Is There Really a Movement Building to Counter
“Maximizing Shareholder Value”? By Rick Wartzman

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Last January, a group of leading management thinkers gathered in Switzerland to “see what can be done to . . . energize organizations in ways that make them better for the organizations themselves, better for the people doing the work, better for those for whom the work is being done and better for society as a whole.”   Next April, a group called Conscious Capitalism expects to draw some 1,500 people to San Francisco to explore how companies can “adopt a higher purpose that transcends profit maximization.”   And in between, hundreds will convene in Vienna on November 15 and 16 for the fourth Global Peter Drucker Forum, which will examine how business can become, […]

Precious Competencies
by Lynda Gratton

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We may be happy to eat the food that multinationals make, and fly in their aircraft, and even take the pills they have invented. But many of us say we don’t trust corporations, and we don’t trust the people who lead them. Some are even willing to go out onto the streets to make this clear. It seems to me that now is the time for corporations and their leaders to be more explicit and transparent about their purpose and goals.   To do this, corporations have to address three questions: how is leadership ensuring there is sufficient inner resilience to take the corporation through these turbulent times? What is the corporation doing to positively […]

Improving share-holder capitalism
by Adrian Wooldridge

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The debate about shareholder capitalism has an unfortunate habit of becoming a clash of absolutes. In the 1980s and 1990s Michael Jensen and his followers argued that shareholder value was the secret sauce of management. In the wake of the 2007-8 financial crisis many influential management theorists declared that the secret sauce was in fact a deadly poison. The search is now on for a better way of measuring success and motivating managers.   There is no doubt that the cult of shareholder value produced perverse results. The fashion for linking remuneration to share prices allowed bosses to manipulate their shareprices to boost their income. The emphasis on short-term results rather than long-term health tempted […]

Drucker our contemporary
by Stefan Stern

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Economic crisis, political uncertainty, the dangers of extremism: these things haunt us today just as they shaped and influenced Peter Drucker many decades ago. Out of the tumult of the 1930s and 40s emerged the steady voice of the original and best management guru. What would he be saying now?   As the British politician Nye Bevan once asked: “Why look into the crystal ball when you can read the book?” Drucker, of course, left dozens of books for us to study. But in spite of his impressive output we seem to have lost sight of some of his timeless ideas. How many meetings that you attend begin with an agenda and the word “objectives” […]

The Gaming of Games
Roger L. Martin

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I have to admit that the thing I like most about Peter Drucker is how often he said things that were dismissed at the time as improbable, extreme or even wacko and 25 years later were considered so obvious that they are assumed to have always been the case. In 1954, he told managers that they should sit down with their direct reports every year and establish objectives by which they will be managed.  Sounded farfetched in 1954 but now you would be considered incompetent if you didn’t manage by objectives. In 1966, he told the business world that its important players would soon be ‘knowledge workers’ not the physical workers that it was used […]

The Revolutionary Tenets of Management 2.0
Steve Denning

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Revolutionary changes in the basic tenets of management are under way. Roger Martin has described the overall transition from shareholder value (making money) to customer capitalism (delighting the customer). For firms to navigate the transition to the new ecosystem of “Management 2.0”, they must master five fundamental shifts:   1. The management mindset 2. The role of managers 3. The way work is coordinated 4. The values practiced and 5. The way people communicate.   Five fundamental shifts in management practice   Shift #1: Management mindset: From inside-out to outside in To accomplish the transition to customer capitalism, reflecting the shift in the balance of power in the marketplace from seller to buyer, firms must […]

Can Europe Become an Entrepreneurial Society?

Posted on rstraub4 CommentsPosted in 4th Global Peter Drucker Forum

In his landmark book Innovation and Entrepreneurship, published in 1985, Peter Drucker described the tectonic shift that he perceived in its early stages—the move from an employee society toward an entrepreneurial society. This shift was, and still is, being driven by unstoppable forces such as changing demographics and ever-hastening advances in information and communication technology.   As Drucker lays out what this new society should look like, he builds upon another great thinker of Austrian origin, Joseph Schumpeter, who had positioned the entrepreneur at the heart of capitalism – as the life force of a market-based, competitive, dynamic and wealth-creating economy. The question for Europe is: Has this sea change happened? Have we seen enough […]

“Capitalism 2.0 Leadership and Paradox Management”
Guest Blog Post by Stephen Rhinesmith

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The globalized world of 2012 is locked in a debate about the appropriate role of corporations. Should corporations continue to have as their primary purpose the maximization of “shareholder value,” (Capitalism 1.0) or should they also be concerned also about creating “shared value” for the societies in which they operate and the world as a whole? (Capitalism 2.0). Ultimately this is a paradox that leaders at all levels of society will need to be committed to recognize and manage.   The key aspect of a management paradox is that it contains two equally valid, but contradictory viewpoints which need to be managed over time so that neither one is totally neglected. Work-family balance is one […]