality traits. By understanding an individual’s traits (e.g., introversion/extroversion, openness to experience), the AI can suggest tailored professional development paths. Similarly, sentiment or emotion analysis can help managers understand the ongoing needs of their employees. For instance, modified LLMs can analyze written or spoken communication (emails, chat messages, or voice inputs) to detect sentiment and emotional tone. This can help gauge mood and satisfaction, giving a sense of an employee’s emotional state over time. If used properly, these insights can help managers boost organizational outcomes by improving job satisfaction and minimizing employee burnout or turnover. It is important to note that establishing clear guidelines and ethical frameworks for the use of AI tools is important to prevent issues related to privacy and ethics. Transparency in informing employees of the purpose and scope of AI-based monitoring is also important. Implementing guardrails such as data privacy protocols and ethical oversight committees can also help prevent misuse and ensure AI tools are used to enhance trust rather than erode it.

AI Helping Managers Understand the Society

AI can help managers understand different cultural and demographic trends by analyzing large datasets that reveal societal changes, consumer behaviors, and global shifts in market demands. For instance, AI tools can analyze social media conversations, news articles, and public forums to gauge public sentiment, identify trends, and understand societal expectations or concerns. Similarly, AI tools can also be used to model the environmental impact of a company’s operations or decisions, helping managers evaluate sustainable practices the benefit different stakeholders. For instance, a company planning to expand manufacturing facilities can use AI to better estimate the carbon emissions resulting from increased production. AI tools can simulate the long-term environmental impacts, such as air and water pollution, as well as public health consequences. Based on these predictions, managers may choose whether to implement more energy-efficient technologies.

AI significantly shortens the gap between when a trend starts and when managers can detect it. Unlike traditional methods where data lag behind real-time developments, AI’s real-time data analysis and predictive capabilities allow organizations to see trends as they emerge, not years later. This immediate access to information enables managers to respond proactively, rather than reactively, to shifts in the marketplace or societal expectations.

Concluding Remarks

While MLA focuses on nurturing a holistic view of management, AI can provide insights and tools that allow managers to efficiently gain a comprehensive understanding of the organizational dynamics within their proper context. This in turn, gives managers a better understanding of various individual and societal factors surrounding a business problem. Rather than replacing human insight, AI can empower managers to make more informed, value-aligned decisions, reinforcing the core principles of MLA.

The Role of Wisdom

Mon, 23 Sep 2024 18:41:00 GMT

In the first installment of this blog series, I discussed the historical philosophical debates about the nature of knowledge. In Part II, I explored the concept of knowledge work and how it may continue to evolve in the future. In this third installment, I’d like to delve into the notion of how people can use knowledge, information, and data wisely.

Peter Drucker described the practice of Management as a Liberal Art as involving knowledge, self-knowledge, wisdom and leadership (Drucker, 1989). What Drucker termed “wisdom” we might term today. One can be armed with a set of marketing data, or extensive knowledge about an organization’s internal processes, or verifiable information about the competition. But what a person does with that information, data, or knowledge reflects the concept of wisdom.

Wisdom finds its roots in Greek philosophy. Aristotle’s complex system of ethics was grounded in the belief that the search for truth and wisdom was key to creating an effective citizenry of leaders. For Aristotle, wisdom did not just involve learning a set of principles (theoretical wisdom) but also the specific instances of how to apply those principles in daily life (practical wisdom). The Greek term for this kind of wisdom is phronesis: the application of wisdom to practical action. Today, we would refer to this as judgment.

Judgment is not simply the use of reason or the accumulation of a body of knowledge. It involves the application of experience, intuition, emotional intelligence, and other factors. In Leonardo da Vinci’s words, “Wisdom is the daughter of experience.” Information without context can perhaps be useful for some quantitative purposes, but at the end of the day, a basketful of measurable truths needs to be given meaning. How should we act, based on this information? What are the data telling us? Is everything we are presented with important and relevant?

Judgment often involves making a decision of some kind. While Drucker emphasized the importance of using rational methods to arrive at decisions (information gathering, consideration of options, welcoming dissenting ideas), he also valued intuition, experience, and even the “hunch” that seasoned decision makers use as part of the process (Drucker, 1966). While no given decision should rely solely on these factors, these play an important role in virtually all decisions that involve human resources and interactions between people. Even decisions involving data, which will always be incomplete and in many cases inaccurate, will require some degree of critical thinking to ascertain what is relevant and impactful.

What are some things that can get in the way of exercising sound judgment? Some barriers are related to the nature of knowledge and information, and some are related to our human qualities. A few things to consider when thinking about judgment:

· Misinformation : If we rely on inaccurate data, information from poor or unvetted sources, knowledge from people with limited experience, or advice from those who have a very narrow scope and range of knowledge, we can make poor decisions based on incomplete or simply wrong information. This is why discernment regarding the quality of knowledge, information, and data is crucial.

· Filtering Problems : We all have to filter information that comes our way. Sir Andrew Likierman, former dean of the London Business School, notes that few of us absorb what we really need to (Likierman, 2020). We might filter out things that are important simply because they don’t fit with our view of the way things should be. Conversely, we might not filter out information or opinions that are not helpful, and instead focus on those, distracting us from the real issue at hand. It takes skill and practice to learn how to adjust our data/information filtering mechanisms, making sure we aren’t doing too much or too little.

· Narrow focus : We all have our areas of expertise. Lawyers will focus on the details of how a decision might impact an organization’s liability and risk exposure. Marketing will think about expanding opportunities and projecting a brand. Executive decision making requires moving beyond such structural models to a broader model that embraces modalities of different kinds. As Scott Hartley so artfully argues in his book, The Fuzzy and the Techie (2017), the world needs BOTH the liberal arts and the technical disciplines to effectively function. Our new world requires wisdom that transcends disciplines and moves towards effective problem solving.

· Bias and Echo Chamber : We all have implicit bias (Banaji and Greenwald, 2013). This is a reality that we cannot change. What we can do, however, is to increase our awareness so that our bias is acknowledged. Are we naturally risk averse? Do we favor or prefer certain kinds of people in hiring decisions? Do we avoid some scenarios when making decisions because we shy away from confrontation? This level of self-awareness (in Drucker’s language, self-knowledge) is crucial to exercising good judgment. If we surround ourselves with people who merely reinforce these biases, rather than challenging them, we can never grow.

If you are a practicing leader or manager, I’m sure you can think of examples of how these barriers to judgment come into play. What can we do to exercise better judgment ourselves and encourage it in others?

· Insist on quality of data whenever possible.

· Be self-aware of our biases and filtering tendencies and be equally aware of our colleagues’ blind spots.

· Respect the importance of having colleagues who challenge each other.

In our next installment, we’ll consider the role of interdisciplinary thinking in transforming knowledge into actionable wisdom.

Aristotle (350 B.C.E). Nicomachean Ethics.

Banaji, M.R. and Greenwald, A.G. (2013). Blindspot: Hidden biases of good people. Random House.

Drucker, P.F. (1966). The effective executive. Harper & Rowe.

Drucker, P.F. (1989). The new realities. Harper & Rowe.

Hartley, S. (2017). The fuzzy and the techie: Why the liberal arts will rule the digital world. Houghton Mifflin.

Likierman, A. (2020). The elements of good judgment. Harvard Business Review (January-February) https://hbr.org/2020/01/the-elements-of-good-judgment

The Future of Knowledge Work

Mon, 16 Sep 2024 17:59:00 GMT

In the first installment of this series, I discussed the historical philosophical debates about the nature of knowledge. In Part II, I’d like to discuss the concept of knowledge work and where we might be headed in the future.

Peter Drucker used the term “knowledge work” to describe the shift in the American economy from industrial manufacturing to service sector organizations. In America’s industrial society of the first half of the twentieth century, technological advances were driven by production needs. Knowledge was applied to work. In the early 1900s, knowledge focused on making people more productive. Frederick Taylor’s work in scientific management and others’ studies of motivation aimed at making human beings more efficient producers of physical goods. Later, processes would be automated using new technologies.

By the end of the twentieth century, the nature of work had changed. Manufacturing employment was declining, and Drucker’s “knowledge work” was ascending (Drucker, 1993). People used their education and minds, not just their bodies, to produce. And, in many cases, they were not producing goods, but instead they were producing services. This resulted in a shift from applying knowledge to work to applying knowledge to knowledge. Work, which for centuries had been defined through physical effort, sweat and calloused hands (and had, by the way, been disdained by the upper class in many societies historically) was now the domain of the educated elite. To Drucker, this represented a massive historical, social, and economic shift that required a multi-pronged response.

Knowledge work in the late twentieth century presented new management challenges. Drucker’s early writing focused on the management of industrial workers who physically produced cars or other goods (Drucker, 1954). These employees worked in organizations with levels of management from the production floor to the executive offices. Traditionally, manual workers were viewed as needing direct oversight of the manufacturing process to ensure production quantities and quality. The new knowledge workers were no longer employees needing direct supervision. Instead, they were independent, possessing specialized knowledge in areas outside of management’s expertise. Knowledge work was self-contained and portable, yet required access to organizations to be effective.

As we shall see, we perhaps are facing a similar tectonic shift in the nature of work in the post-COVID pandemic world that seeks to understand the nature of work. In Drucker’s era, the shift to knowledge work involved a massive reconfiguration of the nature of “labor.” In a post-capitalist society, knowledge was now just as important an input as labor and capital. In our post-COVID society, we are struggling to find the terminology to describe the future of knowledge work in organizations that must be resilient, less focused on structure, more creative, and open to new ways of seeing knowledge work.

Following the COVID 19 pandemic, many organizations are having difficulty with getting knowledge workers to return to the office. Workers in many ways are even more independent than in Drucker’s era, as they possess technologies and skills that allow them to work almost anywhere and collaborate with others outside of a physical centralized workspace. In many cases, contemporary knowledge workers no longer need physical access to organizations to be effective; the rate of new business starts increased dramatically during and immediately after the pandemic, as employees who were laid off or unhappy in their positions decided to go out on their own (https://hbr.org/2024/01/how-the-pandemic-rebooted-entrepreneurship-in-the-u-s#:~:text=Data%20from%20the%20OECD%20show,doors%20than%20before%20the%20pandemic.). Remote work has become increasingly common and yet it presents new challenges to organizations with respect to data security and privacy issues. The portable nature of knowledge work has only become more exaggerated, and while it may seem self-contained, it is in fact less so than it has ever been. Knowledge is easily shared, a fact that increasingly exposes information and data to hacking and other security breaches.

During the 20th-century knowledge work was inherently different from manual labor in terms of the aspect of motivation. While Drucker in the 1950s made the case for a plant community where workers could find status and function within the manufacturing organization, he came to the realization that industrial labor, with its increased routinization, could not provide this kind of fulfillment (Drucker, 1950). Industrial workers needed to be treated with dignity and given opportunities to make a contribution to the mission of the organization. While the work itself may not necessarily be stimulating, blue-collar workers could find status and meaning through understanding their role in furthering the mission and purpose of the organization. On the other hand, knowledge work typically was motivating in and of itself; knowledge workers needed little motivation to actually perform their work. However, the challenge was to align knowledge work with the organizational mission and to prevent siloing of specialized knowledge areas (Drucker, 1993). Thus, while knowledge workers may motivate themselves to perform tasks, they may not necessarily do the work that the organization needs to further its goals, unless they understand the larger organizational mission.

Knowledge worker motivation in the twenty-first century has become increasingly delicate as organizations face phenomena such as quiet quitting, where some employees put in the minimum effort required as a backlash against hustle culture. Particularly after the experience of remote work during the COVID 19 pandemic, many knowledge workers have been considering the importance of work-life balance, and are resisting efforts to increase their workload. In response to the phenomenon of disengagement at work, many managers have increased their level of supervision, calling for more meetings and in-person gatherings. As a result, many knowledge workers feel that their productivity has decreased and that they are being micromanaged (https://www.forbes.com/sites/bryanrobinson/2023/12/14/forget-quiet-quitting-in-2024-employees-want-employers-to-quietly-manage/?sh=4000c0386523).

Drucker called making knowledge work productive the greatest challenge faced by organizations in the twenty-first century (Drucker, 1999). Knowledge-worker productivity was a completely new concept for twentieth-century management. And manual worker productivity was measured in terms of output quantity; knowledge worker productivity involved measurements of quality. Because knowledge workers did not function as traditional employees with direct supervisors, they were responsible for their own productivity (and knew better than their managers how to measure it). For this reason, Drucker emphasized the importance of managing oneself; knowledge workers had autonomy to decide how to work, but also responsibility for ensuring their own performance was in accordance with agreed-upon measurements.

With the rise of remote and hybrid work, knowledge-worker productivity is today a primary concern for organizations. While many employees believe that they are more productive with flexible schedules, often working in hybrid roles, research indicates that their bosses don’t believe this to be true (https://www.forbes.com/sites/glebtsipursky/2022/11/03/workers-are-less-productive-working-remotely-at-least-thats-what-their-bosses-think/?sh=4fe1c43b286a). The subsequent increase in monitoring of remote employees, or demand for more time in the office, has strained relations between knowledge workers and their managers, exposing a rift based on a lack of trust. Interestingly, more and more people who study management are pointing to the need for more flexibility and innovation in organizations, and less reliance on rigid structures and authoritarian models of hierarchy. The pandemic has forced organizations to re-evaluate the nature of knowledge work and productivity. While human connection is important, many knowledge workers are indeed more productive when they are freed from restrictive scheduling demands and constant check ins.

It seems clear that the trends that Drucker observed with respect to knowledge work and workers will continue to present dilemmas to organizations. As he pointed out, knowledge work presented several management challenges, and these have only increased since Drucker wrote on the subject. Recognizing that knowledge work is highly autonomous, yet needs to be aligned with a team or organizational mission, can only help highlight the importance of motivation and managing productivity. Perhaps if we go back to the roots of knowledge work and workers in Drucker’s writings, we can gain insight on how to move forward more effectively to face the future of work.

Next time: The role of discernment and wisdom in human reason

Sources

Drucker, P.F. (1950). The new society. Harper & Brothers.

Drucker. P.F. (1954). The practice of management. Harper & Row.

Drucker, P.F. (1993). Post-Capitalist society. Harper Collins.

Drucker, P.F. (1999). Management challenges for the 21st century. Harper Collins.

Fikri, K. & Newman, D. (2024). How the pandemic rebooted entrepreneurship in the U.S. Harvard Business Review, Jan. 17 (https://hbr.org/2024/01/how-the-pandemic-rebooted-entrepreneurship-in-the-u-s#:~:text=Data%20from%20the%20OECD%20show,doors%20than%20before%20the%20pandemic.).

Robinson, B. (2023). Forget ‘quiet quitting.’ Most employees want employers to ‘quietly manage.’ Forbes, Dec. 14 (https://www.forbes.com/sites/bryanrobinson/2023/12/14/forget-quiet-quitting-in-2024-employees-want-employers-to-quietly-manage/?sh=4000c0386523)

Tsipursky, G. (2022). Workers are less productive working remotely (at least that’s what their bosses think). Forbes, Nov. 3, https://www.forbes.com/sites/glebtsipursky/2022/11/03/workers-are-less-productive-working-remotely-at-least-thats-what-their-bosses-think/?sh=4fe1c43b286a

Economic Growth and the Role of Human Capital

Mon, 16 Sep 2024 17:52:00 GMT

Measuring economic growth allows us to determine whether an economy is expanding, remaining unchanged, or declining. Assessing economic performance, namely economic growth expressed through Gross Domestic Product (GDP), is a common method for evaluating the overall health of an economy. A healthy economy generates jobs and tends to lead to improvements in per capita income and living standards.
In spite of the COVID-19 pandemic’s adverse effects on productivity, supply chains, and economic output worldwide, the U.S. economy has recovered relatively well during the past couple of years. In 2023, the U.S. economy grew at an average rate of 2.5 percent, indicating modest growth. Although there were some fears of economic decline (and trepidation concerning a potential recession), the U.S. economy has rebounded and created jobs, raising overall economic output. The figure below shows the percent change in real GDP (adjusted for inflation) in the United States during the past six quarters. As we can observe, throughout this time period, the U.S. economy has had positive economic growth.

Source: U.S. Bureau of Economic Analysis

Meanwhile, some countries such as Mexico and India have struggled economically, particularly on a GDP per capita basis. So, one might wonder, why has the U.S. economy been able to recover notwithstanding the difficulties of the COVID-19 pandemic? What has enabled the U.S. to remain economically resilient during these past few years? We will explore this a bit later. But first, let’s discuss how the theories behind economic growth have evolved over time.
Background on the Study of Economic Growth
Economic growth has been studied for several decades. The economist, Robert Solow, became a prominent scholar on the subject in the 1950s. Solow’s theories proposed the role of accumulation of physical capital and emphasized the importance of technological progress as the ultimate driving force behind sustained economic growth.
Growth theorists in the 1950s argued that technological progress occurred in an unexplained manner, and thus they placed technological growth outside of their economic model. However, there was a significant shortcoming in assuming that long-run economic growth is largely determined by some unexplained rate of technological progress which, after all, could not be modeled.
By the 1960s, growth theory was based mainly on the neoclassical model, developed by Ramsey (1928), Solow (1956), and Koopmans (1965), to name a few. The neoclassical model considered individual consumers and firms and assumed that they make rational choices to maximize their utility or profits, and it also presumed perfect information and zero transaction costs. The neoclassical growth model posited that economic growth results from capital accumulation through household savings. Over time, economists would realize that consumers and decision makers in general are not always rational, markets indeed lack perfect information, and transactions between parties certainly yield costs.
In the 1980s, most of the research conducted by economists centered on “endogenous growth” theories, in which the long–term economic growth rate was largely assumed to be determined by government policies. As such, economists argued that government policies help to motivate businesses to invest in research and development so they can continue to drive innovation. Several of the economic models that emerged also began to broaden the definition of capital, and included references to human capital (Lucas 1988; Rebelo 1991; Romer 1986). Moreover, another key assumption of the endogenous growth theory is that economic growth is principally the result of internal forces, rather than external ones.
In the late 1980s and early 1990s, scholarly works began to posit that technological progress generated by the discovery of new ideas was the only way to avoid diminishing returns in the long run. Two professors from the University of Chicago, Paul Romer and Robert Lucas, introduced the notion of “ideas” and of “human capital” as variables that have influence on economic growth. From their research emerged the subfield – the economics of technology. In their ensuing models, the purposive behavior that underlay innovations hinged on the prospect of monopoly profits, which provided individual incentives to carry out costly research (Aghion and Hewitt 1992; Grossman and Helpman 1991; Romer 1990).
Economists’ earlier theories about economic growth had suggested that labor and physical capital and increased productivity from technology are the primary factors that contribute towards economic growth. Over time, however, economists recognized the challenges of achieving economic growth especially as there are diminishing returns to capital and labor, combined with the reality that some countries are not as efficient in their allocation of resources as suggested by the neoclassical growth model. Consequently, Robert Lucas (1988) and Paul Romer (1994) as well as others (Barro 1997; Rebelo 1991; Sachs and Warner 1997) proceeded to advance ‘Endogenous Growth Theory’ by arguing that economic growth can be driven by human capital, namely by the expansion of skills and knowledge that make workers productive. Thus, they argued that human capital has increasing returns to scale (i.e., the output increases by a larger proportion than the increase in inputs).
The Influence of Human Capital on the Economy
For some time now, there has been growing research on the impact of human capital on the economy. A study conducted by the Centre for Economics and Business Research in 2016 indicated that human capital is nearly 2.5 times more valuable to the economy than physical assets such as technology, real estate and inventory. The study also highlighted that for every $1 invested in human capital, $11.39 is added to GDP (CEBR, 2016). This study underscored the important role human capital plays in driving economic growth. When human capital increases in a society, including in areas such as education, science, manufacturing, and management, it leads to increases in innovation, increased productivity, and improved rates of labor force participation, all of which support economic growth.
And so, we come back to the questions: Why has the U.S. economy been able to recover notwithstanding the difficulties of the pandemic? What has enabled the U.S. to remain economically resilient during these past few years? I argue that the United States has been able to withstand the adverse effects of the pandemic due to its sizable stock of human capital. Since the U.S. is a high-income country with a workforce that has relatively high levels of education and health (on average), it tends to develop human capital at a higher rate (relative to other countries), enabling it to contend with economic adversity through innovation driven by knowledge workers. Below is a graph using data from the World Bank which shows the relationship between the Human Capital Index (Note: HCI is comprised of education and health components), and GDP per capita. As we can see from the graph, the United States has a high HCI score (0.7) and a high level of GDP per capita (slightly above USD$60,000).

Source: Our World in Data, 2024

Key Lessons
The Human Capital Index, developed by the World Bank, conveys the productivity of the next generation of workers compared to a benchmark of complete education and full health (World Bank, 2024). The HCI measures the knowledge, skills, and health that a child can expect to accumulate during their youth, taking into account factors such as education, health, and survival rates. The index is devised to indicate how improvements in health and education outcomes can lead to considerably greater productivity of the next generation of workers. Higher values indicate higher expected human capital. The United States’ relatively high HCI index score of 0.7 as of the year 2020, indicates that the country had made investments in human capital. A country's HCI score is its distance to the “frontier” of complete education and full health. Based on this index score, a child born in the United States will be 70 percent as productive when she grows up as she could be if she enjoyed complete education and full health. In other words, the future earnings potential of children born will be 70% of what they could have been with complete education and full health.
Unlike physical capital, human capital has increasing rates of return. Therefore, economic growth is augmented at a larger rate as human capital accumulates (people acquire more knowledge and skills). If human capital is indeed nearly 2.5 times more valuable to the economy than physical assets, then economies (nations) ought to invest in those areas that support human capital, namely education and health. And if investing $1 in human capital yields an estimated $11.39 to GDP, then countries will benefit greatly from investing in improving the health and education of people. Nations that invest in human capital are more adept at developing innovations that improve efficiency, competitiveness, and productivity. Human capital is also a key input in the research sector, which develops and incubates new ideas that support technological progress and innovation. Moreover, investing in education is intricately connected with the development of human capital and economic development (Barro and Lee 1993; Romer 1993). Hence, an increase in the educational attainment level of the population will, in turn, yield knowledge spillover effects which spur innovation across different industries and sectors. And at the aggregate level, innovation will produce the long-term effect of increasing the economic growth rate.
Innovation led by human capital (skilled knowledge workers) provides productivity gains that allow firms to expand their size, market reach and profits. Human capital also contributes to the efficiency and effectiveness of organizations within the social and public sectors. In all, investing in human capital is beneficial to the well-being of the economy and society in general. Enhancing the education and health of people is essential to developing human capital and economic resilience. The acquisition of skills and knowledge enable ‘knowledge workers’ to drive entrepreneurial activities and innovation, proving that human capital is indeed the most important factor to developing a resilient economy and a functioning society. References Aghion, P. and P. Howitt (1992). A Model of Growth through Creative Destruction. Econometrica, 60, 323-351. Barro, R. (1997). Determinants of economic growth: a cross-country empirical study (2nd ed.). Cambridge, MA: The MIT Press. Barro, R. J., & Lee, J. W. (1993). International comparisons of educational attainment. Journal of monetary economics, 32(3), 363-394. Centre for Economics and Business Research. (2016). Korn Ferry Economic Analysis: Human Capital. Data Page: Human Capital Index. Our World in Data (2024). Data adapted from World Bank. Retrieved from https://ourworldindata.org/grapher/human-capital-index-in-2020 [online resource] Grossman, G. M. and E. Helpman (1991). Innovation and Growth in the Global Economy. The MIT Press, Cambridge, MA. Koopmans, T.C. (1965). On the Concept of Optimal Economic Growth. In: Johansen, J., Ed., The Econometric Approach to Development Planning, North Holland, Amsterdam. Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 2, 3-42. Ramsey, F.P. (1928). A Mathematical Theory of Saving. Economic Journal, 38, 543-559. Rebelo, S. (1991). Long-run policy analysis and long-run growth. Journal of Political Economy. IC, 500-521. Romer, P. M. (1986). Increasing Returns and Long-run Growth, Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October. Romer, P. M. (1990). Endogenous Growth and Technical Change, Journal of Political Economy, 99, pp. 807-827. Romer, P. M. (1993). Idea gaps and object gaps in economic development. Journal of Monetary Economics, 32(3), 543-573. Romer, P. M. (1994). The origins of endogenous growth. The Journal of Economic Perspectives, 3-22. Sachs, J. D., & Warner, A. M. (1997). Fundamental sources of long-run growth. The American Economic Review, 184-188. Solow, R. M. (1956). A Contribution to the Theory of Economic Growth, The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94. U.S. Bureau of Economic Analysis. (2024). Gross Domestic Product. Retrieved from: https://www.bea.gov/data/gdp/gross-domestic-product [online resource] World Bank. (2024) World Bank Group launches Human Capital Index (HCI). Retrieved from: https://timeline.worldbank.org/en/timeline/eventdetail/3336 [online resource]

Meaning, Happiness, and Peace

Mon, 16 Sep 2024 17:40:00 GMT

There seems to be a general misconception about the famous phrase from the United States Declaration of Independence; “Life. Liberty, and the Pursuit of Happiness.” Jeffrey Rosen (2024), in his book The Pursuit of Happiness: How Classical Writers on Virtue Inspired the Lives of the Founders and Defined America emphasizes that the founding fathers of America were deeply influenced by classical writers who advocated for a life of virtue as the pathway to true happiness. Rosen argues that the pursuit of happiness was not meant to be about accumulating

wealth or achieving fame, but about living a life of purpose, guided by the intrinsic rewards of virtue and service to others. These classical ideals, which shaped the very foundation of American society continues to resonate today, particularly in the context of grassroots movements that seek to promote peace, justice, and the common good.

According to Moss (2017), the biggest misconception of the happiness industry is that happiness is an end, not a means. We think that if we get what we want, then we’ll be happy. We tend to see “being happy” as the end goal. But it turns out that what’s really important is the journey. Another misconception about happiness is that happiness is being cheerful, joyous, and content all the time—always having a smile on your face. It is not. Being happy and leading a rich life is about taking the good with the bad and learning how to reframe the bad.

One of the paradoxes of being human is that while it may make sense for us to pamper and pleasure ourselves because we tend to think that this will make us happy, the reality is that the key to living a meaningful and fulfilled/happy life is caring for and helping other people. Some would say that caring more about other people’s needs than our own is the key to a more peaceful world.

According to Peter Drucker, the father of modern management, no society can properly function unless it gives the individual member social status, function, meaning, and dignity and unless the decisive social power is legitimate power. If the individual is not given these things there can be no society but only a mass of social atoms flying through space without aim or purpose (Drucker Institute).

Toubiana and Yair (2012) state, “It is frustratingly difficult to cite a significant modern management concept that was not first articulated, if not invented by Peter Drucker.” Drucker was born in Austria and was in his early 20s when he witnessed Adolph Hitler and the Nazis taking control of Germany. This event, along with publishing his first of 39 books in 1939, The End of Economic Man: The Origins of Totalitarianism, set his lifelong goal of a peaceful world. Drucker was determined that fascism, totalitarianism, and autocracy could be eliminated by making sure that societies’ function is to give all people’s lives meaning and status. Without status and function, people could allow autocracy and totalitarianism (Drucker Institute).

Drucker (1995 p.29-30) thinks that all people need to have meaning. He said:

For the individual without function and status, society is irrational, incalculable, and shapeless. The “rootless” individual, the outcast—for the absence of social function and status casts a man from the society of his fellows—sees no society. He sees only demonic forces, half sensible, half meaningless, half in light, and half in darkness, but never predictable. They decide about his livelihood without the possibility of his understanding them. He is like a blindfolded man in a strange room, playing a game of which he does not know the rules; and the prize at stake is his own happiness, his own livelihood, and even his own life.

A man in such a state probably has little chance of being fulfilled, rational, or peaceful. There are many reasons for a loss of meaning, status, or function, but one of the most obvious and easiest to understand is unemployment. Not only is unemployment a potential economic catastrophe, but it also entails social disenfranchisement. Prolonged unemployment can lead to the loss of self-respect, which has nothing to do with the person's actions (Maciariello and Linkletter 2011).

In her book The Power of Meaning (2017), Emily Esfahani Smith says that many people spend their lives pursuing happiness and eventually end up asking, “Is this all there is?” Smith says that to have a fulfilling life, one needs meaning in their life. Meaning comes from belonging to and serving something beyond yourself and developing the best within yourself. Creating meaning in your life requires some degree of selflessness (Seligman 2002). Smith cites studies that show people who have meaning in their lives are more resilient, do better in school and work, and live longer. She refers to the four pillars of a meaningful life. They are belonging, purpose, transcendence, and story-telling.

Belonging (bonds to family and friends) means being in relationships where you are intrinsically valued for who you are. Some groups, such as gangs or cults, value people for what they believe or who they hate, not for who they are.

Purpose is less about what you want than about what you give. It gives you something worthwhile to live for. A classic example would be raising children. For some people, their work gives them purpose. The important thing is to contribute and feel needed. What John Bunyan said about meaning and purpose should be kept in mind; “You have not lived today until you have done something for someone who can never repay you.” (Bunyan 2020).

Transcendence is stepping beyond yourself; you get lost in a meaningful task, your sense of self fades away, and you are less self-centered. Transcendence can result in a person being more generous when helping people.

Storytelling is the story you tell yourself about yourself. It gives people clarity about themselves and helps them understand how they became themselves. A person’s story can change because their lives evolve however they are still constrained by the facts.

Too many people today have made the mistake of anointing a job as their main source of meaning. Seventy percent of employees say their jobs define them. Meanwhile, Gallup data shows that only 12.5 percent of us are “totally and utterly engaged” at work. (Wellman 2024)

Victor Frankel had much to say about meaning in his book, Man’s Search for Meaning. He was a psychiatrist, born in Austria, and was a prisoner in some of the Nazi concentration camps during the Holocaust. He used his psychiatrist training to observe what was happening to himself and the other prisoners. One of his observations was that paradoxically, prisoners who shared their last scrap of bread with a prisoner who looked like they needed it tended to live longer than those who stole and ate other prisoners' last scrap of bread. One would think the prisoner who got more to eat because of stealing others’ bread would live longer. But Frankl realized that the prisoners who help others by sharing their food had a reason to live—to help others. They had higher self-esteem than the prisoners who stole from others. They had meaning in their lives. They had a purpose to live. Frankl often used the Nietzsche quote, “He who has a why to live, can bear with almost any how.” Frankl saw what he termed the last of human freedoms, the freedom to choose one’s attitude in any circumstances.

Frankl wrote Man’s Search for Meaning after the Holocaust and created a new psychiatrist discipline, Logotherapy, which is still widely used today. He contends, "The more one aims for success and makes it a target, the more you will miss it. For happiness, like success, it cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one’s personal dedication to a cause greater than oneself or as a by-product of one’s surrender to a person other than oneself.” In other words, Frankel emphasizes selflessness, which is a prerequisite to having meaning in your life, such as giving time and (or) valuables to help others.

In a TED Talk titled “It’s Time to Reclaim Religion,” Rabbi Sharon Brous tells us that “Our World is on Fire.” The world is divided because of extremism. Religions and other institutions can continue to increase divisiveness, or they can oppose extremism in all its forms to stop wars, oppression, radical individualism, and discrimination. If people, instead of being apathetic, told themselves, I can do something, we could live in a more peaceful, loving, and just world that values peace and dignity for all.

The Warren Berger (2018) book, The Book of Beautiful Questions, has a great quote to get people communicating, “What if I replace judgment with curiosity?” P.124. He posits that if people would only understand that just because someone knows that he or she is right, they may or may not be. If there is a disagreement about who is “right,” both sides could avoid an altercation if they ask the “other” person to explain their reasoning for their position because they are genuinely curious. And, of course, the person expressing their curiosity needs to be willing to listen and be willing to change their position if need be. (Berger 2018)

Joshua Becker (2022) says that one of the reasons for living a meaningful life is so that when you get to the end of your life, you are at peace with more satisfaction and less regret and guilt over how you spent your life. Also, a person living a meaningful life is peace-loving and promotes peace in others.

Joshua Becker (p. 157), posits that. fame, wealth, and power are not things to strive for in lieu of living a meaningful life. There are some things worth becoming famous for that can make a life more meaningful: kindness, perseverance, faithfulness, empathy, joy, encouragement, peacemaking, and loving.

REFERENCES:

Becker, J. (2022) Things that matter: Overcoming distraction to pursue a more meaningful life. Penguin Random House WaterBrook.

Berger, W. (2018 The book of beautiful questions. Bloomsbury Publishing. (2018).

Brous, S. (2017). It’s time to reclaim religion. TED talk. https://www.ted.com/talks/sharon_brous_it_s_time_to_reclaim_religion

Bunyan, J. Updated by Vermilye, A. (2020) Pilgrim’s Progress. Brown Chair Books.

Drucker Institute 1999. Claremont Graduate Institute. https://drucker.institute/about/drucker-archives/

Drucker, P. (1995) The future of industrial man. Routledge.

Frankl, V. (1959) Man’s search for meaning: An introduction to Logotherapy. Beacon Press.

Maciariello, J. Linkletter, K. (2011) Drucker’s lost art of management: Peter Drucker’s timeless vision for building effective organizations. McGraw-Hill.

Moss, J. (2017). Happiness Isn’t the absence of negative feelings. In Harvard Business School Publishing Corporation (Ed). Emotional Intelligence: Happiness.

Rosen, J. 2024. The pursuit of happiness: How classical writers on virtue inspired the lives of the founders and defined America. Simon & Schuster.

Seligman, M. (2002) Authentic happiness: Using the new positive psychology to realize your potential for lasting fulfillment. Simon & Schuster.

Toubiana, M. Yair, G. (2101) The salvation of meaning in Peter Drucker’s oeuvre. Journal of Management History. Vol. 18. Iss. 2. 178-199.

Wellman, J. (2024) You only die once: How to make it to the end with no regrets. Voracious.

The Nature of Knowledge

Fri, 30 Aug 2024 23:36:00 GMT

I’ve had several recent conversations with colleagues from academia, business, the arts, and other walks of life about how social media, artificial intelligence (AI), and other technologies seem to be redefining knowledge as we understand it. These interactions have inspired me to start a newsletter series, the first of which will focus on how modern developments force us to reevaluate the definitions of knowledge and knowledge work and the intersections between technology and human beings.

In this first installment, I’d like to briefly explore the history of the philosophical debates about the nature of knowledge and its acquisition. There is an entire area of study devoted to this topic called epistemology. Epistemology concerns itself with the nature, origins, methods, and scope of knowledge. Where do knowledge and opinion diverge? What constitutes knowledge vs. mere data or information? How do we come about acquiring knowledge?

This will not be a treatise on epistemology! But there is a very long history of philosophical discourse regarding how to define knowledge and how it is most effectively acquired and used. This history is informative as we grapple with current events that force us to deal with the nature of modern information in its digital forms that have the potential for rapid dissemination of misinformation and disinformation. AI has disrupted the way organizations work, altering industries and sectors, while providing efficiency gains and the prospect of greater productivity. Artificial intelligence has also proven its ability to “hallucinate,” or take existing information and contort it into falsehood. In recent years, people with malicious intent have been able to harness the technologies of social media and AI to produce deepfake images that result in false and manipulative advertising campaigns that can destroy reputations or influence potential voters in democratic elections. What we see as “knowledge” today can be redefined and contorted in ways previously never imagined. It therefore is instructive to step back and have a clear understanding of what “knowledge” is, and how it differs from other forms of information. This is an ancient conversation that we can learn from.

The philosophical debates about the nature of knowledge can be traced back to Greek society. Plato and Aristotle differed on their views of what constituted knowledge. To Plato, knowledge was innate, part of one’s very being. One discovered truth not through experiencing worldly events, but through contemplation. You may remember references to “Plato’s cave.” Plato wrote a treatise entitled “Allegory of the Cave” (circa 380 B.C.E.) using the illustration of people chained in a cave who can only see a blank wall with shadows cast upon it. He argued that what we see (shadows in the cave) is not the truth. Thus, truth is not expressed in the material world but is only a reflection of what is actual knowledge, which is found within. Aristotle countered with an empiricist argument for knowledge. For him, knowledge and truth were found through experiential learning and evidence. Virtue, for example, had to be learned through practice, not mere contemplation.

The modern world continued this discussion of the nature of knowledge with the addition of scientific discovery. While the West struggled with questions of knowledge in the Medieval period, the Arabic Muslim world made enormous advances in medicine, chemistry, algebra, and engineering. Arabic translations of Greek scholars aided in the spread of this knowledge to other regions. Later, Francis Bacon presented the first theory of modern science centered on the idea that truthful knowledge had to be based on unbiased observation of facts and evidence. With enough accumulation of data, we would acquire knowledge. Bacon countered Aristotle’s use of deductive reasoning (relying on pure intellectual exercise and individual experience) with the concept of inductive reasoning (relying on physical evidence based on experimentation and observation in the real world, not the mental/philosophical world). This shift to the realm of science pushed the nature of knowledge to another dimension. From Bacon of the 17 ^th century to the Enlightenment philosophers of the 18 ^th century, knowledge centered on the perfection of human reason and the triumph of science over religion. By the time of the early 19 ^th century, Western cultures embraced the view of positivism – if scientists and philosophers could understand what they assumed was a static body of knowledge about the world, they would have conquered the realm of the unknown. If we can measure it, we can understand it, and therefore know it. If the world is unchanging, this is an easy task.

Of course, the world has never been static in terms of knowledge. By the late 1800s, Western Europe experienced incredible political and intellectual upheaval. Cultural production of this era shows the crack in the idea of a solidified view of knowledge as steady human progress. Fin de Siecle art embraced the concept that human reality could not possibly be represented by traditional methods. Nietzsche espoused a philosophy that eschewed rationalism and advocated a view of knowledge as intensely personal and disconnected to traditions. By the time Freud and Einstein entered the picture in the early 20 ^th century, “knowledge” was no longer a concept of debate. The concept itself was under attack.

Peter Drucker waded into this discussion in his 1957 book, Landmarks of Tomorrow. Drucker makes the case that knowledge is no longer about evidence, data, and experience. It is about power and how we use it. He refers to the world of Rene Descartes, who gave the world the way to organize knowledge in terms of measurement: the whole is a sum of its parts. But Drucker’s point in the late 1950s was that his world no longer made sense in viewing knowledge this way. The “new” world of Drucker’s era was one of understanding configurations rather than causes. Instead of trying to find measurements and empirical explanations for the events of the world, Drucker calls on us to look for patterns, ways of fitting seemingly unrelated events into a coherent explanation. This requires a new way of viewing knowledge.

We’ve had to wrestle with what knowledge is for centuries. We’re doing it again in the 21 ^st century. We can’t make sense of disinformation campaigns on social media and developments with AI in terms of traditional understandings of knowledge as simply about data and evidence. How do we translate what we are experiencing today in terms of past disruptions, and how can those lessons help us navigate our treacherous waters?

Next time: How has knowledge work evolved, and what might knowledge work look like in the future?

Loving Drucker, Fearing the Full Drucker

Thu, 08 Aug 2024 17:00:00 GMT

"Although Peter Drucker did not like autocratic management, I must be autocratic about one thing: all employees must learn Drucker's management theories," said Cheng Zhenshuo, the owner of a chemical company in Huangshan, Anhui. Despite the economic downturn in China, his business has grown this year. Like many Chinese bosses, Mr. Cheng enjoys drinking tea, reading Buddhist scriptures, and discussing ancient Chinese classics like Laozi and "Da Xue" in his spare time. However, he believes that Drucker's management theories are more practical for businesses and employees. When Mr. Cheng requires his employees to study Drucker, he refers to Drucker's smart advice on how to work efficiently, such as how managers should manage time, how to hold more effective meetings, and how to motivate partners and employees with high goals. In his view, Drucker's works provide him with a toolbox for "working smarter."

"When the boss is the most powerful person in the company, he should be wary of his own arrogance. If the boss is always smarter than the employees, likes to hear praise, and the employees feel they need to rely on the boss for everything, then despite past successes, the company's future is unlikely to be bright," said Sun Zhiyong, the owner of a high-end furniture company ranked second in China's luxury furniture market. Mr. Sun discovered Peter Drucker earlier than Mr. Cheng. In the early 2000s, to understand Drucker's management theories, he would take the night train from Hefei to Beijing every month, a time when China's high-speed rail was not yet developed. He believes the most important lesson he learned from Drucker is the restraint and caution of power. Among Drucker's "entrepreneur readers," Mr. Sun is one of the few who discovered the theme of "power" in Drucker's books. Over more than 20 years of entrepreneurial life, Mr. Sun has grown increasingly appreciative of Drucker's wisdom: if an entrepreneur enjoys the glory brought by power and thus does everything possible to seize power, it may bring disaster to the enterprise. Because overly concentrated and therefore ineffective power can drain the vitality of the enterprise. However, Mr. Sun discusses this topic very cautiously. He likes to express his views on "power" to familiar entrepreneur friends. But he never allows his topics to go beyond the boundaries of business management. In China, avoiding political discussions is a protective measure for entrepreneurs and their companies.

In today's China, entrepreneurs like Mr. Cheng and Mr. Sun are very typical. Born in the 1970s, they did not receive a complete formal education and built medium-sized enterprises from scratch. They have a clear understanding of their abilities, knowing their success comes from the era, luck, and rich life experiences. They also know these factors cannot guarantee continued success in future competition. To manage their companies more wisely, they need a sound methodology to help them better understand the world, politics, economy, work, and life itself.

Many Chinese entrepreneurs and professional managers need a methodology for work and life. As a result, various methodologies have become hot commodities, creating a huge market. Every year, publishers release a large number of best-selling books on methodologies. Countless training courses are offered online and in high-end hotel conference rooms. Business lecturers sell various methodologies promising success to entrepreneurs. Some claim their wisdom comes from ancient Chinese texts, while others come from the latest research in American business schools. Among these courses, Peter Drucker's management theories are not popular. Compared to those trendy success courses, Drucker's philosophy always seems out of place because Drucker emphasizes responsibility over profit.

Chinese entrepreneurs also like to talk about the word "responsibility." However, most bosses think "responsibility" is a tool to restrain and punish employees. Even if they read the word "responsibility" in Drucker's books, they habitually understand it in their own way. As a result, many employees in Chinese companies do not particularly like their bosses studying Drucker. Therefore, whenever a boss talks about Drucker, employees guess that "this year's workload will definitely be greater." In the boss's dictionary, "responsibility" is synonymous with "work tasks." Bosses like to pat employees on the shoulder and kindly tell them, "Your responsibility this year will be greater than last year."

If these bosses seriously read a few of Drucker's articles, they would likely not enjoy talking about Drucker as much. This is because Drucker's understanding of "responsibility" is completely opposite to theirs. Drucker believes responsibility is primarily about self-awareness and self-discipline. Only by understanding responsibility can people effectively use knowledge and power to create performance. Few entrepreneurs can understand and appreciate Drucker's concepts. When they translate their understanding into action, they find that Drucker can help them lead their companies better.

Therefore, despite being born in the early 20th century and passing away in the early 21st century, Peter Drucker's books are still bestsellers in China.

The China Machine Press is the agent for Drucker's works in China. They have just published commemorative editions of "The Effective Executive" and "Managing for Results." These two books have been popular in China for many years, with many pirated copies circulating. Nevertheless, the latest commemorative editions are still bestsellers. The editors at the China Machine Press are smart. They know Drucker's books have a good market in China, so they actively form marketing teams and use various methods to promote Drucker's works. Usually, these marketing methods are only used for newly published books. However, the editors' cleverness is also reflected in another aspect: they have published the complete works of Drucker, but most of the works have been abridged.

They want entrepreneurs to buy Drucker's books but do not want political censors to notice them.

This brings us to the interesting aspect of Peter Drucker. He was a renowned management theorist, and his books are useful to entrepreneurs and professional managers. However, Mr. Drucker never wrote solely for entrepreneurs, and his interests were not limited to business management. Politics and society were deeply concerned topics for Drucker. He predicted the collaboration between Hitler and Stalin in the 1920s and the collapse of the Soviet Union in the 1980s. His first book was titled "The End of Economic Man."

The China Machine Press published the complete works of Peter Drucker, but this collection does not include Drucker's first book because its theme is totalitarianism. Moreover, you will not find discussions about Stalin, Mao Zedong, and communism in this collection. You can read Drucker's insightful views on Christianity in this collection, but you may find it difficult to understand because the necessary context has been removed.

The editors believe Drucker's books are valuable but also know that unabridged versions are dangerous. Entrepreneurs who like Drucker have similar views. They like Drucker because they found some methodology in one of his books or a particular sentence, but sometimes they also find Drucker annoying because they do not intend to think or discuss politics like Drucker. Discussing politics in China is risky; discussing politics like Drucker is especially dangerous. According to Drucker, the prerequisites for a healthy political environment are:

· Freedom based on responsibility

· Power with clear boundaries

· Vigilance against totalitarianism

· A diverse social ecology

· Pluralistic and autonomous social organizations

· Respect for individual freedom and dignity

Every editor and entrepreneur knows these are dangerous topics.

This is the situation of Peter Drucker in China. People love Drucker, but fear the full Drucker.

The Three Knowledge Pillars of MLA

Tue, 02 Jul 2024 19:38:00 GMT

Management as a liberal art (MLA) was first introduced by Peter Drucker as a practical approach for achieving effective and responsible management. MLA portrays management as a multi-disciplinary phenomenon built on a comprehensive understanding of all internal and external aspects related to the business environment. Effective implementation of MLA not only requires the knowledge of organizational drivers of firm performance, but also a foundational grasp of how individual and societal factors can impact business operations and their outcomes. Organizations are comprised of individual decision makers whose characteristics directly influence organizational outcomes. Similarly, the external realities in a society such as needs and characteristics of stakeholders, political landscape, or global trends have a significant influence on business operations. Based on these assumptions, it is safe to argue that successful practice of MLA requires a manager’s broad knowledge of individual, society, and organization, that I refer to as the three knowledge pillars of MLA (see Figure 1).

Figure 1. The three knowledge pillars of MLA

In this blog post, my goal is to briefly explain these three knowledge pillars of MLA by grounding them in Peter Drucker’s work and identify disciplines that can serve as a reliable source of knowledge for each area. I also list some keywords related to each pillar based on the word count analysis of Drucker’s work [1] . These keywords are among the most frequently used words in the body of Drucker’s books that can exemplify his emphasis on each area.
Knowledge of Individual · Disciplines: Psychology, theology · Representative keywords in Drucker’s books (word frequency rankings in parentheses): people (6 ^th ), man (23 ^rd )
In its most basic form, management is defined as getting work done through people. For Drucker, people are at the heart of MLA (Drucker, 1989), and he believed that organizations need to bring people together to accomplish a shared goal. Also, he pays particular attention to the ultimate importance of people in a functioning society. Here, the individual is still in the center stage for Drucker. For instance, in The Future of Industrial Man (Drucker, 1942), he writes: “[society] must give status and function to the individual.” In addition, he has highlighted that if institutions cannot function well, they will not be able to provide people with meaning and status (Drucker, 1942).
Understanding individual characteristics of employees (e.g., personality) is at the focus of disciplines such as psychology and organizational behavior. It is important for managers to understand how differences in personality, attitudes, values, and beliefs influence individual performance in organizations. According to Peter Drucker (1955), in his book Practice of Management, managers’ knowledge of employees’ attitudes and outcomes helps them create a better relationship with employees. Differences in spirituality, religion, and moral values have also been found as important factors that influence effective management of people at work. In his book, New Realities (1989), Drucker writes that “Management is thus what tradition used to call a liberal art …. because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership.”
Knowledge of Organization · Disciplines: Business (all areas) and economics · Representative keywords in Drucker’s books (word frequency rankings in parentheses): Business (1 ^st ), management (2 ^nd ), performance (26 ^th ), production (39 ^th )
Performance is the single most important outcome in the practice of business. In the words of Peter Drucker (1950) in his book, The New Society, “the first responsibility of management is the responsibility for economic performance.” Achieving superior levels of performance by organizations requires making effective managerial decisions. Effective decisions can only be made by knowledgeable managers who not only understand the individuals (e.g., employees’ needs and attitudes) and the environmental context (e.g., society including all stakeholders) but possess certain managerial skills in understanding the organization (e.g., resources and capabilities) and the key success factors. As an example, a general knowledge of fundamentals of value generation from customers to profit is important. Similarly, knowledge of finance and accounting is important for successful management. According to Peter Drucker, by focusing on performance, and on productive activity that is mission-driven and accountable, organizations can give people status and function, and provide checks and balances on power.
Knowledge of Society · Disciplines: Sociology, political science, and history · Representative keywords in Drucker’s books (word frequency rankings in parentheses): society (8 ^th ), government (18 ^th ), politics (28 ^th ), power (35 ^th )
Organizations do not operate in a vacuum. The environment within which organizations operate is influenced by society (e.g., various stakeholders). Therefore, an effective manager needs to be knowledgeable about the trends and realities in the local and global environment. A good understanding of society-level trends is addressed at the heart of disciplines such as political science, sociology and history. A manager familiar with historical and societal context can better understand the needs and requirements of internal and external stakeholders to lead the organization to not only achieve economic prosperity but also to fulfill and respond to the demands from customers, suppliers, competitors, governments, and communities.
Conclusion Peter Drucker's extensive work provides a rich foundation for understanding the relationships between individual, organization, and society as the three knowledge pillars of MLA. By integrating insights from various disciplines, managers can better appreciate the context within which a business operates. Embracing these multidisciplinary perspectives ensures that managers can lead their organizations responsibly and sustainably, ultimately contributing to the broader societal good.
References: Drucker, P.F. (1942), The Future of Industrial Man, The John Day Company, New York, NY. Drucker, P.F. (1955), The Practice of Management, Heinemann, London. Drucker, P.F. (1989), The New Realities, Harper and Row, New York, NY.
[1] Please see https://doi.org/10.1108/JMH-04-2022-0011 for a comprehensive text analysis of Drucker’s work

On the Nexus Between Entrepreneurship and Innovation

Wed, 12 Jun 2024 01:08:00 GMT

Entrepreneurs are motivated by the possibility that the products and services they deliver can add value to society. But they also are keenly aware that in order to operate sustainably, they need to generate profits. As a result, thriving entrepreneurs constantly re-evaluate their products or services, the market in which they compete, and the way they produce and distribute their offerings. Moreover, entrepreneurs understand that in order to survive the intense rivalry and competition they face in the marketplace, they must find ways to continually innovate.

Entrepreneurs’ efforts to offer goods and services to the market often leads to innovation as entrepreneurs introduce new ways of doing things and engage in a process referred to as ‘creative destruction’. Joseph Schumpeter coined this term to describe the inherently disorderly process of change, where ideas, products, firms, and whole industries are displaced by new innovations. Schumpeter posited that entrepreneurs’ principal contribution to society is to advocate for change and disruption, and in doing so, they help advance society. Schumpeter conceptually established the ‘entrepreneur as innovator’ as a key figure in driving economic development.

Schumpeter argued that innovation is a critical factor of economic change. He indicated that economic change orbits around innovation, entrepreneurial activities, and market power. Schumpeter asserted that innovation-originated market power could provide better results than price competition and the invisible hand. Additionally, he suggested that innovation often creates temporary monopolies, allowing anomalous profits that would soon be contested away by imitators and rivals. He explained that these temporary monopolies were needed to provide the incentive required for other firms to develop new products and processes.

The entrepreneur introduces new things, processes, and business acumen in an effort to transform innovations into economic goods. And the entrepreneur is willing to bear the risk associated with introducing change. The innovative activities of entrepreneurs feed a creative ‘destruction process’ by causing constant disturbances to an economic system in equilibrium, thus creating opportunities for generating income and profits. Hence, entrepreneurship disrupts the stationary flow of the economic system, and in this manner initiates and sustains the process of economic development. In adjusting to a new equilibrium, other innovations are spun off, and more entrepreneurs enter the economic system, introducing new products and services, thereby fostering advancement.

In similar fashion, entrepreneurial firms engage in creative destruction and thus are able to capture a share of the market by replacing firms that have failed to produce valuable products and services. The creative destruction process incentivizes firms to develop new products, services, and processes; otherwise, they will not survive in the long run. Accordingly, entrepreneurship encompasses the market entry of new firms, but it also supports the development of innovative activities in existing firms that allow them to create continuing value in the marketplace. In this vein, innovation can be characterized as the development of a new product, service, or process as the firm embarks upon new combinations of the factors of production.

Innovation is a complex, dynamic process that requires commitment, resources, and investment. Often times, firms will modify their existing business model, re-arranging the manner in how they develop a product or the way they deliver new product functionalities or services to their customers. Modifications to an existing organizational process, to an existing business model, or even to a service delivery method, are all examples of how innovation is harnessed towards the pursuit of greater effectiveness and efficiency.

Innovation can be characterized as the development of a new process or product (or service) that meets new requirements and/or existing market needs. Drucker tells us: “Innovation should be focused on a specific need that it satisfies, on a specific end result that it produces” (Drucker, 1985). Innovation allows for more effective products, processes, services, technologies, and ideas to be made readily available to markets, and society in general. As a result, innovation is used by the enterprise (firm) as a means of meeting the needs of consumers; as a tool for competing with other enterprises in an existing market; and as an instrument for entering into a new market. Hence, innovation conceptually increases the likelihood of the enterprise achieving economic efficiency in the short run, and may allow the enterprise to establish a more competitive long-run position. Nonetheless, the enterprise encounters internal constraints (e.g. cost of inputs) and external constraints (e.g. market competition) that make it challenging for it to subsist in a market. Moreover, diminishing marginal returns influence the production capability of the enterprise. Based on these basic premises, innovation can be considered essential for the long-term economic survival and success of enterprises across different sectors and industries.

According to some scholars, innovation can help improve the long-term survival of a firm as it can enhance its product line / service line offering while enabling it to establish a competitive advantage over other firms (Antonelli, 2003; Lundvall, 2007; Porter, 1990; Schumpeter, 1936; Teece and Pisano, 1994). It is worth noting that the firm that chooses to innovate does so based primarily on the information that it has about preferences, wants and needs of consumers in its market. In other words, the firm innovates because it recognizes the opportunity and value of meeting consumers’ needs and wants in the short-run and sees the innovation investment as a means to also help position itself effectively for the long run. Drucker reminds us that: “purposeful, systematic innovation begins with the analysis of the opportunities” (Drucker, 1985) And since the firm most often faces competition, innovation becomes an avenue through which the firm can differentiate its products from those of other competing firms.

Innovation is the successful embodiment of a useful idea in the marketplace, where the idea can be commercialized. Innovation also allows the firm to re-configure resources more efficiently, and hence allows it to increase productivity, with the implication that this can help augment profit. Innovation has helped build companies and grow and develop industries. For instance, just two decades ago, organizations struggled managing the vast amount of information and data related to their ongoing customer interactions. Since 1999, Salesforce has revolutionized how organizations keep track of customer interactions and manage their sales data. Since its founding, Salesforce has developed multiple iterations of its products, leading to a sophisticated cloud-based enterprise software which supports customer relationship management (CRM). Salesforce’s innovative solutions include sales force automation, customer service and support, marketing automation, and digital commerce. Salesforce has enabled large organizations around the globe to automate their sales and marketing processes and to become increasingly efficient, while becoming effective managers of customer data and information.

Innovation is not a linear process. Instead, innovation is a highly iterative process of re-considering many internal technical and operational factors, and external factors, with an ever-changing interpretation of how the firm might continue to develop and deliver products and services. The firm in which innovation is fostered must support the diverse iterations, interactions, and transactions needed to support innovation efforts. The entrepreneur, who does not mind the uncertainty and risk, is able to manage this dynamic process.

Innovation that addresses a real market need or want delivers value to society. Yet, innovation requires that firms systematically analyze opportunities that are present. Hence, the entrepreneur and entrepreneurial firm must be able to develop the ability to observe and perceive the evolving needs of people. The entrepreneur must then focus on delivering a solution that meets a specific set of needs or wants. This implies that innovation must be purposeful. And it also requires that the entrepreneur is not only disciplined, but willing to invest in acquiring knowledge which can be applied productively. Both the entrepreneur and entrepreneurial firm must continually re-evaluate their products and services, analyze the market in which they compete, and re-consider the way they produce and distribute their products and services. By embracing innovation, they will advocate for change and disruption, and help advance society.

References

Antonelli, C. (2003). The economics of innovation, new technologies and structural change: studies in global competition series. New York, NY: Routledge.

