Global Peter Drucker Forum BLOG https://www.druckerforum.org/blog Fri, 30 Nov 2018 06:11:28 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 The human – all too human – nature of innovationby Charles-Edouard Bouée https://www.druckerforum.org/blog/?p=2090 https://www.druckerforum.org/blog/?p=2090#respond Thu, 29 Nov 2018 08:20:25 +0000 https://www.druckerforum.org/blog/?p=2090
3d Waage entscheidung zwischen Liebe und Vernunft

A few days ago, the first artwork made by an artificial intelligence (AI) program sold at Christie’s for €380,000. Judging from the auction price and media attention the blurry portrait of a man received, the first thought for many was that machines have mastered yet one more skill. Not only can they lift heavy loads, drill holes and beat humans at cerebral games like chess and Go – they have now made an incursion into the human realm of imagination and creation.

It is true that machines will take over ever more tasks currently performed by humans, and they will fundamentally influence the way we think, work, and live. At this point, it appears we are only one step away from Picasso or Einstein being rendered redundant, possibly replaced by Artificial Intelligence

But the truth is that even though machines can create, when they do, it is a pale imitation of human creativity. Let me explain.

The power of human imagination

No matter how fast and far technology advances, machines will always lack the imagination, creativity and judgement of humans. Human imagination produces images and ideas without any immediate input of the senses (or data). Human creativity uses complex cognitive processes yet to be fully understood (and thus hard to imitate). And human judgement is nuanced, not binary.

Humans have always sought answers to their questions solutions to their problems. Creation and innovation are the outcomes of this age-old process, in which humans have excelled. Innovation, which can be defined as a purpose-oriented creation, has played a key role in human evolution and our survival as a species. From flint arrowheads to sophisticated algorithms, our “problem-solving” ability has been used to the benefit of humanity. But because it is human, innovation is not a completely positive, error-free dynamic.

Many innovations in our history share a common duality: they represent enormous potential advancement on one hand, yet yet could just as easily destroy humanity on the other. Think of technologies based on fossil fuels or nuclear energy. That is why we need to apply another human innovation : ethics.

AI is the same – except that, for the first time, a technology seems to be encroaching on what was hitherto considered humanity’s exclusive domain of intellectual thinking and, ultimately, creation and innovation. For many, AI is thus a “Faustian bargain”, giving access to great power to something that puts the whole of humanity at risk. And yes, killer robots could engage targets with no human intervention. Yes, intelligent algorithms have the power to destroy many jobs. But this take on the technology fails to understand the complex and very ambivalent nature of innovation.

Personal AI – coming to your smartphone soon

I believe that AI will not only alter production processes and transform businesses models, but even more fundamentally, it will augment our daily lives. Ten years hence, it will be natural for us to carry our own portable AI. Embedded in a smartphone (or other hardware form), using a private cloud to integrate all relevant information, it will rapidly build a deep understanding of who we are, enabling it to provide us with tightly personalized services. Personal AI will simplify our lives in unimaginable ways, as electricity did in its day. It will be a trusted adviser and protector of our personal data. It will offer services that we really want and not the ones that advertising makes us want. And it will relieve us from many time-consuming tasks like searching, organizing and buying. By handling the “doing part”, portable AI will bequeath us time to spend on things we like, or tasks which require more human intelligence and concentration. Innovation, for instance.

The impact of AI on innovation will thus be twofold. As a powerful tool to analyze data, it will give a huge impetus to science and R&D. And as our personal portable companion, it will give us additional time – time to use our imagination, our creativity and our judgement. It is precisely these qualities of human intelligence that we need to apply today. To ensure AI enhances innovation in the best way possible, it is important to frame the innovation process itself. Our challenge is to find the right balance between tasks performed by machines and those performed by humans; to make clear what part humans stay out of and what part they stay involved in to ensure that they still hold the reins in future.

Five points to tame AI

To find this balance, we need to put five points on our AI agenda.

  • First, promote its development. Like every successful technology, AI will thrive, mature and eventually become a commodity available to everyone. The faster this happens, the better.

  • Second, regulate its development. We need to define powerful regulatory bodies to ensure AI develops to the benefit of humanity, not for a handful of companies.

  • Third, accentuate the positive. The potential benefits of AI outweigh the risks by far, especially when we promote and regulate it well.

  • Fourth, be innovative. There will be lots of new inventions to be made and implemented, particularly products and services linked to portable AI.

  • And fifth, let’s call AI what it is supposed to be: human augmented intelligence. The term AI misleads by suggesting threatening scenarios of machine takeover and implying rivalry between artificial and human intelligence. On the contrary, the goal is that each should complement each other.

Innovation will always remain a human question. If we use our truly human skills and imagine, creatively design, judge, and implement the right environment, we can significantly alter the level of innovation. With the powerful help of machines, but as humans.

