Management as a Liberal Art Research Institute

Do Words Matter?

Karen Linkletter, Ph.D.

PUBLISHED:

Nov 16, 2022

Peter Drucker's distinction between language and communication

Peter Drucker made a clear distinction in his writing between language and communication. For Drucker, language was part of culture. It was “substance…the cement that holds humanity together. It creates community and communion” (Drucker, 1992). Language was not just communication. It was something much more important. In our current time, I don’t think we share this respect for language. With the explosion of social media, it has become too easy to type a few words into a text or a tweet, or even an email, and expect that the reader will understand the essence of that communication.


I’ve been leading a course on Drucker Philosophy and Theory 101 for faculty and administrators at CIAM, as well as participants from MLARI, since the summer. Although we’ve been delving into the intricacies of Drucker’s ideas and how to implement them, our sessions have focused on Drucker’s language; what did Drucker actually SAY about topics such as a functioning society of organizations, or management as a liberal art? What role do words play in how we interpret meaning – in short, how do words function in communication?


Communication can take many forms that are nonverbal: body language, facial expression, tone, etc. These are very important, particularly as we emerge from a remote world where many of us are rusty in using these kinds of communication skills. But the role of verbal communication is crucial to any society, particularly a society of organizations where people need to convey complex ideas and information.


Drucker was well aware of the problem of communicating. In a paper presented in 1969, he stated that “communications has [sic] proven as elusive as the Unicorn” (Drucker, 1993, p. 320). Despite the increased focus on the subject, managers in the mid-twentieth century were woefully poor at this skill. Can we argue that the same is not true for today in any sector (government, for-profit, health care, education) save for some exceptions?


I suppose we need to clarify what “effective communication” looks like. In today’s world, communication can look like a Zoom meeting, a tweet, a social media post, a highly-scripted interview, or an administratively-driven process of internal interactions. Are these effective forms of communication for organizations? They can be, but, if misused or poorly crafted, they can be remarkably ineffective.


In his seminal work, Management: Tasks, Responsibilities, Practices (1974), Drucker cited four fundamentals of communication:

·     Communication is perception

·     Communication is expectation

·     Communication makes demands

·     Communication and information are different and indeed largely opposite – yet interdependent (Drucker, 1974, p. 391).


Much of this material derives from the 1969 paper presented to the Fellows of the International Academy of Management in Tokyo.


Communication is perception: Drucker has a lot to say about this, but I can summarize: Did he/she/they “get it”? You may be an incredible speaker (or writer), or you may not be. The point is: did your audience get what you were trying to convey? If not, why? Was it the words you used, the delivery, the body language, etc. It’s hard to admit that, even though you are a professional speaker or writer, “it is the recipient who communicates. The so-called communicator, the person who emits the communication, does not communicate. He or she utters. Unless there is someone who hears, there is no communication” (Drucker, 1974, p. 391). That’s a hard pill to swallow if you fancy yourself an eloquent speaker, leader, or teacher. But it really doesn’t matter, does it? What matters is whether or not your “utterance” was understood. And was it understood the way you intended?  You may think you conveyed an idea or thought, but the language you used may have been perceived in a different way due to cultural differences, gender or ethnic conflicts, class inequalities, or other sources of miscommunication (see, for example, https://www.tandfonline.com/doi/full/10.1080/23311975.2017.1408943).


Our more recent problems with communication and perception have to do with virtual interactions that accelerated during the pandemic and have remained an integral part of how we talk to each other. Various platforms have attempted to upgrade their interfaces to improve communication, such as features that allow one to avoid seeing themselves (which can be distracting, as some tend to focus on their appearance rather than on the content of the meeting or the reactions of others). How can you assess the perception of your Zoom audience during a presentation? Especially when the cameras are turned off? Many have lost their perception skills because of the reliance on technology rather than face-to-face interactions. What does that emoji mean? How do I interpret the exclamation point in that text? Drucker’s first element of communication – perception – is difficult to assess virtually. Is it any wonder we are so poor at real communication today? (See https://www.harvardbusiness.org/wp-content/uploads/2020/03/HBR_How_to_Avoid_Virtual_Miscommunication-1.pdf, and https://www.forbes.com/sites/forbesbusinesscouncil/2021/10/07/zoom-gloom-is-real-how-to-improve-communication-and-connection-without-video/?sh=63c86ebd243d)


Communication is expectation: Humans try to make sense out of our worlds and assemble information into some kind of order. We all have a set of expectations based on experience that influence our processing of information. In Drucker’s words, “We see largely what we expect to see, and we hear largely what we expect to hear” (Drucker, 1974, p. 393). The unexpected is either ignored or largely misunderstood. People try to fit information into their existing framework or understanding of how things work.