Drucker, P. (1985). Innovation and entrepreneurship: practice and principles. New York, NY: Harper Business.

Lundvall, B. Å. (2007). National innovation systems—analytical concept and development tool. Industry and innovation, 14(1), 95-119.

Porter, M. E. (1990). The Competitive advantage of nations: creating and sustaining superior performance. New York: Simon and Schuster Inc.

Schumpeter, J.A. (1936). The Theory of Economic Development, Second Edition. Cambridge: Harvard University press.

Teece, D., & Pisano, G. (1994). The dynamic capabilities of firms: an introduction. Industrial and corporate change, 3(3), 537-556.

The Drucker Difference

Thu, 02 May 2024 17:32:00 GMT

The Executive PhD program that Peter Drucker, “the Father of Modern Management,” and his dean, Paul Albrecht, developed at Claremont Graduate University in 1975 was the first accredited PhD intended for future top executives. According to Albrecht, this PhD taught the “Drucker Difference” for those “with top management potential.” It was and is expensive.

There were only ten students in the first cohort, and only one of the ten completed the program. This individual eventually rose to the rank of major general in the U.S. Air Force, and, after retirement, founded The California Institute of Advanced Management with Minglo Shao, a Chinese billionaire who had earlier founded Drucker Academies across China. Others graduated in later cohorts and became senior corporate executives, presidents of colleges and universities, and entrepreneurs.

Was Drucker Really Different?

Most professors built their careers on conventional research and publication in academic journals. Drucker didn’t. His numerous articles were written for practitioners, not primarily researchers. They appeared in the Harvard Business Review, the Wall Street Journal and other journals read primarily by practitioners. In June 2004, Harvard Business Review honored Drucker with his seventh McKinsey Award for his article, "What Makes an Effective Executive.

Drucker’s 39 books were written for practitioners as well. They won and received numerous accolades. Yet Drucker did not write synthetic research typical in academia, where one or more hypotheses based on multiple inputs are tested for significant differences.

Drucker used a different research model. He declared, “corporations are my laboratories.” His conclusions from observation are the basis of the Drucker Difference. They were explained first by Einstein who used the method and explained it in an article in the London Times.

Drucker’s Research Model

Asked in class where he got his vast knowledge and extensive experience to help organizations in so many different industries, Drucker answered: “I have no vast knowledge nor extensive experience on any specific topic. I have only ignorance and lack of experience. Therefore, all I can do is to ask questions. Clients have the knowledge and experience which I lack; they are the real experts on the topics they hire me for.”

He then gave examples of his questions, beginning with “What business are you in?” “Who is your customer” “What does your customer value? “What are your objectives” and “What is your plan for getting those results?”

Schumpeter, Drucker, and Entrepreneurship

Sat, 27 Apr 2024 18:06:00 GMT

The formal study of entrepreneurship begins with the works of Richard Cantillon and Adam Smith in the 18th century. Cantillon's (1755) Essai Sur La Nature Du Commerce En Général is considered by many an important early treatise on enterprise economics and entrepreneurship. In this work, Cantillon provides his conception of the entrepreneur as a risk-bearer - someone whose acceptance of risk allows them to pursue entrepreneurial activities.

Two decades later, Adam Smith in his (1776) An Inquiry into the Nature and Causes of the Wealth of Nations explains that nations grow wealthy through changes in the division of labor. Smith describes how human actions lead to changes in the division of labor, economic outcomes, and subsequent new venture formation. Smith suggested that division of labor (implicitly entrepreneurship) was the driver of wealth in society.

The French economist, Jean-Baptiste Say in his (1803) Traité d'économie politique ou simple exposition de la manière dont se forment, se distribuent et se composent les richesses posits that the entrepreneur, who he also refers to as the ‘undertaker’, is someone who takes upon himself the immediate responsibility, risk, and conduct of a concern of industry, whether upon his own or on borrowed capital. Say argued: “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield” (Say 1803). By pursuing areas of greater yield, Say argues, the entrepreneur is effectively taking on greater risk. Accordingly, the entrepreneur is also receiving a higher return on investment.

Although entrepreneurial activities continued for two hundred years, the study of entrepreneurship remained largely ignored by academics until the early 20 ^th century. An economist by the name of Joseph Schumpeter in the 1930s,and other Austrian economists such as Carl Menger, Ludwig von Mises, and Friedrich von Hayek begun to increasingly discuss entrepreneurship in their works. Schumpeter would argue that the innovation and technological change of a nation stem from the efforts of entrepreneurs. Schumpeter even devised the term Unternehmergeist , German for entrepreneur-spirit.

Schumpeter suggested in his 1942 book Capitalism, Socialism and Democracy , that “creative destruction” represents the disruptive process of transformation that accompanies innovation. Moreover, he argued that the innovative entry by entrepreneurs into a market was the disruptive force that sustained economic growth. Schumpeter contended that entrepreneurship drives economic growth by disrupting existing industries and creating new ones. Thereupon, the entrepreneur challenges the status quo, leading to the replacement of older technologies, businesses, and economic models with new, more efficient ones.

Schumpeter maintained that entrepreneurship is a dynamic force of change which drives progress and societal advancement. Ergo, as agents of change, entrepreneurs introduce new products, services, and market structures that generate economic growth and influence society. Schumpeter argued that entrepreneurship involves introducing new and different combinations of resources, technologies, and organizational methods that create value. Yet, he emphasized the importance of having an entrepreneurial spirit and mindset in fostering economic dynamism. He believed that entrepreneurship is supported by a mindset which is characterized by initiative, ingenuity, and a yearning to challenge the status quo.

A few decades later, Peter F. Drucker would also discuss entrepreneurship in his writings. In his 1985 book titled: “ Innovation and Entrepreneurship ”, Drucker states: “Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. And it sees the major task in society – and especially in the economy – as doing something different rather than doing better what is already being done” (Drucker, 1985, p. 26). Drucker opined that entrepreneurs introduce changing, newer ways of doing things, and hence fulfill an important role in the market, economy, and society. By addressing needs, solving problems, and offering innovative solutions, entrepreneurs contribute to economic growth and development.

In his Innovation and Entrepreneurship , Drucker also dissects the practice of entrepreneurship, highlighting the importance of establishing systematic, organized, and purposeful management. He describes entrepreneurship as “not natural”, nor “creative”. Instead, Drucker argues that entrepreneurship is work. And entrepreneurship must be consciously driven for, thereby it requires effort. Drucker explains that entrepreneurial management requires policies and practices that support four key areas: (1) fostering an entrepreneurial climate – the organization must be receptive to innovation and be willing to perceive change as an opportunity rather than a threat; (2) developing systematic measurement of performance and learning to improve performance; (3) adapting organizational structure – adjusting staffing, managing, compensation, incentives, and rewards; and (4) recognizing that trying to become “entrepreneurial” without changing basic policies and practices that support those efforts, could lead to entrepreneurial failure.

Drucker believed that entrepreneurs are constantly seeking opportunities for innovation and change. Hence, they have a keen ability to recognize market needs and identify existing inefficiencies. He also believed that entrepreneurs have the courage to step outside of traditional boundaries and challenge the status quo. Yet, Drucker emphasized the importance of taking disciplined initiative in entrepreneurship. Without consistency, discipline, and initiative, the entrepreneur cannot develop new products, services, or solutions that address societal challenges. Drucker highlighted the criticality of results-oriented thinking and of measuring performance. He opined that entrepreneurs must constantly seek ways to improve, and that continuous learning is essential to evolve and deliver value. Hence, entrepreneurs are lifelong learners who are adaptable and resilient, able to pivot and adjust their approaches and strategies in response to varying market conditions and unanticipated challenges.

Through their works, Joseph Schumpeter and Peter Drucker have influenced our perspective of entrepreneurship, and the way entrepreneurship is practiced. Schumpeter and Drucker possessed some similar views on who entrepreneurs are, and what they do. Perhaps, one of the key differences between Schumpeter and Drucker, is that the former considered that “creativity” contributes to and supports entrepreneurship, while the latter argued that entrepreneurship is not about creativity, but rather work and effort. Notwithstanding this notable difference, both Schumpeter and Drucker envisioned the entrepreneur as an agent of change, someone who is willing and able to change the way things are done, challenging the status quo, and delivering value to society. As such, entrepreneurs do not solely create new products or services, they have the ability to profoundly impact society.

References

Cantillon, R. (1755). Essai sur la nature du commerce en général. INEd.

Drucker, P. (1985). Innovation and entrepreneurship: practice and principles. New York, NY: Harper Business.

Say, J. B. (1846). Traité d'économie politique: ou simple exposition de la manière dont se forment, se distribuent et seconsomment les richesses (Vol. 9). O. Zeller.

Schumpeter, Joseph A. (1942), Capitalism, socialism and democracy. London: Unwin.

Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations.

Intersecting the Philosophy of Management as a Liberal Art with the Insights of Dan Solin

Sat, 27 Apr 2024 17:55:00 GMT

For over a decade, Dan Solin's wisdom has shaped my understanding of management philosophy profoundly. Dan Solin, celebrated for his bestselling 'Smartest' series on investing and his widely read work 'The Smartest Sales Book You'll Ever Read' and 'Ask: How to Relate to Anyone', connects with readers weekly through his blog on Advisor Perspectives, drawing in a devoted audience. His background as a securities attorney, along with his academic path through Johns Hopkins University and the University of Pennsylvania Law School, underscores his expertise.

I've personally drawn a great deal from Solin's focus on the human side of business — it's redefined how I see leadership and the way we connect with others. He champions the idea that it's not just what we say but how we listen and empathize that forges strong relationships and drives successful enterprises. Solin's approach echoes the human-centric principles of Management as a Liberal Art (MLA), a concept promoted by Peter Drucker that suggests management is more art than science, calling for a profound engagement with personal relationships.

I am convinced that merging Solin's insights with the MLA philosophy can guide us toward more effective, reflective, and compassionate management methods. In the article that follows, I'll delve into how Solin's writings harmonize with MLA's values.

Emphasizing Human Interactions and Development

Both Drucker and Solin recognize the significance of human development and interactions within organizations. In Solin's work, the recurring theme is the emphasis on understanding and empathizing with others rather than simply imposing one's own viewpoints. A hallmark of Solin's philosophy is the power of asking questions. Moreover, Solin advises managers to guide change with empathy and understanding, acknowledging the impact on individuals. This method aligns with MLA's view of management as an art that requires practice, reflection, and the pursuit of knowledge. By asking questions, managers can elicit deeper insights and foster a culture of curiosity and continuous learning, which is at the core of MLA.

Managing Change and Leading by Example

Dan Solin's forward-thinking approaches, especially his pioneering use of artificial intelligence for small businesses and financial advisors, aligns well with the ethos of Management as a Liberal Art (MLA). Solin offers practical, actionable advice, making complex technology approachable for his readers. Similarly, MLA, as conceptualized by Peter Drucker, stresses the importance of anticipating and navigating change — a skill ever so crucial in today's dynamic business landscape. Solin’s writing emphasizes the practical application of knowledge, resonating with Drucker's belief that true wisdom in management emerges from an integrated understanding of our experiences, leading with both discernment and insight.

Transdisciplinary Perspective and Holistic Understanding

Solin’s work on avoiding the heuristics trap and naïve realism echoes MLA's transdisciplinary perspective. Drucker believed that a manager should not rely solely on a single framework or heuristic but should integrate knowledge from various disciplines. Drucker's notion that management is both a liberal art and a practice suggests that effective managers blend empathy and analysis to make well-rounded decisions. Solin's advocacy for a broad-based approach to understanding others reinforces this principle, highlighting the importance of a holistic understanding in management.

Encouraging Self-Reflection and Growth

MLA posits that self-reflection and personal growth are central to effective management. Solin’s writings often touch on the benefits of self-awareness and the pursuit of personal development, paralleling the MLA belief in the necessity of continuous learning and the cultivation of self-knowledge for managers. Solin's reflections on the impact of our actions and advice demonstrate an acute awareness of ethical responsibility—a key component of MLA. Solin emphasizes that financial advisors (as well as managers) should be cognizant of how their interactions affect their clients, teams, and the larger community, advocating for responsible action and ethical management in line with MLA’s ethos.

Conclusion

Dan Solin's writings provide a rich resource of present practical, everyday applications of the broader and more philosophical principles of Management as a Liberal Art. His focus on empathetic communication, ethical decision-making, and continuous personal and professional growth offers a nuanced take on the MLA framework, exemplifying how management is not just a business function but a holistic and humane pursuit.

Solin's work and Drucker’s MLA together provide a roadmap for managers who aspire to lead not only with competence but with wisdom, empathy, and a deep understanding of the multifaceted human experience within organizations. They teach us that to manage effectively is to navigate the delicate balance of advancing organizational goals while fostering an environment where individuals can pursue meaningful development and contribute to the larger societal good.

Selected Dan Solin Books

Ask: How to Relate to Anyone. Silvercloud Publishing LLC, 2020

The Smartest Sales Book You'll Ever Read: The Truth about Successful Selling. SilverCloud Publishing, 2013

Navigating the VUCA World: Through Peter Drucker's Management as a Liberal Art

Fri, 19 Apr 2024 16:31:00 GMT

Organizations face unprecedented challenges in today's rapidly changing business landscape, characterized by Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). To effectively navigate this VUCA world, leaders must draw upon the teachings of Peter Drucker and his concept of Management as a Liberal Art.

Drucker believed that Management is not merely a set of technical skills but a liberal art containing a broad range of disciplines, including psychology, philosophy, economics, and history (Drucker, 1989). He argued that effective Management requires a deep

understanding of human nature, social systems, and the broader context in which organizations operate.

To thrive in a VUCA world, leaders must cultivate knowledge, self-knowledge, wisdom, and leadership skills.Knowledge is essential for making informed decisions and adapting to change (Drucker, 1999). By stayinginformed about industry trends, technological advancements, and societal shifts, leaders can better anticipateand respond to the challenges posed by VUCA.

Self-knowledge is equally crucial. Leaders must deeply understand their strengths, weaknesses, values, and biases. This self-awareness enables leaders to make more authentic and principled decisions, even amid uncertainty and complexity. As Drucker stated, "The most important thing in communication is to hear what isn't being said"

(Drucker, 2001, p. 145).

Wisdom goes beyond mere knowledge and involves applying knowledge contextually and appropriately. In a VUCA world, leaders must exercise wisdom in decision-making, considering their actions' long-term consequences and ethical implications. Drucker emphasized the importance of judgment and the ability tobalance competing priorities, noting that "Management is doing things right; leadership is doing the right things" (Drucker, 2004, p. 22).

Effective leadership is paramount for navigating the challenges of a VUCA world. Drucker (1999) believedleadership is about setting direction, aligning people, and inspiring them to achieve common goals. In a VUCA world, leaders must be adaptable, resilient, and able to communicate clearly and authentically. They must foster a culture of innovation, collaboration, and continuous learning to help their organizations thrive in uncertainty.

Drucker's insights and recent research have shed light on strategies for managing in a VUCA world. Adam (2024) discusses how antifragile systems recover in VUCA situations and improve and outperform the statusquo. Adam suggests that organizations strive to build resilience and adaptability into their systems and processes to thrive in uncertainty. Anand and Nandedkar (2024) compile key findings on strategic leadership to meet the demands of the VUCAworld. They emphasize the importance of agility, innovation, and collaboration in organizational Management, aligning with Drucker's principles of fostering a culture of continuous learning and adaptability. To implement these principles, organizations should encourage ongoing education and knowledge sharing, provide opportunities for self-reflection and personal development, foster a culture of ethical

decision-making and long-term thinking, and develop adaptable and resilient leadership capabilities at all levels.

By embracing Peter Drucker's concept of Management as a Liberal Art and integrating knowledge, self-knowledge, wisdom, and leadership, organizations can develop a holistic approach to navigating the VUCAworld. This approach, combined with insights from recent research on antifragility and strategic leadership, emphasizes the importance of drawing from a broad range of disciplines and considering Management's human and social dimensions, ultimately enabling organizations to create sustainable value for all stakeholders in the face of unprecedented challenges.

References:

Adam, P. A. (2024). Integrated risk and opportunity management-implementing clause 6.1. Hannover University of Applied Sciences and Arts.

Anand, G., & Nandedkar, T. (2024). A smart leader in VUCA world: Presenting key components of strategic leadership using SLR method. Indonesian Management and Accounting Research.

Drucker, P. F. (1989). Management as a liberal art. New Management, 6(2), 5-15. Drucker, P. F. (1999).Management challenges for the 21st century. HarperCollins.

Drucker, P. F. (2001). The essential Drucker: The best of sixty years of Peter Drucker's essential writings onManagement. HarperCollins.

Drucker, P. F. (2004). What makes an effective executive. Harvard Business Review, 82(6), 58-63.

Peter Drucker: Drucker’s Wisdom Thriving in an Age of Disruption

Tue, 26 Mar 2024 23:53:00 GMT

Today, we find ourselves at the intersection of multiple technological revolutions. Artificial intelligence, robotics, blockchain, biotechnology, and quantum computing are just a few technological disruptive forces reshaping industries, economies, and societies. As we grapple with the profound implications of these technologies, it is worth turning to the wisdom of management thinker, Peter Drucker, to gain knowledge and self-knowledge. While Drucker passed away in 2005, his insights on navigating change and preparing for the future remain as relevant as ever.

Drucker was a keen observer of societal trends and their implications for leading, managing, and organizing. Rather than making specific predictions, he studied emerging patterns to gain insights about the challenges and opportunities ahead. Central to his thinking was that change is not an episodic event to be weathered but a constant reality to be embraced (Drucker, 1999). Let us explore some of Drucker's fundamental ideas about technology and societal transformation and what they mean for us now.

Technology as an Integral Process

In his 1969 book "The Age of Discontinuity," Drucker (1969) argued that technology should not be viewed as a foreign, disruptive tool, but as an integral process that has always been part of human existence. He noted that while technological change can be highly disruptive in the short term, it is a regular and ongoing part of societal evolution. This perspective is worth considering as we confront the dizzying pace of technological change today. Drucker's vision of technology as deeply intertwined with everyday life seems more apt than ever as artificial intelligence, as well as virtual and augmented reality, become embedded in everything from our smartphones to our financial markets. The lines between the digital and physical worlds have been blurred.

Navigating the Knowledge Society

Alongside his insights on technology, Drucker was among the first to identify the shift from an industrial economy based on manual labor to a "knowledge society" based on intellectual capital and the service sector. In his 1993 book Post-Capitalist Society, he argued that knowledge was becoming a critical resource and that "knowledge workers" would be the dominant group in the workforce (Drucker, 1993).

This shift has profound implications for educating, training, and managing people in an age of accelerating technological change. With many traditional jobs being automated or augmented by AI, Drucker’s counsel to pursue continuous learning and adaptability will be essential for individuals and organizations (Drucker, 1999). He also predicted a move away from hierarchical command-and-control structures towards flatter, more collaborative networks that leverage expertise across boundaries (Drucker, 2002).

This transformation is unfolding today, with the rise of agile methodologies, design thinking, and interdisciplinary teams combining diverse skill sets to solve complex problems. At the same time, as Drucker noted, the knowledge society also brings new challenges around issues like intellectual property rights, data privacy, considerations for ethical interactions surrounding new technologies, and the distribution of economic gains (Drucker, 1999). Addressing these issues will require technological innovation and social and political adaptation.

Leading in Times of Change

For Drucker, the key to thriving in a world of rapid technological and societal change was not clinging to yesterday's strategies but constantly questioning assumptions and adapting to new realities. As he wrote in his 1985 book Innovation and Entrepreneurship, "The greatest danger in times of turbulence is not the turbulence itself, but to act with yesterday's logic" (Drucker, 1985, p. 25).

This advice feels particularly apt as we navigate the uncharted territory of a post-COVID world, grappling with the long-term impacts of the pandemic alongside the ongoing march of technological disruption. In such times, Drucker would counsel us to embrace change as an opportunity for innovation, experiment with new ways of working and organizing and cultivate a lifelong learning mindset.

At the same time, he would likely caution against getting caught up in the hype around any particular technology or trend. For Drucker, the key was always to stay focused on the fundamentals - understanding customer needs, developing people, and building sustainable organizations that create societal value (Drucker, 1999). By grounding ourselves in these timeless principles while remaining open to new possibilities, we can chart a course through even the most turbulent of times.

Conclusion

As we navigate the technological and societal transformations of the 21st century, Peter Drucker's insights offer a beacon of clarity and wisdom. We can survive and thrive in an age of disruption by viewing change as a constant, embracing the knowledge society, and leading with a spirit of innovation and adaptability. As Drucker put it, the challenge is to "convert change into opportunity" (Drucker, 1999, p. 57) to harness the power of technology and human ingenuity to create a better future for all. It is a challenge that will require the best of our imagination, courage, and collaboration in the years ahead.

References:

Drucker, P. F. (1969). The age of discontinuity: Guidelines to our changing society. Harper & Row.

Drucker, P. F. (1985). Innovation and entrepreneurship: Practice and principles. Harper & Row.

Drucker, P. F. (1993). Post-capitalist society. HarperBusiness.

Drucker, P. F. (1999). Management challenges for the 21st century. Harper Business.

Drucker, P. F. (2002). Managing in the next society. Butterworth-Heinemann.

Peter Drucker on Innovation and Results

Fri, 22 Mar 2024 18:18:00 GMT

Peter Drucker, throughout his long and distinguished career, advocated for the rights and well-being of all people. Drucker wanted all people to have respect, dignity, a meaningful place in society, and a degree of autonomy. Drucker also made sure to tell managers that even though caring for people is important, productivity and success are essential to the longevity of organizations (Murphy 2023).

According to Drucker successful entrepreneurs have a commitment to the successful practice of innovation and, in fact, innovation is the specific foundation of entrepreneurship. He believed that innovation is not so much about genius, but finding and taking advantage of opportunities for innovation (Drucker 2013 p.156).

Friesen uses the Drucker quote, “Stressing output is the key to increasing productivity while looking to increase activity can result in just the opposite.", to point out Drucker’s belief that successful organizations are innovative and productive.

Drucker defines entrepreneurship, not just in terms of small or start-up businesses, but as “any business that engages in innovation. Innovation is defined as “the effort to create purposeful, focused change in an enterprise’s economic or social potential.” (Drucker 2013 p.143). In other words, innovation is change to create better results. One might say that Drucker thinks of innovation and entrepreneurship as synonymous.

In his essay titled, The Discipline of Innovation (Drucker 2013), Drucker says that most successful innovations result from a conscious, purposeful search for innovation opportunities, Drucker lists seven areas of opportunity that exist within a company or industry. They are:

1. Unexpected occurrences

2. Incongruencies

3. Process needs

4. Industry and market changes

5. Demographic changes

6. Changes in perception

7. New knowledge

An example of unexpected occurrences is when IBM developed the first modern accounting machine in the early 1930s. It was designed with banks in mind, but banks were not buying new equipment at the time. Fortunately, the New York Public Library bought one of the machines. This led to more than 100 machines being sold to other libraries. Instead of IBM losing money, they became even more successful. Drucker cites other examples of unexpected occurrences that led to successful innovations. Drucker suggests that organizations focus their monthly and quarterly reports as much on problems that arise as on potential opportunities because problems or mistakes can turn into profitable innovations.

One of the examples Drucker recounts to show his second area of opportunity, incongruities, is the shipping industry using ocean freighters. Drucker explains that for the first part of the twentieth century shipbuilders and shipping companies kept trying to boost their sagging profits by looking at what turned out to be two incongruous ideas—either making ships faster or making them more fuel efficient. If they made ships faster, then fuel costs skyrocketed. If they made them more fuel efficient, it took too long for them to arrive at their destination. They finally realized that ships sitting idle in ports being loaded or unloaded by hand was a large waste of money. They started using roll-on roll-off containers that truckers and railroads had been using for 30 years. This innovation solved their money problem.

Drucker’s third opportunity for innovation, process needs, is explained by using the example of what we call “the media.” Two innovations were used to create the innovation of the modern media. The first was the linotype, which made it possible to produce newspapers quickly and in large volume. The second was that newspaper publishers Adolph Ochs, Joseph Pulitzer, and William Randolph Hearst started selling advertising in their papers. These two innovations combined so that news could be widely distributed almost free of charge.

To explain Industry and market changes, Drucker points out that even though change is usually disliked, change happens and often things change overnight. And these changes can be opportunities for innovation. The brokerage firm Donaldson, Lufkin, and Jenrette (All Harvard graduates) was started in 1960. They discovered that things were changing in the financial industry—institutional investors were rapidly becoming dominant. They started the concept of negotiated commissions and quickly became one of Wall Street’s stellar performers.

Demographic Changes. The Japanese lead the world in robotics because they pay attention to demographics. Around 1970 everyone in the developed world knew that there was both a baby bust and an education explosion going on. About half of the young people were staying in school past high school. Consequently, the number of people available for blue-collar work in manufacturing was bound to decrease and become inadequate by 1990. The Japanese were ready with the answer to this problem. It was robotics and Japan had a large head start on the rest of the world in this area.

Drucker uses the examples of “The glass is half full” and “The glass is half empty” to introduce changes in perceptions since these two similar statements have vastly different meanings. Drucker points out that Americans’ health has never been better. But for some reason, Americans seem to be suddenly obsessed with it. They want healthcare magazines, health foods, home exercise equipment, and gym memberships. And even though the crime rate is the lowest it has been in 40 years; Americans are buying up the latest alarms and home surveillance systems. And entrepreneurs are taking advantage of, not facts, but perceptions that crime is a problem.

New knowledge innovation is what people generally think of as innovation. It’s big, useful, and important stuff, but Drucker says there is a protracted span (somewhere around 50 years) between emerging new knowledge and when it becomes usable technology. For example, some of the knowledge that was ultimately used to create modern banking goes back to the era of Napoleon. The same can be said of the innovation of computers. For example, the precursor of the modern computer, the punch card, was invented in 1890.

Conclusion

Peter Drucker has often been described as “prescient” and “decades ahead of his time.” (Ambachtsheer 2005). Drucker’s work on innovation, management by objectives, entrepreneurship, and results is another example of Drucker’s work staying relevant and of his ability to foresee the future. A new leadership model, Objectives and Key Results (OKR) is described by Keryn Gold in the July 2023 issue of Leadership Excellence. This model was created by Andy Grove of Intel and has been adopted by organizations including Netflix, Amazon, Facebook, Adobe, and Linkedin. It links, among other things, clarity, innovation, empowerment, and employee engagement to success (Gold 2023).

In the book Measure What Matters, John Doerr writes about “MBOs,” or Management by Objectives. MBOs were the brainchild of Peter Drucker and provided Andy Grove a basis for his eventual theory of OKRs. In fact, Grove’s name for them originally was “iMBOs,” for Intel Management by Objectives (Doerr 2018).

References:

Ambachtsheer, Keith. The Unseen Revolution. Pensions and Investments Vol. 33 Iss. 24 p.12

2005

Doerr, John. Measure What Matters: How Google, Bono, and The Gates Foundation Rock

The world with OKRs 2018

Drucker, Peter. The Discipline of Innovation Chapter in On Innovation, Harvard Business Review

2013

Friesen, Wes. Measure What Matters Business Credit, Volume 125 Issue 8 (Sept. 2023)

Gold, Keryn. OKR Best Practices That Promote a Culture of Empowerment and Innovation

Leadership Excellence. Vol. 40, Issue 7 July 2023

Murphy, Glenn. Delivering on Drucker’s Call to Action. Strategic Finance, Volume 104, Issue 7

Jan. 2023

Peter F. Drucker’s management philosophy and life coaching are interchangeable

Fri, 22 Mar 2024 18:07:00 GMT

Tell me and I forget. Teach me and I remember. Involve me and I learn. Benjamin Franklin
Life coaching, including leadership/executive coaching, team coaching, relationship coaching, health and wellness coaching, and others, has been around for about 40 years. The International Coaching Federation (ICF) started in 1995 and is the only international organization that certifies coaching schools and coaches. It is the world’s largest organization of professionally trained business and personal coaches. ICF defines coaching as “partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential.” According to the ICF, a coach must develop a mindset that is open, curious, flexible, and client-centered. A coach always acknowledges that clients are responsible for their own choices. (coachingfederation.org). So coaching is a process that focuses on the client and encourages client autonomy and decision-making. This should result in more cognitive clarity, better decision-making, and the client being completely confident in his or her decisions. Platis (2016) states that the coach must listen to the client, even in the case where the client does not know exactly where he or she wants to go.
I earned an Associate Certified Life Coach Credential 4 years ago from an ICF-certified school and recently completed ICF training for an International Coaching Federation Professional Coaching Credential. I was taught that asking the right questions is the main tool of an effective coach. A coach is not a counselor or a therapist and does not make decisions for a client. A coach rarely even gives advice to a client. Potential clients with a psychological condition should be referred to a mental health professional. The beginning of a coaching relationship is when the coach works with the client to create an agreement or contract. This includes what each party agrees to or not to do and, among other things, a pledge of confidentiality. After some trust is established, the coach assumes that the client has the answers to their dilemmas, problems, or difficulties.
Peter Drucker said trust is an essential requirement of effective leaders. Without trust, according to Drucker, leaders have no followers. And to build trust, Drucker challenged leaders to go beyond the singular “I” and to lead from a more empowering “we” (Atkins 2009).
It is the coach’s job to draw those answers out of the client, much like Peter Drucker, the “father of modern management” and notable consultant, did by asking questions. Cohen (2008 p.205) relates the story of Drucker consulting for General Electric CEO Jack Welch. Drucker asked him two questions: If you weren’t already in a business, would you enter it today?” and If not, what are you going to do about it?”. Ultimately, the client should realize that they are making the decisions and have the power and the knowledge to solve life’s problems (coachingfederation.org). Two concepts that were stressed during my coaching schools are: “Don’t be a fixer.” and “Coach the person, not the problem.” In other words, trying to “fix” someone is telling them they are dependent and unable to help themselves. And people, as individuals, can function independently and should be afforded that dignity.
Peter Drucker believed that the economic performance of a company (success) is important, and its social and political roles are equally important; since a company’s power is derived from its ability to allocate resources and manage its behavior (Romar 2014, p.203). The following quotes are from Peter Drucker: “Leaders create spirit” (engagement), and “Leaders care about and have compassion for people.” (Drucker 1954). In many of Drucker’s writings, he discusses wanting individuals to be accorded dignity, function, and status. These are all goals of both leadership and coaching. Drucker, himself, as a highly respected business consultant, often “coached” clients by asking questions of them, prompting them to find their own solutions to their problems (Cohen 2008).
Grant (2003) found that despite its high media profile and growing popularity, there had been no empirical investigations of the impact of life coaching on goal attainment and metacognition. Grant, therefore, conducted a study of twenty graduate students over a 13-week period that concluded, “solution-focused, cognitive-behavioral life coaching can facilitate goal attainment, improve mental health and enhance life experience.” (p.263).
Peter Drucker, in his 1954 book, The Practice of Management, introduced a (radical, for the time) concept he called Management by Objectives (MBO). This was a type of motivation that gave employees in an organization some autonomy in how their job was done. This autonomy or empowerment has since been studied and written about by countless social scientists. Most notably, Daniel Pink, in his book, Drive, finds that autonomy is an important and effective intrinsic motivator, i.e., an employee will perform at a higher level if he or she has a say in how a task is accomplished (Pink 2009). As previously noted, autonomy and intrinsic motivation is also an important part of coaching. According to Csikszentmihalyi and Hooker (2003) shared leadership is an effective intrinsic motivator when applied to Peter Drucker’s concepts of knowledge work and knowledge workers in their creation of innovation.
Drucker (1954) writes that “the purpose of business is to create a customer.” Johnson (2023) argues that intrinsically motivated employees are the way to, “create a customer”. He differentiates between good bosses, who respect employees and gives them autonomy, and bad bosses, who control and command employees. Johnson also quotes Reinhart Bendix (1956); “All authority relations have in common that those in command cannot fully control those who obey.” (p. xiv). Johnson believes that “good bosses” create engaged and intrinsically motivated employees by coaching and listening to employees instead of trying to control them. These employees, among other things, create loyal customers, who increase a company’s success. Swain (2019) reports that, according to Peter Drucker, millennials are primarily motivated by intrinsic rewards.
William Cohen (2008) quotes Peter Drucker: “One did not manage workers; one has to lead them. Leadership demands ethical and effective motivation.” Cohen explains that Drucker rejected the Theory X approach (described by Douglas McGregor (1960) as the “carrot and stick method that was used 150 years ago). He said it was definitely not the way to intrinsically motivate employees. Cohen used his relationship with Drucker to help create a list of factors that are most motivational for workers. The list included being respected, having interesting work, working for people who listen to your ideas about the job, and having a chance to think for yourself, rather than just carry out instructions (Cohen p.221).
CONCLUSION: Peter Drucker is still very much relevant. The coaching/client relationship is very much like the leader/follower relationship; to be an effective coach or leader, the client, or the follower should be cared for, respected, listened to, and given autonomy. And whether someone is the coach or the leader, positive results (success) are the desired outcome.

CHART 1: Intersections of coaching and Peter Drucker leadership philosophy: Management as a Liberal Art.
REFERENCES:
Atkins, Andy (2009) Trust and Collaboration: A Virtuous Cycle. Management Issues Nov. 16. 2009. https://www.management-issues.com/opinion/5782/trust-and-collaboration-a- virtuous-circle/ Bendix, Reinhart (1956) Work and Authority in Industry. University of California Press
(coachingfederation.org) Official website of The International Coaching Federation
Cohen, William A. (2008) A Class With Drucker: The Lost Lessons of the World’s Greatest Management Teacher. AMACON
Csikszentmihalyi, Mihaly and Hooker, Charles 2003 Flow, Creativity, and Shared Leadership: Rethinking the Motivation and Structuring of Knowledge Work. Chapter 10 in Shared Leadership: Reframing the Hows and Whys of Leadership, edited by Craig Pearce and Jay A. Conger. Sage Publications 2003
Drucker, Peter (1954) The Practice of Management, William Heinemann Ltd.
Johnson, J. Richard (2023) What’s New About Quiet Quitting (and What’s Not)? The Transdisciplinary Journal of Management. February 28, 2023 https://tjm.scholasticahq.com/article/72079-what-s-new-about-quiet-quitting-and-what-s-not
Grant, Anthony M. (2003) The Impact of Life Coaching in Goal Attainment, Metacognition, and Mental Health. Social Behavior and Mental Health Vol. 31, Iss.3 (pp.253-264) (2003)
McGregor, Douglas (1960) The Human Side of Enterprise. McGraw-Hill
Pink, Daniel (2009) Drive: The Surprising Truth About What Motivates Us. Penguin Group
Platis, Magdalena (2016) Leadership and Life Coaching. Manager. Iss. 24 (2016) pp. 173-179
Swain, Robert W. (2019) What Motivates the Modern Worker? Peter Drucker on Leading Millenials https://www.corporatelearningnetwork.com/leadership/articles/what-motivates-the-modern-worker-peter-drucker-on-leading millennials#:~:text=They%20are%20motivated%20by%20achievement,have%20a%20positive%20organizational%20environment

Why Entrepreneurs Should Learn to Delegate

Thu, 21 Mar 2024 16:09:00 GMT

According to estimates from the Financial Times, there are over 500 million entrepreneurs on planet earth. This figure includes new business start-ups that emerged during the Covid-19 pandemic. Since the start of the pandemic, several countries have experienced a boom in new business formation. The US Chamber of Commerce reports that 5.5 million new business applications were filed in 2023 in the United States, setting a new record. The U.S. Census Bureau also indicates a continuous increase in the number of new business applications during the past few years. Entrepreneurship is on the rise.

For many aspiring entrepreneurs and new business owners, establishing their own business offers the opportunity to pursue their passion, be their own boss, and have greater autonomy. However, many entrepreneurs often times do not have experience managing various aspects of a business, including managing people. As such, as they attempt to scale their operations and grow their business, they often encounter challenges.

As someone who has served as consultant to entrepreneurs and small and mid-sized organizations (SMEs) across different countries, I have learned that people decisions are the most crucial to the success of any enterprise. A small business can potentially develop and offer the ideal product or service that meets the needs of the market. But in the long run, if the entrepreneur or small business owner does not learn how to manage people, may that be 5 or 25 staff members, the organization will encounter critical issues that will impede its growth and development.

Entrepreneurs tend to be passionate individuals who are committed to achieving success and offering value to their customers. Many entrepreneurs also enjoy the sense of being independent and having autonomy to decide what is best for their business. And as founders and owners of organizations they certainly have the right to choose how to manage them. But in the pursuit of independence and autonomy lies the danger of potentially not including others in the organization in critical decisions that affect the organization.

Working with entrepreneurs for several years has taught me that those who are most successful do not try to do everything on their own. They are comfortable delegating some tasks and responsibilities. The most effective entrepreneurs also make efforts to enrich their employees’ knowledge, skills, and understanding of the organization and industry. They assign important projects to them and include them in planning and strategic decisions. Effective entrepreneurs give their people opportunities to comment on processes, activities and systems, so that they are inclined to seek ways to improve them.

In my years of consulting, I have learned that entrepreneurs must learn to trust their people with important decisions and grant them greater responsibilities so as to prevent the organization’s culture from becoming satiated with conformity, inflexibility, and risk aversion. Entrepreneurs must learn to trust their people to take the initiative and introduce change. Promoting trust, delegating responsibilities, and holding people accountable will help develop people into leaders.

In spite of the complexity and rigor of managing the day-to-day operations, entrepreneurs must also make time to plan for the future and unify the team around long-term goals. Entrepreneurs should stimulate critical thinking across the organization, and encourage problem solving and the exploration of multiple solutions. Dialogue should be promoted to give everyone in the organization an opportunity to voice their opinion and contribute to the enterprise. Entrepreneurs should also make an effort to encourage employees to challenge the status quo and think of ways to enhance existing processes, activities, and products.

It is also important that entrepreneurs continually listen to their employees. Valuable lessons can be learned if one simply listens attentively. Asking questions and listening to employees not only will inform entrepreneurs, but will also serve to build employees’ morale, which can then increase motivation, and in turn increase performance. I believe that employees value an entrepreneurial leader who takes time to ask questions and listen. Hence, I would encourage entrepreneurs to make a conscientious effort to listen to their team.

Several successful entrepreneurs I have met followed the motto: “Never ask anyone to do something I am not willing to do myself”. Many of us admire leaders who are not afraid to get their hands dirty and put in the work. Diligence is admirable. However, it is important to realize that the entrepreneur cannot and should not try to do everything under the sun. I have met some entrepreneurs who have tried to handle every task and make every organizational decision from product design to marketing strategy to payroll. And although these entrepreneurs believed they were being productive; they were inadvertently creating a culture where others did not feel comfortable sharing ideas or taking any initiative. Some entrepreneurs unwisely believe that the best way to lead the organization is to do everything by oneself, and thus they are often reluctant to delegate work.

Entrepreneurs need time to decompress and re-energize, and attempting to tackle every issue and manage every task will not allow the entrepreneur to take time to think and reflect, and even get some needed sleep. It is vital that entrepreneurs take time to slow down and contemplate. Delegating some tasks can free up some time to give thought to important questions and issues related to the enterprise. Moreover, entrepreneurs also have the responsibility to lead their team and to model behavior that will be conducive to effective teamwork and high performance. And in order to accomplish this, entrepreneurs need to learn to delegate and model the behavior of entrusting tasks and responsibilities to others.

Every employee has the potential to make a difference. And entrepreneurs can foster an environment where people are able to contribute. Empowered individuals are more likely to generate creative ideas and solutions. As such, innovation and creativity should be encouraged and promoted in the startup, scaleup, and scaler organization because they can become continuous sources of growth and improvement.

Entrepreneurship is complex and demanding. But learning to delegate can help alleviate many of the issues that entrepreneurs and small organizations face. Entrepreneurs can certainly learn to manage people and organizations. And learning to delegate is an important step towards effectively managing an organization, and building a sustainable enterprise.

References Financial Times. (2020, December 29). Pandemic triggers surge in business start-ups across major economies. Valentina Romei. Retrieved from https://www.ft.com/content/3cbb0bcd-d7dc-47bb-97d8-e31fe80398fb
U.S. Chamber of Commerce. (2024, February 02) New Business Applications Surge Across the Country. Stephanie Ferguson and Lindsay Cates. Retrieved from https://www.uschamber.com/small-business/new-business-applications-a-state-by-state-view
U.S. Census Bureau. Business Formation Statistics. Retrieved from https://www.census.gov/econ/bfs/index.html

Michele Buck: Pioneering Management as a Liberal Art at Hershey

Wed, 20 Mar 2024 18:42:00 GMT

Michele Buck’s ascension to the role of CEO at The Hershey Company represents a significant milestone, not only as the first female to hold this position in the company’s storied history but also as an embodiment of the principles of management as a liberal art (MLA). Her leadership journey combines the practicality of business management with the broad, humanistic perspectives of the liberal arts, offering a blueprint for modern corporate leadership that is both effective and ethically grounded.

Early Life and Career Development

Buck's narrative begins in the humble settings of central Pennsylvania, where her early life shaped the principles she would later apply in her corporate journey. Her upbringing, characterized by modesty and hard work, laid the foundation for a leadership style that values integrity, humility, and the contribution of each individual. Buck’s educational and career journey also offers valuable insights into her grounding in principles aligning with management as a liberal art (MLA). Her academic path took her through Shippensburg University for her undergraduate degree, followed by an MBA from UNC Chapel Hill, a choice influenced by the institution's emphasis on teamwork. While her education may not be in the liberal arts directly, the values and skills emphasized in her MBA program—teamwork, ethical leadership, and holistic problem-solving—mirror the multidisciplinary, human-centered approach central to MLA. This background, rich in lessons of resilience and tenacity, directly influenced her approach to navigating the complexities of leading a global corporation like Hershey.

Leadership Innovations and Internal Change

Upon assuming the role of CEO, Buck introduced significant leadership innovations at Hershey. One notable strategy was her initiative to tap into internal change agents, a move that underscores the MLA principle of recognizing and harnessing the intrinsic value and potential within an organization. This approach not only facilitated transformative growth within Hershey but also fostered a culture of empowerment and creativity, aligning with the liberal arts tenet of encouraging diverse and critical thinking.

Steering Through the Pandemic: A Community-Focused Approach

During the COVID-19 pandemic, Buck's leadership at Hershey exemplified the MLA principle of considering broader societal impacts. One specific instance was the company’s decision to prioritize employee well-being while also ensuring product availability to consumers seeking comfort during uncertain times. Hershey quickly adapted its production lines to ensure safety and meet changing consumer demands, notably shifting focus to products like Twizzlers and S’mores kits that were more suited to home consumption. This not only kept the business resilient but also supported the community by providing familiar comforts during lockdowns, demonstrating a balance between business acumen and societal empathy.

Empowerment of Women in the Workforce

Buck’s advocacy for female progression in the workforce reflects her broader vision of an inclusive and diverse corporate culture. Under her leadership, Hershey has been recognized as a female-friendly employer, a testament to the company’s initiatives to promote gender diversity and equality. Buck's efforts in this area are indicative of the MLA philosophy, which promotes fairness, inclusivity, and the development of environments where diverse talents and perspectives can thrive.

Vision for the Future: The New World of Work

In her interview with Adi Ignatius in the Harvard Business Review, Buck articulated her vision for the future of work, characterized by adaptability, innovation, and a deep understanding of societal changes. Her strategies for Hershey’s growth and transformation are imbued with MLA principles, emphasizing the need for foresight, ethical decision-making, and a holistic approach to business challenges. Buck's leadership philosophy aligns with the notion that success in the new world of work requires a blend of traditional business strategies and the nuanced, ethical, and human-centered approach of the liberal arts.

Transformative Strategies and Corporate Growth

Under Buck's leadership, Hershey embarked on significant transformative strategies that catalyzed corporate growth. A prime example is the acquisition of healthier snack brands like SkinnyPop and Pirate’s Booty, reflecting Buck’s vision of Hershey as an innovative snacking powerhouse. This strategic expansion beyond traditional confectionery into the broader snacking market capitalized on consumer trends towards healthier options, showcasing Hershey’s adaptability and Buck’s forward-thinking leadership.

Cultural and Ethical Considerations

A distinctive aspect of Buck’s leadership is her focus on cultivating a corporate culture that aligns with ethical and societal values. This emphasis on culture and ethics resonates with the MLA framework, which advocates for organizations to operate in a manner that is not only economically viable but also socially responsible and ethically sound.

Global Perspective and Community Engagement

Buck's approach extends beyond the confines of Hershey, demonstrating a global perspective and a commitment to community engagement. Her leadership in initiatives aimed at sustainable practices and social responsibility projects reflects an understanding of the interconnectedness of global business operations and their impact on communities and the environment.

Challenges and Opportunities in the Modern Business Landscape

In navigating the modern business landscape, Buck has confronted challenges such as the COVID-19 pandemic, supply chain disruptions, and the evolving expectations of employees and consumers. Her responses to these challenges, grounded in MLA principles, highlight the importance of adaptive leadership, strategic foresight, and a commitment to the well-being of all stakeholders. Hershey faced supply chain disruptions during the pandemic, as did many global companies. The company navigated these challenges by leveraging its strong relationships with suppliers and by increasing inventory levels to buffer against disruptions. Hershey's proactive approach ensured a steady supply of raw materials, minimizing production delays and maintaining product availability. This strategy not only mitigated the immediate impact of supply chain issues but also reinforced Hershey's reputation for reliability and operational excellence.

The Role of Education and Continuous Learning

Buck’s emphasis on education and continuous learning, as evidenced by her own journey and her initiatives at Hershey, underscores the MLA principle that ongoing personal and professional development is crucial for effective leadership. Her support for programs that foster learning and skill development aligns with the liberal arts tradition of cultivating well-rounded, critical thinkers who are equipped to navigate complex challenges.

Conclusion

Michele Buck’s leadership at The Hershey Company epitomizes the application of management as a liberal art. Her journey from humble beginnings to the helm of a global corporation, her innovative leadership strategies, her commitment to ethical and inclusive practices, and her vision for the future of work collectively illustrate how the principles of MLA can be effectively integrated into corporate management. Under her stewardship, Hershey has not only achieved impressive business success but has also advanced a model of leadership that is ethical, humanistic, and forward-looking, setting a benchmark for others to follow in the evolving landscape of global business.

Sources:

5 CEOs who Champion Corporate Social Impact,” Everfi, accessed at: https://everfi.com/blog/community-engagement/5-ceos-who-champion-social-impact/

“Cocoa for Good,” Hershey Company, accessed at: https://www.thehersheycompany.com/en_us/home/sustainability/sustainability-focus-areas/cocoa.html

“Hershey’s CEO Knows How to Get Americans to Indulge,” The New York Times, October 10, 2019, accessed at: https://www.nytimes.com/2019/10/10/business/michele-buck-hershey-corner-office.html?searchResultPosition=1

“Hershey CEO Michele Buck on Empowering Internal Change Agents,” Harvard Business Review, April 29, 2022, accessed at: https://hbr.org/2022/04/hershey-ceo-michele-buck-on-empowering-internal-change-agents

Drucker’s Way of Turning Failure into Success

Tue, 19 Mar 2024 23:53:00 GMT

Rowland Hussey Macy graduated from business school. On four separate occasions, he opened a retail store, only to see each one fail. His fifth attempt succeeded, although the first day brought in a miniscule $11.08 in sales. Macy died a wealthy man, and 150 years later, Macy’s store still exists. Even though suffering periodic setbacks, Rowland Macy’s successors recently received a $5.8 billion buyout offer.

Macy is a prime example of turning failure into success. Politicians also serve as examples of how following the right principles from Peter Drucker can allow one to advance from a dismal failure to outstanding success. Ronald Reagan was defeated twice as Republican nominee for U.S. president. He’d been a Democrat previously. He finally succeeded in becoming President of the United States on his third attempt. Another prominent U.S. president failed at just about everything. He failed in business and faced bankruptcy, and was defeated in bids for the Illinois State Legislature, Speaker of the House, an appointment for the U.S. Land Office, the U.S. Senate, and Vice President. Despite these setbacks, he became the 16th President of the United States in 1860 and took the country to war against the Confederate States. The 16th President was elected during major controversy and eventually saved the Union. To the best of my knowledge, no historian ever called Abraham Lincoln a failure.

Getting the Right Person for the Right Job

What is the key to turning failure into success? For Drucker, the most important step was getting the right person for the job. This step is frequently neglected by managers who are hiring others, as well as many emerging leaders. If you are the consultant or the responsible manager, you may well have inherited a subordinate. The process to obtain one may have started and been completed before you were in a position to make the decision. However, even if it is too late to do anything about finding the best person for the job, you may get in early enough to adjust, or at least correct the situation.

If you are the individual looking at a possible new opportunity, just remember that Drucker said that staffing should be from the perspective of the right person for the right job. This means that matching the needs of the position with the individual’s strengths. Film actors frequently turn down potential roles in new movies because they know that the opportunity may not be right for them, or they have the wrong director or wrong co-star. Managers are artists of a different type. Still, a manager’s professional artistry in his or her work is of no less importance to the outcome of the endeavor. Drucker recommended following three important guidelines for the hiring manager:

1. Think through the requirements of the job

2. Choose three or four candidates for the job rather than deciding

immediately on one candidate

3. Don’t make your final selection without discussing the choice with knowledgeable colleagues. This goes for all concerned directly with the appointment.

The Requirements of the Job

A poorly designed job, one in which the requirements have not been thought through may be an impossible job, a job that no one can perform successfully. An impossible job means that work intended to be accomplished can only be accomplished poorly or cannot be done at all. Being impossible or nearly so risks the destruction, or at best, the misallocation of scarce and valuable human resources, including your own. To design a job properly, the objectives and requirements of the job must be analyzed to decide on those few requirements that are crucial to the job’s performance. That way the individual trying to fill the position can staff for strength, focusing the few critical areas of the job that are essential or more important.

If you are the candidate, you should do an analysis yourself to ensure that to the best of your ability, you believe you can perform the job well and better than anyone else under the conditions intended. If you can’t, inquire as to whether the conditions you feel might hurt your ability to perform the job well can be changed.

Choose Multiple Candidates for a Job before Selection

Some managers promote or make selections for hiring after considering only one or two candidates. They are in a hurry or they are overly impressed with a single candidate for a position. At the very least, think through and select several candidates. The correct way according to Drucker is to consider three or four candidates, all of whom meet the minimum qualifications for the position and make the right decision. Have these selections right from the start.

Sometimes the reason that this wisdom is ignored is that the hiring executive makes assumptions about a candidates’ suitability before considering all candidates qualifications against the prime job requirements. Establishing the most important requirements is a necessity and immensely helpful.

Managers having the opportunity to accept such a job frequently make a similar mistake. They are frequently blinded by the new job being a perceived promotion, paying better, or having a more impressive title. But all these factors are secondary to the ability to perform in the job and fully enjoy themselves during the challenge of their performance. As the manager looks at a prospective new job, being distracted by a few impressive, but less relevant factors is another reason to consider alternatives before accepting any position.

Discuss Your Choice with Colleagues

Drucker was not saying that hiring and making job appointments is a group decision. It is not, and as the hiring executive you are responsible for the outcome regardless of others’ opinions with whom you should consult. You are still responsible. However, it makes sense to share your plans and get others’ opinions and ideas whenever it is possible to do so. Even if you decide to promote someone who others don’t recommend, at least you’ll know the pitfalls of your appointment and you’ll learn more about what others think and know regarding the various candidates you are considering.

Is this a Work in Progress?

It would be nice if every manager could hit the ground running in every new job. However, this isn’t always possible, especially in a new job that is new not only to the placed executive, but also to the organization. Whether new or old, it may present a unique challenge to any a manger. A supervising manager can ease the way by clearly laying out requirements, meeting frequently during the early weeks with the individual in a new position, helping or assisting without doing the new appointee’s job for him or her, but above all, not letting the new appointee fail. So don’t be too hasty in immediately replacing a new assignment. Some need time to develop, and sometimes the assignment itself may have been made without knowledge of a particular factor or whether adequate resources such as money, personnel, equipment, or facilities have been allocated. Moreover, this can change given the way the new assignee operates or plans to operate. You may never be able to anticipate this precisely because there are many different ways of approaching any task; changes may need to be made depending on who holds the position now and who might in the future.

Remembering that as the boss, you are there to help. Never forget the injunction: “Don’t you let him fail.” Again, if you are the job candidate, you need to look at yourself. You can stretch and learn and should expect those changes in any type of promotion. But if the job isn’t one you think you can learn or grow into, look at alternatives and discuss this with the individual who hired you.

Drucker’s People Approach

The idea that managers rise to their level of incompetence is a dangerous myth. If a manager isn’t performing, of course he needs to be relieved of his or her duties. But to automatically fire a manager due to failure with no further thought is, Drucker maintained, human sacrifice. There may be an equally challenging job available at which he or she can be highly successful, even if unsuited to this particular job.

Implement Drucker’s suggestions and you will have an excellent “batting average” of promoting the right person into the right job and of success. If you take these actions your organization is on the way to being populated with the best and most qualified managers. And if you are the candidate for a promotion or a sideways move and one of these managers, you will help yourself to success as you turn past failures into success. You will contribute to the success of any activity the organization has undertaken and “save the Union” as Lincoln did.

Supporting Employees in an Angry America

Wed, 21 Feb 2024 19:14:00 GMT

Though a topic of discussion currently, research and news outlets have been showing increased aggression in the workplace for decades as evidenced by physical and non-physical aggression examples by Glomb, et al. (2002). Brooks brought this topic back up last fall with the question, “Why are Americans so mean?” As more professionals leave the service industry due to difficult clients or patients (Brooks, 2023), more needs to be done to promote healthy employees in what should be a thriving workplace. All have personal stories of difficult co-workers, challenging students or clients, and negative or hostile behaviors of stakeholders. Several articles and research pieces have been written on burnout as many leave service professions, a career of choice, for a job elsewhere.

Brooks (2023) points out that the American society is in a crisis that is both ‘emotional’ and ‘relational.’ Though some researchers agree, such as Glomb, et al. (2002), there is a lack of research in this area. I propose that studies on this topic are limited due to what can be asked about employees and clientele due to privacy issues. Glomb, et al. (2002), suggest that it has just been ignored as more extreme behaviors have been studied first and current models do not include affect and emotion. Regardless, results on such topics lack data on ‘affective/emotional variables’.

Research and discussion should be on what works to sustain quality workers and promote a positive business culture. A system of check and balance as Drucker and Zimbardo suggest supports a business system of healthy positive interactions. Zimbardo, author of The Lucifer Effect (2007), posits that good people will make wrong choices without a system of accountability. Drucker (2010) states that accountability is needed and must be tied to the needs of the organization. Organizational focus on a system of accountability that maintains the purpose of the entity is paramount.

In Drucker’s time, the experience was totalitarian government and aggression of a hostile ideology. My time, 2024, is a time of the absence of a sense of social community for the sake of individualism. Now is a time void of accountability in home, work, school, or society. Drucker experienced Hitler’s ability to convince ordinary people shunned by society that they should live with a sense of entitlement. This small group of people became an entitled race with only a sense of what was important to their small community and not society as a whole. Now we observe not just the notion of small in-group versus out-group thinking, but individualized entitlement. Now each student, client, each citizen lives with a sense of individualized entitlement. Campbell, et al. (2004) posit that ‘perceptual entitlement’ has a negative influence on interpersonal skills which “severely impacts social skills.” How do we reverse this? How do we keep Americans from believing that they are deserving of more than others? To answer this, more research is needed. In the meantime, organizations can do the following to reduce and diffuse negative encounters for their employees now.

Steps toward positive workplace culture

Whether a for-profit or non-profit, the organization must create a system of accountability, of check and balance, that is directly aligned to organizational purpose and supports positive growth behaviors in employees. Though management has control over this process, aggressive behavior in clientele cannot be neutralized. So how does one retain talented staff when repeated outside influences can be so negative and beyond control?

Create a buffer between aggressive and hostile clients and staff. When possible, have frontline employees that are well-equipped to handle angry clientele. Trained management should be prepared to step in before an escalation to be a buffer in these situations.

Create a safe space for frustrated employees to voice their feelings and concerns when negative encounters occur. Often speaking aloud to a non-judgmental coworker or management is enough to reduce the stress caused by the negative situation and shows the employee that the organization is supportive.

Create a menu of coping strategies for all employees including management so individuals are equipped to deal with a stressful situation, not take it personally, and avoid personal entanglement. These choices should be in line with the accountability process that is directly related to the organization’s goals and purpose.

