Leadership as an area of study is still in its early beginnings. Leaders are grappling with the change from the siloed, hierarchical management styles best suited in an industrial era. We now face the challenge of a new shift towards a model where no single individual has formal control.

This shift will require business to break down boundaries between organisations. It will force competitors to become collaborators, and create an environment where team members can become more transient and distributed. All whilst seeking a higher purpose.

Drucker Forum 2019

This article is one in the “shape the debate” series relating to the 11th Global Peter Drucker Forum, under the theme “The Power of Ecosystems” taking place on November 21 & 22, 2019 in Vienna, Austria.
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How do you demonstrate leadership in an ecosystem, when it is harder than ever already?

This was the subject of the panel at GDPF2020, titled: Ecosystems Leadership. New Scope, New Skills

Led by Mary Meaney, Senior Partner at McKinsey & Company, the panel held a fascinating conversation covering topics such as trust-based leadership, the importance of purpose, and creating a culture of curiosity, learning, and collaboration.

Meaney summed up the current environment for many leaders in her intro to the session, asserting, ‘The pace of change will never again be this slow.’ A recent McKinsey Global Study found 80% of leaders operating most of the time in a reactive state of mind.

To prosper, leaders needed to shift their mindsets:

• From reactive to creative
• From command and control to trust and empowerment
• From certainty to discovery
• From scarcity to abundance.

The new game

‘Leadership in an ecosystem world requires a fundamental shift in thinking,’ said panellist Peter Oswald. ‘You can’t really lead an ecosystem, as it consists of many autonomous parts’, each of which potentially having a different purpose, goal, organisation structure and incentives.

Oswald called the new approach ‘Collaborationship’. To display collaborationship, he suggested three key focus areas:

• Building trust between stakeholders
• Building shared purpose
• Building empowerment.

Cross-Boundary Teaming

Amy Edmondson argued that there is a difference between trying to demonstrate leadership of the ecosystem, as opposed to demonstrating leadership in the ecosystem.

The boundaries between organisations will become more fluid. As working together on complex goals increases, cross-organisation teaming will become the norm. This change will bring a new and complex set of problems to solve, challenging leaders to become fluent in a set of behaviours that rarely come naturally. When things break down – and in complex ecosystems they often will – Edmonson warns against making the ‘fundamental attribution error’, blaming individuals for outcomes that may be due to the system or situation.

As a leader, it is so important to create space for others to do great work. To create an environment of psychological safety for all members of the ecosystem, leaders will need to model the behaviours of curiosity and humility, being willing to view things from another’s perspective and to take an interpersonal risk.

The new metrics for leadership

One of the key principles of leadership in an ecosystem world will be our ability to develop organisations which unite through a higher purpose.

Raj Sisodia, a founding member of the Conscious Capitalism movement, believes we need to rethink the fundamental questions of business.

The modern organisation will need to move beyond the ‘we need to make money for shareholders’ of old, and seek to serve a higher purpose, something that aligns with the real problems and challenges that we face in the world and creates value for all stakeholders

In the same way, leaders in the past were measured on their results, efficiency and outcomes. The measure of future leaders will be to generate value for stakeholders as a whole and create a positive impact on customers.

Cultures in the past were predominantly rooted in performance-based incentives and metrics, and these days it’s much more about trust and authenticity, and genuinely caring for human beings.

Modern leadership will need to adapt accordingly. Leadership in the ecosystem will need to show the collective what is possible, create a uniting vision, and motivate the collective to get the project over the line. But it must be able to do so with genuine care for the individuals involved. As Sisodia put it: ‘You cannot be a selfish person and lead, because you will use other people to achieve your personal goals. That’s the definition of a tyrant, that is not a leader.’

A new balance

Traditional leadership styles will need to soften from the tough-minded, results-driven environments of the past. Instead, we need to focus on creating environments and collaborations which balance growth with happiness and joy.

Kim Dabbs lives this through her role at Steelcase, delivering the company promise in the communities where they live and work.

Kim suggested that leadership was the ability to look through a lens of understanding and shared humanity. ‘People are beautiful abundant beings who want to give back. They want a higher purpose’.

INSEAD Associate Professor Jennifer Petriglieri believes we need to lower the bar for leadership and make leaders human again. We don’t always have to chase the big noble goal. Sometimes it can be just about making your local environment a happier and better place to be.

Leadership for the new world

‘The system we have created has self-selected the current group of leaders who focus on numbers. We are now moving into a more purpose-led world which requires new forms of leadership,’ noted Sisodia.

Leaders need to go beyond work and seek to understand the motivations of the individual outside the office as well. We need to find ways to switch off. Our performance management systems will also need to change.

