Moderator
Margaret Heffernan Entrepreneur; Professor of Practice, University of Bath School of Management, England
Speakers
Paul J. H. Schoemaker Educator, researcher and entrepreneur in strategic management, decision making, innovation and leadership
Tom Davenport Distinguished Professor of Information Technology and Management, Babson College; Senior Advisor to Deloitte U.S.
Gerd Gigerenzer Director of the Harding Center for Risk Literacy, University of Potsdam
John Kay Economist; former Chair at LSE, LBS and Oxford

In intensely competitive markets, many decision processes are being sped up or handed over to number-crunching machines. Where should we still be deeply deliberative? Four excellent panellists ably moderated by Margaret Heffernan were invited to discuss this very relevant topic.

Margaret Heffernan introduced the topic by stating that we know that life is always uncertain, but management wants to obliterate uncertainty which it tries to do by forecasting, planning, and executing. But this comes with no certainty.
Managers want to maintain the status quo but have yet to realise that the status quo is uncertainty. She goes on to say it is also at the edges of the known that opportunities exist.

What do we think we know?

Paul J.H. Schoemaker Whether it is uncertainty, risk, ambiguity or ignorance depends on what we think or think we know. He introduced Shell as an example, in particular their engineering, a lot of technocrats, but who embrace humility and what they don’t know as their way of dealing with uncertainty. It’s recognised that people tend to be overconfident in their predictive abilities, show biases and pretend they know. A big difference is how lay people think what is uncertain and what they perceive as risk, depending on how well they understand it. A focus might move to what could happen but without too much detail, so a series of possible futures, rather than one fixed one.

Where algorithms work and where they don’t

It’s wrong to assume that artificial intelligence will overpower our human intelligence, says Gerd Gigerenzer.  Algorithms work in stable, well-defined environments but don’t work well when human behaviour interacts. He adds that risk is a situation when we know all possibilities; uncertainty is where we normally live. Life is not a simple risk based issue, like the Lotto where you can calculate the chances. Risk based scenarios inhibit innovation and discovery. Most economic models are constructed on this basis. Most behavioural economists also evaluate human judgement along these lines, and deviations from the model are labelled as biases.

Tools to deal with uncertainty

He proposes some tools to deal with uncertainty. Scenario planning is a possibility but equally difficult in conditions of uncertainty, as it is based on the past. Heuristics is another tool, which ignores the past and complex models and looks for the variables powerful enough to give some clue towards the future. If there is risk then use models and big data but if the situation is one of uncertainty, then he greater reliance on recent data and heuristics.
In this writer’s experience SMEs are particularly good at this. They run heuristics as a matter of course as they tend not to have enough big data or resources. Often, they are running heuristics unknowingly which produces its own problems, but overall, they are more flexible, agile, and resilient than larger businesses. This is partly based on their ability to make fast decisions, and are therefore more sustainable as a business. For big businesses, the Rendanheyi and similar models may offer some solutions.

Risk or uncertainty?

The question has to be is this a risk or is it an uncertainty. Gigerenzer worked with the Bank of England on simple decision trees to predict bank failures using heuristics rather than the risk models of ever-increasing complexity in Basel II and Basel III  (the international banking regulatory accords) which failed to predict failures. His view is that complexity can be a self defence mechanism whereas a fast and frugal approach generates more transparency. So much so that a single data point can be better than big data.

AI’s role in uncertainty

Tom Davenport, steeped in AI, argues that it can play a role in uncertainty. It is acknowledged that AI is not well suited to decision making under uncertainty, because machine learning is good at tactical repetitive decisions based on big data but has little use where human intuition is involved. Tom is not comfortable just using human intuition but is frustrated by a lot of scenario planning, as too many human interventions make the model too subjective. He’s comfortable using AI and heuristics together on the assumption that the rules part produces some structure to the debate. Anticipating the future still has some AI validity to give us alerts on a large scale, where the human element may not have enough scope or data.  But he still acknowledges that a human decision based on informed intuition is necessary to interpret the data outputs.

Over reliance on behavioural economics

John Kay is not a big fan of behavioural economics as he argues it’s difficult to predict the future or attach some probability when most issues are unique, and can be vague or ambiguous, some even after the event. His alternative is not unaided intuition but decisions based on judgement and experience. Behavioural economics has its strengths in determining what people actually do rather than producing models on what a rational actor ought to do. But it has morphed into attempting to determine how the world works and if people don’t conform to the model, it is the fault of the people who need to be knocked into shape so that the model works. The mistakes from BE are that most are unique problems, such that no model will fit. Our decisions, so called mistakes, are in fact adaptive responses to a changing environment and are not often fully understood, even after the event. He suggests a more useful approach would be to recognise that there are mainly vague and uncertain outcomes. Therefore, do not attempt to produce a prediction of the future, but identify risks that construct narratives which are robust and resilient to minimise issues and maximise outcomes.

Summary

Use an adaptive toolbox.

Check heuristics by having a diverse group which should reduce biases.

Use heuristics, AI, and scenario planning appropriately, recognising that uncertainty is certain, and it is where innovation and opportunities arise.

Where there is a critical issue, buffers (e.g additional stock etc) may be needed, so moving away from Just-in-Time management

We need to feel a little less comfortable in expecting more of the same. Remember that models are only guides to think about the present and future, not strict representations of what will happen. Emphasising optimisation  and efficiency, the usual role of management, may not be helpful as the thinking is too brittle. A more modular system with some redundancy built in should give businesses better resilience. An efficient business has built in risks, and there is little robustness in general management thinking. (Resilient being able to recover from a problem, robust means avoiding the problem).