Create an environment that promotes well-being and positive interactions. Individualized for each organization, management can promote positive behaviors through suggestion or influence. Visuals, trained employees, and strategic management that redirect behaviors may influence clientele response. Does the person feel listened to? Understood? Supported? Is clientele asked to restate comments or asked to communicate productively?

Being forward in clientele behavior expectations can cause initial stress and negative reactions, but it does support employee and clientele emotional health. Businesses and organizations are often at the forefront of what is needed for society. In an America that Brooks and Glomb et al. refer to as in ‘crisis’ and prone to ‘non-physical aggression,’ organizations need to focus on employee well-being and positive work culture through a system of accountability and intentionally created aggression-response systems.

This is a start to what needs to be continued research and implementation on this subject.

References

Brooks, D. (Sept 2023). How Americans Got So Mean. The Atlantic

Campbell, W. K., Bonacci, A., Shelton, J., Exline, J., Bushman, B. (2004). Psychological Entitlement: Interpersonal Consequences and Validation of a Self-Report Measure. JOURNAL OF PERSONALITY ASSESSMENT, 83(1), 29–45

Drucker, P. (2010). Managing the Non-Profit Organization. Harper-Collins, e-books.

Glomb, T. M., Steel, P. D., & Arvey, R. D. (2002). Office sneers, snipes, and stab wounds: Antecedents, consequences, and implications of workplace violence and aggression. In R. Lord, R. Klimoski, & R. Kanfer (Eds.), Frontiers of industrial and organizational psychology: Emotions and work: 227–259. San Francisco: Jossey-Bass.

Zimbardo, P. (2007). The Lucifer Effect. Random House, NY.

Drucker on Integrity, Ethics, Honor, and Doing the Right Thing

Wed, 07 Feb 2024 18:28:00 GMT

To Drucker, ethics and integrity were the bedrock of all business and personal practices and the necessity of considering these values was emphasized in much of what he wrote.

But this differed from what others wrote in some ways.

For example, he recognized differences in cultures in other countries and deviations from what might be considered integrity in the U.S. He also raised the question of international politics. Are certain statements acceptable if not for individual advantage, but for the common good? President Eisenhower initially lied about a U-2 spy plane that had been shot down over Russia. Was he violating his personal integrity?

The concepts of integrity, ethics, morality, obedience to the law, and even honor are closely related, but they are not the same. Drucker spoke about the need for integrity, and he raised issues regarding business ethics. Ethics is a code of values . Integrity speaks of adherence to this code of values. Morality is the quality and manner of this adherence. Drucker defined honor as demonstrable integrity and honesty, adding also that an honorable man stood by his principles.

Yet Drucker did not agree with so-called ‘situational ethics’ and warned against them. In other words, one did not behave one way in private life and another way in business or professional life. He also believed social responsibility to be a part of an individual’s and an organization’s ethical behaviour. But here, too, he gave examples of corporations that, seeking to do good, had caused harm to customers, the organization, and to society. He cautioned that, under certain conditions, what might normally be considered a corporation’s social responsibility should not be undertaken and could even be considered unethical behaviour from an unintended result or society’s view.

Drucker's Struggles

Drucker took his examination of ethics seriously. He looked at the determination of right and wrong in questions of conduct and conscience by analysing cases that illustrated general ethical rules. This might be called cost-benefit ethics or ethics for the greater good. Essentially it means that those in power - including CEOs, kings, presidents, managers – have a higher duty if their behaviour can be argued to confer benefits on others. In other words, though it is wrong to lie, in the interests of ‘the country’ it sometimes might be deemed acceptable according to one way of thinking. This approach carries the name of ‘ casuistry ’. Drucker called it “the ethics of social responsibility” and it had to do with his dislike of the term ‘business ethics’.

During the Cold War, and 20 years after the Japanese surprise attack on Pearl Harbor, the US was determined not to be caught short by a potential enemy again. With the U-2 reconnaissance aircraft, the Soviet Union could be overflown, and sensitive nuclear sites photographed from an altitude at which the aircraft was thought to be invulnerable. However, after several years of operations, a U-2 aircraft piloted by Francis Gary Powers was shot down from its extreme attitude by an anti-aircraft missile. Before it was known that Powers had survived and had been captured, President Eisenhower publicly lied about the fact that Powers was on a spy mission. However, in a widely published Soviet trial, Powers himself appeared and confessed that this was his mission. President Eisenhower’s ethics were never challenged on this issue. He had lied for the greater good, a higher responsibility and so most thought this acceptable. This is casuistry.

‘For the greater good’ sounds very high-minded, but Drucker maintained that it was a dangerous concept, because it could easily become a tool for politicians and business leaders to justify clearly unethical behaviour.

The Ethics of Prudence

After casuistry, Drucker looked at prudence. To be prudent means to be careful or cautious. It has benefits, but also serious defects.

Drucker said that Harry Truman, as a US senator in the early 1940s, advised senior army witnesses in the years before he became vice president that, “Generals should never do anything that needs to be explained to a Senate Committee because there is nothing one can explain to a Senate Committee.”

Now, the ethics of prudence may be good advice for staying out of trouble, but it is not much of a basis for ethical decision-making. It doesn’t say anything about the right kind of behaviour or actions that should be taken. Also, there are sometimes decisions that a leader must take that are risky and may be difficult, or even impossible, to explain but not necessarily unethical, especially if things go wrong after the decision is made. No serving general would like to see a controversial action coupled with his or her name on the front page of the New York Times, requiring his or her appearance before a Senate subcommittee. However, military decisions, and political ones too, are frequently controversial and with high risk. Nevertheless, these could be correct decisions even if results are sometimes not fully as desired. Drucker saw no basis for recommending this approach as the way to come up with ethical decisions, but only noted it as a possibility that his students should bear in mind.

The Ethics of Profit

Drucker also thought through an approach that he called the “Ethics of Profit”. This is not what you might think. Much to the contrary, Drucker wrote that it would be socially irresponsible and most certainly unethical if a business did not show a profit at least equal to the cost of capital, because failing to do so would be wasting society’s resources.

Drucker stated that profit as an ethical measurement rested on very weak moral grounds. As an incentive it could only be justified if it were a genuine cost and especially if it were the only way to maintain jobs and to grow new ones.

Confucius Was a Genius, Too, but...

Drucker felt that Confucian ethics were “the most successful and most durable of them all” although he came short of recommending Confucian ethics as the solution to all ethical conflicts. In Confucian ethics, the rules are the same for all, but there are different rules that vary according to five basic relationships, all based on interdependence. These five relationships are: superior and subordinate; parents and child; husband and wife; oldest and youngest siblings; and friend and friend. The right behaviour in each case differs depending on the best way to optimize the benefits to both parties in each relationship.

Confucian ethics demand equality of obligations on both sides, of parents to children and vice versa, and of bosses to subordinates and vice versa, for example. All have mutual obligations. Drucker pointed out that this is not always the case and is not compatible with what is considered business ethics in many countries, including the US, where one side has obligations and the other side has rights or entitlements. Though he justified Confucian ethics, which he called “the ethics of interdependence”, they cannot universally be applied as business ethics, because this system deals with issues between individuals, not groups. According to Confucian ethics, only the law can handle the rights and disagreements of groups.

Drucker's Exceptions to Lying

Through his stories and examples, Drucker taught his students, readers, audiences, and consulting clients what he had concluded only after intensive study, analysis, and thought. However, he was sometimes criticized for the examples he used. Stories that he told occasionally misstated facts in illustrating his concepts. This was true, and if challenged, he did not deny the charge. His response invariably was, “I’m not a historian; I’m trying to make a point.” His argument was one of literary licence. His creditability suffered because of this, but he felt that these were in the same class as ‘white lies’ told for the benefit of the recipient to make the point and not the teller.

What Exactly Did Drucker Believe?

Ethics is a code of values which might differ in different societies and cultures “on the other side of the Pyrenees”. According to Drucker, differing codes should be respected so long as they it did not violate one’s own code of ethics or morality in the course of its practice. So, a Japanese executive might reward a government employee in thanks for something his company received after the government employee’s retirement, but not for his company’s operations in another country. However, if the other country’s customs, practices, or laws were so abhorrent to his own ethics, he could not do business there or would suffer a lack of integrity.

Integrity speaks to adherence to this code of values. One must practise it with consistency. That is, there can be no situational ethics, no codification for special purposes, and therefore no special business ethics or situational ethics.

If ever business ethics were to be codified, Drucker thought they ought to be based on Confucian ethics, focusing on the right behaviour rather than misbehaviour or wrongdoing.

Drucker felt that managers should incorporate two points when they practise their personal philosophy of ethics:

The ethics of personal responsibility from the physician Hippocrates: primum non nocere, which translates from the Latin to, “above all do no harm”.
The mirror test: what kind of person do I want to see when I look into the mirror every morning?

Peter Drucker's Vision of Management as a Liberal Arts Education

Tue, 16 Jan 2024 17:33:00 GMT

This blog explores how Drucker envisioned a broader education for managers and how this could help prepare them for their future careers.

Drucker believed management was an educational discipline. To be an effective decision-maker, which includes the work of leadership as well as administrative skill and business knowledge, one needs to become a “developed” individual. This used to be, and remains, a desired outcome of a liberal arts education, however it is acquired.

One of the things one learns to do in a liberal arts education is to practice taking different points of view, comparing them, contrasting them, and attaining—in the best of cases—a synthesis. The study of philosophy, social science, and literature teaches us that in human affairs there is often, if not usually, no single “right” answer. And if there is, it is most likely to be found when diverse perspectives are taken seriously as part of a rational discourse, based on facts and logic. Thus, it is reasonable to assume that the mind of a decision-maker can be prepared for this kind of discourse through a liberal arts education.

Drucker's idea of a liberal arts education for managers was based on the idea that managers are more than just people who oversee operations; they also need to think critically, understand human behavior, and lead people. A liberal arts education creates a foundation that provides a framework to acquire knowledge, which is then internalized as self-awareness. This self-awareness evolves into wisdom, empowering the individual to lead others effectively. For his part, Drucker proposed a curriculum that focused on general knowledge from different disciplines, including history, sociology, psychology, economics, and philosophy, to achieve this. This contrasted with traditional MBA programs, which had increasingly specialized in narrowly focused business topics like accounting and finance.

Drucker's vision was not only about learning new skills but also about developing existing ones. He wanted managers to learn to apply what they had learned academically to their professional activities. For example, he believed that learning economics should include exploring concepts such as supply and demand and understanding ethical considerations like fairness in pricing or labor practices. He argued that such knowledge would help prepare future managers for the challenges of leading organizations in an ever-changing world.

Peter Drucker's insights about rapid technological change, short-cycle innovation, knowledge work, and economic shifts are at the heart of current volatility, uncertainty, complexity, and ambiguity (VUCA) discussions. Drucker believed in proactive learning, decentralization, creative experimentation, and prioritizing people's development to navigate hardship and crises. Drucker emphasized every leader's responsibility to cultivate their own "learnability" in times of disruption and to develop change-adept decision-makers. Drucker’s work lays a strong foundation for thriving amidst acute uncertainty today as ever.

In addition to managers broadening academic education, Drucker encouraged managers to look beyond their immediate roles and responsibilities and develop a longer-term view of their career paths. He believed that it was important for managers to consider how their current decisions might influence their future selves so that they could make decisions with greater clarity and foresight. This type of thinking is especially relevant today when organizations must often make decisions quickly while at the same time considering long-term implications across multiple markets or industries.

In Drucker's 2008 essay, "Managing Oneself," he asserted that today's unprecedented pace of change means individuals must continually develop new skills to remain employable (Drucker, 2008). Lifelong learning matters more than specialized knowledge. Recent analyses underscore this reality. A detailed study by global executives found that 87% expect employees to pick up new skills as their roles evolve, valuing adaptability over proficiency for long-term impact (WEF, 2020).

According to a survey by the Association of American Colleges and Universities, over 90% of employers believe that skills like critical thinking, complex problem-solving, and clear communication are more important than one's undergraduate major (WEF, 2020). As automation transforms the workplace, uniquely human intellectual abilities that help workers adapt will be in highest demand according to World Economic Forum analyses (WEF). The liberal arts education provides students the ability to continually educate themselves amidst career turbulence through knowledge, self-knowledge, wisdom, and leadership. Liberal arts graduates possess the self-knowledge, empathy, and intellectual dexterity to continually guide their own development, making them well-equipped to navigate careers.

Peter Drucker's vision of management as a liberal arts education has been highly influential in academia and corporate life over the past few decades. His focus on preparing future managers with broader academic knowledge has helped create leaders who are better equipped for today's complex organizational challenges, while his emphasis on considering one's future self encourages more thoughtful decision-making in the present moment. Ultimately, Drucker's insight into preparing tomorrow's leaders remains as relevant today as it did when he first articulated it decades ago.

References:

Drucker, P. (2008). Managing Oneself. Harvard Business Review.

World Economic Forum (WEF). (2020). The Future of Jobs Report 2020.

Business Analysis Based on Drucker and Mintzberg

Sat, 06 Jan 2024 21:20:00 GMT

Even today, practically every manager seeks maximum profits calculated by quantitative analysis and academic courses based on “quantitative analysis for business decisions” are taught at every graduate school. In the 1960s Peter Drucker and Henry Mintzberg concluded that liberal arts methods of analysis were needed because analysts in concluding that management was a science, excluded liberal arts in analysis but argued academics as to which mathematical methods were more appropriate depending on the situation. Yet only a few years earlier, Einstein won the Nobel Prize for theoretical physics by publishing four major papers in a single year, relying on the liberal arts with no computer and few mathematical equations.

Through economic analysis, an optimal numerical decision was easily calculated for maximum profit and quantitative models made business decisions easier. You just plugged the numbers into an equation. This followed science! However, economic analysis seeking maximum value alone provided a solution which actually resulted in a less than optimal solution. Drucker calculated that if maximum profitability was always the goal, success frequently attracted unwanted competition and led to undesirable results. He used the example of the transistor radio invented by American companies in the U.S. These companies eventually lost the entire market to Japanese firms through overpricing. Drucker concluded that while profitability was essential for business, maximum profitability was not. Laws were introduced limiting high pricing of critical medicines. Maximum profits could lead to failure of the product for firms and undesirable results for society.

Struggles with COVID-19 provide a recent example of the problems in attempts to “follow the science” and attempt to solve problems by quantitative analysis alone and omitting the liberal arts.

Lessons from the Pandemic

As COVID-19 became an important issue, analysts were pressured to “follow the science.” However, it went unnoticed that this was situational. There were always other factors and conflicting goals and benefits. This became more challenging as time went on and unexpected problems were revealed along with strains of the virus mutating. Several effective vaccines were produced under “Operation Warp Speed” despite doubts by many that a “Warp Speed Vaccine” was possible. Other issues surfaced. How many vaccinations were needed, and who should receive them and at what age? Experts looked at numbers and arrived at different conclusions. Some argued that certain individuals should be given priority when distributing the limited supply of vaccines, yet others maintained the vaccine should be required for everyone regardless of any other factor. Ultimately, many recipients rejected vaccination.

An optimal decision requires a different and more complex analysis than the outcome of a single goal analysis or quantitative conclusion. The COVID-19 experience forced us to recognize that there are almost always multiple and conflicting goal solutions and success experiences and that reaching one goal might result in failure or higher risk in others. Finding solutions which considered economic recovery, the need to educate schoolchildren, the worldwide nature of the pandemic, vulnerability, and effect on different age groups and those with other underlying illnesses and more required consideration of a much broader range of situational factors. Even the personalities and abilities of those involved in implementation as well as the culture, customs, and belief systems of the groups requiring help, available resources and other complicated issues must be considered. Politics might affect interpretation of data and decisions far removed from the injunction to simply “follow the science.” Experts appeared on all sides of important issues, and they frequently differed on interpretations of “fake news,” political issues, scientific dangers, or opinions on what certain data meant and what actions should be taken or avoided.

Multiple Factors Complicate Management Decisions

Einstein had grappled with similar problems using liberal arts long before COVID. In 1905, he had employed the liberal arts and not quantitative analysis, to explore highly technical questions in theoretical physics. Einstein developed the theory of relativity and the equation E=MC² for conservation of energy without a computer, or even the use of chalkboards with only the liberal arts and his own imagination. He was awarded the Nobel Prize for theoretical physics for publishing four major papers in a single year using the liberal arts without complicated mathematics or computers (which he confirmed years later in an article in the London Times).

Two Experts who rethought Management

Almost simultaneously, two leading management scientists, Peter Drucker and Henry Mintzberg , concluded that economic analysis alone was insufficient. Both independently concluded that because management itself is an art, effective management decisions require the complete liberal arts spectrum including economics and the physical sciences because certain liberal arts must also be employed which might be of equal or more importance at different times and situations.

Drucker and Mintzberg

The these two geniuses especially noted the prime importance of the liberal arts. Drucker wrote that “management is what tradition used to call a liberal art: ‘liberal’ because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; ‘art’ because it deals with practice and application.” He called knowledge, self-knowledge, wisdom, and leadership “the four essentials” of the process of liberal arts he visualized.

Drucker wrote that leadership is the most important essential and results in 50% of the quality of outcome of any endeavor. Whereas others said that integrity and social responsibility were desirable with leadership, Drucker taught that they were required.

Drucker and his dean, Paul Albrecht, established a Ph.D. program, which, though it offered traditional courses, included other special courses that Drucker himself developed and taught. These courses were outside of the traditional specialty graduate courses offered in a management program. Some called the results “the Drucker difference.”

The approach used behind Drucker’s work was uncovered by Minglo Shao and C. William Pollard, both members of the Drucker Institute Board at Claremont Graduate University where Drucker taught. With another Board Member, Bob Buford, they developed and promoted “management as a liberal art” or MLA and furthered its development. They also commissioned a book, Drucker’s Lost Art of Management by Joseph Maciariello and Karen Linkletter (McGraw-Hill, 2011), which introduced the social responsibility aspect of leadership in MLA as a prime philosophy of management. Professor Maciariello developed and taught a non-degree online course on MLA primarily based solely on this aspect.

Henry Mintzberg’s Innovations

Meanwhile, at McGill University, Henry Mintzberg, an internationally known management scientist, from Canada came to similar conclusions. He wrote that “management, is above all a practice, where art, science and craft meet.” Going further, he theorized that many of the basic courses in accounting, finance etc. required by managers for an MBA were unnecessary, as the material was already part of programs for attaining specialty graduate business degrees. He suggested that the time spent on these courses was better spent mastering the understanding and practice of general management as specialists already assisted generalist managers with support in their areas of expertise.

Along with partners in other countries, Mintzberg developed an accredited graduate management degree that was not an MBA. He convinced senior academic administrators and others at McGill University in Canda to test his concepts in a fully functioning academic and accredited program outside of the school of business. Based on its success, the program grew and he wrote a bestselling book, Managers, not MBAs (Berrett-Koehler, 2004) which explained his views on the shortcomings of the MBA for educating managers. Many of his ideas dovetail with teachings under the MLA banner, including the notion of reflective mindsets, shared competencies, and an emphasis on teamwork and recognition of global management culture.

Mintzberg recognized that reflective mind-sets impact on how a manager looks at any problem. This helps frame how problems are perceived. Therefore, his students practiced one of five mind-sets of emphasis in each of five countries as they traveled worldwide in solving management problems and completing his program. These were: (1.) Reflective mind-set, (2.) Analytic mind-set, (3.) Worldly mind-set, (4.) Collaboration and Cooperation mind-set, (5.) Action mind-set.

Mintzberg also recognized that experienced managers look at any problem differently and might develop different, but equally effective solutions. This fitted with another of Drucker’s observations that the largest breakthroughs and innovations frequently occur when employees with backgrounds from different industries or companies changed jobs, which changed the environments of their practices. They brought with them their old ideas, thinking, and procedures that had been used in their previous organizations, unknown to the new organization with which they were now affiliated. Mintzberg also developed the concept of shared competencies by which experienced students shared ideas for more innovative solutions.

Drucker’s MLA and Mintzberg’s successful development and application of the liberal arts for management decision making demonstrate the flexibility and almost unlimited potential of the MLA concept for success and additional development and that MLA is adaptable to all organizations for more effective problem solving and decision making.

References

A Class with Drucker by William A. Cohen (AMACOM, 2008)

Consulting Drucker by William A. Cohen (LID, 2019)

Drucker’s Lost Art of Management by Joseph A Maciariello and Karen Linkletter (McGraw-Hill, 2011)

Drucker’s Way to the Top by William A. Cohen (LID, 2019)

Managers, not MBAs by Henry Mintzberg (Berrett-Koehler, 2004)

The New Realities by Peter F. Drucker (HarperCollins, 1989)

Robert F. Smith Shows Us What Effective Leadership in Action Looks Like

Sun, 31 Dec 2023 10:42:00 GMT

Robert F. Smith is celebrated globally for his philanthropy and business prowess, but it’s his approach to leadership that sets him apart. An approach that mirrors many of Peter Drucker’s Management as a Liberal Arts principles.

Smith’s success is Drucker’s MLA in action.

A case study not only on the importance of effective leadership but also on our organizations’ responsibility to contribute to building a better society. Philanthropic-focused leaders like Smith are Management as a Liberal Art, personified.

Philanthropy & Business Beyond Profit

Founder, Chairman, and CEO of Vista Equity Partners , Robert F. Smith doesn’t qualify himself as a businessman. But instead—an inventor, investor, and philanthropist. His focus is on creating opportunity, not only within Vista’s ventures but also in the communities where it functions.

His philosophy is clear: we all have a responsibility to build a better society. To encourage our organizations to participate in the betterment of the community as a whole.

The 2% Solution:

Smith knows that a business’ role doesn’t stop within the organization. But instead, must extend far past it. Put in simpler terms, it’s a corporation’s responsibility to contribute to the 2% solution.

“The Solution builds from the tradition that American families on average allocate 2% of their income for charity, and asks U.S. companies to do the same by investing 2% of their profits over the next 10 years into communities that have been systematically held back by the racial wealth gap.” – Robert F. Smith

Smith encourages organizations to see this contribution as an investment, not an act of charity. To take up the mantle of responsibility and leave things better than we found them.

And to do it in a way that promotes success and opportunity for future generations.

Whether that investment be made in capital, know-how, or responsible management solutions, a corporation’s responsibility is to its community. Not just to its profits.

Smith’s call to action mirrors that of Drucker’s philosophies. Management as a Liberal Art asks organizations to provide meaning beyond financial gain. To acknowledge their place and power in society, and do something about it.

Drucker suggests through effective leadership that businesses can successfully bridge this gap between conventional profit-first models to champion innovation that benefits the whole.

Both minds call for workers, managers, and future leaders to challenge traditional business models that leave people behind.

Embracing Lifelong Learning

Spearheaded by Smith (and supported by his fresh take on leadership), Vista Equity Partners exemplifies Drucker’s MLA in action.

Part of Vista’s mission is to take an “adaptable” approach to growth. One that prioritizes value creation in partnership with effective leaders.

To keep advancing, Vista has taken a strategic approach to adaptability. Put another way—the organization and its managers are lifelong learners.

They promote the advancement of technology with the specific intention of creating opportunity. It’s the company’s investment in software, data, and technology that enables technological advancements to better society.

Vista’s portfolio includes leading enterprise companies. This means they’re building better businesses in community with other organizations striving to do the same.

This community of “better business” not only reflects Drucker’s principles but hinges on the openness to learn and adapt.

Drucker tells us that leaders and organizations must encourage innovation and profit by placing an emphasis on the constant search to improve knowledge and skills. That businesses—and managers—must be able to adapt. Not only to the ever-changing needs of an organization but to the people who work within it and those who live beyond it.

Smith has built an organization that functions within Drucker’s philosophies. The firm’s success positions MLA as the approach to foster better business through the ability to learn and adapt.

Supporting Future Leaders

If MLA urges us to lead with management principles that are community-oriented, Smith encourages us to go one step further and take direct action through personal philanthropy.

We know that a well-managed organization respects the individual dignity of its workers. And that effective leaders prioritize people. But Smith shows us that that includes not only people functioning within your own organization, but outside of it in the community as well.

Future leaders exist within both.

Philanthropy & Mentorship:

Smith’s philanthropic efforts extend beyond just MLA in principle. They’re MLA action.

He urges us all to see the importance of mentorship and internships. For managers to place their focus on the greater mission of contributing to society.

To him, it’s about waking up each day and making an effort to create change. Some days that looks like direct influence through his leadership roles. Other days that means donating time, funds, and knowledge to his community.

Smith shows us that it’s up to each individual leader to make society a more just one for people of future generations. And that taking action now, promotes the ability of future leaders to pay forward MLA in action.

Effective Leaders Prioritize People:

Both Smith and Drucker know that effective leaders have the power to alleviate some of the burdens society has placed on minorities, disadvantaged communities, and younger generations. They see leadership as an opportunity to make endless contributions to building better.

Smith shows us that a leader must strive for economic justice. And that the power of your impact comes from visibility. To make change as a leader, you must get out there and be visible to your community.

You must be a mentor in action and in principle.

When leaders like Robert F. Smith show up—both within their organizations and within their communities—they’re effectively ushering in a new era of management.

An era sprung from Peter Drucker’s Management as a Liberal Art philosophies.

The answer rings clear.

Effective leaders must strive to put people first. To position people and community above profits. A model that not only promotes a better society. But better business, and more innovative solutions.

Build Your Strengths into Success

Wed, 13 Dec 2023 22:13:00 GMT

Peter Drucker wrote that though most people think they know their strengths, they are almost invariably wrong. Yet building on strength is of great importance. Focusing on a minor strength and missing a major one or spending too much time in eliminating a weakness which is unimportant and irrelevant can cause us – in the common vernacular – “to miss our calling” or at least to miss the opportunities in many situations which lead to success.

How to Positively Identify Your Strengths

Drucker said there was only one way to identify your strengths. He called it “feedback analysis.” He said that in a short time you would be able to identify your own specific strengths. Moreover he promised that you’d be surprised to discover what your strengths actually are by using his methods.

Drucker’s methodology was simple. Whenever you must take an important action or make a major decision, write down the outcome that you expect from the action or decision you have made. When whatever results are achieved, compare them with those you had expected and wrote down. If expected and actual results are the same or close, you have a definite strength and you should exploit it and even make it stronger. This system works because you will almost always, be able to predict an outcome accurately if you demonstrate a strength in performing this action. Continue to do this when you perform similar actions and after awhile a clear picture confirming your strengths will emerge.

Obtaining Confirmed Knowledge Regarding Your Strengths with This Method

Drucker maintained that this knowledge which he termed “action conclusions” would result in your determining your real strengths. Drucker identified potential action conclusions you should look for that lead to success. Here are a few.

1. Your strengths achieved something spectacular which was unexpected and greater than your already developed skills in another field.

Beautiful and well-known movie actress of the 1930s and 1940s, Hedy Lamarr, was born in Vienna, Austria. Her real name was Hedwig Eva Maria Kiesler. She had fled to Hollywood to escape the Nazis. She made lots of films both in the U.S. and Europe. However, Ms. Lamarr discovered that she was also a math prodigy. She became co-inventor of wireless technology used in both Bluetooth and the cell phone. She was even inducted into the U.S. National Inventors Hall of Fame in 2014.

Ms. Lamarr made 32 films, one of which won several Academy Awards. However, her considerable technical abilities and the technology she invented was amazing and won her as much fame as a scientist as her acting abilities on the Silver Screen. Only she would be able to answer the question as to whether she chose wisely in spending time in science over acting, but the results she achieved in a career as a scientist were considerable. It is estimated that her invention of what became known as “frequency hopping” was worth $30 billion, and it helped the U.S. in the Second World War. Her technical work was also the foundation of modern-day WiFi, GPS, and Bluetooth communication systems.

2. Strengthen your strengths

Steve Jobs didn’t turn his computer genius and imagination into party games. Many do. He surpassed computer games and his imagination, business and leadership abilities gave computers more and more capabilities. He never stopped . . and his abilities did much in starting a new industry.

3. Avoid intellectual arrogance.

Drucker warned that overwhelming knowledge in only one area to the exclusion of all else psychologically sometimes blocked intellectual developments in other areas. Drucker said such people with unknown strength in many fields frequently demonstrated limited performance in only one field because they excluded knowledge from other fields needed to supplement little used strengths which they never exploited.

4. Remedy your shortcomings or bad habits.

If you have serious problems, fix them. If your best work isn’t done because you have drinking problem, don’t drink. Or if being out of shape and overweight limits your success, take the actions you need to put things right.

5. Social skills may be more important than you think.

How many bright, knowledgable people fail to achive what they can because they ignore simple social graces? Drucker called manners the “lubricating oil” necessary for best practice and needed for getting the full support of others in your activities. Don’t ignore them!

6. Don’t take on assignments for which you are not yet competent or qualified.

Don’t act as a Chinese interpreter unless you speak and understand Chinese. A no-brainer? Yes, yet how many ambitious managers without the requisite knowledge or experience use office politics to get ahead by going after every opportunity, ready or not. They may succeed in getting a good job, but their incomplete knowledge or experience frequently result in less success than they might have attained. They often move ahead less rapidly than if they were better qualified or develped abilities they should have attained first.

7. Don’t waste time and effort raising your performance in areas

which do not give you a significant advantage. Jack Welch grew GE 4000% during his tenure as CEO not by squeezing small change out of every profitable business, but by selling off or closing every GE business, including those that were profitable, but for any reason could not become number one or two in its industry.

8. Use your imagination and dream. Prepare, and then take action.

I was fortunate enough to meet and become friends with world-famous entrepreneur. E. Joseph Cossman. He was the inventor and promoter of Cossman “Ant Farms” and many other unique toys and gadgets from which he made a fortune. Like thousands of others, he entered the Army for World War II. With no college education and working in whatever job he could during the Great Depression which preceeded the war, he was assigned a job in the Army based on abilities but limited experience.

This experience, his imagination and dreams of getting in business was all he had when the war was over and he was discharged. However, he took a course in writing to prepare himself for getting a job in the import-export field. On discharge he wrote and prepared a brochure addressed to companies in his hometown area that were engaged in world trade.

His competitors for a job in world trade potentially were as many as 16 million fellow veterans, if that many were looking for jobs in world trade. However, I think you will agree that that the following description of himself was totally unique, even if competitors seeking a similar job in world trade had attended one of the conutry’s best business schools. No one else wrote anything like this:

DO YOU WANT 180 LBS OF RAW MATERIAL?

Now ready for civilian service

RELEASED BY THE ARMY ONLY TWO WEEKS AGO

Ambitious – Able – Capable

THIS ITEM COMES IN ONE-SIX-FOOT LENGTH

and has been

SEASONED FOR TWENTY – EIGHT YEARS!

Operating expenses shared by

G.I. BILL OF RIGHTS

No Strings Attached

NO OBLIGATION TO YOU!

You can get immediate delivery

MAIL ENCLOSED FOR FREE INSPECTION!

Thank You!

Needless to say, Cossman was soon hired and it was only one year before he began his first successful business venture exporting a unexciting product in short supply in Europe and Asia at the time - laundry soap! I liked this short ad that he wrote so much that I asked him to include it in a book we did together called Making It!, published in 1994 by Simon and Schuster.

References

A Class with Drucker: The Lost Lessons of the World’s Greatest Management Teacher by William A. Cohen (AMACOM, 2008)

Making It! by E.Joseph Cossman and William A. Cohen (Simon and Schuster, 1994)

Peter Drucker’s Way to the Top: Lessons for Reaching Your Life Goals by William Cohen (LID, 2019).

How I Made $1,000,000 in Mail Order – and you can too! By E. Joseph Cossman (Simon and Schuster, 1963,1984).

Peter Drucker's Perspective on Recent AI Developments: Exploring the Negative Views

Wed, 13 Dec 2023 22:04:00 GMT

In my previous blog post , I engaged in a creative exercise to envision Peter Drucker’s viewpoints about the benefits of artificial intelligence (AI). In that post, I explored how Drucker would have viewed the importance of AI for enhancing effectiveness, efficiency, strategic focus, and creativity. I also highlighted that he would have probably advocated a symbiotic approach to decision-making where AI is used for complementing and augmenting human decision-making.

In this post, I would like to envision Drucker’s possible viewpoints about the problems or hurdles associated with AI use in organizations. What negative views could have Drucker potentially expressed if he provided such commentary on using AI in organizations?

I would like to remind readers that while Drucker have mentioned the term “Artificial intelligence” in his work (in “Managing for the Future” & “The Ecological Vision”), his definition of AI and the role he considered for machines (e.g., computers) in decision-making was limited by the technological capabilities of that time. In my posts, I have tried to explore Drucker’s view beyond those limitations.

AI and Problems in Decision-Making

As discussed in my previous post, Drucker’s reference to computers as “morons” might not be entirely accurate today in the world of effective generative and predictive AI models. However, one aspect of his criticism of computers, or their use for analysis, stays valid even in the age of advanced AI algorithms. AI tools and algorithms are developed by humans and are trained on available data. Thus, AI tools are only as accurate as the available data they are trained on. AI algorithms such as machine learning can exemplify the notion of “garbage-in, garbage-out” if trained on inaccurate, biased, or incomplete data. In addition, when data is not available or when the decision environment is entirely volatile, uncertain, and unpredictable such that data from the past is not relevant, intuitive decision making can generate better outcomes than data-driven analysis. Therefore, delegating the entire decision process to an AI system would be problematic, especially in complex environments where the accuracy and integrity of data are not guaranteed. I believe that Drucker would have also pushed back against the lousy use of these tools. In this sense, computers can still be considered morons!

Ethical Concerns Due to Lack of Human Judgment

Drucker placed a significant emphasis on human judgment in decision-making processes. He believed that effective management requires value-based judgment and ethical decision-making, qualities he considered uniquely human. Drucker would have been concerned about AI systems lacking the ability to understand complex human contexts, leading to potentially flawed (e.g., biased) decision-making processes. Indeed, Drucker viewed technology as a double-edged sword that can be used for good or evil. Drucker emphasized that technological knowledge requires responsibility, and innovation needs to serve society. In one of his books, The First Technological Revolution and Its Lessons, he wrote that “… a time of true technological revolution is not a time for exultation. It is not a time for despair either. It is a time for work and for responsibility" (Drucker, 1965).

Job Displacement and Inequality

Drucker was concerned about social inequality and believed that management, as a discipline, had a significant role in addressing societal issues. He wrote a lot about industrial workers and the challenges they had to face because of automation. With AI potentially concentrating wealth and power in the hands of a few, he would be similarly concerned about the dangers of widening the social gap through job displacements or wage gaps. For example, AI could replace many of the knowledge workers in the same way that automation replaced many of the industrial workers and created long-lasting societal and political challenges.

Drucker would have also advocated for policies or regulations that promote equitable distribution of the benefits of AI technologies, ensuring that the advancements benefit society. To avoid massive job displacement due to AI advancements, he would probably suggest technological training for all workers. He was a strong advocate of "lifelong learning" and "continuous learning" to keep up with advancing technological change.

Overreliance on AI

Drucker viewed technology as a methodology for work. He advocated for the thoughtful use of technology in organizations, focusing on how it aligns with human goals and values while improving productivity. This perspective implies a concern about overreliance on technology without a sufficient understanding of its possible negative implications. Drucker’s general philosophy on technology and management suggests that he would have been cautious about organizations and societies becoming overly dependent on AI. Drucker had written about concerns regarding workers being the "slave to the machine" in the era of automation.

Similarly, Drucker might have been concerned that an overreliance on AI for various tasks could diminish the use of creative thinking, hindering innovative problem-solving. However, this is an area where AI is supposed to help if it is used as a complement (not a replacement) to human thinking and judgment. As an example, recent advances in generative AI (e.g., ChatGPT) can be used to build on or enhance human imagination and thinking if it is used to complement human thinking for idea generation.

Concluding Remarks

In my two blog posts about Drucker and AI, I tried to bring parallels from Drucker’s writings about innovation, performance, and technology to demonstrate how Drucker’s existing body of work can contribute to discussing the benefits or challenges of artificial intelligence. This way, I showcased the consistency of his principles and the relevance of his ideas to contemporary technological challenges.

Overall, and based on what I have communicated in my two blog posts on the subject, I believe that a human-AI collaboration framework in which AI is viewed to augment human judgment instead of replacing it would be in line with what Peter Drucker would advocate for if he had to take a position on AI use in organizations. Indeed, the human-AI augmentation paradigm itself must address many other important questions, such as the division of responsibility between machines and humans, that warrant dedicated discussions beyond the scope of this blog post.

Peter Drucker’s Most Frequent Comment

Fri, 17 Nov 2023 22:32:00 GMT

Drucker said and wrote so much that was wise, profound, valuable, and witty that he may have more quotes attributed to him than any other management thinker of modern times. However, the most frequent comment he made during my acquaintance with him was “What everyone knows is usually wrong.” His continued use of this phrase clearly meant that he not only believed it strongly, but considered it important. Yet until I wrote it in my first book about Drucker, A Class with Drucker, I never saw it in print.

Drucker was Right

Through repetition I finally began to think more deeply about what his words really meant. This simple statement is not only true; it is immensely valuable in a variety of instances, especially now when various questionable comments are expressed as fact on TV and elsewhere. What Drucker wanted to emphasize was that we must always question all assumptions no matter from where they originate or how obvious they may first appear. This is especially true regarding anything that a majority of people “know” or assume without analysis or further questioning. This “knowledge” should always be suspect and needs to be examined much more closely, because in a surprisingly high percentage of cases, the information “known to be true” will turn out to be only partially true, inaccurate, or a complete falsehood. This is especially true during a war when one side or another may falsify information to put themselves in a more favorable light, and their adversary in a poor one. If you can get many people to announce something as fact repeatedly, many will believe it because “everyone knows it to be true.”

The current war which Israel is fighting with Hamas terrorists is an example. Hamas terrorists attacked an Israeli group of several thousand partying men, women, and children in a peace celebration without warning, shooting parents in front of their children, raping women, even murdering children by beheading, burning others alive and taking over 200 hostages. We know this to be true, and not only from survivors because Hamas filmed these actions themselves, thinking to intimidate Israelis and others and so released the films of their actions to be shown to the world.

Hamas later announced that Israel had intentionally bombed a major hospital causing hundreds of deaths. The Israelis denied this. They said that likely an errant rocket fired by the Palestinian terrorist group the Islamic Jihad had fallen short and caused the hospital explosion. This was confirmed several days later after U.S. experts and others had examined the data. However, many countries and even many entities in the U.S. including students and professors at prominent universities believed this false information, repeated it, and demonstrated in favor of the terrorists and the false information quickly spread around the world with most never waiting for the results of a close examination of the facts by other parties. By the time the truth of Israel’s complete innocence was known definitively, “everyone knew” that Israel was guilty even though that was false.

I s What Everyone Knows Usually, Sometimes, or Never Wrong?

Of course there are many old “truisms” once thought by everyone to be true, which we laugh at today. “The world is flat” or “The earth is the center of the universe” are typical. If you publicly doubted some of these false facts which “everyone knew” in past centuries, you could be sent to prison or burned as a witch. Many were. The French heroine Joan of Arc is a well-known example.

The ancient Greeks knew that everything was made up of only four elements: earth, air, fire, and water. I don’t think that you got imprisoned or killed for believing otherwise, but you were at the very least thought ignorant.

In modern times we learned that these views were mistaken. When I took chemistry in high school, I learned that a Periodic Table of Elements had been formulated by the Russian chemist and inventor, Mendeleev and that it had been established that there were exactly 93 elements which were arranged by atomic mass. You got an “A” if we could name them all. Had we proposed that there could be more, I am certain that we would have been immediately corrected by our teachers. In the words of Richard Rodgers and Oscar Hammerstein in Oklahoma, things “had gone about as far as they could go.” Today, there are 102 elements, maybe even more --- I didn’t check this morning. And they forgot to tell is that Mendeleev had only envisioned 63 elements . . . the other thirty hadn’t been discovered yet in his time.

Elementary, my dear Watson

For over sixty years we’ve seen a lot in the movies or TV regarding Arthur Conan Doyle’s famous detective, Sherlock Holmes. Everyone knows Sherlock’s most famous utterance was a sentence consisting of only the four words, “ Elementary, my dear Watson .” Everyone knows that the famous detective would respond with these words on Dr. Watson’s surprise at a particularly shrewd and unexpected deduction made by Holmes. Maybe everyone knows this, but everyone is wrong. As pointed out by Paul F. Boller, Jr. and John George in their book, They Never Said It (Oxford University Press, 1989), Holmes didn’t utter the immortal words in a single instance in anything ever written by Doyle, not in any of Doyle’s four published novels and fifty-six short stories about the adventures of Sherlock Holmes and his side-kick and physician friend, Dr. John H. Watson. Wherever then did people ever come up with such universally believed, but incorrect bit of knowledge? If not Doyle’s literary character, who did utter these immortal words? It was the English actor, Basil Rathbone playing the part of Sherlock Holmes in Hollywood movies that responded with the famous sentence, not Doyle’s character in anything he ever wrote. These words seemed to fit the character of Holmes perfectly in those days on the silver screen, and though not emanating from Doyle’s creation, it became a known “fact” that it did.

Analyze Every Assumption

Many years ago, I was involved in the selection of one of two designs for a new aircraft from two different companies for the Air Force. The companies were The Boeing Aircraft Company and McDonnell-Douglas Aircraft Company. Those who know this industry also know that the former company eventually acquired the latter, but this has nothing to do with my story here. Both companies proposed modifying one of their standard airline designs, which was already in production and in use.

Periodically we would meet with each aircraft company’s design team individually to assess progress on each company’s proposals, the acceptance of which would be worth hundreds of millions of dollars to the winning contractor.

On one occasion we met to discuss ways in which we might lower the cost of each aircraft. The suggestion came from the McDonnell-Douglas manager (although, getting ahead of my story, it was the other contractor who ultimately won the contract). He said: “You can save several million dollars for each aircraft produced if you will allow us to deviate on the size of the escape hatch by about two inches. That would be the standard size of the hatch of current airliners. They successfully passed all FAA tests with no problems.” I promised to look into his request as it could save a lot of money.

Is the Source Valid?

Both reliability and validity are concepts that come from testing. The validity of a test tells us how well the test measures what it is supposed to measure. It is a judgment based on evidence about the appropriateness of inferences drawn from test scores. But we’re not looking at test scores here, we’re looking at assumptions. So where did this specification in the aircraft design handbook come from? Knowing that source could help me decide whether this specification was valid for the aircraft we now wanted to build. We still hadn’t located the original source for this information.

So, I looked further. I knew that every specification in the aircraft design handbook was referenced as to where it came from and what it was based on. Making this a requirement was good thinking. Usually, they were based on the original tests performed. I asked the engineer to do the necessary research to find out what tests this design specification was based on and when they were accomplished. Surprise, surprise, this specification was based on an aircraft test done with propeller-driven aircraft almost thirty years earlier. That aircraft traveled at about 120 miles per hour. The aircraft we were working on traveled at about 500 miles per hour. Obviously, in this instance, the design specification was not valid. We turned it over to one of our aeronautical designers. He advised us to forget what everyone knew (the design handbook) and the two inches at the air speeds we were anticipating for an emergency bailout would make no difference at all. We took his advice and saved the money. We need to do this with all claims that come with no proof other than “everybody knows.”

What is Effective Leadership?

Fri, 03 Nov 2023 17:16:00 GMT

In a recent conference for economists someone from the audience asked the panel of presenters: “What is the role of a leader in shaping policy?” The panel reflected in silence, and after a couple of minutes offered: “Leaders inspire others. They set the direction and people follow.” This interaction drove me to think about the meaning of effective leadership, and about the actions and behaviors that help set a direction and inspire others to follow.

In my interactions with people across different organizations, I have found that those individuals who others perceive as ‘leaders’ are motivated by the notion of serving a higher purpose and advancing a mission that makes a difference in the lives of others. These ‘leaders’ are committed to the pursuit of goals that ultimately will improve the lives of their customers, employees, investors, suppliers, and other stakeholders.

Over the years, I have found that it is the human touch that ignites, fuels, and facilitates growth and creativity. To foster an innovative, creative, and high-performance environment, the effective leader has that human touch and provides people with opportunities to acquire knowledge, use divergent thinking, and contribute ideas. The leader motivates and inspires other to think creatively, contribute to the enterprise, and develop their full potential by caring about them and allowing them to be their authentic selves.

An effective leader builds people and motivates them to contribute to a worthwhile higher purpose by granting them freedom to express their views and remain genuine. Before a leader can inspire others to commit to an organizational mission, people must feel like they matter and that the organization appreciates them for who they are. James MacGregor Burns speaks of a transforming leadership style, which converts followers into leaders and leaders into moral agents who have the ability to produce social change. But it is important to indicate that people will not follow unless they feel like their opinions and actions matter, and that they are treated with respect and dignity.

A few managers I have encountered throughout my career have utilized a transactional approach to leadership. This type of relationship can yield conformity and often reduces productivity because individuals are discouraged from exerting greater effort. Consequently, under these circumstances, employees feel motivated to only give enough to meet baseline expectations, but never to give more. Recognizing this, effective leaders make attempts to encourage people to contribute and not be simply satisfied with an exchange of work for pay. Effective leaders seek to foster an environment that encourages freedom of thought and that allows the individual to express their views openly, which ultimately is more valuable to the organization and beneficial to the individual whose voice is heard.

Effective leaders seek to transform the organization into a high-performance enterprise that pursues a mission while providing meaning to those involved with the organization. Leaders realize the importance of leveraging employees’ hearts and minds and, as such, enable their people to build on their skills and use divergent thinking in decision-making. Leaders support the ongoing development of people so that they can strive toward continuous growth. Creating this environment requires commitment, trust, fairness, compassion, and respect for the individual. To foster this environment that cultivates engagement, participation and creativity, leaders encourage people to develop their skills and take on greater responsibilities. Effective leaders use transformational leadership as a tool for building people into outstanding leaders. And building leaders can yield great opportunities for future innovation.

People must be encouraged and allowed to contribute ideas that will enrich discussion and enhance the decision-making process. Leaders also understand the importance of motivating people to take intelligent risks. Hence, it is important that the organization consider approaches to better inform and train its people so that when people take risks and make decisions, they will be better informed about the issue and able to leverage different tools and skills.

Leaders understand the significance of fostering an environment that inspires and excites people with the notion that they can accomplish great things. Effective leaders encourage others to speak up and empower them to enhance ‘the existing’ for the betterment of the organization. Leaders invite people to share their perspective which are discussed and challenged with the intent of building more robust and comprehensive initiatives for improving the organization. This is consistent with Jim Collins’ findings pertaining the value of engaging in dialogue and debate, not coercion, as good-to-great companies use discussion not only to get ‘buy-in’, but to find the best decision.

Effective leaders realize that in order to find creative solutions to organizational challenges we must create a safe space for suggestions while welcoming divergent opinions. Effective leaders see the value of not discouraging people from challenging the status quo. After all, maintaining the status quo for the sake of not disrupting the way we have always done things, is inconsistent with the notion of balancing change and continuity. Organizations must evolve and move through a process of creative destruction, and if they do not, they will ultimately perish. Hence, why it is so important to leverage people and allow them to contribute ideas and opinions. Doing so can help motivate people and advance the organization’s mission of making a difference in society.

References

Burns, James MacGregor. Leadership. Harper & Row, 1978.

Collins, Jim. Good to Great. Random House Business Books, 2001.

With Heart, You Can Lift a 1000 Pound Cow or Defeat 61 Enemy Planes in Aerial Combat even if Blind in One Eye

Fri, 06 Oct 2023 22:56:00 GMT

Drucker wrote: “Living in fear of loss of job and income is incompatible with taking responsibility for job and work group, for output and performance.” But how can you avoid fear of job loss and loss of income when both are real possibilities in your situation?

A highly successful Broadway musical of the 1950’s, Damn Yankees, suggested that winning was always possible with “heart.” This blockbuster was based on a book The Year the Yankees Lost the Pennant , by Douglas Wallop. In this book, a fictitious Yankees team, dominated major league baseball . It was challenged by another fictitious, but less successful Washington, DC team. A song in the Broadway musical promoted “heart” as more important than baseball skill.

Here’s the song as performed in the musical:

https://www.bing.com/videos/riverview/relatedvideo?q=+You+Gotta+Have+Heart+-+Song+by+Richard+Adler+and+Jerry+Ross&mid=9ED399B3FDACF88E68A19ED399B3FDACF88E68A1

The Washington team eventually beat the “unbeatable” Yankees.

Drucker’s Analysis

You must acquire any traits yourself before you can instill them in others. Drucker knew only one sure way to acquire heart and the self-confidence that resulted.

Everyone starts out in life having to accomplish some difficult acts in infancy. Yet as adults they are not remembered as being difficult or even think of them as much of a challenge today.

Unless you have an injury which you haven’t yet overcome, there is no longer any doubt that when you stand, advance one leg and then another, that you are going to move forward, and when you open your mouth, you can communicate easily. Those who have impairment of these skills usually learn to accomplish them again. Even with the most serious disabilities, most overcome these limitations even with artificial limbs.

Adults have a right to expect to be able to learn and succeed with complex and challenging tasks. But they may not be successful for one of two reasons. Either he or she has been unsuccessful at similar tasks or projects in the past or has never tried to accomplish the tasks at all previously. Those who have never tried a task at which they don’t expect to succeed frequently haven’t tried because they feel that they would fail if they did try. But I know they can do them because they’ve already accomplished more challenging tasks years ago by just learning to walk and talk.

Learning to Crawl First

How many infants have you heard of that simply hopped out of their cribs and began to walk and run? I haven’t heard of any. The typical sequence is that an infant learns to roll over, begins to crawl, gains self-confidence enough to stand up, gains a little more self-confidence and without instruction takes a step and falls. But the infant knows that it made a start and will eventually succeed. Usually, the parents are are full of praise and cheer enthusiastically even though the infant may not have managed to take a single successful step. . The attempt is certainly not thought of as a failure, but rather an uncompleted effort, and the infant eagerly tries again. If he or she doesn’t grow up to run a four minute mile, at least running is mastered along with walking.

This illustrates one fact as to why some, including experienced executives, sometimes lack self-confidence to accomplish new things, which aren’t as demanding these early essentials. An infant learning a task frequently has cheering supporters. But even if it didn’t, who’s to say that the first step, even with falling, was a bad attempt? However, as we get older, some others are more judgmental and a few involved may even hope we fail! They criticize us if we make a single mistake. They are not encouraging like our parents as we learned to walk. As a result, we get the idea that it was not a good attempt no matter what the results. It took my youngest son, today a highly successful management consultant and investor, almost two years to learn to talk. I wasn’t worried. I knew that he had heart, and it took Einstein almost four years to master speech!

Gain Self-Confidence through Experience as You “Pay Your Dues”

Many of us eventually become successful almost automatically and there is nothing wrong with this, except that it is usually a longer process. Basically, you enter your work or profession, do what you are told, work hard, exert effort and are eventually promoted. Some call this “paying your dues.” Your efforts are eventually recognized and rewarded. As you progress, you gain self-confidence. However, with this method you are subject to fate and what tasks are assigned. You usually advance and reach some of your goals eventually, but there is a better way which is more efficient and certain.

Take Charge of Your Own Confidence Building

If you have heart and decide to voluntarily take on challenging goals in your own areas of interest, it is much faster than the previous method and you have more control. It is based on the principle of your taking charge and deciding on your own progress and development. This takes heart. You can develop just about anything, physical or mental, by beginning with a small challenge and intentionally building confidence over time as you progress with self-selected challenges toward a goal you want to achieve. It is related to the slower, “pay your dues” method but it is much easier, less risky and you are guaranteed results since you are not dependent on someone else’s requirements. You decide what you want to do, how often, and when.

British WWI flying ace Major “Mick” Mannock shot down 61 planes in aerial combat during his time as an aviator. Unknown to his enemies and medical experts that qualified him for flying, due to an injury, he was partially blind in his left eye. But this didn’t stop him.

How did Mannock succeed? He proceeded purposefully toward goals that he set for himself despite his handicap. In Japan this process is known as “kaizen.”

Drucker noted that: “Every artist throughout history has practiced ‘kaizen’.” You will be a top producer if you pick your own goals for your development and if you work on developing these talents further.” If you want to get physically strong, exercise your muscles every day, and every day they’ll grow bigger, and your strength will increase.

Arnold Schwarzenegger didn’t start out with those powerful muscles that led to his winning bodybuilding championships and eventually to becoming the top paid actor in Hollywood and then Governor of California. By exercising with increasingly heavy weights, his muscles got larger and stronger until eventually he was world champion.

In bodybuilding, this didn’t start with Arnold. Milo of Croton was a champion Greek athlete and Olympic competitor in the 6 ^th century B.C. He participated in six Olympic games four years apart. Before the first, he began an exercise which brought him strength, self-confidence, and eventual fame throughout the ancient world. Milo lifted and carried a newborn calf weighing about 80 pounds. He continued every day for four years before the Olympics began. By the Olympics started, the calf was a full-grown cow weighing 1000 pounds. Milo carried the cow the length of the Olympic stadium, creating a spectacle which not only demonstrated his strength and self-confidence, but discomforted his competitors and created a psychological advantage.

Though the calf weighed only 80 pounds when he started, when he carried the same calf four years later, it had grown into a 1000 pound cow. Milo’s feat was noted in several books written about him during his lifetime.

Now I’m not suggesting that you begin lifting a calf which will become a fully grown cow to develop your self-confidence, although this would undoubtedly do the job. But the principle works for other accomplishments in your own field. All you need to do is to make the decision and begin to set goals in an area of your interest, and then to do them. Select an easy goal to begin and proceed as you successively accomplish more difficult goals. Every time you complete one, congratulate yourself. Your heart and self-confidence are taking you to success.

This is how Arnold trained with weights. He increased their poundage as the calf increased body weight. Arnold further increased the difficulty of the exercises as his muscles and strength developed. Because he had heart, his ability and capability as well as his confidence increased and like Milo, Schwarzenegger eventually did things that others, maybe even he, never thought he could do when he started. If you follow his plan, you too will have acquired the strength and self-confidence you need to succeed in whatever you desire, and like Governor Schwarzenegger, Milo of Croton, Major Mannock in World War One, and many others, this can take you to great levels of success in whatever your interest or occupation.

* Adapted from Peter Drucker’s Way to the Top, by William A. Cohen, (LID, 2019).

Next Steps in AI, Mobility and Sustainable Nearshoring

Fri, 22 Sep 2023 00:14:00 GMT

Photo: Mexican Industrial Chambers and federal authorities, among others: Alex Theissen, President of the ANTP; Alejandro Malagón, Secretary General of CONCAMIN; and Jose Abugaber, National President of CONCAMIN.

Last week I had the pleasure and honor of participating in the National Freight Transport Forum of the National Association of Private Transport (ANTP), a Mexican corporation that groups and represents companies that produce cargo. The Forum had a concept that I really liked, as it integrated "transforming logistics and freight transport for the commercial challenge," focusing on human capital, nearshoring and artificial intelligence, "AI."

The challenge and central point is to have our own fleet or to be providers of goods transfer (transport) services, where we seek to contribute to the integral development of cargo transport systems and their environment, so that they are competitive and sustainable. The focus of the conversation was how to ensure that a means to provoke a sustainable link is found throughout the chain to promote electric transport within multiple initiatives, operational efficiencies, optimizing and reducing in all possible ways the emissions that are caused by moving a product from one point to another, and how the electrification of transport plays an important role in achieving the objectives of decarbonization of the economy.

In my case, this is the third time that I have participated in the 23 years that the Forum has been held, and I remember that from day one it positively featured a panel that made me connect with many issues on which we have to move faster, as it evokes the use of AI applied to efficiency in mobility, where although the technology has been available for years, there is no progress in its implementation. The manufacturers of heavy goods vehicles agreed that the incorporation of AI solutions in the units would be beneficial, since it accompanies the operator from the cabin and detects actions that could threaten their safety. I have had the opportunity to test the technology firsthand on test tracks and what already exists on the market is impressive—literally in times of danger the unit takes control to protect everyone.

During the Forum, the ANTP asked the authorities to remove cargo trucks that are more than 20 years old from circulation, seeking to make the transfer of goods more efficient and profitable. Let's just take into account one shocking fact: 20 trucks over 20-25 years old pollute as much as 1 single truck, but with recent technology, said data was a focal point to emphasize urgently moving forward in a program of staggered change of units, thus seeking to progress more quickly.

