He first introduced the emergence of a “knowledge society” with the arrival of the knowledge worker. From there, Drucker insisted the “knowledge society” was beginning to evolve into an “employee society,” so long as management was able to focus on making the knowledge productive and useful.

Drucker then envisioned a day where the created, collective wealth of knowledge would advance into an “entrepreneurial society.”  He felt the “entrepreneurial society” would mark a turning point in history. I believe we’re missing a few steps in order to get there.

Drucker wrote, “What we need is an entrepreneurial society in which innovation and entrepreneurship are normal, steady and continual. Just as management has become the specific organ of all contemporary institutions, and the integrating organ of our society of organizations, so innovation and entrepreneurship have to become an integral, life-sustaining activity in our organizations, our economy, our society.”

Drucker felt the role of the institution (public, private, not-for-profit, legal, etc.) had to be rethought, to become far more innovative and entrepreneurial. I believe the most critical point that Drucker put forward about the “entrepreneurial society,” however, is that of continual learning. We must not believe a university credential earned in our early 20’s is the end of our learning. If leaders are to shift the organization (and our communities) to become a reasonable facsimile of the “entrepreneurial society,” we ought to become better lifelong autodidacts.

Take for instance Bas van Abel. He is the Founder and CEO of Fairphone. The purpose of the company is to manufacture mobile phones that are ethical. The phones are made from conflict-free minerals assembled by firms who also ensure fair wages for the factory workers. They make a mobile phone but do so ensuring they keep the greater good of society in mind.

But Bas chose to start Fairphone mostly because he is someone who loves to learn. In fact, loving to learn is part of Bas’s personal definition of purpose. Arguably, Bas is demonstrating Drucker’s premonition about the “entrepreneurial society.” By learning, he is innovating, and through Fairphone, society is benefitting.

The story of Bas and Fairphone got me thinking about my own professional situation. When I joined TELUS in late 2008, it was an organization possessing an employee engagement score of 53 percent. Customer satisfaction and corresponding likelihood to recommend scores were low, too.

Under the leadership of CEO Darren Entwistle, we utilized an enterprise-wide learning spirit to build a new leadership framework, pervasive learning model, community investment plan, recognition platform and collaboration tools. By 2015, employee engagement soared to 87 percent while every business metric correspondingly improved including customer satisfaction.

TELUS is now a highly engaged organization and its “entrepreneurial society” is paying dividends. TELUS Wise—a program fostering internet and smartphone safety and security—was launched to the public, free. The TELUS Innovation Lab commenced operations in 2016 to help startups, universities, and major corporations collectively bring ideas to market.

In late 2013, I pitched the idea of launching an external “future of work” culture change consulting practice under the TELUS umbrella. TELUS Transformation Office (TTO) works with customers by helping them improve employee engagement, corporate culture and open leadership concepts. We do so by assessing the organization’s current-state and we then work with leaders to address how various processes, actions and disciplines ought to be redesigned. The launch of TTO has afforded me the opportunity to continue my own personal learning—in the start-up of a new business—while the team (and TELUS) gets to learn about our customers in a different way than offering IT services and telecommunications products.

Drucker insisted at the heart of the “entrepreneurial society” is an employee population that continuously learns and constantly innovates to ultimately improve society. I believe it is a goal that can be achieved, but in order to realize this vision, the following ought to be considered:

• Invoke a learning culture across the organization by introducing formal, informal and social learning opportunities; not everything happens in a classroom and entrepreneurs learn from one another, not solely from the sage on the stage.
• Encourage innovation but if a mistake or failure occurs, learn from it, don’t reprimand the error; as Entwistle says, “There is tuition value in mistakes.”
• If the organization possesses a hierarchically driven leadership culture yet wants to become more innovative, employees will likely wait for innovation to originate from the top; if a more open and collaborative culture were to be demonstrated, there is the potential for the “entrepreneurial society” to materialize outside of the C-Suite.

Fairphone and TELUS are but two examples of organizations (and leaders) who understand the important aspect of both individual and organizational learning. If other organizations want to eventually create the “entrepreneurial society” we had better have more Bas Van Abel’s and Darren Entwistle’s in our midst, coupled with an organizational mindset that is open, cooperative and truly wanting to learn from one another.

About the author:

Dan Pontefract is author of THE PURPOSE EFFECT and FLAT ARMY. He is Chief Envisioner at TELUS.

Wherever one looks researchers are predicting that “automatic for the people” is morphing into something we might coin “automation for the people”.