Last questions

Does building a robust business mean that it has less agility? Should we aim for more agility and resilience instead? Should this be a binary question, or perhaps should some parts of the business be robust, but less agile, and others resilient but more agile?

About the Author:
Nick Hixson is an entrepreneur, business enabler based in the South of England, and Drucker Associate 

Session 2 – High Performance in the Digital Age:

What are the metrics organizations should be watching most closely?

Moderator: Jean-Francois Manzoni, President IMD

Speakers: Adrian Wooldridge, Political editor and ‘Bagehot’ columnist, The Economist

Julian Nida-Rümelin, Professor for Philosophy and Political Theory, Ludwig-Maximilians University of Munich

Stephanie Chasserio, associate Professor, Skema Business School

Andeas Rosenfelder, Head of feature section, Die Welt/Welt am Sonntag.

Digitalization fundamentally changes the nature of work and leadership. That’s a huge advantage for those people that get it. But it also challenges human responsibility: Remote work has many benefits, but it comes with human side-effects. Digital lowers the cost of information searches and extends its reach, but instant feedback challenges critical reflection.

One is tempted to suggest that digital needs work on the system.

Differences between Europe and Asia and the US

In Europe, the digital transformation is more human centred than perhaps in China or Silicon Valley. This allows humans to be empowered, not weakened. In line with humanistic self-responsibility, we are responsible for what happens with us as we use digital tools. Software engineers, for example, need to be aware of their responsibility. Ethical processes need to be embedded in agile project structures.

Ideologies of digital

 Digital development follows two ideologies. The first assumes that autonomous software systems are themselves actors and become agents with attached mental states – not now, but in the future. That’s a threat. How do we treat these new agents with mental states?

Secondly, the claim is that the human brain is no different than an algorithmically governed machine. This means that we are not free and cannot be responsible, so we are no different from machines. That’s scary and a step backwards from the benefits of Humanism, when the state and church separated and self-responsibility was born. Human development that leads to a more humane future needs structures in place that don’t muddle responsibility between humans and machines. We need structures in which we can realize human responsibility, and public responsibility for digital communications infrastructure. It cannot be that a few monopolists control the entire infrastructure.

Work life balance and remote work

We have long wanted a good work-life balance. Remote work presented itself as a great solution. Now, for the last two years, many people are in remote work and experience many bad side effects. Digital work is intensive. People add tasks with no breaks in between. It’s called intensification. More productive time with more cognitive workload. People are tired. And some managers are not compatible with distance management. Control and support become an unhealthy mix. In fact, some people overcompensate for the lack of social time with more meetings than before Covid. Women are particularly challenged to manage children, household, and work duties at home. The result is increased worry, stress, anger and sadness. We need to find a balance between remote and onsite work. People want to come back to work onsite but not entirely. Early regulation, for example in France, goes for a balanced combination – remote and face-to-face time. That seems to be accepted by most organizations.

Meritocracy

Meritocracy is how we got from low performance to high performance societies. The 19^th century revolutions replaced lineage, hereditary ascription, and venality with achievement, promise, competence. Meritocracy is a very precious thing. But it can be destroyed. Paradoxically, knowledge workers should be allocated work on basis of merit. But, looking across knowledge workforces, such as, NY Times, Google, or Facebook, the vocal ideologists views are “Merit is a sham, individual ability a fiction, jobs should be allocated on the basis of ascribed characteristics such as gender, ethnicity, or sexual preferences”. A huge revolt is taking place within the digital knowledge workforce, at the heart of the digital economy. Individual performance competes with the promotion of certain groups of people. This happens at a time in the Western economy when China is rediscovering its meritocratic traditions. We are rejecting the tool of high performance at the time when others reinstall it. That helps to shift power away from the west to the east.

Digital journalists and volume metrics

The world as a journalist has become digital. Not only the writing itself but with instant feedback about the writing. Paradoxically, we observe an extreme, accelerated culture transformation (digital high performance) and simultaneously experience the collapse of space and time. But, at the same time, cultural institutions need time to develop. We are moving into a world where space and time don’t exist anymore. Reflection on this is very interesting but the lifestyle of a culture journalist has changed completely. From reading newspapers in coffee shops to a constant flow of meetings, chats, real time metrics on reading and conversion rates. Digital real time economics lead to constant information, algorithms in charge, and feedback to take control. That spells the end of critical journalism.

It looks as if you are a high-performance journalist if you have a lot of clicks. And a high-performance academic if you have a lot of publications. Both may be destroying the very essence of the calling, to explain the world and advance knowledge. That’s just satisfying the beast, which is the wrong measurement. We need to get this under control.

Digital revolution has been hijacked

The digital revolution was meant to make us more human, to interact, globally, to destroy large institutions and so free ourselves.. Today, we find a structure that is only helpful for commercial interest, with monopolized markets in the digital sector. Are we freer today? It comes down to the question of who is the master and who the servant. We can be the masters when we act as individuals and as a society.

Digital needs work on the system. We, the people, need to be the masters – not the servants of digital technologies. As individuals we need to be more disciplined. As society, we need to work on regulation. As organizations, we can reinvent performance management. Perhaps, the attitude about performance and metrics needs a transformation.

Personally, I love my golf, and my digital gadgets that offer me feedback. Golf is technically very difficult. Reaching high performance takes time, dedication, and effort. I have gone that way and learned to develop high awareness. I focus my attention on one thing at the time because that enables my body to learn fast. My tech device offers me the feedback I need on one key metric. I use that feedback to raise my awareness and focus my attention. That combination pays off. I have used a digital metric to become better without goals, incentives, or pressure It’s all about fun and the performance that matters to me, the individual.

