This was the year everything changed. A tiny virus, arguably not even a life form, had a bigger global economic impact than the banking collapses a decade earlier. Ways of working have been transformed. Remote working has gone from being a fringe activity mostly confined to globally dispersed teams, to being accepted as the norm across whole sections of the economy. Sectors such as hospitality and aviation have suffered sharp falls in business, furloughed staff and redundancies.

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This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.
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Adjusting to this harsh reality is inevitable, but leaders need to recognize that there will be opportunities as well. When preparing for recovery, they have a choice: continue to slash costs and neglect individuals, or seize the opportunity to create an inspirational enterprise with humane leadership.

Responses by employers seem to be sharply polarized. Some are going to great lengths to make staff welfare a priority. Regrettably, others are managing only for the short-term – cutting jobs and costs, maximizing government support. Smart employers know that to look after staff in a crisis is to create a powerful asset for recovery. They understand the importance of emotional as well as economic recovery – and that the two are intimately linked. Team members who were supported by their leaders through a period of insecurity and fear will redouble their efforts once recovery begins. This is the essence of humane leadership.

There is urgency. The business world is crying out for courageous and compassionate leadership, to guide us out of the current state of fear. We need to create hope. For many, this challenge is intuitive and obvious – the challenge lies in understanding how our every behaviour affects this shift. Not all leaders possess the self-awareness necessary.

The behaviour of a leadership team has a ripple effect, felt first by the employee population and then more widely. This can be demonstrated both through employee engagement surveys and at the level of neuroscience. Our conduct and emotions are all infectious to the people around us. If we prioritize fair treatment, clear communication and employee welfare, we build a healthy culture that becomes a powerful commercial asset. If we prioritize cost-cutting, neglect of individuals and short-term targets, then commitment will dip, potentially imperilling any recovery. Fear can cause paralysis.

In my  consulting work helping leaders through this phase, I use what I call ‘the 8Cs Model of Humane Leadership’ to prioritize key behaviours that my research over the past 20 years clearly shows to be beneficial. Among these are three crucial attributes: Compassion, Creativity and Candour. Taking each in turn:

Compassion – At a time of heightened workforce fears, it is essential that leaders seek to damp down rather than accentuate anxiety. This does not in any way prevent business leaders from taking tough decisions. Showing compassion is not only the responsible thing to do – it helps build a bank of commitment and energy for the future.

Creativity – The economic world has changed, and some features may be irreversible. We need to reinvent ways of doing business accordingly. Are there opportunities as well as threats in this ongoing crisis? How can businesses reshape themselves to take advantage?

Candour – Few things damage workforce enthusiasm more surely than being kept in the dark or misled about future prospects by a business’s leaders. It is critical to be honest and clear in communication, and to chart a clear way forward, while avoiding information overload.

By supporting individuals during a time of immense insecurity, compassion, creativity and candour also help to rebuild organizational health and resilience for the future. This is a leader’s duty. Normally, if you say ‘Humanity is at a crossroads’, it can sound like hyperbole. In these strange times, it may not be. We have to choose the right path.

About the author:
Vlatka Hlupic, author of The Management Shift and Humane Capital, is Professor of Leadership and Organizational Transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting Ltd.

This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.
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Much has been written and discussed about the pace of technological change. More than replacing routine tasks, artificial intelligence can transform business processes, customer service and the way businesses are set up and run. Blockchain technology, for example, is being used for supply chains not only to improve efficiency, but also transparency. Everyone involved has the same information, which cannot be erased.

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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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Blockchain technology can be used by companies to ensure ethical sourcing – as de Beers does in diamonds. This point, however, underlines that in itself technology is values-free. It will not improve quality of life for people – ultimately, the goal of any legitimate business – unless directed to by humans. At a time of mounting ecological crisis, there is much potential for technology to sustain and protect the precious resources on which we all rely. Advances include renewable energy sources and more efficient agriculture. The large-scale climate strikes of 2019 ought to herald acceleration of such applications: but implementation depends crucially on whether there is a human ecosystem with the social and environmental consciousness to require that technology delivers these benefits. Pro-democracy protesters use digital media to engage with each other and organize protests – but extreme groups use it to spread hatred.

There are ethical dilemmas emerging in developments that seek to merge technology with the human being: that is, to profoundly alter the human ecology. Elon Musk’s Neuralink initiative, aimed at exploring the possibility of implanting a chip in the human brain, may lead to novel cures for blindness or dementia – but in the capacity for the brain to link in real time to computers, might there be moral hazards? If an individual with an implanted chip were to commit a crime, might the chip manufacturer be held partly responsible? There is a wider danger in seeing the human being as a processor of information only, overlooking the importance of kindness, generosity, empathy and love.

