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David Hurst delivers multimedia presentations and a range of customized experiences that will inform and inspire your people and help them learn from the past, master the moment and create the future. For a recent sample of a short keynote to the 10th Annual Global Drucker Forum see the embedded link.
My latest article, Forces of Nature, has just been published in Strategy+Business. In it I discuss Canadian ecologist, “Buzz” Holling’s adaptive cycle and how, transformed into the ecocycle, it can help us understand the dynamics of complex adaptive systems.
Metaphors matter, especially in uncertain times, when the only way to frame a complex predicament is to use models from a familiar past. The title of this blog borrows from Tomas Pueyo’s excellent article and the picture that accompanies it is a mashup of one of my ecological images and it.
When it comes to the coronavirus, war metaphors abound. British politicians summon the ‘spirit of the Blitz’, while Donald Trump describes himself as ‘a war-time President’. These bellicose approaches have rhetorical value and may help address logistical issues, but we need additional views. Ecological analogies supply a helpful lens. For, from an ecological/business perspective, the coronavirus is the ultimate entrepreneur. If the purpose of an entrepreneur is to create a customer, the coronavirus is superb! In a population without immunity every human is a potential ‘customer’. This vulnerability is increased by globalization and global travel and aggravated by long just-in-time supply chains, tuned to efficiency rather than resilience.
What’s more, everyone infected with the coronavirus ‘recommends’ it persuasively to others, with an average of 2.4 other people becoming infected. In marketing the well-known net promoter score is measured by asking customers the question, “On a scale of 0 to 10, how likely is it that you would recommend our organization (product) to a friend or colleague?” Those who score 0-6 are classified as ‘detractors’, those who measure 7-8 are ‘passives’ and those with a score of 9-10 are ‘promoters’. You add up number of responses that fall into each of the three categories and calculate the percentage that each category represents of the total. Then subtract the percentage of detractors from the promoters and the result, expressed an as integer, is your net promoter score. It ranges from +100 to -100. With all ‘customers’ very likely to ‘recommend’ it to others, the coronavirus’ net promoter score would be a perfect +100!
This is a report on a Round Table discussion at the 2019 Global Peter Drucker Forum. Click here for the LinkedIn version which has hyperlinks
Chair: Richard Brem, Senior Advisor, Peter Drucker Society of Europe,
Peter Paschek, Management Consultant,
Timo Meynhardt, Professor for Business Psychology and Leadership, HHL Leipzig Graduate School of Management,
Verena Ringler, Curator, Erste Foundation
Aaron Barcant, Independent Researcher, Karl Polanyi Institute of Political Economy
The round table began with Richard Brem introducing the panelists and each of them summarizing why Peter Drucker’s work and vision mattered to them.
Drucker always argued that one’s worldview mattered to one’s understanding of one’s role and contribution in society and one’s ability to manage oneself and others. American philosopher Thomas Sowell, describes a vision as a ‘pre-analytic, cognitive act’ that helps simplify an overwhelmingly complex reality. Think of it as a walking stick that helps you travel over rugged terrain, giving you support when you need it and allowing you to probe the way ahead. A social vision gives us a sense of how the world works, of the nature of humankind, of causation and how social change happens.
As panelist Peter Paschek pointed out, Drucker described himself as a ‘conservative Christian anarchist’. While accepting the necessity of governance and government, he saw power and the yearning for power as the central problem of society, with that of managerial power and its legitimacy a particular concern. The political philosopher he admired most was Wilhelm von Humboldt, the pioneer of the modern research university, who found balance and harmony while managing the tension between continuity and change. Drucker was concerned with this balance at several levels, especially those of society and community. It was this interest that allowed him to see management as a social function, an organ of society that is responsible for the performance of institutions and gives the individual both status and function. Panelist Timo Meynhardt said that Drucker’s depth of thought and his emphasis on values – his practical wisdom – was his distinctive strength, making him a ‘companion in the darkness’.
Why does so much management advice sound reasonable but turn out to be of little value? Most readers will know what I mean. Take the following guidance on how companies can ‘accelerate their agile transformation’:
- Create a C-suite with an agile mindset
- Hire and develop the right mix of talent
- Foster an agile-friendly culture and organizational structure
What’s not to like? Well that’s the problem. The first test of any management advice is to ask, “Is the opposite also true?” If not, then the statement is a simple truism like each of those above. Clearly one wouldn’t want a C-suite with an anti-agile mindset nor a firm with the wrong mix of talent and so on.
Nevertheless, some truisms bear restating because they emphasize items of particular importance that should be priorities – necessary conditions, without which change efforts may fail. So we should look at this advice more closely. The problem is that each of the three sentences is a linguistic trick. It starts with a verb, which makes it sound like an action, but it’s really an achievement, a desirable outcome. This is why one can’t disagree with them. They are abstract ‘what-to-achieves’ that sound like ‘dos’ and whose abstraction makes them seem generic to all organizations. They are synonyms for success, outputs masquerading as inputs. To be truly helpful these generic ‘whats’ will have to be turned into specific ‘hows’ – how to ‘create a C-suite with an agile mindset’ in thisorganization, in our situation, with these people, right here, right now. And that’s where things get difficult. There are no facts about the future and every organization is different: history and context matter. Priorities will differ and what works in one situation may not work in another. And in the end it will likely turn out that the cluster of attitudes we call an ‘agile mindset’, like so many other ‘success factors’, is itself an emergent property, a consequence of a successful change effort, not its cause.