May I suggest that today’s working world should play more golf to get rid of traditional control and interfering managerial systems and so embrace performance as a joyful side product of what we do. My advice is to decentralize performance, its measurement and management to people that feel responsible at the client front and use digital to support fast learning.

About the Author:

Lukas Michel is a 5x Author, CEO and founder of the global AGILITYINSIGHTS network of management experts.

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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What have we learned at the Forum that is most exciting, concerning, surprising?

Moderator
Isabella Mader CEO, Excellence Institute

Conference chair

Eduardo P. Braun

Commentators
Andreas Rosenfelder Head of feature section, Die Welt/Welt am Sonntag
Ade McCormack Digital leadership expert
Stefan Pickl Professor; Chair for Operations Research, Department of Computer Science, Bundeswehr University Munich
Gabriela Allmi Director Europe, Higher Education, Harvard Business School Publishing France SAS

“The conference was very inspiring.”

“What did people say?”

This is the sobering moment to admit: in fact we don’t remember most of it.

One of the recurring themes at the Drucker Forum is learning. How do we make sure we don’t forget (Maud Bailly)? How do we create new knowledge (John Hagel)? How to ensure implementation?

The Post Scriptum session of the Drucker Forum is such an exercise. Let’s debrief our own mind, jot down notes, reflect and revisit, as we face up to the new challenges ahead.

During the unconference, one of the questions was “How can the Drucker Forum make a difference?” Maybe it is in each of us making a difference when we leave the Forum and tackle our challenges where we are in the world?

Now, what did we learn from this year’s Drucker Forum?

Gabriela Allmi recounted the most moving moments – because these are the things that everyone will remember. The conference started with “Vive la difference!” and ended with “Viva la vida” by Coldplay. Those two sentences can be a good synthesis of what makes us human. Another aspect of being human is to keep on asking questions. Let’s try to answer the question “What is growth?” – when applied to ourselves?

What is the human aspect of digital humanism? Andreas Rosenfelder argued that humans can learn from paradoxes, something machines normally don’t. On one panel with differing views about high performance in the digital age, Adrian Wooldridge suggested learning from low-performance cultures, where talent was the main value and not performance. A high-achievement culture learning from a low-performance culture is just such a creative use of paradox. Another example: escapism. Chafing at the confinement of the real world, humans first “emigrated” to the digital realm because we like to be autonomous subjects. During the Covid crisis, the escapist urge is to stop living so much in the digital world and migrate back to the analogue one. The Drucker Forum is one such perfect escape: as more than one person put it, meeting in real life adds something to ideas that wouldn’t emerge from an audience sitting in a videoconference and participating remotely.

Conference chair Eduardo Braun blended the first ideas together, urging us to keep asking questions but to refrain from perfectionism: “Don’t try to ask the best question. Let’s just have many, the best ones will stand out anyway.”

Ade McCormack argued that today’s uncertainty and volatility are simply a warm-up for what is to come. The synthetic certainty of the industrial era is followed by a world of hyper-uncertainty that forces us to redefine talent to what robots can’t do and to rethink performance, since a faster, cheaper, smarter Titanic will still sink. Performance in hyper-uncertainty likely points to community and collaboration.

Authenticity became almost an imperative, with the danger that our determination to live our perfect self creates microaggressions for others. Don’t confuse authenticity with selfishness, warned McCormack: consider a “graceful organization” instead, practicing respect.

Immanuel Kant contributed the categorical imperative while looking for the universal answer to the lack of respect he saw in society. Stefan Pickl argued that a universal answer may not be needed because there is no single universal solution for any given complex situation. It may be better to ask for different questions and answers and individual perspectives to make sure we learn in the spirit of Peter Drucker.

The Forum discussions kept coming back to ethics. But, as Isabella Mader asked: which ethics? The European notion of Kantian ethics and the categorical imperative (of applied reciprocity)? A kinship ethic as we see in most of Asia and Africa, or a utilitarian one like in the US? Or some other version? How will the world agree which one to use as the foundational principle for ethics in artificial intelligence (AI)? Bringing about a consensus and negotiating international treaties can take decades – so let’s start them now.

A contribution from the audience came from Robin Heilig, who was surprised and happy that leaders were talking about the importance of love and passion. As a civil servant his friends had warned him to be careful, to be cautious, to moderate his passion. His takeaway from the Forum was that he would continue not to be cautious with his passion, saying that this had served him well for the past 20 years.

How can we ensure that learnings are implemented?

Allowing for vulnerability and love may indeed ensure that whatever we do will be done well, Gabriela Allmi suggested. “Viva la vida”, as the re-telling of the French Revolution, but this time from the heart, could be the way forward in leadership.

McCormack recommended viewing one’s career as a path to self-mastery. Curiosity was what drew our ancestors out of their caves; the same quality will be key to our progress now.

Allow for contradiction, escapes and human (!) autonomy. Andreas Rosenfelder: “Machines can never be free, only humans can. Let’s keep that in mind.”

Eduardo Braun first heard about loving your colleagues at work in a conversation with Herb Kelleher: “In that sense loving is helping others become the best version of themselves.”

Aligning with Gabriela Allmi, Stefan Pickl then revised his Forum synthesis from the dialectic principle to “Viva la vida”. As performed by Coldplay at the group’s famous Sao Paulo concert in 2017, the song featured a breathtaking lightshow created by thousands of glowing mobile devices held up by the audience – a stunning visual representation of collective emotional spirit. A similar spirit emerged from the Global Peter Drucker Forum 2021 in Vienna as participants sang lustily along to “Viva la vida”.