Strengthening logistics and digitalization are pressing needs in the era of sustainable nearshoring, where the urgency of strengthening Mexico's logistics chain and the adoption of technologies to perform processes in the sector more efficiently is placed at the center of the agenda; we have a great moment to take advantage of when considering the MUCH lower footprint in the comparative supply of Mexico vs. Asia, but we must recognize that we have expensive logistics, which complicates the implementation of nearshoring on a large scale.

In human capital, examples were presented where programs were initiated to recruit more and more female drivers of units, where it is urgent to make greater progress in the numbers and percentage of women participating in the sector, accompanied by more training for greater efficiency in the management of the unit, along with safety, which always comes first.

In terms of technology leveraged predictive maintenance, it will be essential to optimize the entire process and proper functioning of the units we have in Mexico; state-of-the-art technology and impressive announcements of new electric vehicle charging fleets should not be discarded.

According to the industry leaders who presented the breakthroughs, it will be critical to prepare for what's to come:

· Modernizing the fleet.

· Identifying the type of uses they may adopt first (based on kilometers traveled, type of routes, cargo, etc.).

· Performing pilot tests to adapt the availability of vehicles with the type of operations (especially in terms of autonomy and yields).

· Being essentially “early adopters” in AI in transport.

As I get to know the industry more closely, beyond my position in the plants that I had the opportunity to enjoy for more than 10 years, within coordinating the production and logistics control of steel and aluminum can plants from Baja California, now the advances must be supported with intense training of human capital and sustainable nearshoring. This includes the border states that already have everything ready to go, but many more states and regions of Mexico must capitalize on this hand in hand with the AI, optimizing loads, closing travel circle and above all, taking advantage of Mexican talent and ingenuity, all of which combined will provide the conditions to really see exponential sustainable growth in the region.

In the equation we have experts in mobility, AI and proximity to the most important markets on the planet, now we just need to add more sectors so that it becomes sustainable mobility and expand the use of green technologies, increase electric charging points, and adopt more technologies that we require for different transport routes, such as land, air and sea: In Mexico we can become leaders in all areas of sustainable integral mobility!

Reference sources:

· El Vigia: https://www.elvigia.net/columnas/2023/7/14/siguientes-pasos-en-ia-movilidad-nearshoring-sostenible-421744.html

· Mundo Ejecutivo: https://mundoejecutivo.com.mx/opinion/siguientes-pasos-en-ia-movilidad-y-nearshoring-sostenible/

· Wokii News: https://wokii.com/inteligencia-artificial-ia-movilidad-y-nearshoring-sostenible/

· Empresability: https://movimientors.ning.com/acciones-sostenibles/siguientes-pasos-en-ia-movilidad-y-nearshoring-sostenible?xg_source=linkedin

· El Capitalino: https://elcapitalino.mx/opinion/acciones-sostenibles/siguientes-pasos-en-ia-movilidad-y-nearshoring-sostenible/

How to Lead Change

Mon, 04 Sep 2023 17:50:00 GMT

Drucker said that the best way to deal with change was NOT to manage it, but to lead it. To do this the leader of any organization has to have a system in place whereby needed changes are identified, reviewed, and adopted periodically.

Drucker maintained that any business had two important functions: innovation and marketing. The two must operate together. Moreover, he noted that any change is an innovation, if only to that organization or the user. After the innovation is created it must be accepted by those who receive, implement, and use it and therefore it must be marketed to them effectively and early in the process. Note that both of Drucker’s primary business functions, innovation and marketing, are critical in leading change.

Successful Change Leader

The introduction of a new product is a change. Entrepreneur E. Joseph Cossman isn’t well-known today, but he was an unbelievably productive innovator who created so many winning new products that it was a miracle that he found the time and resources to pursue them all. Still, he exploited most of them successfully. He also followed a different sequence of his education. He became successful in business first, and then attended college first for an undergraduate business degree and then after he was well established for an MBA. Then he wrote a bestselling book, How I Made a Million Dollars in Mail Order which reportedly sold over 1,000,000 copies.

Most of his new products made money every time he introduced one. Moreover, he worked alone and never sought to head a large corporation. A few of his products failed, but there was no question that his success average, as well as his productivity, were both excellent and that made him an expert as an innovator and change leader in his chosen field. For example, the Cossman “Ant Farm” was a hugely successful innovation and is still being sold.

The 19 ^th Century Toy that was an Innovation in the 20 ^th Century

Cossman’s “ant farm” sold in the millions and is still selling. One was bought by President Kennedy for his daughter, Caroline. The idea of re-developing a 19 ^th century toy for children based on an ant colony, with the correct kind of dirt the ants needed for their living environment and using a wooden framework of about twelve inches by twelve inches surrounded by clear panes of glass was hardly new. It had been around for a long time. Observers could watch all the activities of the ants living their lives by looking through clear windows on a thin, picture-frame box was not new either. This basic concept had been around for eighty years or more when Cossman introduced his innovation called an “ant farm” as a child’s toy and that was a major change and was new. However, that’s only where his innovation started. The old version never attempted to create a mass market as a toy for children because the window panes permitting observation of the colony’s activities were constructed from glass and were an obvious hazard as the glass could easily break and made the toy dangerous for the owner or other observers.

Although the original ant colony concept worked when used under the supervision of a teacher in a classroom, before Cossman it could not be sold as a child’s toy, and not only because of the danger of the glass breaking. Unfortunately, the glass-wood interface was not perfect, and the ants frequently escaped in the classroom, much to the dismay of both teachers and their students. Parents would have been even less enthusiastic about this characteristic if it had been a simple child’s toy.

Not only was Cossman’s “ant farm” intended as an educational toy for children at home, but it was also made a safe toy by Cossman’s changes. Cossman replaced the wooden frame and glass with clear plastic. That made it lighter, unbreakable under normal use, and safe for children and more secure regarding the ants’ ability to escape. As a bonus, it was much less expensive to manufacture. However, even the name selected for the toy, “ant farm” was unique, provocative, and promoted increased sales. His distribution system for the ants was logical but even unique, and it was brilliant. Cossman sold every ant farm with a “livestock certificate.” It was packaged with the toy and was sent to Cossman by the buyer after purchasing the product. Cossman guaranteed live delivery of the “livestock” to populate the farm on receipt of a certificate.

So effective were these innovations, that the “ant farm” was an immediate success and more than sixty years after Cossman’s introduction, the product is still being sold today.

Drucker’s System for Leading Change was Unique Too

Drucker told us that preferably we must take the initiative to introduce change before a competitor, or a change mandated by higher authority in our own organization forced us to act. He even recommended modifying the organization so that new changes proposed were recognized by everyone in the organization was prepared for them from the start, beginning with reviewing the need for all changes on an ongoing basis.

Opportunities for change or new products may occur in many ways. These might include:

1. Unexpected successes and failures, both our own and that of others

2. Occurrences that have had unexpected results

3. Emergencies Situations

4. Changes in industry or market structures

5. Changes in demographics

6. Changes in meaning and perceptions of a product

7. Actions by one or more competitors

8. New knowledge

Drucker found that its not necessarily the size of the change that is most important, but the advantage created by the change. Moreover, Drucker told us what we should avoid and how we should approach innovation to build and maintain the success of our organizations with a continual stream of new ideas.

He also recommended specific ways to approach innovation that were new and that most other institutions were not following.

· For example, a review board was established. It met frequently and periodically to review proposed new ideas and the need for them and other changes.

· A review of the budget needed for the innovation was established at the first meeting as was a tentative strategy to be followed for the innovation’s development and its introduction.

· Potential problems that could occur due to the introduction of the innovation along with their potential solutions were identified before the decision was made to proceed.

· The plan as to how the change or product would be developed over time was also begun early.

Because products and procedures currently in use would be affected, what would be done about them were also identified. Most importantly the effect that proposed changes would have on people in the company and subordinate company organizations were also identified with solutions to the problem.

This important step was needed because a major factor that is frequently overlooked was the necessity of discontinuing existing organizations, products or functions in our companies that had been part of successful products or procedures in the past and which would be replaced by what we propose to interduce, especially if the current product, methods, or whatever are still working and may even still be profitable.

This problem occurs because many in our organization will still be committed to the old way or old products, especially if they are still profitable and individuals involved have been affected positively in their careers by these dated innovations in the past. If we do nothing, the old product or way of operating will continue to receive priority over the new innovation and the change you want to implement, and it will be much more difficult to introduce the new innovation successfully.

Drucker told us that we must innovate with this insight. It’s not the size of the change, but the size of the advantage created by the change that is important. However, Drucker did not leave it there. He told us how we should proceed, what we should avoid, and how we should approach innovation to build and maintain the success of our organizations by employing the best way to seek, develop, and introduce new ideas into an organization. Drucker found, and others proved by the adaptation of his methods, that he was right and that what he suggested led to successful changes in any field.

Adapted from:

Consulting Drucker: Principles and Lessons from the World’s Leading Management Consultant by William A. Cohen (LID, 2018)

Peter Drucker's Perspective on Recent AI Developments: Augmenting Human Capabilities

Mon, 04 Sep 2023 17:45:00 GMT

In a world increasingly shaped by technological advancements, Peter Drucker's insights continue to hold relevance. Drucker wrote many pieces about technology, computers and their impact on individuals, organizations, and society (e.g., Drucker, 1967; Drucker, 1970). Were he alive today, Drucker would undoubtedly offer insightful perspectives on the rapid evolution of artificial intelligence (AI) and its impact on various aspects of work, business, and society. In this blog post, my aim is to engage in a creative exercise to envision insights Peter Drucker might have offered if he were alive today. Building on his work, I try to answer the following question: What viewpoints could Drucker potentially express if he were to provide commentary on the benefits of artificial intelligence (AI)?

AI as an Efficiency and Effectiveness Enhancer

Peter Drucker said, "Efficiency is doing things right. Effectiveness is doing the right thing” (Drucker, 1974). Drucker would concur that AI's surge in popularity is rooted in its transformative potential to boost efficiency across diverse industries. His fundamental belief in the need for businesses to continuously improve their processes and practices aligns with the notion that AI can enhance efficiency by automating time-consuming tasks. Similarly, AI can accomplish many decision tasks with far more accuracy and effectiveness than a human decision maker. Therefore, Drucker would see AI as a great addition to the any manager’s toolbox. AI contributes to successful management by its direct impact on efficiency and effectiveness.

AI, Strategic Focus, and Creativity

AI's application in time-consuming tasks and less complex decisions resonates with Drucker's concept of task management. Drucker believed that managers should engage only in decision-making regarding non-routine task. For instance, he emphasizes that majority of decisions are routine and can be standardized or delegated to others. In this regard, by using AI for automating time-consuming functions, managers can focus on bigger problems and organizations can liberate their workforce to channel their efforts toward strategic thinking, innovation, and relationship-building. Drucker's writings often stress that strategic vision and creative problem-solving are uniquely human attributes, forming the bedrock of sustainable success.

AI and the Process of Decision-making

Drucker valued systematic analysis in the process of decision making and highlighted the significance of informed decision-making in many of his books. He was, however, pessimistic about computers as actors capable of effective decision making. Back in 1967, Drucker called computers “total morons” because they could not make decisions (Drucker, 1967). Today, the machine intelligence has changed the equation. Therefore, if he were alive today, Drucker would likely commend AI's ability to analyze massive data and unveil hidden patterns that human decision makers might overlook. Nevertheless, he would also caution against blindly trusting AI-generated insights or decisions. Indeed, while he promoted careful analysis, Drucker believed that analysis alone might not generate the best outcomes in every single situation. Therefore, Drucker might advocate for a symbiotic approach to human-AI interactions (e.g., Jarrahi, 2018) where AI-generated decisions are considered alongside human judgment, combining quantitative findings with qualitative understanding.

Value of People and the Augmentation Paradigm

One of the cornerstones of Drucker's management philosophy is the idea that people are the most valuable assets in the organization. In this context, and consistent with the symbiotic paradigm, Drucker would emphasize that AI should be employed as a partner to augment human intelligence, not to replace it. He would likely stress that AI's real potential lies in its ability to collaborate with human professionals, enhancing their problem-solving capabilities. In this view, human judgment continues to be a significant asset in the organization.

Final Thoughts

In a world captivated by AI's potential, Peter Drucker's hypothetical insights would likely underline the importance of responsible AI integration. I speculate that in the age of machine intelligence, his characterization of computers would shift from “morons” to discerning collaborators whose insights merit careful consideration and thoughtful evaluation rather than unquestioning reliance. His visionary perspective would emphasize using AI to complement human strengths, optimizing efficiency, enhancing decision-making, and fostering innovation. In Drucker's view, AI's true value would not lie in overshadowing human intelligence, but in propelling it to greater heights. As businesses navigate new opportunities in the AI landscape, Drucker's wisdom reminds them that technology's impact is most profound when it aligns with and magnifies the capabilities of the human mind.

References

Jarrahi, M. H. (2018). Artificial intelligence and the future of work: Human-AI symbiosis in organizational decision making. Business horizons, 61(4), 577-586.

Drucker, P.F. (1974), Management: Tasks, Responsibilities, Practices, Harper and Row, New York, NY.

Drucker, P. (1970). Technology, management, and society. Routledge.

Drucker, P. F. (1967). The manager and the moron. McKinsey Quarterly, 3(4), 42.

Doing Research Like Drucker and Einstein

Wed, 23 Aug 2023 17:27:00 GMT

Albert Einstein and Peter Drucker were rare geniuses, and both left a trail of success supported by significant achievement. Both are widely ranked among the greatest and most influential in their fields. Yet neither followed the models of scientific research which are sought by most universities. Drucker, known as the “Father of Modern Management,” did not use the synthetic research method promoted by academia. As a result, many academics do not accept Drucker’s methods of analytical research but insist on the synthetic research whereby hypotheses are established and then proven or disproven for general conclusions and theory. The same with Einstein.

Like Einstein, Drucker did not arrive at his theories in a laboratory surrounded by microscopes and computers, but in a different kind of laboratory. Einstein’s most productive period was in the single year of 1905, during which he produced and published four ground-breaking papers, which eventually won him the Nobel Prize for theoretical physics in 1921. None of the four were conceived and written in the sterile atmosphere of a typical laboratory, or by the synthetic methods desired by universities. Rather, they were accomplished while Einstein was occupied in his first job after obtaining his PhD at the University of Zurich. This position, as a patent examiner at the Swiss Patent Office in Bern, was an entry level position. Moreover, he was passed over for promotion while doing this research which won for him a Nobel Prize!

The Development of the Theory of Relativity

Einstein himself described the development of one of his most famous theories, the Theory of Relativity, as conceived while he imagined himself traveling along side of a beam of light. Remembering that Drucker’s PhD was a law degree, it is possible that it was Einstein who influenced Drucker with examples of developing methods of reasoning and thinking which resulted in Drucker’s theories of management practice. Drucker observed ongoing management operations. He described this as “his laboratory.” He used his analysis and the development of what he observed to develop his theories by observation.

Einstein Revealed His Methods

Although sometimes Drucker sometimes gave only clues to his methods, Einstein described his fully. In a letter to the London Times in 1919, Einstein wrote that his methods came from “Theories of Principle.” He stated that these “were derived from the analytical, not the synthetic method.” Their starting-point and foundation were not hypothetical components, but “empirically observed general properties of phenomena, principles from which mathematical formulae are deduced of such a kind that they apply to every case which presents itself.” Drucker was only ten years old at the time and probably did not then know sufficient English to read this letter when it was written. However, he did refer to Einstein during his career, and it is possible that he read the article in English later.

Synthetic research starts with the known and proceeds to the unknown. The researcher starts with an assumed hypothesis and tests it to prove or disprove it by examination of a sufficient number of examples and testing mathematically for a significant difference.

Analytical research starts with the unknown and proceeds to the known. There is no hypothesis. One definition of analytical research is “a specific type of research that involves critical thinking skills and the evaluation of facts and information relative to the research being conducted.” This is how both Einstein and Drucker arrived at their theories. The theories developed by these two geniuses did not start with hypotheses and their resulting theories did not evolve from scientific research in the commonly understood process in which many sources are surveyed and analyzed through mathematical techniques and equations, but rather from a basic model:

1. Observation, either real (or in some of Einstein’s work, imagined)

2. Analysis of the observation

3. Conclusions

4. Theory Based on These Conclusions

Ed Cooke, a Grand Master of Memory, and a graduate of Oxford University as well as the author of several books on memory wrote that there were two ways of doing brain research: “The first is the way that empirical psychology does it, which is that you look from the outside and take a load of measurements on a lot of different people. The other way follows from the logic that a system’s optimal performance can tell you something about its design.”

Cooke’s description of the latter method describes how both Einstein and Drucker focused on the powers of ordinary observation and applied analytical reasoning leading to practical results.

Unexpected Insights at an Academic Conference

I found insights into the value of Drucker’s methods about thirty years ago. I was invited to participate as a member of a panel held during an academic conference. The purpose of the panel was to discuss the influence of textbooks on management practice, or more accurately the lack thereof. During this discussion, and before an audience of marketing and management professors, one question was directed precisely at me as I was the only one of the five authors on the panel to have written both professional books for practicing managers and textbooks for classroom work with students. The question I was asked was why it was that textbooks seemed to follow established management practices but only professional or “trade” books seemed to be on the cutting edge to provide new insights.

I responded that “The writers of textbooks must bring together research from many sources to confirm the main points or theories they discuss. In many cases, there are also alternate theories to present regarding the various methods proposed for practice. To add the time needed for the textbook writer to do the research his textbook, must be added the time for the researcher to conduct not only this necessary research, but to describe both the research and the results in one or more articles, and to find suitable academic journals for publication for both his articles and realizing that this applies to the research done by others which are cited. For a top research journal, this can take many months before acceptance. After the textbook is published and used in the classroom, textbooks are used to instruct students. It may take several years before these students are in senior management positions and able to practice what was taught. On the other hand, a professional book based on theory resulting from personal observations (analytical research) can much more quickly be applied to practice as it goes right into the hands of the reader who is may already be a practitioner and who put it to immediate use.”

More Insight from the Conference

Sometime later when preparing a lecture for doctorial students at the Peter Drucker and Masatoshi Ito Graduate School of Management at Claremont Graduate University on the potential value of writing professional books for disseminating theory as Drucker did, I came across two unexpected facts. First, many of the most widely publicized theories of management reached practitioners through a book, making the information immediately available to the practitioner in this manner and that the same level of dissemination among practitioners rarely came from publication in research journals.

Well-known consumer behavior researcher, Jagdish Sheth, once revealed during a conference presentation that after more than 25 years of research he had recently written an article published in the Wall Street Journal about which he received several hundred responses from practitioners. In contrast, after many articles published in leading research journals which had resulted in academic fame, he had received a small number queries from other academics, and none from practitioners.

Not surprisingly response from professional books included not only Drucker’s Management by Objectives from The Practice of Management (Harper & Brothers, 1954) and other methods resulting from Drucker’s theories, but also, Abraham Maslow’s Hierarchy of Needs disseminated through his book Motivation and Personality (Harper & Brothers, 1954) and Douglas McGregor’s Theory X and Theory Y disseminated through his book The Human Side of Enterprise. (McGraw-Hill, 1960).

Of course, there were many articles published in research journals on these topics, but these were usually after professional books had already been published and they had already been put into practice and were well known and in common discussion by business professionals.

Drucker’s Methods and Thinking

Drucker did not start with synthetic mathematical formulae into which data was inserted to determine what was to be done but used his powers of observation and reasoning in determining conclusions for theory and then further testing this theory as he saw it applied.

Although Drucker did not describe his methods like Einstein, Drucker’s thinking processes, frequently dismissed by those employing only synthetic research, were a part of the mental arsenal for his research and should not be ignored. I cannot state mathematical equations he used nor his favorite means of testing for significant differences, because he used none. Still, if we can understand his analytical methods, we may apply the same in our own research, problem solving, decision making, and in assisting other practitioners through application of the results of our research.

The Anti-CEO Playbook: How Chobani’s Founder Asks Leaders to Embody the Principles of Drucker’s Management as a Liberal Art

Wed, 23 Aug 2023 17:17:00 GMT

In the fast-paced landscape of the modern business world, traditional leadership models are being challenged like never before. Peter Drucker’s Management as a Liberal Art has long since asked businesses to do better. To take responsibility, acknowledge their place and power in society, and prioritize their people.

Enter The Anti-CEO Playbook. Chobani founder Hamdi Ulukaya’s groundbreaking TED talk presents a refreshing and thought-provoking approach to leadership. One that goes against the grain. But not against Drucker’s Management as a Liberal Art principles.

Ulukaya encourages us to toss out the business playbook. And to, instead, adopt a new one.

These concepts will challenge your assumptions and inspire you to think outside the box. Get ready to rewrite the rules and redefine what it means to be a great leader in the modern world.

From Profits to People: Why it's Time for a New Playbook

In a world where profit margins often dictate business decisions, Hamdi Ulukaya donned his metaphorical cape and became an anti-hero of today’s business world.

Anti-hero : “a person who takes a different path to do things right.”

In 2005, Ulukaya purchased a failing yogurt plant. One that none of its previous big business owners could save.

Today, you may recognize the name – Chobani. America’s No. 1 yogurt brand.

It wasn't just the product that set Chobani apart. It was Ulukaya‘s commitment to his community, his employees, and to making a difference.

By giving shares to employees Ulukaya fosters a sense of ownership and community. Chobani’s engagement with refugees and local communities underscores its commitment to social responsibility. And Ulukaya’s success demonstrates how the principles he and Drucker advocate for can create not only thriving businesses but also flourishing societies.

The Pitfalls of the Old Playbook

Chobani’s success highlights how important effective leadership is. And it shows us the flaws in the old playbook. The one businesses and leaders have been living by for the past 40 years.

It’s time for a change.

The age-old playbook hinges on the practice of putting profits above all else. It has CEOs reporting to shareholders first. Putting their interests above those of the consumer and the communities where they do business.

The current playbook doesn’t teach you how to be a noble leader. It forces you to be beholden to profits. This approach has led to a disconnect between businesses and the societies they operate within.

If the current playbook is broken, the Anti-CEO Playbook is the solution.

From Profits to People: Why it's Time for a New Playbook

In a world where profit margins often dictate business decisions, Hamdi Ulukaya donned his metaphorical cape and became an anti-hero of today’s business world.

Anti-hero : “a person who takes a different path to do things right.”

In 2005, Ulukaya purchased a failing yogurt plant. One that none of its previous big business owners could save.

Today, you may recognize the name – Chobani. America’s No. 1 yogurt brand.

It wasn't just the product that set Chobani apart. It was Ulukaya‘s commitment to his community, his employees, and to making a difference.

By giving shares to employees Ulukaya fosters a sense of ownership and community. Chobani’s engagement with refugees and local communities underscores its commitment to social responsibility. And Ulukaya’s success demonstrates how the principles he and Drucker advocate for can create not only thriving businesses but also flourishing societies.

The Pitfalls of the Old Playbook

Chobani’s success highlights how important effective leadership is. And it shows us the flaws in the old playbook. The one businesses and leaders have been living by for the past 40 years.

It’s time for a change.

The age-old playbook hinges on the practice of putting profits above all else. It has CEOs reporting to shareholders first. Putting their interests above those of the consumer and the communities where they do business.

The current playbook doesn’t teach you how to be a noble leader. It forces you to be beholden to profits. This approach has led to a disconnect between businesses and the societies they operate within.

If the current playbook is broken, the Anti-CEO Playbook is the solution.

The Anti-CEO Playbook

In his TED talk Ulukaya puts it simply: “When you’re right with your people, community, and product you will be more profitable and innovative. You will have more passionate people working for you. And a more passionate community to support you.”

That is what the Anti-CEO playbook is all about.

Prioritize People Over Profits

Ulukaya tells us there is a difference between profit and true wealth. For any business to rise above a profit-first model, it must prioritize its people. Leaders must take care of their employees first.

Prioritizing “dignity of work, strength of character, and the human spirit” is what sets exceptional leaders and exceptional organizations apart.

Community

The new way of business focuses on community. Instead of asking the surrounding communities for incentives or tax breaks for your business, seek out communities that you can be a part of.

Ask – “How can I help you?”

Ulukaya believes that businesses are in the best position to make a difference. To make real change. And that they have the responsibility to do so within their communities.

Accountability & Ethical Leadership

It’s time for CEOs to make a change. To take a different approach to accountability. Instead of being beholden to shareholders, Ulukaya encourages us to think about the consumer.

Consumers have the power of choice. To choose your product over another. When you recognize their place in the success or failure of your business, you start to create change.

When you follow the Anti-CEO playbook you’re not beholden to corporate boards. But are, instead, giving back to your consumers and your community.

The Anti-CEO Playbook

In his TED talk Ulukaya puts it simply: “When you’re right with your people, community, and product you will be more profitable and innovative. You will have more passionate people working for you. And a more passionate community to support you.”

That is what the Anti-CEO playbook is all about.

Prioritize People Over Profits

Ulukaya tells us there is a difference between profit and true wealth. For any business to rise above a profit-first model, it must prioritize its people. Leaders must take care of their employees first.

Prioritizing “dignity of work, strength of character, and the human spirit” is what sets exceptional leaders and exceptional organizations apart.

Community

The new way of business focuses on community. Instead of asking the surrounding communities for incentives or tax breaks for your business, seek out communities that you can be a part of.

Ask – “How can I help you?”

Ulukaya believes that businesses are in the best position to make a difference. To make real change. And that they have the responsibility to do so within their communities.

Accountability & Ethical Leadership

It’s time for CEOs to make a change. To take a different approach to accountability. Instead of being beholden to shareholders, Ulukaya encourages us to think about the consumer.

Consumers have the power of choice. To choose your product over another. When you recognize their place in the success or failure of your business, you start to create change.

When you follow the Anti-CEO playbook you’re not beholden to corporate boards. But are, instead, giving back to your consumers and your community.

Exceptional Management Principles

Ulukaya's approach to business aligns seamlessly with Drucker's ethos. Emphasizing a shift from profit-driven models to ethical and community-oriented management practices.

Management as a Liberal Art urges organizations to recognize their role in shaping society. And fostering a sense of responsibility toward it. The Anti-CEO playbook asks you to do the same.

In his book Management: Tasks, Responsibilities, Practices , Drucker first introduced the concept of Management as a Liberal Art. Arguing that effective management requires a deep understanding of culture, society, and human behavior. And that in order to be an effective leader you must not seek only to maximize profits, but also to contribute to the well-being of society.

Ulukaya's view resonates with Drucker's. Asking you to consider the broader impact of decisions and the power of choice. Both believe that a well-managed organization respects the individual dignity of its workers. And also seeks to provide meaning beyond financial gains.

To be an effective leader you must toss out the old playbook.

You must –

➔ Treat employees as assets rather than costs. A company's success depends on the quality of its people. And their ability to work together towards a common goal.

➔ Acquire a deep understanding of the business and the impact of its actions. Effective leaders have a responsibility to make informed decisions that benefit the organization and its people.

➔ Take a holistic approach to problem-solving. Consider the long-term consequences of your decisions. As well as the social and ethical implications.

➔ Be a lifelong learner. Constantly seek to improve your knowledge and skills, adapting to the changing needs of your organization and the world at large.

Exceptional Management Principles

Ulukaya's approach to business aligns seamlessly with Drucker's ethos. Emphasizing a shift from profit-driven models to ethical and community-oriented management practices.

Management as a Liberal Art urges organizations to recognize their role in shaping society. And fostering a sense of responsibility toward it. The Anti-CEO playbook asks you to do the same.

In his book Management: Tasks, Responsibilities, Practices , Drucker first introduced the concept of Management as a Liberal Art. Arguing that effective management requires a deep understanding of culture, society, and human behavior. And that in order to be an effective leader you must not seek only to maximize profits, but also to contribute to the well-being of society.

Ulukaya's view resonates with Drucker's. Asking you to consider the broader impact of decisions and the power of choice. Both believe that a well-managed organization respects the individual dignity of its workers. And also seeks to provide meaning beyond financial gains.

To be an effective leader you must toss out the old playbook.

You must –

➔ Treat employees as assets rather than costs. A company's success depends on the quality of its people. And their ability to work together towards a common goal.

➔ Acquire a deep understanding of the business and the impact of its actions. Effective leaders have a responsibility to make informed decisions that benefit the organization and its people.

➔ Take a holistic approach to problem-solving. Consider the long-term consequences of your decisions. As well as the social and ethical implications.

➔ Be a lifelong learner. Constantly seek to improve your knowledge and skills, adapting to the changing needs of your organization and the world at large.

Embracing Drucker's MLA & Ulukaya's Anti-CEO Playbook for Success in the Modern Business World

In an increasingly interconnected and complex world, businesses and leaders can no longer afford to ignore their responsibility to society and their people. And many have recognized the value of a new way of thinking.

These visionary concepts challenge us to rethink the purpose of business. And to embrace a new era of management.

Hamdi Ulukaya's TED Talk and Peter Drucker's Management as a Liberal Art converge in their call to prioritize people over profits for a healthy, and well-functioning organization. And to see a business’ place within society as having a responsibility to build better.

It’s time to challenge your assumptions. Think outside the box. And embrace the principles of the MLA and the Anti-CEO Playbook in your own management style. Rewrite the rules, become the anti-hero, and redefine what it means to be a great leader in the modern world.The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Embracing Drucker's MLA & Ulukaya's Anti-CEO Playbook for Success in the Modern Business World

In an increasingly interconnected and complex world, businesses and leaders can no longer afford to ignore their responsibility to society and their people. And many have recognized the value of a new way of thinking.

These visionary concepts challenge us to rethink the purpose of business. And to embrace a new era of management.

Hamdi Ulukaya's TED Talk and Peter Drucker's Management as a Liberal Art converge in their call to prioritize people over profits for a healthy, and well-functioning organization. And to see a business’ place within society as having a responsibility to build better.

It’s time to challenge your assumptions. Think outside the box. And embrace the principles of the MLA and the Anti-CEO Playbook in your own management style. Rewrite the rules, become the anti-hero, and redefine what it means to be a great leader in the modern world.The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

If You Don’t Know, Ask Your Brain

Tue, 01 Aug 2023 23:51:00 GMT

Drucker developed five written questions which he recommended that managers ask in developing their businesses. As time went on, Drucker and others added additional questions to the original five. Clearly the number of questions is infinite though some are more or less important depending on the situation. But most important is how you ask to get an answer that is usable.

Questions Most Effective When You Ask Your Computer Directly

I realized that it was effective for the manager to ask the questions because the manager owns the best computer available, that portable computer each of us carries around known as the human brain. You have already accumulated valuable data on this computer to solve all kinds of problems -you just have to access it properly.

The Best Computer Requires Proper Use

I wasn’t surprised when I was introduced to Drucker’s use of the brain because for many years, I had asked myself questions and received answers. I would not have thought of most answers if I hadn’t asked myself these questions. I stumbled on this method years earlier, and it had already played an important role in my life. When I was 14 years old my distance vision suddenly declined. My father was an Air Force officer, and I was examined by an experienced flight surgeon who declared that it was nothing serious merely that I needed eyeglasses. After my examination and receiving the prescription for the glasses, I told him that I didn’t care that I wore glasses, but that I wanted to go to West Point and fly in the Air Force. This doctor immediately advised me to forget these goals and pursue some other career as I would never be able to meet the vision requirements for either objective. Both had strict visual requirements without glasses. He added that he had seen this happen with dozens of youngsters who wanted to attain these ambitions. Even as he spoke, without my speaking aloud, and without thinking I asked my brain what I should do. I was surprised to receive an immediate reply, and I assumed that I had done something right. This occurred even as the doctor continued to talk and explain that it was impossible for me to meet the West Point and Air Force vision standards without glasses and this disqualified me. He suggested that I apply to a local college when I became 17 and join the Air Force through ROTC, requesting one of the non-flying specialties which the Air Force had need of and forget West Point or flying. Meanwhile my brain had silently repeated its explicit advice: “Go to the base library and find a book which explains sight without glasses.”

I had never seen or heard of such a book, but my brain clearly had. I said nothing to the flight surgeon who was only trying to save me from the wasted effort of pursuing what he saw as an unattainable career because of my poor vision. However, as soon as I left the doctor’s office I went straight to the base library. With the librarian’s help I located a book which had actually had the title, “Sight without Glasses.” I read the book and wrote to its author, Dr. Harold M. Peppard, an optometrist. I explained my ambitions and why it was necessary that I have good vision without glasses. Dr. Peppard had been trained by an ophthalmologist, Dr. William Bates, who had developed eye exercises for improving vision without wearing glasses. When Dr. Bates died, Dr. Peppard, continued his practice, and wrote the book. He answered my letter at once with additional exercises and suggestions. I did further research. The method was controversial, some even saying it could harm the eyes. However, there were also many success stories in the book, and I began the program as he suggested. I did these eye exercises about an hour a day, every day, after school. My eyesight slowly began to improve. Four years later I passed the tests for West Point including the vision exam. I graduated from West Point and again improved my vision with new exercises and began an Air Force career which included flying several thousand hours in B-52 bombers as a navigator-bombardier and in attack aircraft in combat as an air commando and instructor. Later I even had the good fortune to work with PVH Weems, a famous retired Navy captain, who had graduated from Annapolis in the class of 1914 and was known as the “father of air navigation.” In the 1930s he had taught Charles Lindbergh celestial navigation on the orders of President Roosevelt after Lindbergh had made his famous solo flight from New York to Paris and was looking for new challenges. Weems had recently been recalled from retirement by the Navy to develop a manual means of space navigation and invited my participation.

The Power of the Brain

The power of the human brain is truly amazing, and this was known and used not only by Drucker, but also by such famous scientists as Albert Einstein, and reportedly by others even earlier. Einstein had published four major scientific papers in a single year using these principles and was awarded the Nobel Prize in theoretical physics by communicating with and taking the advice of his brain!

I think that what happened to me was that my question focused my brain on everything it had on file in my memory about vision improvement without glasses that I had missed or forgotten. To this day I don’t know exactly where I heard about “sight without glasses” and still don’t. When I used this method for other purposes in later years, I knew that some “brain instructions” came from my own experience, but also from unknown sources: a course lesson , a professional article, something I’d seen on TV or in a movie, something I read or had heard on the radio, or someone had said offhand. This apparently was stored in my mental computer and released in response to the questions I asked myself. My brain had not explained or discussed the method used by Drs. Bates and Peppard. But it had given me the title of Peppard’s book. Dr. Peppard’s advice, encouragement and instructions did the rest. The process of improving my vision took some months, but when I took the West Point test, I had passed.

Talking to Yourself

Drucker had developed his five questions for the purpose of running a business. However, since I had some experience with the method, I knew it worked and that it could help me to solve other problems. It always helped.

I asked a psychologist about this. He told me that one reason this worked is that my brain already had all the facts necessary for problem resolution stored away in my memory. While these facts could not always be accessed easily, by eliminating various blocks and fears associated with my questioning, the forces preventing an answer dissipated and I could access the information I needed.

Sometimes the pressures and stresses are too great. The problem is either too difficult or the situation is too demanding. Your brain cannot function easily and cannot always present a solution under these conditions. But the brain can work subconsciously, even if the conscious brain can’t. The challenge then is getting to the subconscious. Some say the best way to obtain a solution you don’t have from your brain is just to go to sleep and wake up with the solution after a short nap or a night’s sleep. I’ve seen this work.

Other techniques also work. Thomas Edison, the inventor, was said to have developed and used a technique of sitting quietly in a darkened room and letting his mind wander. Others perform some activity to distract themselves such as playing a game or even physical exercise. Suddenly the solution appeared.

Research professors at Carnegie Mellon University found that getting the subconscious to provide guidance worked if another problem was presented to distract the brain for a short period, while allowing the subconscious mind to continue to work.

Drucker’s use of written questions to ask your brain may be different, but it works, and can be used to solve a variety of problems. Try it and see for yourself!

Useful References

The Art of the Leader, 3 ^rd Edition by William A. Cohen (Pyramid Press, 2018)

Drucker’s Way to the Top by William A. Cohen (LID, 2019)

The Art of the Strategist (audio version) by William A. Cohen (Harper Collins, forthcoming, 2023-24)

Are You Lying to your Horse?

Tue, 25 Jul 2023 21:32:00 GMT

I was thinking about the person who got me involved in horses recently. She was a wonderful, brilliant, complicated horse person in my neighborhood whom I sought out for lessons once I decided to try this sport out for real about 12 years ago.

One of the lessons I remember most from her is that “you can lie to your horse.” It was shocking to me. We were on a trail ride, and we encountered some muddy terrain that was suspect. The horses did not want to cross the path. She said, “You know, that’s quicksand. They know. Always remember, you can lie to your horse.” That was more than ten years ago, and it has stuck with me. We could have told those horses to go through that, and they would have done what we told them (because they trusted us). But then, if a disaster occurs, all trust is broken (and, yes, horses remember, maybe more than people). It’s a fine line between projecting strength and authority with a horse (we can DO this) in a situation where the horse is timid and needs leadership, and when the horse reads a situation better than you do in the wild. The key is to understand our relative strengths and weaknesses, and when the horse knows better than the human.

The parallels to human relations are clear, and they are Drucker related on many levels:

· People on the front lines know reality – As a leader, you need to make sure that you are aware of what is going on on the ground. Those dealing with your customers, end-users, and clients know where the quicksand is.

· If you push people into a situation that turns out to be a disaster, you will lose trust, the best asset you have. It doesn’t matter if you use authoritarian methods or coercion. The result is the same. You have lied to your horse.

· If you don’t know the terrain, acknowledge it, but do it in a way that reassures. The unknown doesn’t have to be a scary monster that will eat you, or take away your job, or destroy your status with the organization. Uncertainty is part of life. Horses live with that and deal. But they don’t like lies.

· In the face of change or uncertainty, the spirit of performance that Drucker envisioned, where leaders lift people up to do extraordinary things, is real. Some people are natural leaders, and some are reticent. Horses are the same. Just as a rider can work a timid horse through a scary situation, a leader can help. We can DO this! A horse can also fulfill this role, taking on a leadership role in a herd. Leaders come from all levels of the organization.

Horses have changed how I view human behavior. Their basic functions, yet complex reactions, have made me a much more aware observer of people. And, ultimately, management is about people.

How to Apply Management as a Liberal Art *

Mon, 03 Jul 2023 22:18:00 GMT

Five years before he died, Peter Drucker revealed his basic belief about management for the first time. What a surprise! He wrote: “Management is what tradition used to call a liberal art - ‘liberal’ because it deals with the four fundamentals of knowledge, self-knowledge, wisdom, and leadership; ‘art’ because it deals with practice and application.”

That’s not what others said. They said that management was a science. The popular manta was and is “quantitative analysis for business decisions.” Most management practitioners ignored the liberal arts and focused on economics and quantitative analysis.

If Drucker is correct, a different approach is desirable. The impacts of ethics and social responsibility in management are not just desirable, they are required. But there’s more emphasis than Drucker’s words. To neglect the fact that liberal arts are necessary in decision-making, problem-solving, and discovery, is also to ignore the fact they have been used and their need proven by scientists for centuries. They have not only verified the liberal arts as effective, but in many cases proven them critical to success. Albert Einstein, a world-renowned scientist who accomplished amazing discoveries in theoretical physics, used not quantitative analysis, but the liberal arts in his work. Einstein’s theory of relativity, for example, was accomplished by his imagining himself traveling with a beam of light and what was observed to those remaining stationery, not computers and economic analysis.

Einstein employed liberal arts in many other discoveries. He was awarded the Nobel prize in Theoretical Physics for four papers all published in one year, 1905. How he did this he explained in a letter to the London Times dated November 28, 1919. Among these is probably the world’s best known equation, E = MC², representing the conservation of energy. He calculated this the same way, using the liberal arts along with the theory of relativity the same year. For these four major papers, he was awarded the Nobel Prize in Theoretical Physics. He used the liberal arts. Einstein didn’t use computers, had no lab assistants, and didn’t have a room with chalk-filled blackboards. He was an unknown and did the research while in an entry level position as a patent examiner at the Swiss Patent Office in Bern after receiving his PhD at the University of Zurich.

Economics are but One of Many Topics

Drucker demonstrated that though numbers may be a factor in successful profitability in decision-making, there are always other factors which may be significant in a different situation which can be more important and must not be ignored. Ethics and social responsibility are two important examples. Because management is an art and decisions must be made about an issue and environment that are more complicated and subject to more variability than numbers alone, other topics are equally, and sometimes more important. As an art, such work deserves to be accomplished as if you were developing a musical sonata, painting, or sculpture because, that’s pretty much what you’re doing.

Drucker’s Approach

When Drucker wrote that management was a liberal art, some thought he was anti-science. He wasn’t. But Drucker frequently found advantages to the use of the liberal arts and sometimes even non-quantifiable factors were more important than “quantitative analyses.” He used quantitative methods when appropriate but did not omit important non-quantifiable facts. For example, he showed that while profitability in business was necessary, maximum profitability might not even be a worthwhile or even an ethical goal, even if it were possible by segmenting the market.

Earning a PhD Under Drucker

Ten years after I received my MBA at a first-class business school which prided itself on being arguably the leading school in quantitative management decision making, I entered the PhD program which had been co-developed by Drucker including courses taught only by him and his dean, Paul Albrecht. Their methods differed significantly from other professors. Drucker maintained that at the end of the day, managers make decisions from the gut, and that economics was just one input, and not the only one. He specified four fundamentals necessary for what is now known as Management as a Liberal Art or MLA: 1. Knowledge, 2. Self-knowledge, 3. Wisdom, and 4. Leadership.

Specific Knowledge, the First Fundamental

Drucker listed the following topics that are traditionally included among liberal arts topics: Humanities, Social Sciences, Psychology, Philosophy, Economics, History, Physical Sciences, and Ethics. Unsurprisingly unique knowledge is frequently generated when someone from a different organization, industry, company, country or specialty joins yours. Drucker’s experience was that the most important innovations tend to arrive in this way. Therefore, any knowledge may be useful in a particular situation for a successful solution. Therefore, potential solutions based on unfamiliar ideas should be welcomed, evaluated, and not ignored regardless of source.

Self-Knowledge, the Frequently Overlooked Fundamental

“Self-knowledge” refers to knowledge of one’s own sensations, thoughts, beliefs, and other mental states, but also the state of your organization. Self-knowledge comes from experience, success, failure, observation, and reflection on lessons learned and applied, but also an examination of conditions and resources in your own organization including both strengths and weaknesses.

Two thousand years ago the Chinese philosopher and successful military general, Sun Tzu, wrote: “If I know myself and know my enemy, I need not fear defeat in 100 battles. If I know only myself, I will lose half. If I know only my enemy and not myself, I will lose all.” This says that while knowing your potential competition is important, knowing your own capabilities and limitations may be even more so.

The Fourth Fundamental is Wisdom

Most believe that wisdom originates from experience, but one must use the experience gained and review results before it can be said that wisdom has been assimilated and demonstrated. Though difficult to acquire, many cultures, including our own, believe in its importance. The Chinese culture, one of the oldest existing cultures assign it a high value. There are also 222 mentions of wisdom in the Jewish Holy Scriptures and wisdom is thought to be a foundation of Jewish thought. Certain wisdom was observed abroad and considered unique in America as early as 1815.

In that year, an artistic work on his impression of this unfamiliar new country was completed by James Barralet, an emigrant of Irish and French origin. He described it simply as “America Guided by Wisdom” and created an engraving representing this concept that still hangs today in the Library of Congress in Washington, DC. Of course, a lot has happened since 1815, and we sometimes make mistakes during wisdom’s formation, but the effort and its results are still self-evident.

The Most Important Element of MLA: Leadership

Drucker investigated and found that 50% of the results of management decisions come from leadership, while all other actions contribute smaller individual percentages to constitute the remaining 50%. However, Drucker made it clear that the leadership he recommended must be practiced ethically.

A business must be profitable to continue to operate, but society also demands from businesses social responsibility. Drucker constantly pointed out examples. One of his favorites was case of Julius Rosenwald, President and later Board Chair of Sears Roebuck from 1908 until his death in 1932 which was a period of its great growth. He established the Rosenwald Fund, which was the first of its kind and donated millions of dollars in matching funds to promote the vocational and technical education of minority employees, noting that he considered this a duty. In those days this was a highly unusual act.

Drucker added that while society expected a company to be profitable it had no expectation or requirement that a company generate maximum profits especially through questionable or unethical tactics.

An Art Concerns Practice, Application and Results

As Drucker pointed out, as an art, MLA deals with practice, application, and results. Contrary to the poor conduct and practices that sometimes appear, Drucker maintained that only the best and highest ethical conduct was acceptable. As Drucker’s former student and remembering his values and teachings, I doubt whether he would change his opinion as to what he believed regardless of what others might think or some of the poor examples of leadership sometimes observed by leaders in well-known business or government .

This sets MLA apart and the leadership he demanded is not always easy. Unlike use of mathematic formulae, the learning of which may be confirmed by memorization, paper application, and testing for significance, mastery of MLA can only be demonstrated by application, which includes not only performance, but maintaining ethical values and responsibility. As Doris Drucker, Peter’s widow, said on several occasions “I admired much about my husband, but most of all, I admired the values he believed in and represented.”

References

*Adapted from the following with extracts published internationally

Drucker on Leadership by William A. Cohen (Jossey - Bass, 2010

Drucker’s Way to the Top by William A. Cohen (LID, 2019)

The New Art of the Leader, by William A. Cohen (Prentice Hall, 2000)

The Art of the Leader, 3 ^rd edition by William A. Cohen (Pyramid Press, 2018)

The Art of the Strategist (audio version) by William A. Cohen (Harper Collins, forthcoming, 2023-24)

A Practical Guide to Multi-Disciplinary Learning: Unlocking the Potential within Organizations

Mon, 03 Jul 2023 21:35:00 GMT

One of the central teachings of Management as a Liberal Arts (MLA) is that management should be viewed as a multi-disciplinary field. In this regard, there is a growing recognition that a multi-disciplinary approach to management can elevate the way organizations operate. According to this view, it is no longer sufficient to view management as a singular field; rather, it is a tapestry woven with insights from diverse disciplines such as sociology, economics, psychology, history, and philosophy. By drawing upon these diverse perspectives, managers can make more informed decisions that drive innovation and success.

While some may argue that acquiring a deep multi-disciplinary understanding requires years of liberal arts education, this ideal scenario often remains detached from reality. In the practical world of organizations, time constraints and operational demands necessitate a different approach—one that bridges the gap between theory and application, between diverse disciplines and day-to-day managerial decision-making.

In this regard, a crucial question that has long been overlooked and left unanswered is: How can organizations actively practice management as a multi-disciplinary field? What practical steps can they take to infuse insights from various disciplines into the very fabric of their employees' work?

In this blog post, I will explore several simple and feasible recommendations to enhance multi-disciplinary learning within modern organizations. By fostering a culture that embraces and supports the acquisition and integration of diverse knowledge, organizations can tap into the vast potential of their employees and propel their success to new heights.

Let us dive into a list of practical initiatives to create a culture of multi-disciplinary learning through leveraging some internal and external sources. After introducing these sources, I will conclude my post by briefly discussing the requirements (i.e., antecedents) for successful adoption of these initiatives and some of their most important benefits (i.e., outcomes).

Leveraging External Sources of Multi-disciplinary Learning

Below are certain steps for encouraging employees to learn from external knowledge sources outside of their area of expertise:

1. Book Clubs/Film Clubs: Foster a culture of reading and exploration by organizing book clubs or film clubs within the organization. Encourage employees to delve into topics beyond their immediate disciplines, gaining historical, cultural, and diverse perspectives.

2. Attending Conferences: Encourage employees to attend conferences outside of their immediate disciplines. This exposure will broaden their knowledge base, spark new insights, and facilitate cross-pollination of ideas.

3. Inviting External Guest Speakers: Arrange for guest speakers from various backgrounds to share their expertise. By bringing in speakers with diverse educational backgrounds, such as psychology, engineering, or political science, employees can gain valuable insights from different disciplines.

4. Incentivizing External Courses/Webinars: Offer incentives for employees to pursue external courses or webinars on topics beyond their immediate job responsibilities. By investing in their continuous learning, organizations create opportunities for multi-disciplinary growth.

5. Learning from Other Cultures: Encourage and facilitate interactions with people from different cultures. This can be achieved through travel opportunities, fostering understanding of diverse perspectives and worldviews.

Leveraging Internal Sources of Multi-disciplinary Learning

Here is a list of certain initiatives to use internal sources to enhance multi-disciplinary learning:

1. Cross-Functional Training: Foster collaboration by creating cross-functional teams that include individuals from marketing, operations, finance, engineering, and other backgrounds. This diverse collaboration enables employees to learn from one another's expertise and gain a holistic understanding of organizational challenges.

2. Rotating Job Responsibilities: Design opportunities for employees to experience various roles within the organization. This rotation exposes them to different perspectives, enhancing their multi-disciplinary knowledge and problem-solving abilities.

3. Job Shadowing: Provide opportunities for job shadowing, where employees can observe and learn from colleagues in different departments or roles. This firsthand experience promotes knowledge sharing and collaboration.

4. Knowledge Management Systems: Implement robust knowledge management systems that facilitate easy access to information and resources from different departments or areas of expertise. By breaking down silos and promoting cross-functional learning, organizations can harness the power of multi-disciplinary collaboration.

5. Lunch and Learn Sessions: Organize regular sessions where members of the organization can give talks and share information on their areas of expertise. These internal knowledge-sharing sessions create a platform for employees to learn from one another.

6. Internal Newsletters or Blogs: Establish internal newsletters or blogs to share insights, best practices, and success stories across departments. This promotes a culture of learning and encourages employees to explore ideas beyond their immediate domains.

Antecedents and Outcomes of Creating a Culture of Multi-Disciplinary Learning

In the previous lines, I introduced a list of initiatives for creating a culture of multi-disciplinary learning. However, it is also important to note that organizational support for these initiatives is required for establishing effective multi-disciplinary learning practices in the organization. This support should include:

1. Funding/Budget: Allocating resources to support these initiatives is essential, recognizing that some activities require time and financial investment.

2. Communication and Collaboration Skills: Fostering effective communication and collaboration skills within the organization is vital to enable learning from both internal and external sources.

3. Culture of Learning: Cultivating a culture that values and encourages learning is key. Organizations should establish a norm of allocating resources for learning, creating an environment where continuous development is embraced.

4. Diversity and Inclusion: Promoting a diverse and inclusive workplace culture is paramount. Embracing a diverse employee background facilitates learning from internal sources, broadening perspectives, and enriching multi-disciplinary knowledge.

The cultivation of a multi-disciplinary culture within organizations brings forth a wealth of benefits and outcomes with two primary advantages standing out: critical thinking and ethical leadership. With a multi-disciplinary knowledge base, employees gain a comprehensive understanding of various subjects and areas of expertise, empowering them to evaluate information with a critical eye and make well-informed decisions.

Moreover, this breadth of knowledge equips individuals to navigate ethical complexities by connecting the dots between different perspectives and stakeholder needs. As an example, employees and managers with a comprehensive understanding of the environment around them become more effective proponents of corporate social responsibility, driving initiatives that simultaneously consider the importance of people, profit, and the planet. By embracing multi-disciplinary learning and fostering a culture that values diverse insights, organizations can position themselves at the forefront of innovation, adaptability, and responsible leadership in today's rapidly evolving world.

Drucker’s Approach to Strategy is Amazingly Valid

Wed, 07 Jun 2023 17:36:00 GMT

I’ve read recent comments to the effect that though Drucker’s approach to strategy has been highly effective in the past, because of the pandemic, it was time to develop something new. Drucker was considered the father of modern management, but Drucker did not believe that management was a science. He insisted that it was properly described as a practice. This is important in any approach to strategy. In fact, it would not be amiss to look at the strategy as a doctor practices medicine. Science plays an important part in medicine, but doctors consider the individual situation as he or she practices medicine. Note the difference.

While a medical scientist seeks and develops medicines which cure ailments in many situations, as a practitioner the doctor realizes that medicines, no matter how powerful, won’t work in every case. He recognizes that every case is different and analyzes every illness, with its unique characteristics, to find a treatment that works best in the treatment of the patient. In addition, the medical practitioner has an oath to which strategy must conform: “Above all, do no harm.” Too bad that the business practitioner doesn’t take a similar vow. In effect, Drucker did take care to do no harm and followed no single strategy “system” for all situations.

When I was Drucker’s PhD student, I learned from him that because management is not a science, using mathematics alone is not the only analysis that must be done and Drucker, to avoid doing harm, used no fixed system. For example, one widely used system in those days was portfolio analysis developed by Bruce Henderson at the Boston Consulting Group. That’s the one, with cash cows, dogs, shooting stars, problem children etc. The problem, Drucker said, was not that this was a bad system, but if applied to all situations it would sometimes fail because growth of the organization was always judged the main factor in success. However, a business could be successful and profitable while remaining small and if an organization grew primarily by acquisition, it was successful only if the acquiring organization had something to contribute to what was acquired. A review of companies which had used BCG’s analysis proved his point. Many had failed because after acquiring a company, the acquiring organization had little to contribute, and growth alone did not necessarily result in success. The BCG method was modified by the work of GE and McKinsey and others. However, the danger of using a cookie-cutter approach in all situations persists because even basic assumptions can be wrong.

“Quantitative analysis for business decisions” is frequently the basic tool guiding strategy because a resulting high number identifies the greatest potential profit. But is it? Drucker showed us examples that while mathematically a high price frequently indicated highest profits it also attracted competitors who enjoyed an advantage. Such a competitor could achieve profitability even if it had neither invented nor taken the original product to market.

The transistor radio was one example he cited. Many think it was Sony, a Japanese company, that first developed and sold the millions of transistor radios profitably and that American companies were never able to compete successfully. The reality was that the transistor radio was invented in the U.S. and sold first by AT&T which calculated that a significantly higher price could be charged, and even additional money attained by licensing other companies to manufacture and sell this product. Sony, with lower labor costs, saw the opportunity and bought such a license from AT&T. With the lower labor cost in Japan and some product improvements, Sony dominated the market in the U.S. and forced AT&T out of the business.

Even computers and a program developed based on the success of other organizations has shown to be unreliable. A single condition in a previous marketing campaign might be unknown and not duplicated. For example, the impact of the quality of leadership available in an organization is always important. Yet, it is usually not incorporated into the computer model and in any case, leadership is difficult to quantify.

Good Tactical Implementation Cannot Overcome Poor Strategy

The word “strategy” comes from a Greek word meaning “the art of the general.” As a part of this art, generals separate military strategy into three divisions of action. Tactics are performed at the lowest level. It is the strategy employed by those involved in execution at the fighting level. The next highest level is the strategy employed by more senior generals and is concerned with the strategy of the battle. At the highest level is grand strategy employed by politicians and senior generals at the highest levels in positioning their forces geographically and timing with overall objectives defining what they are trying to do, what battles they are going to fight and when, and considering political and many other situational factors as well as the stages of the overall operation.

Tactics Vs. Higher Level Strategy

I once read that good tactical implementation could overcome a bad strategy initiated at a higher level. Drucker pointed out that good tactical implementation of a bad higher level strategy can even make the situation worse, not better. Good tactical execution at the “fighting level” may succeed, but in some scenarios, it might be better if it had failed. He gave the example of expert salespeople succeeding though they had a product not much desired by potential customers. Their sales talents might result in more acceptable results, but clear failure might have forced the company to drop the product and replace it with a more desirable one. Tactical implementation offering something more desired by potential customers is also a lot easier on the salespeople who can sell more of a needed product to potential customers with less effort, while the wrong product even sold profitably by good salespeople can cause the company to overlook and misidentify the real need of the customer while a competitor may find and sell a better product to greater advantage.

How Important is Leadership?

One management author wrote, “forget leadership, strategy is all that matters.” Drucker’s research estimated that 50% of the success of any strategy in Implementation is due to leadership and the other 50% is due to everything else.

Ignoring the importance of leadership in strategy execution is a major mistake. Good plans are made and implemented under the guidance and direction of good leaders at all levels. A successful leader does not look at his or her planners for instructions. A successful leader looks at his or her planners and explains what he or she wants to do. Once the planners examine the feasibility, they develop options, alternatives, and recommendations to the leader, but the leader makes the final decisions and then returns it to the planners for the details of implementation.

