2010 – The CORE Year: Change, Challenge, Opportunity, and Responsibility

As 2009 comes to an end, the sentiment that most immediately comes to mind is good riddance to what Time magazine dubbed the “decade from hell.”  Many Americans are suffering as a result of bad management, fraud and misguided policy – particularly in the financial sector.But let’s remember that even painful change is the precursor of opportunity.  Rather than wait for a new era, we must take an honest look and find ways to benefit from the incredible opportunities obscured amid the turmoil and wreckage.

Each of us has a rare chance to help define what will be; and the only constraint, beyond our financial situation, is our capacity to imagine. With this perspective, I share my optimism about the year and decade ahead while telling you about an unprecedented project that harnesses the expertise of people like you around the world.


Yes, the world has changed dramatically since 2000.  Consider the industries that are now in flux: energy, health care, transportation, technology, and education. Not-for-profits have been decimated, just when the need for social services and support are ramping up. Even individuals with good incomes are less able to give. Throughout all of this, heavily indebted governments are falling behind on critical needs that were already neglected.

Now consider the advantages to the individual.  We have unrivaled global access to information, combined with a transparency that never existed before. We have an ability to make intelligent choices as consumers, investors, entrepreneurs, and global citizens that our parents never even dreamed of.  Ready or not, we are all now self-managers who can be as entrepreneurial in our outlook as we choose.

Our world is connected in ways never before seen.  Even large companies need each other more than ever.  AT&T’s dependence on Apple’s iPhone overshadows its dependency on its own products. The old-line media companies rely on Google for ad revenue. With the technology for borderless commerce, small companies can connect with customers globally without the conventional intermediaries. Governments and regions are reliant on one another for economic stability. We’re seeing the positive and negative of the rise of Chimerica – a term coined by Niall Ferguson to denote the United States and China. America buys Chinese products; China lends us back the money.  That relationship makes a military war unlikely, but a trade war may have already begun.

Finally, the connections among individuals have changed dramatically as well.  As knowledge workers, we are more specialized and thus more reliant on the expertise of others outside our specialty, thus amplifying the need to be part of a whole that is greater than the sum of its parts.  At the same time, as information-empowered people and micro-businesses, we are less dependent on conventional “outside” experts and organizations.

The world today is so different from the one at the beginning of the 21st century that sometimes it is dizzying. And certainly we are prompted to re-visit our assumptions: §  Is Austria, a country I have always thought of as closed-minded, set to be more innovative than America?  They have free day-care for all two-career families.§ Is unemployment really up if I measure it using a global metric? Or should I think of the 16 to 24 year olds in Spain where unemployment for the group nears 43%?§  Will the next generation ever again have the opportunity to earn more than their parents?§ What is too big to fail today?   Might it be every SMALL business?

Here in America, I think we have a unique challenge relative to a number of other countries that are more accustomed to the dynamics of rapid change and lack a long history of global dominance.  Jim Collins tells the story of a Brazilian friend, who grew up with monthly inflation of 30%.  Some days it was cheaper to take a taxi than a bus because the bus fare was paid up front. What we construe as today’s disruptions and discontinuities, they view as relative stability and opportunity, not chaos.  My friends from China have experienced extreme, rapid change for the past 25 years and find relief when visiting what they view as a slow-moving, unchanging New York City.  Back at home, their GPS is unreliable because streetscapes are changing so quickly.

Not only are we uncomfortable with this ongoing economic roller coaster, we Americans are challenged by the very real threat to our long-standing position as the biggest, most dominant economy on the planet. Russia’s GDP is only 4% of ours, but economists are projecting that China’s will pass ours by 2027, and India’s will pass us by 2031. This new reality brings into question how we think about democracies.  Our democracy gives us freedom of expression and quality of life, but it also lets interest groups delay stem cell research and other innovations for years. Our two-party system has degenerated into partisan agendas that constantly delay vital innovations and entrepreneurial support.  Meanwhile, Korea, China, and India are eclipsing us in energy development, scientific research, and industrial policy.

Are we paranoid enough, visionary enough, and courageous enough to reinvent ourselves and our world?

Whether we are self-managing knowledge workers in a large institution, small business owners/entrepreneurs, or CEOs of our own careers, we all have greater freedom thanks to access to information and the reality of borderless commerce. We can do many things without third-parties, and often without leaving the house. This is both reassuring and daunting, liberating and imprisoning.  Collaboration is the linchpin of our interconnected Lego world. So, let’s stop being spectators to our future and instead create it.


From my long-time consulting and advisory work to management spanning many countries and the public and private sectors and my more recent work with Peter Drucker, I have become convinced that management effectiveness is the key to a proactive, smooth transition to a sustainable future.