The much-missed Clayton Christensen enjoined us to consider how we will measure our lives. In this spirit, we may wish to redefine what we mean by performance – a discussion that we urge you to continue at next year’s Forum under the theme “Performance That Matters”.

About the Author:

Isabella Mader is CEO of the Excellence Institute, Executive Advisor for the Global Peter Drucker Forum and lecturer at universities in the fields of information and knowledge management, IT- strategy and collaboration.

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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Workshop by

Beatriz Arantes

Workspace Futures Senior Design Researcher and Environmental Psychologist Steelcase

Given such a dynamic VUCA and COVID world, businesses and organizations needed to rapidly swerve to a distributed and remote workforce while simultaneously giving considerable thought to the future role of the office. What will be the “new normal” or what will be the best-fit hybrid work model?  However, given the compelling research of Beatriz Arantes, her colleagues and other experts in the field of Environmental Psychology, possibly the greater focus should be on better understanding “Why Coming Together Matters.”

Ms. Arantes explored the nature of human interactions in organizations and how meaningful, authentic and “sticky” interactions can hold organizations together — their “social glue.” This clearly points to the significance of culture, and as Peter Drucker stated, “Culture—no matter how defined—is singularly persistent.”

To explore the significance of culture one might look at the seminal work of Edgar Schein. The Culture Iceberg Image

is used where above the water line is the explicit culture: artifacts, practices, spaces, roles, objectives, planned meeting. And what happens below the water line, below immediate consciousness are the tacit things: norms, rituals, behavior patterns, expectations, and unplanned encounters. And even deeper down are latent aspects of culture: values, beliefs, assumptions, subconscious, discoveries, emergent —  things that only through interaction, conversations and arguments we can discover and make to emerge.

So “coming together really does matter” because it helps individuals, teams and organizations to more easily go below the water line. A 2021 Microsoft study about interactions during the COVID lockdown provided some very important insights:

1. formal business groups and informal communities became less interconnected and more siloed,

2. share of collaboration time with cross-functional groups dropped twenty-five percent,

3. separate groups became more intra-connected and insular, and 4. Microsoft’s organizational structure became less dynamic.

Over time, as valuable and important networks shrink, there is a real risk to the loss of effective collaboration across teams, particularly when innovation depends on interdisciplinary thinking and diversity. So one can see that when time is not invested in speaking with one another, outside of explicit meetings, the result is a lack in social connections and trust  — both necessary to have those transparent, important and difficult conversations that can bridge the gap of understanding. Data does point to the fact that team members really do have to be “intentional” about how they come together and actively expand their collaborative connection circles. The research by Thomas Allen at MIT — The Allen Curve has also shown that those persons who sat closest together were the ones who interacted the most — proximity and intention do matter.

There are very important things that do not necessarily come together explicitly, and in a recent McKinsey Study employees were asked why they would leave their company and look for another job: 1. having caring and trusting employees, 2. flexible work schedule, 3. valued by manager, 4. sense of belonging, 5. valued by organization, and 6. potential for advancement. These are known as cultural “sticky interactions” orthose that can better allow for teams and individuals to be successful and are “below the water line” cultural elements.

Coming together really matters — over time, and without active contact, relationships tend to “unstick” and have a tendency to drift apart. And the implications for leaders — a clear opportunity to be very intentional about what are the initiatives, the efforts, the mechanisms that bring people together and create “sticky bonds” between individuals, within teams, between teams and within the whole organization.

A number of points were noted as one considers how best to achieve meaningful interactions/relationships:

1. identifying one’s network (people, teams, ecosystem, support network),

2. understand the interactions that make those connections important,

3. defining the “moment of magic”, the one that makes the glue,

4. recalling the previous interactions and moments with that person/group that enabled that moment to happen, and

5. listing the interactions would you like to continue having post COVID, which ones are more important, and which ones might you consider eliminating.

There are a number of focus areas in caring for one’s organization and community:

1. culture — people and behaviors,

2. reinforcing/building rituals/processes (policies and knowledge and build that into the work day),

3. providing the tools (digital and analog), and

4. work space — what does it look like (allowing for choice and control) and having informal areas that allows sticky behaviors to happen.

When you literally make space for things then you allow for a little bit of the stuff from below the waterline to more easily bubble up to the top and become a visible, viable and become a vibrant part of the organization’s culture — a win-win.

As leaders there is clear benefit for yourself, your teams and your organization in identifying what those key interactions are that need to be acknowledged and supported — they are part of what makes one’s organizational culture both compelling and successful.

About the Author:

Mark Béliczky is President and CEO of ProHome LLC and is Chartered Manager and a Fellow at the Strategic Management Forum, and a member of the American Academy of Management and the Peter Drucker Society Europe. He holds a faculty position at Georgetown University, and lectures at other universities in the US and Europe.

https://www.linkedin.com/in/beliczkyseniorexecutive/

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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Workshop: Employee Ownership and Governance: How Putting More Power in Employee Hands Affects Performance in Turbulent Times

Moderator: Christian Rangen CEO & Co-Founder, Strategy Tools and Engage // Innovate. Faculty, strategy & transformation 

Toshio Gotō Research Professor, Japan University of Economics 

Christian Stadler Professor of Strategic Management Warwick Business School

Radoslaw Kedzia Vice President of Huawei CEE & Nordic Region

Moon Jérin Co-Founder- Chief Marketing Officer at Vlinder, Industry Associate at UCL CBT

Drucker Forum 2021

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
#DruckerForum

I have always found the most inspiring roundtable talks to be those where the speakers have diverse perspectives on an issue that is critical, even existential. That was the case for the digital workshop on 10 Nov at the 13^th annual Peter Drucker forum.

