It is no surprise that the theme and focus of the 2022 Global Peter Drucker Forum is “Performance that Matters: Sparking the Entrepreneurial Spirit.” And Drucker was very clear about the significance and importance of goals, measures and performance when he stated that “Unless we determine what shall be measured and what the yardstick of measurement in an area will be, the area itself will not be seen.” And some sixty-eight years ago in his book, The Practice of Management, he also spoke to performance when he outlined the idea of MBOs.

It is likely that Peter Drucker would start a “Performance that Matters” discussion by first addressing the purpose of a business — “to create a customer…the customer is a foundation of a business and keeps it in existence. The customer alone gives employment. And it is to supply the customer that society entrusts wealth-producing resources to the business enterprise.” The fundamental “Performance that Matters” questions businesses should then be asking and tracking would be: how well are “we” performing in creating NEW customers, followed by the measures of customer retention and satisfaction. Failure to know and track these very basic customer growth performance metrics likely results in a business challenged in achieving both sustainable growth and competitive advantage.

Two functions of a business

Drucker goes on to state that “the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” The next set of performance measures would be marketing effectiveness and the organization’s propensity to innovate— metrics that allow the company to adjust, refine and move swiftly and directly toward achieving market distinctiveness and leadership. Peter Drucker also notes that marketing and innovation are key entrepreneurial functions and having a culture of entrepreneurship/intrapreneurship can truly set the enterprise apart from all others.

For many established organizations the decision to embrace and move to a more compelling entrepreneurial culture (the process that turns those (creative) ideas into actual innovations) many be daunting, but very possible.

Job crafting

A good starting point would be to introduce “job crafting” or the re-framing of jobs to be more meaningful and aligned with team members’ interests and values. And one will know when they have arrived at a more entrepreneurial culture/climate when the following questions can be answered by “yes”:

Do you try to learn new things at work?

Do you ask your boss to coach or mentor you?

Do you often take on more tasks than your role formally requires?

And in staying on the theme of culture and “Performance that Matters,” should not an organization also be setting its sights on and measuring the extent to which they have a high-performance culture?

Follow the research

Research conducted by the Gallup organization focused on measuring and determining the key success attributes for the best managers. They found that these managers: set clear expectations, defined employee roles, created trusting environments, encouraged employee growth and development, and continuously raised the bar and encouraged high performance. Further, it was found that these managers created a climate of empowerment and in sharing authority/power with vs. over team members. They were also aware of and recognized their business as ever-changing, and maintained a keen focus on innovation and on developing a customer-centric strategy — team members understanding of individual and collective responsibilities in meeting customer needs and expectations.

Another “Performance that Matters” is leadership communication and collaboration. Gallup research also revealed that high-performing leaders and managers understood their role in the communication process, scheduled regular one-on-one conversations, used collaborative approaches, and created strong levels of trust. Lastly, these high-performance leaders maintained a heightened intent to change and their commitment to change resulted in an enhanced brand both with customers and team members.

Globally, there are many great examples of highly successful businesses which have crafted and successfully executed compelling strategies and which 32 have also been quite successful in establishing effective “performance that matter” scorecards. However, there is significant work yet to be done when considering the global business performance scorecard:

• Strategy execution average success rate is 50%
• Only 15% of team members are engaged
• 70% of managers are “just there” or “poor” with 70% of engagement directly  attributable to managers
• 70-90% of acquisitions fail
• 90% of start-ups fail

“Management is practice. Its essence is not knowing but doing. Its test is not logic but results. Its only authority is performance.”

-Peter Drucker

There is a need for more authentic and vulnerable leaders focused on creating and maintaining cultures of openness, honesty and empathy. As many more leaders actively lean into topics and conversations, they may find that their team members are encouraged and enabled to share their very best thinking and deliver “Performance that Matters.”

These questions and more will be great topics of discussion with scholars, business leaders, authors, academicians, business trade journalists and others during the 14th Global Peter Drucker Forum 2022.

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/

markbeliczky@gmail.com

571-228-2341

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.
#DruckerForum

Today with our VUCA world and combined with digitized 4th IR, there has been a clear and compelling shift from an organization-centric to “ecosystem-centric”— a web of interdependent enterprises and relationships which create business value. This is clearly a significant change from traditional markets and a movement toward interacting and interdependent relationships, and a complex and interconnected digitized system.

It is the synergy of ecosystems which is so compelling, and only possible because of significantly increased connectivity and the tremendous advancements in cyber physical systems: AI, IoT, genome sequencing, autonomous vehicles, block chain, 3D printing — all continue to unlock new business models, products, and new customers and relationships.

With the ecosystem age businesses are seeing a “new reality” —particularly for incumbent enterprises. Only 3% of incumbents have adopted an offensive platform strategy. Historically businesses have tackled issues on their own, but in this newer, digitized world the best alternative/approach has given way to companies shaping a new competitive landscape — building their own collaborative network, joining existing ones and leveraging these ecosystems to maximize value and achieve competitive advantage.

