This Digital Forum is a big step on the way to our in-person Forum in November in the Vienna Hofburg. The two events share one overarching theme – performance that matters. Moving the needle on the performance of an enterprise has always been a challenge – and in today’s world it is increasingly complex. In Drucker’s day, “performance” simply meant economic performance—and Drucker himself emphasized that an enterprise must succeed in economic terms before it could devote resources to other objectives. Yet Drucker also stressed that taking on the responsibility of managing a business was a moral undertaking. Expanding profit margins, or creating more shareholder value, could not be the sole “raison d’être” given the very real impact organizations have on their customers, workers, communities, and natural environment.

Doris Drucker, our friend and mentor when we launched the Drucker Forum in 2009, told me about a comment Peter Drucker made in the last years of his life. Famous as he then was, he also knew how quickly the public memory fades. “Two years after I’m gone,” he said, “nobody will remember me.” I told Doris we would work hard to prevent that, because the world still has so much to learn from Drucker – and we especially need his wisdom now, in a time of crisis and great confusion. We try to honor his spirit by taking a broad and deep perspective on the most pressing questions of our time as they relate to management, and not hosting the kind of superficial, politicized, mainstream discussion that can be found in many places.

The backdrop to this year’s Forum is the recent sequence of crises we have experienced in the pandemic, the lockdowns, and the Ukraine war. But there have also long been other major issues smoldering under the surface: mounting debt levels, increasing fractures in our societies, worsening inequalities, diminished freedom and privacy, growing bureaucratization of our lives, and more. For years we were able to muddle through – but now we face a threat of mega-disruption. People often talk about the aftermath of a crisis as settling into a “new normal”—but this is bigger. It seems a new world order is emerging in front of our eyes: geopolitical, social, and economic. A very different world is being born – in a painful and perilous process.

Some basic assumptions are being swept away: for example, that globalization is an unalloyed good, that inflation is easy to tame, that interest rates will remain low in perpetuity, that the most efficient and robust supply chains are global ones, that mature economies are immune to food or energy insecurity, that health care will become ever more effective and accessible, that poverty is everywhere on the decline, and that conflicts will never go nuclear, to name just a few.

Drucker observed that, where there have been great gains in income and wellbeing in the world, they have derived from the improving performance of organizations and institutions – first in the west, after the industrial revolution, and in recent decades increasingly in emerging and developing countries as well. We tend to forget that these immense gains – including comprehensive education systems, universal healthcare, research institutions, social protection and mobility – were not the product of science, engineering, and research alone. It was above all the new social technology called “management” that drove the value creation at unprecedented scale that improved so many lives.

We had many good years after the Second World War, building societies that were successful by numerous measures – and, especially in the west, this led to some complacency and ideological arrogance. But as Intel’s Andy Grove observed, complacency breeds failure, and he might also see now as the moment to inject a degree of paranoia into our thinking. What we have acquired in the time after the industrial revolution is not a given: we have to defend it, again and again, and avoid major breakdowns with their catastrophic consequences for humanity.

Much of good management is about focusing on the right priorities. No longer can we treat the priorities of yesterday as the priorities of today. What we thought about energy, food, climate, efficiency, inflation, work, and management will not necessarily be the same in the future. New trade-offs may be required: economics vs social vs environmental, short term vs long term – so when famine threatens, we may need to move past fears of GMOs, for example. One of the “positive” side-effects of the mega-crisis may be that we get more real about what is really important for human life. From political leaders to managers to civil society players, all actors need to review their agenda. More of the same is not good enough. Extrapolating their narratives to the future won’t work any more, if  it ever did.

This critical introspection applies to the practice of management as well. How much of 20^th century management remains valid today? What classic principles of management still apply and what should change? If Drucker is still right that management’s job is to strike the right balance between continuity and change, how do we decide what stays and what goes?

JP Morgan’s Jamie Dimon recently predicted a looming economic hurricane in the wake of the consecutive Crises we experience. But he warned that we shouldn’t try to hunker down to sit out the crisis. We need to step up to the challenge. Politicians will quickly come up against the limits of bailing out anyone in need with money they don’t have. Survival, let alone progress, will be down to those who are ready to take on the challenge with their flesh, blood and brain  – entrepreneurs, innovators, managers and civil servants driven by a common purpose grounded in an urgent sense of reality to build a future for the generations to come. Ideology, of whatever color, will be a bad guide to the future.

This is the energy we want to inspire at the Drucker Forum. You might ask what influence any one of us can have individually. Yet think about complexity theory and what it teaches about taking action. Famously, the flap of a butterfly’s wing can generate an air current that gathers force and eventually becomes a giant storm somewhere in the world. Let’s each start making our own moves, large and small, to change the world for the better.

