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

What does it take to cause something big about a community to change — something that no one individually has much power over, even something as big as a prevailing mindset? We know what it takes: a social movement. And social movements aren’t only the domain of community organizers and college students. Business people can set them in motion, too, as we are seeing right now.

Currently gaining force is a movement to focus for-profit enterprises more on the essential work of enriching societies — that is, benefiting not only those humans who are their owners as publicly traded companies but also those who work in them and who stand to benefit from more purpose-driven innovation. Like any social movement, this one has started with many people starting small fires. Look around and you will see them:

• Individual CEOs and their boards deliberately deciding to take a stand. Note, for example, the spirited defense by Paul Polman of Unilever of his long-term, sustainable business philosophy in the wake of a takeover attempt. Note the far-reaching production changes Jean-Dominique Senard has made at Michelin to empower and engage workers. In China look at the unique organization of entrepreneurial cells Zhang Ruimin has created at Haier, and in France look at Vinci Group’s success, under Xavier Huillard, with a radically decentralized model designed to foster entrepreneurial creativity in its three thousand constituent companies. See also Rick Goings’s commitment at Tupperware Brands to increasing women’s economic empowerment in emerging economies as well as mature ones.
• Networks and communities spreading new norms and new forms of capitalism. From the Coalition for Inclusive Capitalism to the Conscious Capitalism organization, groups are forming with a mission (in the words of the latter) to “inspire, educate and empower companies to elevate humanity through business.” Some are designing new governance forms for enterprises, such as B-corps and cooperatives. Note especially the brave, innovative management reflected in social enterprises such as the Sampark Foundation, where Vineet Nayar, former CEO of HCL Technologies, is on a mission to inspire kids in rural India to learn how to think and invent like frugal innovators.
• Management thinkers framing the greatest challenges of our time as human ones. Witness the shift that is taking place in the global conversation about artificial intelligence and other advanced digital technologies. Increasingly there is an insistence that these powerful forces must leverage human creativity, not marginalize it. Smart machines can help us find answers more quickly, but cannot frame the questions to address. We must use these technologies to unleash human potential — undoubtedly the most underused resource on the planet — and bring greater purpose, meaning, and values to work.

All these sparks of activity are generating heat and light. But how can the many small flames be fanned into a blazing fire? One key is for all these fire-starters to recognize that they are part of a bigger movement, not just individually acting on their own values but collectively working to change expectations and behaviors. Often this happens when people who would otherwise sit on the sidelines perceive a real threat in not acting, and are galvanized to join the movement.

This is part of why Larry Fink’s open letter to CEOs, sent on the occasion of his investment company BlackRock’s 30th anniversary, has generated such acclaim. In it, he points to the growing threat posed by activist investors who push for short-term share-boosting tactics without regard for firms’ long-term viability. Management teams set themselves up for these assaults, he claims, when they fail to articulate compelling long-term strategies — visions of the future informed by “a sense of purpose.” Purpose, moreover, means for him social purpose. ‘The public expectations of your company have never been greater,” Fink writes. “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”

Of course, the ideas that corporations must earn their “license to operate” and serve stakeholders that go far beyond shareholders are not new. But, as Judy Samuelsen puts it, “When the head of BlackRock, the largest investor in the world, says that companies must produce not only profits, but contributions to society, it sends a powerful message.” It kindles new interest and fans existing flames.

Management educators and researchers can add their own fuel to the fire, if they will step up to it. Lately our formal institutions of management education have been outstripped by thinkers outside the academy in coming up with new frameworks and methods. Much of the welcome recent innovation in management practice has come from the fringes — new communities and groups developing approaches such as the agile (or Scrum) movement, design thinking, lean-startup methodologies and beyond-budgeting approaches, among others.

But as Harvard’s Clay Christensen has noted, management thinking lacks common language and foundational theories; it badly needs a durable base for researchers and practice to build on and progress forward. This can be the major contribution of universities, along with a broad commitment to teaching management as a liberal art — a way of thinking outlined by Peter Drucker. The core tension for management hasn’t changed since Drucker wrote his first books: to establish a systematic approach for achieving collective performance in organizations without killing the entrepreneurial, creative and community-creating human center. In recent years the balance between the two poles has increasingly tilted towards the technocratic and financial-logic-driven side.

