Essay Based on The New Ecology of Leadership Wins a Top Prize in the Drucker Global Challenge Essay Contest 2012

It’s official! My essay, “Practical Wisdom: Reinventing Work and Reinventing Organizations by Rediscovering Ourselves”, which is based on the ideas in The New Ecology of Leadership, has won a top prize in the Drucker Global Challenge Essay Contest. The organizers will be flying me to Vienna in November to participate in the 4th Global Drucker Forum and to receive an award. Publication details for the essay will be available in the next few weeks.

The theme of the contest was “Reinventing Work, Reinventing Organization” and contestants were asked:

What do YOU see?

  • How will the nature of work and the workforce look like a few years or decades from now?
  • Will we still have the traditional corporations with their hierarchies providing the workplace for millions? 
How will SME’s be configured?
  • Will all workers ultimately become knowledge workers?
  • In which environment will knowledge workers conduct business? Still at a desk at the office, or rather from home? Will they work for one or for several companies and organizations – in a mixture of jobs and parallel careers?
  • What will drive and motivate knowledge workers of tomorrow? A good pay? Or perhaps passion and purpose?
  • To what extent will the traditional “employee society” evolve into an “entrepreneurial society”?
  • Which will be the impact of these structural changes on companies, corporations and organizations and how can they best adapt?
  • What role will social entrepreneurs and the non-profit sector play in the future?
  • What role will social entrepreneurs and the non-profit sector play in the future?
  • What regulatory power will governments and trade unions ideally have?
  • And how will the education sector and, last but not least, business schools change – and indeed have to change – to address the challenges of tomorrow?

Contestants were not asked to answer each of the questions but to use them as issues to consider in building a picture of how work and organizations will look in the future.

Drucker as a Social Ecologist

Peter Drucker never regarded himself as an economist; as far as he was concerned economics dealt with commodities and he was interested in people. Instead he described himself a “social ecologist”. Although his fans often hailed him as prescient, he never tried to predict the future. Rather, he anticipated it: “I don’t predict. I just look out the window and see what’s visible but not yet seen.”

He wrote that a social ecologist had to ask questions like:

  • What changes have already happened that do not fit “what everybody knows?”
  • Is there any evidence that this is a change and not a fad?
  • Does it make a difference – is it relevant and meaningful?
  • What opportunities does it offer?

In my essay I used these questions as headings to talk about the new emerging understanding about human nature and the rise of practical wisdom as the key requirement for management. I wrote about the British and French Enlightenments and contrasted Adam Smith’s foundation of human nature in “moral sentiment” with its French rival, the “ideology of reason”. I argued that in the late 1950s management science had separated reason from emotion and had based itself firmly on a Cartesian concept of rationality.

The Search for Stability In The Aftermath of Crisis

Philosopher Stephen Toulmin suggests that Descartes’ (1596-1650) framework of rationality was embraced so firmly in the 17th Century because it promised stability in a time of unprecedented turmoil. For the growth fueled by Spanish treasure ships had faded and Europe had entered an era of general crisis with the long, destructive Thirty Years’ War (1618-1648) as its central feature. Against this backdrop, he argues, the rationality and certainty that Descartes’ system offered must have seemed to be a blessed relief from the bloody religious conflicts and the disputes of the great powers.

Toulmin again suggests that period 1914-1945 was the 20th Century equivalent of the Thirty Years’ War, implying that after the rise of militant nationalism and the destructive turmoil of World War II, the prospect of basing the social sciences on a positive, empirical foundation must have seemed similarly attractive. At last there might be a rational way to manage society and its institutions.

Whatever the webs of cause and effect, the American business schools flourished mightily after World War II, as their clients, large industrial corporations, prospered in a world where all the other major industrial countries had been devastated. Not surprisingly, the emphasis was on continuity – “more of the same” – and the siloed, functional structure of the business schools matched the siloed, functional organizations they served.

In the essay I suggest that this long dalliance between business thought and Cartesian rationality is coming to an end. The behavior of firms and individuals under the assumptions of the rational model has become steadily more dysfunctional. We are now faced not with the problem of allocating resources and distributing wealth but of innovation and the creation of wealth. This is a task that the rational model cannot handle; innovation and creativity are, almost by definition, activities on the margins that do not fit with mainstream definitions of rationality.

Plato and Descartes will not be expelled from the academy, but in the social sciences conceptual knowledge and Cartesian rationality will be embraced and contained by the practical wisdom that Aristotle called phronesis. This is as it should be; markets can make excellent servants of society but they make poor masters. We want market economies, not market societies where everything is for sale.

As readers of my blog will know, I believe that the source for this change is the new understanding of human nature emerging from evolutionary biology, behavioral economics, neuroscience and several other disciplines. One of the most promising vehicles for this – the “umbrella” concept – is the concept of ecological rationality and its natural ally, that of embodied cognition. Together they can reunite facts with values, ideas with matter and body with mind, restoring the relationships that Descartes tore apart.

The impact of such a change on the practice and theory of management will be profound. In the essay I make the case that it has the potential to change the world…

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