It was a cold November morning in 2016. As we walked from our hotel to the conference venue, I asked the late Clayton Christensen why he kept coming back to the Drucker Forum. He said, “At other conferences, I speak, and here, I learn.”

Clay’s response is as simple as it is profound. It perhaps summarises best why many consider the Drucker Forum the world’s premier management conference. It offers unrivaled depth and breadth of perspectives. It creates countless opportunities for thoughtful exchange between speakers and delegates, practitioners and academics alike. And in so doing, it does justice to Drucker’s name and legacy.

What is there to redefine?

Yet something struck me as odd as I read through this year’s conference abstract and learned that in 2022 we would aim to “redefine performance that matters.” What is there to redefine, I wondered? Drucker taught us that

• the ultimate test for management is performance
• the only meaningful definition of performance is results
• results are only found outside the organization
• and for a business, this means a satisfied customer

Drucker was also careful to remind managers of their social responsibilities. Is any of that no longer true? Is something missing? 

Old questions and known answers

My confusion only grew when reviewing the more specific questions listed in the abstract. Each question fits one of five categories:

• How can large organizations be more entrepreneurial?
• How can businesses create value not just for shareholders but also for society? 
• How can we leverage technology to improve the human condition rather than hurt it?
• How does an organization preserve its moral integrity as it aims to grow and improve performance?
• How can organizations cope with complexity and the speed of change around them?

These questions are not new, and we’ve been pondering these very same questions ever since the Forum’s first edition in 2009. What’s more, hasn’t Drucker himself already answered almost all of them?

Yes, times are changing. It’s good to revisit such vital questions from time to time. Yet I would argue that not much has changed at the most fundamental level, at the level of principles and foundational truths. We know the answers to these questions. So why do we keep asking them?

We don’t use our knowledge

This year’s abstract rightly points out that “management as a discipline has had many decades to study, test and spread what works in organizations and what doesn’t.” It then asks the inevitable question, “have our organizations become much higher-performing?”

Unfortunately, they haven’t. The evidence speaks loud and clear. The picture is the same whether we look at metrics such as employee engagement, innovation performance, the success rate of corporate transformations, or financial performance. On average, they remain dismally low (such as employee engagement at 15%, according to Gallup) or have even been in free fall (steady decline of RoA since 1965, according to Deloitte’s Shift Index).

And herein lies the reason why we keep asking these same questions. Because, in practical reality, they are still unresolved problems. We’re violating one of Drucker’s most important principles, that management is a practice and that knowledge is useless if we don’t use it to create results. We know the answers, but we don’t use them in practice. 

The character of leaders

So why don’t we? Again, I believe Drucker has already given us the answer. He writes in Management: Tasks, Responsibilities, Practices (1973):

“Leadership is exercised through character. And character is not something leaders can acquire. If the leader lacks character – no matter how knowledgeable, how brilliant, how successful – he destroys. He destroys people, the most valuable resource of the enterprise. He destroys spirit. And he destroys performance.”

Here, I believe, is the elephant in the room. How many organizations make character a non-negotiable qualification for leadership? How many look for high standards of moral integrity in their people decisions? Are their leaders committed to speaking the truth? What is their motivation to pursue a career in management? Do they aim to serve customers, their people, institutions, and society?

Looking at the evidence, I can only conclude that they don’t. The so-called leaders are in it for themselves. And we let them get away with it. Yet an institution is never to be seen as a platform for anyone’s career, status, or enrichment. Sadly, in his fascinating book A Time to Build (2020), Yuval Levin demonstrates how that’s precisely what’s going on not just in business but also in politics, education, and journalism. He writes, “the people who occupy our institutions increasingly understand those institutions not as molds that ought to shape their behavior and character but as platforms that allow them greater individual exposure and enable them to hone their personal brands.” 