Is it possible for a social movement to achieve a different capitalism, with a human face? No one has all the levers to change organizations and society over night. But collectively we have all we need to do this over time. The great management theorist and storyteller Charles Handy expressed this well in Vienna last fall, at his closing address to the 2017 Global Peter Drucker Forum. He urged managers to be inspired by their enterprises’ power to make a difference. “Let us just spark small fires in the darkness,” he said, “until they spread and the world is alight.”

About the Author:

Richard Straub founded the nonprofit Peter Drucker Society Europe after a 32-year career at IBM. He is on the executive committee of the European Foundation for Management Development, is Secretary General of the European Learning Industry Group, and serves the IBM Global Education practice in a strategic advisory role.

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 the Harvard Business Review

Photo by Tim Ellis/Getty Images

Richard Straub worked for IBM for much of his life. He is now director of the Drucker Forum. He tells Peter Day how the Forum began, and how Professor Drucker’s ideas maintain their relevance in a much-changed business world.

Some, for example, are inspired by Thomas Piketty, who seems to have singlehandedly set a new agenda for economics research. This group focuses on reducing the disturbing inequalities in individuals’ incomes and wealth.

Others, like the Legatum Institute, think of prosperity less in financial terms and more as overall well-being, and focus on measuring and growing all its components in societies around the world.

A third group takes a more managerial approach; and that’s the one we want to focus on here. When Eric Beinhocker and Nick Hanauer took on the topic, they put it this way: “Prosperity in a society is the accumulation of solutions to human problems.” By emphasizing solutions as the engine of growth, Beinhocker and Hanauer wanted to cast capitalism as a force for prosperity (as the system that churns out the most constant stream of superior ones). But their way of thinking about prosperity also offers direction for any managers who want to work harder to make the world better off: your mission is to imagine, develop, and launch more life-improving solutions, especially the kinds of goods and services that improve ordinary people’s lives. Businesses have a variety of social responsibilities, but the essential one—and the main reason that private enterprise is given license to operate—is to innovate.

We’d like to add a wrinkle to Beinhocker and Hanauer’s argument. If we’re thinking about prosperity in broad terms, then we should also recognize it isn’t just the solutions themselves that improve quality of life – it’s also engagement in the act of solving. Participating in the satisfying work of innovating enriches lives by endowing them with purpose, dignity, and the sheer joy of making progress in challenging endeavors. Imaginative problem-solving is part of human nature. Participating in it is essential to the good life – and no elite minority should have a monopoly on that.

So this raises the question: How do we enable more people to get involved in solving problems? Every person is capable of creative thought and action. Great managers know how to tap that superabundant resource, and they recognize that pooling creative energy usually accelerates progress. Many minds make lighter work.

But for this to happen broadly, more organizations need to recognize that their innovation mandate is not just to design new products and services, but also to redesign how work gets done.  The digital age gives us a tremendous opportunity to do that – but also comes with its own challenges and risks. How businesses continue to develop and deploy information and communications technologies will profoundly affect whether prosperity is inclusive or exclusive. At their best, today’s increasingly capable machines enable and empower people to collaborate more effectively, and they make learning from experience scalable. Collaborative platforms allow people to combine their measurements and observations of large-scale phenomena (such as water quality), while advances in machine learning, artificial intelligence, and sheer computational power extend the powers of human intellect just as earlier technologies amplified human strength.

But at their worst, smart machines have the potential to marginalize human contributions, automating cognitive work and leaving society with, as Bill Davidow and Michael Malone vividly phrased it, “hordes of citizens of zero economic value.” The situation creates huge responsibilities for politicians, educators, executives, and others to manage the transition and the hardships that may come with it.