The official title was “Employee Ownership and Governance: How Putting More Power in Employee Hands Affects Performance in Turbulent Times”. The existential question is: What is the impact when employees have strong influence in decision-making? The answer from the workshop is resoundingly positive: It helps organizations thrive, from both financial and human dimensions.

Underlying themes of the conversation reflect deep changes needed in order to wisely benefit from employee power:

• Redefine the role of business in society to achieve sustainable, long-term, people-oriented values
• Rethink corporate structure and governance to make the new values real and actionable
• Recognize and enable the new mindset of seeking purpose, to ensure that top talent is energized and engaged

Evolving from shareholder to stakeholder value: the talk is not yet walked in most cases

It came up early in the discussion that the top leaders of organizations are not necessarily the strongest vectors for change and building value in today’s turbulent times. Incidentally, this corresponds to my own data over many years of surveys about the organization in the digital age where one of the top obstacles has been and still is senior management, rated in 2021 as a “serious concern holding us back” by 18% of the organizations and another 35% calling it a “manageable concern requiring special effort”. https://www.netjmc.com/senior-management-holding-us-back/

A widely publicized attempt to reform organizations starting from the top was carried out in 2019 by CEOs of major corporations, members of the Business Roundtable, who redefined the corporate mission to give it a stakeholder orientation after years of shareholder dominance. They stated that companies needed to invest in employees and deliver value to customers, protect the environment and deal ethically with their suppliers. However there were few specifics in the statement. The real impact of this initiative is debatable, as doubts emerge whether or not member companies have lived up to their joint mission statement.

In 2020 US Conference Board did a study with 1316 CEOs from 44 countries around the world that confirmed that the corporate mission was still lacking in relevant focus: Over 60 percent agreed that “redefining the corporate mission for the benefit of all stakeholders, including customers, employees, suppliers, communities and shareholders” is a post-corona major issue.

I prefer a stronger term than “issue” which I consider to be an easy way to avoid confronting problems head on. Issues are concerns with agreement and disagreement, and that’s not the case here. We have a clearly defined problem and need to look at how we can re-orient the focus of business from shareholder to stakeholder and to the employee in particular.

Several approaches were proposed in the workshop discussion. They are not options to choose from, but rather approaches that potentially fit together and can help organizations reach higher goals beyond what we traditionally call “doing business”.

Involve more voices at the table when defining strategy

As cited by one member of the workshop, “companies are made by and for people”. The people dimension has long been neglected in decision-making in most companies and countries. We need to reach the higher levels in the Maslow hierarchy of needs: sense of belonging, recognition and self-actualization.

Part of the answer is to include employees in strategy discussions and process. Strategy and implementation are usually separate but if we open up and involve people, the separation is no longer there. People can think “what do I have to do in my spot, in the role I’m in, to make the strategy operational?”.

Ensure that people have a sense of real ownership

From a tangible, monetary approach, employees can be shareholders, actual owners of shares in the company. From an intangible, but equally, if not even more powerful approach, employees can be direct participants in the governance structure. This may be from being part of decision-making bodies as well as having employees elect board members.

Organizations that genuinely involve employees reap benefits through better organizational performance. An example discussed was that of Huawei, a company that is owned and governed by the employees through their Representative Commission, its highest decision-making body.

Enable the purpose mindset

The search for purpose has emerged more than ever before because of the pandemic. It may be that people are reflecting about the why behind their work. Many have had a new vision of their work since, often based at home, they have reconnected with family more, and avoided long commutes. Some may have simply rethought what they want from their lives.

They may have decided to re-orient their work lives, which is not easy inside companies organized by functions and operational units. Most organizations do not encourage people to learn new skills in new environments or disciplines. You may call it reskilling or upskilling but whatever the term, giving people the freedom and opportunity to evolve is a means of keeping them motivated and committed.

Involvement, ownership and purpose

These three short words sum up the focal points of the deep and fast-moving discussion about putting more power in employee hands. I only wish we could have continued the conversation longer! I’d like to close this brief summary by combining two quotes from Peter Drucker. The first, and theme of this 13^th annual conference is “Management is about human beings” from The New Realities, published in 1989. The second is “The task of management in the knowledge-based organization is not to make everybody a boss. It is to make everybody a contributor” from Post-Capitalist Society, published in 1994.

The two quotes meld beautifully.Instilling a means of involvement, a sense of ownership and a context to live one’s purpose will result in people becoming genuine contributors, which will in turn ensure their organization thrives in turbulent times.

About the Author:

Jane McConnell, author of The Gig Mindset Advantage: A Bold New Breed of Employee, has conducted 12 years of research on organizations in the digital age, and has worked as a digital strategy advisor with large global organizations for 18 years. She can be reached via her website https://www.netjmc.com and @netjmc on Twitter.

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
#DruckerForum

The 13^th Global Peter Drucker Forum again raised business critical questions such as: “Can big businesses be humanized” and “How fast should you transform your business. The answers were: “YES you can humanize a big company “, and “you need to CHANGE your perception on how fast a strategic change of your business will be”.

Drucker Forum 2021

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
#DruckerForum

Parallel Panel #7 – Can Big Business be (Re)humanized?