To paraphrase one of my favorite Drucker quotes, our responsibility is to balance change and continuity.  If we have no change, we risk atrophying in our irrelevancy.  If we have too much change, we risk losing ourselves in chaos. The debacle of the last decade was not due to malice.  It was due to people enjoying their greater freedom while failing to step up to their responsibilities individually and collectively.

To meet our responsibilities head on, we need to be skilled at management effectiveness, not constrained by our tunnel-vision focus on ‘efficiency’, or quarterly profits. Management effectiveness means having the perspective and judgment to be more right than wrong, to leverage the power of people and their creativity throughout the repeating cycle of vision, execution, and outcome.Management effectiveness requires synthesizing information from all sources, challenging and enhancing conventional wisdom, learning from mistakes, and balancing multiple, often competing, objectives in a manner that enhances individuals and society.

To paraphrase Spiderman’s uncle Ben, with great freedom comes great responsibility.
I’m excited about a project that took up much of my time in 2009. It’s a pragmatic tool for helping promote management effectiveness — the Elemental Table of Management.   My team will continue to tap many of you for advice. When this project is fully operating, we hope to have positive impact on a hundred million managers in profit and service industries around the world. 
We are targeting to have a beta version up by the end of February, and a pilot running by the end of March.   We look forward to engaging with you in the testing, refinement, and launching of this effectiveness tool.

As Coleridge wrote, “Wisdom is common sense to an uncommon degree.”  Cheers to a wiser 2010 for all of us.


by Elizabeth Haas Edersheim July 31, 2009

Last week I had the opportunity to participate in the Student Leadership Summit, the inaugural event of the Frances Hesselbein Global Academy for Student Leadership and Civic Engagement, at the University of Pittsburgh.

The academy’s mission is to inspire, develop, and reward accomplished student leaders to meet the challenges of tomorrow. We spent four days engaged in intense learning, discussion, and fun with 44 leaders of tomorrow—4 of whom are my mentees. The summit began with “The Wizard of Oz of Leadership” and took these up-and-coming leaders through love, a lion, learning, innovation, tennis-racket propellers, inspiration, communication, respect, inclusion, a scarecrow, values, service, a courageous MIT engineer, passion, ethics, understanding cultures, a tin man, a gigantic light bulb, listening, the color line, confronting challenges, growing talent, creating opportunities, living, loving, and leading.[1] They came away understanding that—like the scarecrow, tin man, and cowardly lion—they already have the courage, heart, and mind to be leaders; they just need to see that it is all there inside them. The summit was fantastic.  I learned so much about the difference in perspective that young leaders bring to the table, and walked away with a new sense of hopefulness.  Some observations:

1.       The leaders of tomorrow emphasize collaboration in problem-solving, seeking ways to share what they have and meet the needs of the many rather than commanding scarce resources to benefit the few.  The members of the crucible generation, as Warren Bennis calls them, really do have a more collaborative and less competitive orientation then we ever did.  The differences came through every day as we watched them work.  The most telling moment was the Ugli Orange Exercise:  In essence, two competing pharmaceutical companies want the 4,000 Ugli Oranges right now.  One company needs them to fight a new and deadly prenatal disease, the other to resolve a deadly gas leak.  Participants are divided into teams of four, two representing each company. The speaker who presented this exercise has been using it for 20+ years.  For 20 minutes the two companies typically argue over whose needs are more important and arrive at no solution or action plan.  At the summit, all 11 teams rapidly discovered that one company needed the juice and the other the rind, and worked out a viable plan for moving forward.  Some went so far as to plant the seeds for the next year’s crop!  This has never happened before.  In 1994 no team found a solution.  At another group last year, out of 14 teams, 2 found solutions.  This year at the summit, every team tried to figure out how everyone could be satisfied rather than how to win a fight.  “What part of the orange do you need?” was the first question asked by one of my mentees.  The question belies a collaborative mindset that asks different questions and seeks fundamentally different types of answers.

2.       Despite perceived progress, the color line, with all its ramifications, is still an      active force limiting the participation and potential of millions in our society.  In another exercise, everyone in the room answered a survey featuring questions about isolation in everyday situations and scored their answers.  One of the questions was “Can I swear, or dress in secondhand clothes, or not answer letters without having people attribute those choices to the bad morals, the poverty, or the illiteracy of my race?”  At the end of the exercise, we lined up in order of our scores.  The predominance of black faces among those feeling most isolated was shocking.  It really brought home to me how far we still have to go toward achieving an inclusive society – even here, among the nation’s most engaged, highest-achieving students. The recent arrest of Henry Louis Gates, Jr., in Cambridge has once again brought this concern into the headlines. The presence of the Obamas in the White House – although inspiring and empowering for many – has not even begun to resolve the issue of how we diminish the defining quality of race in American society, how we bring people of color to the table as full participants.  One of the leaders of the future spoke about how many people asked her if they could touch or feel her hair.  There has been progress, but no magic; much more must be done.