In a situation where 70% of professionals are in a relationship where both individuals work, it is inappropriate for leaders to expect themselves and others to commit themselves 100% to their work. It creates unnecessary stress and unbalances relationships.

The ecosystem world will challenge leaders in ways we haven’t thought of yet. There is great potential to improve how we do business which benefits the collective.

Oswald closed out the session with a challenge for us all. ‘Leadership is bringing out the greatness in others. We’re moving more and more into a narcissistic world, and we need to focus less on what we’ve done, and more on what we’ve enabled.’

About the Author:

Steve Forbes is a facilitator, leadership coach and trainer. He is the author of “Creating Customer Value”.

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

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Parallel plenary #4, 21 November 2019: Capitalizing on new technology and connectivity

‘How can we capitalize on new technology and connectivity?’. When the writer read the announcement of the panel chaired by Mehran Gul, he expected the discussions to center on technology and the buzzwords of the day – ‘Artificial Intelligence (AI)’, the ‘internet of everything’ or at the very least ‘Collaboration Platforms’ …

Fortunately this was not the case. The paradox of ‘capitalizing on new technology’ is that technology shows every sign of being the wrong focus. The miracle occurs beyond technology, with a clear focus on innovation and people. Panelists Adam Cheyer, Karenann Terrell, Carsten Linz, Claudia Crummenerl and Amit Bajaj provided a broad range of perspectives, but all focused on dimensions ‘beyond technology’. Two of them, Carsten Linz and Claudia Crummenerl, focused their message very explicitly on this perspective shift.

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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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It’s innovation, stupid!

Carsten Linz, Group Digital Officer of BASF SE, was clear about what really matters for success in ecosystems, focusing on ‘innovation-led transformation’: meaning, don’t digitize the past, innovate for the future. Concentrating on technology-led efficiency and optimizing the status quo only is the wrong way to capitalize on new technology and may even threaten an organisation’s future viability.

But how can innovation-led transformation be brought about in ecosystems? Linz’s message was: ‘You should expose what you can do best that others can use to co-create the future with you’. Taking AI as another example for a ‘beyond technology’ perspective, he made it clear that where data and algorithms are king, then moral and ethical integrity must be queen. The full value of data and algorithms cannot be harvested without an innovation-led framework for ecosystems focusing on the needs of people and organizations. 

It’s people, stupid!

Claudia Crummenerl, Global Vice-President for People and Organization at Capgemini Invent, deepened this second central aspect of going ‘beyond technology’. It‘s people, stupid!

‘When we start looking at how to deliver outcomes from digital transformation, we see that it is actually not a technology problem but a people and organizational capability issue,’ she said.

Echoing Linz, Crummenerl differentiated two reasons for digital transformation: cost-cutting and identifying opportunities for growth. To be successful, any initiative must combine both. As for success factors in realising the miracle of turning growth opportunities into reality, she emphasized that consistency and continuity of strategic direction were key – it is impossible to capitalize on the opportunities that technology brings through the single-minded pursuit of short-term benefits.

The bigger pictures: inter- and intra-enterprise collaboration, culture …

The focus on innovation and people in ecosystems has an impact on the larger context, for example, on inter-company collaboration, culture and even governance. Based on his own experience, Adam Cheyer, co-founder and VP Engineering, Viv Labs (and previously Siri, before it was acquired by Apple), examined, among other things, the pitfalls and opportunities for collaboration between start-ups and companies and how to balance internal and external innovation, integration and autonomy. In his introduction, he called for a clear decoupling of start-ups from the complexity of companies. The sovereignty of the start-ups and the documentation and APIs for decoupling will be a critical part of success. When Bajaj, Crummenerl and others spoke of collaboration within internal ecosystems, they evoked the relevance of platforms, data and integration, but other aspects, such as culture, were again at least of equal importance in moving beyond the silos of our existing companies.

Dark sides of ecosystem collaboration

After the panel presentations, the audience added some important extra elements to the discussion, particularly on the darker sides of ecosystem companies, and the necessity of  distinguishing the ‘fake’ from the ‘real’ ones. While the fake ones call themselves ecosystem-oriented, they focus mainly on its exploitation.

We should not be naive about ecosystems. We need a clear focus on win-win strategies, unambiguous ecosystem governance and transparency to ensure that ecosystems fulfill their promise of capitalizing on new technologies and connectivity for the benefit of all participants. While the audience and panelists added many other valuable insights and experiences, they served above all to confirm the central  ‘beyond technology’ message of the session: innovation should be the ‘North Star’ for capitalizing on technology within ecosystems, with a strong focus on people and appropriate organization and management concepts as keys to ultimate ecosystem success.