The truth about human nature and the performance that truly matters

If we’re going to do anything about it, we need to come to terms with human nature. Would you be surprised to learn that Drucker also had something to say about that? In The New Realities (1989), he writes, “Management is deeply involved in spiritual concerns, the nature of man, good and evil.” And in a lecture titled Peter Drucker’s Theology of Work, Joe Maciariello quotes Drucker saying, “I’m only too aware that human beings perversely insist on behaving like human beings. This means pettiness and greed, vanity and lust for power and, yes, evil.”

Here is the second elephant in the room. Humans aren’t basically good. This profound insight penetrates much of Drucker’s work, and it’s why he puts such a heavy emphasis on character in leadership. We can’t just assume that humans will do the right thing, even if they know how to do it. 

In that light, there may actually be a need to redefine “performance that matters.” What truly matters is our performance in shaping men and women of character. And in making sure that such men and women run our institutions. 

Asking the difficult questions

Many will disagree with my analysis, and I invite you to change my mind. Do you have evidence that our organizations have become much better? Or do you have a better explanation for why they haven’t? 

I’m well aware these are controversial questions. But we need to ask them if we desire to make real progress. Questions, especially the difficult ones, are the source of all learning. Remember why Clay Christensen came back to Vienna time and again? And questions, perhaps more than anything else, were the defining mark of Drucker’s work. 

So let’s wrestle with such questions at this year’s Forum. To quote Charles Handy from his powerful closing address in 2017: “If not us, then who? And if not now, then when?”

About the author:

Raymond Hofmann is a management and organisation designer, entrepreneur and pastor-in-training. He is based in Switzerland.

In his introduction to the 10th Global Peter Drucker Forum, focussing on the human dimension of management, Richard Straub asks “What place do we give the human in organisations?” and, leaning on Aristotle’s phronesis, argues that “reasserting the human dimension means above all asking the why questions that enable us to ponder deeply who we are, what we do and where we should be going”. He concludes with a strong call to action: “Bearing direct responsibility for confronting these issues in the workplace, management can light the fire – and must do it now, before it is too late.”

Worthwhile questions

I have no doubt that the Forum, which again brings together the brightest minds in business in an unmatched lineup of speakers, will give us plenty of worthwhile questions. And more.

We will hear appeals to rediscover our humanity, to create more than shareholder value and turn business into the force for good it could be.

We will have speakers present us with brilliant analyses of how AI, robotics, digital and other technological developments are changing the nature of work. And why, despite the threats posed to our jobs, technology comes with the inherent potential to liberate us from repetitive activities – allowing us to focus on what makes us uniquely human.

We will discuss inspiring examples of how human-centric innovation can create growth and wealth for all of us. We will convince ourselves that a better world is indeed possible.

How to make it happen

But will we talk nearly as much about how to make it happen? Or will we get so excited with the what and the why that we end up neglecting the how?

Are our current organisations capable of turning these hopes and dreams into reality? If they are, why haven’t they been able to solve longstanding simpler problems?

According to Gallup, only 15% of employees worldwide are engaged in their job. We have poured hundreds of millions of dollars into “engagement programs” for years – with zero effect.

Similarly, according to the Deloitte Center for the Edge’s shift index, return on assets (RoA) as a measure of performance of US public companies has been on a steady decline since 1965, to a quarter of what it was in the sixties.

Equally depressing evidence exists for our organisation’s continued inability to innovate, to change or to earn public trust.

If we can’t fix these, how can we get our organisations to “reassert the human dimension” and create a better world for us all?

Rethink organisations

In his closing address at last year’s Drucker Forum, Charles Handy observed: “We need to rethink how organisations, particularly businesses, are run, why they are run, and what their purpose and role are in society.”

He has got the order exactly right. Before we can expect our organisations to produce different outcomes, we need to rethink how they are run.

That means management. What Peter Drucker described as the “life-giving element in every business”. And what Gary Hamel so beautifully calls “the technology of human accomplishment”.

Pillars of management

Management needs to stand firm on all three pillars: what, why and how. If it doesn’t, it fails to live up to its purpose. How we practice management makes all the difference.

