In a networked world, opportunities for individuals to develop, create and grow are available everywhere. Whether they can successfully capture the opportunity or surf on the wave of the changes, depends heavily on the individual ability to manage oneself. At the 11^th Global Drucker Forum on “The Power of Business Ecosystems” on November 21, 2019 in Vienna, one plenary discussion on the theme of “Managing Oneself” drew on Peter Drucker’s 1999 article of the same name to bring new perspectives on leadership, innovation, and organizational resilience and agility in the context of ecosystems today.

Art Kleiner, Editor in Chief of PWC Strategy+Business, kicked off the discussion by revisiting Drucker’s original text. According to Drucker, managing oneself is about discovering strengths, understanding values, and taking responsibility for self-reinvention. To be effective in an organization, an individual’s values must be compatible with those of the organization. Why do such things matter in the networked society? What commitment to learning should an organization/ecosystem expect from its people and vice versa? And what challenges is one liable to face in managing oneself? In other words: what does it actually mean to manage yourself/oneself in the world of ecosystems?

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

There is no doubt that in today’s workplace wellbeing has been seriously compromised by the anxiety and stress caused by overwork. In this context, managing oneself is about both self-protection on one hand and the healing of others on the other. To be resilient, agile and happy, you must learn to manage yourself, counselled executive coach Michael Gelb; in the same way organizations committed to healing the anxiety and suffering in the world turn out to be more financially profitable as well as healthier. The number one skill required for leadership in such organizations is the ability to self-manage and choose love and compassion as the basis for making big decisions. Quoting Leonardo’s “men of genius sometimes work best when they work least”, Gelb suggested that “to smile as Mona and to think like Leonardo” is a practical route to better thinking, creativity and personal effectiveness.

In “Managing Oneself”, Drucker reminds us that the changes brought about by the internet make savvy self-management a must for knowledge workers to be effective. Drucker’s body of knowledge is about creating human energy and human vision. Julia Wang, President of Peter F. Drucker Academy (Hong Kong), reflected on the context of Drucker’s writing. Today, everyone has an opportunity to become or at least to think as a chief executive officer. Managing oneself is about discovering who you are, then focusing on what you can contribute, as well as taking responsibilities for relationships and communications. This is especially true in the world of ecosystems, where trust and collaboration are essential for both individual and organizational success. 

Nowadays technological speculation and hype are endless; but human skills remain central to business endeavor. Venture capitalist Scott Hartley shared his views on cultural aspects of big tech. The business of both liberal arts and technology is either understanding or improving the human condition, and both deal in human values. We cannot separate the two when we try to understand the fundamental problems of society and the value technology can bring to solving them. The ability to ask the right questions is critical, especially in the face of uncertainty, and training in the humanities sharpens skills in this regard. Managing oneself means looking at oneself as a person and reflecting on how we interact with others. To succeed in the era of AI, robotics and technological disruption, human skills, creativity and empathy are fundamental.     

Self-management is about doing things in fresh and different ways, innovating and thinking creatively to push the envelope of current possibility. When people or organizations reach their capacity, they have to find a new way to build out new ones, suggested Whitney Johnson, CEO of WLJ advisors. The idea of S-curve learning demonstrates the self-disruptive learning path that eventually can lead to creativity and innovation.

Digital anthropologist Rahaf Harfoush shared her perspectives that managing oneself is mainly to do with accountability and impact. The networked society is created by ourselves as human beings, and it is up to all of us to make it what we want it to be, whether happy, angry or sad. This reminds us that we are accountable for choosing how we invest our time, attention and energy, and those actions and choices impact on people around us. Will our actions as individuals positively or negatively affect the digital environment? It’s essential for us to understand our own behaviour, habits and biases, to enable us to become a more positive impact on the whole network.

The panellists shared insights on how to create conditions for individuals and organizations to nurture creativity, resilience, agility and collaborative cultures through conscious self-management.

In summary, the most important takeaways from the session were:

1. Leaders who make strategic decisions do, and should, listen to their inner voices. 
2. A courageous decision on the basis of love and compassion can make a big difference.
3. Technology is a human activity. Leaders with human insights have a better understanding of others as well as themselves. The liberal arts are foundational to our way of thinking and our ability to ask the right questions. Human skills, values and empathy are central to success in the era of technology disruption.
4. Managing oneself is about doing things differently – a mindset change that leads to creativity and innovation.
5. Managing oneself is about taking responsibility for relationships and communication.  In the era of complex ecosystems, the starting point for leading others has to be the ability first of all to understand and manage oneself.