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

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The cities of the future we imagined in the 1970ies were about flying cars and beautiful skyscrapers.

Where are we now? At micromobility with e-scooters? Where did it all begin? If the Renaissance began in Florence, Smart City began in Silicon Valley. While we know San Francisco as an ideal place to test the latest Smart City tech gadgets their City Government took an interesting decision recently: you now have to demonstrate which public value your technology will bring to the city.

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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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What value does your tech bring to the city

Cecile Maisonneuve, President of the think tank Fabrique de la Cité, kicked off the Session on “Cities as Social Ecologies” at the 11th Global Peter Drucker Forum with this revealing development of urban policy. She goes on to explain: Cities are wonderful laboratories, but citizens are not guinea pigs. It seems we are currently living at a turning point in the way we are considering the future of cities. We seem to be coming back to the right questions. What is the purpose? What is the vision? Future cities have to overcome three main and intertwined problems, she argues:

1. Climate Change:
As worldwide two thirds of people are living in cities, urban policies will play a major role in this challenge. The discussion with the audience was quite controversial. Too drastic measures will lead to failure due to public resistance. Policies need to be ambitious and balanced at the same time, which is not a trivial task to pursue. Thomas Madreiter adds to the discussion that providing alternatives that work well contribute best to wider adoption of those alternatives.

2. Affordable housing:
Social and economic accessibility remains crucial to successful urban and economic development. The City of Vienna manages to tackle the issue of affordable housing in a way that no other metropoly has been able to. The social crisis upcoming around the world – illustrated by France‘s yellow jacket movement – is about the fact that cities increasingly exclude people who built them, says Cecile Maisonneuve.

3. Mobility
Mobility in a city is not about technology, e-scooters or public transport. Mobility is about people, about how you fulfill your program of activities every day: working, movies, shopping, taking the kids to school …

Cecile Maisonneuve proposes a new urban social contract. The classical social contract in cities was about taxation: paying taxes bought you services and representatives. The future model can be that we give data. What do we get in return? Mobility, social security, affordable housing, innovation …?

Cities as a contributor to climate change

Thomas Madreiter, Vienna‘s Director of Planning, sees the contribution of cities as critical in the context of climate change. Vienna initiated climate budgeting in June 2019 to address this as one of many initiatives. Another policy cornerstone in Vienna is affordable housing: Vienna started 100 years ago with its social housing program to tackle social inclusion and social peace. The so-called Red Vienna housing program is still one of the decisive factors that secure Vienna’s position as one of the world’s most livable cities.

Urban planning’s daily business is to deal with conflicting goals. Understanding the city as a social ecosystem in a modern way means urban policy must find compromises. In other words, the city has conflicting interests and that can’t be avoided. Thomas Madreiter concludes that embracing conflict and finding solutions in a collaborative process is part of the solution. No single technical solution can solve this problem. Solutions will need to involve people and city policies will be about conversations and finding solutions to mediate interests.

Public policy breakthrough in London

Martin Ferguson, Director of Policy & Research at SOCITM, contributed examples from the UK, citing Charles Booth, a social ecologist, who mapped poverty in London which resulted in a breakthrough in terms of public policy. Breakthroughs in this sense eliminated the blind spot that poverty existed in London. This enabled reformers to influence government to introduce a variety of social reforms that enabled the city to progress. Today the UK looks back on an extraordinary period of austerity in terms of public expenditure. The idea of centralist top-down hierarchical silo-based thinking has stifled innovation in the communities and brought about an inability to do anything to improve the human condition. This is why cities would need to focus on a local level and would need to leave the debate on a national level aside.

Deficits, according to Martin Ferguson, are less about budgets and more about visible shortcomings in other fields like poor air quality, unemployment, homelessness and other social problems typically migrating from the countryside to the cities. Manchester City Council and other municipalities like Barking & Dagenham demonstrated a new way forward based on a collaborative approach solving citizens‘ needs. Barking & Dagenham developed a data driven Social Progress Index to look at the causation of problems surrounding poverty and well-being in particular.

The crucial success of urban public policy seems to be whether the real problems that people are facing are being solved and communities are being included in the process. The development of city policy should focus on how to bring humanity back into managing cities. A shift from the Taylorist centrist view to a point that Charles Handy made as a conclusion of this conference two years ago: shifting to a more organic, social, evolving approach to improve the human condition, orchestrating the interactions – and going beyond harvesting just the low hanging fruit.