Yet when I ask managers to explain their organisation’s management model, more than 80% cannot describe it.

Management model

Management has one job: to make an organisation function. The management model describes how management achieves that, like a business model describes how a business creates value for customers profitablty.

The management model clarifies which systems, tools and practices we are using to get the job done. It also clarifies why we made these choices: what are the underlying theories and beliefs that we rely on? Are these good theories? Do they apply in our context?

What does it mean if more than 80% of managers cannot answer these questions about their own organisations?

Foremost it means that we are unable to purposefully change the way our organisations work. How do you improve something that’s not explicit?

Failure to solve big problems

I believe this largely explains why we haven’t been able to solve the problems of engagement, innovation or performance. Neither will we be able to address the next set of challenges as we explore the human dimension of management.

Unless we first talk about management itself. How we practice it and how we anchor that practice in the body of solid management theory. We know how to make people thrive at work, we know how to innovate and we know how to create high performance organisations.

But we have failed to reflect that in managerial practice. We have failed to design management models that produce different results.

Reformation

Remembering the 500 year anniversary of the Protestant Reformation, Charles Handy ended with a call for a business reformation. He asked if the Drucker Forum could not be the new Wittenberg and Peter Drucker (with all of us magnifying his voice) the new Martin Luther.

I believe it can. The reformation is analogy is a perfect one. The Reformers, led by Martin Luther, did not invent a new religion. They went back to basics, re-discovered and brought to light the truth that the Christian Church possessed and had relied on for centuries. At the heart of that re-discovery was a how question: how can man be reconciled with God?

Likewise, for our successful business reformation, we not only need to ask the most important how questions but also remember that we already know the answers to many of them. Answers that Peter Drucker and many other great management thinkers, have already given us.

These answers might not be quick fixes, or popular. There may be a cost. But they represent truth on which to build better organisations.

In Vienna, let’s not be satisfied with inspiring visions of what might be. Let us be relentless in asking how. Let us aim improve the practice of management first.

About the author:

Raymond Hofmann is an associate of the Peter Drucker Society Europe and an independent management consultant. His latest project, management model design, aims to help improve the practice of management by a) creating a common language to describe, challenge and improve management models and b) making good management theory more easily accessible.

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.

The evening’s theme was “rediscovering entrepreneurial management”.

Peter Drucker observed: “We know that theories, values, and all the artefacts of human minds and human hands do age and rigidify, becoming obsolete, becoming ‘afflictions’”.
This is also true for management. Traditional management is becoming an “affliction” for many organisations. It buries their innate “entrepreneurial competence” (Drucker) under layers of bureaucracy.

The interactive panel, moderated by Lukas Michel, Associate Drucker Society Europe, discussed the changes needed if established organisations are to become more entrepreneurial again. Panel members were Tammy Erickson, Executive Fellow at London Business School, Vlatka Hlupic, Professor of Management at University of Westminster, Hermann Arnold, co-founder of Haufe-umantis AG, a Swiss software company and pioneer of democratic, self-organising organisations, and Hans Martin Graf, a senior executive at Credit Suisse.

Five themes for more entrepreneurial organisations were discussed.

Five themes for more entrepreneurial organisations

Remove barriers

Hermann’s initial proposition was that we’d be surprised by how much entrepreneurship already exists – if only we let people be more entrepreneurial.

Hans Martin noted that being entrepreneurial requires taking personal risks. Organisations therefore have to create an environment where people feel safe to take those risks.

This is essential today, as Tammy added, because “you need people to do their best but most often can’t exactly tell them what to do.”

Peter Drucker would certainly agree. He was the first to observe that knowledge workers are most productive when they choose their own work, their own contributions.

Review the contribution of leadership

What is a leader’s contribution? First, it’s important for leaders to ask themselves that question. An organisation which democratically elects its leaders, like Haufe-umantis AG, might help aspiring leaders humbly reflect on this before they are in the role.