We have to understand what people expect to see and hear before we can effectively communicate. If information fits within someone’s expectations, it will be perceived. If the message is contrary to the recipient’s expectations, that must be clearly signaled. The worst mistake is to attempt “a gradual change in which the mind is supposedly led by small steps to realize that what is perceived is not what it expects” (Drucker, 1974, p. 393). This only reinforces expectations. Instead, clearly communicate that “This is different!”, creating an awakening that breaks through expectations.


This is easier said than done! Such a signal can create a sense of panic or distress, as it implies the need for a change in approach, strategy, outlook, and/or tactics. In the United States, the poor messaging with respect to public health measures needed to combat the impacts of the COVID-19 pandemic illustrates the dangers of mismanaging human expectation in communications. In the early stages of the pandemic, when data were limited, public communications did not emphasize that this was, in fact, a novel coronavirus, and that the potential threat was unique and serious. As a result, much of the public discounted later attempts to curb mortality rates through lockdowns, distancing, and masking. The COVID-19 pandemic did not fit within anyone’s expectations (save for the handful of experts trained in virology and public health). Yet, other nations, notably Germany, Taiwan, and South Korea took the threat seriously, communicated it effectively, and managed to avoid significant deaths in the early stages of the pandemic. Researchers are evaluating the various responses to the pandemic, and how the public reacted to communications from scientists and government representatives (see, for example, https://www.sciencedirect.com/science/article/pii/S2212420921004775 and

https://journals.sagepub.com/doi/full/10.1177/09636625221093194

 

Communication makes demands: In his 1969 paper, Drucker used the subtitle “Communication is Involvement” (Drucker, 1993, p. 326). That header actual encapsulates his argument more effectively; he likely modified it to appeal to a management audience in his later work. Drucker says that communication “always demands that that the recipient become somebody, do something, believe something. It always appeals to motivation. If communication fits in with the aspirations, values and purposes of the recipient, it is powerful. If it goes against them, it is likely not to be received at all…By and large, therefore, there is no communication unless the message can key in to the recipient’s own values [emphasis mine],” (Drucker, 1974, p. 395). I think this is possibly the most important message Drucker gives us about communication. Real communication involves some kind of expectation of action. A salesperson asks for the order. A human resources manager requests her team to implement a new policy. A non-profit director asks volunteers to show up for an important event. Drucker remarks that “Communication is always ‘propaganda’” (Drucker, 1974, p. 394), but, frankly, I find his word usage ineffective here. Propaganda is associated with the misuse of language - the attempt to promote a biased perspective or a particular point of view. But the point that communication expects some kind of action - physical, intellectual, or spiritual – is important. Clear communication is not propaganda. It conveys information that is congruent with values that are shared by the individual and the organization (or the communicator). If a leader asks team members to participate in a project, the project needs to make sense in terms of the organization’s values and objectives, as well as the individual participants’ sense of purpose and meaning. This is why it is so critical for organizations to make sure that team members share the same values and goals of the larger institution. If individuals are not aligned with a higher purpose, their efforts are solely their own, with no greater function. Communication that asks them to do something for the “team,” or the “organization,” or “society” will not be received. Conversely, organizations need to make sure that they are communicating in a way that speaks to the motivations of the individual; how will that person grow from this experience? How will they become more effective in their role, or as a leader, or as a person?

 

Communication and information are different and largely opposite – yet interdependent: Information is pure. It is logic, without meaning, impersonal, and free of human intervention. Communication, however, is steeped in human intervention. Communication seeks to make meaning out of information. As Drucker noted in 1974, humans were awash in information, but lacking in ways of making sense out of that information: “…information is, above all, a principle of economy. The fewer data needed, the better the information. And an overload of information leads to information blackout. It does not enrich, but impoverishes” (Drucker, 1974, p. 395-396).