We find ourselves, therefore, at an important crossroads. The technologies our species is developing might either hold the keys to unlocking human potential — or to locking it up more tightly than ever. Indeed, they could even transform what we think of as human potential, given the startling new combinations of technological and human capabilities being devised. (No need to wait for Elon Musk’s Neuralink. As DARPA’s Arati Prabhakar has described, the merging of humans and machines is happening now. )

Clay Christensen likes to remind innovators of the importance of remembering the essential “job to be done” by their offerings – what is it that customers “hire” your product or service to do for them? In that spirit, what is the “job to be done” by the practice of management itself? What is the job that society needs to get done that it turns to competent managers to do? Increasingly, that job is not only to produce better goods and services more efficiently, but to organize individuals to collaborate and create together in unprecedented ways.  The business leaders who get that job done will be those who make the most of human potential, and manage to make prosperity inclusive.

This post is the first in a series leading up to the 2017 Global Drucker Forum in Vienna, Austria – the theme of which is Growth and Inclusive Prosperity.

Originally posted on https://hbr.org/, 3 April 2017.

About the authors:

Richard Straub founded the nonprofit Peter Drucker Society Europe after a 32-year career at IBM. He is on the executive committee of the European Foundation for Management Development, is Secretary General of the European Learning Industry Group, and serves the IBM Global Education practice in a strategic advisory role.

Julia Kirby is a senior editor at Harvard University Press and longtime contributor to HBR‘s pages. Her newest book (May 2016) is Only Humans Need Apply: Winners and Losers in the Age of Smart Machines, with Tom Davenport. Follow her on Twitter @JuliaKirby.

It may be that we are living a defining moment for the future of capitalism and for humanity. For the last 200 years entrepreneurial prowess enabled by financial capital has powered a long surge of economic growth. Over the major innovation cycles, the capitalist system has been resilient enough to absorb the effects of the crashes caused by pure speculation and turn them to its advantage. Production capital took the lead over financial capital and real value over paper value, as Carolta Perez has so brilliantly demonstrated.

Fast forward to today, and the picture is not so happy. Financial capital is in the driving seat. Eight years on, the world is tentatively emerging from a financial crisis that almost broke the global economy. Even though we are back to a semblance of stability, a range of unresolved issues – sky-high government debt, a still-fragile financial system, stagnant productivity, increasing levels of inequality, latent currency crises, slowing growth in emerging markets, high volatility in stock and commodity markets and geo-political instability and extremism – preclude any easy return to sustained economic growth.

There are certainly many causes for concern. A striking features of today’s fragile world situation is the inability to channel an abundance of cheap financial capital into productive use by companies, economies and states. Some prominent economists predict a new period of secular stagnation as the last great phase of innovation-fuelled growth (as they see it) dries up. With attention fixed on the obsessive search for the next high-tech “unicorn”, vital investment is lacking in “Main Street” companies that could fuel precious growth and employment.

Most large companies seem to have lost the taste for entrepreneurship, their CEOs preferring to focus on using technology to maximize profit from existing businesses. They are too often governed by the interests of shareholders who regard corporations as speculative investment opportunities rather than human communities for which true owners would feel ties of responsibility and commitment. And while capital markets celebrate short-term results over long-term corporate development, governments seem to have only one response to the urgent new challenges of our time: overregulation, resulting in crippling micromanagement and microregulation of domains that are evolving at breakneck speed, frequently aggravating the problems the regulations attempted to resolve. It is questionable, for example, whether many thousands of pages of regulations have enhanced the banks’ ability to carry out their core mission of funding the real economy of goods and services for real human beings.

The entrepreneurial society

Between discredited financial capitalism on one side and ever more burdensome state bureaucracies on the other, can we revive a lost but deeply-rooted human capability – the capability to take ownership of the problems we face, and to accept responsibility for creating our own solutions – that is, create the basis for a properly entrepreneurial society?

Drucker called this a turning point in human history. What we need, he said, was not just an entrepreneurial economy but an “entrepreneurial society in which innovation and entrepreneurship are normal, steady, and continuous”. He saw innovation and entrepreneurship as a life-sustaining activity pervading organizations, the economy and society.

In terms of management, the advent of the entrepreneurial society means above all replacing the rigidities of industrial-age mind-sets, with their command-and-control, top-down orientation. What indications are there that this is happening?

