Drucker Forum 2014 Update

It is time again for the Global Peter Drucker Forum.  Here are some highlights of talks from John Hagel, Clayton Christensen, Gary Hamel and others.

All of the talks are are recorded and available on the web at http://www.druckerforum.org/2014/

  • John Hagel – The Dark Side of Technology.  Gave a quick overview of ‘The Big Shift.’  Increasing pressure in three levels:
    (1) removing barriers to entry/movement giving more competition,
    (2) accelerating pace of change,
    (3) connectivity means disruptions can come from anywhere on Earth.
    Analysis of all public companies shows that the return on assets has declined 75%.  There is a mindset disconnect.  Shift from scalable efficiency to scalable learning.  A CEO needs to ask three basic questions:
    (1) what is our business?
    (2) what should it be?
    (3) what should it not be?
    There are three types of business:
    (1) High volume routine processes,
    (2) product innovation,
    (3) customer relationship.  These three business types are very different; we should not lump them together.  The democratization of the means of production of content means that content has grown tremendously.  The same will happen with 3D printing.  The dark side of technology becomes a catalyst for change.
  • Lawrence Crosby – Drucker School of Management has some strategic initiatives
    (1) A Drucker Index as a measure of organizational effectiveness
    (2) Invent/innovation extend to challenge of managing creative workers
    (3) customerific,
    (4) bringing goals of Drucker into economy.
    How to deal with an uncertain future?  Agility, resilience, foresight, and a solid foundation.
  • Clayton Christensen – The Capitalist’s Dilemma.  What causes managers to invest to grow?  Growth comes from innovation, and the link is investment.  Three types of innovation:
    (1) market creating innovation/disruption (growth)
    (2) sustaining innovation
    (3) efficiency innovation.
    If these are all in balance the economy does well.  Finance gives us metrics which are ratios (e.g. IRR, PE, RONA), either increase the numerator, or decrease the denominator.  Investing in market creating innovation destroys these measures.  All free cash goes to efficiency innovation.  The show is being run by the people who dictate the metrics.  Gave the example of Japan.  Not a small problem.
  • Gary Hamel – Hacking Management.  How do you know if you have an evolutionary advantage?  Most companies don’t.  How to build a self-renewing organization.  Not one company of 100 makes innovation intrinsic.  Ask a random selection of employees
    (1) are you trained in innovation?  have you made investment in innovative capital?
    (2) how quickly can you take a small amount of experimental capital and produce something new?
    (3) are you measuring innovation?
    Enormous problem: only 13% of employees are engaged in work.  Our organizations are less capable than the people inside them.  Core-incompetency.  Every organization today is still run on principles of hierarchy/bureaucracy.  Management is a mashup of military command structures and disciplines of industrial engineering.  Stuck with management which is the love child of Julius Caesar and Fredrick Winslow Taylor. Organizations fail when the leaders fail to write off their own depreciating intellectual competence. All of us would be pressed to imagine the structure of some of the world’s most amazing companies.  Will take:
    (1) models of managing without managers (mentioned MorningStar)
    (2) motivation, admit that no alternative to move to new management model
    (3) change mindset and residual beliefs away from hierarchy
    (4) migration paths to get there from here
    Where do you see evidence of bureaucratic management drag.  The organizations that win in the next few years are the ones who learn how to evolve their management models.  Fiddling at the margins will not work.  Not just wrap theory around reality, but to change reality.  Nobody should be sitting on the sidelines.

(more to come)

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