About the author:

Charles-Edouard Bouée, is CEO of Roland Berger, and author of Light Footprint Management: Leadership in Times of Change (Bloomsbury 2013) and Confucius et les Automates (Grasset, 2014)

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 LinkedIn Pulse

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Standing on Peter Drucker’s shoulders to shape the futureby Richard Straub https://www.druckerforum.org/blog/?p=2094 https://www.druckerforum.org/blog/?p=2094#respond Thu, 29 Nov 2018 06:56:00 +0000 https://www.druckerforum.org/blog/?p=2094

Ten years of the Global Peter Drucker Forum: Richard Straub, founder and president, on visions for a better society – and a new paradigm for management

This November we are proud to celebrate the first decade of the Global Peter Drucker Forum. It all began in 2009 – the year that Peter Drucker would have turned 100. At that first congress, we had the special honor of welcoming Peter’s widow Doris to Vienna. We had the benefit of her wise advice until 2014, when she died at the age of 104. Her wish at the time has been has been both our legacy and our mission: “Do not make the Drucker Forum a Peter Drucker Museum,” she told us. “But stand on his shoulders and look to the future.”

Rediscovering our humanity

Standing on Drucker’s shoulders to look to the future: no small undertaking, but one we have done our best to fulfil over the last nine years as leading management thinkers and practitioners have used the Forum to debate Peter Drucker’s core ideas and values and how to apply them to our increasingly unpredictable world. It is fitting that in this anniversary year, as the Drucker Forum unfolds in the imposing surroundings of the Vienna Hofburg, we are breaking all records: not only in terms of attendance – we expect one thousand participants – but also in terms of events and networking opportunities for the young generation of managers now coming through.

Combating fear

The Forum’s central concerns have always been the social role of management and the foregrounding of humanity in the economy. Today, at a time when the latter is all too often marginalised by the pressure of economic constraints and the dynamics of the digital revolution, the prevailing feeling is fear. There is concern that even in most knowledge-based work we may be disposable, replaceable by “smart” technology. Is the logic of the technocrats and the algorithms really our destiny? To what extent can management play a role in humanising the future and reasserting the values of relationship, community, emotion and creativity? Not without reason, Peter Drucker described management as a liberal art – one of the humanities.

Note that we are not talking here about a touchy-feely “feel-good society”. We unambiguously need strong companies and institutions that do what they were created for – with and for people. Peter Drucker reminded us that free enterprise cannot be justified as good for business: “It can only be justified as good for society.” This means contributing to a functioning society though innovation and the creation of value. Their performance is put to the test by daily competition in the marketplace.

What kind of organizations and institutions do we need today and in the future, and what qualities will leaders need to guide them? How can the social technology of management develop a new synthesis between the quest for efficiency and the freeing up of human creativity?

The Drucker Forum: at the center of change

Of course, there are no patent remedies here either. Every organization has to chart its own way into the future. Yet breakthrough ideas and inspiration will be essential as we seek to initiate profound changes in management and leadership. We hope that the Drucker Forum will be a source of this inspiration. That will help to ensure the community that benefits from this platform for change will also grow and thrive. In today’s complex world, good intentions and engineered solutions are not enough to achieve sustainable transformation. Peter Drucker never wanted to know what managers thought of his lectures. He just asked, “Tell me what you’re going to do on Monday that’s different”

Change must come from a need: from the desire for vision, meaning and purpose. Our mission is to be at the center of these changes. Our deep aim is to attract an ever-growing group of dedicated thinkers and practitioners to join the common endeavor – the foundation for which has been laid by the first decade of the Drucker Forum.

 

Selected highlights from the Forum’s first 10 years

First Forum highlights (2009) https://www.youtube.com/watch?v=QXHue14I3D4&feature=youtu.be

C.K. Prahalad opening keynote (2009) https://www.youtube.com/watch?v=F68w6sQ-kSU&feature=youtu.be

Clayton Christensen on data from hell (2016) https://www.youtube.com/watch?v=lxecAi5-FBw&t=11m3s

Carlota Perez on the responsibility of the state (2017) https://www.youtube.com/watch?v=TuVenQcdHX8&feature=youtu.be

Charles Handy final presentation (2017) https://www.youtube.com/watch?v=Tg88zIgeE2o&feature=youtu.be

About the Author:

Richard Straub is the president of the Global Peter Drucker Forum

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 was first posted on LinkedIn Pulse

 

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Fixing Today’s Economy Is About Humans, Not Technology by Nicolas Colin https://www.druckerforum.org/blog/?p=2086 https://www.druckerforum.org/blog/?p=2086#respond Tue, 27 Nov 2018 08:30:53 +0000 https://www.druckerforum.org/blog/?p=2086

Most of today’s conversations around technology are centered on the successive waves that have been sweeping in since the Internet became a real thing in the early 1990s. We’ve gone from web-based applications to cloud computing to smartphones to artificial intelligence to virtual reality to crypto protocols. Every time, the new “new thing” takes over the conversation and some claim that it will change everything while others are skeptical that it will be ever used at a large scale.