Successful leaders will see themselves as architects of their companies, not as being in charge and calling the shots day to day. For Tammy this means a leader must do four things.

1. Create capacity for collaboration. Not force people to collaborate but create organisations where it is easy to do.
2. Constantly “disrupt” the organisation. Ensure it is exposed to a continuous flow of new ideas.
3. Ask great questions. Questions that trigger thoughts, ideas, learning.
4. Lead with meaning. Ensure an organisation’s purpose is crystal clear and kept in focus.

Ask questions

From Tammy’s four points, asking questions is what many of us struggle most with. First, education systems prepare us for the exact opposite: giving answers. Second, it takes courage and humility to ask questions to which you don’t have the answer.

However, asking great questions is something all of us can learn, if we choose.

Build 21st century organisations and share leadership

Building on the theme, Tammy shared her idea of the best leader: “one that’s focused on the most important question the organisation is facing”.

The industrial age had its own set of questions for leaders, centred around “how can we make a lot of stuff, cheaply and with unskilled labour?”. The answers helped shape traditional management, still widely practised today.

Now organisations face a different set of questions, centred around “how can we get people to come up with good ideas?”. Organisations and management need to be built on a different logic.

One element of this logic is shared leadership. Hermann noted that so much is being asked of leaders, that we’d better think about how we can share leadership in teams.

That’s at the heart of what Vlatka calls the “management shift”, which aims to achieve much higher participation, and collaboration. In such organisations, decision making becomes widely distributed and even strategy development a collaborative task.

Champion discipline and meaning

Letting people choose their work (or even their leaders) may sound like a great recipe for chaos.

Yet process and discipline are still needed. The question is: what process to solve which problems? Even self-organising systems need rules by which they operate. Self-organising systems also need control. But it’s more likely to be personal control than a form of top-down control.

A key ingredient for functioning self-control is a strong purpose. It serves as a compass to help navigate the myriad of decisions that are needed to move us towards our goals.

Are we even trying?

For those of us already involved in shaping the future of work, these are not revelations. Yet if these ideas are widely accepted, why don’t we see more of that in practice?

One explanation is that this kind of change is hard and takes time. True, but perhaps an even bigger challenge may be ahead of us.

What if we are not even trying?

Zeno Staub, SMG board member and CEO of Bank Vontobel, in a Druckerian remark during his welcome message, observed that for the two most important social functions, parenting and management, there is no formal training. And many even question the need for management training in the first place.

So how likely is it that someone who does not believe management can or should be learned will buy into the need for changing management?

Ok, but other managers will understand, so this should be easy for them to buy into, surely?

Not so, if audience questions and comments are any guide. Many were appreciative and thoughtful, but many also revealed that the magnitude of change required is not fully understood, that we’re mainly talking cosmetics.

Not seeing the need is a major barrier to change. Maybe also an excuse, because who can invest in long term change when you’re under pressure to deliver next quarter’s numbers?

So perhaps we’re not trying on a large enough scale.

It’s not just business leaders. This includes consultants and academics who speak and write about the need for change. If we don’t reach the hearts and minds of more business leaders and can’t help them overcome the barriers, then we fail them.

In her closing remarks, Angelica Kohlman, Chair of the Global Peter Drucker Forum Advisory Board, said: “25 years ago Europe had recovered from WW II and seemed to be on its way to greater success. At that time my car was German, my watch was Swiss and my mobile phone was Finnish. Today, all my kids want is a mobile from Silicon Valley, a watch from Silicon Valley and a car from Silicon Valley! What happened?”

It seems we’ve been sleeping in Europe.

If we want a prosperous future for ourselves, our children and our societies, we first need to wake up.

About the author:

Raymond Hofmann (www.raymondhofmann.com) is an independent advisor and management designer. He is also an Associate of the Peter Drucker Society Europe and co-organiser of the Swiss launch event.