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

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Friday Nov 22^nd 2pm-3pm Zeremoniensaal, Hofburg, Vienna

The corporation may be one ecosystem operating within a broader ecosystem. But at its heart remain the people who have to carry out the work that has to be done. This session of the Forum took time to consider the role of people and how they contribute to the wider ecosystem of business.

In the chair was Andrew Hill of the Financial Times, and he was joined by Michele Zanini, managing director of Gary Hamel’s Management Lab; Gianpiero Petriglieri, associate professor of organisational behaviour at Insead; Avivah Wittenberg-Cox, author and CEO of the 20-first consultancy; and Bart Weetjens, a social entrepreneur and a Zen priest.

Hill opened by recalling the words of the English writer and art historian John Ruskin, who identified three requirements for people to be happy in their work: they should be fit to do it, there should not be too much of it, and that people should have a sense of success in it. This neatly introduced the contributions from the panel, all of which, in their different ways, considered how humans react with the systems they find themselves in.

Incremental change is no longer enough

Zanini asserted confidently that the bureaucratic model of the organisation is no longer fit for purpose – too slow and inadequate to the needs of today. A lasting shift in management models requires radical change.

To get beyond slow, incremental change (which can be sabotaged) change has to be ‘syndicated’ – spread through the organisation. At the Management Lab this is called a ‘management hackathon’.

At one large consumer goods organisation which worked with the M-Lab, 4,000 employees were asked to reimagine the organisation’s management model, working on a dedicated collaborative platform. People felt they could change the system. The advantage of this approach is that, while 50 people working remotely on a change project can be blocked, thousands working in real time online (and visibly) are harder to stop. This is about ‘leveraging the wisdom of the crowd,’ he said.

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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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Work: an existential moment

What was happening to our experience of work? Petriglieri asked. Change today is freeing us up, potentially, but also freaking us out, he said. Existential questions arise in this context: will we survive, will we matter, will we be in charge?

We have poor management tools, in our theory and practice, to deal with these questions, he noted. We are better at instrumental questions (‘are we productive?’) than existential ones. Yet this is an existential moment.

Three hundred years ago what it meant to be human was to belong. The logic was tribal. Later we defined ourselves in terms of what we did, what we contributed. And there were two basic psychological needs which underpin this: the need to belong and the need to be free. We need to have some agency. Belonging and agency are the two pillars of humanity. When we dehumanise others, we either tell them that they don’t belong or we restrict their choices.

In this digital age people are asking, about this emerging world of work: will we be able to make friends? How free will my choices really be? Who are we becoming and with whom?

We need a different metaphor for work and leadership, Petriglieri suggested. We’ve had the military metaphor (the general), the saint, the entrepreneur…now we need to consider the metaphor of the artist.

Artists are free and cultural, personal but working for others, marketable but adding beauty…we need to stop the tyranny of thinking that says if we are preoccupied with becoming and meaning it means we are not practical, Petrigieri said. He concluded: There is nothing as human as a good story. We don’t need another theory of management. We need a different story of management if we are to figure out what it means to be human in ecosystems.

Companies need to become gender-bilingual

For Wittenberg-Cox, women were the ‘canary in the coal mine’, choosing to have fewer children. But this leads to the problems of the ageing society. Designed and organised for men by men, companies have yet to adapt to the arrival of women in the workplace – women have been allowed in but only as long as they become men (or at least display a close resemblance to the dominant group).

Women will change the organisation, but only if they are allowed in as women, Wittenberg-Cox argued. Companies need to become gender bilingual, not gender blind. They are not the meritocracies they think they are. Where women are excluded, the ecosystem is ‘set up to fail’. ‘The Drucker Forum is, at least, one of the most gender balanced conferences I have seen,’ she added.

Weetjens showed a film of his organisation, Apopo, at work. Apopo trains rats to locate land mines, which can then be safely destroyed. (This represents quite a change for him – formerly he had worked as a product designer, before becoming a Zen monk.) ‘We work on human potential and rodent potential!’, he commented.

What do our structures do and for whom?

In the discussion that followed the initial presentations panelists looked more closely into what a healthy and changing ecosystem at work might look like.

Petriglieri observed that ‘you can have too much control but also too much freedom’. Organisations should be neither stifling nor neglectful. Today’s level of control now is ‘FW Taylor plus an algorithm’, he said.

A question to ask is: what do our structures do and for whom? And: ‘does our work allow us to make work that resembles us, and make friends who do not? If not we are being dehumanised,’ he said.