About the Author:

Julia Wang is the President of the Peter F. Drucker Academy (Hong Kong)

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

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Panelists:
Chair: Richard Brem, Senior Advisor, Peter Drucker Society of Europe,
Peter Paschek, Management Consultant,
Timo Meynhardt, Professor for Business Psychology and Leadership, HHL Leipzig Graduate School of Management,
Verena Ringler, Curator, Erste Foundation
Aaron Barcant, Independent Researcher, Karl Polanyi Institute of Political Economy

The round table began with Richard Brem introducing the panelists and each of them summarizing why Peter Drucker’s work and vision mattered to them.

Drucker’s vision

Drucker always argued that one’s worldview mattered to one’s understanding of one’s role and contribution in society and one’s ability to manage oneself and others. American philosopher Thomas Sowell, describes a vision as a ‘pre-analytic, cognitive act’ that helps simplify an overwhelmingly complex reality. Think of it as a walking stick that helps you travel over rugged terrain, giving you support when you need it and allowing you to probe the way ahead. A social vision gives us a sense of how the world works, of the nature of humankind, of causation and how social change happens.

As panelist Peter Paschek pointed out, Drucker described himself as a ‘conservative Christian anarchist’. While accepting the necessity of governance and government, he saw power and the yearning for power as the central problem of society, with that of managerial power and its legitimacy a particular concern. The political philosopher he admired most was Wilhelm von Humboldt, the pioneer of the modern research university, who found balance and harmony while managing the tension between continuity and change. Drucker was concerned with this balance at several levels, especially those of society and community. It was this interest that allowed him to see management as a social function, an organ of society that is responsible for the performance of institutions and gives the individual both status and function. Panelist Timo Meynhardt said that Drucker’s depth of thought and his emphasis on values – his practical wisdom – was his distinctive strength, making him a ‘companion in the darkness’.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

Drucker had what Sowell calls a ‘constrained’ vision – a feature that he shares with thinkers like Adam Smith, Edmund Burke, the authors of the Federalist Papers and Friedrich Hayek among others. It is a vision of society as an evolutionary product with much wisdom contained in the traditions that are handed down to us. History matters and experience is critical. Order is emergent from the interactions of many individuals rather than planned and the emphasis is on practices, processes, incentives, trade-offs and prudence. This constrained vision was in contrast to the much less, if not unconstrained vision of his close friend, Christian socialist Karl Polanyi. While he and Drucker agreed on their ends – to tame capitalism and hold economic power to democratic account – they differed greatly on the means to achieve it. While Drucker regarded economic man as a once-appropriate idea that had been over applied, Polanyi thought it an outright mistake, with the ideal of a self-regulated market never existing in practice. Drucker’s concern over the very real limits to what the state can do and the ever-present risk of factional strife, required a large role for markets, albeit imperfect ones, as a valuable and effective tool to help balance the private sector against the state. Enlightened individualism must serve society. Polanyi, on the other hand, with his more utopian vision of the primitive community, saw a much larger role for an activist state (it was noted that Polanyi’s ideas have attracted renewed attention since the financial crisis of 2008 and the disenchantment with capitalism that has accompanied it).

The role of history

For those with a constrained social vision history really matters. Panelist Aaron Barcant suggested that Drucker’s view of history matches that of Neustadt and May in their book Thinking in Time. Here is what they have to say about thinking of time as a turbulent stream:

“Thinking of time [as a stream] . . . appears . . . to have three components. One is the recognition that the future has no place to come from except from the past, hence the past has predictive value. Another element is recognition that what matters for the future in the present is departures from the past, alterations, changes, which prospectively or actually divert familiar flows from accustomed channels, thus affecting the predictive value and much else besides. A third component is continuous comparison, an almost constant oscillation from present to future to past and back, heedful of prospective changes, concerned to expedite, limit, guide, counter, or accept it as the fruits of such comparison suggest.” (p. 251)

Thus history has predictive value, not because the future will be like the past, but because some things will continue, habits will endure, and humans will tend to behave in the future much as they have behaved in the past, given similar contexts. We cannot predict the future, but studying history is a way of expanding our experience, making us resilient in the face of change, so that we can interpret the past to help us understand the present and anticipate the future.

Looking at the present

The study of history may actually enhance a manager’s ability to stay in the present and to focus on doing what is happening and has to be done.

As panel chair Richard Brem pointed out, Drucker was never a futurist. In 1992, relatively late in his career, Drucker identified himself as a social ecologist and wrote: ‘If there is one thing I am not…it is a “futurist”….it is futile to try and foresee the future….the work of a social ecologist is to identify the changes that have already happened. The important challenge in society, economy, politics is to exploit the changes that have already occurred and use them as opportunities.’

The events that mattered did not lend themselves to quantification. They happened at the margins of society. By the time they show up in aggregates and become statistically significant they are ‘past’. Drucker’s injunction was to ‘look out the window’.

