In a 1992 HBR essay, Peter Drucker observed that we are in an age of profound transformation where “knowledge is the primary resource for individuals and for the economy overall.” Conventional factors of wealth and production (Land, Labour and Capital), will not vanish but “become secondary.” Ever the humble scholar, Peter was conscious that it would be impossible to accurately predict what kind of a society will emerge from this period of transformation but he was confident that the changes we would do well to make were already evident.
The two primary changes Peter saw are about the ways we “manage” others and ourselves.
In “Management Challenges for the 21st Century”, published just before the dawn of this century, Peter points out that “"employees" have to be managed as "partners"--and it is the definition of a partnership that all partners are equal.“ In my work consulting, training, and coaching, i find this is probably the biggest and hardest challenge that individuals and organisations are wrestling with. Even in Information Technology Teams that proclaim to anchor themselves to the Agile way in projects, i find that our habits of management have yet to change. It is indeed interesting to see Scrum Teams where “tasks are allocated” and Project “Managers” operate with a “command-and-control” approach that is far removed from the “partnership” spirit that is at the heart of the Agile thinking — a thinking that Peter subscribed to with his view that workers (seen as partners) “cannot be ordered” .
Summarising research and insights from the trenches of some of the most innovative organizations in “Drive: The Surprising Truth About What Motivates Us”, Daniel Pink identified “autonomy” as the most important of three factors that are key to motivation. Autonomy is not, as Daniel explains, “the rugged, go-it-alone, rely-on-nobody individualism of the American cowboy. It means acting with choice — which means we can be both autonomous and happily interdependent with others.” The prophetic Peter foresaw that the emerging era is one where people will seek greater autonomy and prefer “to be led, not managed.” This calls for a significant shift in the approach to management — something we are struggling with.
One of the consequences of not fundamentally changing our approach to working with people is increased workplace disengagement. Gallup’s 2017 State of the Global Workplace report presents the eye-popping conclusion that 85% of employees are disengaged. This new global norm translates to, among other things, direct productivity losses and fragile loyalty. The Forbes-Silk Road 2018 Report articulates employee engagement’s central role for firms to succeed in “the Age of Digital Disruption”. About two-thirds of CFOs surveyed indicating that their firms are having a hard time retaining the employees they want. “Eight out of 10 high-turnover firms say that more than a quarter of their company’s labor costs go to unwanted turnover, with three out of 10 saying that employee churn eats up more than half of total labor costs.” This excludes the cost of productivity losses and losses owing to impact on customer-experience. Organisations with low employee-turnover report fair pay, environments that empower, and training opportunities on the job as factors that help retain and engage their people. While remuneration is a factor, creating “environments that empower” (an idea right out of Peter Drucker’s mind) is key. It is imperative that we change the way we “manage” others.
Peter was alive to the fact that, more often than not, organizations are slow to change because when faced with turbulent change, individuals “act with yesterday’s logic.” In 2005, as the Knowledge Revolution was sweeping around the world, he called on each of us to embrace a new personal ethos — “to learn to manage ourselves….learn to develop ourselves….to place ourselves where we can make the greatest contribution.” In other words, each of us would do well to actively create conditions for our growth by continuously learning, and seeking fulfilling ponds that give us room to put our capabilities to meaningful use. The wise Peter’s powerful advice is that each of us must “think and behave like a chief executive officer” of our lives. Daniel Pink’s remark is a hat tip to Peter — “This era doesn't call for better management. It calls for a renaissance of self-direction.” Each of us is not a pawn but a player with potential to actively change ourselves and, consequently, the fate of the game.
A significant part of this new ethos is acting on the reality that Peter discerned a long time ago. Any organization, to be genuinely successful, “has to be an organization of equals, of colleagues and associates” without “any inherent superiority or inferiority” and a culture of relationships that is the opposite of “boss and subordinate.”
This idea of taking sole responsibility for our careers (indeed, our lives) while genuinely working for the good of the collective is Peter Drucker’s message for our times. The state of the world today provides ample evidence that we would do well to act on this wisdom.