Researchers at the University of Oxford indicated 47 percent of employees in the U.S. are at risk of losing their jobs due to automation. In Australia, a recent report by the Committee for Economic Development of Australia (CEDA) suggests 40 percent of all jobs — more than 5 million— face the likelihood of being replaced by computers in the next 10 to 15 years. It is no better in the United Kingdom either. Deloitte pointed out that 35 percent of all jobs across the U.K. will disappear by 2035. The authors further state “jobs paying less than £30,000 a year are nearly five times more likely to be lost to automation than jobs paying over £100,000.”

Perhaps these predicted twists will end up becoming “automatic for the unemployed.” If you believe the prognosticators, society might be left with 40 percent of the workforce unemployed, or underemployed.

Erik Brynjolfsson and Andrew McAfee, in their recent book The Second Machine Age, argue that automation and advanced technologies are root causes to the widening income gap. In 2003, Maarten Goos and Alan Manning coined this phenomenon “job polarization”. Brynjolfsson and McAfee suggest that such advances in concepts such as robotics and artificial intelligence may help to increase overall productivity, but it results in an ironic lack of job creation.

Indeed, the current state seems to have become “automation against the people.”

But there are those who believe this sort of advanced technology can actually accrue benefits to humans.

David Autor, economics professor at the Massachusetts Institute of Technology is a firm believer that the so-called “smart machines” are not that smart and it is the tacit forms of knowledge that humans naturally possess that ensure we will forever remain “automatic for the people”. In a paper published in 2014, Autor presented many points suggesting automation is a good thing for society.

He cautioned that human capital investment “must be at the heart of any long-term strategy for producing skills that are complemented rather than substituted by technology.” He argued that job polarization will eventually disappear because “many of the middle skill jobs that persist in the future will combine routine technical tasks with the set of non-routine tasks in which workers hold comparative advantage” including behavioral attributes such as adaptability, problem-solving, interpersonal interaction and flexibility.

Perhaps the future Autor describes has already arrived.

Autonomous haulage is beginning to take shape in the harsh climate of Northern Alberta throughout the oil sands. Gigantic $150 million trucks are not only expensive, they can be dangerous. A lot can go wrong when 8000 tonnes of dirt is moved 365 days a year by humans. Before self-driving trucks, there were normally four human drivers for each truck, and one mechanic for every 4-6 trucks. It was labour intensive, risky work.

My organization, TELUS, a $12 billion Canadian telecommunications firm, has been working with the oil companies to create pervasive wireless coverage that permits self-driving trucks to operate in those harsh conditions all-day, every day. This has decreased collisions, rollovers and accidents because the autonomous driving error rates are lower than humans.

Improving safety has been a key motivator for the oil companies – not the elimination of jobs. In fact, oil companies encourage workers to achieve their mechanic’s license –to safeguard the 24-hour cycle needed to keep the new trucks running. Perhaps this is an example of Autor’s point about comparative advantage. It is not as though a mechanic’s role can be automated. The oil companies need humans to fix an offline truck resulting in driver jobs being shifted to mechanic jobs.

Within TELUS, “automation for the people” is being meshed with the “automatic for the people” customer service ethos that Dexter Weaver defined earlier.

The team behind much of our client experience processes developed “Next Best Action” that uses a combination of big data, artificial intelligence and automation to improve the entire customer experience.

“Next Best Action” ensures call center agents and team members in our face-to-face stores have the details to be far more proactive – and arguably human – with a customer’s inquiry than ever before. For example, if a client calls into the customer care team, there is automated logic that then routes the call to the right person in the right department saving time for both sides. Data is constantly being fed into a predictive analyzer which speeds up the potential to solve a customer issue. The opportunity is to merge automation and artificial intelligence with a far more customized human touch.

The goal is not to replace call center or store agents with automation; it is using the advanced technologies we continue to develop and invest in to further improve the overarching customer experience with our team members.

But might those computers ever completely take over?

I asked David Autor if organizations should be worried about the so-called technological singularity, where computers and robots might learn how to redesign and improve their existing functionality, to ultimately become better than humans. His response said it all. “No, they should not be worried,” Autor said. “The machines work for us. If they can ultimately do our jobs for us, then we are richer not poorer as a result.”

Autor also introduced me to the observations of economist, computer scientist, and Nobel laureate Herbert Simon, who wrote in 1966 during another time of automation anxiety: “Insofar as they are economic problems at all, the world’s problems in this generation and the next are problems of scarcity, not of intolerable abundance. The bogeyman of automation consumes worrying capacity that should be saved for real problems.”

Put differently, “automation for the people” has been around for a long time.

I have never visited Weaver D’s Delicious Fine Foods restaurant yet, but when I do get there, I know there will be a smiling human being serving me. Indeed, “automatic for the people” will be sticking around in perpetuity, most likely assisted by “automation with the people”.