When we ‘look out the window’ for clues to the future of society what do we see? Those with an unconstrained social vision sometimes talk of utopian moves toward cooperation on a larger scale and world government. The evidence around us indicates otherwise. The rise of populism and the disenchantment with both capitalism and democracy in the West suggest a movement toward disaggregation, with attention being paid to smaller units of cooperation. The failure of the federal government in America to address issues of popular concern has led to a renewed focus on the state and municipal government and local communities – the grass roots – as the places where things get done. Panelist Verena Ringler talked about the blurring of what is public and what is private and of cities like Palermo and Barcelona, where pockets of local cooperation are forming in opposition to the policies of national governments. Other cooperative communities, such as the well-known example of Mondragon, also offer alternative ways of coping with the tensions between democracy and management discretion, market forces and social forces, community and society.

‘What would Drucker have made of China?’, one participant asked. Karl Polanyi might have argued that the China case shows that capitalism is antithetical to democracy. Drucker would have taken a more developmental approach, perhaps quoting Berthold Brecht, ‘Food first, then ethics’.

The powerful play goes on….

About the Author:

David K. Hurst is a management speaker, writer and educator. His latest book is The New Ecology of Leadership: Business Mastery in a Chaotic World (Columbia University Press 2012)

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

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Throughout the modern industrial era, industries have generally been organised as linear value chains, producing vertically integrated organisation, organised to control the entire value chain and achieve economies of scale, to create a competitive advantage. As digital technologies gain adoption, they enable new ways of organising how value is created. This transition to digital ecosystems is challenging. There is still limited knowledge of how these ecosystems are created, how they work and how organisations can best participate in such ecosystems.

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This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
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The need to better understand digital ecosystems

Moving to an ecosystem model involves a different approach and a new set of strategies, processes, competences and technology assets.

In a recent interview, the SVP of IoT at Sprint, a major Telecom operator in the US, explained how telecom operators are struggling to transition from serving the single-service consumer market to the myriad of new applications that form part of the Internet-of-Things (IoT) ecosystem.

The key building blocks of digital ecosystems

There are three main elements for building a successful ecosystem.

1. The Platform

This is the enabler upon which ecosystem partners can build their products or services. The platform allows access to platform resources (via APIs, for example) enabling participants to build complementary products or services. The platform in turn supports the other two elements.

2. Network Effects

This is the self-perpetuating cycle of ecosystem participation and user enrolment. More products or services on the platform lead to more end-users attracted to it. At the same time, more end-users on the platform attract more participants with their products and services. Organisations driving successful ecosystems tend to focus on creating the right incentives (financial and other kinds), as well as systems to support other ecosystem participants. Here the focus is on creating and sharing value across the ecosystem.

3. Market Expectation

Market expectation is related to how prospective participants and end-users perceive an ecosystem in terms of its potential to become dominant. Indeed, in choosing an ecosystem they tend to focus more on the prospective development of the ecosystem rather than its current size and position. In a way, building credible market expectations is the first push to get the wheel rolling towards self-perpetuating network effects. This is arguably one of the reasons why the Windows phone operating system failed. Nokia and Microsoft could not create enough market expectation among both users and app developers to propel their ecosystem. As a result, they ended up losing to Apple iOS and Goggle Android.

The above are the three key elements that make up digital ecosystems. The key question is how to activate and cultivate these three elements.

The Enablers of Digital Ecosystems

There are six levers that are used to shape the three key elements that make up digital ecosystems.

Application Programming Interfaces (APIs)

APIs are basic building blocks of a digital ecosystem. APIs can be used to promote network effects. A good example of this is Stripe, a company whose platform enables payments over the internet. Their approach from the start was to build their platform with developers in mind, so their APIs would be simple, well-documented and stable. The company has used APIs to propel its network effects by focusing not only on building its credibility (market expectation) among the developer community, but by providing all necessary support (see support functions below) to drive developer adoption and advocacy.

Communities

This is communities of participants that interact with one another and create value within the ecosystem. These participants develop products and services based on platform resources (via APIs). The benefits can be significant as in the case of Stripe. By enabling others to invest and create new products and services on the platform, the ecosystem can provide a richer set of options to end-users than it could do on its own. Moreover, the faster an ecosystem develops a positive reputation among developers and thus more join the platform, the further it develops. This reflects market expectations driving network effects. As more developers are attracted to the ecosystem, more users are drawn to new products and better services offered.

Spearhead Products or Services

The launch of ‘spearhead’ products or services is another essential driver of ecosystem development. These are products or services that are developed on top of their platform, in order to target a key segment of the market. This approach helps develop market expectation. However, the real power of spearhead products or services is that they create a user base that can help kick-start the ecosystem. One way to visualize this is to look at how the video games industry relies on one or more key spearhead games (think Call of Duty) to drive early user adoption to consoles, which helps attract developers to the platform and in turn brings in even more users.