I wish us all a great conference and a continuing deep and serious discussion on performance that matters – for the individual, for the team, the organization, the ecosystem and society at large.

It is high time to rethink our parameters for dealing with the pandemic. What we need are leaders with judgment and common sense.

We are currently seeing an alarming new twist in the Covid narrative: while at the start of the pandemic the aim was to prevent our healthcare systems from collapsing, the goal now seems to be to stop anyone at all becoming ill. But the situation today is in no way comparable to that of spring. It is true that in much of Europe infections are again on the rise. Yet on the whole rising case numbers are having little effect on hospital bed occupancy or even on intensive care units. We are in a new phase of the pandemic, not a repeat of the first one. For now the collapse of our health systems is not imminent, nor, according to experts, is one anticipated.

Drucker Forum 2020

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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The reasons for this are multifactorial: on the one hand, a growing proportion of those affected in the new wave consists of the young, who mainly present with mild symptoms; on the other, better therapies are becoming available to treat more severe cases. Last but not least, it is being suggested in some quarters that as the virus becomes more infectious, it is also weakening in potency.   

Meanwhile, the collapse that we are actually suffering is that of the economy. According to OECD forecasts, Europe can expect to feel the greatest blow to its prosperity since the second world war, in which the first wave with its lockdown is set to leave much deeper traces (France and the UK more than -11%, Germany -6.8%, Austria -6.2%) than the second, which in turn may be morphing into something more like a “permanent wave”. This means that even if the health crisis were to worsen again, it would have to be weighed against the social and economic consequences. For one thing has become clear: even if a vaccine is forthcoming, it will not magic the problems away at a stroke. 

What we need from leadership today is clear thinking, sound judgment and common sense. That means being able to take the best insights from different kinds of expertise and blend them into decisions that are balanced and above all pragmatic, as Roger Martin, Julia Kirby and I outline in our HBR article on the approaches leaders should bring to different types of problem. Those who focus on counting infections while turning a blind eye to actual hospital admissions and deaths, let alone the enormous collateral damage currently being inflicted on the economy and society as a whole, are committing errors of thinking that do society a grave disservice. “If your only tool is a hammer, every problem looks like a nail”. The authorship of this quote is disputed, but no one can doubt that in the current situation it hits the nail squarely on the head. It is high time to bring a different set of tools to the task of dealing with the pandemic.

About the Author:
Richard Straub is Founder and President of the Global Peter Drucker Forum. The 2020 Forum will take place on October 29 & 30 in the Vienna Hofburg Palace with the general theme: Leadership Everywhere – A Fresh Perspective on Management.

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.
#DruckerForum

Crisis always shifts people’s attention abruptly to the quality of their leaders. We are seeing this now, as the appalling spread of the COVID-19 virus and the alarming collapse of economicactivity worldwide have people in all quarters looking to leaders for guidance—and often being left far from reassured by what they see.

Why do people give so much more attention to their anointed leaders in such moments? Leadership pundits usually explain that when they are panicked, people grasp for certain things: a model of resolute confidence to calm their nerves, a clear thinker to outline the right course of action, a decisive actor who wastes no time dithering. All this is true.

Drucker Forum 2020

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.
#DruckerForum

But what many students of leadership miss is that people also know that any crisis is a time of uncertainty and ambiguity, when big changes are afoot. They suspect that rules will change, priorities be reordered, and that some of those who used to be up will find themselves down. And they want leaders who can be trusted to protect their interests, not advance a pet agenda of the leader’s own or their cronies. They want leadership focused on practical solutions – not motivated by ideology, let alone political considerations.

The fact that so many leaders in these past weeks have come up short on all these requirements underscores that our institutions must focus more on improving how they are led – just as they have, over the past century, concentrated on how efficiently they are managed. The two functions are not synonymous. In any enterprise, good management means seeing that work is done in the best way to achieve an organization’s objectives. But figuring out what those objectives should be and orchestrating the capacity for collective performance with the right players in place is the province of leadership. As the classic expression goes, management is doing things right—leadership is doing the right things.

Figuring out the right things to do has always been difficult because it involves judgment and strategic vision. It also requires trade-offs. But the challenge has become much greater given the modern world’s unprecedented level of connectivity and interdependence, and hence complexity. Across the past 200 years, we have seen the formation of a vast, man-made network of organizations and institutions. Equally, the notion of being stewards of our natural ecology, our environment, has made its way to the top of the agenda of companies, public sector bodies and governments during the last decades. However, we have terribly ignored the challenges that the new man-made environment of myriads of interconnected companies, consumers, investors, public sector institutions, governments and NGOs poses. They are all part of a web that Peter Drucker called the new Social Ecology. Just like natural ecosystems, our social ecology needs care, maintenance and diligent stewardship.

