Peter Drucker and Enterprise 2.0 | Drucker Centenary

November 19, 2009 · · Posted by Greg Lloyd

ImageEarlier this week Oliver Marks wrote an excellent post on his Collaboration 2.0 Blog: The Purpose of a Business is to Create a Customer' - Peter Drucker Centenary. Oliver celebrates the Nov 19, 2009 Centenary of Peter Drucker's birth with two of his favorite Drucker bumper sticker quotes: " ‘Knowledge has to be improved, challenged, and increased constantly, or it vanishes‘ and ‘There is an enormous number of managers who have retired on the job‘, which somehow seem to fit together very well." then uses these quotes as context to discuss the disturbing findings of the 2009 Shift Index report and followup analysis by John Hagel, John Seely Brown and Lang Davidson of the Deloitte Center for The Edge. Please read Oliver's full post - you'll like it. Oliver was also used kind words to build on my earlier Enterprise 2.0 Schism post. Here's a slightly extended version of the comment I posted in reply, along with my two favorite Drucker bumper sticker quotes and several links to celebrate Drucker's birth and life.

Thank you for the kind words and for pointing out the HBR Drucker Centenary issue. My "Enterprise 2.0 Schism" post was fun to write - with tongue firmly in cheek - as you note. But it also expresses some serious beliefs.

For me the key Drucker quote is: "The purpose of an organization is to enable ordinary human beings to do extraordinary things."

The scale shift that ubiquitous Web tech enables as well as bottom up participation in E2.0 initiatives are both necessary - but neither are sufficient to distinguish "Enterprise 2.0" from the Web we see and use every day outside work. I believe the difference lies in the shared purpose which drives people to create or join an enterprise and work together over time, along with the need to manage use of scarce resources to a shared end.

By definition an enterprise is a purposeful undertaking that generally requires many hands, expertise and capital that aren't easy for a non-purposeful group to gain and apply over time. This make the "social ecology" of an enterprise different from other groups.

In saying "2.0 modifies how the Enterprise works, not the technology," I take the rhetorical position that the technology which underlies E2.0 - specifically the ubiquitous Web as a platform - is a necessary enabler which provides the first chance to practically apply many of the principals of open work, distributed work and effective collaboration over time that Drucker and Engelbart have advocated for the past fifty years.

I believe that emergent phenomena which Prof Andrew McAfee includes as a core part of his definition of Enterprise 2.0 are significant and different in kind and structure from anything seen before in any enterprise - based on the speed, scale, simplicity and ubiquity of the technology combined with expectations and experience grounded in the public Web. Speculating on how management could embrace but not squash these phenomena to "create more customers" is a good Druckerian question.

But I also believe that the most likely path to large scale adoption and use of this enabling technology will come from small to mid size groups within an organization who intentionally use it to improve their own ability to get work done - rather than in direct pursuit of emergent benefits. They can (and by mandate should) open the direct and indirect record of their work to others who then may become better aware of what their enterprise plans to do, is doing or has done - and who knows what. I really like Jon Udell's term for this principal: Observable Work.

I believe this bottom up and pragmatic adoption model parallels lessons learned from bottom up Knowledge Management versus the failure of top down KM, and lessons learned from the history of the simple, practical Web itself versus failed dreams of more sophisticated universal hypertextuality.

The benefits that are new in kind are emergent, but the path to broad adoption and acceptance will be based on mutual consent, compelling benefits to those who do the work, leadership, and experimentation in activities that have a clear business purpose - designing, building, selling, maintaining products, providing services to clients, customers and partners.

It's presumptuous to guess what Peter Drucker would say about the relationship between the technology, techniques and phenomena we call Enterprise 2.0 and its potential to change the patterns of work and management of an enterprise.

But I believe it's fair to ask: "What sort of hard questions might Peter Drucker ask?" David Rendall (of the UK's National Health Service, Orkney) tossed a nice Druckerian question to Carmen Medina during the followup discussion to her Enterprise 2.0 and the Context of Work keynote at TUG 2009 last month:

#tug2009 Question for Carmen: how do those collaborative networks balance with clear lines of responsibility e.g. in healthcare? from TweetDeck @davidrendall

For example, the decision on course of treatment for a particular patient is yes or no and may be life and death. You want many people to be able to contribute to that decision - including the patient - but ultimately someone has to accept responsibility for that outcome. In all enterprises decisions between mutually exclusive courses of action need to be made - up to and including "bet the company" decisions.

See the video (time 68:20) for David's question. Then follow Carmen's response and a fascinating discussion that includes FAA experience in understanding and mandating training on cockpit resource management to make air crews aware of how to communicate effectively in high stress situations. Planes have literally flown into mountains when a junior officer was not willing or able to alert a senior pilot to a critical issue while the senior pilot was dealing with the same or an unrelated emergency.

Drucker would hold management ultimately responsibility for the course of action and outcome. But how to make best use of the experience and judgement of a distributed, experienced and self-directed organization is not a simple question, particularly in a crisis such as the mortgage credit crisis (or South Sea Bubble) where madness rather than wisdom of crowds is part of the problem. In my opinion Drucker was often at his best when expressing and defending contrarian opinions that he considered morally right as well as intellectually correct. See Schumpeter and Keynes which Drucker wrote on the Keynes Centenary.

Drucker makes the point that innovation in how an enterprise (profit or non-profit) works - how it provides motivation, support, leadership and resources to its members to "Create a Customer" - is as important as innovation in whatever else an enterprise delivers.

I hope we'll see more good work (like John Hagel & John Seely Brown's The Only Sustainable Edge) that focuses on E2.0 style business innovation based on Drucker's understanding of what drives success.

PS - My second Peter Drucker bumper sticker quote for the day: "A manager's task is to make the strengths of people effective and their weakness irrelevant--and that applies fully as much to the manager's boss as it applies to the manager's subordinates."

Peter Drucker Centennial

'The Purpose of a Business is to Create a Customer' - Peter Drucker Centenary Oliver Marks, Nov 16, 2009

Entreprise 2.0 : Les promesses du management moderne enfin tenues ? Cecil Dijoux, Nov 11, 2009

The Drucker Centennial - The Drucker Institute, Claremont Graduate University

The Drucker Centennial: What would Peter Do? How his wisdom can help you navigate turbulent times - Harvard Business Review, Nov 2009

Books and articles by Peter Drucker

Management: Tasks, Responsibilities, Practices - Peter Drucker (Paperback edition 1993)

The Essential Drucker: The Best of Sixty Years of Peter Drucker's Essential Writings on Management (Collins Business Essentials) (Paperback 2008)

The Theory of Business - Peter Drucker, HBR Sep-Oct 1994 ($)

Schumpeter And Keynes - Peter Drucker, Forbes May 1983 (cover story) A superb essay comparing the two greatest economists of the 20th century, written in the centenary of Keynes birth. A Drucker classic on the relationship between economics and innovation.


Enterprise 2.0 Schism

CIA and the NHS: Common features of “high risk, high reliability” organisations - David Rendall, A Web that Works, Nov 3, 2009

Carmen Medina: Enterprise 2.0 and the Context of Work | TUG 2009 Keynote

As We May Work - Andy van Dam

Mind, heart and hands: Lifelong learning and teaching in the digital age - Jon Udell on what he memorably calls the principal of Observable Work April 2009

Reinventing the Web

Enterprise 2.0 - Letting hypertext out of its box

Traction Roots - Doug Engelbart

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