Session 2 – High Performance in the Digital Age:

What are the metrics organizations should be watching most closely?

Moderator: Jean-Francois Manzoni, President IMD

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

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

Stephanie Chasserio, associate Professor, Skema Business School

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

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

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

Differences between Europe and Asia and the US

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

Ideologies of digital

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

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

Work life balance and remote work

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

Meritocracy

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

Digital journalists and volume metrics

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

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

Digital revolution has been hijacked

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

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

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

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

About the Author:

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

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

What have we learned at the Forum that is most exciting, concerning, surprising?

Moderator
Isabella Mader CEO, Excellence Institute

Conference chair

Eduardo P. Braun

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

“The conference was very inspiring.”

“What did people say?”

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

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

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

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

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

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

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

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

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

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

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

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

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

How can we ensure that learnings are implemented?

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

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

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

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

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

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

About the Author:

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

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

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

Workshop: Employee Ownership and Governance: How Putting More Power in Employee Hands Affects Performance in Turbulent Times

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

Toshio Gotō Research Professor, Japan University of Economics 

Christian Stadler Professor of Strategic Management Warwick Business School

Radoslaw Kedzia Vice President of Huawei CEE & Nordic Region

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

Drucker Forum 2021

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

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

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

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

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

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

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

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

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

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

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

Involve more voices at the table when defining strategy

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

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

Ensure that people have a sense of real ownership

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

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

Enable the purpose mindset

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

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

Involvement, ownership and purpose

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

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

About the Author:

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

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