Time publisher John A. Meyers wrote, “Several human candidates might have represented 1982, but none symbolized the past year more richly, or will be viewed by history as more significant, than a machine: the computer.”  Pity those worthy humans who might have been in contention. The year 1982 was the point in history when humans became mere mortals, suffering the ignominy of garnering second place to a machine.

It hasn’t got much better. Some 33 years later, we might suggest 1982’s “Machine of the Year” has now morphed into an omnipresence of highly sophisticated technologies, outperforming and outsmarting those fallible humans.

Today’s “Machine of the Year” is no longer solely the personal computer either. It’s everything with an IP address. It’s my fridge!

More alarmingly, perhaps Time’s “Person of the Year” distinction – you know, humans – is becoming irrelevant, destined for a future of runner-up badges to the almighty machine. Wearables, Big Data, robotics, cloning, telepathy, the ‘Internet of Things’ and the pending ‘singularity’ – perhaps better stated as the rise of Artificial Intelligence – is no longer relegated to the futuristic thoughts of Orson Welles or Elon Musk. Indeed, the future is now.

There are warning signs ahead that leaders ought to pay attention to.

Firstly, we mustn’t put technology ahead of humanity. Leaders of people should be equipped to handle the continued onslaught of technology innovation but doing so such that they don’t make the mistake Time magazine made in 1982. We mustn’t allow the machine to replace the true purpose of an organization. We mustn’t abdicate the responsibility of leadership so advanced machinery supplants the very basis of civilization. The workplace will not survive if we put machine before man.

Just as the roads of yesterday will not take us to the places of tomorrow, old technology hasn’t ameliorated bad management. The typewriter coded letter turned into a Microsoft Word document which turned into a shared Google document. The face-to-face meeting turned into the conference call which turned into a webcam meeting. For many leaders, ironically, these ‘machines’ and innovative advancements have not helped them to become better leaders. If anything, it has made them worse. Distraction looms and inconsiderate use of the technology prevails. It’s analogous to the Victorian era cotton mills, when people were treated as slaves to the machines, and considered dispensable.

So while we continue to develop these new forms of functionality, levels of employee disengagement and disenfranchisement remain at anemic levels. For every Enterprise Social Network we launch and implement, millions of workers remain left out. For every technological advancement invented, there are millions of employees who remain dissatisfied and unrecognized for their efforts at work. Are we trying to let the machine make up for poor leadership?

Then there is irony. A Chief Information Officer mandates a certain collaboration platform to be installed across the organization – because one of their CIO friends did the same a few months back – but doesn’t once contribute or participate. This is an individual who has misunderstood the benefit of collaborative behaviour. Open leadership? Not even close. When a CEO begins to blog on the company’s corporate website – but employees discover it’s full of ghost-written entries by members of the firm’s corporate communications team – it fuels the fire of deceitful behaviour.

If as author Andrew Keen suggests, The Internet Is Not the Answer, and author Nicholas Carr claims we are now operating our organizations in a Glass Cage, what are leaders doing to ensure human behaviour continues to flow – as Plato taught us – via the three main sources of “desire, emotion and knowledge?” If the technology that we are implementing into our organizations is eliminating an employee’s desire and her emotion, while confusing the transfer of knowledge, I argue it is the antiquated behavioural models that we currently have in place in the organizations itself that are causing such dire employee disengagement aftereffects. The technology isn’t helping; indeed it’s simply masking the root problem. The presumption continues that an infusion of new technologies will somehow solve the greater issue. Ultimately, the behaviour remains the same.

Socrates once stated, “The secret of change is to focus all of your energy, not on fighting the old, but on building the new,” yet we must also remember that pre-existing behaviour tends to trump enhanced technology functionality. If there is a culture of fear at your place of work, no amount of technology is going to help.

As we continue to develop new technologies and as we seek new growth in our businesses, leaders need not worry about delivering the next new “Machine of the Year” as that will happen anyway. Society has proven over and over again we are pioneers of innovation.

But to truly prosper – to ensure society comes before machine – leaders must develop and inculcate new behaviours that are open, collaborative and inclusive across the organization in step with the technology itself. We must put humanity ahead of and before the technology expansion.

Perhaps we humans should aim to be the next ‘us’, rather than developing intelligence machines that we plan to build to replace us.

Let ‘us’ put the machine in its place. If we want that to happen – if we want to enhance our own humanity in concert with the technology – leaders best begin the process of introducing and balancing new forms of open and collaborative behaviours with employees and peers, in parallel with the technologies we are thoughtfully, and thoughtlessly, introducing to society.