We know that good planners can also be good leaders and top executives. Dwight Eisenhower was an unknown Army lieutenant colonel who had made a name for himself through his planning abilities though he had never commanded troops in actual combat. In 1940 General George C. Marshall, then Army Chief of Staff plucked Eisenhower from obscurity because of his planning abilities and made him a brigadier general, later selecting him for top allied commander In Europe. Eisenhower never held the rank of colonel, the rank between lieutenant colonel and brigadier general. He had never led troops in combat at any level. Eisenhower, however, was a gifted leader. As Supreme Allied Commander in Europe during World War II, he led the largest sea-borne invasion in history and developed, and executed the overall strategy that was triumphant. He did all this while leading troops of many different countries, speaking different languages, with different priorities and politics as well as controlling great field commanders such as Patton and Montgomery.

Business is not War, but There are Strategy Lessons to Consider

We don’t intentionally take human life in business, nor set out to destroy a competitor’s physical resources during competitive engagements. But while business, no matter how challenging, is not war, it is important not to ignore thousands of years of trial and error and innovation regarding any strategy because many of the general principles of strategy are the same.

The work of the thinkers and doers of strategy over the millennia, and in many cultures have resulted in these principles. These are general principles which are the same no matter where we apply them. Strategy lessons from all fields, are worth examining not only by specialists who develop strategies for a particular situation, but by leaders at every level who must think through proposed strategies for their organizations, make the overall decisions, and finally see them implemented under their direction.

References:

*Adapted from:

The Art of the Strategist by William A. Cohen (AMACOM, 2004)

The Art of the Strategist (audio version) by William A. Cohen (Harper Collins, forthcoming, 2023)

Churchill and Leadershp

Fri, 26 May 2023 20:03:00 GMT

I’ve just returned from a recent visit to London, where I toured the Churchill War Museum.

Drucker wrote of Churchill as an exemplary leader, and I kept thinking about this as I viewed the exhibit. Drucker had this to say about Churchill: “…there was amazingly little charisma in the bitter, defeated, almost broken Winston Churchill of the interwar years; what mattered was that he turned out, in the end, to have been right” (Drucker and Maciariello, 2008, p. 289). Drucker saw Churchill as a leader who clearly defined missions and goals – the first of the critical components of leadership Drucker defined. Charisma, style, and qualities did not define leadership for Drucker. Rather, it was “doing”, or the day-to-day activities that constitute real leadership. Often this requires flexibility and willingness to change given circumstances and conditions; leaders who recognize that they are capable of error realize that this is important. The mission of an effort or organization may also change, requiring the group to pivot. Drucker says that “when things go wrong – and they always do – [leaders] do not blame others” (Drucker and Maciariello, 2008, p. 290). Leadership also requires earning trust. This is gained through consistency, not cleverness or eloquence. In short, leadership, for Drucker, was mundane work, being accountable, showing up and doing the job, and exhibiting humility.

Which takes us to Churchill as a Drucker example of leadership. Churchill had a very checkered career as a politician. He changed parties twice. A conservative in 1900, he became a Liberal in 1904, only to rejoin the conservatives after World War I. Now, one could certainly argue that Churchill was displaying flexibility, responding to events that unfolded. But his early seeming indecisiveness made some view him with distrust.

Churchill also did not have an even track record of success as a man of service. His positions during the first World War created a lot of turmoil. He was the Head of the Royal Navy and was the architect of the disastrous Gallipoli campaign. He resigned after that British defeat.

But Churchill’s warnings against Hitler and Neville Chamberlain’s appeasement policies earned him the post of Prime Minister in 1940. Churchill created the position of Minister for Defence for himself, highly unusual for a Prime Minister. Also unusual was Churchill’s active involvement in the prosecution of the war effort; his speeches helped lift the British morale during difficult times, notably during intensive bombing campaigns by the Nazis.

Scholars of and others interested in leadership have analyzed Winston Churchill to uncover the keys to his effective service during the war. Some claim that Churchill was a charismatic leader, relying on his own oratory skills and personality to gain the public’s trust. Others argue that he was an authoritarian leader; some say his approach was bureaucratic, characterized by persistence and dogged adherence to plans. Still others say Churchill was a transformative leader, or a servant leader. It seems that, by picking certain traits, behaviors, or actions, one can make virtually any argument for what kind of leader Churchill was. In any event, his communication skills, incredible work ethic, and refusal to accept defeat roused the British public in a time of real need.

Some aspects of Churchill’s management and leadership style during the war would probably leave some of you ready to jump ship. He was notably hard on himself, and just as hard on others. The notion of a workday or weekend was nonexistent; work occurred around the clock regardless of the day. Many of those around him found him difficult to work for. One noted that he “wiped the floor” with a staff member who failed to bring a notice to his attention. Typists working in the war rooms were at times subjected to irate tirades and bursts of anger. Yet, at the same time, he could be very caring and concerned for the well being of personnel.

Drucker talks about this aspect of leadership: it is measured in results and performance, not in who likes you. I wonder how this idea of leadership flies in today’s society. Do we tolerate that “difficult” leader who gets incredible results? Or do we seek the leader who uses people skills more effectively? Do the results of the “difficult” leader result in longer term damages to the organization? Does the “likeable” leader get the results we need as an organization? Does leadership in crisis call for a different kind of leader? Or is leadership always a “foul-weather job,” as Drucker says?

It seems we are always trying to balance performance and results with “feeling good” about being part of an organization. Drucker had little patience with “feeling good.” He wrote that “An organization in which people are constantly concerned about feelings and about what other people will or will not like is not an organization that has good human relations. On the contrary, it is an organization that has very poor human relations…Constant anxiety over other people’s feelings is the worst kind of human relations” (Drucker and Maciariello, 2008, p. 424). But he was concerned with the need for status and function. Work needs to provide people with a sense of being an important part of a group or team (status), as well as contributing individually in a meaningful way that is personally fulfilling (function). This work may come through one’s job, or it may come through volunteer work or other activity. But Drucker understood that leaders need to make people feel like they are contributing individually and also part of a team. I think those working in the basement in the war rooms obviously felt that they were contributing to an enormously important effort, and that, even when Churchill was at his worst, they were still part of a group that was saving the nation (and the world) from Hitler and totalitarianism. Churchill motivated those workers in the basement, as well as a nation (and those outside of Britain who listened to his speeches). Even a “difficult” leader can be effective if they are able get results and instill what Drucker called the “Spirit of Performance”:

Leadership is lifting a person’s vision to higher sights, the raising of a person’s performance to a higher standard, the building of a personality beyond its normal limitations. Nothing better prepares the ground for such leadership than a spirit of management that confirms in the day-to-day practices of the organization strict principles of conduct and responsibility, high standards of performance, and respect for individuals and their work (Drucker and Maciariello, 2008, p. 288).

Maybe the case of Winston Churchill can make us think a bit about what leadership looks like more deeply. It isn’t just about a set of qualities. If it were, everyone would agree that Churchill was a fill-in-the-blank type of leader. Maybe leadership depends on the circumstances. Churchill was ineffective early and late in his career but found his calling during the crucial moments of the Second World War when the world needed him. Had history unfolded differently, would Churchill be relegated to the dustbin of has-beens? Probably. Do leaders need to constantly monitor their words to make sure they don’t offend? During normal times, this is good policy and effective communication. But in the heat of the moment, we are all human, and will likely have outbursts that are inappropriate or, more likely, offend someone without our intending that to happen. Part of Management as a Liberal Art is understanding this “art” aspect of management. Dealing with people involves dealing with the whole person. Churchill had a war to contend with. He also got little sleep (and was notoriously lax in other areas of self care). I’m sure the typists he railed at understood the pressure he was under, and how people can react to such pressure. We may not be at war, but your co-worker or boss may have had no sleep, and thus have a short fuse. Churchill apologized for his outbursts. We should too, and we should also recognize that work tensions are often not related to work at all.

My takeaway from the visit to the Churchill Museum was that it humanized him as a leader. I returned to Drucker’s writing on him when I got home, and Drucker similarly characterized Churchill as a person. Churchill wasn’t some charismatic, God-like figure who loomed over the war as a presence. He led by “being right,” by performing, by being effective in spite of his personality, not because of it. For me, this is incredibly insightful, and one of the best evaluations of Churchill I’ve read. While I value much of what people say about leadership qualities and style, I return to Drucker’s emphasis on performance and effectiveness. Real people, those who are fallible and have bad days, who may not always speak beautifully and present themselves with a media persona, can be the most effective leaders when needed.

Sources

“An Overview of Executive Leadership Styles and Traits,” Washington State University website, Carson College of Business, June 4 2020, https://onlinemba.wsu.edu/blog/an-overview-of-executive-leadership-styles-and-traits/.

Churchill War Rooms Museum, London, U.K., https://www.iwm.org.uk/visits/churchill-war-rooms .

“Churchill: Leader and Statesman,” International Churchill Society, https://winstonchurchill.org/the-life-of-churchill/life/churchill-leader-and-statesman/ .

Lewis W. Douglas, “The Qualities of Leadership: Churchill as Diplomat,” The Atlantic, March 1965, https://www.theatlantic.com/magazine/archive/1965/03/the-qualities-of-leadership-churchill-as-diplomat/660832/.

Peter F. Drucker and Joseph A. Maciariello, Management: Revised Edition, Harper Collins, 2008.

“Winston Churchill: How a flawed man became a great leader,” BBC News Magazine, 23 January 2015, https://www.bbc.com/news/magazine-30934629 .

Caroline Longstaffe, “Winston Churchill, a leader from history or an inspiration for the future?”, Industrial and Commercial Training, Vol. 37 No. 2, 2005, pp. 80-83.

Dean Williams, “Winston Churchill’s Terrible Leadership Failure,” Forbes, April 24 2015.

Three Questions for Karen Linkletter, Research Director of the Management as a Liberal Art Research Institute (MLARI)

Tue, 18 Apr 2023 21:21:00 GMT

One of the most striking things I’ve discovered in more than three decades of research/writing about Peter Drucker is the accomplished and multidimensional lives of so many of his associates. Karen Linkletter perfectly fits in that category, as someone who combines her researching and writing career with being a professional cellist and equestrian. She is Research Director of the Management as a Liberal Art Research Institute (MLARI), and her involvement in the Drucker world goes back to her MBA and Ph.D. (in history) from Claremont Graduate University . She later taught in the American Studies Department at California State University, Fullerton for 15 years.

Karen collaborated as coauthor with Drucker’s longtime friend, colleague, and fellow Drucker School of Management professor, the late Joseph A. Maciariello , for the 2011 book Drucker’s Lost Art of Management: Peter Drucker’s Timeless Vision For Building Effective Organizations . She was also involved in the earliest days of the Drucker Archives , and conducted an oral history interview with Drucker in 1999.

I edited Karen’s article “ Leading Through Management as a Liberal Art ” for the Summer 2022 issue of Leader to Leader, where I am managing editor. Also in 2022, I was interviewed by her for the Management as a Liberal Art podcast .

Many thanks to Karen for answering my questions about her multifaceted life, and her continued work related to Peter Drucker, including a book she is currently writing.

For the non-specialist reader, how would you characterize your overall work, writing, and research?

I am trained as an historian, so I have an unusual approach to management and leadership. I tend to look at things in terms of context. How does what is happening right now fit in with a larger pattern, or a theme? I suppose that is why I was so drawn to Peter Drucker as a teacher, and as the subject of my dissertation. I taught American Studies at Cal State Fullerton for 15 years, where I rarely discussed Drucker. But how can you not address the rise of managerial capitalism in America in the 1950s? There was an entire genre of movies devoted to this (boardroom dramas)! It was not just an economic phenomenon, but also a cultural one. Many scholars have written on this subject, and, of course, sociologists were commenting on this at the time. But, until relatively recently, to teach management as part of cultural and intellectual history was heresy. Graduate work in business and other fields (humanities, the arts, sciences) were separate silos. This has – thankfully – been changing.

Can you provide an overview of the new book you are writing about Peter Drucker?

The publisher is creating a series on management thinkers from the past. The idea is to reintroduce important figures, such as Michael Porter and Peter Drucker, to today’s management students, younger practitioners, and a general audience. I’m excited about this project because it positions management as a cultural and intellectual product of history, not just a realm of day-to-day operations. Don’t get me wrong- Drucker emphasized performance and results! But this pragmatic aspect of his work often overshadows his larger project. He was, in essence, a philosopher and theorist. As someone who experienced Nazi Germany and the rise of fascism, Drucker sought to devise a social system that would prevent a repeat of history. I’ve presented Drucker as a social theorist in my previous work. The challenge with this book is to critically examine Drucker in terms of his place in history, yet also show his relevance to today.

Can your describe your life as a musician and how it fits in with your work as a writer, research director, editor, and teacher?

The short answer is: it makes for a complicated life. I find that all of the things that I do eventually overlap – and this may be a good message for some people who think they are “scattered.” Working as a musician involves leadership, individual growth, personal reflection, goals, performance and results – all of the things Drucker wrote about. It may be very focused (on a specific performance or piece of music) or it might be more broad (bringing a group together to create an event). Music informs my research, as it did Peter Drucker’s; he related group dynamics to musical groups (jazz combo and orchestra). Editing an article requires a sense of the writer’s rhythm, and how that translates to the reader’s understanding; we want to retain the author’s voice but work to maximize communicating the message to the audience. Teaching for me has always involved bringing in music, often with visual material. In some recent training sessions on Drucker’s philosophy and theory, I used scenes from a couple of old science fiction movies (2001: A Space Odyssey and Blade Runner) to illustrate Drucker’s concern with how new knowledge could be used for evil and how existentialist questions impact everyone – even androids. Bruce, as you argue in your book, Living In More Than One World: How Peter Drucker’s Wisdom Can Inspire and Transform Your Life , Drucker very much advocated living a life rich in variety, and devoted to excellence in more than one endeavor. It’s not for everyone, but it’s made for a fulfilling life for me, and I hope, at the end of it all, I’ve touched a few lives and made a difference. The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

The Application of Management as a Liberal Art

Tue, 11 Apr 2023 22:45:00 GMT

Peter Drucker wrote extensively about the functions and responsibilities of managers and of the principles that could help advance organizational performance. In his works, Drucker inferred that individuals who comprise the organization ought to cultivate self-knowledge, self-awareness, and develop their skills through application.

We first learn about the concept of management as a liberal art in Drucker’s book, The New Realities. In this text, Drucker refers to management as a liberal art: “Management is thus what tradition used to call a liberal art - ‘liberal’ because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; ‘art’ because it deals with practice and application. Managers draw on all the knowledges and insights of the humanities and the social sciences - on psychology and philosophy, on economics and history, on the physical sciences and ethics. But they have to focus this knowledge on effectiveness and results.” (Drucker, 1989)

Drucker argued that individuals in organizations must recognize that human nature is imperfect, but through careful observation and contemplation, and lots and lots of practice, decision making can be improved. Over time, as people in organizations practice management ethically and responsibly, the community at large benefits from the decisions made in responsible, socially-conscious organizations.

Management as a liberal art is a concept that embodies a philosophy - one which rests on the elements of knowledge, self-knowledge, wisdom, and leadership. This implies that an individual has the potential to grow and develop into a more effective manager and decision-maker as long as the person takes time to reflect, develop skills and knowledge, and continually acquire experiences that will enrich her or his perspective about effectively leading people in the organization.

However, Drucker recognized that self-interest often disrupts and in the worst cases, impedes and restricts the efforts of others. As such, the individual must develop the ability to observe what is occurring within the organization and outside of it, but also develop self-awareness and the ability to reflect on his or her own behavior, and the decisions that are made. This includes analyzing how decisions may influence the actions and behavior of others.

It is through self-reflection and awareness that we can take note of what has worked, what did not, and what we could do differently the next time another situation arises. An individual can develop emotional intelligence, to use Daniel Goleman’s concept. And in the context of management as a liberal art, this is what we would refer to as self-knowledge.

An individual can become more effective in supporting the growth and development of others, as long as the person learns to appreciate people for who they are and allow them space to be themselves. But to do this, the individual must learn to listen to others, respect them, and recognize their concerns and needs. It is also important to leverage people’s ideas and suggestions to help find solutions. This is an important assumption under management as a liberal art.

Another key element of management as a liberal art is the notion that the individual must build knowledge. As such the individual must actively seek information, data, facts and stories that can help augment knowledge. Moreover, we can enhance our managerial skills and decisions by applying a transdisciplinary perspective to solving problems.

Using a transdisciplinary perspective provides the individual with an integrated, more holistic perspective that aggregates different points of view from across the arts, humanities, and science. Drucker posited that we can learn from reading history, philosophy and economics, and that the reconciliation of ideas from multiple disciplines can be beneficial to determining the best course of action. Drucker suggested that the careful consideration of differing alternatives and downstream effects, contingencies, and potential outcomes, would enhance decisions and enable the individual to become a more effective decision-maker.

According to management as a liberal art, it is important that we consider how our actions will influence others and that we take responsibility for our actions. Management as a liberal art posits that people define themselves (and serve society) through responsible action. This means that effective managers will act responsibly and ethically, and use their status and power to advance the well-being of the organization and its people. This infers that the individual will act with the best interest of the organization (and its stakeholders) in mind. Using good-judgment and having insight and an improved understanding of situations and contexts is what we would refer to as exercising wisdom.

In order to engage people and build better organizations, and ultimately contribute towards what Drucker referred to as a ‘functioning society’, it is vital that we treat all people within the organization with respect and dignity. And that we help people grow and develop and find meaning in what they do. This is how great organizations are built. This is what we would call leadership.

And leaders within the organization must be aware that things change and that some things must be changed, and others kept. This means balancing change and continuity and recognizing which process or activity needs to be revamped, and which other best practice needs to be preserved.

Management as a liberal art is rooted in practice and application, in self-reflection, in treating people with dignity and respect, and in using a trans-disciplinary lens to help improve decisions. It takes time to achieve results and build great organizations, but it can be done. And organizations whose managers are able to practice and apply, and continuously reflect and learn from their actions, are more likely to help build a better community and a thriving functioning society.

References

Drucker, Peter F. (2003) A Functioning Society (Routledge, London and New York)

Drucker, Peter F. (1989) The New Realities: in Government and Politics, in Economics and Business, in Society and World View (New York: Harper & Row)

Goleman, Daniel. (2007) Emotional Intelligence. 10th ed., Bantam Books.

The 14th Global Drucker Forum 2022

Mon, 09 Jan 2023 22:49:00 GMT

The 14 ^th Global Drucker Forum 2022, held at Hofburg Palace, Vienna, Austria

PERFORMANCE THAT MATTERS: Sparking the Entrepreneurial Spirit

November 17 and 18, 2022

Drucker Forum founder and president, Richard Straub, in his opening statement for the Forum said, “Management-as-usual is not going to cut it.” He then announced the opening in January 2023 of “a new force for change”, The Vienna Center for Management Innovation. The aim of this center is to help solve the world’s problems by taking management to a new and higher level. According to Straub, we need a step change in productivity and innovation; We must ask of ourselves, how can we advance the social technology of management—in practice as well as theory—to do more to solve the problems and overcome the challenges of our fast-changing world. The Center, under the umbrella of Global Drucker Forum, will serve as a meeting place, both physical and virtual, a form of think tank, and a center for dialogue and research.

The location of the Forum was the Hofburg Palace, which serves as the Austrian seat of government. It is an awe-inspiring complex in the center of Vienna. The meeting rooms were palatial and ornate. The forum consisted of six sessions attended by all forum participants and eight sessions where participants picked which session to attend. All sessions were moderated panel discussions with either three or four speakers and time at the end of each session for questions from the audience. I was impressed with how they used the breaks between sessions: Food was served at lunch and at every break. Participants were asked to get our coffee or food and gather at the numerous standing tables and have discussions with each other. Lunch breaks were 75 minutes and shorter breaks were sometimes 30 minutes. I found this strategy to be very effective. Some of the best learning happened at the breaks.

The official statistics on the Forum were that over 500 people from 50 countries attended in person, and thousands more attended virtually. Two memorable highlights of the Forum were a celebration of Harvard Business Review’s 100 ^th birthday and a video presentation by author and social philosopher, Charles Handy.

The Executive Editor, Editor-in-chief, and six other executives from Harvard Business Review attended the Forum and participated in the informal discussions at the breaks. They also presented a panel discussion on the Review’s philosophy. They noted that Peter Drucker had over 30 articles published in the Review.

Charles Handy attended all previous Forums. Handy has been listed by Thinkers 50 as one of the top 50 management thinkers in the world. He is now 90 years old and lives in Ireland. He sent an inspiring video presentation to be viewed by Forum participants.

The Forum topics included performance, innovation, entrepreneurism, intrepreneurism, change, spirituality, purpose and passion, autonomy, resilience, risk-taking, sustainability, and humility. Some of the notes I wrote down from the Forum included:

· What is performance?

· Have we gone too far towards performance?

· Mixing preference with prediction.

· Don’t confuse effort with results.

· If a supervisor says “no” to an employee's suggestion, they must write a report. If they say “yes”, they don’t have to write a report. (Amazon)

· The journey is important, not the destination.

· The current trend towards people often changing jobs might be because people leave when they don’t feel cared for.

· Culture eats strategy for breakfast (Drucker)

· Some leaders think, “How can I change without really changing”?

· The ONLY thing that wants change is a wet baby.

· Human-centric organizations.

· Purpose drives performance.

· The meaning of life is to find your gift, the purpose is to give it away.

· There are too many CEO narcissists. They stifle innovation.

· Is the world a better place because your company is in it?

Some miscellaneous observations I made: I only heard the name, Drucker. a few times. Many of the presentations were on concepts that Drucker wrote about, but had few Drucker quotes. Drucker’s idea of management as a liberal art was not discussed or spoken. The words leadership and management seemed to be used interchangeably. About 70 percent of the speakers used the word leadership, instead of management.

Dignity, Status, and Function: Pay Attention to the New Concerns of Knowledge Workers

Thu, 15 Dec 2022 18:11:00 GMT

The recently averted railroad worker strike reminded me of an important event in history that most people today are probably unaware of. In 1877, rail workers across the United States went on strike, creating what historians now refer to as the Great Railroad Strike. When historians think an event was significant, causing some kind of cultural, economic, social or other upheaval, they designate it with the term “Great” (the Great Depression, the Great Awakening, the Great Recession).

Peter Drucker looked at events of his time through the lens of a social ecologist: someone looking for meaningful change that has already impacted or would impact society in the long run. This change may be in the form of demographic trends, shifting attitudes, or significant events. In hindsight, we know that the 1877 strike was significant although, at the time, it appeared to be a short-lived, albeit violent, worker uprising. The Great Railroad Strike showed the changing nature of class identity, and what can happen when people feel a loss of dignity, status and function in society. While certainly not a “great” event, the averted 2022 strike is perhaps another event that points to changing attitudes about work and the continued importance of dignity, status and function. I think it presents us with a moment to consider the nature of work in our post-pandemic environment, particularly as many organizations grapple with challenges related to finding and retaining qualified workers – especially knowledge workers.

Before we get to the details of the 2022 railroad strike that didn’t happen, I’ll give a brief summary of the Great Railroad Strike. Economic conditions in 1877 were grim. The United States suffered an economic “panic” in 1873, when the failure of a major investment firm triggered a loss of confidence in the financial markets. The country plunged into a depression, and firms began cutting jobs and wages, raising unemployment and further dampening the economy. The railroads, which were the primary means of transporting goods across the United States, had been a growth industry until the Panic of 1873, and employed large numbers of workers. In May of 1877, the Pennsylvania Railroad, the nation’s largest railroad, cut wages by ten percent, and then cut them by another ten percent the following month. Other railroad companies did the same thing, and also cut the work week down to a couple of days. In July, the Pennsylvania Railroad doubled the size of its eastbound trains with no increase in staff to manage the additional workload. In that month, workers began to rebel, taking control of train switches and preventing cars from moving. Violent strikes began to erupt in cities across the country; Maryland, West Virginia and Pennsylvania called up their state militias to respond to the violence. In some cities, militia members sympathized with the strikers, and joined in. President Rutherford B. Hayes called in federal troops, and in Pittsburgh, these troops fired into crowds of people, killing more than 20 civilians. By the end of July, the strike had subsided, leaving 100 people dead across the country and over a thousand arrested.

The workers received none of their demands (better pay, restored hours), and labor unrest continued in the industry well through the late 1800s. So why was this such a momentous event?

· Public support: Mark Twain published The Gilded Age: A Tale of Today in 1873. In this novel, he satirizes the wealth inequality that was a feature of American society in the late nineteenth century. The greed and political corruption of this era is well documented; as working-class Americans became increasingly aware of the growing class divisions in society, they sympathized with the railroad strikers. This public opinion fueled an eventual call for labor reform.

· Multi-industry support: This was the first general strike in American history, where workers from other industries supported the rail workers. The Great Railroad Strike touched a nerve in the growing working class, who felt devalued, increasingly marginalized, and exploited by a wealthy ruling class.

· Catalyst for unionization: At the time, there were few organized labor unions; organized labor consisted of local brotherhoods of primarily skilled workers. The Great Railroad Strike galvanized workers to organize into more effective unions, such as the American Federation of Labor, to attempt to ameliorate their work conditions, hours, and wages.

· Power: The Great Railroad Strike showed the power of human action. Without any organization and structure, rail workers were able to cripple the transportation network of the United States. Meat rotted on railroad cars, mail was not delivered – an entire national system of order was brought to a halt by a relatively small group of people wielding enormous power.

There are some parallels between the Great Railroad Strike and the averted 2022 railroad strike, and also some remarkable differences. First, the parallels.

· Essential workers: People in the 1800s paid a LOT of attention to what happened with railroads, because they understood how goods moved through the country, and they felt the impact. The COVID 19 pandemic highlighted the importance of “essential workers,” including those employed in transportation. As supply chain constraints led to shortages of all kinds of goods, from microchips to toys to food items, most Americans, probably for the first time, were unable to purchase some product for lack of supply. During the pandemic, essential workers in health care and grocery stores were heralded as “heroes.” Workers in rail transport received little attention even though that industry experienced enormous upheaval. However, the threat of a strike in 2022 just before the holidays put the railroad industry in the spotlight, showing how, in spite of their small numbers, these workers could inflict considerable damage and pain to the U.S. economy. President Biden cited the devastating effects of a rail strike, pointing to the possible loss of 765,000 jobs. In 1877, railroad workers shut down the economy of the United States in a time where rail transportation was the primary way to ship material interstate. Rail workers were few, but powerful. Today, rail workers are an even smaller portion of the labor force, but they still wield power as essential workers.

· Industry turmoil: In the late 1800s, the United States was in the throes of an economic decline precipitated by a financial panic. The railroads were the primary source of interstate transportation (and also a new, growth industry, and thus their securities were susceptible to price fluctuations). The railroad industry of the 21 ^st century also faced considerable turmoil, including international pressure. Following a steady decline since the 1940s, employment in the railroad sector remained relatively stable from the 1980s until 2018, when employment numbers began to drop. One reason for this decline in jobs was the decrease in shipments of coal resulting from a shift away from fossil fuels. Another reason was the uncertain trade relationships the United States had with key partners, particularly China. Tariff threats between the two countries involving both agricultural products and manufactured goods caused rail companies to reconsider hiring new employees. Company practices also played a role. In the early 2000s, the railroad companies began to pursue a business model that emphasized boosting profits by reducing labor costs. The implementation of precision scheduled railroading (PSR) allowed railroads to operate more efficiently, but it also eliminated the business’s ability to have staffing cushions or manage unforeseen circumstances, such as weather disruptions. Finally, like all industries, the nationwide shutdowns forced by the COVID-19 virus outbreak caused widespread unemployment in the railroads. When the economy began to recovery from the pandemic in 2020, the industry faced staffing shortages, and made increasing demands on workers’ already stressed schedules. Train operators don’t have regular days off; when they return from a trip, they are rotated to the bottom of the staffing list to give them time off. However, if the staffing list is short, workers have little to no time off, and are discouraged from taking any paid leave. With deteriorating work conditions, attrition increased, exacerbating the railroad companies’ already stretched staffing problems. As was the case in many other sectors, the “Great Resignation” impacted the rail business, as older workers opted to retire, and younger workers prioritized work-life balance over wages. So, as in the late nineteenth century, the industry looked to labor reductions to cope with changes in externalities.

· Lack of dignity, status, and function: In the 19 ^th century, workers felt devalued for a number of reasons. As America industrialized in the early 1800s, skilled workers saw themselves as partners with management; management and labor both had a seat at the table to negotiate work conditions, output, wages, and goals. In a way, these early years of labor reflected Drucker’s idea of Management by Objectives. Each party saw themselves as having responsibility for the organization’s success. However, as industrialization matured in the late 1800s, coupled with immigration of lower-skilled labor, relations between management and labor soured. Growing class division and economic uncertainty fueled the working class’s sense that they were inferior, unvalued, underpaid, and lacking in status and function. The Great Railroad Strike was but the first of many labor actions that reflected this sense of indignity in a country that preached that hard work would equal success. In 2022, dignity for workers of all kinds means not just money. Railroad workers are highly paid, but cannot take time off for personal needs, such as doctor visits. In the 21 ^st century, dignity involves being treated as a human being, not an economic being. Drucker wrote about this tirelessly. We should not be surprised that workers who cannot have time to have a meaningful life outside of work should be unhappy and unproductive. Railroad workers are not merely labor inputs.

Now, the historical divergences.

· Union power: The Great Railroad Strike of 1877 did not involve union participation because there was no railroad union. Today, there are multiple unions representing the various trades associated with railroad work (37 railroads and 12 unions), including machinists, train operators, electricians, blacksmiths, and transportation communication professionals. The interests of all of these parties are not the same. Negotiating a labor agreement requires balancing the desires of all participants and involves compromise. The 2022 agreement was criticized by many – a sign that it was a compromise that involved parties giving in on positions. In 1877, workers had no bargaining power, and violence became the tool of last resort.

· Unimportance of wages: The Great Strike of 1877 was primarily about wages (and job retention). The workers of 2022 were paid well; the average pay for a train conductor in 2022 was $53,571, and they certainly did not want more hours! The issue in 2022 was about time. As discussed previously, dignity, status and function – aspects that Drucker emphasized from the beginning of his writing – are key in both of these labor actions. In 1877, wages and more hours were valued. Today, workers value time with their families, time to take care of their personal needs, and having a life outside of work, especially if they are an essential worker, stretched to the limit during the pandemic and the years of recovery after. Money is important to cope with inflation and financial stressors, but this strike shows that highly-paid workers can still feel undervalued.

· Technology: In 1877, the railroads were still relatively new technology. The financial meltdown in 1872 was a result of speculation in railroad securities. By 2022, rail transportation was a very old industry that has undergone major shifts to stay alive and relevant. The railroad industry, like many others, has seen an increased use of technology and a subsequent shift in job requirements for workers. Rather than rely on human eyes for inspecting tracks and equipment, companies use drones and sensors to collect large amounts of information and rely on data analytics to streamline operations and improve safety and efficiency. Positive Train Control (PTC) uses Artificial Intelligence and algorithms to determine the location, direction, and speed of a train on many routes, notifying the train operator of a problem and, if no action is taken, stopping the train. Those tasked with developing and using these new technologies are a new kind of knowledge worker in the rail industry.

Takeaways

· Knowledge workers are essential workers too. The pandemic shed light on existing class divisions (as well as ethnic, racial, and gender divides). People celebrated “essential” workers who were visible, working on the front lines. But many other workers were just as “essential,” managing freight traffic to accommodate the shift towards purchasing consumer items during the lockdowns. When the economy reopened, these same workers were tasked with managing supply chain issues. In the 19 ^th century, railroad workers were, for the most part, skilled labor. They are even more so now. We need to think through who is an “essential” worker and what is “knowledge” work.

· All workers need balance. Workers in the 1800s needed adequate wages and hours to survive – but not to the point of being worked to death. Once unionization provided some control over wages, workers in the late 1800s and early 1900s were pushing for balance. “Eight hours labor, eight hours recreation, eight hours rest” became the rallying cry for an eight-hour work day. Knowledge workers may scoff at such an idea, but for manual laborers in heavy industry, physical labor takes a toll. Today, it is easy for knowledge workers to toil for 12 plus hours a day. But the pandemic created a shift in attitudes about work/life balance. We all need time to manage personal needs (doctor appointments, child care, etc.). Even if work isn’t physically grueling, it shouldn’t prevent us from being human beings.

· Wages are important in an inflationary environment, but time is more important. Early labor actions fought for better wages and work conditions. Today, wages are important, and lower-skilled workers are fighting for better pay to keep up with the cost of living. Knowledge workers also need to be paid a reasonable wage or salary, especially given our inflationary environment. However, increasingly, time is more valuable to people than money. At some point, the utility of time outweighs the utility of money. The Great Resignation and the threatened railroad strike show that we are seeing this economic tradeoff become more widespread.

· All workers need a sense of dignity, status, and function. This sounds great. What does it actually look like? It is complicated. In the 1800s, American society began to sort people into an increasingly divided class system, with industrial workers (no matter how skilled) at the bottom. The managerial and professional class began to rise as the new middle class (replacing teachers, tradesmen, and others of the old pre-industrial era), while the wealthy plantation owners and merchants were joined (in many cases surpassed) by a growing upper class of industrial elite. When the working class of the United States sensed a lack of dignity, status and function, they rebelled – and organized. When the organized railroad workers of 2022 sensed a lack of dignity, status and function as a result of years of overwork, they spoke. It seems to me that if managers can grasp the importance of such key aspects of MLA (dignity, status, function), then we can prevent such actions in the future. And, if we can view things through the lens of a social ecologist, we can see the bigger picture, understanding how history can teach us how not to repeat the errors of the past.

https://www.digitalhistory.uh.edu/disp_textbook.cfm?smtid=2&psid=3189

https://www.nytimes.com/2022/09/15/business/economy/railroad-workers-strike.html

https://www.aar.org/article/the-future-of-rail/

https://www.bls.gov/opub/mlr/2021/article/employment-in-rail-transportation-heads-downhill-between-november-2018-and-december-2020.htm

https://www.whitehouse.gov/briefing-room/statements-releases/2022/11/28/statement-from-president-joe-biden-on-averting-a-rail-shutdown/

https://raillaborfacts.org/bargaining-essentials/the-parties/

https://www.glassdoor.com/Salaries/railroad-conductor-salary-SRCH_KO0,18.htm

https://www.nelp.org/blog/this-week-in-labor-history-remembering-the-adamson-act/

An Interview with Yellow Couch, Filip Hrkal, Chief Vision Officer-CEE Region

Wed, 30 Nov 2022 16:43:00 GMT

Dr. Mendenall chose to interview Yellow Couch due to their business traits: innovation, a change-balance model, ethical leadership, and consistency in product. Yellow Couch is an online Human Resources business that provides clients with employee recruitment and development services in Central East Europe. Filip Hrkal and Vaclav Coubal started the company in 2006.

1. What was your most recent set of innovations to become the online self-sufficient company that you are now?

Product Innovation

Add the best technology and the best assessments to increase awareness and explanation of human potential. This is for businesses and potential as well as current employees. “Everyone was asking how can you test on mobile phone. Stay with what you do.” The answer was “We see this trend coming.” Now, Yellow Couch is focused on virtual and augmented reality. 60% of the assessments now run in Eastern and Central Europe are on smartphone over the computer. Therefore, Mr. Hrkal sees that these tests will soon be done in alternate realities.

Business Innovations

Yellow Couch became a “pure online company over a 3-year period.” State-of-the-art technology was essential with stable Internet connection. They had to avoid cloud collection to protect data so Yellow Couch as has their own secure servers. This also allows employees to access the necessary materials to work from a distance.

Yellow Couch developed the method for recruitment of employees because different characteristics were needed such as flexibility and ability to work independently.

2. How do you keep the team dynamic so everyone is traveling toward the same goal?

Keeping Talented Employees

There is a clear set up of responsibilities. Leadership promotes meeting in-person once every 14 days for social time, when possible, so that online meetings can focus on projects, new ideas, and issues. Yellow Couch can be very flexible because of their size and being quick decision-makers. For example, an informal idea forming document was shared in the common online space to promote suggestions and discussion prior to the quarterly goal-setting meeting. This provides brainstorming time that gives autonomy to employees to share their thoughts. With this think time, the meeting can begin part way through the discussion, be focused, and within a shorter time limit because the discussion had already been started.

Flex Schedules

Yellow Couch uses flex scheduling with part-time employees of specialized talents. The employee is paid to be available instead of at an hourly or daily rate. This allows colleagues to work on their own business endeavors, but also work for Yellow Couch when needed. Flex scheduling also works for those on parental leave . Full-time employees have standard scheduling for certain functions and meetings, but also have some flexibility to complete other responsibilities.

3. What are some obstacles that are no longer in the way now that you are an on-line company?

The obstacle was the office. The time that it took to commute to the office for each employee is now spent on personal life. This allows for a focus on personal health and wellbeing. The need for an office was a psychological obstacle. It was made easier to adjust to online only with COVID though we had started the process before. Customers want online assessment instead of assessment being done in an office because more work is being done online.

Mr. Hrkal’s closing thoughts:

Balance in Function

In the past 3-4 years, Yellow Couch has streamlined what was offered to clients based on time and investment analysis. They narrowed their portfolio to reduce the energy spent on items that were not viable from an economic point of view. This allows for focused energy in other areas.

The company also has zero debts to allow for financial freedom to choose projects, clients, and without the added pressure of financial need. The clients seem satisfied because the employees are not in a rush. There is a balance. This also allows a focus on “health and well-being for us, our employees, and our clients and their employees to promote good work-life balance and mental status” Mr. Hrkal stresses that this is an essential focus of business leaders for the next few years.

Yellow Couch can be found at https://www.yellowcouch.cz/en/ as well as LinkedIn.

The full interview can be found on our MLARI channel at Yellow Couch Interview with MLARI, Part 1

Do Words Matter?

Wed, 16 Nov 2022 00:40:00 GMT

Peter Drucker's distinction between language and communication

Peter Drucker made a clear distinction in his writing between language and communication. For Drucker, language was part of culture. It was “substance…the cement that holds humanity together. It creates community and communion” (Drucker, 1992). Language was not just communication. It was something much more important. In our current time, I don’t think we share this respect for language. With the explosion of social media, it has become too easy to type a few words into a text or a tweet, or even an email, and expect that the reader will understand the essence of that communication.
I’ve been leading a course on Drucker Philosophy and Theory 101 for faculty and administrators at CIAM, as well as participants from MLARI, since the summer. Although we’ve been delving into the intricacies of Drucker’s ideas and how to implement them, our sessions have focused on Drucker’s language; what did Drucker actually SAY about topics such as a functioning society of organizations, or management as a liberal art? What role do words play in how we interpret meaning – in short, how do words function in communication?
Communication can take many forms that are nonverbal: body language, facial expression, tone, etc. These are very important, particularly as we emerge from a remote world where many of us are rusty in using these kinds of communication skills. But the role of verbal communication is crucial to any society, particularly a society of organizations where people need to convey complex ideas and information.
Drucker was well aware of the problem of communicating. In a paper presented in 1969, he stated that “communications has [sic] proven as elusive as the Unicorn” (Drucker, 1993, p. 320). Despite the increased focus on the subject, managers in the mid-twentieth century were woefully poor at this skill. Can we argue that the same is not true for today in any sector (government, for-profit, health care, education) save for some exceptions?
I suppose we need to clarify what “effective communication” looks like. In today’s world, communication can look like a Zoom meeting, a tweet, a social media post, a highly-scripted interview, or an administratively-driven process of internal interactions. Are these effective forms of communication for organizations? They can be, but, if misused or poorly crafted, they can be remarkably ineffective.
In his seminal work, Management: Tasks, Responsibilities, Practices (1974), Drucker cited four fundamentals of communication: · Communication is perception · Communication is expectation · Communication makes demands · Communication and information are different and indeed largely opposite – yet interdependent (Drucker, 1974, p. 391).
Much of this material derives from the 1969 paper presented to the Fellows of the International Academy of Management in Tokyo.
Communication is perception: Drucker has a lot to say about this, but I can summarize: Did he/she/they “get it”? You may be an incredible speaker (or writer), or you may not be. The point is: did your audience get what you were trying to convey? If not, why? Was it the words you used, the delivery, the body language, etc. It’s hard to admit that, even though you are a professional speaker or writer, “it is the recipient who communicates. The so-called communicator, the person who emits the communication, does not communicate. He or she utters. Unless there is someone who hears, there is no communication” (Drucker, 1974, p. 391). That’s a hard pill to swallow if you fancy yourself an eloquent speaker, leader, or teacher. But it really doesn’t matter, does it? What matters is whether or not your “utterance” was understood. And was it understood the way you intended? You may think you conveyed an idea or thought, but the language you used may have been perceived in a different way due to cultural differences, gender or ethnic conflicts, class inequalities, or other sources of miscommunication (see, for example, https://www.tandfonline.com/doi/full/10.1080/23311975.2017.1408943 ).
Our more recent problems with communication and perception have to do with virtual interactions that accelerated during the pandemic and have remained an integral part of how we talk to each other. Various platforms have attempted to upgrade their interfaces to improve communication, such as features that allow one to avoid seeing themselves (which can be distracting, as some tend to focus on their appearance rather than on the content of the meeting or the reactions of others). How can you assess the perception of your Zoom audience during a presentation? Especially when the cameras are turned off? Many have lost their perception skills because of the reliance on technology rather than face-to-face interactions. What does that emoji mean? How do I interpret the exclamation point in that text? Drucker’s first element of communication – perception – is difficult to assess virtually. Is it any wonder we are so poor at real communication today? (See https://www.harvardbusiness.org/wp-content/uploads/2020/03/HBR_How_to_Avoid_Virtual_Miscommunication-1.pdf , and https://www.forbes.com/sites/forbesbusinesscouncil/2021/10/07/zoom-gloom-is-real-how-to-improve-communication-and-connection-without-video/?sh=63c86ebd243d)
Communication is expectation: Humans try to make sense out of our worlds and assemble information into some kind of order. We all have a set of expectations based on experience that influence our processing of information. In Drucker’s words, “We see largely what we expect to see, and we hear largely what we expect to hear” (Drucker, 1974, p. 393). The unexpected is either ignored or largely misunderstood. People try to fit information into their existing framework or understanding of how things work.
We have to understand what people expect to see and hear before we can effectively communicate. If information fits within someone’s expectations, it will be perceived. If the message is contrary to the recipient’s expectations, that must be clearly signaled. The worst mistake is to attempt “a gradual change in which the mind is supposedly led by small steps to realize that what is perceived is not what it expects” (Drucker, 1974, p. 393). This only reinforces expectations. Instead, clearly communicate that “This is different!”, creating an awakening that breaks through expectations.
This is easier said than done! Such a signal can create a sense of panic or distress, as it implies the need for a change in approach, strategy, outlook, and/or tactics. In the United States, the poor messaging with respect to public health measures needed to combat the impacts of the COVID-19 pandemic illustrates the dangers of mismanaging human expectation in communications. In the early stages of the pandemic, when data were limited, public communications did not emphasize that this was, in fact, a novel coronavirus, and that the potential threat was unique and serious. As a result, much of the public discounted later attempts to curb mortality rates through lockdowns, distancing, and masking. The COVID-19 pandemic did not fit within anyone’s expectations (save for the handful of experts trained in virology and public health). Yet, other nations, notably Germany, Taiwan, and South Korea took the threat seriously, communicated it effectively, and managed to avoid significant deaths in the early stages of the pandemic. Researchers are evaluating the various responses to the pandemic, and how the public reacted to communications from scientists and government representatives (see, for example, https://www.sciencedirect.com/science/article/pii/S2212420921004775 and https://journals.sagepub.com/doi/full/10.1177/09636625221093194 Communication makes demands: In his 1969 paper, Drucker used the subtitle “Communication is Involvement” (Drucker, 1993, p. 326). That header actual encapsulates his argument more effectively; he likely modified it to appeal to a management audience in his later work. Drucker says that communication “always demands that that the recipient become somebody, do something, believe something. It always appeals to motivation. If communication fits in with the aspirations, values and purposes of the recipient, it is powerful. If it goes against them, it is likely not to be received at all…By and large, therefore, there is no communication unless the message can key in to the recipient’s own values [emphasis mine],” (Drucker, 1974, p. 395). I think this is possibly the most important message Drucker gives us about communication. Real communication involves some kind of expectation of action. A salesperson asks for the order. A human resources manager requests her team to implement a new policy. A non-profit director asks volunteers to show up for an important event. Drucker remarks that “Communication is always ‘propaganda’” (Drucker, 1974, p. 394), but, frankly, I find his word usage ineffective here. Propaganda is associated with the misuse of language - the attempt to promote a biased perspective or a particular point of view. But the point that communication expects some kind of action - physical, intellectual, or spiritual – is important. Clear communication is not propaganda. It conveys information that is congruent with values that are shared by the individual and the organization (or the communicator). If a leader asks team members to participate in a project, the project needs to make sense in terms of the organization’s values and objectives, as well as the individual participants’ sense of purpose and meaning. This is why it is so critical for organizations to make sure that team members share the same values and goals of the larger institution. If individuals are not aligned with a higher purpose, their efforts are solely their own, with no greater function. Communication that asks them to do something for the “team,” or the “organization,” or “society” will not be received. Conversely, organizations need to make sure that they are communicating in a way that speaks to the motivations of the individual; how will that person grow from this experience? How will they become more effective in their role, or as a leader, or as a person? Communication and information are different and largely opposite – yet interdependent: Information is pure. It is logic, without meaning, impersonal, and free of human intervention. Communication, however, is steeped in human intervention. Communication seeks to make meaning out of information. As Drucker noted in 1974, humans were awash in information, but lacking in ways of making sense out of that information: “…information is, above all, a principle of economy. The fewer data needed, the better the information. And an overload of information leads to information blackout. It does not enrich, but impoverishes” (Drucker, 1974, p. 395-396).
Fast forward to today, and we are in the same situation on steroids. Misinformation abounds on social media platforms, leading to political division and violence. Organizations are overwhelmed by data, struggling to find meaning in the mass of information. Data analytics has exploded as a field of study and application. Fifty years ago, Drucker commented that the information revolution of that age did not really produce information; it merely produced data (Drucker, 1974, p. 398). This is not communication. Communication involves understanding the human component: emotions, values, expectations and perceptions. Thus, communication and information are, as Drucker states, largely opposite, but yet they are interdependent, particularly today. How can we use information constructively in communications? By understanding the human component of communication.
So, do words matter? Do what we say and write make a difference in communication? Absolutely.
If communication is perception, it requires effectively conveying concepts or ideas in a way that another person can actually hear and comprehend. This may require using a variety of words to communicate; not everyone understands a particular term the same way, as words carry associations, cultural references, and other information. In our class, for example, we discussed the fact that Drucker’s use of the terms “conservative” and “liberal” can be very jarring for a modern audience, as those words today are particularly loaded politically. In Drucker’s writing, they are not; Drucker uses those terms in a historical context that is largely unfamiliar to a contemporary audience, particularly an American audience. In academia, the use of jargon is another example of where language can get in the way of perception. The term “rationality” in decision making has specific connotations that may be unclear to someone who comes from a humanities background, where “rationality” may mean something more philosophical. Particularly when we are attempting to discuss complex problems or subjects, our word choice can actually make a complicated subject more confusing. If communication is expectation, we need to understand what our audience expects to hear, read, or see. What is “expected” for this particular person or group of people? Can we use language that fits with their worldview or perspective? Or do we need to signal clearly that something is out of the ordinary? Some individuals are more flexible and open to change; they are resilient in the face of adversity and have coping skills to adapt. Others are less capable in this area; they fear change and prefer routine and the safety of predictability. If you are introducing a new program, method of performance evaluation, or other change, how does your language impact the reception of that action? If someone expects change as the norm, the communication can take one form. If another person expects the absence of change as the status quo, then the communication needs to be modified, using a completely different tone and approach. This is why it is crucial for you to know your team members and assess them without passing judgment. What do they expect? How can you most effectively institute a change without having people ignore that something is different and needs to be noticed? If communication makes demands, our language needs to consider the values of the recipient so that we effectively stimulate action. If we are asking someone to do something, or believe something, or comprehend a point of view, our words have to align with the worldview of the recipient. This is particularly true if we are asking people to be part of a team or organization, or to do something that benefits society. Drucker’s discussions of the social responsibility of business, for example, emphasize the fact that actions that mitigate negative impacts can be profitable for an organization. It actually can benefit a company to remedy its negative social impacts – not just because it’s “the right thing to do,” but because it is financially beneficial. This kind of thinking would aid communication involving corporate social responsibility, particularly efforts to mitigate climate change. Finally, if communication and information are different and largely opposite – yet interdependent, we need to do a better job of integrating the two, particularly in today’s society that is awash in data. What information is relevant to decisions? How do we glean meaning out of big data? How do we use information as part of effective communication? Simply reporting data is not communication. Communication involves taking information and telling a story, making that information useful to the world of problem solving, decision making, and the often messy practice of management. How do we craft written articles and oral presentations to make data meaningful and useful? We need to consider all of the factors Drucker mentions earlier. How will the data be perceived? As a threat? An opportunity? How can I use language to effectively communicate the meaning of the information? How does the information fit with the expectations of the audience? Is it shocking, or expected? How do I need to convey data to motivate people to act? Information alone won’t motivate, so what words do I use, or do I use pictures or some other method to illustrate the information? In short, what is the best way to present my analysis that will reach my audience and actually make them listen, understand, and respond?
What does effective communication look like in your organization? If language is important, and not just “communication,” shouldn’t we pay attention to how we use it, particularly with the vehicles we have? With all of the media available to us, are we as careful about the words we use as we should be? Language may not be the realm of culture that it was in Drucker’s era, but words do matter, whether they are used on Twitter, email, voicemail, text, or in a meeting on Zoom or in person. In this time of rapid change and response, perhaps it benefits us to slow our response down to make sure we are communicating with each other effectively. Sources Drucker, P. F. (1974). Management: Tasks, Responsibilities, Practices. Oxford: Butterworth-Heinemann. Drucker, P.F. (1969). “Information, Communication, and Understanding.” Reprinted in The Ecological Vision: Reflections on the American Condition. New Brunswick: Transaction Publishers, 1993, pp. 319-337. Drucker, P.F. (1992). “Reflections of a Social Ecologist.” Reprinted in The Ecological Vision: Reflections on the American Condition. New Brunswick: Transaction Publishers, 1993, pp. 441-457. Evans, A., Suklun, H. (2017). “Workplace diversity and intercultural communication: A phenomenological study.” Cogent Business Management, Vol. 4, Issue 1, 5 December. Ferrazzi, K. (2013). “Managing People: How to Avoid Virtual Miscommunication.” Harvard Business Review, April 12. Lui, L., Wu, W., McEntire, D. (2021). “Six Cs of pandemic emergency management: A case study of Taiwan’s initial response to the COVID-19 pandemic.” International Journal of Disaster Risk Reduction, Vol. 64, October. Trejo, B. (2021). “Zoom Gloom is Real: How to Improve Communication and Connection Without Video.” Forbes, October 7. Utz, S., Gaiser, F., Wolfers, L. (2022). “Guidance in the chaos: Effects of science communication by virologists during the COVID-19 crisis in in Germany and the role of parasocial phenomena.” Public Understanding of Science, Vol. 31, Issue 6, May 18.

What Kind of Crisis Leader are You?

Sat, 24 Sep 2022 00:04:00 GMT

Thirteen years ago in September, I was diagnosed with breast cancer. It was a complete shock, as I had no family history of it and was, I thought, perfectly healthy. I was told I would probably not need chemo after my surgery, which took place one month later. After the oncologist obtained more information from the tumor samples, it turned out the cancer was much more aggressive than he originally believed. Chemo was next up. The journey to remission was one such surprise after another; every time I thought we were out of the woods a new complication arose. My strategy for coping was to imagine myself every morning donning a pair of boxing gloves and duking it out with whatever villain cancer threw my way.

Since the COVID-19 pandemic, there are countless articles on crisis leadership. Studies point to the importance of resilience in individuals and organizations, the role of communication and information, empathy or compassion as a component – the body of work in this area is enormous. We will likely be thinking and learning about crisis leadership for quite a while in the wake of this once-in-a-generation event.

I got thinking about this topic of crisis management not because of the pandemic, but because of the realization that there are many different kinds of crises, and also many different possible ways to respond (more than one of which can be effective). The passing of Queen Elizabeth also made me think about the phrase “stiff upper lip,” the stoicism and determination in the face of adversity often attributed to the British. I suppose my psychological boxing match with cancer reflects a similar kind of response; I can also see why such a response seems aloof, callous, and heartless to some.

What is your personal style of response to a crisis? What is your most natural inclination? Does it transfer from your individual personal life to your style of leadership with others? Is it helpful to have a range of ways to respond to crisis, particularly in the face of different kinds of crises?

Peter Drucker called leadership a “foul-weather job”:

The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it. To wait until the crisis hits is already abdication. One has to make the organization capable of anticipating the storm, weathering it, and in fact, being ahead of it. That is called innovation, constant renewal. You cannot prevent a major catastrophe, but you can build an organization that is battle-ready, that has high morale and also has been through a crisis, knows how to behave, trusts itself, and where people trust one another. In military training, the first rule is to instill soldiers with trust in their officers, because without trust they won’t fight” (Drucker, 1990, p. 9).

Drucker uses battle imagery to describe crisis leadership. How do you get people in your organization to be “battle ready”? Make sure that the organization is ahead of the curve to the best of its ability (isn’t blindsided, if possible). The timing and nature of the COVID-19 pandemic could not have been foreseen; however, SARS, MERS, and other virus outbreaks taught us (to some degree) that public health events were possible. But perhaps the most important message Drucker conveys is the importance of trust; people must not only trust leadership, but must also trust one another (and, I would add, themselves). Even in the face of limited information and rapidly changing data and events, a battle-ready organization is willing to fight together because there is trust at all levels. They trust leadership’s integrity, honesty, and capability. They trust each other’s ability, dedication, and perseverance. And, importantly, they trust in their own individual capabilities to execute the work that needs to be done and to be willing to take risks. In other words, we all put on the gloves because we know we did our training and are able to perform to the best of our ability – even in the face of a relatively unknown opponent.

This sort of military language related to crisis management and leadership can lead to somewhat gendered views of effective reactions to crises. The phrase “Keep calm and carry on” was originally used on a poster to motivate the British at the beginning of the Second World War, but it became associated with Queen Elizabeth as the reigning monarch and symbol of British resiliency. Angela Merkel’s leadership of Germany during the pandemic was widely praised for her clear communication of information and her cautious, unemotional, and analytic tone; one scholarly work notes that Merkel refrained from using war metaphors in her framing of the pandemic. During and after the 2016 presidential campaign, media coverage dissected Hillary Clinton’s lack of emotion or warmth, or any expression of feeling. This focus on women’s emotionality – or lack thereof – may result in the “stiff upper lip” style of crisis management that may appear cold.

A similar sentiment to this gendered, military style view of crisis management was attributed to President John F. Kennedy’s father, Joseph Kennedy. “When the going gets tough, the tough get going” was a Kennedy family saying used to rally the team in the face of adversity. “Toughness” can be viewed in a number of ways, from physical strength and endurance to emotional resilience. In cultures with a strong Protestant history (Germany, the United States, Great Britain), this association between hard work and morality, virtue, and success is deeply ingrained. Sociologist Max Weber famously wrote on the role of the Protestant work ethic and its impact on the drive for capitalism and economic success. The willingness to subordinate immediate gratification for future rewards in large part fuels “toughness,” particularly in the face of adversity.

But different kinds of crises warrant different kinds of responses, particularly when they involve leading people. We have so much new research to digest. The importance of resilience is clear in most research on crisis management. How to implement that in organizations is a challenge, given that some people are more resilient than others. Research in the area of public health is showing us how this might work in organizations, not just during a pandemic. How can we, for example, actually use periods of disruption to encourage new relationships and provide a period of adjustment to extreme change? This would involve breathing room. If the building is on fire, we can’t do this. But if we are trying to grapple with big uncertainty, this might be a wonderful insight. We are also learning that, while vision is important, the harder, in-the-trenches work of making sense of what is happening in the moment is equally important (“holding” in psychological terms). This does not involve “toughness” or “a stiff upper lip.” It involves explaining and making sense in a way that taps into emotion and uncertainty. Angela Merkel embodied this during the pandemic.

Psychologist Angela Duckworth’s 2013 book, Grit: The Power of Passion and Perseverance, sparked a discussion about the qualities that lead to success. Her experience as a management consultant, educator, and psychology researcher resulted in her conclusion that persistence in the face of adversity, fueled by passion and clear, high-level goals, are the drivers of success. Her primary point is that talent alone does not dictate achievement. The concept of “grit” has taken on social meaning, particularly in America, where the story of achievement through “hard work” and “pulling oneself up by one’s bootstraps” has deep roots. This keys into the cultural ground of “toughness.” Those who have trouble adapting to change, particularly during the pandemic, are sometimes accused of lacking “grit.”