Wittenberg-Cox noted: ‘Feminism is a movement against domination.’ And Zanini observed that, in his opinion, the best organisations feel like a community or a family, in which you can set your own path. Families are not always unproblematic, however. And parenting is a risky metaphor, according to the former psychotherapist Petriglieri.

This was a stimulating and wide-ranging panel which in just one hour raised all sorts of questions worthy of further enquiry. It certainly added depth and variety to the rich ecosystem that is the Drucker Forum.

About the Author:

About the Author:

Stefan Stern is the co-author (with Prof Cary Cooper) of “Myths of Management – what people get wrong about being the boss” (Kogan Page 2017), and “How To Be A Better Leader” (Bluebird 2019)

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

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As the leading management conference in the world, the Global Peter Drucker Forum serves as a conduit of powerful ideas and insights for both business and society.  In 2019, the conference theme was The Power of Ecosystems

My observations are from the Plenary Session 2, Day 1, from the Global Peter Drucker Forum, 2019. Chaired by Adi Ignatius, Editor-in-chief, Harvard Business Review Group, the panel included: Vinton G. Cerf, VP and chief Internet evangelist, Google; Michael G. Jacobides, Professor, London Business School; Miriam Meckel, Founding publisher ada, Handelsblatt Media Group; Amy Webb, Founder, Future Today Institute; Professor Stern School; Zhang Ruimin, CEO and Chairman of the Board of Directors, Haier Group

The Biggest Risk for Business: Focusing on the Product

Adi Ignatius started with the intriguing statement that the biggest risk for companies now is to focus on their product, an idea he attributed to panelist Zhang Ruimin. “If companies are not thinking about a broader ecosystem of customer experience they’re going to be left behind.”

So how should we think about ecosystems?

Marc Jacobides explained that while we might speak of ecosystems in metaphoric and playful ways, it is firms like Haier that are creating a “dense web of relationships that are operating across their own boundaries whose power rests on structured sets of collaboration.” Opportunities for value-creation emerge because technology allows us to revisit how we add value and reorganize the value chain.

Vint Cerf expressed that as an engineer, he wanted “stability, interoperability and the ability to adapt to change.” Google has reorganized itself internally to “make the ecosystem work well.” It has created a core group focused on “making the ecosystem function technically and uniformly,” he explained.

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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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Will Platforms Survive?

Adi then asked: “Do you think the current platform model will survive?”

Miriam Meckel suggested that there were two pathways. One, a continuation of the current platform monopolies which will continue to grow via network effects and create “gargantuan wells of data”; if this continues, she surmised, there will be a bifurcation of the Internet based on politics – with a Western internet and a Chinese internet with its social credit system.  Two, the “breakup of Big Tech” – as proposed by Elizabeth Warren – which will create a more competitive landscape with more viable platforms emerging. This model could encourage public value creation opportunities, she implied.

Vint Cerf insisted that there was a third way, beyond monopoly and competition, which was collaboration and cooperation. He said there was a path that allows collaboration and cooperation, even while you compete with each other, but where you don’t feel trapped in a particular piece of an ecosystem.  His example was Kubernetes, the open source container orchestration system for automating application deployment, scaling, and management.

What is an Ecosystem Brand?

Adi asked Zhang Ruimin: “You’ve called Haier an ecosystem brand. What does that mean for your business strategy?” 

He started bluntly – “We all need to transform into ecosystem companies or we won’t be able to survive.”  “Haier,” he explained, “has been one of the been ranked as one of the largest white goods manufacturers in the world, but now we want to transform into a major ecosystem.  In the future I think single standalone products are no longer valuable. What’s more valuable is a user case scenario where all of the appliances are connected together.”

Users want the best experience – a total experience.  He continued, “Haier is working on an Internet of food which connects oven, microwaves, stoves, and refrigerators; the connected appliances talk to food producers and cook and recipe providers so that our users are not simply using the appliances but accessing the best food ingredients and the best recipes so it’s about the experience of food. Partners join us because they can grow 15% (per annum) in China using the Haier ecosystem as a channel. This means that we are no longer fighting alone but fighting together for our users.”

Ruimin saw two trends for the future: one, where products are replaced by integrated use-case scenarios and, two, where ecosystems overlap and cover different industries.

Ruimin said that deal sizes might be sixty thousand dollars instead of a few hundred dollars, showing the value of this approach. 

To demonstrate this, Haier uses its experience stores to showcase the ways in which products are embedded into the daily life of the consumer.  The smart home has a smart kitchen, a smart living room, and a smart balcony. 

More intriguing is how Haier then engages the consumer in an ongoing “conversation” to continuously improve the living experience. Most customer relationships end with the sale, but here the relationship actually begins after the sale!