One could argue that this concept of technological waves impedes our understanding rather than improving it. It breaks the history of the current technological revolution into separate episodes rather than revealing a continuity essentially fueled by two general-purpose technologies: computing and networks. It insists on the technological dimension rather than on the political and economic ones—and this at a time when technologists are failing us on both those fronts. It distorts our view of the world by making us focus on technological devices rather than on the humans who use them.

It doesn’t help that the world of technology is populated by, well, technologists. For some reason, this particular population rarely appears as humanity’s best friend. There’s the fascination for the assumed perfection of machines as opposed to humans. There’s the unease in human relationships that contributes so much to the cliché of nerds stuck to their screens rather than speaking to other people. There are the weird fantasies around the singularity and becoming immortal. And there’s the eye-popping absence of women, with its dire consequences.

A good way to refocus the conversation is to to use the concept of the “multitude” that Henri Verdier and I borrowed from Italian post-marxist philosopher Antonio Negri when we wrote our book L’Âge de la multitude back in 2012. We came up with this concept when trying to position the book and its core thesis. Because we wanted simple ideas to explain the digital economy (in our case, to the French elite and general public), we were looking for a polarizing view of what technology is all about. And we came up with the following, simple idea: “Now there’s more power outside than inside organizations”.

What exactly is the nature of that outside power? For Henri and me, today’s power is vested in this mighty “multitude”—the billions of individuals who are now equipped with powerful computing devices and connected with one another through networks. And it inspires a lesson in strategy and management that every corporate executive needs to keep in mind: the businesses that succeed in the digital economy are the ones that realize how power has been redistributed outside of their organizations. The winners are not the companies who use the most technology. Rather, they are the companies that best use technology to harness human power, which in turn fuels growth and generates profits.

Of course the world didn’t wait for Henri and I to develop the idea of the networked multitude. Before us, there were Don Tapscott’s “Wikinomics”, Shoshana Zuboff’s “Distributed Capitalism”, and the more widely used “Web 2.0” crafted by Tim O’Reilly and Dale Dougherty. While most people—including policymakers and journalists—like to talk about robots and software, many others realize that value creation is mostly about the many humans that computing and networks have so greatly empowered.

Indeed every single technological wave that’s been sweeping forward during the past 20 years can be reinterpreted in terms of how it contributes to the ever-increasing power of the multitude. Web-based applications and cloud computing consisted in pooling the computing power provided to billions of Internet users. Smartphones made it possible for these users to be connected most of the time rather than only when they were sitting at a desk. Big data was the result of the multitude using applications at an even larger scale. Now artificial intelligence makes it possible to store the power of the multitude so as to use it later by running well-trained algorithms. And finally crypto protocols provide us with a way to incentivize the multitude in contributing to network effects. Overall, it all revolves around ubiquitous computing and networks—and it’s all about the power of the humans more than that of technology.

Realizing the centrality of the (human) multitude in the economy won’t solve all the problems the current transition is bringing about. But as detailed in my most recent book Hedge, which is about inventing a new Safety Net for the current Entrepreneurial Age, embracing this narrative is a step in the right direction. It’s not only that the concept of the multitude provides technologists with a clear explanation of what their own work is about. It also helps us realize how we create value in the new techno-economic paradigm and the new social and political challenges we now need to tackle.

Indeed the constant pressure on wages and the downward quality of jobs has but one explanation: the unprecedented power of customers is weighing almost exclusively on the shoulders of workers. Customers are able to use computing and networks and organize as a multitude to bargain with corporations whereas workers are still constrained by the legacy rules that govern the workplace. Likewise, the widespread instability of the Entrepreneurial Age can be explained by the many ups and downs of large network-driven consumer markets, on which the multitude calls the shots in its very unpredictable and erratic way. Never before have both private and public companies been able to lose their assets in such a short amount of time, as we’ve seen in the examples of MySpace and Yahoo disappearing into oblivion, or Uber sounding the retreat in China and southeast Asia.

We cannot solve these problems until we realize that they are dominated by a human dimension rather than a technological one. It’s time to take a step back and accept that it’s the multitude—we humans—that drives the economy, not the latest technological breakthrough performed by scientists in a research lab or the most advanced software architecture deployed by engineers in a garage.

Indeed the power of the multitude is to the Entrepreneurial Age what mass production was to the Fordist age: both a blessing (because it fuels economic growth) and a curse (because it comes with adverse consequences). That is what must become the basis of our too-long-awaited effort at institutional innovation: understanding the power of the multitude is the starting point for making our Entrepreneurial Age more sustainable and inclusive.