Fast forward to today, and we are in the same situation on steroids. Misinformation abounds on social media platforms, leading to political division and violence. Organizations are overwhelmed by data, struggling to find meaning in the mass of information. Data analytics has exploded as a field of study and application. Fifty years ago, Drucker commented that the information revolution of that age did not really produce information; it merely produced data (Drucker, 1974, p. 398). This is not communication. Communication involves understanding the human component: emotions, values, expectations and perceptions. Thus, communication and information are, as Drucker states, largely opposite, but yet they are interdependent, particularly today. How can we use information constructively in communications? By understanding the human component of communication.


So, do words matter? Do what we say and write make a difference in communication? Absolutely.


If communication is perception, it requires effectively conveying concepts or ideas in a way that another person can actually hear and comprehend. This may require using a variety of words to communicate; not everyone understands a particular term the same way, as words carry associations, cultural references, and other information. In our class, for example, we discussed the fact that Drucker’s use of the terms “conservative” and “liberal” can be very jarring for a modern audience, as those words today are particularly loaded politically. In Drucker’s writing, they are not; Drucker uses those terms in a historical context that is largely unfamiliar to a contemporary audience, particularly an American audience. In academia, the use of jargon is another example of where language can get in the way of perception. The term “rationality” in decision making has specific connotations that may be unclear to someone who comes from a humanities background, where “rationality” may mean something more philosophical. Particularly when we are attempting to discuss complex problems or subjects, our word choice can actually make a complicated subject more confusing.

 

If communication is expectation, we need to understand what our audience expects to hear, read, or see. What is “expected” for this particular person or group of people? Can we use language that fits with their worldview or perspective? Or do we need to signal clearly that something is out of the ordinary? Some individuals are more flexible and open to change; they are resilient in the face of adversity and have coping skills to adapt. Others are less capable in this area; they fear change and prefer routine and the safety of predictability. If you are introducing a new program, method of performance evaluation, or other change, how does your language impact the reception of that action? If someone expects change as the norm, the communication can take one form. If another person expects the absence of change as the status quo, then the communication needs to be modified, using a completely different tone and approach. This is why it is crucial for you to know your team members and assess them without passing judgment. What do they expect? How can you most effectively institute a change without having people ignore that something is different and needs to be noticed?

 

If communication makes demands, our language needs to consider the values of the recipient so that we effectively stimulate action. If we are asking someone to do something, or believe something, or comprehend a point of view, our words have to align with the worldview of the recipient. This is particularly true if we are asking people to be part of a team or organization, or to do something that benefits society. Drucker’s discussions of the social responsibility of business, for example, emphasize the fact that actions that mitigate negative impacts can be profitable for an organization. It actually can benefit a company to remedy its negative social impacts – not just because it’s “the right thing to do,” but because it is financially beneficial. This kind of thinking would aid communication involving corporate social responsibility, particularly efforts to mitigate climate change.

 

Finally, if communication and information are different and largely opposite – yet interdependent, we need to do a better job of integrating the two, particularly in today’s society that is awash in data. What information is relevant to decisions? How do we glean meaning out of big data? How do we use information as part of effective communication? Simply reporting data is not communication. Communication involves taking information and telling a story, making that information useful to the world of problem solving, decision making, and the often messy practice of management. How do we craft written articles and oral presentations to make data meaningful and useful? We need to consider all of the factors Drucker mentions earlier. How will the data be perceived? As a threat? An opportunity? How can I use language to effectively communicate the meaning of the information? How does the information fit with the expectations of the audience? Is it shocking, or expected? How do I need to convey data to motivate people to act? Information alone won’t motivate, so what words do I use, or do I use pictures or some other method to illustrate the information? In short, what is the best way to present my analysis that will reach my audience and actually make them listen, understand, and respond?


What does effective communication look like in your organization? If language is important, and not just “communication,” shouldn’t we pay attention to how we use it, particularly with the vehicles we have? With all of the media available to us, are we as careful about the words we use as we should be? Language may not be the realm of culture that it was in Drucker’s era, but words do matter, whether they are used on Twitter, email, voicemail, text, or in a meeting on Zoom or in person. In this time of rapid change and response, perhaps it benefits us to slow our response down to make sure we are communicating with each other effectively.

 

 

Sources

Drucker, P. F. (1974). Management: Tasks, Responsibilities, Practices. Oxford: Butterworth-Heinemann.

Drucker, P.F. (1969). “Information, Communication, and Understanding.” Reprinted in The Ecological Vision: Reflections on the American Condition. New Brunswick: Transaction Publishers, 1993, pp. 319-337.