Support Mechanisms

In exploiting a platform enabling an ecosystem, participants expect support. This support includes among others, technical (for example, how to use an API), marketing (how to sell your apps on our marketplace) and operational support (“fulfilled by Amazon” logistics support services). When an element is missing it tends to create frustration and disinterest among participants that can lead to the demise of the ecosystem.

Revenue Model

The revenue model is a key feature of a digital ecosystem. The ecosystem has to have a well-defined revenue generation and allocation model – one that incentivises participants to be part of the ecosystem, so reducing their risks to invest and innovate within it. Also the revenue model needs to be flexible and adaptable to avoid partner frustration and churn. One such frustration is with Apple and Google, who are being pushed to adapt their revenue share models in response to complaints by partners such as Spotify, Netflix and Match Group regarding their high platform fees.

Governance

An governance model establishes very clearly the rules of engagement among ecosystem partners. It also sets out processes to deal with disputes, as well as how value will be distributed based on the agreed revenue model. In the end, just like all other enablers, the governance model needs to be defined in a way that supports the development of the ecosystem and helps create value for all stakeholders.

As digital technologies continue developing and gaining adoption, they start enabling new ways of organising how value is created. If ecosystems are the new way of organising and enabling value creation, then it is essential that we realise how these ecosystems work. By seeing ecosystems through the lens of the three key elements and the six levers described above, we shall be better prepared to approach this new convention.

About the Author:

Omar Valdez-de-Leon is a digital transformation practitioner and advisor, founder of Latitude 55° Consulting. He is author of the “How to Develop a Digital Ecosystem: a Practical Framework”.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

I’d like you to imagine for a moment … we are standing on the banks of the River Thames.

We are going ‘mudlarking’ – combing the shore – to discover British experience of how place-based leveraging of social ecologies is changing the fortunes of people and their city environments and how cities are breaking the public-policy impasse of recent decades that has allowed the wellbeing of significant parts of their places to be forgotten, to be placed in the ‘too difficult’ box.

Our mudlark began by observing numerous signs of the public policy impasse facing cities, including:

• a ‘new normal’ of perma-austerity, with unsustainable rises in demand for services that were conceived for different times and that now struggle to cope;
• mega changes in expectations and erosion of trust, driven in part by new technology, but also the rapid decline of old-world power paradigms;
• a legacy of industrial-age thinking, leadership, government and public-service provisioning;
• environmental degradation and climate change;
• rapid and unpredictable demographic changes that challenge prevailing patterns of cohesion and identity;
• an economy that isn’t working for significant numbers of people; and
• persistence of hard to solve, ‘wicked problems’.

Taking us on a short exploration, our mudlark left the River Thames to venture a stone’s throw into East London and then north to Manchester.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

In East London, he described the social ecology of Barking and Dagenham, one of 32 London boroughs. Located just 30 mins from the City of London, today it is (literally) ‘post-Fordist’. Just 2,000 are employed at the Ford Motor Company’s Dagenham plant, compared with 40,000 during our mudlark’s East London childhood. Meanwhile, the population has grown to 212,000 (23% more than a decade previously); 51% of schoolchildren have English as their first language (c.f. UK 80%); and the Borough has the youngest demographic of all local municipalities in the UK.

On the other hand, Manchester had been the birthplace of the industrial revolution, suffering repression in the Peterloo Massacre of 1819, establishing the basis for the cooperative movement and witnessing decades of industrial decline with the loss of cotton and manufacturing industries. Today it has 2.8 million residents, served by 10 local municipalities, 10 local health bodies, one police force and one fire and rescue Service.

In both locations, he described deep-seated deficits. For Manchester, these include poor air quality, wide differences in life expectancy depending on where you live, homelessness and rough sleeping, unemployment and unpreparedness of children to start school.

Using data from Barking and Dagenham, he explained how the borough is close to bottom on 12 out of 14 measures compared with all other London boroughs, including life expectancy, educational attainment, domestic violence and abuse, and survival of new businesses. With the realisation that national government was not going to help, this begged the question for local municipal leaders: what would a thriving place look like? They responded by making a manifesto commitment to leaving ‘no-one behind’. Barking and Dagenham Together was born and over 3,000 citizens contributed.

From a leadership and governance perspective, the municipality had repurposed and restructured to transform its public services into Community Solutions, an integrated service focused on harnessing the local ecosystems of ‘community assets’ and helping residents to thrive. In parallel, it had created new, collaborative organisations to build local ecosystems for ‘inclusive growth’, for example: Be First aiming to facilitate creation of 20,000 new jobs. As a consequence, the Barking and Dagenham is now one of the fastest growing boroughs, economically, in London and is building more municipally-owned houses for rent than it is losing through sales.

