Of the many forms of ecosystems facing disruption these days, fewer are reeling more than the large, global incumbent corporations struggling to adapt and grow. This year’s panel on “Transforming the Legacy Company” fueled a spirited debate about issues like digital disruption, shifting entrenched cultures, the role of hierarchy and command-and-control leadership, and surfacing voices of dissenting views to drive innovation and change.

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

Chaired by Megan Reitz, Professor of Leadership and Dialogue at IBS, the panel of experts, all with first-hand experience changing large organizations, exchanged a wide range of perspectives on this issue. The panel’s opening poll of the audience asked what the primary obstacles were that prevented organizations not born digital from adapting to a world of ecosystems. By a large margin, 52% of the room said it was a stuck mindset and culture. Said Lisa Hershman, chief management officer of the U.S. Department of Defense, “The challenge is how to leverage and preserve aspects of the culture you need, but change policies, structures, processes to get behaviors to shift. One of the biggest traps is that we get confused by outputs, vs. outcomes, and we need to shift our views. We used to measure the success of a knee replacement surgery by the length of a suture, now we measure it by the number of days it takes to walk. If you automate bad processes, you just get bad results faster. Sometimes getting adoption means taking the old approach away from people.”

According to an Accenture survey, only 15% of the class of 2015 said they would “prefer” to work for large corporations. And what they want most in a job is interesting, challenging work (39%). More interesting than what future leaders want from work is what they want from leaders. In the 2016 Edelman Global Trust Barometer survey of more than 33,000 people around the world, only 27% of leaders were seen as behaving in open and transparent ways. More revealing, 82% of workers around the world did not trust their bosses to tell the truth.

The gap between what people want and what they are getting from legacy organizations is dangerously widening. Here’s what is blatantly clear: larger companies once considered pinnacles of career opportunity have become employers of last resort. Unless they make radical changes, people will continue exiting in droves, leaving behind only mediocre talent.

Asked Reitz, “During transformation, the intensity of change pulls our attention internally, and we take our eye off external realities and our customer. Habits about when we speak up and about what, what we stay silent about, whose voice we listen to and whose voice we discount all intensify. How do we raise contradictory voices to challenge the traditional ways legacy companies operate?”

Ralf Wintergerst, group CEO of Geisecke & Devrient, offered his view: “We now we have different forums that allow different voices to surface – quarterly reviews, innovation boards and moving the company forward, the executive team. The innovation board isn’t composed hierarchically – it’s based on who has something to say. I’m rather silent in those meetings – it’s good for me to observe and listen.”

The desire of future employees to have a voice, and to be told the truth, can’t be overstated. It’s astounding how routine deceit is in organizations. When people know they are part of a collusive environment where the truth is unwelcomed, they hide parts of themselves out of view. My 15-year longitudinal study of more than 3200 leaders revealed that large companies put in place systems that encourage withholding or distorting the truth.

Researchers Detert and Burris have found “when employees can voice their concerns freely, organizations see increased retention and stronger performance. At several financial services firms, for example, business units whose employees reported speaking up more had significantly better financial and operational results than others.” While truth telling is critical in any organization, larger organizations are perceived as more political and therefore less safe to be honest. Sheryl Sandberg, COO of Facebook and bestselling author of Lean In spoke at a conference where she said, “If you look at any company in Silicon Valley that is failing, everyone in the company knows it’s failing, knows why and how it’s failing, but no one is saying anything. If people felt safe to speak up, many organizational failures could be avoided.” One CEO client asked me to review his remarks to employees following a difficult analyst call announcing missed earnings. The remarks had been prepared by his PR department. The reasons for the missed earnings were clear and correctable. But the remarks were spun to dismiss the sting. He said to me, “I just don’t want to rub people’s noses in our failure.” I responded, “That your organization has failed is no secret. You have 36,000 people now watching to see how honest you are about it. If you minimize the significance of this, so will they. And any valuable learning to be had will be minimized along with the truth.”

Said panelist Reto Isenegger, global strategy services leader for EY Advisory, “It’s vital that we build cultures of authentic relationships and trust – true connectedness. In ecosystems, trust becomes a very important aspect of success.” That trust enables leaders to push past the culture of hoping people share their views, to making it an expectation that everyone, especially leaders, actually do.