3.       The power of a fresh, independent perspective cannot be underestimated.  On our third day, each group of four went to a not-for-profit organization in Pittsburgh to help address an issue facing the organization.  Their reports back to the group were astounding.  My group went to help the Ladies Hospital Aid Society (LHAS) think through how to revitalize their donor base.  My team’s first question about achieving that goal was, What is the constraint?  They felt that one significant constraint might be the name of the organization.  This created a lively discussion with the president and two board members.  Finally one board member said that when she has to tell people what LHAS stands for, she often bites her tongue.  It is not a name she is proud of, but she had assumed that, as the historical identity of the organization, the name could not be changed.  A young man on my team was quick to challenge this boundary condition, pointing out that the organization’s name had originally been the Hebrew Ladies Hospital Aid Society and could potentially be changed again.  I was reminded of why McKinsey hires very smart people with little or no business experience—because their lack of preconceptions enables them to push the envelope and cast a wider net in seeking solutions to problems.  My team discussed the need for diversity in the images of the organization and on its website, pushing LHAS to redefine its image to draw in more potential donors.  Now the board is engaged in reading the Harvard Business School case about the Girl Scouts.  The boldness the students showed in their recommendations was surprising, as was the rare opportunity for senior executives to listen to the leaders of tomorrow and discuss solutions with them.

4.       The older generation has a significant contribution to make—in mentoring.  Jim Collins, the dinner speaker on the final day of the summit, talked about how each of us needs a personal board of directors.  That is particularly true for the crucible generation, even though its members scored higher on every academic test than we did and have been developed and programmed to succeed throughout their young lives. They are emotionally young. They have grown up with more supervision than we had, and less freedom to experiment. They are operating in a very uncertain world, where the norm is relentless challenge and unclear expectations.  After working hard practicing and performing all their lives, these young people are now faced with the task of deciding how to change the world and making those sweeping changes happen.  They do need mentors and people to think with—people who believe in them.  When I came home, the first thing I did was call two young people I have worked with recently; I listened to their thoughts and encouraged their ambitions.  I hope to be in touch with each of my mentees for a long time to come.  Each of them is a fantastic person with a tremendous amount to teach me.  To quote Peter Drucker,  “Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of the knowledge worker.”

5.       The leaders of tomorrow define success in terms of making a difference by serving others.  Our final exercise was for each leader of the future to define a mountain they want to move, the barriers to moving it, and a plan for how they will get started.  To a person, their goals are geared to making this a better world (rather than individual enrichment or achievement) and are all about service.  For example, Michael, a graduate student in pharmacy, wants everyone to have available comprehensive information about regulated and unregulated drugs and foods that impact their bodies.  He doesn’t want to be a pharmacist – he wants to help people improve their health.  Alyssa, an aspiring orthodontist, wants to serve children who might not otherwise be served and help them feel better about themselves.  Celeste, a student of Sport Science, wants to help other people accomplish things they never dreamed they could have.  Minh, an aspiring ophthalmologist, wants to break down walls and be available to patients where and how they need their doctors. Although it is possible that this youthful idealism will devolve into relentless self-interest, as happened with so many of the baby boomers, the strong emphasis on practical service to others makes me hopeful.

6.  Including and respecting young leaders is an essential step to helping them grow and develop. Including people in the group while acknowledging each one’s unique contributions and needs is an enormous part of leadership development—and that is the unique genius of Frances Hesselbein. Frances Hesselbein graciously introduces people to each other so they can make connections, broaden their view of the world, adjust their lens, and grow as leaders.  She introduced Tamara Woodbury—a colleague from the Girl Scouts of America whose interest in leadership and organization development was pushing her toward business school—to Peter Drucker, who insisted that business school would be a colossal waste of her time and offered her a different perspective on social enterprises.  As a result, Tamara came to change her focus and redirect her impact.  As Jim Collins says, “If you are a plant, Frances is the ultimate ultraviolet light—she helps each of us see things differently.  For me, the opportunity to talk with military leaders about leadership was a new and eye-opening experience. I learned about President Clinton’s courage in inviting and addressing contrary opinions, about the thinking behind his decision to send troops to  Bosnia when only 36 percent of Americans approved of it, because it was the morally right thing to do for millions of innocents.  And then when General Randy Fulhart offered to give me some feedback on my writing, a wide smile went across my face…that hasn’t left.

