Moderator
Aaron De Smet Senior Partner, McKinsey & Company

Speakers
Alain Bejjani CEO Majid Al Futtaim Group
Tiffani Bova Chief Growth and Innovation Evangelist, Salesforce
Steven Baert Chief People & Organization Officer of Novartis
Amy Edmondson Professor of Leadership & Management, HBS

Drucker Forum 2020

This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.
#DruckerForum

The character of organizations has changed so much in recent years, that we have invented new words and phrases to describe life in 21^st century organizations.  Examples include:  chaotic, disruptive, and VUCA—an acronym for volatile, chaotic, uncertain and ambiguous.   Global competition, digital revolution, political uncertainty and other factors are now joined by the global pandemic.

The increasing pace and complexity of global business is demanding a new kind of leader able to thrive in disruption—not just survive in it.  Who are these leaders, What makes them different, and how do we build them?  This plenary addressed these and other questions by “reimaging what it means to lead.”

Panel members and participants identified several qualities of a new generation of leaders but focused most discussion on the following:  

• The reimagined leader focuses on building his own, and others, learning capacity.

• The reimagined leader focuses on developing and managing the self.

• The reimagined leader has a new perspective on humans in organizations.

The reimagined leader focuses on building his own, and others, learning capacity

This means the reimagined leader focuses on developing the ability to quickly adapt and function during disruption. 

Being the “smartest person in the room” may have been possible once.  However, the sheer volume and complexity of problems can overwhelm any single person.  As panelist Alain Bejjani put it, “we need leaders able to master situations they never trained for, didn’t expect, and may never see again.”  In addition, we need leaders who can do this repeatedly—without burning out–as new disruptions continue to surface over time.

How can this be done?

Panel members suggested that a leader’s ability to learn quickly in mastering new situations begins with the leader’s mindset and the ability to engage the collective wisdom, experience, and insight of a team.  Building an effective mindset relates to Drucker’s notion of “managing oneself” and is discussed below.

Panelist Tiffany Bova highlighted the power of communication in creating and managing high performing teams.  The reimagined leader communicates more and differently.  The leader’s communications are more frequent, more authentic, and more personal.  The panel noted that this type of communication can unfreeze a team experiencing the chaos of disruptive change by creating the psychological safety a team needs for creativity and performance.  Frequent and authentic communication helps team members navigate through disruption and perform better during it.

Panelists also highlighted the ability of the reimagined leader to share power constantly and to imbue a team with shared purpose—often a higher purpose– such as making the whole organization, or even the world, a better place.

Finally, panelist Amy Edmondson further expanded the definition of psychological safety by noting that it included safety within the team.  Without the facilitation of an active and attentive leader, teams can become scary and low performing places.  Reimagined leaders are attentive to how teams form, how new members join, how the team communicates, and other dynamics.  Great autonomous teams need leadership help to form and perform.

The reimagined leader focuses on developing and managing the self

 Earlier I noted the panel’s belief that the reimagined leader is able to quickly adapt and perform during disruption.  Rather than relying solely on past experiences or old irrelevant knowledge, the reimagined leader brings a fresh mind to each new situation.  The reimagined leader is able to recognize a new situation as new and to join others in creating an original solution.

The panel briefly discussed “mindfulness” as an important tool in managing self.  Mindfulness is loosely defined here as an awareness of one’s present thoughts, emotions, and actions. Panelist Steven Baert noted that awareness of his emotions—including fear of failure–was a starting point in better leading himself, and his team, through disruption.  Once fear had been named, it could be recognized and dealt with.

Another tool in self-management briefly mentioned by the panel was resilience.  The Harvard Business Review, Analytic Services defined resilience as “a set of personal skills and processes that enables individuals…to reduce stress and perform well under it, learn continuously, and keep work and life responsibilities in harmony.”

The Harvard study cites several practices that build resilience including:  clear employee buy-in, recognizing and rewarding performance, nurturing talent and active mentoring. The reimagined leader builds resilience by recognizing and rewarding performance, nurturing team members, and actively mentoring them.

The reimagined leader has a new perspective on humans in organizations

Long before there were digital revolutions or VUCA, there was conflict in management science between organizational performance and human fulfillment.   It was as though the two were mutually exclusive and beyond the intervention of any leader.

Panelist Steven Baert observed that the current environment could hold new hope for human fulfillment in organizations. He noted that machines were increasingly performing the transactional tasks previously performed by humans.  This situation was freeing people to focus on higher order work–the kind of work that conveys more meaning and satisfaction.  An example is a more active role in solving complex business problems. The ability of humans to leave the transaction behind and to provide new organizational value represents a win/win for people and for organizations.

Personal Perspective

The panel’s description of a reimagined leader able to thrive during disruption through the enlightened leadership of a team has caught my imagination because it elevates the stature of people in organizations.  In our discussion, the reimagined leader joins with the team to solve complex business problems.  Problems with a complexity  beyond the ability of any single mind.  In our discussion, people demonstrate new business value and become the consummate source of competitive advantage.

About the Author:
Walter McFarland is the founder of Windmill Human Performance, the past Board Chair of the Association for Talent Development (ATD) and co-author of Choosing Change from McGraw Hill.

This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.
#DruckerForum

I imagine the entrepreneurial society as a vibrant place in which entrepreneurial leaders in government entities, commercial organizations, and not-for-profit institutions work together to “…make innovation and entrepreneurship a normal, ongoing and everyday activity….”[1] . Because of this, the entrepreneurial society is also a place of continuous change—and therein lays the rub.  Continuous change is something that organizations find extremely difficult to do [2].