In discussion about technological advances there is a tendency to forget, or at least downplay, the fact that digital systems are designed and managed by people, with the intention of serving people: the human ecosystem at the heart of the digital one. Nothing functions effectively without human trust. A recent GPDF19 blog emphasized the importance of trust in relation to customers, describing how online services are used by fraudsters as well as honest businesses.

Trust is of equal importance in respect to employees, and the way in which workplaces are designed and run. My research for the Management Shift has shown that workplaces with the highest levels of human connectivity are more effective than others, often to a dramatic degree. Moreover, they tend to deliver the strongest financial performance too. So there isn’t a choice between head and heart. This is a lesson learned by leading-edge digital as well as traditional firms, as evidenced in the profiles of 35 high-engagement, high-performance businesses in my 2018 book Humane Capital. One of them is the UK-based digital marketing agency Propellernet. It is a human-centred workplace, with its hiring, management and reward policies all geared towards creating a great environment for people. The result is that talented people queue up to join, the brand is strengthened, and the company continues to expand..

The founder Jack Hubbard, almost instinctively “gets” a central point: the quality of the digital ecosystem depends entirely upon the quality of the human one.

About the Author:

Vlatka Hlupic is Professor of Leadership and Organizational Transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting. Her latest book is Humane Capital (1918) @VlatkaHlupic

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

Vlatka Hlupic is professor of management and business at the University of Westminster in London. She’s also a consultant and author of the book “The Management Shift”. She tells Peter Day how companies can discover systematic ways of building humane organisations fit for innovation and prosperity in the 21st century.

And it is increasingly recognized that high levels of entrepreneurship are needed for survival in the wider economy. Steve Denning, in his blog in March, made a convincing case that the entrepreneurial firms are outperforming the firms still wedded to the practice of ‘maximizing shareholder value’ and narrow financial measures[1].

But what does an entrepreneurial way of working actually entail, and how can businesses, large and small, established and new, nurture and sustain it?

One thing is clear; having an innovative set-up doesn’t guarantee an entrepreneurial culture. In September, for example, the fast food service UberEats was affected by a protest by its couriers, over progressive erosion of their hourly rate[2].

All the evidence linking high levels of motivation and leadership ability to inspire high performance is every bit as relevant in the gig economy as elsewhere, because you are still dealing with people. The good news is that there is now a substantial body of evidence demonstrating how to build and sustain an innovative culture. What the research tells us is that the quality of leadership is central. And it can best be improved when the enterprise is understood as a community, based on relationships. It is not a set of resources, which may be the assumption in a corporation; nor is it just a set of transactions, which may be the assumption in the gig economy.

The concept of ‘Levels’ of management maturity, organizational climate and performance (Figure 1), from the highly dysfunctional Level 1, to the unbounded and passionate Level 5, is firmly backed by my research[3]. At the highest Levels of operation, entrepreneurial ways of operating emerge naturally, because the whole purpose is to ensure that teams of people are empowered to think of new services, new technologies, new ways of working, within a collaborative environment, to help the customer.

A particularly significant change comes from moving from an orderly but uninspired culture, or Level 3, to high engagement at Level 4.

At each of the 5 Levels of management maturity and organisational culture, there is a different drive for entrepreneurial mindset/spirit. At Level 1 entrepreneurial thinking is almost non-existent, and at Level 2 it is random and sporadic. At Level 3 it is compliant in nature, as employees attempt entrepreneurial tasks only when they are asked to do so by their manager. Then at Level 4, entrepreneurial thinking becomes embedded in organisational culture. At this Level, employees have autonomy to experiment with new ideas, they can make decisions on the basis of their knowledge rather than a formal position in organizational hierarchy and they collaborate with diverse teams.

Finally, at Level 5 entrepreneurial mindset becomes intrinsic, and it gets embedded sub-consciously in employees as there are no limits in thinking about what can be achieved.

Figure 1: Management maturity and entrepreneurial mindset

Facilitating the shift from Level 3 to Level 4 is an approach that often results in dramatic transformations. What we have learned is that moving up the Levels is typically not a straightforward, linear process. Above all, it is multi-dimensional.

When trying to rise above ‘command and control’, or Level 3, it is necessary to handle the transition carefully, with sufficient preparation for more autonomous ways of working.

There is a need to monitor and nurture attitudes as well as abilities and the organizational set-up. Mindsets are crucial. You cannot produce an entrepreneurial climate with ‘command and control’ mindsets, in which people are looking for a rule-book rather than new opportunities; or if unfairness emerges in working arrangements, as occurred at UberEats.

The discipline of continually measuring workplace climate provides an early warning sign of potential problems. Ideally the monitoring is in different dimensions; and is not simply a gauge of the overall climate. Data on engagement indicates the level of passion or enthusiasm within a team.