About the author:

Nicolas Colin is Co Founder & Director, the Family, an investment firm based in London, Paris, and Berlin. and author of Hedge: A Greater Safety Net for the Entrepreneurial Age

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 LinkedIn Pulse

 

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The new normal in lifelong learning by Johan Roos https://www.druckerforum.org/blog/?p=2079 https://www.druckerforum.org/blog/?p=2079#respond Mon, 26 Nov 2018 07:51:40 +0000 https://www.druckerforum.org/blog/?p=2079 It used to be that a university degree certified that you had enough knowledge to last a lifetime. An occasional book and on-the-job training would fill in the gaps and keep you up-to-date. Now the new normal requires continuous lifelong learning, including regular updating in your knowledge of things you may never have studied, particularly literacy of technology and the humanities. Fortunately, you can obtain all this knowledge in small chunks from a variety of providers — online, face-to-face, or blended learning formats. Here’s why these have become the new normal in lifelong learning.

Technology literacy

This model is required because technology is making the world increasing efficient, complex, and prone to sudden change. Whatever was learned at the university is insufficient, as courses, programs and even professors constantly lag behind the exponential developments in technology. Who can keep abreast with advances in data analytics, blockchains, robotics, machine learning, and nano-technology as well as what is happening in the fin-tech, auto-tech, med-tech, agro-tech and any other industry disrupted by technology? Graduates today have to keep filling their skill gaps simply to maintain employability by topping up their degrees with short courses with or without diplomas.

On the corporate side, CEOs are taken aback when they realize the extent to which activities within so many jobs in their companies can be automated. The prospect of replacing 20% of the workforce with algorithms every year over the next few years is a daunting leadership task and terrifying social project. It is not surprising that rapid upskilling of the workforce is high up on the leadership agenda in many boardrooms, and in governments.

Technology wants what life wants – more of itself, which makes the world more complex. There is no stopping this evolution.1 Higher education, especially older traditional universities, quickly need to adapt to the new circumstances that technology is creating. Some have already argued that the purpose of universities should primarily be “robot-proofing” people.2 Of course, not everyone can be, or needs to be a star coder or gene editing expert, but life will be tough for graduates who are ignorant of basic vocabulary and syntax in the technology fields, especially if they aspire to leadership roles.

Continuous technology literacy is the new normal in life-long learning.

Human literacy

Humans are not robots and neurons are not digital switches. All the brilliant discoveries and inventions from technology will not solve the grand challenges of today’s world — mass-ignorance, poverty, intolerance, famine, and conflict – without knowing how to make the most out of being human. In view of what technology wants and can do, we need to ensure that our precious human potential is valued and used rather than going underused or moved to the aft behind awe-inspiring technology.

If we do not carefully consider how technology can and should be applied to our very humanity, we will end up as dull, ignorant and rather useless automatons in an incredibly complex and fast world, with our humanity lagging behind. That danger is clear and present if or when the current machine-learning algorithms running refrigerators and accident-prone autonomous vehicles finally evolve into artificial superintelligence with an IQ of, say, 20,000 and accelerating, compared to our measly 150.3 When parts of job are replaced by robots, or rather algorithms, we need to learn how to work with and complement what machines can and should do.

Unlike any other species, homo sapiens has ways for individuals who have never met to share strong religious, political, national, and corporate identities. We can make moral choices, persuade and convince, be culturally sensitive, empathetic, globally agile, and able to read and speak body language, imagine, intuit, improvise, and so much more. If technology advances our capacities to perform ever-greater actions, we must also advance our capacities to think ever greater thoughts and co-create, and know how to become masters of machine-human interfacing.4

Continuous human literacy is the new normal in lifelong learning.

A Cambrian explosion of variety of possibilities

Over the last decade, we have witnessed an explosive increase in diversity of institutions offering higher education of all kinds. Yet, although universities think they are delivering, experts are still saying that employers are not happy with university graduates. It is time to sound a few alarm bells; universities cannot stay the same. The ed-tech and tech-ed landscape will become even more complex and dynamic. There will be an enormous need for more on-demand, customised, and stackable courses, milestone degrees, micro-masters, and badges of all kinds. Universities will continue to play important roles, but the ever-changing landscape will see a wider range of suppliers, formats, credentials, and validations.

Universities can participate in this evolution. Within a few years in the early 2000s, there will likely be just one market segment in which providers of all types become partners for lifelong learning, co-creators of knowledge, catalysts of innovation and enablers of individual, organizational and societal prosperity. Expect lifelong education to become the normal for experienced adults, as well as the unemployed, and even retirees reconnecting to help junior workers progress.

Learning to know, to do, to be, and to live together remain the classical pillars of lifelong learning,5 with obvious benefits for individuals, organizations and our shared society. But, the idea and practice of life-long learning is being disrupted. The game is changing and a new normal is emerging that will challenge the status quo of universities and create new opportunities for the illiterate and literate alike.