If we fail to deliver on a proper balance, expect to see plenty more “Machine of the Year” distinctions in the future.

And if this imbalance continues, it’s our humanity that will suffer.

About the author:

Dan Pontefract is the author of DUAL PURPOSE and FLAT ARMY, and is Chief Envisioner at TELUS.

Billed as “The Great Transformation”, its work was cut out for itself from the moment you could register online. A conference paying homage to the brilliance of Peter Drucker has now become an annual calendar fixture not to be missed. The 6th iteration of the Global Peter Drucker Forum — recently held in Vienna, naturally — has arguably become the TED or Davos of all leadership conferences. But could we shift into an era of “managing our way to prosperity,” as the conference sub-title suggested?

Could we achieve “The Great Transformation”?

Richard Straub, the Forum’s chief architect, asked a rhetorical question in his opening remarks to the Forum, “Have we reached a turning point?” The ‘we’ he referred to might have been leaders in today’s organizations. I reckon you could argue it was ‘society’ in general that needed an autopsy on turning points. Either way, I sat at my seat, took another look at magnificent mural on the ceiling, and answered the question Richard posed to myself.

No.

We haven’t reached a turning point.

At least not yet.

We’ve reached a crisis point.

Think of it as if you were a member of the G7, trying to sort out what to do about Russia, Vladimir Putin and the ongoing saga that is the Ukraine.

The opening act of the conference included Clay Christensen, Gary Hamel and Roger Martin. This conference was about to get epic. What a triple-play bill of thought leaders to begin with.

The question this trio was tasked to answer was, “Is management up to today’s challenge?”

Renown Harvard Business School professor, Clay Christensen, — he of the disruption theory and accompanying models — claimed that growth comes from innovation and the link between growth and innovation is investment. Clay suggested there are three types of innovation:

1. Market creating innovations (only the rich have access to it) e.g. the computer. It’s the source of all corporate and national growth. The kind of innovations that allow access to more people and services.
2. Sustaining innovations – most of what we see today are sustaining innovations, he said. It helps an organization’s margins improve because they make markets vibrant. They don’t create growth, per se. These innovations are important but they are replicative.
3. Efficiency innovations – helps an organization get lean. If the firm doesn’t get more efficient, they get kicked out of the game sooner. It’s when an organization seeks to “do more with less” as an innovation strategy.

When I heard Clay gracefully and calmly explain the “efficiency innovation” example — using the term “do more with less” — I immediately felt my body go into uncontrollable spasms, reminded of the far-too-frequent number of times I’ve heard that soul-sucking phrase in my various workplace dealings. I always thought it was a practical joke of CFO’s to wax lyrical about doing more with less.

Where I felt Clay answered the question most effectively, however, was when he launched into a finance lesson on numerators and denominators. “Prior to 1980, measures of success were based on whole numbers,” he remarked. “For example, dollars were used as the measurement.” Now that made sense. But Clay went on to outline something I hadn’t thought of before.

“Finance has now given us measures to view how successful we are with capital. These are measures of how efficiently we are using capital. They are ratios and as we know, ratios have a numerator and a denominator.”

“We stand on the shoulders of others,” exclaimed another management guru Gary Hamel, as he took the stage in what can only be described as a frenetic delivery style, compared to Christensen at least. With the audience half-scared he might venture off the stage to deliver head-butts, he continued,

Gary believes salvation and prosperity can be had if the goal of organizations becomes the process in which they can become a self-renewing organization. This happens by innovation which, as he stated, “is the fuel for renewal.” He outlined three to build a self-renewing organization:

1. How have employees been trained as a business investor?
2. If an employee has an idea, how can they get capital to launch it?
3. Is the organization measuring the investment/idea and attaching it back to compensation and other targets?

The final opening act speaker was fellow Canadian, Roger L. Martin, Academic Director of the Martin Prosperity Institute out of the Rotman School of Business in Toronto. Truth be told, I’ve always been a fan of Roger’s work. He long has railed against the “game” that has been played by publicly traded companies, analysts, hedge funds, pension corporations and the stock market. He, like me, yearns to bring balance to our organizations such that there may be a better sense of equilibrium between purpose and profit.

His talk, as I had hoped, delivered on multiple levels. Speaking on the “Structure of Democratic Capitalist Infrastructure” and how it has become what he calls “perverted”, Roger explained to a captivated audience that “patent trolls” exist solely to make money and they do so by raping and pillaging companies that want to use the technology for good. You should tweet that sentence.