Finally, there is the literature on empathetic vs. compassionate leadership. In a crisis, it may be a mistake to be empathetic; there is no time to truly feel everyone’s situation and connect. But one can be compassionate. Compassion moves empathy (feeling) to a position of action (helping).

Each crisis demands an assessment of the leadership style needed. My cancer battle was my own; I just had to lead myself (although many of my friends responded very emotionally, as cancer forces others to think about their own mortality). When I had to deal with a very sick horse in the heat last month, it was a boxing glove moment; the tough get going and get that horse back on its feet, hose it down, get it walking, give it electrolytes, monitor its activity, and stay up long enough to make sure it’s stable. Emotional sensitivity won’t help the horse. But the owner was understandably worried and emotional, and I probably could have done a better job of being compassionate in the moment. After the horse was in the clear, I let myself be empathetic. I apologized to the owner for my “stiff upper lip” boxing glove approach to the situation. She understood, speaking of her mother-in-law talking about “putting on her boxing gloves” when dealing with a difficult situation.

In a team situation, when the going gets tough, we may need to make room for adjustment and take time. The horse isn’t in distress. The building isn’t on fire. But we need to move smartly and quickly – often with limited information. We may need to exhibit empathy at times, listening closely. Sometimes we need to go to battle, putting on those gloves, or mobilizing for the fight as a team. At other times, we need to regroup, allow emotions to connect us. As Drucker reminds us, the most important component of crisis leadership is trust: in leadership, in each other, and in ourselves.

Drucker, Peter F. (1990). Managing the NonProfit Organization. New York: HarperCollins Publishers.

Duckworth, Angela (2016). Grit: The Power of Passion and Perseverance. CreateSpace Independent Publishing Platform.

Gavin, Matt (2019). “How to Become a more Resilient Leader.” Harvard Business School Online, December 17 https://online.hbs.edu/blog/post/resilient-leadership#:~:text=Building%20resilience%20is%20vital%20to,%2C%20peers%2C%20and%20direct%20reports

Hougaard, Rasmus, Carter, Jacqueline, Afton, Melissa (2021). “Connect with Empathy, but Lead with Compassion.” Harvard Business Review, December 23 https://hbr.org/2021/12/connect-with-empathy-but-lead-with-compassion

Kneuer, Marianne and Wallaschek, Stefan (2022). “Framing COVID-19: Public Leadership and Crisis Communication By Chancellor Angela Merkel During the Pandemic in 2020.” German Politics, March 10 2022 https://www.tandfonline.com/doi/abs/10.1080/09644008.2022.2028140

Petriglieri, Gianpiero (2020). “The Psychology Behind Effective Crisis Leadership.” Harvard Business Review, April 22 https://hbr.org/2020/04/the-psychology-behind-effective-crisis-leadership

Teo, Winnie L., Lee, Mary, Lim, Wee-Shiong (2017). “The relational activation of resilience model: How leadership activates resilience in an organizational crisis.” Journal of Contingencies and Crisis Management, Sep. 25 (3), 136-147 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7166971/

Weber, Max (1905). The Protestant Ethic and the Spirit of Capitalism. English Edition (1930), Talcott Parsons and R.H. Tawney, Trans. London: George Allen and Unwin Ltd.

Leadership and Uvalde A Case Study

Fri, 23 Sep 2022 23:57:00 GMT

Much analysis has been done of the mass shooting on 5/24/22 at Robb Elementary School in Uvalde, Texas. I will examine the incident from a leadership perspective. My experiences that might make my opinions worthwhile are:

Retired police officer, police supervisor and manager of 32 years
Police trainer for the last 30 years
UCLA graduate with a doctor of education in leadership degree
Graduate school professor of leadership for the last thirteen years
Peter F. Drucker researcher at the Management as a Liberal Art Research Institute (MLARI) at the California Institute of Advanced Management (CIAM), for the last 5 years

There are four areas that would help explain the Uvalde law enforcement response to this incident. They are:

Basic police academy training
Fear
Bystander Effect, particularly Diffusion of Responsibility, and
Leadership and Autonomy

I will weigh in on each of these, and I will save what I feel is the most important, a lack of autonomy, for last.

BASIC POLICE ACADEMY TRAINING

I graduated from the Los Angeles County Sheriff’s Academy in 1970 and I still train academy recruits at the Simon Wiesenthal Center Museum of Tolerance, where most police academies in California send their recruits for a day-long workshop on tolerance. The amount of knowledge the academy imparted on us recruits was impressive. However, my most vivid memory of the academy is that there was a strong focus on officer safety. We were told that out first priority was to go home to our families every night. A lot of the curriculum centered on police officer killings, including photographs of dead police officers. The purpose of this was obviously to reduce the number of police officers killed by scaring us into being more cautious. As far as I can tell from interacting with new recruits, this focus on officer safety is still in effect. It probably saves police officer lives, but, at least in my case, it made me less likely to put myself in danger. I don’t know if this is a good thing or a bad thing, but I think recruits should be told that there may be times when officer safety comes in second to saving innocent victims’ lives.

On August 15, 2022, I spoke with a current police academy instructor from a large police academy. I asked if there was still a large focus on officer safety. The answer I got was “yes and no; the phrase, …first priority was to go home every night… is still used. However the academy also teaches active shooter protocols; that is, …at the scene of a mass shooting officers will advance into the site of any ongoing shooting and act to neutralize the shooter as quickly as possible.” The instructor I spoke to added that they know a police sergeant who does in-service training (training of veteran officers) who tells officers, “If your first priority is to go home at night, look for another job.”

FEAR

Police officers are human. They react to fear pretty much the same way everybody else does. What would you feel and what would you do if you were asked to confront someone who is armed with one of the deadliest weapons ever devised (commonly known as the AR15) and who has just killed numerous innocent people? Needless to say, the average person would quickly decline for fear of being killed. Police officers have very similar feelings. But police officers have a lot things going for them that should help mitigate their fear compared to the average citizen. Police officers usually have those same AR15-type weapons, training, almost unlimited backup, and hopefully a lot of experience. In case you were wondering, the bullet proof vest will not stop a bullet fired from an AR15-type rifle.

Personally, I would think back to those lessons at the police academy that I have a responsibility to go home to my family after work. Theoretically, police officers don’t have the luxury of declining to go in after this crazed killer. I’ll explain this later.

BYSTANDER EFFECT/DIFFUSION OF RESPONSIBILITY

And now a discussion of a very close cousin of fear— the bystander effect.

The bystander effect refers to the well-documented fact that at any incident, event or scene where bad things are happening, the huge majority of people choose to be bystanders. They simply watch instead of doing something to help the people being victimized. In 1964 a young woman named Kitty Genovese in Queens, New York was murdered. She was coming home to her apartment and was stabbed numerous times with a knife. Even though the murder took place over several minutes just outside her apartment in view of her neighbors, no one did anything to try to stop the attack. In fact, it was later determined that 37 of her neighbors saw the attack and none of them even called the police.

The Genovese case drew international attention and has been studied by social scientists in hundreds of experiments. A particularly powerful part of the bystander effect is diffusion of responsibility (Rentschler 2016), which has been defined as:

When a person notices a situation and defines it as requiring

assistance, he or she must then decide if the responsibility to help

falls on his or her shoulders… Diffusion of responsibility refers to

the fact that as the number of bystanders increases, the personal

responsibility that an individual bystander feels decreases. As a

consequence, so does his or her tendency to help  (Brittanica).

In other words, “Why should I place myself in danger by doing something when some of these other people will probably do something.” Very shortly after the shooting at Robb Elementary School started there were dozens of police officers at the scene, including the Uvalde School District Chief of Police, Peter Arredondo. It looked like most of them were waiting and wishing someone would do something (Sanderson 2020). Albert Einstein said, “The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing” (Einstein). And bystanders who are in positions of power (such as Chief Arredondo) are especially dangerous because other people look to them as models. Their lack of action encourages and gives permission to others to be bystanders.

How many people at Robb Elementary looked at Arredondo and were emboldened to be bystanders? I would like to add another phrase to the end of Einstein’s quote; that is, “especially if they are a person in a position of power” (I use “person in a position of power” because according to Dr. Kotter of Harvard Business School, just because someone has a title doesn’t make them a leader. They have to earn the title of leader by their actions) (Kotter 2001). A leader and a bystander are two diametrically opposed positions. A leader is the opposite of a bystander (Cory and Cory 2021, Katz 2016). A leader, by definition, takes action. A bystander, by definition, stands by and watches. In the words of Peter Drucker, writing on the definition of leadership, “Wishing won’t make it so; doing will” (Drucker 1954, p.160).

It’s important to note that in April 1999 at Columbine High School in Colorado a mass shooting occurred (15 people were killed). At that time police officers who arrived at the scene waited for the Special Weapons and Tactics team (SWAT) to assemble and come to the scene to deal with the shooters. In 1999 this was the police culture; that is, confronting mass shooters was the domain of specially trained SWAT teams. Since Columbine, police departments have acknowledged that not taking immediate action to neutralize the shooter at a mass shooting increases the likelihood that more people will die. Therefore, policies were universally enacted by police departments to change this culture/tactic; that is, the first officers at the scene of a mass shooting will advance into the site of any ongoing shooting and act to neutralize the shooter as quickly as possible (YOYO Response 2020). This is commonly called the Immediate Action Rapid Deployment (IARD) tactic (IARD 2022).

This change in culture/tactics was huge. It made being a police officer even more dangerous. And keep in mind that, even a small cultural change is difficult and time consuming (Schein 2016). So, this recent (22 years ago) major change in police culture coupled with the bystander effect made it easier for police officers to consciously or sub-consciously succumb to their fears and do what we saw the first officers on the scene at Robb Elementary School do—basically nothing. I suspect that most of these officers looked around and thought something like, “With all these officers here, I’m sure someone is going to do something…soon.”

LEADERSHIP AND AUTONOMY

This brings us to leadership and autonomy which, I think, is the most important factor that would lead to better law enforcement responses to mass shootings. One of the earliest uses of autonomy in leadership is from Peter Drucker in his 1954 book, The Practice of Management . Drucker described a management strategy he named Management by Objectives (MBO). This strategy was radical for its time in that it suggested, among other things, that management should share responsibility with the employee for deciding how the employee should do their job. In other words, giving the employee autonomy. Today MBO is widely used in various forms (Staunstrub 2022). According to Exchange Leadership, MBO was being used by 79% of Fortune 1000 companies in 2008 (Curtin 2022, Sung et. al., 2022) and others have found that management by objectives positively affects employee engagement and meaningfulness.

Perhaps the best description of leaders using autonomy to motivate employees is from Daniel Pink in his New York Times bestselling book, Drive (Pink 2009). Pink makes the case that one of the most effective ways to motivate people is by giving them as much autonomy as possible. People who get to make their own decisions as to how they are going to do their jobs, will do a much better job. They will be more engaged and prouder of their accomplishment. Lao Tzu said, “Of the best of leaders, when the task is done, the people say, ‘We did it ourselves” (Heider 1997). Conversely, if people are told what to do and how to do it, they will probably comply, but they will not be committed and will only do the minimum required.

A new study (Maran et al. 2022) concurs with Pink on the effect of autonomy on job engagement. They posit that employees, given a high degree of autonomy, are more engaged, higher performers, and better decision makers. When employees are given autonomy, once vision is set, they develop a clearer understand of their goals, and align their decisions with the organization’s vision and goals. And just getting to practice making decisions makes them better decision makers: “This granting autonomy acts as a vitamin for goal achievement” (p. 147).

The Texas House of Representatives Investigative Report on the Robb Elementary Shooting report was published on July 17, 2022 (Texas House of Representatives Investigative Report on the Robb Elementary Shooting 2022). The report cites numerous failures and mistakes by numerous people. This paper will point out only the failures of leadership cited in the report. The report noted several high-ranking law enforcement personnel who exhibited a shocking lack of leadership. It reported that among the first law enforcement people to arrive at Robb Elementary were Uvalde School District Chief of Police, Peter Arredondo; Uvalde Police Department Acting Chief of Police, Lt. Mariano Pargas; and Uvalde Police Department SWAT Commander, Staff Sgt. Canales. Lt. Pargas told the committee that he and Chief Arredondo never communicated with each other. Staff Sgt. Canales was one of three officers seen in surveillance video approaching the door to classroom 112, where the shooter was. When the shooter shot through the wall the three officers ran away. This was at 11:37 AM. It was 12:50 PM when a U.S. Border Patrol Tactical Team (BORTAC) made entry and confronted the shooter. As Staff Sgt. Canales was exiting the building he was heard to say, “we got to get in there” (p.58). He then helped other officers evacuating children from other classrooms. Cable News Network (CNN) aired a special on August 7, 2022, What Really Happened in Uvalde (CNN 2022). It showed Texas Governor Gregory Abbott at a news conference 24 hours after the shooting saying the law enforcement officers at Uvalde saved lives by running towards the gunfire. There was also video of Staff Sergeant Canales and two other officers running away from classroom 112 when the shooter shot through the wall.

The report states that “The general consensus of witnesses interviewed by the Committee was that officers on the scene assumed that Chief Arredondo was in charge or that they could not tell that anyone was in charge of a scene described by several witnesses as chaos and a ‘cluster’.”

INTERVIEW WITH CHIEF JACQUELINE SEABROOKS

On 7/30/22 I interviewed retired police chief, Jacqueline Seabrooks. The police department she was chief of at the time had a mass shooting in 2013 (CNN 2013), that by all accounts, even though 5 people died, was a hugely successful law enforcement response. This shooting started at a residential house in the city and ended at the local community college. During her 37-year career Seabrooks was police chief of two different medium size Southern California police departments. She retired from the department where the mass shooting occurred and was chief of the other department for five years. Due to a disastrous law enforcement response to some civil unrest and mass looting in May 2020 (Los Angeles Magazine 2020) she was asked to return to that department where the mass shooting occurred as interim chief for a year.

The questions I asked Seabrooks about her experiences of being the Chief of Police and having the ultimate responsibility for a successful law enforcement response to a mass shooting were: (1) What about your and your staff’s leadership helped make the response to this incident so successful? and (2) What did you learn about leadership from your involvement in this incident?

Seabrooks mentioned the nationally used Incident Command System (ICS) (ICS 2022) that was immediately put into place when the incident started. This system facilitated several organizations to seamlessly work together under a single command structure. Seabrooks cited an interaction she had with a captain from her department who, in accordance with the ICS system, had declared himself the Incident Commander. (She said that every member of her department is regularly and thoroughly trained in ICS.) She arrived at the incident command post and the captain asked her if she was assuming command. After getting a quick briefing on the situation, she replied, “Certainly not, carry on.” In other words, Seabrooks reinforced in this person that he had the autonomy to continue making decisions about the incident. She was telling him that she trusted him and his competence to do what was needed to successfully carry out their mission. She told me that the people carrying out the mission did not need her sticking her nose into everything. She said that leadership is giving her people what they need, staying out of their way, and being available if they have any questions. Seabrooks said that as a leader she believes that hiring the right people and then trusting them to effectively do their jobs makes for engaged and committed employees at all levels, who are not afraid to lead and make decisions. She said that it appeared that members of law enforcement in Uvalde were not talked about as leaders or told that everyone in an organization can and should be a leader.

For many years Seabrooks had been inviting the (much smaller) college police department to join the city police department in whatever training they were doing. This made for good relationships and cooperation between the two police departments. So, when it came down to having two city police officers and one college police officer being in the right place at the right time to engage the shooter, they quickly formed a team and neutralized the shooter, thereby saving uncountable lives. They didn’t need to ask for permission; they just did their job. Seabrooks said, “What they did was the opposite of just following orders.” Seabrooks also talked about complacency, the “It can’t happen here” attitude, and the idea that you don’t need a title to be a leader. She has always tried to send a message to employees that, in police work, mental preparedness is just as important as physical preparedness. And every employee should be mentally prepared to take charge of a scene at any time. As a police administrator she has had regular dialogues with subordinates about the fact that police officers are human and there are officers who might freeze up or not commit to putting their lives in jeopardy to save innocent citizens’ lives. These dialogues have the effect of reminding officers of their responsibilities, confronting themselves about these responsibilities, and keeping complacency in check.

Seabrooks added that a very important part of leadership is also, to keep an eye on the police officers for the foreseeable future, who shot the suspect for symptoms of post-traumatic stress disorder (PTSD) (Garrett 2006).

CONCLUSIONS

Historically, law enforcement agencies are conservative and hesitant to move away from command-and-control leadership and towards giving employees more autonomy. However, my experience is that they are slowly becoming more open to the more progressive styles of leadership. A leadership program that was started by the California Commission on Police Officer Standards and Training in 1989, the Sherman Block Supervisory Leadership Institute (SBSLI) is very progressive and has trained several thousand front line supervisors from every law enforcement agency in California.

Maybe the Uvalde event is the impetus for law enforcement people in positions of power to start embracing empowerment; hiring and promoting the right people, giving guidance, goals, and vision, and encouraging officers to make as many decisions as possible.

The first officers on the scene at Uvalde didn’t seem to think of themselves as leaders. If they did, they would have made the decision, without being told, to do something. In watching video on the incident, I would call many of these officers unengaged. The reality is that everyone, no matter their title or position, influences other people and is therefore a leader (Sanborn 2006). Everyone should be encouraged to practice being better leaders by honing and practicing their leadership skills.

For current people in positions of power in law enforcement who are concerned about losing power or feeling unneeded, or “having the inmates run the asylum” Matthew Barzun, former ambassador to the United Kingdom and Sweden, has some advice. He makes a very convincing case that by giving employees more autonomy/power, you are saying to them, “I care for you, trust you, and want you to succeed.” This helps in building a trusting, caring relationship between employee and supervisor and therefore will result in more influence (personal power) and engagement for both employee and supervisor (Barzun 2021).

Peter Arredondo, Uvalde School District Police Chief, was a bystander at the school. The Uvalde shooting might have turned out differently if Arredondo had realized that he was one of those law enforcement officers who would not commit to risking his life to save innocent people, so he should have just stayed away. The report, of course, points out that since the 1999 Columbine tragedy all police officers must be willing to risk their lives without hesitation. And at the Uvalde shooting police officers failed to adhere to their active shooter training. It is unknown if Uvalde police superiors regularly reinforced this training. The Uvalde School District Chief of Police, who was inside the school failed to assume command or to assign anyone else to take command. And, only after 77 minutes did anyone exercise leadership; at that time members of the U.S. Border Patrol Tactical Team entered the classroom where the shooter was. The report seems to place blame for the lack of leadership on all Uvalde law enforcement personnel. “The entirety of law enforcement and its training, preparation, and response shares systemic responsibility for the many missed opportunities on that tragic day” (p.7).

RECOMMENDATIONS

The bystander effect is real and needs to be a subject of regular training for all law enforcement personnel.
Hiring and promotional testing should be about finding leaders, not charismatic people. Demagogues are charismatic. Leaders act with integrity. (Drucker 1964 p.159). The hiring and promotional processes should also take into account whether or not the potential candidates are sure that they can prioritize the lives of innocent citizens over their safety and the safety of their subordinates.
Officer safety is not what it used to be. Police academies need to stress to recruits that starting in 1999 there was a major change in policing policy. Police officers now need to manage their fear and prioritize the lives of innocent citizens over their own safety.
All members of law enforcement should take note that Uvalde law enforcement and the Uvalde School District was a victim of complacency (“It can’t happen here.”) Regular communication and dialogue are the best way to ensure that complacency will not take hold of your organization.
It seems that when an organization is being examined or evaluated, the cliché, “poor communications” always seems to come up. The Uvalde shooting was clearly a case of disastrous communications or lack of communicating altogether, especially from people in positions of power. Every organization can use more practice/training in improving communication.

References

Anonymous, The YOYO Response, Police Vol.44 Iss.8 Aug. 2020

Barzun, Matthew, The Power of Giving Power Away: How the Best Leaders Learn to Let Go.

Penguin Random House, New York 2021

Britannica, Diffusion of Responsibility

https://www.britannica.com/topic/bystander-effect/Diffusion-of-responsibility

Curtin, Joseph, Using Management by Objectives To Improve Performance,

https://www.researchgate.net/publication/255645533_Values-

Exchange_LeadershipR_Using_Management_by_Objectives_Performance_Appraisals_t

o_Improve_Performance

Cory, David and Cory, Jill. Emotional Intelligence and the Bystander Effect: Being a Leader is the

Opposite of Being a Bystander. Webinar August 26, 2021 Emotional Intelligence

Training Company. https://www.emotionalintelligence.ca/2021/08/emotional-

intelligence-and-the-bystander-effect/

CNN, Cable News Network 2013

https://www.cnn.com/2013/06/09/justice/california-college-gunman

CNN, Cable News Network 2022

https://cnnpressroom.blogs.cnn.com/2022/08/04/anderson-cooper-360-special-report- what-really-happened-in-uvalde/

Drucker, Peter F., The Practice of Management. Harper & Row. New York 1954

Einstein, Albert. https://philosiblog.com/2011/11/29/the-world-is-a-dangerous-place-to-live-

not-because-of-the-people-who-are-evil-but-because-of-the-people-who-dont-do-

anything-about-it/

Garrett, Ronnie. Don’t Cowboy Up: Healthy Agencies Help Officers Get Out of the Saddle and

Ride the Waves of Their Emotions to Keep Stress Disorders at Bay. Law Enforcement

Technology Vol. 33, Issue 2, Feb. 2006

Heider, John, The Tao of Leadership Humanics New Age, Atlanta 1997

(IARD), Immediate Action Rapid Deployment Tactic Retriev

https://www.police1.com/police-products/wmd-equipment/ppe/articles/immediate-

action-rapid-deployment-new-rules-of-engagement-wbXig9LBrPJRnpQh/Page Break

ICS100, Incident Command System

https://www.usda.gov/sites/default/files/documents/ICS100.pdf

Katz, Jackson. The Macho Paradox: Why Some Men Hurt Women and How All Men Can Help

Sourcebooks, Inc. Naperville 2006

Kotter, John P. What Leaders Really Do. Harvard Business Review December 2001,

Los Angeles Magazine, 2022

https://www.lamag.com/citythinkblog/santa-monica-police-may-31/sions Into Results

Maran, Thomas K.;Baldegger, Urs; Klosel, Kilian, Turning Vi: Unraveling the

Distinctive Paths of Leading with Vision and Autonomy To Goal Achievement.

Leadership and Organization Development Journal Vol. 34 No. 1 2022

Pink, Daniel H, Drive: The surprising Truth About What motivates Us Penguin Group New Your

2009

Rentschler, Carrie Filmic, Witness To the 1964 Kitty Genovese Murder Urban History Vol. 43 Iss.

4 2016

Sanborn, Mark, You Don’t Need a Title to Be a Leader: how anyone, anywhere Can Make a

Positive Difference. Waterbook Press, Colorado Springs 2006

Sanderson, Catherine, The Bystander effect: The Psychology of Courage and Inaction William

Collins Publication. London 2020

Schein, Edgar and Schein, Peter, Organizational Leadership and Culture Jossey Bass. New York

2016

Staunstrup, Per A., Management. By Objectives is Still Relevant,

https://www.linkedin.com/pulse/management-objectives-still-relevant-per-aae-staunstrup/

Sung, Moon J.; Yoon, Dong-Yeol; Han, Caleb S., Does Job Autonomy Affect Job Engagement?

Social Behavior and Personality journal Vol. 50 Iss. 5 (2022)

Texas House of Representatives Investigative Committee on the Robb Elementary Shooting

Report. 2022

https://house.texas.gov/_media/pdf/committees/reports/87interim/Robb-Elementary-

Investigative-Committee-Report.pdf

Attracting and Keeping Star Employees

Fri, 23 Sep 2022 23:46:00 GMT

Recently, there have been several articles and blogs on how small businesses can attract hard-working employees that fit their needs. No matter the recommendations, all can agree that it is difficult for small businesses to offer benefits that potential employees desire. The Forbes Coaches Council (2019) advises companies to offer flexible hours and offer partnership in stock or equity. Businesses should have already created a climate and culture that supports their origin story, a sense of community, ownership, and innovation. Pasetsky, an owner of a public relations firm, suggests outsourcing non-critical functions by using part-time staff to allow full-time staff to focus on innovation. Similar to Forbes, Pasetsky maintains that flexible scheduling is necessary, but also includes a flexible workload. This is especially true with part-time employees who are rather talented but also need to maintain their work for other employers. Communication is key but time must be of equal value. Organize meetings for days that correspond to the beginning of projects or the beginning of the week and limit follow-ups to as needed. Once the match making is done, how do small businesses keep such talented employees? No matter the strategies for attracting talent that will fit your business, it is equally important to support sustainability. This can be accomplished through the coach and consult models of Lipton (2003). These models are based on Adult Learning Theory, which Lipton (2003) expands upon in her book. Employees need guidance so the employer can obtain necessary goals, but also should be given autonomy and opportunity to develop. Coaching is a skill Lipton (2003) suggests for training and retraining based on progress. Consulting is the skill used to maintain accountability and a global perspective of business goals while giving space to hear alternate solutions, innovations, and other perspectives. Lipton (2003) reminds those in this leadership role to switch between the two skills as needed. This method provides structure, knowledge, and accountability to reaching goals, but also gives talented employees the opportunity to give suggestions, use their own ideas to obtain goals, and ownership of the results. This is how to draw and maintain talented business professionals. Drucker’s model of management by objectives allows for employees to set their work schedule within the parameters needed by the company, objectives and discussion on steps to obtain those objectives, and due dates. After a meeting or two on objectives, workload and calendar, a list of objectives is first created by the employer, then discussed with the employee, and then finalized. This process shows employers where support such as training is needed, gives employees the autonomy to choose the pace and design the work, and a system of accountability is created. This strategy creates ownership and a sense of community (Forbes) while allowing for flexible workload (Pasetsky). Management by Objectives (MBO) of Drucker has been an effective model for more than five decades yet it fits in tandem with the suggestions of today. Consider using MBO to obtain and keep talented employees.

Forbes Coaches Council. 11 Ways Small Businesses Can Attract Top Employees. (June 6, 2019). https://www.forbes.com/sites/forbescoachescouncil/2019/06/06/11-ways-small-businesses-canattract-top-employees/?sh=7ed5518e16

Lipton, L., Wellman, B., Humbard, C. (2003). Mentoring Matters: A Practical Guide To Learning Focused Relationships. 2nd Edition. Charlotte, VT: MiraVia, LLC

Pasetsky, M. 7 ways small business owners can attract A-list talent: What is one of the biggest challenges for small business owners in 2022? Finding and retaining A-list talent. (June, 15, 2022). https://www.fastcompany.com/90759189/7-ways-small-business-owners-can-attract-a-list-talent

Are you a leader or a manager? Yes, there’s a difference

Fri, 23 Sep 2022 23:42:00 GMT

Your answer determines your ability to build strong, resilient teams.

What makes a competent leader? How does one create a measurable metric to determine the efficacy of leadership?

While there are numerous exams to certify a manager in a specific area, there was no widely accepted universal measure of leadership competency as a whole. That is until Resilience Building Leader Program (RBLP) came in and changed the game.

Why has this metric been missing from contemporary management? Well, because it’s challenging to capture. There’s quite a bit of grey area in what makes a competent leader.

RBLP set out to fill this gap in the marketplace. They developed an oral exam and turned it into a definable metric of success.

So what has this highly successful program found to be the key to effective leadership? Dr. Gene Coughlin, RBLP’s founder and CEO, insists it’s simpler than you may think…

“Be brilliant at the basics.”

Let’s dig in.

Leader tasks like earning trust, treating people with respect, enforcing accountability, and encouraging people to have fun in the workplace, are the keys to effective leadership. At first glance, there is nothing revelatory about these leader tasks. But that’s exactly what it’s about, being brilliant at the basics.

This is what is enduring and sustainable. This is how to build strong, resilient, teams and organizations.

Building and leading a team is a human endeavor … and humans haven’t changed that much. The foundations of leadership haven’t either.

There’s a lot of fad leadership training out there, but to abandon the basics is to sacrifice your people. When your people are not prioritized, your leadership and management inherently suffer.

We know Peter Drucker’s Management as a Liberal Art (MLA) supports self-development and moral growth in people. The results of RBLP’s analysis reads like a ringing endorsement of this MLA philosophy.

RBLP found that successful managers create an environment that allows people to find meaning in the work they do. An environment with opportunities to grow both personally and professionally. These are core values in building resilient teams.

Organizations are made up of humans. People who need to be managed and led to effectively contribute to an organization, and to society at large. Bringing people together to work as a team is vital, especially during times of adversity and challenge – such as the COVID-19 crisis.

It is by working together, that the organization achieves its mission. And from there, makes a positive contribution to the community. The ability to make this contribution hinges on affording your employees the opportunity to excel.

People spend at least 8 hours a day, 5 days a week at work. For many of us, work can become as much, or more important, in our lives than personal endeavors. It is this fact that great leaders must remember and nurture.

So, what sustains a resilient team?

Most MBA programs encourage prioritizing shareholders and profits. These curriculums focus on all the components of business that are not human. Coughlin urges you to be more well-rounded as a leader than one advanced degree can offer.

In fact, leaders with an MBA and a background in the humanities, often find more success in building a resilient team. Why? Because they understand the importance of humanity. How nurturing individual employee success affects society.

Prioritize employees over shareholders and profit.

Take care of your employees first. The others – that profitable bottom line – will always follow if you focus on the success of your people. People over process is your key to success.

Prioritize employees over the customer.

A bold claim against the “customer is always right” mentality. RBLP’s work tells us that companies and leaders with an employee-first mentality sustain resilient teams and processes.

Provide Purpose

Help your workers find meaning in the work they do. Provide them with purpose in the work, and they will thrive both personally and professionally.

Prioritizing people is not a revolutionary idea. But if it is so obvious, why is it such a difficult long-term strategy?

Top-level executives are often managing, but not leading.

We manage process, but we lead people.

Your only sustainable source of competitive advantage is your people. Product and process come and go. People are what is behind new ideas, new products, and new processes.

There is no shortage of management in organizations today, but there is not a lot of leading. Both Coughlin and Drucker’s findings encourage you to lead.

If you focus on your people, you inherently prioritize where the next great idea is coming from.

In order to advance from management to leadership, it is vital you ground your style in liberal arts principles – in Management as a Liberal Art.

As RBLP continues to revolutionize leadership, it is clear that simply building teams is outdated. Building resilient teams that can work together through adversity and challenge – that can adapt to industry rocking crises such as COVID-19 – is the new gold standard.

It is Dr. Gene Coughlin’s hope that in ten years people will be using the phrase, “building resilient teams,” as easily as the term “project management” is used today. The future of leadership is in resilience. It is in your hands to build it.

Sources:

https://open.spotify.com/episode/2P5MmGfQaQCV2oTKCKRGOJ

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

How Drucker Can Make You a More Effective Manager

Thu, 22 Sep 2022 22:31:00 GMT

Drucker was different than other management gurus. He didn’t even like to be called a guru but preferred a scientific description of his work: “social ecologist”. This described the study of people and their behavior in organizations. His discoveries and conclusions were important, and far from intuitive. They were powerful and effective. They were also frequently controversial. For example, encouraging a client to sell or close profitable businesses is hardly music to anyone’s ears, but that was the recommendation to Jack Welch when Welch became CEO of General Electric and Drucker became his consultant.

Drucker’s Counterintuitive Advice Brought in Billions

Drucker told Welch to sell or close profitable GE businesses to gain resources to invest in newer businesses that had more potential. This was far from intuitive, and created detractors, and enemies who called Welch “Neutron Jack” after the neuron bomb which left structures standing while it killed the inhabitants. This may have contributed to Welch’s willingness to explain Drucker’s role as a consultant and this situation fully, something that many clients and consultants tend not to talk about but to keep consulting confidential to avoid lawsuits or expose tactics to competitors. Fortunately for us, by mutual agreement Welch released the explanation.

Drucker called this his “abandonment theory” and necessary for successful innovation and expansion. He said that otherwise older businesses, even if still profitable, would tend to consume resources and dominate the efforts of some of his best people while newer businesses, no matter if greater potential, would be ignored.

Welch did as Drucker recommended. Though criticized and berated by the business press and even many academics, he thereby increased GE’s market value from $12 billion in 1981 when he became CEO, to $410 billion on his retirement nine years later. He had made an astounding 600 acquisitions in emerging markets. They brought GE a fortune. When he retired, he was awarded the largest retirement package in history and Fortune Magazine named Welch Manager of the Century.

A Completely Different Approach to Consulting, Too

Drucker also differed greatly in his consulting model from any other management consultant and his method is rarely practiced today. Drucker claimed that his methods of analyzing issues, solving problems, and making recommendations were not based on his knowledge and his experience, but rather his ignorance and lack of experience in a specific business or industry. This required him to ask a lot of questions of his clients to unearth the critical information and encourage the maximum minds in the organization to solve their own problem. He said that his client’s managers were the true experts, not he. This unusual mindset and its procedures for consulting explain a lot.

The Trials and Tribulations of Being a Drucker Client

I once heard that the way Drucker provided his consulting was the most difficult and unusual aspect about being a Drucker consulting client. One client expressed it this way: “We had been accustomed to hiring consultants to whom we told what we wanted done. They sold us on their expertise. Then they went off and returned after a time with piles of data and reports, and before the era of Power Points, stacks of Overheads which represented their work and their detailed solution to our problem. They presented themselves as having unique knowledge which others lacked. It’s not that their solutions flopped, but they were routine. Drucker would begin with asking us questions which we were expected to answer and discuss. In the process, we had to think through the problem. This generated solutions which were frequently unique, and we would have otherwise overlooked. At first this this was uncomfortable, but eventually we began to appreciate his system and found it of great value.”

The Chinese philanthropist and successful billionaire businessman, Minglo Shao, who founded Drucker Schools all over China with Drucker’s encouragement also contributed the money to start and run the MBA-granting, accredited and nonprofit California Institute of Advanced Management of which I served as president for five years. He told me that he would visit Drucker in his home occasionally and Drucker would ask him questions about various issues regarding the developments of his businesses and foundations in China and elsewhere. However, though Drucker asked questions which opened new insights and guided him as what he would do, Drucker never told him how to do anything. He had to work that out himself.

The Most Difficult Action --- To Think!

Although Drucker was aware of many innovative methodologies for analyzing business situations and developing strategies, he made almost no use of them. Instead, he emphasized thinking through every situation on its own. For example, he never taught “portfolio analysis” with their famous quadrants of cash cows, shooting stars, problem children, or dogs as developed by the Boston Consulting Group (BCG) or the GE/McKinsey nine cell version, or any other version of management or business strategy by rote system. He developed few special systems himself. These were integrated with a philosophy of integrity and social responsibility which were required in implementation of everything he did.

“Fad” Systems

Drucker was aware of new fads which became popular, but he was extremely cautious in applying them without thinking through each individually as whether it made sense to employ it in a particular situation.

Although his close association with and analysis of management methods and philosophies in Japan gained him numerous insights, and mangers in Japan frequently adopted many of Drucker’s ideas, he did not instantly jump on the bandwagon of “Japanese Management” when it took hold in the U.S. in the early 1980s. He maintained that any culture had to apply what worked best for it and what worked perfectly in one culture might not work in another. He was highly suspicious of all systems of the kind which Fortune Magazine termed “management by fad”

Example: Participatory Management

When organizations joined the participatory management idea based on Douglas McGregor’s research and his explanation of Theory X verses Theory Y in the early 1960s, Drucker pointed out that McGregor intended that Theory Y management with significant participation of the managed, was an alternative to the more directive style practiced almost exclusively previously. Drucker noted what almost all adopters of Theory Y missed: that McGregor himself had written that his intent was to describe an alternative management style which might give better results under certain circumstances, and that research should be conducted to uncover exactly what these circumstances were, not that participatory management was the universal solution in all situations. For example, participatory management might not be the best during emergencies, when decisions must be made under the pressures of limited time, or when those led were inexperienced and uncertain or were overconfident.

Feelings May be More Important than Numbers

Drucker insisted on measuring just about everything, but the results were to be considered informational, not quantitative analysis for business decisions” made solely by numerical calculation. He avoided decision making whereby the decision was arrived at solely by inputting certain data considered important into a software program, turning on a computer, and having the strategy instructions automatically appear. He pointed out that although one could gather data and develop a program based on thousands of business experiences, even the weather; still the information could be incomplete. Designing software based on extensive data, and inputting data unique to your situation might predict results with some high percentage of accuracy, say 92.5 percent, and still fail in your situation.

Drucker maintained that computer-generated answers were inferior to using the human brain and even making a “gut” decision based on integrating all available information, personal experience, even knowledge of the personnel involved and their leadership and integrity. He noted that personal knowledge or instinct of one single, but vital, factor might well be decisive, and that a computer might never consider it. Also, he reasoned that though a certain program might produce accurate results 92.5 per cent of the time, for 7.5 per cent of the time the results were 100% inaccurate. He recommended that managerial decisions made with “a gut feel” after considering all the information that could be obtained and integrated by the brain not be ignored. This method however should not be employed frivolously and without thought. The brain was a better device than a computer or maybe the better computer of the two.

The application of Drucker’s consulting, or management principles were based on four basic principles:

Questioning and gathering information from all sources including managers and their subordinates
Using the human brain rather than “management by fad” depending on the situation
Gathering all the information possible and the use of computers, but the manager and not a machine or a methodology making the final decision
Maintaining high integrity and social responsibility in all decisionmaking.

*Adapted from Principles and Lessons from the World’s Leading Management Consultant by William A. Cohen published by LID in 2018 and syndicated internationally.

75th Anniversary edition of George Orwell’s Animal Farm REVIEW

Fri, 24 Jun 2022 00:43:00 GMT

What makes this edition of Animal Farm unique and especially valuable is a new forward by Serbian born novelist, Tea Orbrecht and a new afterward by Pulitzer Prize winner and New York Times columnist, Russell Baker.

As most of us know, Animal Farm was based on the Russian revolution of the early 1900s. At the time of the revolution, Russia had been under of the control of a series of dictatorial authoritarian czars for several decades and was definitely chaotic and not a “functioning society”. And, of course, after the revolution, the authoritarians who seized power in the name of “helping the people” ended up making the plight of the people as bad, if not worse than before the revolution.

This is a quote from the Orbrecht’s Forward:

“Wouldn’t George Orwell be thrilled to know that we no longer have need of a text that so explicitly decries authoritarianism, fearmongering, tribalism, historical erasure, factual manipulation, and war as an engine of national pride? That Animal Farm has served its purpose and is now nothing but a fairy tale.” “Reader, I jest.”

Orbrecht’s hope for mankind is that:

“We will never be isolated enough to keep signs of danger to ourselves as we once did.”

Baker’s afterward gives the reader valuable insight into George Orwell and his motives for writing the book.

And if anyone has any doubts as to who Orwell was writing about, Russell Baker is not hesitant to put actual historical names to many of Orwell’s characters in the book. Baker, keeping in mind that Orwell also wrote 1984, leaves little doubt that Orwellian means the evils of totalitarianism.

Everyone should read or reread this 75th edition of Animal Farm with a consciousness of current events in Europe and the United States. And also, being mindful of Peter Drucker’s concept of a “Functioning Society of Institutions”.

Drucker felt that no organization or country can be a functioning society unless it gives individual members social status and function, and unless the decisive social power is legitimate power. The former establishes the basic frame of social life; the purpose and meaning of society. The latter shapes the space within the frame...But only a legitimate power can have authority and can exact and command that social self-discipline which alone makes organized institutional life possible. Illegitimate power, even if wielded by the best and the wisest, can never depend upon anything but the submission to force. On that basis a functioning, institutional organization of social life cannot be built (Drucker, The Future of Industrial Man 1942, pp. 28-36). In The End of Economic Man (1933), Drucker speaking about the lack of meaning for the masses in Europe, pre-WW II, said that a functioning society would be the only resistance to the totalitarianism onslaught (p. 248).

Drucker, much like George Orwell spent much of his career warning the world about what happens when institutions or societies don’t give people status, function, purpose, meaning, autonomy, respect, and freedom from totalitarianism. In other words, A Functioning Society .

Where would the world be without George Orwell and Peter Drucker, considering that Animal Farm is published in 70 languages and has sold 12 million copies. And Drucker wrote 39 books and published hundreds of articles?

It should be noted that George Watson, writing in 2004 in Vol. 54 of History Today, ( The Eye-opener of 1939 or How the World saw the Nazi-Soviet Pact ), wrote that Hitler astounded the world by signing a pact with Stalin. Watson reports that George Orwell called it an eye-opener, and said that Hitler’s National Socialism is, in fact, socialism and is emphatically revolutionary. Peter Drucker in The End of Economic Man, foresaw that Hitler and Stalin would have to unite as totalitarian forces and as a meeting of socialist minds. A year later, Watson wrote that one of the few who agreed with Drucker was George Orwell who wrote in The Lion and the Unicorn (1941) that it was inevitable that the two socialists (Hitler and Stalin) would plan the future together.

There is no evidence in the management or leadership literature that Drucker and Orwell collaborated on fighting totalitarianism. It’s unfortunate that these two great minds didn’t put their minds together to more emphatically warn the world that, in Albert Einstein’s words, “The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing.”

On the Importance of Managing for Results (while Involving Your People)

Wed, 01 Jun 2022 18:39:00 GMT

Most of us, at one time or another, have worked in organizations with inspiring mission statements. These carefully drafted statements aim to convey a sense of higher purpose – “serving the community”, “making a difference in society”, “helping the world”. Meanwhile, while seeking to communicate an uplifting, clear mission, organizations have to manage the day-to-day and deliver results.
In his “Managing for Results”, Drucker reminds us of the realities organizations must reconcile, including: “ results are obtained by exploiting opportunities, not by solving problems ” and “ economic results are earned only by leadership .” (Drucker, 2006). Drucker reminds us that leadership in the organization has a profound influence on strategy and results. And he also emphasizes the importance of effectively managing people towards achieving the mission.
Having worked in several organizations throughout my career, I can recall instances of effective managers who understood the importance of focusing on the mission, while managing people with respect and dignity. These managers realized that employees must be clear about the mission, yet the way you treat them also matters. What is the point of drafting an “inspiring” mission statement, if managers do not even come close to understanding what their people need, the challenges they are facing? Effective managers acknowledged that it was important to inspire employees with a vision, while living up to the values of the organization.
It is essential then, that managers instill the values and vision of the organization so as to achieve a common set of goals that will provide direction and standards of performance. The organization and its managers should also be committed to enriching and motivating individuals to achieve higher levels of performance.
What did these effective managers have in common? They listened to what employees, at all levels, had to say about their functions and the processes around them. These managers understood the job functions, and therefore could relate to the challenges their people could be experiencing. (Conversely, there are cases of managers who have oversight over functions and processes, and yet are completely clueless).
These effective managers asked questions and listened to employees. They made an effort to get to know their people. Moreover, they understood that building employees’ morale and confidence is important. And increased morale and motivation can help improve performance.
Effective managers invited people to contribute ideas. They solicited opinions and insight, and often acted on it. Rather than pretending they were listening to ideas, they called for people to become actively involved in the decision-making process. They also did not push decisions downward. They realized that pushing decisions on people is counter-productive and leads to attrition.
These effective managers trusted their people and delegated responsibilities. They assigned challenging tasks and held people accountable. But they did so respectfully, never insulting or demeaning a person. They had high expectations of themselves and of their people, but treated everyone with dignity and respect.
They encouraged people to learn news skills and to take on new projects. And they supported their people – coaching, mentoring, training. Additionally, they promoted teamwork and had meetings that involved people from different departments. They were careful not to create organizational silos. According to Csikszentmihalyi, teamwork helps increase the “flow” in the organization through increased feelings of concentration and satisfaction in achieving goals and performing tasks well. (Csikszentmihalyi, 1997).
It is possible for organizations to achieve their mission - “serve the community”, “make a difference in society”, “help the world”. However, in order to achieve their mission, managers need to manage their people effectively. The organization needs to manage for results, and it can only do this through its people. And it is only through engaged and motivated people that organizations can prosper and produce results. If we truly want to serve the community and make a difference in society, we must be able to build our people, motivate them to contribute, and treat them with respect. Otherwise, we will only have an illusory mission statement, with no organization to support it.

References:

Csikszentmihalyi, Mihaly. " Flow and the psychology of discovery and invention ." Harper Perennial. New York (1997).
Drucker, Peter F. “ Managing for Results. ” Harper Collins. New York (2006).

Is successful management the gatekeeper to a functioning society?

Wed, 01 Jun 2022 18:36:00 GMT

The answer to humanity’s reason for being lies within Management as a Liberal Art.

In a democratic society, significant power is given to the organization – to individual institutions – and not to the government. However, falling into the clutches of a totalitarian societal mindset is an ever-present threat.
It is for this reason that management is the tool that organizations must wield and uphold to function successfully within society.
Management is the dominant, decisive power. Making successful management the gatekeeper to totalitarianism.
In totalitarian countries the government limits organizations – their decisions, place within society, and ultimate veto power. Whereas in a democratic country, pluralist institutions are encouraged. Government has little control over the function of any private institution.
While the development and survival of these pluralist institutions is key to the prevalence of democracy, Peter Drucker issues a warning to the highly educated man. To management. To the managers.
Drucker posits that anyone equipped with knowledge, the ability to learn and do –
“is equipped with so much power as to be a menace, if not a monster unless he has virtue. He must have … a commitment to serve no mean end . He needs spiritual values founded in the knowledge of man’s fallibility and mortality… and in the knowledge that freedom is but the responsibility to choose between service to a true and a false master. ”
Education is a privilege to wield, and remains a threat to society so long as man is imperfect. Minglo Shao – the founder of the Peter F. Drucker Academy – reminds us that knowledge is power, and power is responsibility. This truth makes education and knowledge dangerous in the wrong hands.
For this reason, American education often rejects the traditional concept of the “educated individual.” In President Lincoln’s words, responsible self-governing American citizens, “do not want to be masters because they do not want to be slaves.”
To be highly educated places a burden on your shoulders. One to uphold and influence society through which master you place your service. It inherently asks you to be a slave to choice. To choose daily between service to an institution that positively influences society, and one that negatively impacts it. One that abandons good management, or one that utilizes it for good.
To look at it another way, Shao reminds us of Peter Drucker’s “Monster and the Lamb.” A concept that comes from Drucker’s 1984 work, Adventures of a Bystander.
A Lamb is someone who is innately liberal but does not oppose evil when it is present. He does not take a stand. Likewise, he may also place too much value in his own abilities, essentially falling victim to pride. Believing that he is working for the greater good, but tainted by unrealistic expectations of himself and his own abilities.
A Monster , on the other hand, is power-hungry. He uses his education as a way to gain position, and wield power over others. This position affords him the ability to change the course of history.
Both the Monster and the Lamb are a threat to society, albeit in different ways. The highly educated individual is constantly under threat of becoming one or the other. In using his power to topple society instead of work for the greater good.
Shao recognizes the Monsters and Lambs in present-day society. They will always exist, but what can you do as a responsible self-governing citizen to combat this?
The answer is management.
The struggle is within the mind and a successful manager must default to conscience. To realize individual dignity – freedom – is pivotal. A commitment to serve no mean end is the only way for the highly educated man to function as a contributing citizen without falling prey to the Monster or the Lamb.
Such a knowledge worker is naturally a person who has realized this freedom and dignity. And they lead through management by teaching. Making management the definition of a Liberal Art. This manager knows his power and his responsibility to society, and that his influence creates more responsible knowledge workers.
Today, the concept of freedom is a universal agreement amongst all the world’s countries and peoples. Even in totalitarian governments, although it may not be practiced, the human desire for equality and freedom is known.
If the concept is universal, what has it come to mean in present day? For Minglo Shao, real freedom is when each citizen keeps his own understanding. Because of this, it is the responsibility of successful management to continuously clarify the concept within liberal art and education.
However, equality is only meaningful within dignity. The dignity that every individual can take responsibility and contribute to public interest in society. That every individual has education and choice to serve the master of his choosing.
It is through the organization of achievement that personal fulfillment awaits. Only at this point of human dignity can we realize true and real equality. It is the responsibility of Management as a Liberal Art to realize this potential both on the individual and organizational level.

Sources:

Applying Management (MLA) Lessons to Education

Wed, 01 Jun 2022 16:57:00 GMT

It could be argued that the field of Education has little if any relation to the world of Business. With work experience in both fields, I would reject that notion. 24 years as a sole proprietor and 25 years in teaching K-12 public education have shown me that the elements of Education easily apply to successful business practice. After all, teachers are instructing the young on how to navigate through issues to become successful adults. Through similar techniques, management can foster employee growth. Some of the necessary skills in Education are described as self-awareness, social awareness, and the practice of good decision making. These three skills are prominent in both Business and Education.
So, are the elements of the core competencies developed by the Commission for Academic, Social, and Emotional Learning (CASEL) synonymous with the principles of Drucker’s Management as a Liberal Art? First, CASEL’s core competencies include self-management and self-awareness, social awareness, relationship skills, and responsible decision-making (CASEL, 2022). This well-known educational organization brings forward the need to teach the whole child from social-emotional learning to academics. Teachers guide students to discover which of these competencies they excel at and which need further development, then facilitate growth in self-management and sound decision making. Let me take a moment to explain CASEL. This non-profit organization was established to promote Social-Emotional Learning (SEL), a term created in 1994. The purpose is to support learning for the whole child; emotional intelligence to academic intelligence, from preschool to Twelfth Grade.
These competencies share great similarities with the principles of Drucker outlined in Drucker’s Lost Art of Management: Peter Drucker’s Timeless Vision for Building Effective Organizations (Maciariello & Linkletter, 2011). Drucker was a management consultant, educator, and writer. In chapter 5, the authors explain that Drucker’s philosophy is that management is a liberal art. This is due to the fact that it entails the management of people who have “human behavior, creativity, emotions, decision making opportunities, and moral values” (Maciariello & Linkletter, 2011, p.181). This list is similar to and influenced by the awareness, relationship, and decision-making skills emphasized by CASEL.
According to Reed, et al. (2010), social learning is the experience of learning from one another in ways that benefit the “social-ecological systems” in the context of a social setting. The term social ecology as used by Drucker means “the systematic evaluation of factors” such as “changes in environment . . . [and] trends . . ., new technologies, and other external or internal sources of opportunity” (Maciariello & Linkletter, 2011, p.16). Therefore, social learning shapes our social ecology which involves awareness of not just sources of opportunity but also those around us. Learning must be evident, go beyond the perspective of self into a worldview, and be a continuation of a “social network” (Reed, et al, 2010). These key concepts are taught in Education through social-emotional learning as demonstrated by CASEL. We need to explore ideas in groups to take in new useful information (learn) and increase our social skills (self-awareness, social-awareness, and decision-making). In this sense, social-emotional learning, like social ecology, involves considering factors/people outside of our own organizations or personal experiences/viewpoints.
We are intentionally fostering growth and supporting the success of individuals in both arenas. To do so in Business, we highlight individual, organizational and societal purpose, which fits CASEL’s social awareness and self-awareness as found in Education. The “moral science” of managing individual employees of an organization as explained by Drucker (1992) focuses efforts on employee assets and development. Drucker (1992) uses the term moral science to demonstrate that it is not a true science at all but a balance of belief. For example, how can someone truly define what “life, liberty, and the pursuit of happiness” means to each citizen of our nation? One person’s belief may be in “natural creation” while another’s may be in “spiritual creation” (Drucker, 1992). Each person must find their own purpose in life as an individual and be a productive member of organizations and society. This is similar to teaching the whole child; focusing on social skills and academics. Life experiences, whether in the classroom or in the workplace, shape perspective and lead to identifying one’s status and creating one’s function in society. Just as the classroom shapes the student in preparation for life, the well-managed organization provides opportunity for individual growth and development that is aligned with organizational mission and vision. Both educators and managers need to provide room for individual status, but also function within society.
It is the perspective of this entrepreneur, educator, and psychologist that competencies can also be taught in Business just as they are in the classroom. Drucker believed that management ability was acquired through learning rather than a set of innate qualities. The focus of Business can be on teaching, through an intentional organization citizenship behavior model, the desired foundation. Intentional planning and creation of a reflective environment are key in both fields to foster development of general and specific skills. Core competencies focused on innovation, and social awareness can be fostered by a proactive citizenship behavior environment. Organization management needs to purposefully teach and facilitate the desired behavioral outcomes. Every manager can be a teacher.

References

CASEL.org (2022), Fundamentals of SEL (Social-Emotional Learning). https://casel.org/fundamentals-of-sel/
CASEL.org (2022), Interactive CASEL Wheel. https://casel.org/fundamentals-of-sel/what-is-thecasel-framework/
Drucker, P. F. (1992). “Reflections of a social ecologist,” Society, Vol. 29, No. 4, pp. 57-64. Reprinted, with an afterword, in Ecological Vision (1993), Transaction Publishers, New Brunswick, NJ. Pp. 441-457.
Maciariello & Linkletter, 2011. Drucker’s lost art of management: Peter drucker’s timeless vision for building effective organizations. McGraw-Hill, New York.
MLARI staff. (2022). Management as a liberal art; Train the trainer course. pp.72-82. An excerpt from Maciariello, J. A. 2009. Marketing and innovation in the Drucker management system. Journal of the Academy of Marketing Science 37, 36.
Reed, M. S., A. C. Evely, G. Cundill, I. Fazey, J. Glass, A. Laing, J. Newig, B. Parrish, C. Prell, C. Raymond, and L. C. Stringer. (2010). What is social learning? Ecology and Society 15(4): r1. [online] URL: http://www.ecologyandsociety.org/vol15/iss4/resp1

Transformation of a Bystander

Mon, 16 May 2022 17:46:00 GMT

What Do Being a Bystander, Moral Injury, and Purpose in Life, Have in Common?

In the 1960s, when I began my career as a police officer, I was initially shocked at the overt culture of racism, intolerance, and discrimination that I saw. My experience as a young police officer was that the “N” word was openly used and people of color were often victims of discrimination and excessive force. Women, gays, and other minorities could be the objects of jokes and disdain. Unfortunately, I believe this behavior continues to this day, although less overt and less often.

I put part of the blame for this culture on the word loyalty. Part of my unofficial training to become a police officer was that law enforcement officers are a “thin blue line” who protect society from chaos. We have to be loyal to each other; “have each other’s backs”; and “take care of our brother officers”. The effect of this “training” was that if a “brother officer” got carried away and used excessive force on an arrestee or other misconduct, other officers witnessing this excessive force would be “loyal” and not intervene or report this conduct to anyone.

Personally, I was programmed growing up to think of loyalty as an absolute moral value. It was only later in life that I realized that loyalty is a good value only if one is loyal to an ideal or loyal to an ethical organization. When I first heard the Samuel Johnson quote, “Patriotism, the last refuge of the scoundrel”, I realized that the same can be said of loyalty. Police culture was using the “value” of loyalty to cover up illegal activity.

The unwritten rule that a police officer should not turn in a fellow officer for misconduct was enforced by the knowledge that an officer who did report misconduct would be ostracized, potentially terminated, or force to resign. The movie, Serpico, directed by Sidney Lumet, based on the true story of an idealistic New York City police officer, Frank Serpico, was released in 1973. The story describes how Serpico tried to fight bribery and excessive force corruption and was forced off the department. My experiences as a police officer lead me to believe that the events depicted in the movie are accurate. One of the last lines in the movie was a statement from Serpico: “The problem is that the atmosphere does not yet exist in which honest police officers can act without fear of ridicule or reprisal from fellow officers”. Serpico believed that the majority of police officers are not corrupt, but that this majority is afraid of exposing the few officers who are corrupt.

My experience is that very few officers engage in misconduct, but the corrupt officers are allowed to continue their illegal activities because the rest of the officers choose to be bystanders, rather than report the few corrupt officers. At the Museum of Tolerance, where I am a facilitator, one of the main lessons we pass on to people is that being a bystander is not a benign act. Adolph Hitler could not have perpetrated the Holocaust if the majority of the citizens of Germany did not choose to be bystanders. They chose not to protest when their Jewish neighbors were brutalized and killed. Albert Einstein said, “The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing”.