About the Author:

Johan Roos is a Chief Academic Officer, professor, author, and co-inventor at LEGO Serious Play

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 was first published in LinkedIn Pulse

 

1 Kevin Kelly, 2010, What Technology Wants, Viking Press.

2 Joseph E. Aoun, 2018, Robot-Proof: Higher Education in the Age of Artificial Intelligence, MIT Press.

3 Tim Urban, “The AI Revolution: The Road to Superintelligence,” Wait but Why, 22 January 2015.

4 See my short articles “Build STEM Skills, but Don’t Neglect the Humanities,” Harvard Business Review, 24 June 2015 and “Extending Moore’s Law to Claiming Our Humanity,” Drucker Forum Blog, June 8, 2015, and “The Adjacent Possible in Humanistic Thinking,” Vertikals, 12 November 2015.

5 Treasure Within: Report to UNESCO of the International Commission on Education for the Twenty-first Century, 1996.

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Communityship beyond Leadership by Henry Mintzberg https://www.druckerforum.org/blog/?p=2075 https://www.druckerforum.org/blog/?p=2075#respond Sun, 25 Nov 2018 11:30:14 +0000 https://www.druckerforum.org/blog/?p=2075

Richard Straub, who runs the Drucker Forum, tweeted recently about my forthcoming book Bedtime Stories for Managers: “Good to know—maybe one or two preview chapters for the Drucker Forum at the end of the month?” So here is one, related to my contribution on “Leading Smarter Organizations.”

Say organization and we see leadership. That’s why those charts are so ubiquitous. They show us who sits on top of whom, but not who talks with whom, when, and about what. Why are we so fixated on formal authority? Is there no more to organizing than bossing? Have a look at Figure 1 to see an Organization. Then look at Figure 2 to see a Re-organization.

Figure 1: This is an Organization

Figure 2: This is a Re-organization

Did you notice the difference? A few names were changed in a few boxes, but the chart—the very perception of organization—remained the same. Do you know why re-organizing is so popular? Because it’s so easy. Shuffle people on paper and the world is transformed—at least on that paper. Imagine, instead, if people were shuffled around offices, to make new connections?

Say leadership and we see an individual—even if that individual is determined to “empower” everyone else. (Must people who are hired to do a job have to be empowered to do that job?) Too often, however, it’s about something else: a great white knight riding in on a great white horse to save everybody else (even when headed straight into a black hole). If one individual is the leader, then everyone else must be a follower. Do we really want a world of followers?

Think of the established organizations that you admire most. I’ll bet that beyond leadership is a profound sense of communityship. (Never heard that word? I made it up), to put leadership in its place, namely to support communityship.) Effective organizations are communities of human beings, not collections of human resources.

How can you recognize communityship in an organization? That’s easy. You feel the energy in the place, the commitment of its people, their collective interest in what they do. They don’t have to be formally empowered because they are naturally engaged. They respect the organization because the organization respects them. No fear of being fired because some “leader” hasn’t made the anticipated numbers on some bottom line. Imagine a whole world of such organizations!

Sure we need leadership, especially to establish communityship in new organizations and help sustain it in established organisations. What we don’t need is an obsession with leadership—of some individual singled out from the rest, as if he or she is the be-all and end-all of organizing (and is paid accordingly). So here’s to just enough leadership, embedded in communityship.

© Henry Mintzberg 2018. Modified from “Organizing beyond Leadership”, to appear in Bedtime Stories for Managers (Berrett-Koehler, February 2019). A similar TWOG appeared on 15 February 2015.

About the author:

Henry Mintzberg, Cleghorn Professor of Management Studies at McGill University, is the author of Rebalancing Society, and a weekly TWOG.

Photos from the author’s collection of beaver sculptures.

1. I first wrote about this in 2006 and again in 2009: “Community-ship is the answer” Financial Times, 23 Oct 2006, page 8, and “Rebuilding Companies as Communities” Harvard Business Review, July/August 2009, pages 140-143.

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 LinkedIn Pulse

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Corporate governance: embracing a new mindset by Peter Crow https://www.druckerforum.org/blog/?p=2070 https://www.druckerforum.org/blog/?p=2070#respond Sun, 25 Nov 2018 09:08:52 +0000 https://www.druckerforum.org/blog/?p=2070

The limited liability company is a great construct; an efficient vehicle for commerce, through which to pursue an overall aim and to create value over an extended period. What’s more, greater economies of scale are attainable (over what a sole trader or entrepreneur could typically hope to achieve), mixed levels of ownership are possible and, for shareholders, liability is limited to the level of capital invested. Yet for all their benefits, companies are not without flaws—they are social constructions, after all. Even seemingly strong and enduring organisations are susceptible to missteps and failure at the hands of ineffective boards. The societal and economic consequences are not insignificant.

When failures occur, blame is typically placed at the feet of the board of directors. This is reasonable: ultimate responsibility for firm performance does of course lie with the board.