Despite powerful headwinds, green shoots are visible. Agile methods and Scrum are creating space for individuals to self-organize and work in iterative processes; by bringing customer development closer to the marketplace and enabling rapid learning from failure the lean start-up movement has great potential to increase the success rate of new ventures. New business models and value propositions are developed by global teams using web-based tools and communication methods. Design thinking is entering the mainstream as large organizations learn to proceed by prototyping and iteration. Start-up factories, incubation hubs, living laboratories and hotspots for innovation are springing up in cities around the world. Large corporations are devoting serious attention to becoming “ambidextrous”, combining robust exploitation capabilities for existing businesses with new exploration-driven business engines inside and outside their organization. And above all, new generations are legitimizing entrepreneurship and innovation with the enthusiasm and drive of youth.

Managing the transition

Yet start-ups and large corporations can only be part of the story of entrepreneurial reinvention. Making the shift from small to medium-sized business and generating more fast-growing “gazelles” remain major entrepreneurial challenges. Germany has shown the way, its “Mittelstand” encompassing numbers of world leaders or “hidden champions” in highly specialised fields, as demonstrated by Hermann Simon. This entrepreneurial success story has not happened overnight. Many family-owned Mittlestand businesses are exemplars of stewardship in its truest sense, demonstrating long-term commitment to a business and to the employees who are its heart and brain. Are there lessons here for giant corporations and the stock markets they trade on?

While digital technology creates extraordinary opportunities, it also disrupts existing economic, social and physical infrastructures in ways and in time-spans that make the social consequences hard to absorb. Drucker observed long ago that each social problem is a business opportunity in disguise. Social entrepreneurship and social innovation must play their part here. Not all solutions in this field will generate the financial flows to make market-based responses viable. But besides innovative public private partnerships, digital technology could yet enable the emergence of a “sharing economy” for acts of citizenship and mutual support and exchange that is worthy of that name. Together with state agencies combining in a new “Entrepreneurial State”, such institutions may knit together a flexible social web to provide security for the most needy.

The emerging world has embraced the notion that only entrepreneurship can lay the foundations for decent lives and a good society – important, because the challenges are daunting. By 2050 two billion young adults will enter the global workforce. These are the genuine challenges of the world, beside which many of the luxury problems that politicians, trade unions and advocacy groups tussle over in the West pale into insignificance.

For sure, transition into a new settlement that is not yet fully formed is painful and frightening. But it can be shaped by society’s responsible groups, among which management, as Drucker always reminded us, is a leader. Our vision: a new age of innovation and entrepreneurship that brings to bear the energy, the creativity and the “wisdom of the crowds” in a new way – as the practical wisdom of engaged, motivated and ethical individuals; open and critical minds who connect in the real and virtual worlds to understand and solve human problems in novel ways. Entrepreneurship leads us back to the essence of being human – the ability to create something that may not been seen even imagined before. No algorithm can do this. Entrepreneurs, entrepreneurial managers and a new entrepreneurial mind-set may represent our secular opportunity to make the difference between secular stagnation and secular prosperity – as such, a true defining moment for the 21st century.

About the author:

Dr. Richard Straub is founder and president of the Peter Drucker Society Europe and a member of the EFMD Executive Management team.

Over the last 250 years, a series of radical scientific and engineering advances has triggered an accelerating rise in living standards that even the two deadliest wars in history have failed to halt. The digital revolution propelled by Moore’s law is the latest and most far-reaching in this line of transforming “general purpose technologies.” It carries the tantalising promise to augment the power of the human brain in the same way that steam, the internal combustion engine and electricity augmented human brawn.

But as stunning as humankind’s technological achievements have been, they are only half the story. All are part of and embedded in a larger social reality. The advent of the modern organization and the practice of management constitutes a “social technology” that has been equally transformative.