Organizations as Actors
Many management writers (especially consultants) gloss over these problems by writing about corporations as if they were rational decision-makers, actors in their own right, with clear goals and identifiable preferences for outcomes. Companies are said to have ‘found ways to infuse a higher-purpose calling into their culture’, they ‘leverage their core capabilities to enter new growth markets’ and ‘unleash the creative abilities of their people’. Personifying corporations as actors in their own right may be a useful for headlines but it’s unhelpful when we are trying to understand cause-and-effect in complex systems. When The New York Times publishes a report that “Boeing Fired Its Leader” its journalists are using writers’ shorthand to report the outcome of a complex process, not to describe the decision of a lone actor.
Sometimes these corporate actors are represented as mechanically applying external rules or ‘principles’. Now change simply becomes a matter of swapping out the old principles for new ones and all will be well. Calling abstract features of successful agile organizations ‘laws’ or ‘principles’ and even ‘imperatives’ makes them sound like critical inputs but they are really outputs, usually the results of virtuous habits that have been developed over long periods of time. American Supreme Court Justice, Oliver Wendell Holmes once wrote, “The life of the law has not been logic, it has been experience”. Civil and criminal laws embody the experience of a society; most of us obey them because we are raised to do so in a law-abiding community, not because we read about the laws and ‘apply’ them. Management laws and principles are really desirable outcomes, abstract goals perhaps, but reducing them to rules and treating corporations as actors makes their achievement seem a whole lot easier; the critical management task of enabling people within the organization to work together cooperatively simply disappears. Indeed, the very definition of an ‘agile mindset’ might be when an enterprise begins to act as if it were a coherent whole, with what some have called a “shared consciousness” (See General Stanley McChrystal’s Team of Teams: New Rules of Engagement in a Complex World).
Decision-making as Conscious and Deliberate
Another way that management writers make ‘implementation’ sound easier is to imply that all decision-making in organizations either is or should be conscious and deliberate. The role of our unconscious minds as well as habits and competencies acquired over time and from hard experience are slighted in favour of premeditated choices and strategies. This downplays the fact that when we are talking about change in an established organization, we need to understand its history and its existing technologies, habits and competencies. We need to appreciate how they help or hinder what we are trying to do and think about what is involved in changing them. This, in turn, widens our focus from just what we should start doing to what we should also stop doing.
For example, in my experience, one of the biggest obstacles to trust and cooperation in established organizations is the yoking together of the annual budgeting process and the performance management system. Many readers will be familiar with the ritual torture of preparing budgets that are linked to individual compensation. The corporate head office tries to push the numbers as high as possible, arguing for ‘stretch’ goals, while operating managers try to get them as low as possible, theoretically to maximize their income but often just to make organizational life bearable. The resulting bad-tempered, adversarial process and the accompanying zero-sum game-playing perpetuates top-down, command-and-control management cultures. It wastes a prodigious amount of time and prolongs destructive competition within the organization, damaging trust and cooperation. One of the first things to do is to separate financial forecasting from performance management and make the latter retrospective, dependent on a comparison between our actuals and those of the competition or against what was available in the marketplace.
Similar problems exist with other tyrannical relics of the Industrial Era like manipulative Management by Objectives (MBO) schemes, mechanically applied Balanced Scorecards (BSC), and cults of RONA (Return on Net Assets). These usually focus on short-term individual performance at the expense of the long run and team learning. They typically distinguish strategy formulation from implementation, precluding the emergence of novelty. At the same time, they trail behind them constellations of oppressive Key Performance Indicators (KPIs) that breed like rabbits. Peter Drucker never said or wrote anything like “If you can’t measure it, you can’t manage it.” He argued that there were many important results in organizations that were tangible but nonmeasurable – like their ability to attract and hold able people. Most importantly, it was these nonmeasurable events that dealt with the future, whereas measurements are always about the past.
This is the first part of a much longer article published on LinkedIn
The concept of management as a science has its origins in the aftermath of World War II. During that conflict the use of analytical disciplines drawn from operations research proved enormously useful in decision-making. After the war the hope was that the business use of operations research would form the basis for a science of management that used rational, evidence-based techniques and analytical methods to inform and improve decisions of all kinds.
The result was what I think of as a “Cartesian” theory of management that assumed that:
- Decision-making is the essence of management
- Decision-making is (or should be) a conscious, logical, fact-based process that depends on certain premises (rules or principles)
- Corporations think and make decisions just like persons do: if you can change the rules or principles they use, you can change the decisions they make
Managers are portrayed as a detached, objective observers in search of “facts” and using deductive logic to predict and control the performance of organizations. They achieve this via the making of decisions and the issuing of crisp, actionable instructions accompanied by the appropriate rewards and sanctions. It is highly numerate view, with the mantra that “If it can’t be measured it can’t be managed” and even “If it can’t be measured it doesn’t exist.” Thought precedes action and the highest form of thought is conscious, deliberative, instrumental ‘scientific rationality’. Thus, management is a technical practice, like engineering, that demands the application of context-free principles in the efficient pursuit of goals that are often given externally. Deviations from this normative practice are the results of a host of human cognitive biases that stand in the way of managers achieving the gold standard of deliberative rationality.