Drucker, P.F. (1992). “Reflections of a Social Ecologist.” Reprinted in The Ecological Vision: Reflections on the American Condition. New Brunswick: Transaction Publishers, 1993, pp. 441-457.

Evans, A., Suklun, H. (2017). “Workplace diversity and intercultural communication: A phenomenological study.” Cogent Business Management, Vol. 4, Issue 1, 5 December.

Ferrazzi, K. (2013). “Managing People: How to Avoid Virtual Miscommunication.” Harvard Business Review, April 12.

Lui, L., Wu, W., McEntire, D. (2021). “Six Cs of pandemic emergency management: A case study of Taiwan’s initial response to the COVID-19 pandemic.” International Journal of Disaster Risk Reduction, Vol. 64, October.

Trejo, B. (2021). “Zoom Gloom is Real: How to Improve Communication and Connection Without Video.” Forbes, October 7.

Utz, S., Gaiser, F., Wolfers, L. (2022). “Guidance in the chaos: Effects of science communication by virologists during the COVID-19 crisis in in Germany and the role of parasocial phenomena.” Public Understanding of Science, Vol. 31, Issue 6, May 18.

 

 

 

By William A. Cohen, Ph.D. 02 May, 2024
The Executive PhD program that Peter Drucker, “the Father of Modern Management,” and his dean, Paul Albrecht, developed at Claremont Graduate University in 1975 was the first accredited PhD intended for future top executives. According to Albrecht, this PhD taught the “Drucker Difference” for those “with top management potential.” It was and is expensive. There were only ten students in the first cohort, and only one of the ten completed the program. This individual eventually rose to the rank of major general in the U.S. Air Force, and, after retirement, founded The California Institute of Advanced Management with Minglo Shao, a Chinese billionaire who had earlier founded Drucker Academies across China. Others graduated in later cohorts and became senior corporate executives, presidents of colleges and universities, and entrepreneurs. Was Drucker Really Different? Most professors built their careers on conventional research and publication in academic journals. Drucker didn’t. His numerous articles were written for practitioners, not primarily researchers. They appeared in the Harvard Business Review, the Wall Street Journal and other journals read primarily by practitioners. In June 2004, Harvard Business Review honored Drucker with his seventh McKinsey Award for his article, "What Makes an Effective Executive. Drucker’s 39 books were written for practitioners as well. They won and received numerous accolades. Yet Drucker did not write synthetic research typical in academia, where one or more hypotheses based on multiple inputs are tested for significant differences. Drucker used a different research model. He declared, “corporations are my laboratories.” His conclusions from observation are the basis of the Drucker Difference. They were explained first by Einstein who used the method and explained it in an article in the London Times. Drucker’s Research Model Asked in class where he got his vast knowledge and extensive experience to help organizations in so many different industries, Drucker answered: “I have no vast knowledge nor extensive experience on any specific topic. I have only ignorance and lack of experience. Therefore, all I can do is to ask questions. Clients have the knowledge and experience which I lack; they are the real experts on the topics they hire me for.” He then gave examples of his questions, beginning with “What business are you in?” “Who is your customer” “What does your customer value? “What are your objectives” and “What is your plan for getting those results?” Other Questions General Electric’s former CEO Jack Welch, who retired with the largest retirement package ever awarded, significantly increased GE’s wealth. He credited Drucker’s consulting. Welch said that Drucker had asked him two questions: “If you have a choice, which GE businesses would you discard?” and “If this is true, what are you going to do about it?” Welch explained that he made the decision to sell or liquidate even profitable GE businesses, which were not number one or two in their markets and were unlikely to attain these positions. He used the funds to invest in businesses with better potential. Over nine years this increased GE’s wealth by 4000 percent. This became known as Drucker’s Abandonment Theory. Another former client explained: “Drucker got us thinking through our problems and applying our own knowledge and experience in a way we had never considered previously. This was amazingly effective, and we found solutions to our problems with his guidance that we had overlooked.” Drucker was Different Here was an expert who not only did not claim special talents but rejected the title “guru.” Drucker made no claim as being an extraordinary management researcher. When not at the university, Drucker used his home as his office. He practiced without a staff or even a secretary. He even answered his own phone. He did not claim any special expertise or experience. Yet he reportedly received as much as $10,000 for a few hours work. Few complained. He taught a simple procedure to students. It began with defining the problem and determining the relevant factors including facts, estimates, speculations, assumptions, time available and financial limitations. Only then did he advise clients to identify, discuss, compare, and analyze possible solutions. Strategy, not Formulae