Moderator
Amy Bernstein Editor, Harvard Business Review & VP Harvard Business Publishing

Speakers
Hubert Joly Senior Lecturer Harvard Business School; former CEO, Best Buy
Claudio Fernández-Aráoz Executive Fellow for Executive Education, HBS
Maurice Lévy Chairman of the Supervisory Board, Publicis Groupe
Patricia Pomies Chief Operating Officer, Globant

Parallel Panel #9 – Leading People through Change – Hoch much? How fast?

Moderator
Jenny Darroch Dean, Farmer School of Business, Miami University in Oxford

Speakers
Roger L. Martin Strategy advisor; former Dean, Rotman School of Management
Sara Mathew Non-executive Chair, Freddie Mac; former CEO Dun & Bradstreet
Elsbeth Johnson Senior Lecturer MIT’s Sloan School of Management, Managing Director, SystemShift
Michael Watkins Professor of Leadership and Organizational Change at the Institute of Management Development and Co-Founder of Genesis Advisers

Can big businesses truly be humanized

The focus of this year’s Drucker Forum was on the leader him- or herself. Many top leaders are indoctrinated by the old- stereotyped picture of a leader- the hero, who knows it all and will guide his or her people on what to do and how do it. In a VUCA world, 80% of leaders, according to Hubert Joly, understand and want to adopt the new humanized leadership model, better suited for the current dynamic economy, but find it very hard to do. According to Joly, leaders’ true purpose is to transform from only being great business leaders to also become great human leaders. Today’s leaders must lead with, not only the brain, but also with their heart and soul. Therefore, leaders need to start with themselves and ask: “what is my true purpose as a leader?”. Getting some coaching help could be one way of managing this transformation, as mentioned in last year’s Forum.

Another factor that plays an important role in humanizing businesses is who the board select as the next CEO. According to Maurice Levy, board rooms are haunted by Milton Friedman and his maximizing shareholders’ value mantra as the ultimate duty of any board. Whilst boards recognize this may not be useful anymore, they struggle to discard it.  Perhaps if boards started seeing and accepting the importance of an CEO as a great human leader, as well as a great business leader, they might recognize that better performance comes from better human qualities.

How fast should leaders push the transformation of their businesses

The panel shared the view that many leaders should “slow down” the transformation to achieve true strategic change of their business. The hunt for quick wins, could according to Dr. Elsbeth Johnson play some role to demonstrate success, but is not in any way a proof for true long-term change, which demands a true shift in mindset and of the technical system. Instead, leaders should view a transformation more long-term and understand that for a real change to happen, behavior need to change, supported by changes in structure, compensation and more. This reminds me about the excellent model developed by Schein and Schein (2017) in their book ‘The Corporate Culture Survival Guide’ in which they discuss cultural transformation from three perspectives: social culture (behavior), technical culture (the design), and the macro culture (influences from outside, for example fads such as Holacracy, Lean, and more).

In fact, the leader should during a transformation focus on ‘outcomes’ and ask the right questions to their people in the organization, rather than take on the role of the central agent for change. Johnson referred this phenomenon to ‘Magic Delusion’ in which the leader over values his or her own role and contribution to change. The risk then is that the change process will stop as soon as that leader has left the company. Other risks are the; ‘Drama delusion, the Activity delusion, and the Agency delusion. With the Drama delusion Johnson means that the change needs to be perceived as fast and action packed but is then also very risky. With Activity delusion she refers to the risk of focusing on quick wins, rather than on a long-term change. Finally, with Agency delusion she means the same as Schein and Schein (2017) stated, namely that a change in people and their behavior is not enough for a change. Instead, a change requires also changes in the technical system.

An excellent example on a leadership team that BOTH has humanized their company and successfully managed a long-term transformation, from being a cash cow to start being a winner in the digital age, is the leadership team at GE Appliances (GEA).

The team did 4 simple things:

a) Defined a leading goal

b) Promoted and role modelled a new set of beliefs (culture)

c) Reinvented the organizational structure and how different units were to be aligned with each other

d) Redefined the compensation system

The transformation of GE Appliances was not falling into any of Johnson’s ‘delusion traps.’

Let us start with the first one, ‘Magic delusion’. The transformation was and is not conducted by Kevin Nolan, the CEO himself. Instead, he got advice from Mr. Liang at Haier, and he consulted his senior leadership team and asked them to suggest solutions for working more ‘user focused’ and to become a winner in the North American market. Nolan trusted his senior leaders, so that important decisions were made based on senior leaders’ involvement and competences. Further, Nolan also avoided the ‘Agency delusion’, as GEA, after Nolan’s alignment with senior leaders, performed technical changes of management processes, structure, and compensation system, which in turn required a new behavior as well from leaders, between units, and between people on different levels. Regarding the ‘Drama delusion’, GEA did several of the big changes already during the first 12 months. However, the leadership team perceived the risk to stay ‘AS-IS’ as larger than to perform the changes during the first year- and they had key stakeholders with them. So even if many changes were done during a short time period, the team was not looking for quick wins (the ‘Activity delusion’) as they believed they had to change to stay relevant in the digital age. Their focus was, and still is, long-term and their transformation journey has not stopped. Neither will it, as the external environment continuous to change.

For more information about GE Appliances transformation, please read:

https://www.druckerforum.org/blog/must-there-be-a-human-imperative-at-the-core-of-organizations-by-annika-steiber/

Or

https://www.forbes.com/sites/benjaminlaker/2021/09/17/here-are-the-four-simple-steps-that-transformed-ge-appliances/?sh=25eb50d763ff

About the Author:

Dr. Annika Steiber is a Professor, Best-Selling Author, Speaker, Founder, Investor and the Director of the Rendanheyi Silicon Valley Center. She is the author of eight management books.