For Greater Manchester, devolution of governmental functions had cultivated a new ‘platform of purpose’, the Greater Manchester Combined Authority. With an elected mayor and leaders of the ten municipalities, the city’s cooperative mindset was being rekindled with local municipal leaders cultivating ecosystems to grow capacity and capability and to orchestrate solutions organically, co-created with local interests.

A collaboration between 30 organisations is creating a Cyber Eco-system, growing local expertise and contributing to the city region’s economy.

Here also, city-wide data, co-created with service users, is being used to inform better decision-making and identify deficits in local ecosystems, including access to green spaces and safe, sustainable modes of transport.

Returning to Barking and Dagenham, he found a strong focus on evolving accessible, educational and training opportunities, including The Campus, a collaboration with Coventry University in the repurposed, former Civic Centre.

More than a century after Charles Booth mapped Life and Labour in London, our mudlark described how Barking and Dagenham is pioneering a Social Progress Index drawing on a rich variety of datasets. New insights are being generated into the principal components of diverse social ecologies – the root causes of persistent problems that undermine basic human needs, the foundations of wellbeing and access to opportunities.

Published openly, these insights are forming the basis for collaboration and participation, indicating where to locate assets, services, advice and support based on the needs of residents, helping to bind social ecologies together and holding diverse stakeholders, including municipal leaders to account.

In conclusion, our mudlark suggested that, in these two city-based examples, we have observed a ‘regime shift’ from organisation-centric, producer-led interventions to organic, and co-created solutions that facilitate the wellbeing of ecosystems. These centre on a concern for people and their wellbeing – the social ecologies in which they live and interact. Leadership is visionary but diffuse and collaborative, orchestrating healthy interactions of people and enterprises in places and complementary relationships that spawn innovation and co-create value. Focused on the whole system – political, social, economic, environmental, technological, legal and not being afraid to tackle persistent, wicked problems, these approaches work across geographical, language and cultural barriers to address issues of power and distribution. Critically, they focus on the future, what could be and ‘what’s not there’ currently, to break through previous decades of public-policy impasse to build a healthy and sustainable city ecologies.

About the Author:

Martin Ferguson is Socitm’s Director of Policy & Research.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

Unlike classic collaboration setups, open business ecosystems are not limited in their possibilities. Participating companies can combine their capabilities more quickly in order to jointly exploit new opportunities.

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This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

Flexibility and speed in cross-company collaboration is what distinguishes ecosystems from other business setups. Innovation superclusters are a special kind of ecosystem, with one additional distinctive feature: they make it simple to quickly grow innovations to profitable size. Innovators in superclusters can easily partner with corporations in joint businesses. Corporations have these capabilities. They can add the punch to grow innovative ideas into profitable operations. They have the resources, the business capabilities, the customer base and the market access that small businesses still lack.

That is the theory. In practice, corporations struggle to adapt to the speed and flexibility required in ecosystems. Their management practices and governance principles are not adequate for joint businesses. Their management practices are too slow to quickly connect with promising partners and to set up joint business operations. IP-management, risk management, financing and staffing of operations are just some examples where corporations today follow governance principles that simply leave no room for the openness, transparency and trust that is required in collaboration ecosystems. These practices are roadblocks to rapid connection with promising partners and the establishment of joint business operations. Corporations need to remove these barriers in order to participate and profit.

Companies like Haier and Amazon show the way to remove these barriers: Corporations have to internally transform their operations into a highly dynamic ecosystem, and learn to manage and govern them according to principles of adaptivity. This step is essential to develop management and governance practices that are required in highly dynamic business environments. Having these practices in place makes it much easier for them to collaborate with external partners. The practices for joint operations are already established and used every day to run existing operations. Extending them to accommodate new external partners is simple. Previous barriers for joint business operations are gone: All existing business operations run according to principles optimized for joint operations. Then, and not sooner, corporations can participate and profit from business ecosystems, quickly bringing in their corporate power to grow promising innovation into big business.

About the Author:

Janka Krings-Klebe is a Co-Founder & Managing Partner at co-shift GmbH. She works as a trainer, business coach and keynote speaker on topics around Digital Transformation, Platforms and Business Ecosystems for more innovation.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, taking place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

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The third session at the 2019 Global Drucker Forum in Vienna on “Ecosystem Insights – Rethinking the Organisation” offers early signs. Five ecosystems with creativity, platforms, and a network at their core offer a filter that separates the signals from the noise. Ecosystems stretch beyond the boundaries of traditional organisations and force leaders to adapt management to fit it to the needs of the specific context. This offers the opportunity to rethink management and organisation beyond tradition.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

Traditional management, invented early last Century based on the negative assumption about people with command and control as its dominant principles, delivers what it was designed for: Efficiency and exploitation. It is obvious, people got lost in management science and practice.