The more light of day there is between any members of a department, or a leadership team, the more fragmented it becomes. A shared sense of collective success helps unite organizations and reinforces the expectation that “issues that affect others are my concern.” Leaders must let people know that when they have insights or concerns about challenges, they are expected to share them in a respectful and helpful way. When this doesn’t happen, the default mode for many groups becomes a “hub-and-spoke” model of operating, where the leader becomes the primary source of keeping things synchronized, and everyone else is excused to worry only about their own “spoke.” If leaders reinforce this too long, it conveys that the only issues you must be concerned with are your own.

Legacy companies don’t have to obscure into obsolete behemoths. To adapt, they must shift their cultures to be more inclusive, and inviting of differing voices and views. Ecosystems have great power, but they are fragile. The only way to ensure their strength and longevity is to strengthen the voices of all those participating in them, deepening ownership for everyone’s collective success.

About the Author:

Ron Carucci is managing partner of Navalent. He has written eight books, including the Amazon #1, Rising to Power – The Journey of Exceptional Executives and is a regular contributor to Harvard Business Review and Forbes.

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”, which took place on November 21-22, 2019 in Vienna, Austria #GPDF19 #ecosystems

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My 15-year longitudinal study revealed four factors that determine whether people will lie or withhold the truth within a business context. Two of these factors are directly relevant to the healthy design of ecosystems.

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

Ensure roles and purpose are strategically clear. When the purpose of an ecosystem is unclear, or the roles of participant’s contributions are ill defined, you are three times more likely to have dishonesty among participants. The value to consumers as well as to participating members of the ecosystem must be clear and shared. Nokia’s painful example of Symbian’s failure offers a warning – when the value of partners isn’t considered or thoughtfully defined, they will become self-interested, and eventually defect. Finding the right combinations of industry leaders and those who can best complement them with shared products and services means narrowing choices and being clear on who contributes what and why. Apple and Google have mastered this by tightly controlling the numerous ecosystems in which they are central orchestrators. What makes ecosystem strategy complex is that it must have clear value for both the businesses participating as well as the consumers they serve together, ensuring that one doesn’t compromise the other. Once strategic clarity is diluted, ecosystem partners retreat to serving their own interests at the expense of the broader system.

Define governance with appropriate transparency. Ecosystem governance design is a nascent process. From loose, open systems to tightly controlled participation, and everything in between, the legal and contractual structures are not sufficient to build integrity into governance. Making sure decision rights provide levels of participation that keep participants satisfied with their respective degrees of control while still building levels of loyalty to the ecosystem can be tricky. If they have too little control, self-protection may motivate either leaving or guarding their contribution. Too much freedom and they may be ambivalent about staying. When governance is unclear, you are almost four times more likely to have dishonest behavior. Establishing decision rights across the ecosystem participants, rules of engagement, conflict resolution processes, and well defined behavioral rules of engagement helps ensure that those invited into the ecosystem know what’s expected, and what they can be held accountable for. Governance designs that manage partnerships with mutually defined standards not only raise the quality of the products and services being jointly created, but strengthen mutual commitment to those standards, raising the odds that participants act with integrity.

As digital technologies shape consumer behavior, and regulations increasingly blur lines between products and services, ecosystems are an inevitability of how our economy will function. Designing integrity into them from the start will ensure they remain vibrant sources of innovation and value.

About the author:

Ron Carucci is managing partner of Navalent, bestselling author of eight books, including the Amazon #1, Rising to Power; The Journey of Exceptional Executives. He is a popular contributor at Harvard Business Review and Forbes.

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

Today, the tensions between human and technical ingenuity are tightening as the lines between them are blurring. When we see the magnificent advances in artificial intelligence, and the impact they have on fields like medical science, is it the technological breakthroughs we stand in awe of, or the human genius behind them? Some days, it’s hard to know.

Today, finding meaning and purpose at work stands as one of the greatest pursuits of the workforce, and one of management’s greatest challenges to fulfill. Some researchers suggest that 50% of those in the workforce lack a sense of meaning and purpose. Which may well be behind the statistic we’ve all heard for years, that nearly 70% of the workforce remains disengaged.