Moderator
Johan Roos Chief Strategy Officer, Hult International Business School

Speakers
Santiago Iñiguez de Onzoño Executive President, IE University
Patricia Pomies Chief Operating Officer, Globant
Rosanna Sibora Vice President Digital Products & Innovation, Universal Music Group

Setting the Stage

When the pandemic hit, few companies were prepared for the unpredictability of the threats and related challenges that it brought. The completely unexpected need to switch the internal operating system to fully digital within days ruthlessly exposed the flaws and booby traps hidden in many organizations. Operations were not prepared. Staff was not prepared. Management was not prepared. Governance was not prepared. Media discontinuities, paper files, compulsory attendance, undocumented workarounds, and micromanagement became visible as what they are: the legacy debt of an anachronistic business culture that suddenly turned into a very real threat to the business. In many companies, home office was more an incentive-like working model for a small number of employees. All of a sudden, this exotic mode of working turned into the new normal, creating a bunch of unsolved problems for the routines of a legacy business operating system. Managers and employees were thrown into the deep end of a new digital reality where established cultural habits and soft practices lost their impact.

Drucker Forum 2021

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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Technology – Driver or Threat

Looking back on these early days, it is obvious that the problem had different layers. On the one hand is the problem of how to deal with technology. Often digital technologies are seen as purely an IT matter, leading to a lack of knowledge and understanding in the rest of the company. Also dangerous is the glib assumption that “technology or digital tools will solve the problem and make change happen”, overestimating their impact on deep-rooted procedures and habits, as well as their ability to solve the problem of missing leadership. All this can leave an organization digitally unprepared when a pandemic hits. In today’s world technology cannot be delegated, since everyone needs to have the knowledge, the ownership and the skills to make use of it.

Leadership? Leadership!

On the other hand, there are big issues in management and leadership. The pandemic created a situation of great uncertainty, compacting corporate working routines. From one day to the next people became isolated and invisible behind their computer screens at home. They lost the office as the familiar locus for social interaction with peers, managers and leaders.

This presented a huge problem for leaders, as it is difficult to create a safe social space using narrow band communication through digital channels. Capabilities like empathy, listening and awareness of what happens in the team on a daily basis are easily lost in digital operations, yet are must-haves in situations like the pandemic, with teams and leaders daily dealing with uncertainty, anxiety and stress. Such situations call for the full range of human-centered leadership skills, trust and psychological safety – and not for more micromanagement. Unsurprisingly, the pandemic quickly exposed the many organizations lacking these leadership skills and cultures, greatly contributing to record levels of employee turnover throughout the US, for example.

Understanding the Human Side of Business

The session panelists described the different leadership challenges they were facing, and what they did about it in their respective organizations. During the pandemic, the boundaries between private and professional life blurred. While challenging, this situation also offered the chance to better understand employees and to connect emotionally on a much deeper level than in the office: Seeing their living rooms and getting to know their children and families, leaders could build a new depth of connectedness within the team, develop fresh leadership abilities and stronger social skills.

Expanding on these individual leadership skills, leadership development also took a giant leap forward. It is no longer sufficient to manage known risks and to lead people through best practices with superior knowledge. Uncertainty, i.e. not having superior knowledge, characterizes the new business environment in which leadership has to prove its worth. Leadership, and leadership development then, is all about people and continued learning to understand the nature of new challenges and deal creatively and effectively with them. In addition, this has to happen at all levels of an organization, requiring more leaders everywhere. Discovering and developing new leaders can start small, by combining the need for more learning, training and leadership. Globant, for instance, successfully instituted communities of practice to share good practices among peers. These communities set the stage for individuals who were gifted trainers, and who were good at leading others without having formal authority over them. Talented new leaders rapidly emerged from these communities, equipped with exactly the skill sets required for the new business challenges: Leading others without having formal authority, proactively rising to new challenges and easily adjusting to new technology.

Leadership Development 2.0

Bringing newly-forged leadership talent like this into formal leadership development programs quickly exposes their flaws. Existing programs are too focused on management and leading with formal authority. Reforming leadership education in business schools and development programs inside organizations might sound revolutionary– but it is no less than a necessity for the times ahead.

Future leadership development needs to put much more focus on building interpersonal skills, encouraging entrepreneurial opportunism and continuous learning. The path of leadership can only be an individual journey of exploration, constantly taking advantage of new opportunities to grow and learn in real-world challenges. This setup has a far more experimental nature than in the past, and no pre-cut-out career paths. It requires patience and mentors who really care. After all, you cannot become a good leader unless you have a deep liking for people. Nor can one develop leaders without liking them – they are people too.

Today, we need good leaders more than ever.

About the Author: Janka Krings-Klebe and Jörg Schreiner are founders and managing partners of co-shift GmbH, helping companies to transform into business ecosystems. Their latest book is “Future Legends – Business in Hyper-Dynamic Markets“ (Tredition 2017). Both also contributed to “The Power of Ecosystems“ (Thinkers50 2021).

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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Ed Catmull: co-founder of Pixar Animation Studios and president of Pixar Animation and Disney Animation.

Hal Gregersen: senior lecturer in leadership and innovation at MIT’s Sloan School of Management.

Moderated by Julia Kirby: Senior Editor, Harvard University Press

The workshop began with Hal Gregersen introducing the polling software Question Burst (questionburst.com) which was used to interact with the workshop participants.

Acknowledging the pandemic and its exponential features, he then told the story of Hungarian biochemist, Dr. Katalina Kariko and her 30 year-long quest to make RNA molecules in the laboratory and get mRNA into the cells of the body. Her work would form the basis for the successful mRNA vaccines that have been so instrumental in slowing the spread of COVID-19. Drucker would have called her a “monomaniac on a mission”.