With this inexcusable mindset in play, the infrastructure inside our organizations is set to be far too narrow, thus basing its interests on short termism type actions. As I am an opponent of maximizing shareholder value as the sole means to measure a business, Roger deftly argued (and phew, agrees with me) that this sort of deplorable corporate robbing creates stagnation, a lack of innovation, and a skewing of what the true purpose of an organization really should be.

The Global Peter Drucker Forum was two hours into its journey but, with a tear in my eye, I was becoming more depressed by the second. The talks to this point were splendid but the recipe for change — the master playbook for “The Great Transformation” — seemed complex and beyond our reach. Were my expectations off kilter? Or, perhaps, I was correct in asserting we were not at a turning point, but at a continued state of crisis.

The speakers continued throughout day one. Each took a turn identifying the problem, and for some, taking a crack at a solution.

Vineet Nayer, the former CEO of HCL — a company and leader I profiled in FLAT ARMY — stated the turnaround at HCL was due, in part, to a democratization of innovation where ideas were allowed to surface from anywhere, and decisions were made across any level.” He believed that an organization’s competitive advantage lies in “putting employees first, and customers second.” I’ve read the book, so if you’re looking for the ‘how’, there are some good examples you might want to investigate.

Would an economist have better luck answering our question? Martin Wolf, Associate Editor and Chief Economics Commentator at the Financial Times, gave it his best shot suggesting no one individual should be allowed to own a company. “No one can own a country,” Wolf further stated, “so the claim that shareholders should have absolute control of the company is false.” I liked where he was going. It reminded me of the work another economist — Bill Lazonick — had put forward recently on Harvard Business Review.

The real answer began to surface when he said, “If management is to use its position to benefit the company and society, it needs the best arrangement in which to do so.” His answer?

“The company should be seen as a semi-permanent institution and philosophically it should be set up much like a trustee relationship.”

Bingo! Wolf had set the table and highlighted a possible answer to our vexing question. Perhaps Wolf was suggesting companies re-establish themselves as B-Corps, otherwise known as Benefits Corporations? I’d be all for that idea.

In his usual thoughtful and cerebrally controversial way, John Hagel — Co-Chair of the Deloitte Center for the Edge — concluded day one, and claimed most companies are an unnatural bundle of three business types:

1. Infrastructure management business – high volume e.g. call center
2. Product innovation and commercialized – e.g. iPad
3. Customer relationship business – knowing customers better, and helping them more

By the end of Day One, it was clear to me many smart people have thought an awful lot about the current crisis. Each had provided a wonderful snapshot explaining “what” was wrong but I still was missing the unified “how is this going to get fixed” answer.

Was there a unified answer out there?

Day two saw more talks and panel discussions. There were three talks in particular that I found further defined our current crisis, that also provided a glimpse into how our organizations might be fixed.

Rita Gunther McGrath, a professor at Columbia Business School, delivered a delightful talk suggesting “intelligent failures” need to become more common in today’s organizations. “You had a plan, you tested it, you knew what went wrong, you shared messages of failure, you learned from it, and you innovated again,” was how Rita explained the concept. My take from Rita’s talk was organizations need to be resilient and flexible — while not only being a learning organization – agreeing to gather and disseminate the tuition value from mistakes.

Nilofer Merchant, entrepreneur extraordinaire, took the conch and wonderfully hammered home the point that social is not a technology, it is a behaviour. (She actually stopped her talk mid-keynote and asked us to get social with someone beside us) Her point? The more people are allowed (and encouraged) to connect and collaborate, the greater payoff your organization will have downstream. I loved Nilofer’s message in addition to her delivery style, something I hadn’t yet experienced face-to-face. (If you haven’t watched her TED Talk, please do so. It’s a gem.)

Herminia Ibarra, a professor from Insead, gave incredible insight into the nuances of different types of leaders. From heroic, to charismatic, to visible, to individualistic, to peacetime/wartime, to collaborative, Herminia’s examples were insightful, funny and painful for their accuracy. I’ve always appreciated her work and the connections she makes between effective (and ineffective) leadership and the crisis we find ourselves in today’s organizations.

From the various speakers, to the attendees I spoke with, to several meaningful and deep conversations, — it was evident everyone is (for the most part) on the same page. It was fair to summarize that we may not be at a turning point but we’re all acutely aware of the crisis we’ve gotten ourselves into.

As Clay Christensen remarked in the closing comments to the conference,

“Let’s take the best of each other’s ideas and languages, — our ways of communicating — share, focus and then standardize to make change.” That’s exactly what we need to do next!

Dan Pontefract, author of FLAT ARMY: Creating a Connected and Engaged Organization. (@dpontefract or www.danpontefract.com)

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A blog following the Global Peter Drucker Forum 2014. An opportunity to share experiences and learn from one another in the context of The Great Transformation.