Drucker refused to develop strategy by formula. There was no BCG nor GE/McKinsey chart with cash cows or dogs. He believed that each situation was so unique, that a manager must know as much as possible to determine strategy. There was no common element of identical importance for all situations. What was decisive and important in one situation might be totally unimportant in another. Decisive elements might not even be quantitative or directly associated with profit. While profitability was deemed as necessary to a business as oxygen to breathing, he said that profit maximization was not, and noted that transistor radios were developed in the U.S., but lost the market to the Japanese because American developers tried to maximize profit. Drucker described management as a liberal art and suggested that liberal arts should be employed in developing strategies and management decisions. He noted economics, ethics, history, humanities, philosophy, social science, physical sciences, and psychology, as all being useful in a variety of managerial and business situations. He noted that in addition to external knowledge, self-knowledge of the organization and its people and available resources might be of even greater importance. Drucker also wrote that 50% of the outcome of any project was due to its leadership. Once invited by an organization to explain the latest leadership techniques, he rejected the opportunity with the explanation that the latest techniques were known to the ancients and recommended that his inquirer read “the first systematic book on leadership and still the best” which had been written 2000 years earlier by Xenophon, an ancient Grecian general and author. Drucker and Research Most controversial was Drucker’s approach to research, yet it was also employed by Einstein who’d been a researcher in theoretical physics. In the single year, 1905, Einstein produced four papers, winning the Nobel Prize for theoretical physics. All four were written a year after earning his PhD at the University of Zurich while he was working at the only job he could obtain: as Assistant Patent Examiner in the Swiss Patent Office in Bern. Like Drucker, he had no conventional laboratory or computers. The Theory of Relativity Einstein himself described the development of one of his most famous theories, the Theory of Relativity. He imagined himself traveling along side of a moving beam of light. Einstein may have provided Drucker with ideas of research. Drucker observed people in companies in action as Einstein had observed his imaginary beam of light. He used analysis and development of what he observed to develop his theories of management. Einstein Reveals His Research Methodology Einstein described his research methodology in an article in the London Times in 1919, discussing what he called his “Theories of Principle.” Einstein wrote “these theories employ the analytical, not the synthetic method of research. Their starting-point and foundation are not hypothetical components, but empirically observed general properties of phenomena, principles from which mathematical formulae are deduced of such a kind that they apply to every case which presents itself.” Synthetic research is what most use in research. It starts with the known and proceeds to the unknown, beginning with a hypothesis or hypotheses. It then tests these hypotheses by proving or disproving each usually by examination of a sufficient number of examples and testing mathematically for significant differences. Einstein’s analytical research starts with the unknown and proceeds to the known. There is no hypothesis. One definition of analytical research is “a specific type of research that involves critical thinking skills and the evaluation of facts and information relative to the research being conducted.” This analytical process is how Drucker arrived at his theories and is part of the Drucker difference. This research approach comes from a simple model: 1. Observation, either real or even imagined 2. Analysis of the observation or imagination 3. Construction of theory based on this analysis A sampling of Drucker’s theories derived analytically include: · That marketing and selling are not the same. · Moreover, selling is not a subset of marketing and marketing and selling could be adversarial. Since, if the product or strategy chosen by the company were better, with the same effort and ability, the same salesmen might sell more product with less effort. · What everyone knows (or think they know) is usually wrong. This short statement was the one most uttered by Drucker in the classroom. · Social Responsibility and Ethics are part of good leadership. · Society demands that an organization be profitable, but not the maximum profit attainable. · Many managerial decisions are made from the gut, and these may be optimal despite complex analyses. · Managers must ultimately make decisions from the gut.  What Drucker taught, worked, and the “Drucker Difference” produced many successful leaders using “Drucker Difference” skills. While other factors influence results and other research methods are still valuable, researchers using primary analytical research including Einstein confirm the value of the “Drucker Difference” confirming Drucker’s conclusion that Management is a Liberal Art.
By Byron Ramirez, Ph.D. 27 Apr, 2024