Ecosystems require a more open, innovation-oriented approach to structure, capabilities, systems, culture, change, and leadership. Digital is the trigger: Digital forces flattened companies. Teams, collaboration, and networks are the themes that emerge.

Have we reached the point where positive assumptions about people drives management?

Structure: Creativity unfolds when power leaves the room

Pixar Animation Studios has a perfect structure filter: Film making is the ultimate of freedom in creativity. Creativity is problem solving and a group effort. New ideas come through co-creation. To bring out the best in people, one has to remove power from the room: Sometimes magic happens when Ego leaves the room.

Terra Numerata maintains a platform that connects partners in consulting that was designed on the creativity argument. Co-design engages the diverse knowledge of people and offers its stakeholders more than they would have if they would operate alone.

Klöckner is a company that combines digital of the traditional with an open systems platform. As such, it invites clients and competitors to collaborate on that platform. Traditional hierarchy and connectedness coexist with communications as the means to return agility to large organisations.

With this, creativity, co-creation, and communications shape ecosystem structures rather than traditional hierarchy and power systems.

Capabilities: Start with self-responsibility as the mindset

At Pixar, good practice is contrary to the dominant control mind-set: It starts with the assumption that everyone wants to do well. People want to grow. As a consequence, there is no need for leaders to motivate.

For Tencent it is important to free people to focus on what they do best. Self-responsibility is the foundation for motivation and purpose its means.

Tupperware connects women with party holders as their ecosystem. The business model empowers women economically. It brings them confidence, connectedness, influence and economic value as otherwise they would not trust themselves.

Finally, people are seen what they are: self-responsible individuals.

Systems: Remove the fear with a design for people

For Pixar, removing fear is the answer of how to get full engagement from people in a way where leadership and systems need to establish a safe place to be: Does the least powerful person feel safe to talk? Normal values, expectations and words do not matter; it’s the action that matters. The challenge with systems is that we don’t recognise the things we don’t see. We overvalue the things we see. Systems need a design that balances the invisible with the tangible.

May I add: Design systems for the people that use them to do work.

Culture: Team, collaboration, and ownership

The Terra Numerata ecosystem model is built on transparency, trust, and collaboration. Klöckner uses collaboration tools to connect people in virtual groups that solve problems and create new ideas. At Tupperware, peer presentations encourage support and help with teams. People need to feel ownership of the company and their work. At Pixar, people have a vested interest in each other’s success. They help each other.

It takes the right systems and connected leadership to create that kind of a collaborative culture.

Change: Change systems not people

When Disney acquired Pixar, it was important to keep the studios separate. This required high confidence in the depth of management. A couple of rules were introduced to share, borrow, steal without going through traditional channels. A merger would have slowed things down. It was important to adapt systems but keep people separate.

When growth hit Tencent with the need to transform into a social network company, systems were slow due to approvals and cross-unit collaboration. To get around that, it created an ecosystem platform, broke up into 20 units, empowered small teams, reengineered bonus systems, and revenue sharing.

It obvious, changing systems is what alters the behaviours, decisions, and actions of people.

Leadership: Develop leaders and diversity

It is a general management job to develop leaders. And when it comes to leadership, the needs of people are most critical. Moreover, diversity is essential in ecosystems: As a leader, I have experience, but there are experiences that I don’t have. Accept that there are experiences that we don’t see.

Have people made it back into management?

Julian Birkinsaw who summarised the Global Drucker Forum as follows: “There are no new management ideas under the sun. What has changed is the practice of management.“

Here is what I have learned from the session: The thinking has definitely passed the tipping point to agile that separates us from the bureaucratic past. 21st Century organisations are at the cross-roads: remain stuck in power & hierarchy or turn thinking into action and create value through network relationships and people-centric leadership. The signals are strong that we have overcome traditional management based on the negative assumptions so we can put people back into management theory and practice.

About the Author:

Lukas Michel is CEO of Agility Insights AG, Switzerland, founder of the AGILITYINSIGHTS.NET, and author of 2 books “The Performance Triangle” and “Management Design”.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, which took place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

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Of the many forms of ecosystems facing disruption these days, fewer are reeling more than the large, global incumbent corporations struggling to adapt and grow. This year’s panel on “Transforming the Legacy Company” fueled a spirited debate about issues like digital disruption, shifting entrenched cultures, the role of hierarchy and command-and-control leadership, and surfacing voices of dissenting views to drive innovation and change.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

Chaired by Megan Reitz, Professor of Leadership and Dialogue at IBS, the panel of experts, all with first-hand experience changing large organizations, exchanged a wide range of perspectives on this issue. The panel’s opening poll of the audience asked what the primary obstacles were that prevented organizations not born digital from adapting to a world of ecosystems. By a large margin, 52% of the room said it was a stuck mindset and culture. Said Lisa Hershman, chief management officer of the U.S. Department of Defense, “The challenge is how to leverage and preserve aspects of the culture you need, but change policies, structures, processes to get behaviors to shift. One of the biggest traps is that we get confused by outputs, vs. outcomes, and we need to shift our views. We used to measure the success of a knee replacement surgery by the length of a suture, now we measure it by the number of days it takes to walk. If you automate bad processes, you just get bad results faster. Sometimes getting adoption means taking the old approach away from people.”