This summit adjusted all of our lenses.  Thank you, Frances.

As described by Charles J. O’Connor III, Retired Air Force Colonel, Senior Vice President, Fidelity Investments.

Elizabeth Haas Edersheim conducts case-study-based research on critical leadership issues — often in collaboration with corporations and speaks frequently at management events. 

©Elizabeth Edersheim

You as a leader

Brendan Calder, chairman of Coventree Inc and Adjunct Professor of Strategic Management at the Rotman School of Management,  recently invited me to talk to a group of 26 students at the Rotman School.  The topic was: Is Peter F. Drucker relevant?

In answering that question, I chose to create a dialogue around sections of a letter Peter wrote in 1974.  By the end of my talk, virtually everyone in the room said, “yes.  Peter F. Drucker is relevant to me today.

Let me share with you the excerpts drawn from Peter’s 1974 letter. First, a bit of background. Peter was asked if he thought Robert McNamara would make a good president of the World Bank. Robert McNamara had been one of the wiz kids serving in the combat analysis group during WWII, went on to become President of The Ford Motor Company, and then Secretary of Defense for President Kennedy. As you read Peter’s excerpts on his sense of McNamara’s personal and leadership strengths and weaknesses,  think about yourself as a leader, how you might score on the characteristics discussed, and the reasons for your score.

Peter wrote:

“To me, the greatest strength of McNamara as a person is that he inspired admiration.”

But Peter continued:

“… his greatest weakness is that he did not inspire trust.”

Do you inspire admiration from your colleagues and others in and beyond your organization?   Do you inspire trust? Why or why not?

Peter F. Drucker wrote:

“The greatest strength of McNamara as an administrator was his ability and willingness to pick the very strongest people as members of his team. McNamara’s greatest weakness as an administrator was that he had not the faintest idea how to make use of the strengths of his team, or even how to make a team out of them.”

Do you pick truly strong people to join your team, even when their strengths may exceed your own? Do you encourage and fully leverage team work? Do you and your team members help make one another and hence, the collective team stronger (i.e., leverage each other’s strengths while making each other’s weaknesses irrelevant)?

Peter continued:

“McNamara’s greatest strength as a manager was his realization of the need to think through strategy. His greatest weakness was that he always got caught up then in the minor points and the strategy became secondary to the way in which this or that specific “urgency” of the moment was being done.

McNamara lost one objective after the other by dictating how something should be done instead of saying ‘this is what we are going to do, you work out how to get there.”

Do you value strategy? Can you communicate strategy effectively and in an engaging manner to your organization and other stakeholders?  Are you able to stay true to your strategic objectives versus the flavor of the month?  Are you an effective delegator, leaving the job of translating strategy into action and tactical to others?   Do you track your results against strategic objectives?

Peter went on to say:

“McNamara’s great strength as a leader was his realization that he had a role to play.  His great, and I think ultimately self-destructive weakness was that he confused leadership with morality. Anyone who did not agree was an “enemy”, and clearly had to be damaged, destroyed, or at least humiliated – and McNamara’s willingness to humiliate people was, and is, I think, his one great character weakness and a very serious one.

He never learned to use disagreement as a source of understanding and conflict as a management tool. And this is the reason why, in the last result, I believe, he was a failure as Secretary of Defense, just as I think he is a failure now as head of the World Bank.”

Can you easily and clearly articulate your role as a leader in your organization? Do you view your role as meaningful to and well-understood by your organization and other stakeholders?  Are you a good listener?  Do you encourage or discourage dissenting views and do you view conflict situations as an opportunity to learn?  When was the last time that you publicly dressed someone down?

Fundamental to much of this letter is what I consider to be Peter F. Drucker’s most valuable contribution to management thinking – namely that the critical role of a leader is to ask the right questions, make sure the organization understands why the questions are important and what the honest answers are, respect people and manage for results.  The letter Peter F. Drucker wrote in 1974 is relevant to every leader today.


Cecilia Regueira – Instituto Hartmann Regueira

Cecilia Regueira – Instituto Hartmann Regueira

The Drucker Institute recently hosted a global symposium. A number of leaders at the symposium noted the way their own relationships with Drucker influence their business decisions and strategies. Really, they were talking about so much more – an organization’s need to educate and care, and its people’s need to learn and commit.

I thought I would share one of those stories with you in this blog.