So, when I was a police officer, where did I stand on reporting officers for misconduct? I’m sorry to say that for most of my career I chose to be a bystander. After I got over my misplaced ideas about loyalty as a value, I believed that If I reported misconduct by a fellow officer, that I would not be allowed to remain employed as a police officer. I chose to remain a police officer.

A tipping point for me about exposing misconduct by police officers started when I was testifying in a civil lawsuit for police excessive force in the mid 1980s. I was asked by the plaintiff’s attorney if I ever witnessed excessive force by police officers. I said “yes”. I was asked when was the last time I witnessed excessive force and after some thought I answered that it was in approximately the year 1979. The next question was what did I do about it. I, sadly, had to answer, “nothing”. This exchange caused me to rethink my stand on police excessive force. I came to the realization that in the several years since I was promoted to be a supervisor in 1981 I hadn’t witnessed any excessive force. I hadn’t realized that since I never witnessed excessive force any more, I had been assuming, possibly erroneously, that it suddenly stopped for some reason. Actually, I think the reason for this is that after being promoted, I was no longer trusted to not report officers who might use excessive force. No one would use excessive force while I was there. The only good news of all this was that just by my presence I was stopping any misconduct.

I was encouraged by this positional power I had, to influence whether or not officers used excessive force and decided that now was the time to take some action against it. I started speaking to officers at pre-shift roll call meetings on subjects such as respect and ethical behavior. Eventually, I organized department-wide workshops on diversity, ethics, and leadership. At a 16-hour workshop on diversity in 1993, I used the newly opened Simon Wiesenthal Center Museum of Tolerance in Los Angeles for a 4-hour field trip. The Museum uses the Holocaust as an example of what can happen when people are intolerant and disrespectful of people who are different from them and how being a bystander only encourages evil acts.

After my diversity workshop was finished, I remained at the Museum as a volunteer and helped them create a statewide program for all police officers. This is now called Tools for Tolerance for Law Enforcement. It is funded by the California Commission on Peace Officer Standards and Training and is one of the largest police training programs in California. 30 years later I still work there as a facilitator.

Maybe it’s wishful thinking or a rationalizing of my decision to be a bystander many years ago, but I would like to think that my almost 40 years of working with police officers to be more tolerant has made a difference. And I don’t think that would have been possible if I had chosen to do the right thing and violate the unofficial loyalty rule I was taught as a new police officer. I’m pretty sure I would have been terminated and forgotten.

Epilogue

A few years ago a friend told me about a new psychological field, Moral Injury, that was introduced in the 1990s. After researching this field, I began to realize that I had suffered a moral injury from all those years of being a bystander to police corruption. This injury is common among soldiers and police officers (Williamson, et al. 2018).

Moral injury is when one feels they have violated their conscience or moral compass when they take part in, witness, or fail to prevent an act that disobeys their own moral values or personal principles. The effects of moral injury can include feelings of guilt, shame, anger, sadness, anxiety, and disgust; beliefs about being bad, damaged, or unworthy; self-handicapping behaviors; loss of faith in people and avoidance of intimacy; and loss of religious faith; or loss of faith in humanity or a just world (Papadopoulos 2020).

I also realized that by serendipity or dumb luck, I had intuitively done something that gave my life a new purpose and meaning, and also allowed me to begin to heal from the moral injury I had suffered—I began working at the Museum of Tolerance. I didn’t realize it then, but I now realize that my meaning or purpose in life is to help improve law enforcement effectiveness through dialogue with police officers.

Peter Drucker, a management consultant known as the father of modern management, besides advising corporations, also advised people to manage themselves. In his essay, Managing Oneself (1999), Drucker said that people now stay in the workforce for 50 or more years and that people find the same occupation boring after 30 or 40 years. He proposed that people need a second career in order to stay engaged and active. He felt that workers should develop expertise in an area other than their primary occupation while they are still working in their first career. If they do this, they will be ready for a second meaningful and worthwhile career when the time comes. Drucker also talked about the importance of purpose in life and in business.

In an essay titled, How Will You Measure Your Life?, Harvard Business School professor Clayton M. Christiansen says, “Knowledge on the purpose of your life…is the single most important thing to learn. If a student doesn’t figure it out they will just sail off without a rudder and get buffeted in the very rough seas of life.” And, “Had I spent an hour each day learning the latest techniques of autocorrelation in regression analysis, I would have badly misspent my life. I apply the tools of econometrics a few times a year, but I apply my knowledge of the purpose of my life every day. It’s the single most useful thing I’ve ever learned.” (Christiansen 2010 p.5).

In my case, I started developing expertise in diversity, equity and inclusion in 1992 when I developed a 16-hour diversity workshop. I then helped the Museum of Tolerance develop a program to teach tolerance to police officers and stayed at the Museum as a volunteer to facilitate this program. By the time I was ready to retire from the police department, I had much expertise in facilitating diversity, equity, and inclusion workshops and made a smooth transition from the police department to the Museum of Tolerance.

Drucker was absolutely right about developing a new expertise and starting a second career. It helped me to stay engaged, active, and relevant after retirement and also helped me to start to heal from my moral injury of being a bystander fifty years ago.

References

Christiansen, Clayton M. 2010 How Will You Measure Your Life? HBRs 10 Must Reads On Managing Yourself Harvard Business School Publications

Drucker, Peter F. 2008, Managing Oneself, Harvard Business School Publications

Papadopoulos, Renos K. 2020, Moral Injury and Beyond: Understanding Human Anguish and Healing Traumatic Wounds, Routlege

Williamson, Victoria; Stevenlink, Sharon; Greenburg, Neil 2018, Occupational Moral Injury and Mental Health: Systematic Review and Meta-analysis British Journal of Psychiatry Vol. 212 Iss. 6

Management and Leadership in Peter Drucker’s Writings

Mon, 16 May 2022 17:36:00 GMT

Peter Drucker has written a lot on management and leadership, but where did he stand in terms of his focus on the constructs of management and leadership? Was he more concerned with “managing” or “leading” in his writings? To take Drucker by his words, I conducted a computer-aided text analysis on all Drucker’s published books to objectively compare the number of times “manage” and “lead” have appeared in his writings. This way, I compared the relative frequency of words starting with “manage” (including manger, management, etc.) with “lead” (e.g., lead, leadership, leader etc.) in all Drucker books excluding novels.

Word Frequency Results

Using the machine-readable text versions of all Drucker’s books, I analyzed the relative word frequencies on Voyant Tools which is a powerful publicly available tool for computational linguistic (Sinclair & Rockwell, 2016). The figure below shows the frequency with which terms “manage” and “lead” have appeared in each of Peter Drucker's written contributions. As evident in this figure, in 29 out of 32 of Drucker’s books, the relative frequency of “manage” is significantly higher than “lead”.

Similarly, I ran the same analysis at the aggregate level to compare the total number of times Drucker has used these words in his books. Looking at the aggregate frequencies (The total number of appearances in all 32 books), words including “lead” have appeared around 3010 times while words including “manage” appeared 13532 times . Thus, Drucker has used “manage” more than four times more frequently than “lead”.

Conclusion

This analysis shows that based on the frequency of words written by the author, Peter Drucker has put a far greater emphasis on the construct of management than the construct of leadership, throughout his writing career. This finding is not surprising considering Drucker’s dedication to general management topics. Nevertheless, this finding does not mean that Drucker has ignored leadership as an important organizational phenomenon. Drucker has written a lot about leadership and believed that effective leadership is less dependent on leader’s charisma and personality and more dependent on a leader’s ability for thinking through organizational mission. In this regard, Drucker had a very critical view of certain over-glorified views of leadership. Particularly, his negative views of charismatic leadership are evident in many of his writings. For instance, he believes that “The three most charismatic leaders in this century inflicted more suffering on human earth than almost any trio in history: Hitler, Stalin, and Mao (Drucker, 1990)”. Drucker considered leadership as “the essential” management skill.
For a deep understanding of Peter Drucker’s thoughts on leadership, I invite you to read “ Drucker on leadership: New lessons from the father of modern management ” by William A. Cohen (Cohen, 2009). In addition, Teo-Dixon and Monin (2007), have conducted an interesting study to track the evolution of the meaning of “leadership” through time in various Peter Drucker books and articles.

References

Cohen, W. A. (2009). Drucker on leadership: New lessons from the father of modern management . John Wiley & Sons. Drucker, P. (1990). Managing the non-profit organization: Practices and principles . Harper Collins Publishers Teo-Dixon, G., & Monin, N. (2007). Guru of gurus: Peter Drucker, logology, and the ultimate leader. Journal of Management Inquiry , 16(1), 6-17.

Interview with Francisco Suarez

Mon, 25 Apr 2022 20:14:00 GMT

The triple bottom line is the new standard. Are you onboard?

The triple bottom line is the new standard. Are you onboard?
As a leader, you have the power to transform communities … but only if you are doing these three things.
When applied to Management as a Liberal Art (MLA), the triple bottom line is a fresh take on an existing framework .

It’s all about where vision meets the three Ps: People, Profit, Planet.
Francisco Suarez, the CEO of AdeS for Latin America asks you to look at it another way.
Social, Economic, and Environmental value .
So what is the triple bottom line, and how did Drucker predict its importance in the modern world? Is your organization providing value in all three areas? Or have you not redefined your bottom line? Let’s discuss.
While profit is the typical metric for success, it is not the only one that matters. For Francisco Suarez, every company vision needs to incorporate the triple bottom line.
University of the People explains that a successful business operates by taking ‘into account its expenses and impact on people and the planet.’ An organization transforms the communities where it operates when all three values – social, economic, and environmental – support its single vision.
Giving equal weight to profit and social and environmental concerns is the new bottom line .
It’s time to expand the impact your business, and management approach can have on the world. Francisco Suarez builds on Peter Drucker’s philosophies, highlighting a corporation’s three obligations:

Social

Both Drucker and Suarez see management as the catalyst for every successful organization. And every successful organization plays a huge role in society. Peter Drucker posits that successful organizations support self-development in their people. In other words, developing your workers makes for a better society.
So if it all comes down to people, how can the individual leader support this development? The answer is self-knowledge.
Self-knowledge as a leader is essential . It’s a balance of both experience and an internal belief in yourself that makes a valuable leader.
Yes, you always try to have the best information possible. But thought leaders like Minglo Shao (founder of CIAM), insist that what sets successful leaders apart is their ability to know and act on their gut decisions.
It takes great executives to ensure organizations are intentional about their impact on society. Suarez exemplifies this in his work for FEMSA. A pioneer in social and environmental practices, FEMSA stands firm in the social aspect of its company vision.
It is a leader's responsibility to know themselves. Without self-knowledge, an organization's societal impact diminishes.

Economic

Just as knowing yourself is key, so is knowing your competitors.
An organization’s economic impact is by far the most measurable by today's standards. It’s not to say we won't have better tools to measure social and economic impact in the future. But for now, no business leader is a stranger to economic impact.
Every single company measures its profit and loss. But Suarez tells us that economic success is also directly tied to social and economic value.
University of the People says it well. “Caring about society and the environment isn’t in opposition to being profitable. In many instances, the companies that care about more than just their bottom line end up being more profitable because people like supporting companies that care.”
You must redefine what the “bottom line” means to your organization. And find value in more than just financial profit.

Environmental

Companies make environmental sustainability possible.
As much as the individual must also take action to make a difference, it is not the actions of the individual that make a true environmental impact. Instead, it is organizations that have the resources to enact true environmental change.
But the big companies cannot do this alone. Leaders must be humble enough to acknowledge that there are things they don’t know and be open to working with other sectors. Suarez reminds us that collaboration is vital to environmental impact.
Yes, organizations make environmental sustainability possible. But we also need consensus. A multi-sector collaboration that does not yet exist.
Suarez uses the example of the United States leaving the Paris Climate Accords. And then returning. Big companies cannot alone be responsible for environmental impact. Individuals and political policies must be considered as well.
There must be a consensus across sectors about what is, and what is not, negotiable when it comes to making an environmental impact.
Peter Drucker’s philosophy of management as a liberal art has influenced many thriving business leaders and minds. Francisco Suarez uses Drucker's insight daily and has seen real-world results.
He asks us all to be social ecologists. To think beyond economic and financial impact. To ensure that every project incorporates the triple bottom line in their vision.
While the concepts may have changed over time, Peter Drucker's principles remain useful in today's business landscape. Francisco Suarez has felt their impact through his work and encourages us all to do the same.
Sources: https://open.spotify.com/show/2Ct5vJOgGkazlg2md6qMAG https://www.uopeople.edu/blog/triple-bottom-line/ https://www.femsa.com/en/about-femsa/about-us/

Interview with Bruce Rosenstein

Tue, 12 Apr 2022 23:39:00 GMT

As a leader, how are you taking care of your next 100 days?
In the age of the Great Resignation, there’s a new set of rules.
How do leaders today deal with changes that happen faster, and more profoundly, than ever before? Where does your organization fit within our ever-changing workplace?
You’re concerned about where you stand, and what to do next as a manager. We get it. But there's good news. Peter Drucker’s foundational philosophies answer many of these questions.

Drucker's concepts have withstood the test of time. And by putting his principles into action, managers can not only withstand the ever-changing business landscape but thrive within that change.
In a post-pandemic society, many of the rules that existed before no longer hold true. We are in the new age of the Great Resignation. Jack Kelly with Forbes coined the term, as 'a sort of workers’ revolution and uprising against bad bosses and tone-deaf companies.'
With a worker mass exodus on our hands, learning and adapting to changing societal needs is more important today than ever before.
The changing times bring new relevance to Peter Drucker’s concept of Management as a Liberal Art (MLA). Bruce Rosenstein – Managing Editor of Leader to Leader and author of Create Your Future the Peter Drucker Way – helps us explore Drucker’s concepts in the modern era. How best to apply them to help your organization – and leadership style – adapt to the new rules.
So what does viewing MLA mean?
Peter Drucker left it open to some interpretation. But for Rosenstein, Drucker’s concept centers around lifelong learning. He stresses the importance of learning both as an organization and as an individual. Applying new knowledge is the key to embracing change. Not fighting it. After all, there is no way to halt change, so we must adapt to it.
“Drucker said that unless the manager takes care of the next 100 days, there will be no next 100 years.” – Bruce Rosenstein
So how do you take care of your next 100 days?
Here’s what to do daily:
1. Learn something new All learning counts. In the era of micro-credentials, it is not necessary to go out and get another four-year degree. But you can, and should, find daily ways to expand your access to high-quality information. As a leader this is imperative.
Ask yourself – What new information can I take in and then apply to my business?
2. Focus on the idea of meaning & purpose in work People want to find meaning in their work no matter what it is they do. This is the nature of why people work. To be a part of a larger whole.
Ask yourself – How do I continue to help people find this meaning through both what our company does, and what I do as a leader?
3. Go beyond your four walls To stay relevant, you must go beyond your four walls. These walls used to be literal. A physical office. But for many of us, we no longer have a physical office or a daily commute. It is necessary to re-set this boundary even if it is no longer a physical one.
As Bruce Rosenstein reminds us, we lose the big picture when we get too wrapped up in what we are doing. So get out, beyond those four walls and see how it inspires you as a leader.
Ask yourself – How can my part in the outside world help me discover how my organization can remain relevant now, and in the next 100 days?
Peter Drucker always saw the connection the workplace had on society and vice versa. Living in more than one world is vital on both a personal and professional level. Having other spheres of interest beyond work is vital.
Just a few short years ago, we managed our lives around our work. Now, many of us are managing work around our lives. This is an important distinction.
If you're finding resistance to this new reality, lean on Peter Drucker’s vision, that a functioning society asks us to see management and organizations as a part of the whole.
Take part in social interests. You are not neglecting work, you are contributing to its growth.
It will all come back to how you can better yourself around work. And when you are a better manager, you better your employees and your organization.
As the whole changes, so must your daily actions as an individual, and as an organization. Who are we as people and where do we fit into organizations? How do we fit into our communities and society? How does your organization fit?
Both Rosenstein and Drucker understand the importance of asking yourself these daily questions. Learn a little bit every day and put that new knowledge into action.
This is how we regain perspective and find where our historical moment fits in. And perhaps most importantly, how you will contribute to this moment of change.
Sources:

Leadership vs. Management: A False Dichotomy

Fri, 08 Apr 2022 19:29:00 GMT

A heated debate among some colleagues about the prominence of management or leadership in Peter Drucker’s writings pushed me to think about an important question that I have been struggling with for quite a long time: Do the differences between “managing” and “leading” mount up to a contradiction between them?

Later in another post, I will get to an in-depth analysis of Peter Drucker’s writings to shed a more definitive light on which one, management or leadership, has been at the center of attention for Peter Drucker. But in this post, I would like to write about what I refer to as the false management-leadership dichotomy in commentary about these topics. To this goal, I start by listing some of the alleged differences between leaders and managers noted by Warren Bennis (1987) in his famous book, On Becoming a Leader :

The manager does things right; the leader does the right thing
The manager accepts the status quo; the leader challenges it.
The manager administers; the leader innovates.
The manager maintains; the leader develops.
The manager focuses on systems and structure; the leader focuses on people. The manager relies on control; the leader inspires trust. The manager has a short-range view; the leader has a long-range perspective.
The manager asks how and when; the leader asks what and why.
The manager has an eye always on the bottom line; the leader has an eye on the horizon.

Looking at this list reminds me of the very many articles or blog posts I have read in which authors assumed an inherent contradiction between leadership and management roles. For example, in one of the chapters of the management textbook that I use for teaching principles of management, a manager is portrayed as a bureaucrat focused only on efficiency and short-term goals while the leader is glorified as a visionary architect of future goals and directions. The problem with a polarized conversation illustrated by this example, as well as the bullet points above, is that it creates a false dichotomy (e.g., either/or mentality) and implies superiority of one aspect over another.

I acknowledge the conceptual differences between these constructs of management and leadership, but I am bewildered by the false dichotomization of these concepts. In my opinion, contradicting the leadership and management roles is not productive and creates more harm than benefit to the public discourse about these important topics. Apart from the evident conceptual differences between the constructs of leadership and management, which understandably warrant scientific clarification, leadership and management should both be viewed as important skills greatly needed by those individuals in charge of any successful organization.

Instead of dramatizing the conceptual differences between “management” and “leadership” in the academic- or practitioner-based commentaries (i.e., either/or mentality), the focus should be on the integration of leadership skills in management (both/and mentality). Leadership skills form an important category of must-have skillsets for any manager. It is not imaginable for a good manager to only focus on efficiency or short-term goals while ignoring the purpose or long-term goals of her organization. Therefore, reducing management to efficiency/short-term view/control is not only unfair but misleading. A successful manager must be both efficient and effective. If management is “getting the work done through others,” leadership is an important function of successful management. A successful manager should have leadership skills to inspire and motivate others to achieve organizational goals.

The Experience of Working at A Company Without Flow

Fri, 08 Apr 2022 19:25:00 GMT

Throughout my career, I’ve been fortunate to work in several great organizations. I’ve had great managers who have shared their wisdom and taught me important skills. However, there was one organization where things were different – It was a reputable organization where top-down management reigned and where power was abused to keep employees from questioning decisions. Ultimately, this organization struggled to achieve what renowned psychologist, Dr. Mihaly Robert Csikszentmihalyi, would call ‘flow’.

According to Csikszentmihalyi, ‘flow’ is a state of consciousness where people experience deep enjoyment, creativity, and a total involvement in an activity where nothing else seems to matter. Csikszentmihalyi argued that organizations could foster an environment conducive to a positive state of flow where individuals could enjoy their work, become highly engaged, and therefore, become more productive and committed to the organization’s mission.

Yet, this particular organization ignored the importance of fostering an environment where people could find enjoyment and engagement. Instead, upper management made decisions without promoting dialogue and discussion. We felt as if a decision had already been made prior to the meeting, and we simply needed to agree with upper management when the idea was presented. Over time, people became increasingly silent in meetings. Managers became more impatient with those few who would ask a question. Ultimately, the fear of being publicly shamed, ridiculed, or verbally insulted by management led to ‘groupthink’. Originally coined by psychologist, Irving Janis, ‘groupthink’ is the process in which a team conforms to a leader’s opinion and has little tolerance for divergent opinions.

In this organization, upper management moved forward with its decisions, and hired people who followed along and agreed with the prevailing views of upper management. As upper management continued to develop the strategic plan, they did not realize that they were missing key data and viewpoints. Rather, upper management relied on their assumptions and their own perceptions, rather than seeking to gather evidence and challenging opinions. Hence, their decisions became quite often inundated with incongruities, which resulted in flawed decision processes and poor performance.

As the weeks transpired, three key indicators began to signal that the organization was in trouble. The employee turnover rate increased. Sales decreased. And customer retention decreased. To make matters worse, employee morale dropped. Although the data revealed that something was amiss, upper management decided to keep course and maintain processes as they were. Over time, remaining employees grew afraid of losing their jobs.

The organization was inundated with opinion conformity. This prevented employees from ever learning and developing critical thinking skills. Upper management began to argue that the company was experiencing “temporary” challenges which were caused by market and economic forces. However, interestingly, while this organization was declining, competitors were experiencing growth and increasing sales. Ultimately, the organization became saturated with inflexibility and risk aversion. Several employees (including me) left the organization dissatisfied with the culture and frustrated about not being able to grow and contribute.

The organization relied on the wisdom and experience of its upper management, but did not realize that the environment around them kept changing, and hence they should be flexible and open to new ideas. The organization failed to appreciate its employees and the ideas they could have contributed. Instead of encouraging employees to speak up and share, they shut them down. Upper management should have focused on building people, motivating them to contribute, and allowing them to become engaged with the mission. Employees should have been encouraged to build on their skills and use divergent thinking in decision-making. Encouraging the establishment of an innovative and creative environment can yield substantially powerful and transformational effects on any organization, while providing individuals with high-challenge, high-skill situations that will increase flow and performance.

References:

Csikszentmihalyi, Mihaly. Flow: The psychology of optimal experience. New York: Harper & Row, 1990.

Janis, Irving L. "Groupthink and group dynamics: A social psychological analysis of defective policy decisions." Policy Studies Journal 2.1 (1973): 19.

Leadership Lessons from Horses

Thu, 31 Mar 2022 23:18:00 GMT

I thought I’d give you a lighter piece this month. There is so much weighing all of us down, from the threat of global war, the lingering pandemic, inflation…

So, rather than write about Peter Drucker’s lessons to be learned, I thought I would share lessons from another source. You probably don’t know this, but your Acting Research Director at MLARI is also an avid equestrian (which means I like to ride horses). I own two, a male and a mare (female). I came to this sport very late in life, as my mother was terrified of horses and wouldn’t let me near them. So I fell in love with these animals in my forties, and have never looked back.

Horses have a lot to teach us about leadership, as others have noted (Rajfura, Tomasz, and Robert Karaszewski. "Horse Sense Leadership: What Can Leaders Learn from Horses?." Journal of Corporate Responsibility and Leadership 5.1 (2018): 61-83; Kelly, Simon. "Horses for courses: Exploring the limits of leadership development through equine-assisted learning." Journal of Management Education 38.2 (2014): 216-233). It’s an interesting area of inquiry that, I think, relates intensely to MLA. I hope this piece piques your interest in things related to horses and leadership. These are my own thoughts independent of outside research:

1) Horses are prey animals.

As large as they are, horses are preyed upon. Unlike dogs, who travel in packs and attack, horses move in herds, but for safety because they are food for predators (in the wild). This mentality is in their DNA. Think of them as giant rabbits. Any change in their environment means a threat. And you may not perceive the change that they see. The light changes when the seasons shift. We don’t see that, but they do. The subtle rustle of an animal in the bushes can set a horse off. All of these slight changes result in reactions, that may be small (an ear tilting) or dramatic (bolting to get out of there).

Lesson: Change is scary . Drucker wrote about the need for balancing continuity and change, and that too much sudden change created disorientation and disruption. Change is part of life, but it needs to be managed and lead. Horses dislike any kind of change in their environment that can be perceived as a threat. Think about this when you are implementing new procedures, policies, ideas, or programs. Your idea is probably really great! But every person reacts differently to change. Some may embrace the change but need to process it (tilt the ear) while others might perceive a new policy or program as a threat (and decide to bolt). Think about each person on your team and how they might react to a change. Is it a new and interesting thing to explore? Or a scary plastic bag ghost that is chasing them? Watching horses deal with daily changes in their environment has helped me understand how to think about managing change for people.

2) Horses live in a herd.

Horses do not like to be alone. They need company, preferably the company of another horse (although if they are bonded with a human, they need that person to be there, too). There is a pecking order to a herd. One horse is the Alpha lead horse (often a mare, but not always), and then the order follows from there. Depending on the size of the herd, it gets complicated and sometimes competitive. In my barn, we have four. The Alpha (my gelding) has always held his position. He actually likes being alone and doesn’t care when the other horses leave. The bottom horse has always held his position. He hates it when any of the other horses leave. However, the other two (my mare and the other gelding) have competed for the number two and three slot. The mare has won out and is now number two. Yet, she hates being alone the most!

Lesson: Humans are social beings . Drucker expressed this over and over in his work. People need status and function. Do they attain this at work? Or do they need to get this somewhere else? We need each other; we are not just isolated beings operating independently. The pandemic reinforced this aspect of human nature exponentially, I think. And perhaps we have lost some of our social skills after two years of being apart. Who are the natural leaders on our team? Who works well in a group, and who prefers to be independent? What are the group dynamics of your team or organization? Horses work this out. It’s a good lesson to learn.

3) Horses prefer a quiet leader.

A lot of trainers and horse people use force and aggression to deal with the animals. I don’t find this very effective, based on observation. Horses need a leader, but they want a leader who is assertive in a confident, quiet way. If a person walks up to a horse with a slouching body position, they are signaling weakness. But, if you walk up to a horse with a whip in your hand all the time, you are just a bully, and the horse will back away from you or, worse yet, take you on. Horses want to know that you know what you are doing, and that you won’t let them down. Trust is key. Why should a prey animal let you get on his or her back? Or tell it what to do, when it weighs 1200 pounds and you weigh a tenth of that? You can’t force a horse to do anything (unless you want to be horribly abusive). The horse has more muscle and strength than you can ever overcome. So how do you lead/manage that?

Lesson: Trust and integrity are key to effective leadership . Drucker emphasized this over and over. Horses know when you are lying, and if you let them down, you destroy the relationship. If you tell a horse to do something that isn’t safe, that horse will not trust you again. It’s a big responsibility. Leadership is a big responsibility. It requires that you raise others up to be better, and to be the best example you can possibly be. The quiet, confident leader will always have better results than the bully or the authoritarian with the whip. What is your leadership style? Do you operate from a position of strength but also empathy and compassion? Do you give clear directions? How do you build consensus (get those 1200 pound animals to think it’s their idea to go along with the mission/vision)? In Drucker’s terms, what constitutes power in your relationships? A whip? A cookie? Or a relationship that involves communication?

4) Horses are intuitive and reactive.

As prey animals, horses have to read their environment constantly to perceive potential threats. They are thus constantly on alert. One of the things horse owners need to do is to desensitize their animals to whatever environment they are in. A horse in the wild doesn’t have to deal with urban stressors. In my neighborhood, we have all kinds of scary things, like baby strollers, umbrellas that open and close, tree trimmers, plastic bags blowing in the wind, kids on scooters and bikes…you get the idea. All of the things that are normal to us are not normal to a horse. That tumbleweed that appeared on the trail? It might be a monster out to eat me!

Horse reactions vary. Some will just look at a scary thing and give it a wide berth. Others will try to back away from it. Others will suddenly spin and run away from that scary paper bag. In short, they are highly unpredictable. No horse is immune to such incidents. That’s why it’s called a high-risk sport (I know…why do I do this???).

Lesson: Life-Long Learning is Important . Horses need to be worked every day (a day off or two) to be in a good frame of mind and physical condition. So do we humans!!! The parallels between horses and humans continue to amaze me. Even old horses, like my 27 year-old Spencer, need mental and physical work. That keeps them from reacting to things that might be worrisome. People tend to get locked into routines as they get older. And, as Drucker noted, learning is going to be important to keep one’s job. Flexibility is crucial. Everyone who works is going to need to be willing to learn new skills, technology, and ways of viewing the world. Leaders will have to be ready to desensitize people unwilling for such change. The new software program is the equivalent of the tree trimmer to my horse. If we can present new material in terms of a life-long learning process rather than a scary threat, perhaps we can help current employees feel that they can grow within their positions.

So, think like a horse, and lead your team forward happily, strongly, and with trust

Being Myself But Part of a Team

Tue, 01 Mar 2022 23:23:00 GMT

Last month, I wrote about implementing MLA in organizations, particularly during times of change or even crisis. I discussed that different definitions of freedom might make it difficult to bring people together. As I said, people need status and function, according to Drucker. But status and function require people to have responsibility and to submit to legitimate authority. We can’t have a team if everyone does what they want without any direction in terms of the organizational mission.

This month, I’d like to build on the challenges presented by this tension between the individual and the organization. In a 1992 article in Harvard Business Review , Drucker identified the challenges facing our society of organizations. Two of them were “the relationship between individual and organization and the responsibilities of each to the other” and “the tension between specialists with specialized knowledges and the organization’s need for these specialists to perform as a team (“The Society of Organizations”, 1992). As Drucker pointed out in much of his work, knowledge workers cannot be managed in the traditional sense. They cannot be told what to do, because those directing them likely do not have the specialized knowledge that is required to perform the necessary work. Drucker liked to use the symphony orchestra as a metaphor for organizing knowledge workers; the conductor has no idea how to play all of the instruments in an orchestra but guides the specialists to honor the score and the intent of the composer and the director’s interpretation of that score. But she can no more tell the cellist how to produce a certain tone than a team leader can tell a market research specialist how to design a survey.

As such, an organization, says Drucker, has a single purpose. It must because it is simply a tool. This requires a crystal-clear mission:

“The organization must be single-minded, or its members will become confused. They will follow their own specialty rather than apply it to the common task. They will each define ‘results’ in terms of their own specialty and impose its values on the organization. Only a focused and common mission will hold the organization together and enable it to produce. Without such a mission, the organization will soon lose credibility and consequently its ability to attract the very people it needs to perform” (“The Society of Organizations”, 1992).

Therefore, the way to resolve the second tension Drucker identified is to have a clear mission that every specialized knowledge worker can understand and get on board with. This then gives knowledge workers the freedom and autonomy to direct their own work, but under the “score” of the mission as part of the “orchestral” team.

But what of the first tension Drucker identifies – “the relationship between individual and organization and the responsibilities of each to the other”? Here, Drucker argues that this relationship is complicated and, in 1992, was a new phenomenon. The old term “employee” doesn’t really apply to these people. After all, knowledge workers are employed by organizations, but they don’t identify themselves as employees of an institution; they identify themselves by the knowledge they have and the specialized work they do. As a result, organizations must earn knowledge workers’ loyalty not through a paycheck, but by providing them with “exceptional opportunities for putting their knowledge to work”. Highly educated knowledge workers know that they own their means of production, so to speak, and that they can transport that knowledge to any organization that will provide them the opportunity to use it effectively and in an interesting, meaningful way. This presents a challenge for organizations seeking to attract and retain the best talent.

Importantly, modern knowledge worker organizations are organizations of colleagues, associates, and equals. As Drucker says, “No one knowledge ranks higher than another; each is judged by its contribution to the common task rather than by any inherent superiority or inferiority. Therefore, the modern organization cannot be an organization of boss and subordinate relationship. It must be organized as a team” (1992). This is crucial to navigating the new world of individuals working in organizations. Work needs to be done in teams where expertise is recognized and valued. What kind of team is best for the given situation or mission? Is it the tennis doubles team, where a very small group of people adapts themselves to the personality, skills, strengths and weaknesses of the others? Or is it the soccer model, where individuals have fixed positions but the group is moving and responding to rapidly-changing circumstances? Or the orchestra model, where each member’s position remains the same even though the group mission (the score) may change? Drucker says that the decision of which kind of team to use is one of the riskiest decisions in any organization. A change in team strategy can be very disruptive, because it requires giving up old ways, habits, and perhaps relationships. But the only way for an organization to be productive is to have a team effort. This is easier said than done, because it may require giving up old leadership behaviors and old models of boss-subordinate relationships. How can we work together as a team, with leaders who are not necessarily fixed by position, to fulfill the mission?

Drucker believed that knowledge workers still needed an organization in order to have status and function in society. But he clearly saw that this relationship was tricky and filled with tension – and that was before the explosion of technology and people’s ability to connect with others independently through the internet and social media. Drucker remarked that society didn’t really have a vocabulary word for the new knowledge worker who wasn’t really an employee; the term “self-employed” was the one he thought best fit the change occurring. Yet Drucker still believed that most knowledge workers required access to an organization in order to make a contribution. Today, that is not necessarily the case. Knowledge workers can access stakeholders through their own organizations that they themselves create. Technology allows people with knowledge to connect with others anywhere and collaborate on projects, create new products and services, and develop the infrastructure to deliver what they create.

So, the organizations of today face additional challenges in terms of building “the relationship between individual and organization and the responsibilities of each to the other”. I think the key concept is responsibilities. Drucker’s entire idea of a functioning society rests on the recognition that we have responsibilities as free individuals. As we discussed last month, freedom isn’t the license to do whatever you want. It’s the burden that you bear when you have the freedom to exercise your free will and suffer the consequences. As we become more atomized as knowledge workers (particularly during the pandemic), we need to revisit our responsibilities to our collective goals and mission without losing our individual freedom to pursue our passions and dreams. I think the tension Drucker identified is increasing as we move towards a society that celebrates individuality over collective achievement. How can we come together as a team, yet still recognize the individual as a unique person? That was Drucker’s lifelong project, and we still wrestle with it. The clear mission statement helps an organization clarify activity. But when it comes to relationships between people working together? I think we still have a lot to work on, as Drucker signaled thirty years ago.

Is MLA Just a Concept?

Tue, 01 Feb 2022 23:21:00 GMT

As the Director of Research at MLARI, I think a lot about not just what MLA is, but how is works in everyday life. I frequently hear from people that MLA is too complicated or is too philosophical. Other times, people tell me that MLA is simple: it’s just about people, or social responsibility, or good leadership. In other situations, I have people giving me examples of MLA that, frankly, have nothing to do with the concept. It’s very clear to me that there is a vast disconnect between a deep understanding of MLA as an idea and how to actually put it into action. So, I have some thoughts on how to bridge this gap.

First of all, we have a lot of work to do to understand MLA and its complexity. That is really the only way we will get MLA done effectively. But, I’ve realized, in the short term, there are some ways we can begin to have conversations about how to implement MLA in organizations with respect to specific issues. I’d like to discuss the concept of freedom, and how it relates to implementing MLA in organizations. I did a podcast on this last month, so I hope you’ll listen to this for a deeper conversation about this topic.

The meaning and definition of freedom have changed depending on the time, people doing the defining, and other contextual matters. As a result, today we have multiple definitions of freedom, resulting in competing views and values that can impact not just society but also organizations. Some people see freedom solely in terms of individual rights. Freedom is my right to do what I want, when I want, and how I want. And be who I want to be. This is a valid definition, but it presents challenges for organizations. How do we build a team when everyone has his/her/their own agenda? Drucker emphasized the need for balancing individual rights with the rights of society (or the organization, or some greater good). MLA’s emphasis on the human condition is not just about letting people do what they want or be who they want to be. Yes, people need status and function, according to Drucker. But status and function require people to have responsibility and to submit to legitimate authority. We can’t have a team if everyone does what they want without any direction in terms of the organizational mission. The key is to lead people to want to be part of the team and contribute their skills to the overall vision and mission. This is particularly important when it comes to knowledge workers, who can take their skills anywhere they choose, particularly in today’s job market.

Similarly, leaders need to understand that they don’t lead by virtue of their position. There are anti-authoritarian people who bristle against any exertion of power in every organization. And power takes many forms. It’s often not overt; often it’s in the form of a great idea, plan, program, or change that didn’t involve the input of others. The plan might be brilliant; but, if presented as, “Here’s what we’re going to do, and it’s great” without buy-in from those affected, it is easily interpreted as a mandate. We’ve all seen how government mandates and public policy during this pandemic have met with incredible resistance. Think of how your great idea might be met with resistance if you present it as an obligation rather than a free choice. Yes, policies need to be implemented, and organizations are guided by external authorities,

such as labor laws and accreditation requirements. Communicating the why of a change or program, not just the what , can help people be part of the process rather than feeling that they are out of the loop.

Similarly, as Drucker said over and over, one cannot prevent change; one can only prepare for it and manage it as effectively as possible. Many have written on the challenges of managing and leading change during the pandemic (see https://www.insidehighered.com/advice/2021/07/22/academic-administrator-shares-lessons-managing-change-during-covid-opinion , https://www.forbes.com/sites/billfischer/2021/03/26/leadership-lessons-from-a-year-of-covid-19/?sh=b3f9bdf13645 , and https://www.harvardbusiness.org/leading-through-a-pandemic/ , for example). One of the key principles of MLA is to balance change with continuity. Too much change without any sense of institutional stability is very unsettling for most people. Change can be very difficult for people who define freedom in terms of their individual rights; their freedom to conduct their daily business may be dramatically impacted by external circumstances that require a shift in organizational policies and procedures. For these people, leading through change may require demonstrating more empathy and compassion in their communications with team members (see, for example, https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/leadership-in-a-crisis ). One way to build resilience and a mindset of “we’re in this together” is for leadership to demonstrate an MLA model of freedom: status and function require people to have responsibility and buy in to the organization’s mission. Particularly in a time of crisis, it is crucial that leadership not only builds trust, but acknowledges the actual pain and negative impact that needed change may have on certain team members. In short, if everyone sees MLA as only about my own freedom (in any role), we lose sight of the important role of responsibility and the role of the organizational mission.

These are just some brief thoughts about how to relate MLA’s idea of freedom to your organization or daily life. For a more in-depth treatment, please see our MLA podcast. There’s a lot going on at MLARI, and we’re excited to share it with all of you!

Student Activism and MLA: The Importance of Status and Function in Society

Tue, 04 Jan 2022 23:20:00 GMT

How do we find individual freedom, dignity, status and function in a society dominated by institutions that, to many, don’t seem to function effectively?

…it suddenly dawned on me that many of the young Americans now in college and graduate school are searching for an ethic based on personal (if not spiritual) values, rather than on social utility or community mores – what one might call an Ecumenical Ethic. The old ideologies and slogans leave these young adults cold…But there is a passionate groping for personal commitment to a philosophy of life. Above all, a new inner-directedness is all the rage in this group. Peter Drucker, “The Romantic Generation,” Harper’s Magazine, May 1966.
In doing research for a project, I revisited an article Drucker wrote about college students in the 1960s. Titled “The Romantic Generation,” this piece is Drucker’s musing about what was then referred to as “the generation gap.” Why were young people in the 1960s so different from college students in the 1950s, who were much less rebellious? I wanted to share some of Drucker’s insights from this article because many commentators today remark that college students in this era are increasingly rebellious and contentious. References to “wokeness” and “cancel culture” pepper commentaries, as voices argue that college students are intolerant of dissenting opinions and downright hostile toward freedom of speech. Do Drucker’s observations of young adults in the 1960s shed any light on the debates over discourse and student activism?
At the time of Drucker’s article, students were concerned with a number of social justice issues, including the civil rights movement and students’ rights. At the University of California, Berkeley, the Free Speech movement during the 1964-1965 academic year involved a student-led protest against a ban on on-campus political speech and activities. Fueled by the civil rights movement and later protests against the Viet Nam War, the Free Speech movement represented students’ rebellion against 1950s-era anti-Communist restrictions on First Amendment rights of young people. Universities and colleges were believed to be in loco parentis, or “in the place of a parent” with the power to limit young people’s rights for their own safety. Women were subject to curfews, and there were other significant restrictions on students’ private lives. The Free Speech movement at Berkeley was the death knell for in loco parentis on most college campuses, where students are now treated as adults.
But it was the civil rights movement that motivated students throughout the United States to engage in activism, often in ways that endangered their own lives. The Freedom Riders were groups of college students who protested segregation in the South. Students from Northern universities traveled to the Deep South in the summer of 1961 to work with activists from Southern colleges and universities to desegregate public transportation. White students would sit in areas on buses designated for black people, and black students would integrate into white seats. The events were nationally televised. When buses were burned and students beaten in places like Birmingham, Alabama, the whole world watched; in fact, the Soviet Union gleefully used television images of violent reactions to non-violent protests to denigrate capitalism. Then there were the Freedom Schools organized in 1964, the first one of which was in Mississippi. These free schools were designed to educate Southern blacks on their own history and organize them to achieve social, economic, and political equality. Drucker comments on this in his article: The young people are much closer in their views on civil rights to the abolitionists of a century ago than they are to yesterday’s liberals. The oppression of the Negro is to them a sin rather than a wrong. “We Shall Overcome” has the ring of a gospel hymn rather than that of a New Republic editorial. This explains in large part the tremendous impact the civil rights movement has had on the mood, vision, and worldview of the campus generation. In addition, civil rights has offered scope for individual initiative and effectiveness, something our society otherwise does not readily grant to men or women in their early twenties. There are students, white and coloured, who have gone South to teach in the Freedom Schools. There are the white college girls up North who in considerable numbers venture into the meanest Negro ghettos of the big cities to tutor or counsel, often entirely on their own. What caught my attention most about this part of Drucker’s discussion is his comment that the civil rights movement gave young people “scope for individual initiative and effectiveness” – In other words, status and function. Drucker rarely wrote about issues of race, gender, or social justice. But when he did, it was always in the context of his larger philosophy of a functioning society of institutions – the very philosophy that drives Management as a Liberal Art. Elsewhere in this article, Drucker sounds a bit like a cranky older person, complaining about the sentimentality of college students and reminiscing about his days as part of his own “romantic generation.” But his point is important: young people need to feel that they have a voice, a place, status and function. If they do not, they will turn on the very institutions that support them (universities and colleges). When Drucker comments that the students of his era are searching for “personal commitment to a philosophy of life” and are “inner-directed,” he is not being cheeky or critical. He is echoing his own young self who found meaning in the writings of the philosopher Kierkegaard. How can young people be part of a functioning society of institutions? Especially when those institutions seem to alienate those who are “inner-directed,” driven by values and morals rather than by the kudos and rewards offered by the outside world? Drucker’s own crisis revolved around the failure of every institution to stave off National Socialism. How could a young man have faith in society, or find meaning as an individual, when hope was seemingly lost? For, Drucker, Kierkegaard’s existentialism was the answer.
Young people in the 1960s faced a similar existential crisis, driven not by Nazis but by a sense of society’s moral failure. Despite the promises of freedom and equality embodied in America’s founding documents, the country still embraced segregation and racial intolerance. The Viet Nam war was evidence of Eisenhower’s “Military-Industrial complex,” a set of powerful institutions that seemed to pull the levers of society. A growing environmental awareness, spawned by Rachel Carson’s book Silent Spring and its revelations about the dangers of DDT, showed young people that industrialization was poisoning the planet. As students in this era looked at the world around them, they saw not just political issues to discuss, but moral failings – as Drucker says, “sin.”
Today’s young people see, in many ways, a moral failure of society in epic proportions. Students are very engaged on social issues. A recent study by BestColleges shows that over 70 percent of today’s students are motivated by social justice issues and are acting on those impulses . Topics that most concern students include racial justice, climate change, gun control, and gender equality. The murder of George Floyd sparked a widespread movement against police violence against Black Americans. Anti-Asian hate crime rose 73 percent in 2020 . On November 30th, 2021, a 15-year-old student opened fire on his fellow classmates and teachers with a gun his parents had bought him for Christmas, wounding seven and killing four. As I write this, it is the ninth anniversary of the Sandy Hook Elementary school shooting, where a 20-year-old shot 26 people, including 20 children. Gymnasts abused by Larry Nassar, team doctor for the U.S. Olympic Gymnastics Team, reached a $380 million settlement with U.S. Olympic organizations. Climate change has been linked to a number of extreme events in recent months ( https://www.nytimes.com/2021/11/17/climate/climate-change-wildfire-risk.html , https://www.cnn.com/2021/08/21/weather/hurricane-henri-climate-change/index.html ). So, yes, the ills of society weigh heavily on young people, and some generations seem to feel this weight more than others.
Drucker concludes his essay with some food for thought: But a society of big organizations also raises in new and acute form the question of the person. What is his relationship to these new leviathans which are at one and the same time his servants and his master, his opportunity and his restraint, his tool and his environment? How can the individual maintain his integrity and privacy in such a society? Is individual freedom necessarily limited to whatever small air space will be left between the towering organizational skyscrapers? In such a society of big organizations, the need becomes more urgent for new answers to the old questions: “Who am I?” “What am I?” “What should I be?” …For once today’s young-adult fashions may foretell the concerns, and refigure the intellectual landscape, of tomorrow.
I keep coming back to Drucker’s remarks about students needing function and status, and how, in a society of big organizations, the questions about individual meaning loom large. For here, Drucker is telling us that students may be signaling views that others in society share. As a social ecologist, Drucker is looking at student activism as a possible “change that has already happened.” Is society as a whole moving towards more concern for the role that the “new leviathans” play? In other words, how could everyone, not just students, find status and function as large organizations played an increasingly important role in society? If institutions control every aspect of my life, where is the room for individual freedom? Is the “small air space” outside of institutions? Or can we find status and function within organizations (which is key to Management as a Liberal Art)?
I can see how this desire for “integrity,” “privacy” and “individual freedom” play a role in today’s student activism. The Parkland, Florida shootings in 2018 catapulted high school students to the forefront of gun control advocacy. Despair over the killing of George Floyd and many other black men at the hands of police officers sparked the Black Lives Matter protests that were particularly visible in the summer of 2020. Teenagers and young adults are some of the most prominent activists fighting to avert climate change. As was the case in the 1960s, young people point to previous generations’ failure and abdication of responsibility for solving these problems. And, as was the case in the 1960s, the tactics that young people use to protest are not always welcomed by larger society. Southerners viewed the Freedom Riders of 1961 as troublemakers, not moral activists. Attempts to curtail inflammatory presenters on college campuses and protestors shouting down speakers at events in today’s climate look like limitations on freedom of speech. When viewed through the lens of Management as a Liberal Art and social ecology, however, we can see how student activism is perhaps a symptom of a larger problem: how do we find individual freedom, dignity, status and function in a society dominated by institutions that, to many, don’t seem to function effectively? Management as a Liberal Art can help us answer these big questions.

Politics and Education: How can MLA Help Us Today?

Fri, 17 Sep 2021 19:10:00 GMT

“American education rejects alike the traditionally European concept of the ‘educated individual’ and the ‘trained robot’ of modern totalitarianism. To both it opposes the demand that the school has to educate responsible self-governing citizens who, in Lincoln’s words, ‘do not want to be masters because they do not want to be slaves.’” - “The American Genius is Political”

American society is polarized about almost everything. Unfortunately, politics comes into play in virtually every discussion. Public health measures to combat the rising death tolls of COVID-19 are politicized. Climate change is a political issue rather than one based on scientific evidence. Matters of education – whether it is the policies of the local school district, the question of charter schools, or the curriculum taught in public universities – have become so volatile that public meetings on educational issues result in screaming matches and outright physical assault. Can MLA help us out of this situation, where Americans no longer listen to each other? Where does CiAM fit in this larger discussion of the role of education in American society, and how that role fits in terms of preparing students from all cultures for being “responsible self-governing citizens” for a global society?

In 1953, Peter Drucker published an article in Perspectives magazine titled “The American Genius is Political.” At that time, Drucker was on his way to securing his position as the seminal thinker on the practice of management and knowledge work ( The Practice of Management was published in 1954). But most of what Drucker had written was about society ( The End of Economic Man – 1939; The Future of Industrial Man – 1942; The Concept of the Corporation -1946; The New Society – 1950). In those books, Drucker was working out his philosophy of a functioning society of institutions. As he began to analyze his adopted home country of America (Drucker became a naturalized American citizen in 1943), he not only looked at corporations, but also the other institutions of American society. One of these was the educational system.

Drucker’s larger point in “The American Genius is Political” is to argue that the glue that holds together American society is “a common political creed.” Essentially, Drucker aims to show how peculiar (he uses this word repeatedly in the essay) the American viewpoint is compared to that of Europeans. Drucker analyzes the ways in which the values embodied in the Constitution influence all aspects of American life. In his paragraph on education in this essay, Drucker contrasts the American view of education with that of the Europeans (whether totalitarian, democratic, socialist, liberal, or conservative). Drucker’s point is that America’s political values inform education as well (this essay comes after his book, Concept of the Corporation , where Drucker explored how federalism influenced General Motors). He states that Americans want education to create “responsible self-governing citizens”, and then paraphrases (although he employs quotation marks) Abraham Lincoln. The actual quote is: “As I would not be a slave, so I would not be a master . This expresses my idea of democracy. Whatever differs from this, to the extent of the difference, is no democracy” (undated fragment, believed to be written around August 1858). In this piece of a manuscript, Lincoln defines democracy in terms of not just political theory, but in terms of human relations; democracy cannot tolerate a social structure that allows slavery to occur. Drucker turns Lincoln’s words around to describe the American educational system. Americans believe in the equality of social relations, and demand that their educational system reflect this, according to Drucker. This desire for equality results in the “insistence of Americans that education, on all levels, be equally accessible to all, if not, indeed, obligatory on all.” Drucker claims that it is a “naïve but general belief” that the better one’s education, the better a citizen one becomes.

What is Drucker trying to tell us here? As part of his larger argument, his point is that American education reflects the nation’s values embodied idealistically in our founding documents (in this case, equality). Americans don’t understand how unique this view of education has been historically. As Drucker notes, traditionally, Europeans viewed education not as a vehicle for everyone to become citizens, but for the elite few to become “educated individuals.” Europeans have long commented on America’s obsession with equality (notably Alexis de Tocqueville argued that democracy could thwart individual expression and independent thought). Drucker also comments on another model of education, the rigid, unthinking model of the “trained robot” in autocratic or totalitarian countries, where curriculum is dictated by the central government. American education notoriously resists any federal attempts to guide curriculum. For example, the 2001 No Child Left Behind Act aimed to provide all children with a fair and equal opportunity to education. However, implementation of the law was highly problematic, and the controversial 100 percent proficiency mandate was never achieved. American schools are controlled at the local level; as a result, Drucker says, education “is bound to be the subject of violent political dispute whenever this country examines the premises on which its society and government rest, as, for instance, during the early days of the New Deal and again today.”

Drucker wrote this in 1953, but the words certainly ring true today. Education is the realm of “violent political dispute”, and it is indeed because we are wrestling with the “premises on which [American] society and government rest.” Local school board officials face the wrath of parents protesting policies aimed at preventing the spread of COVID-19; anti-mask protestors invoke public health measures as assaults on their “freedom.” “Critical Race Theory” has become a rallying cry for those concerned about how the history of race and racism is taught in American classrooms; most who use this term don’t understand what Critical Race Theory actually is, or that teachers have been teaching the history of race and racism for decades. The Trump administration’s 1776 Commission Report called for a return to more “patriotic education” in American schools. Unfortunately, many of the examples of “patriotic education” include misrepresenting factual evidence (such as misquoting Frederick Douglass’s “What, to the Slave, is the Fourth of July?” to portray him as celebrating rather than critiquing the nation). Debate is healthy, but “violent political dispute” is not, especially when it is not grounded in evidence.

Why are we at such odds over what education represents, and how we should go about providing it? Because, as Drucker states in his essay, education is about citizenship in this country, and it is driven by people’s views of what holds our society together. When we say we value freedom and equality, what does that mean? Does being patriotic mean that we can’t acknowledge the ways in which America has failed (and continues to fail) to live up to its values? How can educational institutions, free of centralized control, develop innovative curriculum that produces critical thinkers who can solve problems and be discerning about sources of information? How can our educational system, while grounded in a “common political creed,” produce people who are ready to be part of a functioning global society ?

These, of course, are the questions raised by the philosophy behind Management as a Liberal Art. How can organizations allow people to grow and develop while still serving the needs of their stakeholders (making a profit, creating a customer, being socially responsible, etc.)? How do we teach curriculum ethically and responsibly? As a student, what are my responsibilities to think critically, be discerning about my sources of information and data, and reason through a problem with care? If education is a reflection of larger society (and Drucker was right – it is), then we need to have some agreement as to what our values are and what we believe to be important. However, while Drucker was more concerned with the American political “genius”, we will have to think through how our values and “common political creed” work in a global society of functioning institutions. But this is certainly true: in order for us to be part of a society of functioning institutions (especially a global one), we need Management as Liberal Art, with its emphasis on critical thinking, values, and responsibility, to help us find some common ground in this country. It may be our only hope to overcome the shouting.

Tribute to Joseph A. Maciariello

Thu, 29 Jul 2021 21:52:00 GMT

On June 30th, the Drucker Society in Vienna hosted “A Day of Drucker” conference featuring several sessions devoted to celebrating the work of Peter F. Drucker. One of the sessions at that event was “Management as a Liberal Art: A Tribute to Joseph A. Maciariello.” Joe Maciariello, Research Director of MLARI, passed away on July 1, 2020. He was the preeminent scholar of Peter Drucker, devoting much of his career to updating and studying Drucker’s management writings.
I had the distinct honor of moderating the panel discussion for the session celebrating Joe’s legacy. Our distinguished panel members were Bill Pollard, Chairman Emeritus of ServiceMaster Corporation; Jean Lipman-Bluman, Thornton F. Bradshaw Professor of Public Policy and Professor of Organizational Behavior at CGU’s Peter F. Drucker and Masatoshi Ito Graduate School of Management; Pat Maciariello (Joe’s son), and CiAM’s Byron Ramirez. Each panel member spoke from their own personal knowledge of Joe’s work and Joe as a person. As most of the people streaming the conference did not personally know Joe, the virtual session allowed many people to get to know the man whose name is on our Research Institute.
Bill spoke of the importance of faith to Joe’s work and life, and how his view of people as eternal beings meant that he cared about everyone as a human being regardless of status or position. In this sense, Joe truly embodied MLA’s emphasis on management being about people, not just about work. Jean reminded us that Joe sacrificed his own academic work to pursue a career carrying on the legacy of Drucker. Through his own writing on Drucker, and his work editing and updating Drucker’s management writings, Joe ensured that Drucker’s ideas carried on after Drucker’s passing. Pat told wonderful stories of his dad’s love of baseball, and how he became fascinated with the role of statistics in assessing performance. Joe’s last work, which will be published in the near future, features vignettes of his favorite heroes, including sports legend Jackie Robinson; he was always looking for examples of MLA in life, and found many in sports. Finally, Byron reminded us of the importance of Joe’s own work; Joe helped to bridge the gap between Drucker’s management theories and the needs of practitioners. Byron pointed to Joe’s prolific use of case studies and examples to show MLA in action, something that is crucial in understanding Drucker’s concept.
When Joe received an honorary Doctorate from the HHL Leipzig Graduate School of Management in 2017, Professor Timo Meynhardt interviewed him and asked Joe what he wanted to be remembered for. Joe responded that he wished to be remembered as “a man of integrity,” citing Drucker as the person from whom he learned the importance of that quality. I personally knew Joe Maciariello as an M.B.A. student, as a Ph.D. student, and as a colleague for nearly 30 years. He was indeed a man of integrity, and he will be sorely missed. His name and spirit live on in the Joseph A. Maciariello Management as a Liberal Art Research Institute.

MLARI Update for July 2021: Leadership Beyond the Walls

Thu, 24 Jun 2021 21:48:00 GMT

Summer 2021: What's new at MLARI?

Tue, 01 Jun 2021 18:13:00 GMT

It's been a busy Winter and early Spring at MLARI! Here are some exciting developments and new projects:

Train the Trainer (TTT) Course : We launched our 2021 TTT course for the faculty and staff of CiAM in March. TTT provides an in-depth study of Management as a Liberal Art (MLA), entailing 15 sessions devoted to various topics such as Drucker's concept of a Functioning Society, using Social Ecology to deal with crisis and change, and the role of values and ethics in leadership and decision making. We've already had some great discussions during our first two sessions.
Updated MLA Reader : The MLA reader has been updated for use by faculty and students at CiAM. This resource is a collection of articles by Peter Drucker and others that discuss various aspects of MLA. Faculty can draw on this electronic resource for reading assignments, and students can delve into the material to get a deeper understanding of MLA.
Student Orientation on MLA : We're putting the finishing touches on a PowerPoint presentation for new CiAM students to give them an overview of MLA. Students can watch the presentation and learn about key concepts behind MLA, as well as a little about methodologies for implementing MLA.
New Articles : You will find some new articles and brief essays on the MLARI section of the website:
These blogs view current events and topics on interest through the lens of MLA. For example, "Do Women Exemplify MLA Leadership?" and "Anti-Asian Hate and Drucker's Functioning Society" show the currency of MLA in today's world.