According to an Accenture survey, only 15% of the class of 2015 said they would “prefer” to work for large corporations. And what they want most in a job is interesting, challenging work (39%). More interesting than what future leaders want from work is what they want from leaders. In the 2016 Edelman Global Trust Barometer survey of more than 33,000 people around the world, only 27% of leaders were seen as behaving in open and transparent ways. More revealing, 82% of workers around the world did not trust their bosses to tell the truth.

The gap between what people want and what they are getting from legacy organizations is dangerously widening. Here’s what is blatantly clear: larger companies once considered pinnacles of career opportunity have become employers of last resort. Unless they make radical changes, people will continue exiting in droves, leaving behind only mediocre talent.

Asked Reitz, “During transformation, the intensity of change pulls our attention internally, and we take our eye off external realities and our customer. Habits about when we speak up and about what, what we stay silent about, whose voice we listen to and whose voice we discount all intensify. How do we raise contradictory voices to challenge the traditional ways legacy companies operate?”

Ralf Wintergerst, group CEO of Geisecke & Devrient, offered his view: “We now we have different forums that allow different voices to surface – quarterly reviews, innovation boards and moving the company forward, the executive team. The innovation board isn’t composed hierarchically – it’s based on who has something to say. I’m rather silent in those meetings – it’s good for me to observe and listen.”

The desire of future employees to have a voice, and to be told the truth, can’t be overstated. It’s astounding how routine deceit is in organizations. When people know they are part of a collusive environment where the truth is unwelcomed, they hide parts of themselves out of view. My 15-year longitudinal study of more than 3200 leaders revealed that large companies put in place systems that encourage withholding or distorting the truth.

Researchers Detert and Burris have found “when employees can voice their concerns freely, organizations see increased retention and stronger performance. At several financial services firms, for example, business units whose employees reported speaking up more had significantly better financial and operational results than others.” While truth telling is critical in any organization, larger organizations are perceived as more political and therefore less safe to be honest. Sheryl Sandberg, COO of Facebook and bestselling author of Lean In spoke at a conference where she said, “If you look at any company in Silicon Valley that is failing, everyone in the company knows it’s failing, knows why and how it’s failing, but no one is saying anything. If people felt safe to speak up, many organizational failures could be avoided.” One CEO client asked me to review his remarks to employees following a difficult analyst call announcing missed earnings. The remarks had been prepared by his PR department. The reasons for the missed earnings were clear and correctable. But the remarks were spun to dismiss the sting. He said to me, “I just don’t want to rub people’s noses in our failure.” I responded, “That your organization has failed is no secret. You have 36,000 people now watching to see how honest you are about it. If you minimize the significance of this, so will they. And any valuable learning to be had will be minimized along with the truth.”

Said panelist Reto Isenegger, global strategy services leader for EY Advisory, “It’s vital that we build cultures of authentic relationships and trust – true connectedness. In ecosystems, trust becomes a very important aspect of success.” That trust enables leaders to push past the culture of hoping people share their views, to making it an expectation that everyone, especially leaders, actually do.

The more light of day there is between any members of a department, or a leadership team, the more fragmented it becomes. A shared sense of collective success helps unite organizations and reinforces the expectation that “issues that affect others are my concern.” Leaders must let people know that when they have insights or concerns about challenges, they are expected to share them in a respectful and helpful way. When this doesn’t happen, the default mode for many groups becomes a “hub-and-spoke” model of operating, where the leader becomes the primary source of keeping things synchronized, and everyone else is excused to worry only about their own “spoke.” If leaders reinforce this too long, it conveys that the only issues you must be concerned with are your own.

Legacy companies don’t have to obscure into obsolete behemoths. To adapt, they must shift their cultures to be more inclusive, and inviting of differing voices and views. Ecosystems have great power, but they are fragile. The only way to ensure their strength and longevity is to strengthen the voices of all those participating in them, deepening ownership for everyone’s collective success.