Drucker Forum 2019

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

This new Digitized Era (4IR) has prompted many organizations to re-tool their teams and to make collaboration and partnering central to their skill set development and competitive advantage. There is more complexity to this newer business model: geographic diversity of participants, cross-industry focus, shorter and more focused deal structures, and mutually and continuous value creation. And with “digital-age partnerships” collaboration happens across geographic, language and cultural barriers. Analysis shows that 90% of ecosystems involve participants from more than five countries and 77% of ecosystems involve developed and emerging market participants. It is not surprising that today’s competitors may become tomorrow’s partners — “frenemies.”

As for customers, 81% of consumers are demanding improved response time, 76% expect organizations to understand individual needs, and 68% anticipate that the ecosystem will provide for “harmonized consumer experiences.” And when executives are surveyed, 64% believe the new business models will profoundly impact their businesses.

It is expected that ecosystems will account for more than $60 trillion in revenue by 2025 or more than 30% of the global corporate revenue. Many companies have clearly experienced the value and competitive advantage having already reengineered their business models to insert a digital backbone.

About the Author:

Mark Béliczky is a consultant to The Carlyle Group 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

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

The challenge for business leaders in today’s slower/slowing growth period is to find ways to reverse the trend and to shift and propel their organization into growth mode. The growth engine can be stimulated and energized, not with real capital, but with a greater LEADERSHIP focus on human capital. This can be achieved by: (1) looking internally, assessing and formally embracing an “engaging” and a more inclusive workforce as well as social/community engagement — embracing and practicing “doing good while doing well,” and (2) recognizing and responding to the VUCA World.

Inclusiveness and Diversity: Improving Corporate Performance, Drive Growth, and Enhance Employee Engagement

For years compelling research has verified and validated what has been known for some time — that diversity and inclusiveness achieves more positive and sustainable results: “effective decision making, innovation, and economic growth by promoting deeper information processing and complex thinking“. Further, as more and more leaders understand and embrace the “contributing-belonging” cycle (“the more people feel they belong, the more they will contribute”), the easier their path will be to real and sustainable growth and well-being.

A significant milestone to formally address inclusion and diversity occurred earlier in 2017 when 150 CEOs  from leading global companies across the US signed a commitment and pledged to “take action to cultivate a workplace where diverse perspectives and experiences are welcomed and respected, where employees feel encouraged to discuss diversity and inclusion…” This movement, and now an organization known as CEO Action for Diversity & Inclusion, will be sponsoring a summit this fall where they will assess: “initial progress, understand fundamental gaps, and determine the next phase of this work.” It is likely that CEOs and from other areas of the world will see this as a call to action.

Leading in Today’s VUCA World — On Becoming a SuperAccelerator Company

A major challenge for business leaders today is effectively navigating in the VUCA World and the need to alter one’s management worldview/practice and to change from the historic “probable outcomes” approach to “what is possible”.

Learning to migrate from “The Probable” to “The Possible” will require formal commitment and action to leadership re-tooling. Some astute business leaders have already figured this out and have recognized that in order to effectively navigate in this new environment they will have to address this head-on with their senior leadership teams and to then integrate and SHIFT their company culture. Leaders today are still likely in those early stages of “VUCA Survive” and with the right focus and engagement they can migrate to “VUCA Thrive”.

There is a path and an approach and some very interesting work done over the past two years at Heidrick & Struggles as they have identified methods and factors that drive to accelerated growth in the VUCA world. Based on extensive research, Heidrick & Struggles identified four key, unique attributes/tests of company performance that are key to driving accelerated and sustainable growth: Mobilize, Execute, and Transform with Agility.

First tests started in 2016 which identified those “superaccelerator” companies by applying their model to the top 500 companies in the world. Twenty-three companies were identified in 2016 and twenty-five have been identified in 2017.  It is important to note that “the companies come from a range of industries—healthcare/life sciences, consumer, financial services, real estate, professional services, and communications, as well as technology.” Clearly, the answer is not always high-flying tech companies which many believe are the only ones to have a monopoly on innovation and agility. Granted, Heidrick’s model and test is limited, but serves as a great starting point for business leaders as they plan and execute their VUCA growth plans. There are likely some key lessons learned from these companies as they reach “VUCA Thrive”. No doubt that there are other “VUCA Conquering” success models, with the key leadership action to acknowledge and take action with a sense of urgency. And by the way, there are no indications that the VUCA World is moving off its present course.

There has also been some great work done by Dr. Hitendra Wadhwa at Columbia University on high-impact decision-making in the VUCA World where he identified six critical practices  to help leaders arrive at “VUCA Thrive”:  (1) be reflective and iterative, (2) nurture conflict and make it constructive, (3) integrate, collaborate and be a team player, (4) encourage diversity and collaboration, (5) intelligence distributed across the team/organization, and (6) maximize results and learning. Ample evidence exists today that the VUCA World can be tamed (real and sustainable growth) through emboldened and enlightened leadership.

Early adopters have already demonstrated that inclusive prosperity and real and sustainable growth can both occur in a VUCA world. The key is continued dialogue, sharing and learning to leverage real human capital.

About the author:

Mark Beliczky is a Consultant & Adviser to The Carlyle Group in Washington, DC, New York City. The Carlyle Group is a leading global private equity firm with $170BN in assets under management.

Mark has a faculty appointment at Georgetown University, and past management lecturer at Vienna University, The Ohio State University, and former Board Co-Chair for Heidelberg Universityʼs School of Business.