Inspired by Ruimin – Philip Kotler and I came up with the idea of an “Internet of Purpose.”

How Should Companies Prepare for the Future?

Adi then asked: “How should companies prepare for a future where they may have to participate in ecosystems?”

Amy Webb pointed out that one of the challenges is based on how humans use language.  While we tend to speak in terms of metaphors, we need to get far more specific to address the issues presented to society by AI and Big Data. “There’s a lot of misplaced optimism and fear about this,” she said, “ with a lot of our cues coming from science fiction, where we’ve got very clear ideas of what the future might look like: for the most part it’s robots coming to murder us in our sleep, or robots taking our jobs.”

The real issue, she says, is that we don’t have a lot of transparency and clarity around data policy.  At the highest levels of business, she finds there is almost no discussion of data governance.  This is important, she explains, because “we’ve had a leadership vacuum in the United States over the past few administrations, while in other areas of the world, we currently have conflicting ideas of the future of data and AI.”

Webb’s concern: “what if some of these companies started trading on this proprietary data in a way that that might cause a new kind of an inflation that we’ve never seen before, a new kind

of housing bubble or problem?” 

Webb also brought up the tale of two internets – US vs. China, and with it her concern that we are witnessing a restructuring of the world economy and a future of deep uncertainty.

Organizing as an Ecosystem: The RenDanHeYi Model

“In the era of the Internet of Things, companies need to become ecosystem companies.”

With that statement, Zhang Ruimin began explaining the ecosystemic organizational structure of the Haier Group. “We have created a RenDanHeYi model which means aligning our employees with the needs of the user.”

Translated, “Ren” is employee, “Dan” is “user needs,” and “HeYi” is “the connection between each employee and the needs of each user.”

Ruimin explained how The RenDanHeYi model lets go of the traditional “command and control” management paradigm.  At Haier, the traditional management model has been replaced  to create a network of thousands of micro-enterprises, each a small team of about eight employees.

“Peter Drucker said that in 21^st century companies everyone will become our own CEO.  This is what we are doing. CEOs have three powers: the decision-making power, the HR power, and the power to set compensation. We gave these three powers back into the hands of our micro enterprises.”

Ruimin also explained that when other companies came to study Haier, he would ask if they could give up the three powers to their people.  The answer was always “No.”

The only other companies we can think of that have done something similar and sustained it over time are the Semler Group (now Semler Partners) in Brazil and W. L. Gore & Associates, Inc. in the US.

This is the true meaning of “Leadership Everywhere,” the theme of next year’s Drucker Forum.

FURTHER READING:

• Picking The Brain Of The World’s Most Radical CEO: Zhang Ruimin – Corporate Rebels
• An Entrepreneurial, Ecosystem Enabling Organization – Simone Cicero
• In the Ecosystem Economy, What’s Your Strategy? – Michael Jacobides
• The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity – Amy Webb
• Mein Kopf gehört mir: Eine Reise durch die schöne neue Welt des Brainhacking – Miriam Meckel
• What we need to do to fix the web – Vint Cerf

About the Author:

Christian Sarkar is an artist, entrepreneur, and consultant.  He is the founder of Double Loop Marketing LLC, a marketing consultancy, and Ecosystematic, an ecosystem mapping tool. He’s also the co-author of Brand Activism: From Purpose to Action, a book written with Philip Kotler, the “father of modern marketing.

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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At last year’s Global Peter Drucker Forum, attendees engaged in a pre-conference workshop to confront the inconvenient truth that the failure rate in implementing organization transformation initiatives is too high and too costly.

The Project Management Institute (PMI) pegs the total cost of impotent transformation efforts at approximately $2 trillion per year – roughly equal to the GDP of Brazil. As things stand, organizations are squandering more than $3 million every minute on efforts that yield little-to-no change.

Key questions

In facing this stark reality, a number of key questions surfaced: What is causing the need for increased organization transformation? Why can’t we develop strategies that are more resilient to uncertainty? What traps do we fall into in implementing transformation? What role should leadership play in transforming organizations? How do we bring our people along?

Transformation by means of ecosystem

Michael Jacobides of London Business School tackled the question of increased organization transformation. He argued that modern-day technology can activate intra-firm networks, or ecosystems, and integrate the respective capabilities of these firms to create, deliver and capture unique and differentiated value to customers.

This ecosystems based approach, Jacobides posits, has both a Yin and a Yang. The Yin of ecosystems lies in the simplicity, convenience and seamlessness with which new offerings are surfaced and integrated into the lives of customers. The Yang lies in the complex web of relationships and agreements that are being structured between different ecosystem players to deliver that seamless and differentiated experience to the customer.

