Traditional management is over. The internet has killed command and control. Now that everyone can analyse and ridicule their chief executive’s every move almost before they’ve made it, it has become impossible to order people about.

This view is put forward by Carol Bartz, the new head of Yahoo, in The Economist’s “The World in 2010”. It sounds pacey and plausible and for a second I was lulled into thinking that perhaps the “Niagara of information” really has changed management for ever. But then I looked around me. I saw lots of people at desks calmly doing what they were paid to do: working.

Command and control is not over and won’t ever be. Bosses are still bosses. If mine tells me to do something, I’m inclined to get up off my bottom and do it. If Bartz’s employees don’t get off their bottoms when she tells them to, there is a problem – and it has nothing to do with the internet.

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Vienna

A full day of debate, analysis, homage and, just occasionally, longueurs here at the inaugural Peter Drucker forum.

Delegates heard about Drucker’s “integrity, humility and generosity” from Rick Warren, the priest chosen by Barack Obama to speak at his inauguration as President. It turns out that Dr Warren’s all-time best-selling book The Purpose Driven Life was heavily inspired by Drucker.

We heard both CK Prahalad and Charles Handy share their perspectives. CK said that, in his opinion, no other person has had the impact on the practice of management that Drucker has. Charles Handy observed that, even when he felt he had provided some new insight into the challenge of management, he would invariably discover that Drucker had already written at some length along similar lines, often dozens of years earlier.

Continue reading "Peter Drucker - yodelling down Mount Fuji"

Vienna

A wonderful gathering of the management clan is taking place here in the Austrian capital this week. CK Prahalad is in town, as is Charles Handy, Yves Doz and Philip Kotler, among many others. What is everyone doing here? They have come to commemorate the hundredth anniversary of the birth, in this city, of Peter Drucker, the world’s greatest management writer, who died in 2005 just short of his 96th birthday. Why, even his widow Doris, aged 98, has come over from the States to see it all for herself.

On Thursday and Friday delegates will be taking part in the first global Peter Drucker forum, led by Richard Straub, president of the Peter Drucker society of Austria and himself a senior IBM executive based in Paris. On Wednesday there was a pre-summit series of talks and debates, which whetted appetites nicely.

I shall be writing in greater detail about what emerges during this event in my column next Tuesday. But it is already apparent after one half day that the management world is eager to use this anniversary, and the ongoing global economic crisis, as an opportunity: not only to reacquaint itself with Drucker’s writings, but to stake out new ground and reinvigorate thinking on the art of management itself.

What is the big goal for management as we approach 2010? Put simply, it is “to reinvent the social compact of business,” as CK Prahalad declared earlier today. Not what you might call a trivial ambition. And the full conference hasn’t even started yet.

My children like Kraft’s Philadelphia soft cheese - the light version (got to think of their health, you know). But I have a question for the company. For many, many years - too many - the product was presented in the most flimsy, feeble packaging imaginable. If you dropped it the lid broke or the packaging shattered.

Finally, this year (in the UK at least), a sturdier version has gone on sale. I and my children welcome this. (Well, I do anyway). But my question is: what sort of company takes so long to recognise the inadequacies of its packaging? Is this new packaging a sign that Kraft’s management has woken up and would therefore make a worthy acquirer of Cadbury? Or is it still a lumbering giant that would never move fast enough in the ultra competitive and fast-moving confectionery market?

I hope the analysts and investors are giving this some thought.

The bear market in management bullshit is over. Last week, I came across two signs that managers’ brief flirtation with being sensible – which started the day that they watched staff of Lehman Brothers leaving the bank with their stuff in boxes – is now finished. It is time to be sillier than ever before.

A friend who works at a large, multinational company tells me that he arrived in the office the other day to find a bottle of water had been placed on his desk – and on every other desk in the 11-storey building – alongside a little card displaying a series of yellow blobs from the palest lemon to the deepest ochre. This represented the colour of urine depending on how much water had been consumed and was meant to tell employees whether they ought to be drinking more. Dehydrated workers were less productive, the card warned.

This is the most extreme example I have yet seen of a HR department infantilising the workforce and meddling in matters that should not concern it. In my experience, even the youngest child has a perfectly good way of working out whether it is dehydrated – which does not involve going to an office loo with a yellow colour card. If it feels thirsty, it demands a drink.

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I recently participated in a debate entitled “The good society: virtues for a post-recession world”. A couple of my fellow panellists emphasised the importance of promoting happiness rather than material wealth as a true measure of human progress. They believe that advances in gross domestic product are an inferior way to achieve greater wellbeing, and that a concept such as “gross national happiness” might be a better tool.

As I listened to their definitions of happiness, I realised that not many coincided with my view of what made entrepreneurs tick. I have spent decades partnering entrepreneurs, trying to understand their psychology and motivation. I find them hugely exciting to work with, because it is only thanks to their ambition and ingenuity that enterprises are started and fresh wants satisfied.

There is no stereotypical personality, but one can identify characteristics that most entrepreneurs share. At heart they are highly competitive. They do not seek security as their main goal – rather, they actively seek risk, and enjoy overcoming stressful challenges. They are not sheer gamblers, but they embrace dynamism and are willing to invest in spite of the possibility of failure – to have the chance to win.

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The scene is Detroit, a training room at the headquarters of one of the three great US car companies. A group of corporate vice-presidents is attending a course being given by a distinguished management thinker.

“What you are telling us is great,” the VPs say, “but you are talking to the wrong level. You should be speaking to the next tier up.” The next week, working with more senior managers, he hears the same thing. “This is great, but you are talking to the wrong level. You should be speaking with the chief executive.”

The week after that, our thinker finally gets in to see the boss. “This is great,” the CEO says, “but you should be speaking with my subordinates – I’d need their support in order to do it.”

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At an Editorial Intelligence panel discussion here at the FT in London on Wednesday evening, I was astonished to hear a former City editor, someone well-known for his robust and solidly pro-market views, condemn the levels of some City bonuses as “nauseating”. He also decried what he saw as the “grotesque inequality” of modern society.

When such a distinguished and experienced commentator is prepared to speak publicly in this way, we can safely say that times are changing. Public unease about the behaviour of certain people in financial services is growing. Politicians and regulators talk tough. What will they do?

And what will ordinary decent businesspeople do when they find themselves being harangued for the excesses of others? This is not healthy. Nor is it reassuring. The historian (and FT contributor)  Simon Schama, also speaking at this event, predicted massive social unrest and a real threat to democracy itself.

Is that wildly over the top? Or a reasonable forecast?