Regulators have responded over the years by tightening statutes with the intention of clarifying boundaries and limiting malfeasance. Researchers, directors’ institutes and stock exchanges have added guidance in the form of codes, recommendations and ‘best practice’ statements.

Superficially, these responses appear to be moves in the right direction. But are they? If the roll call of corporate failures and missteps that continues to emanate from boardrooms is any indication, compliance with statutes and the adoption of codes or contemporary ‘best practice’ recommendations provide little assurance of board effectiveness, let alone high firm performance. They may be necessary, but they are by no means sufficient. A review of how boards actually allocate their time highlights the problem: despite what directors claim, most board meetings are dominated by monitoring, controlling and compliance activity. Precious little time is spent on what matters most: ensuring the performance of the company into the future.

To date, robust explanations of how boards can exert influence over firm performance have remained, demonstrably, elusive. Such guidance is desperately needed if boards are to fulfil their mandate.

Changing the mindset

If different outcomes are to be achieved, a new mindset is required. Flawed understandings of what corporate governance is and how it should be practiced need to be corrected, especially the misguided beliefs that any particular board structure or composition is a reliable predictor of firm performance; or that compliance with statutes or codes, or the close monitoring of management is a precursor to better outcomes. The power games, hubris and ineptitude apparent in some boardrooms also need to be rectified.

Necessarily, effective steering and guidance requires the board to be discerning and committed to the task, drawing on expertise and using relevant practices in pursuit of better outcomes, lest they be diverted by spurious and often discordant ‘best practice’ recommendations that appeal to symptoms or populist ideals. Otherwise, directors will continue to be confused about their duties and responsibilities, the role of the board, what corporate governance is and how it should be practiced.

If boards are to contribute effectively, they need to ensure the ongoing performance of the company they are charged with governing. This includes setting strategy and policy; monitoring and supervising management; overseeing strategy implementation and verifying desired outcomes are achieved; ensuring compliance with relevant statutes and policy; and ​providing an account to shareholders and legitimate stakeholders. This is corporate governance.

Projecting influence beyond the boardroom

While outcomes are not guaranteed, emerging research reveals that boards can exert influence beyond the boardroom, including on firm performance, but only if they focus on ‘the right things’. Three things matter most, namely, the capability of individual directors (what they bring), the activities of the board (what it does when it meets), and the underlying behavioural characteristics of directors individually and collectively.

A strategic mindset is crucial (the value creation imperative), and proximity (between the board and management) may actually be more conducive to effective contributions and higher quality decisions than separation and distance. The underlying modus operandi should be one of service: the board and management working harmoniously together, as a team in service of the company itself as the purpose for which it exists is pursued. The board’s effectiveness in this regard is readily measured: either it is making a difference (agreed firm performance goals are being achieved, in the context of agreed values and principles), or it is not.

The need for a new approach to corporate governance has never been more pressing. If shareholders understand the capabilities needed in their directors (and recruit accordingly), and boards understand and intentionally exercise several underlying behavioural characteristics as they seek to perform agreed strategic management tasks effectively, then increased influence from the boardroom is not only possible, it is potentially transformative.

About Peter Crow:

Dr Peter Crow is an experienced company director and board advisor with internationally acknowledged expertise in strategy, corporate governance and board effectiveness. www.petercrow.com

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 LinkedIn Pulse

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Trumpeters of Nothingness by Kenneth Mikkelsen https://www.druckerforum.org/blog/?p=2066 https://www.druckerforum.org/blog/?p=2066#respond Thu, 22 Nov 2018 11:11:43 +0000 https://www.druckerforum.org/blog/?p=2066

As a student I elected to study journalism. I was taught how to discover, craft and tell stories. I was motivated to understand what was behind the choices people made, to gain different perspectives, to hold the powerful to account and to spark critical discussions. Investigative journalists like Woodward and Bernstein were my inspiration. My first job after graduation, however, was with a PR agency. I never felt at peace there but it taught me some valuable lessons about life. 

If you wish to work in the service of the highest bidder, to become a master of deception, quick fixes, short cuts and shady deals are all part of it. Each day, I observed how political, economic and corporate interests shaped people in the PR industry. When you are exposed long enough to mile-a-minute talkers, you develop zero tolerance for phonies. Bluff and bluster can be overwhelming but it is difficult to bypass gut feelings. There is only so much nothingness you can deal with. Either you follow the herd or take the road less travelled. 

I found myself trying to find any reason why I should show up at the office each day. Eventually, I didn’t. 

Souls for sale

In ancient Greece, Sophists were masters of deception, hired by insecure leaders to make their ideas more appetising to the people. The rise of social media and the erosion of the established news industry have created a fertile ground for modern Sophists. In our always-on, do-it-now culture, these are fruitful times for lobbyists, pundits and forecasters. Speed and quick reactions are in demand. Integrity and thoughtfulness not so. 