Organizations need leaders who understand the connection between the causes and the effects of culture; and the immense value of operating at the higher Levels. Such leaders encourage entrepreneurship, but allied to the common good. Discipline is maintained through a system of accountability, honest communication, and adherence to the organization’s positive values.

Once a substantial body of organizational leaders adopt this approach, and the practices to support it, the change is transformational; not only for the organization and its customers, but for wider society, as thriving enterprises become more sustainable. Peter Drucker once commented that an organization is one of the most noble creations for the prosperity of society. We now have much practical experience and knowledge to help us implement this far-sighted vision.

About the author:

Professor Vlatka Hlupic is an international award-winning thought leader, an author of “The Management Shift” book and founder of The Management Shift Consulting Ltd and Drucker Society London.
[1] How Close Are We To An Entrepreneurial Society?, Steve Denning Drucker Blog 28 March 2016, https://www.druckerforum.org/blog/?p=1155
[2] When Your Boss is an Algorithm, FT 8 September 2016, https://www.ft.com/content/88fdc58e-754f-11e6-b60a-de4532d5ea35
[3] Vlatka Hlupic: How to Harness the Power of People and Transform Your Organization for Sustainable Success, Palgrave Macmillan, Basingstoke, October 2014.

But has futurism been here before? In the 1950s and 1960s in western Europe, there were projections of what the world would look like by the Year 2000 (remember that?), and plans based on such projections were not always effective. The new inventions of the day, principally in the realm of transport, dominated thinking. So we had architects’ drawings of super-highways, urban roads, space-rockets and smaller flying vehicles.

By the early 21st Century, however, it was clear that the dominance of technology in such planning had caused harm. Communities had been torn apart by urban motorways. In some cities exhaust fumes posed a direct threat to human health, to say nothing of carbon emissions and climate change. Many cities are now reversing those errors: introducing pedestrianised zones, creating more green spaces, banning cars – trying to let communities breathe again. Such initiatives do not only improve health and the environment, but tend to boost economic development and reduce crime.

Are we making the same mistake again in the 21st Century? Are too many plans based around what technology can do, rather than what people need?

A truly radical idea to help the future work for us is for research on technology, and on the human community, to be much more closely coordinated. This should be based on unifying concepts that technology ought to serve people, while observing timeless ethical principles of: first, do no harm; never use people as a means to and end, and so on.

An examination of the evidence base for effective human organizations and other communities points clearly to the need for a step change improvement in our leadership and management. As I have set out in my book The Management Shift, this can be summarized as a shift:

• From a controlling mindset to an empowering one,
• From setting rules to establishing principles,
• From issuing instructions to creating teams,
• From overseeing transactions to building alliances,
• From a focus on short-term profits to serving all stakeholders.

Collectively, business schools and the wider management community have not fully modernized the business model, as I wrote in an earlier blog. There is still the cultural bias of referring to people as ‘resources’ and to people management as ‘the soft stuff’, as though organizations do not comprise people. Application of the rich evidence base on maximizing employee engagement and collective intelligence is applied patchily, at best. The most dynamic employers create meaningful careers for staff, reward them well, and pay attention to collective morale and engagement. Not only do such employers provide a more human working environment, they also tend to perform better – including on financial measures.

Slow implementation of such research findings opens up the risk that technology will be badly implemented.  Much every-day experience often bears this out. For example, customer service automation is often badly implemented, creating a short and inappropriate list of options for the frustrated consumer.

We often have intelligent IT, but unintelligent organizational design. The separate ‘silos’ of the conventional corporation mean that technologists, the personnel function, customer service managers and marketing department are at arm’s length apart from each other – or even further. If website programmers are not communicating well with product designers and the marketing folk, preferably co-creating technology, services and products together; and if morale in the workplace is poor, the customer experience is unlikely to be thrilling.

Meanwhile, an ever-present fear is that ‘Big Data’ will rapidly become ‘Big Brother’ – snooping on us as workers and consumers and compromising our privacy, seeking to trick the unwary customer, rather than engage them in a lasting relationship. The surest defence against this is to maintain a relentless and principled commitment to nurturing the human community, and honouring timeless ethical principles.

A lesson from corporate scandals – LIBOR-rigging, horsemeat passed off as beef, illegal phone-tapping – is the primacy of ethical conduct. It is a glaring omission that management has never developed its own ethical code, similar to doctors’ Hippocratic Oath. It may be impractical to have everyone with managerial responsibility formally registered, but a move towards a more formal statement of intent to avoid fraud, deception, cruelty, exploitation and so on would be a liberating initiative – especially as we see how such enlightened practice actually helps the business perform better.

If technology is mis-used, through snooping on staff and customers, there is a risk of backlash against all technology, and a rise in people opting out of social media altogether.