About the Author:

Ron Carucci is managing partner of Navalent. He has written eight books, including the Amazon #1, Rising to Power – The Journey of Exceptional Executives and is a regular contributor to Harvard Business Review and Forbes.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, which took place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

#GPDFrapporteur

With around 1000 participants from 60 countries – including large delegations from the US and China – the global management conference debated the topic “The Power of Ecosystems” with many of the leading management thinkers and practitioners of our time. For the first time, clusters were on the agenda, through the dedicated session on “Innovation Superclusters – Trust-based Collaboration Platforms for Growth Industries”.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
#GPDF19 #ecosystems

Moderated by Daniel Rettig, Editor-in-chief ada, Handelsblatt Media Group, the speakers engaged in a dialogue around questions like “Why exactly do we need superclusters?” “What is the difference between an ecosystem and a supercluster?” “How does a leader create the relationships needed internally?”

(@Christian Rangen)

Christian Rangen, founder and CEO of Engage // Innovate and Strategy Tools, introduced the concept of “innovation superclusters”: “While regional clusters, anchored in theories of agglomeration economics and local industry analysis have been recognized since at least the late 1980s, our understanding of superclusters is just emerging. These initiatives are large, national-level innovation programs, built around specific industries to accelerate system-level innovation at scale. They have a global outlook, extend beyond national borders, and, over time, become magnets attracting in capital, talent and companies.” In one sentence, “Innovation superclusters are engines of growth, and they can unlock significant industry value creation” (read more here about the supercluster approach).

(© Christian Rangen)

As clusters and superclusters have a mission to fulfill at regional or national level in driving forward the innovation competence of the industry, Kristianne Paasche, special advisor for cluster development at Innovation Norway, brought in the policy perspective: “In order to secure future sustainable growth we need to further develop our clusters so that they become globally connected ecosystems where entrepreneurship is at the core of developing new businesses and moving our existing business into the new era of technology and global value chains. As an innovation agency our main focus is to support such a development with knowledge, network and financial support.”

©Kristianne Pasche

Janka Krings-Klebe, co-founder and managing partner at co-shift GmbH, addressed the opportunities and practical challenges that corporations have in open ecosystems: “Flexibility and speed in cross-company collaboration is what distinguishes ecosystems from other business setups. In innovation superclusters, corporations can add the punch to quickly grow innovative ideas into profitable operations. In practice, corporations struggle to adapt to the speed and flexibility required in ecosystems. Their management practices and governance principles are not adequate for joint businesses. To remove these barriers, corporations have to internally transform their operations into a highly dynamic ecosystem and learn to manage and govern them according to principles of adaptivity, customer needs and value added” (more about the corporate challenges here.)

(© co-shift GmbH)

The European Cluster Collaboration Platform, an initiative funded by the European Commission under the COSME programme, and its purpose and services as “the platform connecting clusters” were introduced by Lucia Seel, communication and content manager. The sole entity of its kind in the world, the platform has attracted more than 1000 cluster organisations from Europe and beyond to use it as a hub for finding partners, initiating collaboration and rapidly accessing complex cluster-relevant information (see the mapping functionality for cluster organisations and for the regional ecosystem scoreboard) in a community-like ecosystem. She pointed out the huge difference between looking at individual clusters/ecosystems in isolation or as part of a larger grouping: only as part of interconnected networks can clusters unleash their full power.

(© Sarah Zareian)

Another session closely related to the cluster approach was that on “Managing Innovation in Ecosystems”, chaired by Philippe Dewost, co-founder of Wanadoo and author of the 2013 report to French Prime Minister on how to make France’s innovation ecosystems more attractive to foreign investors — the report sparked the government-supported La French Tech. Although not mentioned as such, cluster organisations appeared as instrumental in managing the collaborative processes within ecosystems – Cambridge professor Peter Williamson referred to them as “orchestrators of the ecosystem”. Noboru Konno, chairman of the Japan Innovation Network and president of the Future Center Alliance Japan, talked about the Japanese approach of cluster-like ecosystems. Dewost described the “time paradox” induced by the collision of very different time horizons and paces across startups (weeks), corporations (quarters), boards and policy makers (five years) and venture-capital investors (10 years), which called for creative intra-ecosystem orchestration.

(©GPDF/Gerry Rohrmoser)

The whole conference had at heart – in direct or indirect ways – the urgent problems the world is facing. In his blog on the “ecosystem of wicked problems”, Christian Sarkar reminded us that humanity faces a growing number of existential issues; to confront them, he challenged the audience to start collaborating on a purpose platform that brings together business and public institutions to address the root causes of society’s biggest problems.

A subject for urgent debate at next year’s Drucker Forum on the theme “Leadership everywhere”, perhaps?

About the Author:

Lucia Seel is communication and content manager of the European Cluster Collaboration Platform, member of the European Cluster Expert Group of the European Commission (DG GROW), networker, moderator, trainer and speaker with more than 25 years of experience in cluster development and international business.

This article is one in the Drucker Forum “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems”, which took place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

#GPDFrapporteur