It can be a bad career move to pay heed to your conscience. A lack of principles is often a more profitable strategy. As demonstrated by investigative journalists, three former European heads of state, Anders Fogh Rasmussen, Tony Blair and Gerhard Schröder have all leveraged highly paid careers from the fabrication of opinion and the fragmentation of facts. 

These are men of many answers but few questions. Like fly fishers, they have refined a technique that attracts repressive regimes, oligarchs and financial institutions in need of whitewashing. They represent a society where influence, power and contacts can be manipulated and used for personal gains even when it hurts the common good. Their assumption is that you can always spin an inconvenient truth or silence critics when caught in a lie. Souls for sale rarely follow a virtuous path.

When there are no consequences amorality becomes the norm. This undermines a healthy civilisation. What we are left with is a vicious circle of fake news, declining trust and the failure of community, all fuelled by dark money networks

Unprincipled behaviour is not unique to politicians. Tech giants claim to liberate information and make the world more open and connected. Behind the scenes, a much larger game of surveillance capitalism is unfolding. When the U.S. Congress and the European Parliament questioned Mark Zuckerberg about Facebook’s business model earlier this year, the wider public caught a glimpse of this reality. Before the hearings, an army of advisers had trained Zuckerberg to give his patter the human touch. At the same time, Facebook was busy moving 1.5 billion users out of the reach of European privacy law. No laws were broken, but a new level of corporate sociopathy revealed itself, as documented by the PBS series FRONTLINE and The New York Times.

Trumpeters can be found in any industry, but their fingerprints are most visible in domains of public interest. In 2014, a study published by the Corporate Europe Observatory revealed that the financial industry alone spends more than €120 million per annum on lobbying in Brussels. It employs more than 1,700 lobbyists. The metastasis keeps growing bigger every year. More than ever, we need international, collaborative journalism and big data to challenge and question the powerful in the interests of the broader society. When news broke recently that Europe’s taxpayers have been swindled out of €55 billion by the world’s biggest financial institutions, banks and law firms, it was the culmination of a massive covert operation of 19 different media and journalists from 12 countries. The investigation of 180,000 secret documents, known as the CumEx files, was led by CORRECTIV, a non-profit newsroom in Germany.

Five steps to Nirvana

Humans are linguistic animals. Stories help us construct meaning and make sense of the world. Sadly, much of the public discourse today consists of empty soundbites, candyfloss entertainment and hollow newspeak. Experts that deal in black-and-white answers and promote either/or thinking fill up most of the airtime. Like moles, they pop up from their holes everywhere. Whacking them is a Sisyphean task. They just return faster. Mastery of reductionism is what attracts the spotlight and gets you ahead. In politics. In business. In life in general. 

Dealing with the daily complexity of life is challenging. That is why so many people today look for reassuring simplifications that fit their worldviews and offer solace in the face of information overload. Wrapping viewpoints up with catchy headlines is how trumpeters grab our attention and serve our need for easy answers. Often, we are told to follow five steps to be successful, happy, healthy and lovable. Most literature in the business and self-help categories is based on this false Nirvana, catering to misguided expectations, brushing over nuances in the quest for sales. Only through critical thinking can we challenge the false prophets of profits – unimaginative publishers, opportunistic writers and click-bait obsessed news outlets. 

We are hardwired to seek fulfilment of our deepest desires. The entertainment industry figured this out a long time ago. When young girls aspire to keep up with the Kardashians or young boys look toward Kanye West for inspiration, they buy into a carefully scripted illusion.  According to Forbes Magazine, during 2018, Kylie Jenner will become the youngest self-made billionaire in U.S. history. She established her fortune by leveraging her social media following and the Kardashian-Jenner family name to sell make-up.  Having plastic surgery to enhance her lips does not prevent the crowd from believing her gospel. In the absence of critical thinking, fiction becomes a monetisable reality show. The same trick even put a master trumpeter behind the desk in the Oval Office.

Our attention is not only drawn towards successful people. We praise companies when they pretend to have a higher purpose and claim to make a difference in our lives and communities. The truth is that very few companies actually walk the talk. Instead, we are being pumped full of empty calories leaving us fat and lazy.

Bread and circus

When reductionism rules the world, we end up living fearful lives, deprived of meaning and hope. We become passive consumers and apathetic bystanders schooled in false longing. Nationalist rhetoric and the rejection of difference foment the misguided belief that time can be reversed and long-lost greatness restored. Our conception of ‘we’ becomes narrower still as we dismantle our bridges and erect our walls. We look elsewhere for scapegoats who can account for our own shortcomings and misfortune. In our despair, we elect and hire charlatan leaders based on their confidence rather than their competence. We reward CEOs with huge bonuses because we assume they have all the right answers and thereby further inflate their sense of ego and entitlement.

Our democracies are littered with trumpeters who influence the way we think and reason about public issues. They constantly invent new ways to integrate their messages into the fabric of our lives, catering to our need for appeasement. They steal our time and pollute our minds. They empty our souls by serving us bread and circus.