In this perspective, while just-in-time globalized supply chains can justly be celebrated as a great advance in management practice, the resulting dramatic increase in vulnerability must be part of the leadership equation. In the same way, the globally integrated virtual enterprise with its company rolesand functions distributed across the globe can be hailed as a great organization innovation that frees us from the constraints of time and space. Yet, again in a leadership perspective, the organizational gain has to be weighed against the social impact of large-scale displacement of jobs and the damage done to trust in corporate leadership both internally and in society at large. Managing investment portfolios through artificial intelligence and automated algorithmic trading processes that amplify shocks to the system and accelerate downward spirals is another example of the culpable abdication of leadership responsibility to digital systems – whatever their benefits in terms of productivity and efficiency.

At the same time, governments and public sector bodies seeking to impose sweeping restructuring on whole sectors, such as the automotive industry in Europe, should be forcefully reminded of the huge costs of such top-down transformations in terms of social burden and destruction of economic value. They lose sight of the fact that the social ecology is made up of evolutionary systems that cannot be transformed by government fiat without creating unintended consequences that may be more damaging than the ill they are intended to cure. The German “Energiewende”, and the stifling regulatory micromanagement that has become the norm are examples of this failure of leadership vision. Responsible leadership needs to embrace both the preservation of the natural environment and the need to keep modern society functioning by nurturing the social ecology of existing value-creating organizations and institutions.

If all this sounds like an overdramatic wakeup call, I make no apology. The Covid-19 shock hits us at a time when our economic, social and political fabric are already significantly stretched. As The Economist’s Adrian Wooldridge reminded us at the 10th Global Peter Drucker Forum in 2018, we are living an acute crisis of leadership. This crisis is massively amplified today by the latest developments. In the midst of the financial crash in 2008, Rahm Emanuel, then chief of staff to President Obama, made a memorable observation to an interviewer: “You never want a serious crisis to go to waste.” His meaningwas that, because people are unusually compliant when rattled, leaders would be foolish not to use the license granted to them to execute real change. The phrase is often repeated as the quintessential cynical response to a situation that can be exploited to push what would, in normal times, be an unpalatable agenda. Yet odd as it may sound, even today’s unprecedented crisis is a real opportunity for leaders to rethink their outdated assumptions.

In terms of the leadership agenda, the first essential is clearly to mobilize the leaders of all organizations to live up to their responsibilities – initially in the fire-fighting phase that we are currently traversing. The more power leaders wield, the more they must remember the crucial importance of their role in serving a bigger cause and strengthening trust with their communities and society as a whole. We think here particularly of those who have most benefited from the long stock- market boom: investors who largely remain hidden behind anonymous trading systems, and selfdealing boards/executives at Dow Jones corporations who have made propping up share prices with massive stock buybacks a standard practice, thereby collaborating, deliberately or not, in the inflation of the larger stockmarket bubble that has just burst.

This fortunate minority need to remember that they are not investing in shares but in real people, for whose livelihoods, and lives, they bear a responsibility. To just run away is not an acceptable response, either ethically or economically. As leaders and stewards, they are called on to take a longterm perspective and demonstrate this by their actions. Warren Buffet should be considered a role model in this respect. Secondly, surmounting this crisis in the coming months will require us to reassess the importance of leadership for the remainder of the 21st century. It can only be based on fundamental human values, with human dignity at the center, deep understanding of reality, constant openness to learning from that reality, and a profoundly pragmatic mindset that finally demands us to shed the ideological blinkers that we have inherited from the last two centuries.

Charles Handy had it absolutely right. Things need management. People need leadership – and it is dangerous to get it the other way round. Our society needs leadership to imaginesolutions without which – make no mistake – our social cohesion is at risk. To this end, the high calling for leadership in the 21st century is nothing less than to unchain the potential of human ingenuity, creativity and eagerness to engage, and thus make fully effective the most important resource on the planet. We need nothing less. Richard Straub is Founder and President of the Global Peter Drucker Forum. The 2020 Forum will take place on October 29 & 30 in the Vienna Hofburg Palace with the general theme: Leadership Everywhere – A Fresh Perspective on Management.

About the Author:

Richard Straub is Founder and President of the Global Peter Drucker Forum. The 2020 Forum will take place on October 29 & 30 in the Vienna Hofburg Palace with the general theme: Leadership Everywhere – A Fresh Perspective on Management.