But what happens as we continue down this path? If previous revolutions wrought dramatic changes in the human condition—including urbanisation, mass literacy, large-scale employment and generalised healthcare – exponentially accelerating technology cycles threaten to upend much of the socio-economic infrastructure that has taken root over the past two centuries. Tumbling transaction costs alter the economics of organisation and, at a stroke, invalidate old business models while enabling unimagined newer ones. New giants like Amazon, Google, Apple and Facebook, along with emerging ones such as Uber and Airbnb, are borne by waves of “winner takes all” network effects. These trends will leave no aspect of working and private life unaffected. A foretaste of what is to come is the rapid progress of automation not only in manufacturing and services but also increasingly in knowledge jobs.

Directing the path and force of these revolutions has been management, with its embrace of scientific rationality and engineering prowess, and with key assumptions about the behaviour of economic man and the efficiency of bureaucratic organizations as its hallmarks.

Yet it is clear today that this industrial-age mindset stands in the way of fully realising the promise of the digital revolution. Those modes of thinking have hardened into a straitjacket constraining human energy and creativity in organizations. Meanwhile, “heroic” management actions such as cutting jobs and investment as a response to currency fluctuations and their accounting impact on EPS are applauded by stock markets despite the damage to the longer-term value creating capacity of the enterprise. Too often share buy-backs are preferred to investment in innovation, entrepreneurship and value creation. Internal innovation tends to be obsessively targeted toward cost-cutting instead of finding new ways to delight customers, and enable employees and partners.

This is the end-point of an implacable logic held together by measurement, formulas and algorithms—the 20th century model. There is just one problem: The most important future-oriented indicators have gone missing in action. These would be indicators that gauge the levels of social capital and trust within the organization and of society, and the ability to unleash human creativity and engagement. Objectives such as these are rather afterthoughts for interesting discussions on company programs that may be scrapped if next quarter’s EPS is under threat.

Indeed, here is the great downside of industrial-age philosophy: the downgrading of the human being to a resource that can be sacrificed to short-term interests of shareholders and those who are supposed to exercise the stewardship of what Peter Drucker called the constitutive elements of modern society—our organizations and institutions. Corporations benefit from great privileges conferred on them by society, including their legal status. The reciprocal duty of care to society is therefore not a charitable option but a fundamental obligation of management.

The digital revolution—the “mother of all technology developments”—marks a fork in the road. As the Future of Life Institute starkly sums it up: ‘Technology has given life the opportunity to flourish like never before… or self-destruct’. One way can spring us from the industrial-age management practices and mindsets that currently hold so many companies back. The other reinforces the mechanistic logic of existing organizations by hard-wiring them in ever-accumulating data and software routines.

There are ample signs around us of the limits of rational logic and algorithmic determinism—and always, of the precious, unique capacities of human beings. Howard Gardner has shown that the analytical intelligence is just one in seven. What is most important happens where there is no replicable logic or algorithm. Rather, it occurs where human judgment, intuition, creativity, empathy and values are consciously brought into play. It is the domain of entrepreneurial thinking and innovation, of strategy setting, of collaboration and trust—qualities that cannot be replaced by whatever Singularity-seeking AI-creature the engineers in Silicon Valley might come up with.

Never in human history has there been a better opportunity to create a new world of prosperity for all. As the ultimate general purpose technology that pervades all aspects of life, digital technology has the potential to unleash a “new Golden Age,” in Carlotta Perez’s description—one that could dwarf the achievements of the steam, electrical and fossil fuel revolutions. However, this golden outcome depends on the choices of those called on to allocate resources on behalf of society and the economy. As Drucker put it: “Managers are society’s major leadership group…… They command the resources of society.” Will these leaders choose to put the “creative” back in the process of creative destruction by privileging entrepreneurial investment in customer- and market-creating innovation over short-term profits? Will they use big data, analytics and complexity sciences in ways that leverage rather than replace human judgement and values, taking them as what they are: tools and instruments to help us navigate a complex world?

To do so will require a new synthesis of the prevalent technocratic logic in politics, economics and management with a deep understanding of the human condition—nothing less than a reframing of management along the lines traced by Drucker and others, combining the best of art and science, imagination and logic, in a bold and distinctive liberal art for the 21st century.