In our hunger for meaning and purpose, we may well be over indexing on individuality as a source of that meaning. To contain our fear of being eclipsed, or replaced, by sweeping technological changes, many have stressed “individual branding” and self-promotion as one way to avoid extinction. The irony is, most of our large organizational systems neuter individuality through standardized performance measurement systems, policies that strictly direct how respect must be shown toward fellow employees, and by cultures that homogenize the workforce, becoming 50 shades of beige instead of bright collective bursts of many colors.

Our attempts to diminish individuality have intensified our hunger for it.

But the one thing technology will never be able to replace is our capacity to co-create. Further, some of our greatest sense of purpose can be found not within ourselves, but in the shared space of joining efforts to create something we could never create on our own. Research proves that people feel more connected their work, and to others, when they feel part of a team working toward a common purpose.

In an age of hyper-technological advances, managers must be vigilant about fostering shared meaning within their organizations, not by neutralizing individuality, but by harnessing it into a greater coalition of co-creation. Here are three ways managers can foster a greater sense of collective ingenuity and purpose.

Honor me and we. As humans, we’re hard-wired with both the innate desire to stand apart as “me,” and the deep longing for intimate connection to a greater “we.” These needs often feel contradictory, especially when one person’s need for “me” collides with another’s need for “we.” Managers should legitimize both longings with careful exploration of how those on their team seek to meet their “me” and “we” needs. Knowing how to orchestrate coalition among your team prevents veering too far to either extreme, where you have a homogenized group of frustrated people whose individuality feels squelched, or a group of maverick individuals who can’t blend their efforts toward a unified, greater result.

Encourage full ranges of emotional expression. Our workplaces often feel void of, sometimes even discouraging of, emotional expression. To keep things “professional,” we often imply that showing feelings of ecstatic delight after an achievement, or angry frustration from a setback, are akin to an “unprofessional” loss of control. This narrowing range of emotion comes with an important hidden cost managers may fail to appreciate. When people limit what they feel, they also limit their imagination. Of course, we can’t have people leaping off desks when they’ve aced a project, or throwing staplers at each other when they are angry. But there’s far more room for wider ranges of emotional expression than we’ve allowed people to explore.

My friend’s son expressed this poignantly at a recent competition for his school’s robotics club. His team was one of two finalists awaiting to hear where they placed. His son turned to my friend and whispered, “I bet none of those robot’s hands are sweaty like mine. And whichever team wins, their robot still won’t be able to high-five them afterwards.” Our capacity to feel deeply, and to share those feelings with trusted colleagues, is what makes us beautifully human, and fuels our greatest ingenuity.

Cultivate shared creativity. Nourishing creativity takes careful work. Creativity is actually rooted in a social experience, not a cognitive one. It’s meant to be done in community. Understanding the delicate nature of cultivating creative talent raises a managers odds that her team will bring their most creative ideas, take risks with new approaches, and be open to having their minds changed when other’s ideas prevail. Establishing clear expectations for collective creativity helps teams anticipate their managers push for collaborative effort without doubting their individual creativity is well regarded.

Human ingenuity at scale is one of the world’s greatest innovations. Cultivating a greater sense of shared purpose within that ingenuity is today’s manager’s greatest challenge, and greatest opportunity. Unleashing that shared purpose is where tomorrow’s greatest technical advances awaits.

Ron is co-founder and managing partner at Navalent, working with CEOs and executives pursuing transformational change for their organizations, leaders, and industries. He has a thirty year track record helping executives tackle challenges of strategy, organization and leadership. He is the best-selling author of 8 books, including the recent Amazon #1 Rising to Power. He is a regular contributor to the Harvard Business Review and Forbes, and a two-time TEDx speaker.

About the Author: 

Ron Carucci, Managing Partner, Navalent; HBR & Forbes Contributor, 2x TED, bestselling author Rising to Power

This article is one in a series related to the 10th Global Peter Drucker Forum, with the theme management. the human dimension, taking place on November 29 & 30, 2018 in Vienna, Austria #GPDF18

This article first appeared  in the Drucker Forum Series on Linkedin Pulse.