The numbness that has crept in is the biggest issue of all. It has produced indifference and inertia. We listen to those who shout loudest. We lack curiosity and gravitate towards the simplistic and the well-known. Familiarity is what we worship. Whatever requires an effort to understand remains unexplored. No energy is wasted on matters that require deeper contemplation and committed action.

In his poem, ‘The Ad-Man’, the British writer A.S.J. Tessimond captures the persistent voice of a trumpeter:

Where our defence is weakest, he attacks.

Encircling reason’s fort, he finds the cracks,

He knows the hopes and fears on which to play.

We who at first rebel, at last obey.

We who have tried to choose accept his choice.

Tired, we succumb to his untiring voice.

The drip-drip-drip makes even granite soften.

Attention is the oxygen that keeps the fire burning. Trumpeters need our attention to stay in the game. Without an audience, they would have nothing, they would be nobodies. We should know better than to be outmaneuvered by their dripping taps. We fools who know our folly, you and I. 

About the Author:

Kenneth Mikkelsen is a social philosopher. He is founder of Future|Shifts and an associate of the Drucker Society and Copenhagen Institute for Futures Studies. Kenneth is co-author of The Neo-Generalist: Where You Go is Who You Are with Richard Martin. 

© Illustrations made by Frits Ahlefeldt-Laurvig for Kenneth Mikkelsen.

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 LinkedIn Pulse

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AI and Quantum Logic to rescue Humanity? by Thomas Wienold https://www.druckerforum.org/blog/?p=2049 https://www.druckerforum.org/blog/?p=2049#respond Wed, 21 Nov 2018 13:55:18 +0000 https://www.druckerforum.org/blog/?p=2049

The Good News

We still have roughly 4 billion years before our sun turns into a red giant and scorches the earth, which will bring the end of life on earth. So why worry?

The Not-So-Good News

Life on earth may end much before the end of our sun, much sooner – in fact, a little too soon.

Why?

Because our brains are still rooted in ancient history and behaviors. Trained to survive, to win, to be the number one, to be the strongest, to be a hero. This was coded into our beings as it was necessary to win over wild animals – eat or be eaten!

The Consequence

There is no wild beast left for our brains to fight against. We now fight with each other as a consequence. Fight for a living, income, security, family – survival of the fittest in an economic sense. You against me, nation against nation. We sharpen our teeth to win: intelligence, economic advances, education, technology. We are being trained to win, starting at very early age. Money has become the center of power, controlling one’s life. This has become the essence of winning. As individuals – maybe, but as the human race or as a society – is this really winning?

The Crossroads

It is hard to leave our genetics behind, to get some distance from animal behavior (the ape genome is only about 1.2% different from the human genome). However, I believe there is an alternative path to help us dampen the primitive pangs of our genes.

Artificial intelligence (AI) could be our answer. A mirror that reflects our actions. For the first time, humans have something to reflect themselves against and to escape from the confines of their closed world.

Of course, we should not program AI to act like humans. What would we gain that way? Our collective actions as humans raise questions of being reasonable, but we also need quick, collective, and responsible actions to avoid major catastrophes.

AI could help us simulate and remove the animal ego from the equation. It seems to have emerged just at the right point in time. This is our first chance.

Collectivity

Our second chance is collectivity. Acting in a collective way takes the fight out of the game – it unites. We start small, in our families, in teams, then in communities, in nations and finally as united humanity, or so we must hope. AI helps to unite along the lines of language – so much that language will no longer be a barrier. We will start to understand each other. With the help of AI we will be able to talk to each other in real-time even in different languages. Our thoughts will get connected, leading to humans getting connected across the world.

Nature likes connections, as quantum theory tells us: connected (entangled) states of photons or Bose-Einstein condensates are powerful examples.

Quantum computers, processing connected states, are waiting to be realized – and connected states might be more common than isolated ones. Humans will get used to quantum logic (not just black or white, 1 or 0, there are states in between). The world is not digital (you or me), there are things in between and they are highly connected. The nature of those quantum connections is a bit spooky as they seem to defy the laws of space and time. Something where scientists still scratch their heads. No worries, because we are still 99% apes!

The Net

In the last 25 years, the invention of the world wide web has been connecting people around the world. We are caught in a net of connections. How much time of our day (or night) do we spend without being ‘Caught in the NET’? We are trapped …

The spider web has been woven and we are sitting on strings of silk. If we move, it is felt across the net. The net vibrates with its connected strings. If we move synchronously, we will create the right vibes to keep the ugly spider, also known as ego, under control.

As humanity is approaching a pivotal point, we might consider learnings from AI and quantum logic: there is not just black versus white, not just east versus west, not just communism versus capitalism, not just individualism versus collectivism. There are things in between. If our cultures blend, there will be hope. The middle path could be the solution.

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 on Linkedin pulse.

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