It is perhaps ironic that in a moment of technology-driven information and knowledge explosion we should be feeling our way back to something that has been largely forgotten in the frenzy of accelerating change and instant gratification: genuine wisdom. Yet it is such wisdom—which can only come from human beings and not from machines—that we need in order to make the decisions that will create a better future for all.

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Dr. Richard Straub is founder and president of the Peter Drucker Society Europe, a member of the EFMD Executive Management team and the Secretary General of the European Learning Industy Group.

March 24, 2015

Short Bio:

In his 32 years with IBM Dr. Richard Straub has held key international executive functions such as Deputy General Manager for PC Europe and Global Chief Learning Officer. Since . 2006 he has started a new career working with non-profit organizations – as part time executive and as social entrepreneur. He is currently executive committee member at the European Foundation for Management Development (EFMD) and Secretary General of the European Learning Industry Group (ELIG). In addition he retained a strategic advisory role for the IBM Global Education Industry.

As a social entrepreneur he founded in 2008 the Peter Drucker Society of Austria and in 2010 the Peter Drucker Society Europe. He is the president of both. The Peter Drucker Society has as its mission to be a catalyst for the improvement of Management as a vital role in modern society.
As the crystallizing yearly event the Drucker Society organizes the Global Peter Drucker Forum in Vienna — the 6th edition will be held in November 2014.

Technology Centric World View

When it comes to the discussion of our digital future the world-view of the European Commission is too much centred on technology and does not take sufficiently into account the human factor. Europe could differentiate itself in the international debate and in the strategies it develops by linking to the European humanistic tradition. In the face of exponential digital technologies the human factor is fundamental: the ability of human beings using these technologies to make informed choices and judgements, avoiding to follow blindly recommendations coming from analytics tools based on big data. Applying common sense and cross-discipline knowledge will be vital. Hence, liberal arts education will be more important than ever and Europe has a great tradition and strength in this field. This does not discount the fact that e-skills and STEM education will be of extreme importance. But the point is that we need more than highly specialized technocrats, namely accomplished and better educated human beings who can see the broader context, if we want to apply these technologies in an informed and responsible way.

Mass collaboration

Mass collaboration seems to be a bit of a fashionable term these days. Effective collaboration needs a small and committed core team. Real collaboration does not happen on a massive scale. This has always been the case and will not change. What is changing is the ability to access experts and knowledge outside the core team in real time. This can increase the effectiveness of the team and should result in better outcomes. Open platforms, social media and collaboration tools can be perfect levers to enhance the team performance. Yet we should not underestimate the importance of physical proximity to achieve breakthrough results in the field of innovation and entrepreneurship including in the social sphere.  There are good reasons why it is physical places where collaborative ecosystems for innovation thrive; think of  Silicon Valley or Haifa.

Black Swans in the making

Peter Drucker has often remarked that we cannot predict the future, but we can see the future that has already arrived – if we try hard and step out of our preconceived notions of what we believe it should be. There is increasing evidence that the open internet shows tendencies to disintegrate into smaller entities – at a geographic level and in terms of the deeper layers it comprises. Autocratic regimes have the tendency to control the content that citizen can access, and recently even democratic nations such as Brazil, Germany and France discuss the building of their own protected space. They have been scared by the Snowden revelations and by the collusion between large social media players and the US Government to provide access to personal user data.  If these trends persist, the days of the global, open and free internet may be counted. If we take this scenario into account it is also clear that we must think through as to what the consequences would be and how they can be managed. There is also a question of whether the open internet can be saved by establishing some regulation and moving beyond the open jungle paradigm. We have learned over long periods that defending free markets does not mean no framework and no regulation. The same should be true for the Internet.

The web-layers under the surface web (the latter is the virtual space that we know) should also be evaluated. The dark web and deep web (however we may call these layers) seem to be much larger than the surface web and has become the place for unbridled criminal and terrorist “collaboration”. See recent NZZ Article about the “End of the Internet” http://www.nzz.ch/nzzas/nzz-am-sonntag/das-ende-des-internets-1.18239023.