What would be even more revolutionary than Big Data, etc. would be a Copernican shift in management thinking, in the spirit of Peter Drucker and other enlightened thinkers. This would replace the current misanthropic obsession with company structure and data, with a philosophy based on an understanding of real human communities, and how businesses can profit by serving them.

This philosophy will not only get the best out of people, it will get the best out of technology. Along with the urban motorways of the 20th Century, we need to ditch the cold, hierarchical corporation of silos, separation and obedience.

About the author:

Vlatka Hlupic is Professor of Business and Management at Westminster University, CEO of the Drucker Society London has advised major international organisations and is a management consultant.

Though he approved of all these developments, he struck a cautionary note:

“Does this flurry of activity add up to more than a bunch of scattered conferences and white papers? Are we actually witnessing the beginnings of a social movement?”

This raises a challenge for those of us who write about the commercial and social benefits of shared value/management shift/conscious capitalism and so on. Do we constitute a movement? Or are we just a loose connection of academics and consultants who communicate principally with one another?

We have an impressive evidence base. The weaknesses of short-termism, and the strength of the case for an alternative, were discussed by the Drucker Institute just over a year ago on this blog. I can demonstrate to the most sceptical audience that returns on investment and corporate longevity are improved by making the shift to an empowering style of leadership, where employees throughout the organization are rightly seen as the source of all value.

But I have come to the conclusion, after around 20 years of research and related work in this field, that we cannot rely on good evidence seeping into the corporate world. We have to think more deeply and act more persuasively.

Think more deeply, because it’s not enough just to condemn speculative activity, corporate short-termism and management by the bottom line; we have to understand the cultural narratives that sustain these ways of operating. And act more persuasively because, given that these practices are supported by entrenched beliefs, we have to win over hearts and minds, not just present evidence and write papers.

Rick mentioned the Global Drucker Forum. At the most recent event, held in Vienna in November 2014, I got talking to Gary Hamel and others. It was the time of the launch of my own book The Management Shift. I floated the idea of a petition and manifesto for enlightened management. I am delighted to report that Gary enthusiastically supported the idea, and promised to support and publicize it.

Since then, in consultation with other thinkers, I have drafted a Petition and Manifesto in two parts – one for employers and business schools, the other for Government (initially, the UK Government).

Of course, there isn’t likely to be a single policy change that can have a dramatic effect.

At the level of an organization, my research shows that the best management teams attend to all key aspects of management. I have distilled this into six broad dimensions, hence my ‘6 Box Leadership Model’. Three relate to people: Individuals, Relationships and Culture. Three relate to processes: Strategy, Systems and Resources. For more details, go to the website: http://www.themanagementshift.com/.

The management shift involves different mindsets and behaviours as well as strategies and policies. It follows, therefore, that a social movement for better management also involves many dimensions, and engages people and institutions emotionally as well as intellectually.

In our Manifesto for Humanizing Management, we have recommended six dimensions of reform:

1. A company is better understood as a dynamic, behavioural entity than as a structure.
2. Management can now move towards being more solidly evidence-based.
3. The quarterly accounting statement needs supplementing with a range of quantitative and qualitative measures at least equal in priority.
4. Careful selection and education of managers at every level is a priority for high-performing organizations.
5. Employers that define and articulate their purpose and values, and seek to uphold them, have a greater chance of becoming high-performing and resilient.
6. In high-performing organizations, innovation is understood as being the responsibility of the whole organization, not just the research & development department.

If you would like to know more about this fledgling movement, please contact me at: vlatka@themanagementshift.com. Do let me know your views about how we can best publicize this message and begin to effect lasting positive change.

—

A blog following the Global Peter Drucker Forum 2014. An opportunity to share experiences and learn from one another in the context of The Great Transformation.

There is a hope that we can get out of the current economic crisis by embracing emerging management practices based on collaboration, autonomy and decentralization (which were all promoted by Peter Drucker), and by changing a mindset from the one that focuses on personal gratification to another that seeks to find a deeper meaning of work that is greater than any individual aspirations, and that is focused on making a positive difference for individuals, organisations and society.

In my own endeavour to make this world a better place, I have founded the Drucker Society London, one of the twenty Drucker Societies operating around the world. The aim of the Drucker Society London is to promote responsible management practices based on Peter Drucker’s ideas. One of our core activities is to teach young people self-management and entrepreneurial skills based on the Drucker’s Future Leaders Programme. I am delighted that we plan to teach workshops based on this Programme to WBS undergraduate students as a part of Employability module sometime next year.

If anyone would like to join the Drucker Society London and help us to make a difference for the future generations please contact me on hlupicv@wmin.ac.uk.
Professor Vlatka Hlupic

This post was first published on http://blog.business.westminster.ac.uk