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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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As the context within which value is created, delivered and captured evolves from linear value chains into networked value ecosystems, the value creation game is changing. In an ecosystem based game, the goal of each player is to remain relevant and useful to other players in order to sustain the overall health, resilience and development of the shared ecosystem. In a value chain based game, the goal of each player is to defeat the other players by seizing control of the most profitable position on the value chain and defending that position to maximize value capture by squeezing other players out of the game.

Given this game-changing shift in value, Jacobides asserts that successful transformation must begin by first-and-foremost transforming people’s errant perceptions around how value is created, delivered and captured in an ecosystem-based world.  

Lack of resilient strategies

Rita McGrath of Columbia Business school addressed the question of why we fail to develop strategies that are resilient to uncertainty. She introduced the concept of a strategic inflection point which she defined as a change in the environment that causes the taken-for-granted assumptions on which your business is based on to no longer be true.

Successful transformation, McGrath contends, begins with cultivating empathy at the edge of the enterprise. It is only by truly understanding the context your customers find themselves in that you can identify the leading indicators that signal a potential strategic inflection point for your business. Once identified, successfully responding to a strategic inflection point requires that organizations first unlearn much of what they previously believed to be true. Then attempt new and different ways to create, deliver and capture value. Continue until a fresh set of beliefs and behaviors, better aligned with the new business environment realities, are appropriated.

McGrath maintains that this type of organization transformation cannot succeed without an environment of psychological safety where people believe they will not be punished or humiliated for speaking up, challenging the status quo, taking risks and failing.

Transformation traps

Martin Reeves of BCG responded to the question of transformation traps by claiming that not all change is created equal, and that different environmental circumstances require different types of transformational response.

In a traditional stable and predictable operating context where an organization recognizes a misfit with its environment, a change plan is created to move the organization from its existing state to a new state that better fits with the environment.

However, in a world of increasing uncertainty, Reeves maintains that change very rarely goes according to plan. Since ecosystems are dynamic and unpredictable, he cautions that applying a traditional model of planned change can be lethal. Instead, a more emergent test-and-learn based transformation approach must be employed.

Since organizations don’t change unless people change, Reeves argues that change should come from people rather than be imposed upon them. People who are involved in creating change do not resist change. People who have change imposed upon them resist change. In an ecosystems based operating context, it is critical to engage people’s ingenuity and imagination to dynamically uncover and pursue value generating progression paths.

The transformer’s dilemma

Karolin Frankenberger from University of St. Gallen tackled the question of leadership and organization transformation by introducing the concept of the Transformer’s Dilemma: a situation where leaders must deftly navigate the polarities of exploiting the core business while simultaneously seeking the next wave of breakthrough growth opportunities.

This challenge requires two distinct and opposing leadership systems to operate successfully. In a traditional core business, the leader’s role is to command and control resources to maximize the organization’s profit. In an ecosystem based context the leader’s role to connect and collaborate to maximize the ecosystem’s value. To succeed in navigating these polarities leaders must maintain their authenticity by staying true to the organization’s purpose and core values while having the ambidexterity to lead differently in different contexts without compromising that authenticity.

People and change

Rick Goings, Chairman Emeritus of Tupperware addressed the question of people and change by arguing that every successful strategy or business model works…until it doesn’t, and when it stops working all that is left is people.

If the people in your organization suddenly vanished, all that would remain is an impotent agglomeration of assets that sit idly by, awaiting an infusion of human inspiration. People are the life-force of every organization. The structures, processes, practices and technologies firms invest in are practically useless without people.

While things can be managed people must be inspired, encouraged and led. The role of the transformational leader, Goings argues, is to cultivate fast, focused, flexible and fun operating landscapes that enable people to become the best version of themselves.

Brightline’s People Manifesto argues that people form the link between strategy design and delivery. People turn ideas into reality, they are the strategy in motion. Most transformation efforts fail because organizations over-emphasize the tangible side of change and under emphasize the emotional one. Successful organization transformation requires an empathic, people-centered approach that turns inspiration into action. 

Anything less will almost certainly result in yet another costly transformation initiative that ultimately changes next-to-nothing.

Note: The People Centered Transformation Panel Discussion can be viewed here

Note: The PCT Framework can be viewed here

About the Author:

Tony O’Driscoll is an adjunct professor at Duke University’s Fuqua School of Business and a Research Fellow at Duke Corporate Education.