Use of personal data that are under control of a few dominating US based players becomes an issue for 21st century Democracy

This point is related to the previous as it may drive the need for state-controlled internets. A new type of market dominance has emerged during the last 10 years or so, i.e. market dominance in ownership and control over personal data of hundred millions of users. These data represent an inestimable value for media and advertising. Market dominance in this field has a different connotation than market dominance in traditional industries. This type of markets are not being covered by the existing antitrust laws and competition rules , and the current data and privacy protection laws seem to be totally inefficient to deal with these new phenomena.

However, due to the winner-takes-it-all situations, the market and the personal data which are held by social media players are concentrated in a few big server farms and they are being used in ways that are not transparent to the users. The recent publications about the new algorithmic prisons and the profiling that already happens in the US at a large scale give an avant-gout of what is in store – see the excellent article by Bill Davidow on the Atlantic blog http://www.theatlantic.com/technology/archive/2014/02/welcome-to-algorithmic-prison/283985/

Traditional policy generating approaches seem to be far too slow – hence the internet age will require a transformation of how policies are being built to protect individuals and to re-establish transparency.

The huge opportunity for the future – leveraging digital technology to make Europe a leading entrepreneurial region in the world and to create meaningful work for the young generation

While the first and second industrial revolutions levelled off after an initial steep increase in growth, the digital technology revolution is on an exponential development since the invention of the microprocessor. There has been no precedent in history for this type of continued exponential increase in technology performance. Hence, automation is progressing in all sectors of society. The world runs increasingly on SW. A new generation of robots will eliminate even more factory and services jobs.

In the social sphere a shift from an employee society towards an entrepreneurial society is in the making (another example for the future that has already arrived but is not seen by most). This development has huge policy implications for the European Union. The entrepreneurial society does not replace the employee society but it complements and extends it. It can be taken for granted that traditional employment contracts will not take the place in the future that they had in the last century. Since there will be less full time jobs offered by existing organizations the new challenge will be to create one’s own job. Self-employment, portfolio work (as coined by Charles Handy some 30 years ago) and entrepreneurship is becoming the new normal.

Our western societies are full of barriers for those who want to create their own work portfolio or enterprise. Everything seems to be geared toward traditional employment. We are far from the empowered individual as touted by so many policy papers. However, there are huge new opportunities provided by digital technology to accelerate this move towards an entrepreneurial society as an answer to the structural issues for traditional employment. Capacity building for the entrepreneurial society should  be enabled and enhanced by MOOCs, social media (communities), new funding schemes (e.g. Crowd-sourcing), new open innovation methods (living labs, co-creation platforms) etc. Innovation and entrepreneurial ecosystems can be built more effectively with support of digital technology.

Many large organizations and institutions have developed Kafkaesque characteristics during the last 30-40 years. Employees increasingly feel to be held in straight jackets under high pressure for short-term results. Hence many large organizations have become worse during the past decades as to leveraging the motivation, creativity and innovativeness of their employees. Engagement levels are at a historic low (see the recent Gallup survey http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx).

Yet, if an increasing number of knowledge workers (or rather knowledge-entrepreneurs) will operate outside these constraining settings as a self-employed workforce their capability to use and develop their knowledge capital and their own creative potential will inevitably grow. This might become a Black Swan in the positive sense i.e. increasing the creative potential in modern societies by magnitudes. However, in order to make this happen it needs to become a central policy focus – not an addendum to all measures that are based on conventional wisdom. It requires a fundamental reorientation of policies. It means brushing aside the numerous obstacles that hold back the entrepreneurial dynamics in Europe by penalizing self-employed and entrepreneurial activities, be it on the tax and social security side, be it with financing and support for R&D, be it by an education system that does not value sufficiently the managerial and entrepreneurial roles as key pillars of our society. Policy makers are called upon to move from administrators and regulators (focussing on limiting and constraining economic activities) to enablers and innovators, who understand the wider context and who venture into new territories to create adequate policies to accompany major social trends.

Dr. Richard Straub

President Peter Drucker Society Europe

http://www.druckerforum.org/

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February 25, 2013