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.
#DruckerForum

“People need leadership. Things need management.It is dangerous to get it the other way round.”– Charles HandyPeter Drucker, whose life spanned the twentieth century, labeled that time as the era of organizations and institutions. Ob-serving the dramatic rise of complex large-scale enterprises, he saw them as the new backbone of society and economy. As a consequence, he recognized the growing role of managers as fundamental to making these new legal, economic, social, and ultimately human constructs work. He also saw that when hospitals, education institutions, government bodies, and companies don’t perform, society at large does not function. Thus, he stressed the role of management as essential not only in business but in society. In this sense, management is a “social technology”—a robust set of tools to make human endeavor more productive.

Drucker Forum 2020

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.
#DruckerForum

Achieving efficiencies of scale was the dominating theme of twentieth-century capitalism—pursued across the board by both the public and private sectors. The power of scalable organizational structures and work processes became evident in ways horrifying and inspiring. The model showed its ugly face in two world wars, as the machinery of conflict extended to weapons of mass destruction and industrialized genocide. On the other hand, its enormous positive power became clear in the postwar period, as the new economic and social system dramatically boosted human prosperity, albeit not in equal distribution around the globe. The twentieth-century model of efficiency management was indeed extremely successful and brought unprecedented progress.

Today we face a new critical point in the course of human progress. While our intellectual, social, and moral capabilities have evolved only slowly and incrementally over the millennia, our technical capabilities have grown exponentially. AI, robotics, machine learning, genetic engineering, and other breathtaking developments now challenge us with unpreceden-ted questions and fill us with new anxieties. Meanwhile, our increasingly global perspective forces us to confront planeta-ry-scale threats, from overpopulation to huge disparities in life chances on different continents, to climate change, to the culture clashes that come with globalization and mass migration.

This is a century in which the metaphor of the “perfect storm”—a swirl of powerful elements colliding to produce unfore-seeable effects—is constantly invoked. Traditional management is overwhelmed and often disoriented by the interplay of challenges. As the Economist’s Adrian Wooldridge warned at last year’s Drucker Forum in Vienna, to focus too tightly on management techniques in such times is to commit a monumental failure of leadership. The two are not synonymous, as Drucker knew. He famously summed up the difference by noting that management is doing things right, but leadership is doing the right things. The worst mistake is to manage in excellent and efficient ways what shouldn’t be done at all. The work of leadership is to determine the direction an organization should take, and make the difficult decisions that require judgment and tradeoffs. Leaders, who emphasize purpose and values, are less about the “how” of the organization than the “why.”

The technological progress we have made puts the emphasis even more strongly on this leadership imperative. The challenges of the twenty-first century cannot be tackled from a technical perspective, just as they cannot be met with compliance checklists, certifications, and ever more specific regulations. They require the deeper, wider, and more holistic world view that visionary leaders can provide. There is no shortcut to cross-disciplinary knowledge, judgment, capabilities, and ultimately wisdom. No machine will ever be able to take this over.

In the current transition to a new world that is emerging—but that we shape ourselves—we should certainly draw wisdom from the great thinkers and mentors of the past. We are lucky in Vienna that quite a number of these giants were connected to this place and its cultural and economic tradition. Schumpeter shaped our understanding of a vibrant capitalism, based on entrepreneurship and innovation; Hayek made the case for freedom and for the power of competitive markets; Popper sharpened our view what an open society actually means and where its limits are; and Polanyi showed the dangers of unbridled markets and the need for continued role of the state to create a just society. Drucker, we might say, brought these strands together and taught the world how to translate good intention into actual performance—again, not only by doing things right but by doing the right things.

These great thinkers cannot provide us with specific answers in a world that is characterized by exponential change. If we want specific answers for dealing with it, we will have to find them ourselves—but they can provide us with enormous inspiration and depth. We can stand on their shoulders to see further, and discover ways to shape tomorrow’s society. Their voices remind us to return to reason and to avoid falling back into tribal fights, entrenched ideological positions, and the shallow simplifications of populist agendas on all extremes of the political spectrum.

The rise of large-scale organizations has dramatically increased the need for management and leadership, and both must grow in terms of quantity and quality. Even as we take care to distinguish leadership and management, we must recognize that they are not disconnected. While great leaders focus more on the question of what things must be done, they also understand how much effort is required to “do things well”—to establish the conditions and marshal the resources to make an organization’s work productive. Yet we should also recognize that the scarce resource in the twenty-first century will be leadership, not management talent.

It all comes back to the special qualities of human beings. If the twentieth century was called the century of management, the twenty-first century should be proclaimed the century of leadership. We need more capable leaders to open up the wide area of human ingenuity and creativity, and to unlock more human potential—the most crucial “natural resource” on the planet.

About the Author:

Richard Straub is Founder and President of the Global Peter Drucker Forum. The 2020 Forum will take place on October 29 & 30 in the Vienna Hofburg Palace with the general theme: Leadership Everywhere – A Fresh Perspective on Management.

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.
#DruckerForum