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

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Not a classic panel, nor the speakers you’d expect at a conference like the Global Peter Drucker Forum. The motto: growth happens where there is access to opportunity. The format is targeted at younger-generation participants from two camps: the winners and finalists of the Peter Drucker Challenge, an essay contest for students and young entrepreneurs, and participants in the Talent Award program for corporate career talents nominated by their employers.

The shortened ‘Barcamp’ format used within the Global Peter Drucker Forum sees pitches by participants, followed by an audience vote to select the most popular topics that will then be presented in a short talk. Ample discussion time is provided thereafter.

To start off the Barcamp, moderator Isabella Mader cited Charles Handy’s closing keynote at the 2017 Drucker Forum: ‘To change the world let us start small fires in the darkness until the whole world is alight.’ The idea behind this session is to be one of those small fires and to spark further ones from the talks given and the ideas discussed with the audience in the session .

The voting brought seven young leaders to the stage with the following topics:

Ecosystems need eco-leaders, by Drenusha Shehu (Talent Award Participant, Raiffeisen Bank International): Industrial-age leadership was a lot about ego and lone decision making. Today, leaders need to be closer to the team, brainstorm ideas with their staff, and capture their input.

Words are losing their meaning, by Anika Marie Kennaugh (Drucker Challenge Finalist, Students): Peter Drucker knew about the magic, necessity and beauty of words. After all, words are what binds the world together or pulls it apart. Contracts, love letters, pitches, inaugural speeches … all rely on the magic of words. Even the success of scientific papers depends not only on the quality of the research, but also on the ability to convey ideas. But our “arsenal” is getting dull: students need someone to demonstrate how to polish their armour and brandish their language in order to become successful commanders-in-chief of their destiny.

We need neurodiversity to encourage diversity, by Karolien Koolhof (Drucker Challenge Finalist, Students): When asked, ‘Who thinks diversity and innovation go hand in hand?’, a vast majority of participants raised their hands. Extroverts and introverts bring complementary talents to the table – fast action and introspection, boldness and calm. Recounting her personal story as an introvert, Koolhof explained how she came to build a platform to encourage introverts to embrace their natural strengths and extroverts to understand what introverts can contribute.

 We might note here that the first three speakers with the best voted pitches were young women – a first at the Drucker Forum Barcamp.

Why become more data-driven? by Christian Renz (Talent Award participant, Raiffeisen Bank International): Corporate survival is not enough, argued Christian Renz. If companies are to excel, a data-driven approach is a crucial strategic ingredient for success. Basing decisions on data and information rather than taking a chance or relying on gut feel will improve the quality of decisions in two important areas: business development – finding opportunity and spotting patterns of consumer need – and generating efficiency.

What should the agenda be for AI today? by Babajide Muritala (Drucker Challenge Winner, Students): We all know AI is the ‘boss’ these days. In endless panels and chat shows, academics and pundits discuss control and the prospect of robotics and AI replacing human labor. But maybe this fear is misdirected. There is another AI apocalypse dawning that’s not talked about enough, which is algorithmic bias. Stories like a man getting 20 times more credit than his wife although she has a better credit rating illustrate the idea. What do cases like this predict for the surveillance of citizens, the militarization of AI, and so on? Let’s talk about discrimination by AI – and let’s not have AI take relevant decisions until this is fixed.

AI as the “third factor”, by Sorin Suciu, (Talent Award participant, Raiffeisen Bank International): The exponential development of business ecosystems has been largely supported by the development of artificial intelligence. In practice, the increasing application of digital technology has led to the emergence of a third factor in the business ecosystem: AI. The question to be addressed in this context: which is to be the dominant factor, AI or humans? Only responsible management of business ecosystems can ensure that the economy and society won’t be reduced to profit-making machines. Responsible management of AI will need to address the question of a life worth living.

Specialization kills management, by Shubhadeep Basak (Drucker Challenge Finalist, entrepreneurs category): In projects dominated by functional arguments about who is in charge of what and where silo thinking and blame culture govern behavior, lengthy discussions will delay completion and increase cost. Projects go astray. Managers capable of taking a holistic and inclusive view of both project and people are a crucial element in project leadership.

Questions discussed with the audience revolved much around inclusion and collaboration and the human condition, bound together by an improved ability to communicate with each other. As Financial Times management editor Andrew Hill pointed out, appropriately enough all the talks seemed to be linked by a sense of connectedness and collaboration. He proposed to take the ‘eco’ out of ecosystems and pursue systems thinking instead (a thought continued in a post Forum FT article), supporting the idea that problems are more easily solved by diverse groups. AI in this context should not alienate but facilitate collaborators to work together across continents and diverse groups.

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.

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

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

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

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

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

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

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

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

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

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

About the Author:

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

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

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