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How Have Leadership Principles Changed?

June 19, 2008

At times I feel old-school when it comes to leadership.  My perspective of a good leader is a servant leader who can listen well and concretely respond to followers while providing a compelling vision for what an organization can accomplish.  Followers, in turn, actually want to follow as they vest themselves in both the vision and the leader because the leader, along with all other responsibilities, has their interest in mind, and has proven this through speech and action.  In business, where next quarter’s numbers matter more than pretty much anything else, and six-week cycles rule as companies release earnings guidance mid-quarter, implementing a vision is difficult at best.  And servant leadership exists in two places:

  1. In theory as investors pound at the door demanding attention and earnings.
  2. In practice after a company has filed for bankruptcy or has missed earnings enough times to force out the current “leader.”  In this case, the new leader is given the ability to implement a vision with a leash.  Earnings better turn around in 18 to 24 months.  Think Bob Nardelli at Chrysler.

George Andrews wrote a piece in the June 18th Journal about the influence of Peter Drucker on Asian business management principles (subscription required for full access).  In China last year, 6,000 managers gathered to discuss Drucker’s principles, and next year’s conference expects a 20% rise in attendance.  14 acadamies exist to expressly spread the Drucker word.  Why the enthusiasm?

“With China building up its manufacturing capacity…it’s probably more useful for Chinese management students to examine U.S. industrial triumphs of past decades, rather than get distracted by the fanfare associated with the various postindustrial ventures of today’s America.”

You see, when Drucker describes leadership, says Henry To, CEO of the Drucker acadamies, “he says that integrity must come first.  He says leaders need to listen to their employees and be followers, too.”  Andrews concludes that Drucker’s philosophy is “out of step with the tastes at many leading business schools, where the preference is for conclusions based on large statistical studies.

And what philosophy has Drucker forwarded that is out of step?

  • The essential activities of business are innovation and marketing; it’s a mistake to fixate on profits.
  • Good management should make work productive and the worker effective.
  • Set objectives.  Set separate ones for each crucial area of the business.
  • Take social responsibility seriously.  An enterprise exists only as long as society believes it does a necessary and useful job.
  • Quality is what the customer wants, not what’s expensive and hard to do.
  • Knowledge workers in modern organizations may manage no one, yet their decisions’ impact can be comparable to what executives do.

Mr. To explains that “Drucker’s fondness for business history is considered a virtue, not a fault. ‘I tell students: “The truth will not be outdated.” ‘ ”

I’d agree.  Am I out of my mind?

- Andy

Written by AndyErickson · Filed Under Business & Leadership 

Comments

5 Responses to “How Have Leadership Principles Changed?”

  1. DAVIDeBOWMAN on June 19th, 2008 10:21 am

    I am a huge fan of Peter Drucker. The man was brilliant. He remains one of the most respected thinkers in the history of business. Too many times, businesses sacrifice long term success by focusing too much on short term results. It becomes about satisfying the shareholders and the street instead of changing the world and making the remarkable into reality. Yes results are important, but they can come with a price that far outweighs any quick gains. Socially responsible organizations that focus on innovation and long term growth, that deliver quality goods and services to their customers, and that help employees succeed represent what is right with business. We still have much to learn from the late, great Peter Drucker.

  2. AndrewHamann on June 19th, 2008 10:53 am

    I concur as well. I think of the great investor of the 20th century Warren Buffet. He made all his money on what is called value investing, (which is short for investing for the long term.) I find that nowadays in business and pretty much everywhere else our short term memory is what influence’s us the most, which is unfortunate given the sensationalism which pervades all facets of the media. And while I agree that management should be progressive and innovative and not “dogmatic,” there are some concepts that stand the test of time. Furthermore, we should never forget our history because….wait how does that saying go?

  3. Andy Erickson on June 19th, 2008 3:05 pm

    new blog post on Drucker’s influence on Asian business mgmt. http://snipr.com/2l528

  4. John on June 30th, 2008 8:48 am

    Nice writeup Andy. As I pondered the title of your post, I came to the realization that the true leadership principles that have stood the test of time since more than 2000 yrs ago, haven’t changed. It’s the people in so-called leadership positions that have. In today’s rapidly changing global economy, high integrity values have given way to greed, profits, a devaluing of people into commodities and a refocusing of the business lens from the customers to the dollars. Look at Enron and others like it. Peter Drucker hasn’t invented anything new from a leadership perspective, he simply has adhered to the timeless principles that are transcendental and hasn’t wavered in his beliefs of those principles. We need more people in business throughout the world to follow suit.

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