I am now entering my 21st year as a management thinker, author, adviser and professional speaker on the core topics around business excellence. As with nearly everyone in my line of work, I consider Peter Drucker one of the most important business thinkers of all time and have carefully studied all of his work. Each year in Vienna, Austria they host a global forum to talk about Drucker’s work and how it will impact the future of business. In a recent article on Forbes online Steve Denning (who is presenting at the Forum) wrote:
“We have arrived at a turning point,” says the launch abstract of the Global Peter Drucker Forum 2014. “Either the world will embark on a route towards long-term growth and prosperity, or we will manage our way to economic decline.” We* believe the three most important issues that the Forum should address are:
• Should firms make the shift from the goal of maximizing shareholder value as measured by the current stock price to a principal focus on adding value to those for whom the work is being done?
• Should organizations make the shift from the practices of hierarchical bureaucracy to the collaborative leadership and management practices of the Creative Economy?
• Should organizations make a shift from metrics that reflect narrow financial goals to metrics that reflect contributions to prosperity of individuals, organizations and society, for achieving both purpose and profit?
*several of the key presenters at the event
Just a few weeks ago I attended the Abundance 360 Summit in Los Angeles hosted by Peter Diamandis and featuring several dozen of the world’s top thought leaders on artificial intelligence, computer learning, the Internet of Things, robotics, augmented reality, virtual reality, and human longevity. We spent three days exploring how major innovations in these areas will change not only the business world, but the entire world. I left that meeting with my head swirling and three big ideas that captured my attention:
1. It is not a case of if these mind-blowing innovations will occur, it’s simply a matter of when, and if businesses today are even slightly prepared for how it’s going to dramatically change nearly everything about the way they do business. Seriously, this is not hyperbole, the new innovations coming in just the next few years will touch every sector of business in the world. For some businesses it will mean minor adjustments, others will have to be completely reimagined and many others…will no longer exist.
2. The future of business is Smart Machines (advanced machines, driven by self-learning computers, connected to the Internet of things through the cloud, which connects every computer on earth to every other computer on earth). So at least for the next 10 years or so, until machines take over, success in business will be determined by a company’s ability to attract, keep and grow top knowledge workers. This means that leadership, communications, culture and innovation are going to be even more critical in building the foundation of sustainable business success.
3. As a global society we are going to be deeply challenged by some of the moral and economic issues raised by these advanced technological innovations. What do you do when entire industries disappear overnight? When millions of low level and middle-class jobs are replaced by machines? How do you feel about a world where everything is connected to the Internet, meaning that your every move, your every purchase, nearly everything you do is being tracked? What do you do when genetic coding and synthetic medicine allows people to live a healthy and productive life to age 120, 130 or more? What does that do to your workforce? How does that impact retirement? How do you manage a workforce that might span as much as five or six generations?
Some of you might feel that these questions are far-fetched, but I assure you they are not and I also assure you that if you plan to be in the workforce for the next 15 years, you are going to see some highly disruptive innovations that will significantly impact numerous industries. That also means that if you are a leader in one of those industries, you better start getting ready right now! Which brings me back to the three questions that Mark posed to the Global Peter Drucker Forum:
Should firms make the shift from the goal of maximizing shareholder value as measured by the current stock price to a principal focus on adding value to those for whom the work is being done?
YES: Short-term thinking to “maximize shareholder value” TODAY – often leads companies to make shortsighted decisions that will leave them exposed and unprepared just a few years down the road in this highly volatile and fluid business environment. It is my strong belief that successful leaders must have the ability and the courage to make strategic decisions today that may not pay off immediately, but will position their companies for success in 2025 and beyond. This is best not only for the shareholders, but for every constituency that the business serves from vendors and suppliers, to workers and managers, to the final consumer.
Should organizations make the shift from the practices of hierarchical bureaucracy to the collaborative leadership and management practices of the Creative Economy?
YES: The truth of the matter is they have no choice, the Millennial’s and the next generation after them (Generation Z? Generation C? The iGeneration?), disdain hierarchy and do not work well in a command-and-control culture. They crave independence, respect, personal and professional growth, a highly engaging culture, cool colleagues and meaningful, challenging work. You give them all of these things and fair pay (10% above or below what they would make to do the same job anyplace else) and you can absolutely attract and keep the top creative knowledge workers.
Should organizations make a shift from metrics that reflect narrow financial goals to metrics that reflect contributions to prosperity of individuals, organizations and society, for achieving both purpose and profit?
YES: I recently did a research study of 10,000 high performing employees at top companies around the world asking them what they look for in a leader they respect and would willingly follow. One of the seven core factors they identified was…Contribution. They wanted to work in an organization where the leader’s used their power, influence and access to resources to impact their community and the world in a positive way. For them the company values were as important as the company’s stock value. I also believe that as more and more company’s products become indistinguishable, many consumers are going to look to this metric (what many people call the triple bottom line) as the main reason they choose to do business with an organization.
I have been deeply honored in the last few years to be named as one of America’s Top Business Thought Leaders, but honestly I didn’t think that I was thinking anything all that special. I’m not really sure that I have added any significant thoughts to this topic, but what I will tell you is that all of us who are in business today need to spend some serious time thinking and acting on these critically important issues…they are going to be here must faster than you realize.
I’ll keep thinking and sharing my ideas – you do the same. Hope you found this helpful and if you did please share with your network – thanks – John