I'm excited to be directing the research activities at MLARI and supporting CiAM's needs. Looking forward to a productive 2021!
Karen Linkletter
Acting Research Director , MLARI

MLA AND LEADERSHIP: Learning Empathy

Tue, 25 May 2021 18:54:00 GMT

Campus Newsletter - May 2021: What's New at MLARI?

Tue, 27 Apr 2021 22:48:00 GMT

Anti-Asian Hate and Drucker’s Functioning Society

Tue, 30 Mar 2021 16:43:00 GMT

Drucker’s entire body of work is based on the concept of a functioning society that allows individuals to have their own aspirations while still being part of a larger community. In Drucker’s language: Social status and function of the individual is the equation of the relationship between the group and the individual member…It thus makes comprehensible and rational individual existence from the point of the group, and group existence from that of the individual.

The recent increase in anti-Asian speech and actions illustrates the dangers of discrimination and scapegoating, noted by Drucker in 1942: Lack of social status and function, and absence of a functional relationship between society and individual are at the bottom of every persecution of minorities which either are without social status and function — that is, not integrated into society (like the Negro in America) — or are made the scapegoat for the lack of integration in society (like the Jew in Nazi Germany).
The pandemic has unleashed a barrage of anti-Asian hate speech and violence. The uncertainties surrounding the origins and nature of the novel coronavirus engendered fear and panic, fueled by racist rhetoric used by political leaders. As the Trump administration referred to the virus as the “China virus,” Kung Flu,” and “Wuhan Flu,” anti-Chinese posts and sentiments exploded; digital expressions of hate spilled over into actual acts of violence against Asians. The Center for the Study of Hate and Extremism found that anti-Asian American hate crimes reported to the police in 2020 increased by 149 percent over the number reported in 2019. This figure does not include those incidents that went unreported. Nor does it reflect more subtle forms of racism and discrimination. Kurt Bardella, a Korean American, discusses the implicit bias of white Americans asking Asian Americans the question, “Where are you from?” ( https://www.latimes.com/opinion/story/2021-03-22/op-ed-the-question-every-asian-american-hates-where-are-you-from ). This kind of “othering” of Asians has a very long history in the United States.
Initially, discrimination against Asians in America involved excluding Chinese and other Asians from becoming Americans. The Chinese Exclusion Act of 1882 created the first class of people forbidden to enter the country legally. In the 1800s, Chinese immigrants, primarily single men, came to the United States to escape unstable political conditions and for economic betterment. Drawn to the West by the Gold Rush of 1849, they were also the primary source of labor for building the nation’s network of railroads. Once railroad construction was completed in the 1870s, Chinese laborers fanned out to other regions of the country seeking work and white Americans viewed them as low-cost competitors. In 1882, Congress passed the Chinese Exclusion Act, which specifically prevented Chinese from entering the United States legally. The law was renewed in various forms until 1943. Because Chinese immigration had been so drastically limited for over a generation, this ethnic group was a true minority and stigmatized as unassimilated and un-American. Chinese American participation in the war effort after Pearl Harbor dramatically changed public sentiment, and the repeal of the Exclusion Act allowed limited Chinese immigration and some Chinese Americans to become naturalized citizens for the first time.
Other Asian ethnicities suffered discrimination as America began to develop its theories of scientific racism and eugenics. The pseudo-science of race theory dates back to the mid-1800s, when America was debating the issue of slavery. As immigration to the country increased in the late 1800s and early 1900s, scientific racism was similarly applied to various ethnic groups to evaluate their fitness for assimilation into American society. What began as a reaction to a specific ethnic group’s perceived economic threat grew into a full-blown racial argument of inferiority. More and more Asian ethnics were deemed as “racially unsuitable” for citizenship because of their sub-human status. The Supreme Court case of Takao Ozawa is a case in point. Ozawa was born in Japan, but emigrated to the United States, attended the University of California, and became a successful businessman with a family. In 1922, Ozawa pressed his case for citizenship, arguing that not only did he model American values, but his skin was whiter than that of most Europeans According to U.S. law at the time, “free white persons” and people of African descent could be citizens. Ozawa was making a racial argument for citizenship because, given the status of the law, he had no other choice. The Court ruled against Ozawa, citing race theory and noting that Ozawa was “clearly of a race which is not Caucasian.” This ruling set the stage for further legal wrangling over racial identity, and the eventual passage of the Immigration Act of 1924, which essentially banned all immigration from Asia. Asian ethnics were deemed racially unfit to become Americans. It was not until 1952 that Congress struck down the Asian exclusion acts, finally allowing most Asian ethnics to become eligible for United States citizenship.
Just 100 years ago, the majority of Americans viewed Asian ethnics with suspicion and fear. Some of this suspicion and fear was driven by economic factors, but the history of excluding Asians from not just the American character but the human family itself weighs heavily. Perennially viewed as “other,” even when living a model American life as Ozawa did, Asians faced a life apart from society, where no matter what, their existence was at best tolerated if not threatened. Peter Drucker warned of the dangers of having individuals without status and function. A functioning society requires individuals to have a place in the larger community where they have meaning and can achieve their own dreams and sense of purpose. If society does not provide this, and excludes a group of people, those people become outcasts or even more of a threat. In Drucker’s words:
The asocial, uprooted, unintegrated individual appears not only as irrational but as a danger; he is a disintegrating, a threatening, a mysteriously shadowy force. It is not coincidence that so many of the great myths — the Wandering Jew, Dr. Faustus, Don Juan — are myths of the individual who has lost or repudiated social function and status.
Yesterday’s Asian Americans, forced into enclaves by the necessity of economic survival and physical protection, not to mention cultural relevance, became stereotyped as “unintegrated” and “threatening.” The “coolie” laborer and the Japanese businessman could never become American because they had no social function or status (other than to represent a perceived inferior species).
Today’s Asian Americans may enjoy significantly more legal protections and representation in society, yet many still see them as “from somewhere” other than America. Suspicions and fears surrounding the COVID-19 outbreak have been projected onto the Asian community, with hate and discrimination now aided by social media and the explosion of white supremacy movements and their followers. Americans no longer explicitly embrace the pseudo-science of race theory, but the remnants of that thinking remain in the verbiage of “Kung Flu,” “Where are you from?”, and the persistent stereotype of Asian women as objects of illicit sexual pleasure. If we are to have a functional society that aligns with the ideals of Management as a Liberal Art, there is simply no room for this kind of thinking. Human beings are all part of the human family, and are all deserving of dignity, status, and function.

Do Women Exemplify MLA Leadership?

Tue, 09 Mar 2021 23:02:00 GMT

“ The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it…You cannot prevent a major catastrophe, but you can build an organization that is battle-ready, that has high morale, and also has been through a crisis, knows how to behave, trusts itself, and where people trust one another. ”
— Peter Drucker, 1990
COVID 19 has certainly presented the world with a crisis to test heads of state, governors, and other leaders in the public and private sector. Researchers have been studying how various leaders have responded to the pandemic, with some focusing on the effective responses of national leaders who are women. Iceland, Taiwan, Germany, New Zealand, and Denmark are a few of the countries whose female heads of state managed to contain the virus early on and limit the financial and health impacts on their citizens.
Since women began to be more visible in positions of leadership about twenty years ago, much has been written about the “female leadership style.” It is interesting to note that many of the qualities attributed to women leaders appear not only to work particularly well in times of crisis, but also line up with Drucker’s concept of leadership as part of the practice of Management as a Liberal Art (MLA).
Recent literature on women leaders points to connections between the way women lead and the leadership skills Drucker emphasized as part of MLA. Consultants Jack Zenger and Joseph Folkman used their own database of more than 60,000 reviews of business leaders to see how those leaders were evaluated before and after a crisis. They found that women rated more positively in 13 of 19 competencies for overall leadership effectiveness, and that this gender gap grew during a crisis. In other words, women tend to perform better during a crisis ( https://hbr.org/2019/06/research-women-score-higher-than-men-in-most-leadership-skills ).
What exactly are the skills that seem to be most effective in a crisis? They are not the skills that traditional models of leadership emphasize. The military-style, dominant, authoritarian model of the executive is not, in fact, the leader that is most effective in times of crisis. Avivah Wittenberg-Cox analyzed seven women leaders and their responses to COVID 19 and found that these heads of state modeled an “attractive alternative way of wielding power.” Their key leadership qualities? Truth, decisiveness, use of technology, and love/empathy. Angela Merkel, Chancellor of Germany (and a trained scientist), was transparent about the dangers of the virus from the beginning and emphasized testing and technology ( https://www.forbes.com/sites/avivahwittenbergcox/2020/04/13/what-do-countries-with-the-best-coronavirus-reponses-have-in-common-women-leaders/?sh=2a2f96903dec ).
Other researchers and authors point to women’s use of empathy, team building, people development, and role modeling as part of their leadership practice. In “7 Leadership Lessons Men Can Learn From Women,” Tomas Chamorro-Premuzic and Cindy Gallop argue that, rather than training women to be more assertive and self-promoting, we should learn from women’s leadership strengths. These include knowing one’s strengths and also one’s limitations (and how others on a team can better contribute), putting others before yourself, and transforming and elevating others. In the words of the authors, “Academic studies show that women are more likely to lead through inspiration, transforming people’s attitudes and beliefs, and aligning people with meaning and purpose” ( https://hbr.org/2020/04/7-leadership-lessons-men-can-learn-from-women ).
What did Drucker have to say about leadership? He did not write about different leadership styles between men and women. But he did articulate the important qualities of leaders who practice MLA:

They have clear values that are in line with the organization and its mission. They model these values in their behavior and how they uphold the organization’s higher purpose, providing clarity and truth so that everyone in the organization understands that they are part of a larger vision.
They value trust. They understand that trust in their leadership and authority must be earned, and that they must place trust in those in the organization (who also have a responsibility to earn that trust). Leadership cannot operate under MLA without a climate of trust.
Leaders feel an enormous sense of responsibility for both the mission of the organization and to support those being led. Leadership is not about power and authority but serving and bringing out the best in those who are part of the organization.

The traditional models of charismatic leadership, control and corrective action, and individualistic decision-making may work in some situations. But increasingly, research is showing us that the non-traditional, female-gendered models of leadership that emphasize Drucker’s MLA values of servant leadership, transparency and trust, empathy and concern for bringing out the best in those led, and clarity of values and mission are valuable in times of crisis. As Drucker said, we cannot prevent a major catastrophe, but we can build an organization ready to face it. And, as we celebrate Women’s History Month, it is perhaps time to finally acknowledge that women do not have to emulate men to be powerful leaders.

There is a Cure to the Polarization That is Damaging American Democracy

Mon, 11 Jan 2021 17:21:00 GMT

Over the last few decades, the political system in the United States has become increasingly dysfunctional. Power is in the hands of the two main political parties. This political duopoly, Republicans and Democrats, seems to be mostly interested in a contest with each other to see who can get more power. This results in the duopoly winning and the public interest losing. That is, the duopoly keeps getting more power and the constant infighting between the Republicans and the Democrats means that very little legislation gets passed that might help ordinary citizens. (Gehl & Porter 2020). Peter Drucker, the father of modern management and perhaps the most influential leadership and management thinker of the twentieth century would be appalled at our current state of dysfunction. Drucker’s leadership philosophy of Management as a Liberal Art is focused on the human component. Leadership should empower and provide people with opportunities for human development and fulfillment. Power and profits should be secondary to the responsibility of leaders to empower and help people. (Maciariello & Linkletter 2011).
Drucker, in his book, The Ecological Vision, said “an effective organization ethic, indeed an organization ethic that deserves to be seriously considered as ethics, will have to define right behavior as the behavior that optimizes each party’s benefits and thus makes the relationships harmonious, constructive, and mutually beneficial” (Drucker 1993 p.213).
An unfortunate consequence of the animosity between political parties is polarization. Republicans and Democrats have mostly refused to listen to each other’s ideas. It has gotten so bad that not only do the political parties think that the other’s ideas are wrong; they think that the other’s ideas are evil. And, of course, when someone is fighting against evil it is their moral obligation to do whatever it takes to ensure that the “other’s” ideas are completely trashed and exposed as being “evil”. The bottom line of all this is that many politicians and even ordinary people treat each other with disrespect, there is little to no communication and very little can be accomplished. If a political system can’t function, it is destined to failure. (Doherty 2014) Barack Obama said it best in his farewell address on January 10, 2016 while commenting on our increasing naked partisanship and stratification, “we become so secure in our bubbles that we accept only information, whether true or not, that fits our opinions, instead of basing our opinions on the evidence that’s out there…we’ll keep talking past each other, making common ground and compromise impossible”. (Obama 2016)
In 2020 Katherine Gehl (a CEO) and Michael E. Porter (a professor at Harvard Business School) published a book, The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy. Gehl and Porter posit that there is a duopoly in the United States, i.e., the two main political parties, the Democrats and the Republicans have all the power. Both of these parties want to increase their power while many corporations and businesses want to harness this power to increase their profits.
Gehl and Porter use the phrase, the “political-industrial complex”. They warn that the political-industrial complex (our American political system) has seized too much power. The duopoly (Democrats and Republicans) has the power to stop any outsiders who might want to enter the political system and challenge their power. They zealously guard their power and at the same time try to wrest as much power as they can from the other side. They cite several things that work to make our political system dysfunctional. One of these is plurality voting; that is, whoever gets the most votes wins. It is a feature of our election machinery that is one of the challenges for a healthy and fair system. As an example, three candidates are running against each other in a party primary and one candidate gets 34%, and the other two candidates get 33% each. Under our plurality system, the person who got 34% wins even though 66% of the voters voted against that candidate.
Gehl and Porter have a list of election reforms that can save democracy by eliminating most of our polarization. One of their proposals is a new approach for congressional elections; something called final-five voting (instead of plurality voting). This would entail (1) replace closed party primaries with open non-partisan primaries (you don’t have to belong to a political party to run in a primary) in which the top five finishers advance to the general election, and (2) replace plurality voting with ranked-choice voting in general elections. This ranked-choice voting is a little complicated, but it makes sure the most popular candidate wins.
(see appendix 1 below).
Historically, the role of business is to make profits for shareholders. 87 percent of annual lobbying of Federal Government officials is done by businesses — that’s $3,000,000,000 (Yes. That’s 3 billion). There is also ”shadow” or unreported lobbying that doubles this amount to $6,000,000,000 (And yes. That’s 6 billion). This money goes into the hands of Republican or Democrat partisans, giving them even more power. Almost half of all lobbyists are former government officials hired by businesses at large salaries. This creates the conflict of government employees trying to stay on the good side of business in hopes that they will be hired as lobbyists after they leave government employment. And, of course, businesses hoping to enrich themselves, contribute huge sums of money to partisan political causes and candidates, enriching and keeping the duopoly in power. (Gehl & Porter 2020)
Besides writing a book, the authors, Gehl and Porter, are donating all royalties to the Institute for Political Innovation. They published an article in Harvard Business Review (July-August 2020). There are several YouTube interviews and discussions on this subject. They have also been in negotiations with major corporations, such as Apple, Google, Microsoft, and Amazon to enlist their support in stopping businesses from encouraging this political duopoly.
The bottom line is that we, the people need to heed Peter Drucker’s Management as a Liberal Art philosophy and return control and power to the people. The current way the political system operates clearly does not put people first. You can help by making yourself more familiar with this problem and with the solutions offered by Gehl and Porter. Remember their words, “The duopoly wins, and the public interest loses”. You could read the book, read the Harvard Business Review article, or take a look at one of the YouTube videos (They run from 50 minutes to 80 minutes (I recommend: this youtube video ). Most importantly, get involved! Lobby whatever businesses you are involved with to become more ethical and more socially responsible by not encouraging the duopoly by lobbying, hiring of ex-government officials, and by not making campaign contributions to partisan political parties.
Professor Michael Cortrite

References:

Doherty, Carroll, 2014, Political Polarization of the American Public Pew Research Center retrieved 1/5/2021 https://justin.vashonsd.org/Resources/BadScience+Evidences/CounterFactualRationale/PolarizationInAmericanPolitic
Drucker, Peter, The Ecological Vision: Reflections on the American Condition 1993 Routledge New York
Gehl, Katherine & Porter, Michael, The Politics Industry: How Political Innovation Can Break Partisan Gridlock and Save Our Democracy 2020 Harvard Business Review Press Boston
Gehl, Katherine & Porter, Michael, Fixing U. S. Politics: What Business Can — and must — Do to Revitalize Democracy. Harvard Business Review July-August 2020
Maciariello, Joseph A. & Linkletter, Karen E., Drucker’s Lost Art of Leadership: Peter Drucker’s Timeless Vision for Building Effective Organizations 2011` McGraw Hill New York
Obama, Barack, Farewell address from Chicago Illinois on January 10, 2016 retrieved 1/5/21

Trumpism, the Recent Riots, and the Way Back to a Healthy Society

Fri, 08 Jan 2021 18:22:00 GMT

The old orders have broken down, and no new order can be contrived from the old foundations. The alternative is chaos; and in despair, the masses turn to the magician who promises to make the impossible possible…For if you are caught between the flood of the past, through which you cannot retrace your steps, and an apparently unscalable blank wall in front of you, it is only by magic and miracles that you can hope to escape.
— Peter F. Drucker, The End of Economic Man
On January 6, as Congress convened to recognize the results of the November election, Americans watched in horror as a mob of Trump supporters stormed the Capitol. During the “Save America” rally in Washington D.C., Trump encouraged the crowd to march to the Capitol, telling them that “We will never give up. We will never concede. It will never happen. You don’t concede when there’s theft involved. Our country has had enough. We will not take it anymore.” After the subsequent riot, 83 were arrested, five people were killed, including a police officer, and 50 police officers were injured. Images of people in MAGA gear breaking windows, trashing congressional offices, and stealing podiums from the senate floor engendered a collective response of disgust, shame, and disbelief. Is this what America has become?
In the days and weeks that follow, the nation will have to come to terms with what this paroxysm truly represents. Yes, there will be questions about events and details. Why was law enforcement so overwhelmed, when they knew about the “Save America” rally well in advance? Why was the police response to those violating the Capitol perimeter so mild, particularly when compared with the law enforcement response to the June 2020 Black Lives Matter protest in Lafayette Park, where police used batons, tear gas, horses, a helicopter, and well over 5000 National Guard troops to disperse the peaceful protestors. How complicit are Facebook, Twitter, and other social media platforms in promoting conspiracy theories that have fueled the deep divisions in this country?
But more importantly, we come to the question of leadership. Drucker’s management theories derive from his concept of a functioning society. In times of great change, particularly social upheaval, people need to hold on to some stability, retaining some institutions in which they can have faith, while others are experiencing rapid change. This balance between continuity and discontinuity drove much of Drucker’s work — both his writing on business and his social analyses. Innovation within an organization needs to be systematic, not haphazard and overly disruptive. Social and economic change is inevitable, but institutions cannot simply be thrown out wholesale. Leaders, therefore, are responsible for helping people through inevitable times of change, whether they lead companies or countries. As Drucker said, “Leadership is a foul-weather job.”
Which leads us to Drucker’s quote from his 1939 book, The End of Economic Man. Drucker, like many who escaped Nazi Germany, was attempting to come to grips with the reality of totalitarianism and its origins. What happened, and why? Drucker’s thesis is sophisticated, but one of the key components he identifies is a complete lack of hope combined by a failure of all social institutions. If there is nothing left of the past, the foundation of your society, you have nothing left to hold on to. If there is no hope in the future — merely an “unscalable blank wall in front of you” — then you have nowhere to go. Given this scenario, Drucker posits, people will look for “magic and miracles.” In Germany and Italy of the 1930s, that was fascism.
In the United States, Trumpism has become the “magic and miracles” that disaffected America has turned to. The post-mortems of the 2016 election are too many to count, but it is clear that much of what drove Trump’s support was a deep distrust of elites, particularly political elites, in American society. Trump’s promise to “drain the swamp” was aimed directly at this distrust. As increasingly educated women and minorities gained ground in the late 20th and early 21st centuries, uneducated American workers began to fall farther and farther behind. Rapid technological change and economic recession accelerated the job losses in manufacturing that had begun earlier, so the economic future for those without a college education was bleak indeed. Barack Obama modeled the achievement of a Harvard education and sharp legal mind, and an eye towards the future and progress. Trump’s appeal was not policy, but his promise to “make the impossible possible.” He would turn back the clock and bring back an America that no longer existed. However, this didn’t mean returning America to its values and shoring up its beloved institutions. That meant breaking down all of the norms and inherited history. Of course, this wouldn’t bring back jobs in coal mines. But it made people feel good because it gave them a way out of an impossible situation. One that made them feel really, really bad about themselves. By making enemies of the educated elite, of minorities, of the very democratic institutions this country was founded on, those alienated by a rapidly changing world could hold on to some chance to escape. Even if that meant burning down the house on the way out.
All this is to say that Drucker, as a social ecologist, would have seen this all coming. Trump repeatedly, on social media and during his rallies, undermined the 2020 election (even before the election itself, claiming that the only way he would lose would be if the election was rigged). After all, Trump is a charismatic leader, and Drucker greatly feared that leadership style. He said that leadership has very little to do with charisma. Rather, “It is mundane, unromantic, and boring. Its essence is performance.” Leadership, in the Drucker sense, would have prevented this entire situation. A true leader would never have exhorted his followers in Washington D.C. to “show strength” and “fight” when they marched to the Capitol, which was filled with elected officials doing the people’s business. A true leader would have told the truth. We lost. We fought hard, but now is the time to respect the institutions of democracy. But this leader has repeatedly undermined those very institutions. So, it is not surprising to see this ultimate trashing of the buildings that epitomize our representative democracy.
We have other leadership to hold accountable for this. The Republican leadership who has looked the other way — until now. Mitch McConnell, Lindsay Graham and others seem to have finally decided that this is not the kind of leadership they want to be associated with. 140 Republicans in the House of Representatives still chose not to recognize the results of the election, even after the melee in the Capitol on January 6. The business community supported this administration — until now. The National Association of Manufacturers, Business Roundtable, and U.S. Chamber of Commerce are backpedaling away from Trump. If, as Drucker says, leadership is about trust, ethics, and modeling right behavior, then these “leaders” should long ago have distanced themselves from a charismatic leader who failed to truly lead. Instead, these Republican and business leaders chose to close their eyes to the true nature of Trumpism, and instead only looked at policy (or their fear of losing their jobs). But Trumpism isn’t about policy. It’s about a magician making promises.
How do we move forward? First and foremost, we must restore faith in our institutions of democracy. Drucker’s functioning society can only work if we have that. The Biden administration has an unfathomable amount of work ahead of it. If we have a significant percentage of our population who really believes that our democratic institutions and processes are broken, we cannot function as a society. It does not matter if businesses thrive. It does not matter if kids are in school. The first thing we must do is make sure that we still have a functioning democratic society. We somehow must work to convince those who believe in the magician that they are still part of a society that includes them. And that is a real challenge, given what we saw this week.
Yes, America. This is what we have become. But we can change it. Together.

Peter Drucker on Social Ecology, Balancing Change and Continuity, and Building a Functioning Society

Mon, 07 Dec 2020 00:46:00 GMT

Towards the latter part of the 20th century and beginning of the 21st century, Peter F. Drucker became known as the guru of management and as ‘the man who invented management’ (BusinessWeek, 2005). Ever since his “The Concept of the Corporation” (1945), where he examined General Motors, Drucker focused his writings on the structure and internal dynamics of organizations. He spent decades studying the way people work, and the ways managers manage. Drucker also examined how people work under different contexts and environments. For several years, his works primarily focused on private sector organizations, their management practices, programs, and performance.

Over time, however, Drucker seems to have transformed from a management author and consultant into a social ecologist. In his “Management: Tasks, Responsibilities, Practices” (1973), we can see Drucker’s emphasis on managerial tasks, managerial work, managerial tools, managerial responsibilities, and the role of top management, across all organizations, including nonprofits. Some years later Drucker would write “Managing in Turbulent Times” (1980), where he reveals his concern for the future of business, the economy, and society.

Drucker’s works became increasingly permeated with examples of matters surrounding society at large. Drucker would later write “Innovation and Entrepreneurship” (1985), where he advised all organizations, including public-service institutions, to become entrepreneurial in order to survive and prosper in a market economy. Years later, Drucker explained: “ My interest in, and concern for, community, society, and polity, goes back a very long time, all the way back to 1927 and 1928. ” (Drucker, 2003).

Perhaps one of Drucker’s greatest strengths was his ability to observe the environment that surrounded him. He possessed an uncanny ability to see things that others had not recognized, and to focus on details that many overlooked. Joseph Maciariello, Emeritus Professor of Social Science and Management at the Drucker School of Management, and who collaborated with Drucker on many publications, writes: “ One of the most important duties of the social ecologist for Drucker is to identify major trends that have already emerged in the nub but have not yet made their impact felt on the institutions of society. ” (Maciariello, 2005).

Drucker believed that freedom and dignity were imperative to building effective organizations in modern society. And he expressed his recognition of these principles. Drucker’s “The Frontiers of Management” (1986) and “The New Realities” (1989) highlighted that changes in society are inevitable, and thus, we must realize that change represents opportunity. Rather than perceiving change as an inconvenience, we should treat it as an opportunity to grow and develop. Moreover, Drucker advises all of us to focus on what to do today in reflection of tomorrow. A few years later, Drucker reveals the focal points of his work. Drucker writes: “ Finally there is one continuing theme, from my earliest to my latest book: the freedom, the dignity, the status of the person in modern society, the role and function of organization as instrument of human achievement, human growth and human fulfillment, and the need of the individual for both, society and community. ” (Drucker, 1992)

Drucker focused many of his writings on improving society as a whole, and fostering the common good. Drucker writes: “ But what I learned from Toennies — and never forgot — is the need for both, a community in which the individual has status, and a society in which the individual has function. ” (Drucker, 2003) This particular excerpt embodies the roots of Drucker’s philosophy of management as a liberal art (MLA).

One can observe Drucker’s own transformation by examining his initial works which focus on for-profit organizations to later writings which converged on topics surrounding communities and society. Drucker writes: “ I consider myself a social ecologist concerned with man’s man-made environment the way the natural ecologist studies the biological environment. ” (Drucker, 1992) In some of his writings, Drucker explains that he perceives himself as a social ecologist who recognizes change and continuity. Drucker states: “ Social ecology is a practice. Its aim is to maintain the balance between continuity and conservation on the one hand, and change and innovation on the other. ” (Drucker, 1992) Drucker adds: “ Fundamental to the discipline of social ecology…is the belief in responsibility, in authority grounded incompetence, and in compassion. ” (Drucker, 1992) Drucker emphasizes these points because he argues that in order for society to improve as a whole, we must look at our existences (lives) as being inter-related, inter-connected. Drucker posits that if organizations and individuals strive toward maintaining the balance between continuity and change, society will benefit.

Drucker explains to us that his work as a social ecologist also evolved over time and that he realized that environmental conditions were changing. Drucker states: “ In working on this book I began to realize that totally new — indeed unprecedented — social institutions were rapidly evolving… ” (Drucker, 2003) A couple of years later, Drucker tells us: “ Our society has become, within an incredibly short fifty years, a society of institutions… ” (Maciariello, 2005) These reflections seem to reveal that Drucker acknowledges that he was examining society as if he were an ecologist examining an ecosystem. Drucker writes: “ And it soon became obvious to me that work is a central factor in shaping and molding society, social order, and community. ” (Drucker, 1992)

Drucker changed as the world that he observed around him was changing. In an attempt to better discern and explain the changes affecting society, Drucker asked poignant questions such as: “ But this conclusion then led me to ask: what will, what can take the place of the ‘organic’ community of Toennies’ rural society? What can again integrate individual, community and society in an Industrial Age? ” (Drucker, 2003) Drucker’s ability to ask questions and observe patterns allowed him to discern changes in organizations and society.

One of Drucker’s integral concepts is that of a Functioning Society. Central to this visionary concept is the notion that freedom, dignity, and equal opportunity can provide conditions for individuals to find meaning and purpose in their lives, and in turn, individuals will be able to contribute towards the betterment of communities and society. Drucker explains: “ Corporations and other businesses are the wealth-producing institutions of society. Without these private sector institutions, our public sector and social sector institutions would not have the resources to function. It is the private sector that provides the resources to fund social and public sector institutions .” (Maciariello, 2005) However, Drucker also realized the importance of other institutions’ role in society. He writes: “ The work of society is carried out through different kinds of organizations, each with its own tasks. Three diverse kinds of organizations make up the society of organizations. First there are public sector organizations…then there are private sector organizations…and finally there are social sector organizations .” (Maciariello, 2005)

Drucker was undoubtedly a social ecologist as he was not only examining organisms in the ecosystem (society), but also tracking the relationship amongst organisms (public sector, social sector, and private sector) within the ecosystem (society). Drucker offers this observation: “ Each institution is an organ of society. And no organ can survive the body it serves .” (Maciariello, 2005) Drucker shares his understanding and perception of society as a body, and society’s institutions as organs that help sustain the body (society).

The work of a social ecologist involves observing relationships between organisms, explaining what those relationships are, and conceiving ways to improve those relationships. Drucker attempts to improve our understanding of society and the relationships between its organizations by offering some insight. Drucker writes: “ Government commands; it tries to obtain compliance. Business supplies; it tries to get paid. The nonprofit institutions however are human-change agents .” (Drucker, 1992) Drucker not only understood the relationship between organisms (government, business, and nonprofit), but also tried to explain to us what their roles in society ought to be. Drucker believed that nonprofit organizations would provide human beings with those items that were not produced by either the public or private sector. Consequently, Drucker suggested that in order to meet the needs of individuals in the future, a nonprofit organization must adopt and embrace change, as it is the way to predict the future. Drucker states: “ The most effective way to manage change successfully is to create it. The enterprise has to become a change agent .” (Drucker, 2001)

Drucker also believed that organizations (organisms) within society (ecosystem) must focus on what they do best. Maciariello writes: “ Drucker believes that for a society to function well, its organizations should be single-purpose institutions….as a result, each organization, whether for-profit or nonprofit, should focus on a single task. ” (Maciariello, 2005) It would appear that as Drucker observed society as if it were an ecosystem, he realized that every organism has a role and function to serve within such an ecosystem. Thus, Drucker suggested that each organism seek to do what it is best at doing. Hence, Drucker firmly believed that companies and individuals must build and focus on their strengths.

Also important to Drucker was the notion that social ecology is an important and necessary discipline that must be employed to better understand and improve society. Drucker writes: “ But also social ecology as a discipline deals with action. ” (Drucker, 1992) Drucker argues that one must take action and regard social ecology as a practice. Maciariello, who collaborated with Drucker, adds: “ A principal goal of a social ecologist is to help promote continuity in the conserving institutions of society, while advancing change in the inherently destabilizing institutions of a free society. ” (Maciariello, 2005) Furthermore, Maciariello explains: “ Knowledge workers must become accustomed to the process of creative destruction. They must become change leaders, active in the pursuit of change .” (Maciariello, 2005) Drucker argued that we must understand our environment and observe what is changing or has changed, as change is a constant in the knowledge society.

Ecology is defined as the scientific study of relationships of organisms to one another and to their environment. Furthermore, a biotic community is one where all populations of living organisms, in a given area, interact and interconnect. Drucker studied society as if it were an ecosystem where biotic communities (biomes) are interconnected by physical, biological, and chemical processes. As such, one could argue that society sustains itself through processes similar to photosynthesis, energy flow through food chains, and recycling of nutrients. Just like a biological ecosystem, society contains organisms (organizations) that are capable of carrying on photosynthesis, and thus is able to convert light into organic material. Similarly, organizations are able to produce energy that helps sustain the ecosystem (society).

One can also draw a parallel between society and the human body. A human being is composed of a complex, highly integrated system of cells. Cells specialize and serve a specific purpose. Thus, when an aggregate of similarly differentiated cells merge, they form a tissue. Living tissue is made up of molecules which would never be able to assume the proper structure if energy were not supplied to maintain this level of organization. It is important to understand how cells (humans) obtain their energy and are able to maintain their configuration and sustain life. This is a crucial point as it may help explain and define our role and influence on society.

A cell is comprised of structural parts: cell membrane, nucleus, and cytoplasm. Similarly, human beings are also made up of structural parts: emotional, physical, intellectual, and spiritual. It is important to think of the complexity of humans (cells) when studying society (human body). For instance, a human being may be able to perform effectively if she or he carries a high level of protoplasm (knowledge), which allows her or him to continually carry on dynamic biochemical processes. There are individuals whose “mitochondria” may not contain the same ability to break down glycogen and glucose into water and carbon dioxide, and thus form energy. All individuals are different, just as cells are different. The important point is that when cells (humans) are aggregated, they form a human body (society). Comparatively, when organisms (organizations) are aggregated, they form an ecosystem.

Throughout his body of work Drucker reminds us to identify major trends that have already emerged, but have not yet made an impact on the institutions of society. One can look around and realize that the world continues to change rapidly. While there are continuous emerging technologies aimed at addressing social challenges, we must evaluate what needs to change, and what we ought to maintain. Innovation and technology alone cannot remedy many of the social issues we currently face.

Humans must work together to improve their interactions and relationships while helping to build a society that functions more effectively. It is in the best interest of society that we do so. We should collectively look to build common good and to do so by improving our organizations. We must learn to manage people effectively while giving them an opportunity to develop their full potential. We must nurture freedom and dignity. Thirty years from now, our ecosystem (society) will have changed, and we will need each other as much as we do today. As Drucker once wrote: “ No organ can survive the body it serves ”.

References

Denning, S. (2013). The Founder of 21st Century Management: Peter Drucker. Forbes.
Drucker, P. F. (Ed.). (2003). A Functioning Society: Selections from Sixty-five Years of Writing on Community, Society, and Polity. Transaction Publishers.
Drucker, P. F. (1973). Management: Tasks, Responsibilities, Practices. Harper Collins, New York, New York
Drucker, P. F. (1980). Managing in Turbulent Times. Harper Business. New York, New York
Drucker, P. F. (1992). Reflections of a Social Ecologist. Society, 29(4), 57–64.
Drucker, P. F. (1986). The Frontiers of Management. EP Dutton. New York, New York
Drucker, P. F. (1989). The New Realities: In Government and Politics, In Economics and Business. Society and World View. Boston, Massachusetts.
Drucker, P. F. (2001). The Next Society. The Economist.
Editor, (2005). The Man Who Invented Management. Business Week, 28, 102.
Maciariello, J. A. (2005). Peter F. Drucker on a Functioning Society. Leader to Leader , 37, 26–34.

Joseph Anthony Maciariello (1941 – 2020)

Tue, 07 Jul 2020 00:14:00 GMT

Joseph Anthony Maciariello of Claremont, California passed away peacefully on July 1st with his family by his side. He was born on December 1, 1941 in Troy, New York six days prior to Pearl Harbor and our nation’s entrance into World War II. Joe was the proud son of immigrant parents, Lorenzo and Raphael. He was raised in Mechanicville, a mill town on the Hudson River, upstate. Though growing up his family was of modest means they were rich in the love of a large extended family and a closeknit Italian community.
At the age of fifteen his father was taken from his family by an inherited condition that Joe later conquered with the help of a kidney transplant in 1993. He died as the longest living kidney transplant recipient in UCLA Medical history. Despite the added responsibilities of leadership as the oldest of three brothers without a father, his love of learning and dedication to scholarship was ignited early and continued until his death at 78. After graduating from Mechanicville High School he went on to Bryant College in Providence, Rhode Island where he graduated summa cum laude with a degree in business administration in 1962.
Following college he worked at Hamilton Standard where he had the opportunity to contribute meaningfully to high profile projects, including the development of the portable life-support system used by American astronauts in the first moon landing. While maintaining a rigorous full-time professional life during the early stages of his career he continued his education at Union College in Schenectady, receiving a Master of Science in Industrial Administration in 1967.
He then moved to New York City and began the arduous task of completing his PhD in economics at NYU, again while continuing to work full time. He received his doctorate in 1973 having the honor of being advised on his dissertation by legendary economist William Baumol. During this period, at a Christmas party in 1969, his life was forever changed when he met his wife and partner for the next 50 years, Judy. They were married on August 9, 1970 and together built a home in Burnt Hills, New York while Joe taught at Union College. This was a happy time in their lives and they were blessed with two wonderful sons who have continued to bless them to this day.
In 1979 the family packed up their station wagon and drove across the country to Claremont, where Joe had accepted a joint professorship at Claremont McKenna College and Claremont Graduate School. He continued in this role for the next twenty-five years, then moved to be full time at the Drucker School of Management at Claremont Graduate University until his retirement in 2013.
He had the privilege of working closely with Peter Drucker during the later stages of Peter’s life and career. He was honored to have coauthored several books with him. Following Peter’s death in 2005 Joe felt his calling was to expand Peter’s legacy and has taught and published extensively since then. His final book was completed on Memorial Day of this year, shortly prior to his passing. He was fortunate enough to have his work supported by several like-minded men who shared his love of management in the Drucker mold and supported him as he extended that legacy. These men, Bill Pollard, Bob Buford, and Ming Lo Shao, were dear friends to Joe. Recently he has been blessed to work with the Shao Foundation and the California Institute of Advanced Management where he was honored with the creation of the Joseph A. Maciariello Institute of Management as a Liberal Art.
Joe believed that effective management could lift individuals to perform at levels even above their innate ability and teams to perform in a manner far greater than the sum of their parts. He was a strident believer that management should be taught broadly as a subject matter and that effective management and leadership was paramount to the creation of a functioning society.
Joe’s family and work were his greatest earthly passions, in that order, right behind his love for Jesus Christ. Close behind these loves, however, came the New York Yankees and Notre Dame football. Survivors include Judy, his loving wife, two sons, Patrick Anthony (Aleeza) of Laguna Hills and Joseph Charles (Lauren) of Mill Valley. A brother, Lawrence, and five wonderful grandchildren (Callie, Reese, Grace, Alice and Charlie) as well as many wonderful nieces and nephews. He was predeceased by his parents, and his younger brother Carmen.
Joe was a gentleman of great character and possessed deep faith. To know him was to love him.
In lieu of flowers donations can be made to the: Professor Joseph A. Maciariello Honorary Scholarship University of Notre Dame Gift Management 1100 Grace Hall Notre Dame, IN 46556

A Functioning Society and Management as a Liberal Art — Peter Drucker’s Beliefs and Values

Sat, 20 Jun 2020 17:57:00 GMT

“To make our institutions perform responsibly, autonomously, and on a high level of achievement is thus the only safeguard of freedom and dignity in the pluralist society of institutions. Performing, responsible management is the alternative to tyranny and our only protection against it”. - Peter F. Drucker

World-renowned as “the father of modern management”, Peter Drucker believed that although he was famous for establishing management as a discipline, he was actually a “social ecologist”, and his real concern was the individual’s existence in the social environment. In Drucker’s view, management was a newly emerging tool for improving society and life. He was the author of 39 books, only 15 of which dealt with management. The others were related to community, society, and polity. Only two books — Management for Results and Innovation and Entrepreneurship —were devoted to business management.

Drucker knew that human nature is imperfect, so nothing humans create, including the societies they design, can be perfect. He didn’t hold high expectations or ideals for society; he only hoped that it could be less painful and more tolerant. However, a society still has to have basic functions; it has to provide the people living in it with the conditions for normal life and work, and it has to give individuals identity and status. These functions or conditions are necessary for a society in the same way that normal functions are necessary for a living body.

It is worth noting that society is not the same as nation-state, because “nation-state(government)” and “family” cannot provide the necessary functions of a society. This is evidenced by the fact that some powerful countries have only fragile and fragmented societies. In Drucker’s view, in the industrial age, a normal functioning society must consist of at least three types of institutions: government, business, and non-profit, each of which plays a different and unique role. Individual organizations within each of those categories must have distinctive performances, which requires them to have power centers and decision-making mechanisms. The power centers and decision-making mechanisms should give each individual a place within the organization, allowing them to use their strengths, to play a part and contribute, therefore obtaining livelihood, identity, and status. In the past, nation-state did not have such power centers or decision-making mechanisms; in other words, “management” is the new “polity”. (Drucker collectively refers to all three power centers as “polity”: management systems of business, management systems of nonprofit institutions, and governmental systems of nation-state, because these three sectors all hold power but each has different objectives. Business and non-profit organizations have the power to allocate society’s resources in order to provide specific products and services; the government has the power to arbitrate and intervene to maintain fairness and justice throughout society).

Near Claremont University in the United States, there is a small Drucker memorial — the Drucker House Museum — in what was once Peter Drucker’s California home. On entering the museum, one sees a famous quote in a prominent place facing the entrance of the living room:

When the museum opened, the Drucker Institute’s colleagues asked themselves, if they were to choose a quote from Drucker’s publications that sums up the significance of his work to the world, what would it be? They eventually chose the above passage.

If you are familiar with Drucker’s life and how his beliefs and values were formed, you’ll surely agree with their choice. From The End of Economic Man , his first book, to A Functioning Society , the last volume that he completed independently, a common thread runs through all his work: resistance to totalitarianism and defense of the individual’s freedom and dignity.

There is a great difference between totalitarianism and authoritarianism. It was not until the 20th century, with the rapid advancement of human knowledge and capabilities, that conditions arose for the centuries-old tradition of authoritarianism to mutate into totalitarianism. Totalitarianism seeks to thoroughly manipulate and control every human being, flesh and spirit, to expunge their compassion and conscience, transforming them into humanoid machines that fulfill the dreams of individual totalitarian rulers. Under totalitarian rule, loyalty to leaders is everything; personal thoughts, feelings, desires, and goals are superfluous and must be eliminated. The 20th century brought wars, revolutions, and movements that caused unprecedented disasters and human suffering. Whether Nazism (National Socialism), Fascism, or Communism, all are “masterpieces” of totalitarianism. The rise of Hitler and Nazism, which the young Drucker lived through, is among them. To best understand how Drucker’s experiences influenced his beliefs and values, read his Adventures of a Bystander . To see what totalitarianism is and why the masses support it, read his The End of Economic Man , with the subtitle “The Origins of Totalitarianism”.

Fortunately, history’s evolution has not always been so dispiriting. Since the Industrial Revolution, especially from the 1800s onward, in the last 200 years, productivity has increased dramatically, not only creating vast material wealth but also bringing profound changes in the social structure. Eighty years ago, Drucker perceived and pointed out the formation of a new pluralistic, organizational society: Emerging enterprises and nonprofit institutions fill the gaps and empty spaces between “nation-state” (government) and “family” in the social structure of the past.

Based on that foundation, universal education and the rise of the knowledge worker are creating a knowledge economy and a knowledge society, and information technology has accelerated all these changes. It should be noted that “knowledge society” and “knowledge worker” are terms Drucker coined. “Knowledge workers” broadly refers to those who possess and apply specialized knowledge and work to create useful products and services for society. This includes entrepreneurs and executives, professionals, and technicians in any organization, as well as independent professionals, such as accountants, lawyers, consultants, trainers, and so on. Today, in the 21st century, owing to the development of knowledge and the ever-widening area to which it is applied, individuals and individual institutions are no longer alone and helpless. Having mastered certain types of knowledge, they have freedom of choice to decide where and how to work and the power to influence others. Knowledge workers and the knowledge-based organizations they formed no longer resemble traditional intellectuals. Knowledge workers’ unique characteristics are their independence and autonomy. They can integrate resources, build their own organizations or start new businesses, create value, and foster economic, social, cultural, and political changes. Traditional intellectuals depended on and were subject to government authorities, and could only act on platforms provided by those authorities.

This is an epoch-making, far-reaching change that has taken place not only in Western developed countries, Japan, and other democracies but also in many developing countries still under authoritarian or even totalitarian rule, such as in today’s China. In totalitarian countries, rulers instinctively and inevitably treat independent and autonomous organizations and knowledge workers as potential threats, suppressing or even banning them. But this can have only one consequence: the hollowing out of society and the economy, which in turn will undermine the basis on which any regime depends, ultimately leading to totalitarianism's collapse. To put it in popular terms, the wave of freedom and democracy now sweeping the world is irresistible; totalitarian rulers, no matter how ostensibly powerful and arrogant, will inevitably be drowned by it.

A healthy modern society is made up of pluralistic organizations. Of the three organizational categories — government, business, and nonprofit; businesses and nonprofits are comparatively more constrained by the market, the public, and the government. Therefore, their managements are less likely than the government to take the road to totalitarian rule (except for businesses and nonprofits that are de facto government proxies). That’s why, in Drucker’s view, businesses and nonprofits are more important and worthy of hope than governments. Nonetheless, they may still fail to achieve the “performing, responsible” operation that Drucker expects, either due to lack of management or mismanagement, providing space and opportunity for totalitarian governments to monopolize social resources and strip individuals’ rights. The rise of knowledge workers in all organizations, including the Internet-era’s virtual work community, has provided the foundation and conditions for a new era of management, posing a challenge to the traditional “carrot-and-stick” approach to management. In response to this reality, Drucker researched, established, and constantly strove to improve the discipline of modern management.

On January 18, 1999, when he was almost 90 years old, Drucker answered the question, “What is my most important contribution?” This is what he wrote:

“That I focus this discipline (management) on People and Power; on Values, Structure and Constitution; AND ABOVE ALL ON RESPONSIBILITIES - that is focused the Discipline of Management on Management as a truly LIBERAL ART”.

Dubbing management discipline a “liberal art” was Drucker’s brainchild, reflecting his unique perspective on management. This is obviously important, but in his many works, there is little further explanation of it. The most complete exposition is found in the fifteenth chapter of his book The New Realities , entitled "Management as Social Function and Liberal Art”:

“Thirty years ago, the English scientist and novelist C.P. Snow talked of the ‘two cultures’ of contemporary society. Management, however, fits neither Snow’s ‘humanist’ or his ‘scientist.’ It deals with action and application; and its test is results. This makes it a technology. But management also deals with people, their values, their growth and development—and this makes it a humanity. So does it concern with, and impact on, social structure and the community. Indeed as been learnt by everyone who, like this author, has been working with managers of all kinds of institutions for long years, management is deeply involved in spiritual concerns—the nature of man, good and evil.

Management is thus what tradition used to call a liberal art: ‘liberal’ because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; ‘art’ because it is practice and application. Managers draw on all the knowledge and insights of the humanities and the social sciences—on psychology and philosophy, on economics and on history, on the physical sciences and on ethics. But they have to focus this knowledge on effectiveness and results—on healing a sick patient, teaching a student, building a bridge, designing and selling a ‘user-friendly’ software program”.

As one who has many years of practical management experience and has read nearly all of Drucker’s works, I have often pondered why Drucker called management a “liberal art”? I finally realized that this was not just a beautiful and unconventional act but was a characterization of management; it revealed management’s essence and pointed out the proper direction for managerial efforts. At a minimum, this includes the following implications:

First, the most fundamental management issue, or the key to management, is how managers and individual knowledge workers regard and handle the relationship between people and power. Drucker was a Christian. His faith and his life experiences were mutually confirming and had a profound impact on his research and writing. In his view, man should not have power. Only humankind’s creator, God, master of all things, has power. The Creator is always superior to humans. After all, human nature is weak and cannot resist the temptation to acquire power or withstand its trials. Therefore, a person can only possess authority. He is authorized by the Creator because of his character, knowledge, and ability, which are effective only at a certain stage and in certain actions. This is true not only for individuals but for the entire human race. In democratic countries, “the people are sovereign”; their power is also a kind of authorization granted by the Creator. Under this authorization, human beings are only “tools”—they have free will but must also accept responsibility. Human beings are the Creator’s tools and they cannot become masters; They cannot manipulate and control fellow humans according to their own intentions, nor should they become tools for the manipulation and control of others. Only by recognizing this will people gain both humility and a sense of responsibility; only then will fairness and justice—which the Creator alone commands and which can only summon and be revealed to humans—guide their actions. Moreover, people must constantly examine themselves and willingly conform to society's norms and constraints.

Second, although human nature is imperfect, every person comes from the Creator and bears his image and good intentions. In this sense, they are all equal to each other, all have their value, their creative abilities, and their functions, and should be respected, and encouraged to create. As stated in the American Declaration of Independence, all men are created equal, and every person has innate, self-evident and inalienable rights. The fundamental reason why “Drucker’s” management discipline can make a difference stems from just this conviction. Does one believe that every person has goodwill and potential? And does one thus really treat people equally? These core values and convictions ultimately determine whether one can respond to Drucker’s management knowledge and whether one can understand and implement it.

Third, in knowledge societies and knowledge organizations, every worker, to some extent, is both a knowledge worker and an executive. In that, they can use their expertise to authoritatively influence other people and organizations — knowledge is power. But power must be governed by responsibility. And performance and results indicate how effective an executive has been in exercising responsibility. Power that accounts to performance and results is legitimate, that is, it is represents authorized authority; otherwise, it becomes “might”, which Drucker is firmly opposed to. The importance of performance and results lies not only in economic and material aspects but also in the psychological aspects that people tend to overlook. If managers and leaders continually fail to solve real issues, a despairing public will irrationally choose to rely on and obey powers that promise a “perfect society”, and willingly surrender their freedom and dignity. This is why Drucker repeatedly warned that if a management fails, totalitarianism will take its place.

Fourth, does management have other responsibilities besides getting organizations to achieve performance and results? Or to put it another way, are performance and results limited to quantifiable economic gains and wealth? In addition to providing customers with inexpensive, high-quality products and services, and earning reasonable profits for shareholders, can an industrial or commercial enterprise become a good, responsible “social citizen”? Can it help its employees enhance their character and competence, turning the organization into a “moral community”? This might seem too demanding, but it is reasonable. More than ten years ago, I worked with a multinational logistics corporation that asked itself and found it was possible to put it into practice. This means that we must learn to design moral and ethical demands and economic goals into the same workflow, the same set of weighing systems, and into every method, tool, and model of operation. Today, it is gratifying that more and more organizations are beginning to take this issue seriously and responding positively to it in their respective fields.

Fifth, “博雅技藝的管理” (management as a liberal art) or “博雅管理” (liberal-art management) are lovely Chinese translations, but they’re a bit problematic. Judged from the three requirements of translation — 信 xin (fidelity), 達 da (clarity and flow), and 雅 ya (elegance), the rendering is elegant but is not faithful enough to the original. Translated directly into Chinese, “liberal art” would be “free art” (自由的技藝); that is, freedom from restraints, a liberal art that lets people throw off restraints and attain spiritual and physical freedom. To put it another way, to become a free person, one must master an art. In ancient Greece and Rome, only “freemen” were permitted to learn such knowledge and skills; slaves neither needed nor were permitted to study them, because only “freemen” bore the exalted responsibilities of a citizen. However, in the earliest traditional Chinese-character editions of Drucker’s works, “liberal art” was translated as 博雅藝術 boya yishu , probably to take advantage of the positive connotations that terminology has in the Chinese language. I feel that “自由的技藝” (free art) is closer to the original English meaning. “Liberal” is freed. “Art” can be translated as 藝術 yishu , but management must be applied, it must perform and produce results, so it is first and foremost a “skill (技能)”. On the other hand, the management’s object is people’s working. When dealing with people, managers must face the good and evil inherent in human nature, as well as people's ideas — emotional and rational — which can change on a moment’s notice. They also must face the same issues within themselves. When viewed from this angle, management is an “art” involving subjective judgment. Therefore, “art” is more suitably interpreted as技藝. “Liberal” (自由) and “art” (技藝) combined is “liberal art” (自由的技藝).

Finally, I’d like to say, the reason I've taken such pains in translating “liberal art” is not just to produce a “correct” Chinese equivalent. More importantly, it’s to stress that management is not what people commonly mistake it for: a study of how to succeed, either personally or organizationally. Its aim is not to help an enterprise make money or achieve the highest efficiency in production; nor is its aim to help a non-profit organization win a good public reputation. Management aims to allow every person to live in a healthier, less harmful and painful human society and community. It is to allow every worker to freely choose the responsibility one is willing to bear in that society or community, according to one's innate goodwill and potential, to freely use one's talents to create value that is useful to others, thus fulfilling one’s responsibility. Moreover, in the process of that creative work, to live out human dignity and grow into a better and more capable person: They have pragmatic knowledge and skills, but are not arrogant or vain; they pursue psychological and spiritual sublimation, but are not jaded or cynical; they revere the sanctity of natural creation, but are not callous or cold-hearted. As a “social ecologist”, this is what Drucker defined and anticipated —"Management as a Liberal Art” or “liberal-art management”, the terms’ true meaning.

Minglo Shao

Licensee of the “Peter F. Drucker/Peter Drucker” brand in Taiwan and China

Management as a Liberal Art (MLA) Articles

An Unflinching Gaze: Peter Drucker's Self-Portrait Through a Fallen World

On Decisions and their “Agents”

Paul Polman: Management, Sustainability, and Stewardship as a Liberal Art

From a Functional to a Free Society-- The End of Economic Man: Drucker's Diagnosis of Totalitarianism

Drucker in the Lab: Leading Through Trust, Not Control

Marc Benioff: Reimagining Capitalism through Management as a Liberal Art

Drucker on Soft Power

Alexis de Tocqueville and The Future of Democracy: Part III

The Great Professional Recalibration: Rethinking Work in the Age of Autonomy and AI

Alexis de Tocqueville and The Future of Democracy: Part II

El Emprendedor, El Emprendimiento, y La Innovación

Alexis de Tocqueville and The Future of Democracy: Part I

On Leadership, Legitimate Power, and Influence

Helping Civilization Understand Business

Satya Nadella and the Liberal Art of Management

Freedom, Responsibility, and Worldview: Understanding Drucker

The Children of the American Dream

Foundations of CSR: Truly Sustainable

Sustainable Leadership: Here to Stay, Even When Politicians Say Otherwise

Rethinking Motivation: The Key to Sustainable Performance

The Animated Movie, Inside Out 2, Can Help Leaders Better Comprehend and Internalize Emotional Intelligence

Innovation and its Impacts

La Gestión Como Arte Liberal

Part II: Knowledge Work in a Post-Capitalist Society

Peter Drucker’s Philosophy on Business Sustainability as Applied to Proctor and Gamble

A Tribute to Charles Handy (1932-2024)

Treasures from the Charles Handy Drucker Forum legacy

The Future of Knowledge Work: What Drucker can teach us

Interview with Karen Linkletter at the 16th Global Peter Drucker Forum 2024

﻿

Video Interview

Nike, Inc.: A Review Through the Lens of Management as a Liberal Art (MLA)

Introduction

1. People-Centered Management

2. Ethical Leadership and Responsibility

3. Alignment with Social Purpose

4. Integration of Multiple Disciplines

5. Long-Term Thinking and Sustainability

6. Fostering Community and Relationships

7. Adaptability and Learning

8. Stewardship for the Greater Good

Final Assessment

References

Patagonia, Inc.: A Review Through the Lens of Management as a Liberal Art (MLA)

Introduction

1. People-Centered Management

2. Ethical Leadership and Responsibility

3. Alignment with Social Purpose

4. Integration of Multiple Disciplines

5. Long-Term Thinking and Sustainability

6. Fostering Community and Relationships

7. Adaptability and Learning

8. Stewardship for the Greater Good

Final Assessment

References

The Specifics of Management of the Knowledge Worker

The Wisdom and Continuing Relevance of Peter Drucker

Revolutions in Labor Hierarchies

The Specifics of Management of the Knowledge Worker

The Computer’s Relevant Companion - the Knowledge Worker

Human/Technology Collaboration: Tomorrow's Knowledge Society

A Fourth Revolution in the Use of Resources

The Value of Interdisciplinary Thinking

AI as an Enabler of Management as a Liberal Art

The Role of Wisdom

The Future of Knowledge Work

Economic Growth and the Role of Human Capital

Meaning, Happiness, and Peace

The Nature of Knowledge

Loving Drucker, Fearing the Full Drucker

The Three Knowledge Pillars of MLA

On the Nexus Between Entrepreneurship and Innovation

The Drucker Difference

Schumpeter, Drucker, and Entrepreneurship

Intersecting the Philosophy of Management as a Liberal Art with the Insights of Dan Solin

Navigating the VUCA World: Through Peter Drucker's Management as a Liberal Art

Peter Drucker: Drucker’s Wisdom Thriving in an Age of Disruption

Peter Drucker on Innovation and Results

Peter F. Drucker’s management philosophy and life coaching are interchangeable