Gregersen compared Kariko’s story to those of other visionaries like Jeff Bezos (Amazon) and Marc Benioff (Salesforce) who, he suspects, saw the world through an “exponential lens” identifying opportunities that others could not. He then illustrated the nature of exponential growth by referring to Azeem Azhar’s book The Exponential Age and what Azhar calls the “exponential gap” between organizations designed for a linear world and exponential growth.

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This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
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Hal Gergersen’s opening remarks supplied the frame for Ed Catmull to introduce the concept of a Learning Power Cycle. He began by recounting his experience at the University of Utah in the 1970s. Although computers were big (in all senses) at the time, computer graphics was not considered part of computer science. Catmull, who believed that computer images would one day become part of feature films, could get traction in neither the computer nor the film industries. This was due in part he thinks to the difficulty people have in grasping the explosive potential of exponential growth from its usually modest beginnings. For example, it took Pixar twenty years to produce its first feature film, Toy Story.

Reality is complex. Many exponential activities are in play and the dynamics are unpredictable. Catmull and Gregersen describe this dynamic interplay as the “Learning Power Cycle”. They used the example to illustrate this of machine learning and its origins in neural networks, a concept that had been around for fifty years but sidelined by a lack of computer power. The catalyst for machine learning to take off was the rise of the games industry from it humble origins in the game of Pong (1972)to its explosive growth through arcades, consoles, desktops, handhelds and mobile devices. In 2020 the market was worth $165 Billion. Nvidia capitalized on this growth by releasing a new GPU (graphics processing unit) every six months, creating a positive reinforcement cycle. Out of this emerged the application of GPUs to neural networks, enabling deep learning. A second example is the power of apps on mobile phones, the emergence of which was unpredicted.

The workshop then went to Breakout Rooms. Questions for discussion were:

• What exponential events will or are affecting your organization? Who is seeing them? Who is missing them?
• What is one of the biggest challenges faced by your organization because of these exponential events? How well is your organization responding?
• “What Great Surprises are Machine Learning (ML) and Deep Learning (DL) creating in your organizational industry? How did those Great Surprises come about? How are you and your organization approaching them?

Ed Catmull told the workshop that at Pixar they make it clear to their people that the growth and economic success of their films is not their #1 priority. They intentionally make films (often short ones) that don’t make money to show they have other values, like encouraging people to push themselves creatively. People are often focussed on data to the exclusion of softer sources of information. Pixar tries to create a “classless” organization to enhance the sense of ownership.

Nice quote: “Tenant farmers don’t pick up rocks”

The Learning Power Cycle

The cycle is conceived as going through three phases:

1. Potential Arising
   • First steps in exponential processes seem small and inconsequential
   • They are not intuitive or obvious
2. Realizing Potential
   • The results affect large numbers of people.
   • They affect the environment in a broad sense, good and bad (unintended consequences).
   • Many transformational events are not exponential. (Do not confuse rapid with exponential)
3. Preparing for Transition
   • There is an end to exponential growth.
   • The outcomes are highly unpredictable.

Great companies operate in all three phases simultaneously.

Each of these phases requires a particular mindset to navigate in a dynamic environment:

1. Potential Arising
   • Recognize the implications of exponential change at the beginning of exponential growth – when it is not obvious.
   • Start with a challenge-driven, project-focused mindset.
   • Vote at least one-third of your growth innovation resources to longer-term initiatives that hold the potential for becoming Learning Power Cycles.
   • Learning Power Cycles are neither sparked or sustained by people operating in isolation.
   • Build a broad umbrella allowing uncertainty, noise, and a high volume of small but interesting developments, often unrelated or loosely related. (in Pixar’s case those that fail the “elevator test” i.e. cannot be explained in 30 seconds or even longer).
   • Seek out ideas that have great exponential potential.
2. Realizing Potential
   • Continually modify the processes in almost every aspect – far beyond what the originators could conceive.
   • Beware of the “sweet spot” trap (Innovators Dilemma).
   • Hold long-term and short-term views/approaches simultaneously. (and retain the ability to function)
3. Preparing for the Transition
   • Many look for replacement systems but often make the mistake of only wanting systems that are already far up the exponential curve.
   • Align people around what “might” work when systems are built for them to hold onto something that is working.
   • Are we actively looking for the end of exponential growth?

The session closed with a general discussion around which mindsets were most difficult to master and what questions and insights the Learning Power Cycle and the associated mindsets had surfaced.

Ed Catmull suggested that the secret of creating the right mindsets is to hire people who want to make a difference by working in a company that wants to make a difference. People who will help each other spontaneously without expecting rewards.

Closing Questions and Answers

Question: As a small cog in a large corporate machine how do I get management interested in these ideas?

Answer: In most large organizations management is rewarded for short term results. The challenge is to change that system – there is no simple answer.

Question: What learning, experience or educational design can help me get better at thinking this way?

Answer: Observe what’s blocking you. You still have choices about how you behave. Good role models are really helpful. Read books by and engage with people who think like this.

About the Author: David Hurst is a speaker, writer and management educator (www.davidkhurst.com). His most recent book is The New Ecology of Leadership: Business Mastery in a Chaotic World (Columbia University Press 2012)

This article is one in the “shape the debate” series relating to the 13th Global Peter Drucker Forum, under the theme “The Human Imperative” on November 10 + 17 (digital) and 18 + 19 (in person), 2021.
#DruckerForum