How does continuous change unfold in the entrepreneurial society?  More importantly what, if anything, can the entrepreneurial society teach today’s organizations’ about continuous change?  The following sections explore this question by examining Drucker’s perspectives on “the nature of change” and on “the nature of change leadership.”

The Nature of Change

On one hand, Innovation and Entrepreneurship is not a book about organizational change—at least in the usual sense.  However, it is all about change—because change triggers the opportunity for “systematic innovation.”  In Drucker’s words:

Systematic innovation therefore consists of the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation [1](p. 35).

The “changes” referenced above flow from a unique perspective on the nature of change—and one very different from the orthodoxy of the field of organizational change.

To Drucker, change is not something an organization occasionally does to align itself better with its market.  The need for continuous change is an immutable force of history arising from a particular kind of entropy—the entropy of the “artifacts” of humans.  In Drucker’s words:  “…we also know that theories, values, and all the artifacts of human minds and human hands do age and rigidify, becoming obsolete….”[1] (p. 254).  Because everything created by humans inevitably becomes obsolete, opportunities for innovation are constantly presenting themselves in organizations and societies.  It is the job of the entrepreneur to recognize this ongoing obsolescence and use it as an opportunity for innovation.

This notion of change arising from obsolescence is a very different perspective than that of the organizational change community—at least in the US.  In that community, the need for change arises primarily from shifts in the market.  When the market shifts in a significant way, so too must the organization to remain viable.  The focus is not on innovation but quick reaction.

This difference in perspectives is important for several reasons, but a key one is that the perspective in Innovation and Entrepreneurship is proactive while the perspective of the change community is reactive.  In the entrepreneurial society:  “…the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”[1] (p.28).  In the change community, organizations wait for market changes and focus resources on trying to anticipate better and predict these changes.

One lesson from the entrepreneurial society is that using continuous change for innovation demands a more proactive stance–constantly seeking change and acting on opportunities.  This proactive stance by entrepreneurial change leaders might lead the market instead of following it.

The Nature of Change Leadership

In the entrepreneurial society, leadership is all.  It, therefore, requires a process for creating and reinforcing entrepreneurial leadership across both the leadership corps and the workforce.  In the section entitled, “entrepreneurial practices”[1] (p. 155).  Drucker makes three recommendations for accomplishing this.  The first one is “focusing managerial vision on opportunity” [1] (p.155). This practice assures that managers are not only focused on problems but also on successes—on understanding what is working better than expected and why.  As an aside, this focus on success has recently been highlighted by neuroscientists as a key factor in brain performance. [3].

The second practice is “generating an entrepreneurial spirit among the entire management group.”[1] (p. 157).  This practice focuses the entire leadership corps on “units that do better and do differently”[1] (p. 157) and ensures that learning from the highest performing parts of the organization is shared organization-wide.  This practice also unites the leadership corps and contributes to creating an entrepreneurial culture.

The third practice is “systemically listening to and interacting with the workforce.” In this, senior leaders listen to and engage members of the workforce in discussions about opportunities for innovation and entrepreneurialism.  Leaders not only draw out the best ideas of the workforce—but actively engage them as fellow entrepreneurs. Recent research has highlighted this approach as a critical factor in increasing employee engagement and decreasing resistance to change [4].  The alignment of the workforce with the leadership corps is a major step in creating the entrepreneurial culture.

Historically, the change community has viewed the leadership of change very differently.  Change leaders—or change agents—are not focused on discovering opportunities for innovative change but on leading change efforts initiated by someone else.  In the context of large-scale change, for example, these leaders focus on topics like the cost, schedule, and performance of change efforts.  Their function can be as much administrative as entrepreneurial.

Another lesson for change from the entrepreneurial society is that change leadership has little to do with administrative chores and much to do with continuously searching for opportunities for innovation—and putting these in motion.  Because the entire leadership corps and the workforce are united in this, continuous change can fuel innovation across the organization.

Innovation and Entrepreneurship has been largely ignored by the change community in the US and potential lessons missed.  Even so, I believe several ideas are worth considering by today’s change leaders.  First, perspective matters.  A review of the change literature reveals that many change scholars are “admiring the problem too much.”  Much is said about difficulties arising from increases in the volume and complexity of change but little about how to use this situation for advantage.  The entrepreneurial leader’s perspective is that continuous change is fuel for continuous innovation.

Second, leadership matters.  Entrepreneurial leaders are not “fast followers” of change and innovation but initiators of them.  They consider risk but are not captured by it.

Finally, culture matters.  Continuous change affects an organization as a system—and affects different parts of the system differently.  Organizations must, therefore, respond to changes effectively and creatively.  To accomplish this, the leadership corps—and the workforce of the organization—must be united in common purpose:  to find change and use it for innovation.

Thirty years after its publication, Innovation and Entrepreneurship challenges us to see change with better eyes.  Continuous change is not a problem to be solved, but fuel for continuous innovation

About the author:

Walter McFarland is the founder of Windmill Human Performance and co-author of Choosing Change.

References

1. Drucker, P., Innovation and Entrepreneurship. 1985, New York: Harper.
2. LaClair, J. and R. Rao, Helping employees embrace change. McKinsey Quarterly, 2002.
3. Brains, S., 4 Ways to acquire Navy Seals’ mental toughness. 2014.
4. McFarland, W., Managers in the Digital Age Need to Stay Human. Harvard Business Review, 2015.