Cecilia Regueira – Instituto  Hartmann Regueira

A family therapist, Cecilia lived for over 20 years in Weston, Connecticut.  In 1990, she and her husband decided to return to Brazil, where she had been born. Cecilia was not licensed to practice in Brazil. When she arrived, she was invited by the secretary of education to help deal with the pervasive problem of violence in the schools.

The homeless and hopeless children she saw shocked her.  She learned that in Rio de Janeiro alone 50 children drop out of school every week and join the streets. That is more than the number of Americans who die in Iraq every week. In effect, that is a death sentence because many do not survive. She decided that she needed to somehow volunteer and reach these kids in the streets rather than spend her time in schools from which many of them already had fled.

On visits to the streets, however, she quickly realized that she’d chosen an inefficient and even dangerous way to solve the problem.  Over the next 15 years Cecilia built an organization, with a staff of 25, to reach out to kids on the edge. She convinced a telephone company to donate a mobile unit to each of these kids so that she can send them messages. If she knows there is a job at a shoe factory and she knows that a child is interested, she messages that she has set up an appointment.  On certain days, she lets kids know that there is a free movie.

As Cecilia was building this organization, she needed to convince people that transforming people brought results.   She realized that she had no management skills, so she went back to school and read Drucker over and over again. Cecilia is convinced that understanding Drucker helped her put fire in the belly of everyone in her organization and make the whole work.  As she told me repeatedly, “We need values, we need accountability – we need a different kind of work.”

Her organization is seen as a pioneer in Brazil – an NGO with explicit management practices partnering with the government.  Now she is looking to help transform her own society.   As such, she has set up an organization to strengthen the third structure and train other NGOs in the Drucker philosophy.  Her tools include Drucker’s seven modules for self assessment:

  • Commitments and accountability,
  • Financial management,
  • Network and partnerships,
  • Monitoring and evaluation,
  • Human capital,
  • General management, and Governance.

Cecilia holds workshops with the NGOs 12 times a year. She then visits the NGOs to help them apply all the learning in the seven modules, and  her organization monitors the impact on the NGO – in 2 years, 3 years, and then in 5 years. (See www. institutohr.org.br). In short, Cecilia is just starting.

*                                            *                                            *

One of the action steps from the global symposium is the creation of a website for a global conversation around social responsibility. This site is targeted for launch in early September. If you would like to be alerted when the site is running, please register here.


Drucker in the 21st Century

When I mention Peter Drucker, I get two very different responses – often from the same person.

First, comes respect. Drucker, of course, was the management guru of the 20th century. And then comes the doubt: “What makes Drucker relevant today?”

In a 21st century business environment where constraints of time and distance are gone and change comes as fast as the blink of an eye, Drucker’s “take” is absolutely essential to managers.

1. His ideas are practical observations about what works in management. They aren’t theoretical. They are as important in the 21st century as they were in the last. For example, “Management is about human beings.” That very much is at the center of much of Google’s success. It is really the ultimate Druckerian company because they follow his playbook.

2. His ideas force us to think. Drucker challenges his readers, clients, and students to act today for tomorrow. He asks us to abandon outdated assumptions. Doug Ducey, chairman of Cold Stone creamery, commented that until he had read Drucker, the chain was going to be 70 stores. After studying Drucker, he could dream of the 2,000 plus they are today. Or, on the other side, consider the plight of Detroit’s auto companies and you’ll know why this is relevant.

3. His approach lets managers see what is visible and often not seen. He helps us create context so that patterns and changes are more readily identifiable. He believed that the most important measure of a company is its ability to anticipate and invest in tomorrow’s opportunities. For example, by looking at unexpected results – both successes and failures – one often finds opportunities. The ability to use his tools and take a fair amount of uncertainty out of the future by proactively creating tomorrow is of enduring relevance. Seeing shifts in demographics helped the Marriot chain diversify from the standard motel. As Tony Bonaparte said to me, “He looks at things as they are with a very realistic sense of how they could be and helped me do the same. It changed my life.”

4. He holds management accountable – accountable for human fulfillment. No wonder, then, that Drucker puts such great emphasis on the character of managers and on the immense responsibilities they bear and of a healthy society. Management success is measured by results that sustain the whole organization in a manner that values employees, customers, collaborators, and larger society. Wal*Mart still has the opportunity to do the right thing as opposed to its current PR campaign justifying the low wages and benefits as necessary to deliver the lowest cost goods to their customers. Other retailers – The Container Store, Wegmans Food Market, and Whole Foods, were selected as 3 of the best places to work this year.

Drucker believes, that the human freedom most genuinely cherished – fulfillment – depends to a great extent on organizations. They provide the main stage for achievement of personal freedom and a healthy society.

I’d like to hear your stories.

© ElizabethEdersheim