Throughout his life, Peter Drucker strived to understand the increasing complexity of business and society and, most importantly, the implications for how we can continue to create and deliver value in the face of complexity. I have long been influenced by Drucker’s work. In the 1960s and 1970s, he was already anticipating some of the implications of the Big Shift just beginning to emerge: the transition to an information economy, the centrality of knowledge work, and the transformative impact of digital technology on all types of work.

Around that time, two forces coincided, each amplifying the disruptive capacity of the other. First, the deployment of the digital microprocessor and packet-switched networking marked the beginning of the rise of the digital infrastructure that would eventually span the globe, driven by exponential performance improvements in computing, storage, and bandwidth technologies. Digital technology unfolded on top of a second force that had been building for a few decades: a global movement in public policy towards economic liberalization which was systematically reducing barriers to the movement of goods, money, people, and ideas across the boundaries of nations and industries.

The combination of these two forces created enormous opportunities but also enormous challenges. They have systematically and significantly eroded barriers to entry and movement on a global scale. The result is relentlessly mounting performance pressure. Evidence of this pressure is starkly captured in the return on assets (ROA) for all public companies in the US since 1965. Over this period, there has been a sustained and dramatic erosion in performance: ROA has collapsed by 75 percent.

The full blog post can be found at: http://blogs.hbr.org/cs/2013/06/how_drucker_thought_about_comp.html

Humans engage with their world in two reciprocal ways: firstly as passionate participants and secondly as detached observers. As managers we cycle between these modes constantly. It’s the mark of a great manager to be able to judge, in a complex situation, when and how to use each of them.

Detached observation requires a certain maturity. Consider that we are born into the world immersed in context. We are embodied organisms, fine-tuned by evolution to garner cues to action from our surroundings. We pay attention when we see a face and smile when we are smiled at. We learn to walk and talk without explicit instruction. From about the age of seven onward, however, we develop the capacity for perspective-taking. We learn to distance ourselves from the world and to swap our roles as involved participants for positions as distant observers.

The full blog post can be found at: http://blogs.hbr.org/cs/2013/05/the_mongrel_discipline_of_mana.html

 
I remember well when the idea of applying complexity science to management was first being eagerly discussed in the 1990s. By then, for example, scholars at the University of St. Gallen had developed a management model based on systems thinking. Popular literature propagated the ideas of complexity theory – in particular, the notion of the “butterfly effect” by which a small event in a remote part of the world (like the flap of a butterfly’s wings) could trigger a chain of events that would add up to a disruptive change in the larger system (such as a hurricane). Managers’ eyes were opened to the reality that organizations are not just complicated but complex.

Why did this interest and work in complexity not lead to major changes in management practices? There are, I think, a few major reasons that it didn’t – and that also suggest that the overdue change might now finally take place.

Read more at http://blogs.hbr.org/cs/2013/05/why_managers_havent_embraced_c.html