The Drucker Daily: January 26 – A Social Ecologist

For me the tension between the need for the continuity and the need for innovation and change was central to society and civilization.

I consider myself a “social ecologist,” concerned with man’s man-made environment the way the natural ecologist studies the biological environment.  The term “social ecology” is my own coinage.  But the discipline itself boasts an old and distinguished lineage.  Its greatest document is Alexis deTocqueville’s Democracy in America.  But no one is as close to me in temperament, concepts, and approach as the mid-Victorian Englishman Walter Bagehot.  Living (as I have) in an age of great social change, Bagehot first saw the emergence of new institutions: civil service and cabinet government, as core of a functioning democracy, and banking as the centre of a functioning economy.

A hundred years after Bagehot, I was the first to identify management as the new social institution of the emerging society of organizations and, a little later. to spot the emergence of knowledge as the new central resource, and knowledge workers as the new ruling class of a social that is not only “post-industrial” but post-socialist and, increasingly, post-capitalist.  As it has been for Bagehot, for me too the tension between the need for continuity and the need for innovation and change was central to society and civilization.  Thus, I know what Bagehot meant when he said that he saw himself sometimes as a liberal Conservative and sometimes a conservative Liberal but never as a “conservative Conservative” or a “liberal Liberal.”

ACTION POINT:   Are you and your organization change agents?  What steps can you take to both change and balance change with stability?

Quoted from The Daily Drucker, January 26 , Page 28

The Daily Drucker: January 25 – Reinvent Yourself

Knowledge people must take responsibility for their own development and placement.

In today’s society and organizations, people work increasingly with knowledge, rather than with skill.  Knowledge and skill differ in a fundamental characteristic – skills change very, very slowly.  Knowledge, however, changes itself.  It makes itself obsolete, and very rapidly.  A knowledge worker becomes obsolescent if he or she does not go back to school every three or four years.

This not only means that the equipment of learning, of knowledge, of skill, of experience that one acquires early is not sufficient for our present life time and working time.  People change over such a long time span.  They become different persons with different needs, different abilities, different perspectives, and, therefore with a need to “reinvent yourself.”  I quite intentionally use a stronger word the “revitalize.”  If you talk of 50 years of working life – and this, I think, is going to be increasingly the norm – you have to reinvent yourself.  You have to make something different out of yourself, rather than just find a new supply of energy.

ACTION POINT:  Ask those ahead of you in age how they went about “re-potting themselves.”  What steps would you take now?

Quoted from The Daily Drucker, January 25 , Page 27

New Bougainville Documentary highlights its economic potential without mining

New Bougainville Documentary highlights its economic potential without mining.

The Daily Drucker: January 24 - Feedback: Key to Continous Learning

To know one's strengths, to know how to improve them and to know what one cannot do - are keys to continuous learning.

Whenever a Jesuit priest or a Calvinist pastor does anything of significance (for instance, making a key decision), he is expected to write down the results he anticipates.  Nine months later, he then feeds back from the actual results to these anticipations.  This very soon shows him what he did well and what his strengths are.  It also shows him what he has to learn and what habits he has to change.  Finally it shows him what he is not gifted for and cannot do well.  I have followed this method myself, now for fifty years.  It brings out what one's strengths are - and this is the most important thing an individual can now about himself or herself.  It brings out where the improvement is needed and what kind of improvement is needed.  Finally it brings out what an individual cannot do and therefore should not even try to do.  To know one's strengths, to know how to improve them, and to know what one cannot do - they are the keys to continuous learning.

ACTION POINT: List your strengths and the steps you are taking to improve them.  Who knows you well enough to help identify your strengths.

 Quoted from The Daily Drucker, January 23 , Page 25

The Daily Drucker: January 23 - Private Virtue and the Commonweal

In a moral society the public good must always rest on private virtue.

To make what is good for the country good for the enterprise requires hard work, great management skill, high standards or responsibility and broad vision.  It is a counsel of perfection.  To carry it out completely would require the philosopher's stone that can translate the basest element into pure gold.  But, if management is to remain a leading group, it must make this rule the lodestar of its conduct, must consciously strive to live up to it, and must actually do so with a fair degree of success.  For is a good, a moral, lasting society, the public good must always rest on private virtue.  Every leading group must be able to claim that the public good determines its own interest.  This assertion is the only legitimate basis for leadership; to make it a reality is the first duty of the leaders.

ACTION POINT: Make a list of three new products or services that have failed and will fail because you and your organization have ignored the public good.

 Quoted from The Daily Drucker, January 23 , Page 25 

The Daily Drucker: January 22 - Economics as a Social Dimension

Keynes was interested in the behavior of commodities, while I was interested in the behavior of people.

I do not accept the basic premise on which economics as a discipline is based and without which it cannot be sustained. I do not accept that the economic sphere is an independent sphere, let alone that it is the dominant one.  It is surely an important sphere.  And as Bertolt Brecht said, " first comes the belly and then morality" - and filling the belly is what economics is all about in the main.  I not only willing, but insist that in all political and social decisions the economic costs are calculated and taken into account.  To talk only of the "benefits," I consider irresponsible and bound to lead to disaster.

But still, for me the economic sphere is one sphere rather than the sphere.  Economic considerations are restraints rather than the overriding determinants.  Economic wants and economic satisfaction are important but not absolutes. Above all, economic activities, economic institutions, economic rationality are means to non-economic (that is, human or social) ends rather than ends themselves.  And this means that I do not see economics as an autonomous "science."  In short, it means that I am not an economist - something I have known since, in 1934 as a young economist in a London merchant bank, I sat in the John Maynard Keynes seminar in Cambridge.  I suddenly realized that Keynes was interested in the behavior of commodities, while I was interested in the behavior of people.

ACTION POINT: Before you finalize a major budget or strategic decision, set aside half an hour to make sure you have really considered the impact it will have on your people in your organization and on your customers.

 Quoted from The Daily Drucker, January 22 , Page 24 

The Daily Drucker: January 21 - Profit's Function

Today's profitable business will become tomorrow's white elephant.

Joseph Schumpeter insisted that innovation is the very essence of economics and most certainly of a modern economy.  Schumpeter's Theory of Economic Development  makes profit fulfill an economic function.  In the economy of change and innovation, a profit, in contrast to Karl Marx's theory, is not a "surplus value" stolen from the workers.  On the contrary, it is the only source of jobs for workers and labor income.  The theory of economic development shows that no one except the innovator makes genuine "profit";  and the innovator's profit is always quite short lived.

But innovation, in Schumpeter's famous phrase, is also "creative destruction."  It make obsolete yesterday's capital equipment and capital investment.  The more an economy progresses, the more capital formation will it therefore need.  Thus, what the classical economist- or the accountant or the stock exchange - considers "profit" is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today's profitable business will become tomorrow's white elephant.

ACTION POINT: Insure that you are investing enough in innovation to prepare for the day when your profitable business becomes obsolete.

Quoted from The Daily Drucker, January 21 , Page 23