When I stumbled upon Devin Fidler’s recent HBR blog post “Here’s How Managers can be replaced by software” (https://hbr.org/2015/04/heres-how-managers-can-be-replaced-by-software), a loud voice in my head said: “What a nonsense. Here’s one more clueless author contributing to the mass-confusion about the nature and purpose of management.”

I was already turning the page in my Flipboard when something made me go back and actually read the article. And sure enough, what the article celebrates as the iCEO is not much more than an (admittedly clever) algorithm capable of breaking down a relatively simple task (writing a research report) into a well-coordinated series of micro-tasks (data gathering, writing, editing, lay outing and more) which the iCEO then automatically routes to freelance workers via platforms such as oDesk. Add a little bit of automated workflow and voilà, here’s your research report, the production of which has been entirely “managed” by software.

All well, except that this is not management. At best, it is micro-management: the manager knows all the answers (what are the discrete steps required to produce the report) and tells people what to do (assigning micro-tasks and controlling their execution).

The iCEO isolates the mechanical aspects of the task and completely ignores all human elements. What else is software to do? In the real world, of course, there is always a human element, even in relatively simple tasks such as writing a report.

Here’s a few human questions relating to this simple example: would the people working on one of the discrete, iCEO-commissioned tasks be able to do a better job if they actually knew what they were contributing to? What if they knew who else is working on the job and had a chance to interact with them? What if someone along the way had a clever idea which would require changes to the production process? What if the quality of one of the intermediate deliverables did not meet expectations? And of course: people taking jobs on platforms such as oDesk expect feedback in the form of ratings and short comments on the quality of their work. It’s a way to build a reputation and attract more work. Would they work for the iCEO again in the future if such feedback were missing, inaccurate or generic?

Nonetheless I was intrigued by the possibilities and did some more research. I learned that Devin Fidler works for the Institute for the Future (http://www.iftf.org/home) and a few years ago gave this really interesting presentation on “Realigning the Human Organisation” (https://vimeo.com/53985771). In the presentation, he talks about coordination problems and how humans invented the classical hierarchical organisation as a social technology to solve such problems. And about how inadequate this technology is in our modern organisations.

On a side note, one of the very aspects that make hierarchical organisations inadequate for our times is that they are prone to create and reward micro-managers. Micro-managers tend to drive the best talent mad and out of the organisation. I don’t see how replacing them with software is solving that problem – unless people somehow are more tolerant of being micro-managed by a machine instead of a fellow human being. Which I consider unlikely.

Nevertheless, the point that traditional organisations are hopelessly inadequate for today’s word remains valid and my respect for Devin Fidler’s work grew by the minute. My thoughts moved from judgement (“this is nonsense”) to inquiry (“how might this kind of work help create better management?”).

Then I remembered Dov Seidman’s wonderful talk at last year’s Global Peter Drucker Forum, during which he reflected on one of Peter Drucker’s many important observations: that we need to distinguish between doing the next thing right and doing the next right thing. Dov made it very clear that only humans (as opposed to machines or processes) could do that and that we need to make this distinction meaningful again in our organisations. Leadership then becomes a moral business, since the question of “what is the right thing to do” is a moral one.

Richard Straub was hitting a similar note in his thoughtful blog post “The Human Difference” (http://www.druckerforum.org/blog/?p=802):

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.

So of course, management “as the technology of human accomplishment” (Gary Hamel) cannot be replaced by software. But we will certainly be able to replace many of the mechanical, non-value added tasks related to management – and with it the legions of micro-managers haunting workplaces and tainting the reputation of management all over the planet. By doing so, we help clarifying what the value-added, human essence of management actually is. Or more broadly speaking: help us understand what truly makes us human.

Once again, Peter Drucker was right when in 1967 (!) he said: “We are becoming aware that the major questions regarding technology are not technological, but human questions.”

About the author:

Raymond Hofmann is an independent consultant and coach, dedicated to help senior management design and run better, more human organisations.