The formal study of entrepreneurship begins with the works of Richard Cantillon and Adam Smith in the 18th century. Cantillon's (1755) Essai Sur La Nature Du Commerce En Général is considered by many an important early treatise on enterprise economics and entrepreneurship. In this work, Cantillon provides his conception of the entrepreneur as a risk-bearer - someone whose acceptance of risk allows them to pursue entrepreneurial activities. Two decades later, Adam Smith in his (1776) An Inquiry into the Nature and Causes of the Wealth of Nations explains that nations grow wealthy through changes in the division of labor. Smith describes how human actions lead to changes in the division of labor, economic outcomes, and subsequent new venture formation. Smith suggested that division of labor (implicitly entrepreneurship) was the driver of wealth in society. The French economist, Jean-Baptiste Say in his (1803) Traité d'économie politique ou simple exposition de la manière dont se forment, se distribuent et se composent les richesses posits that the entrepreneur, who he also refers to as the ‘undertaker’, is someone who takes upon himself the immediate responsibility, risk, and conduct of a concern of industry, whether upon his own or on borrowed capital. Say argued: “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield” (Say 1803). By pursuing areas of greater yield, Say argues, the entrepreneur is effectively taking on greater risk. Accordingly, the entrepreneur is also receiving a higher return on investment. Although entrepreneurial activities continued for two hundred years, the study of entrepreneurship remained largely ignored by academics until the early 20 th century. An economist by the name of Joseph Schumpeter in the 1930s,and other Austrian economists such as Carl Menger, Ludwig von Mises, and Friedrich von Hayek begun to increasingly discuss entrepreneurship in their works. Schumpeter would argue that the innovation and technological change of a nation stem from the efforts of entrepreneurs. Schumpeter even devised the term Unternehmergeist , German for entrepreneur-spirit. Schumpeter suggested in his 1942 book Capitalism, Socialism and Democracy , that “creative destruction” represents the disruptive process of transformation that accompanies innovation. Moreover, he argued that the innovative entry by entrepreneurs into a market was the disruptive force that sustained economic growth. Schumpeter contended that entrepreneurship drives economic growth by disrupting existing industries and creating new ones. Thereupon, the entrepreneur challenges the status quo, leading to the replacement of older technologies, businesses, and economic models with new, more efficient ones. Schumpeter maintained that entrepreneurship is a dynamic force of change which drives progress and societal advancement. Ergo, as agents of change, entrepreneurs introduce new products, services, and market structures that generate economic growth and influence society. Schumpeter argued that entrepreneurship involves introducing new and different combinations of resources, technologies, and organizational methods that create value. Yet, he emphasized the importance of having an entrepreneurial spirit and mindset in fostering economic dynamism. He believed that entrepreneurship is supported by a mindset which is characterized by initiative, ingenuity, and a yearning to challenge the status quo. A few decades later, Peter F. Drucker would also discuss entrepreneurship in his writings. In his 1985 book titled: “ Innovation and Entrepreneurship ”, Drucker states: “Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. And it sees the major task in society – and especially in the economy – as doing something different rather than doing better what is already being done” (Drucker, 1985, p. 26). Drucker opined that entrepreneurs introduce changing, newer ways of doing things, and hence fulfill an important role in the market, economy, and society. By addressing needs, solving problems, and offering innovative solutions, entrepreneurs contribute to economic growth and development. In his Innovation and Entrepreneurship , Drucker also dissects the practice of entrepreneurship, highlighting the importance of establishing systematic, organized, and purposeful management. He describes entrepreneurship as “not natural”, nor “creative”. Instead, Drucker argues that entrepreneurship is work. And entrepreneurship must be consciously driven for, thereby it requires effort. Drucker explains that entrepreneurial management requires policies and practices that support four key areas: (1) fostering an entrepreneurial climate – the organization must be receptive to innovation and be willing to perceive change as an opportunity rather than a threat; (2) developing systematic measurement of performance and learning to improve performance; (3) adapting organizational structure – adjusting staffing, managing, compensation, incentives, and rewards; and (4) recognizing that trying to become “entrepreneurial” without changing basic policies and practices that support those efforts, could lead to entrepreneurial failure. Drucker believed that entrepreneurs are constantly seeking opportunities for innovation and change. Hence, they have a keen ability to recognize market needs and identify existing inefficiencies. He also believed that entrepreneurs have the courage to step outside of traditional boundaries and challenge the status quo. Yet, Drucker emphasized the importance of taking disciplined initiative in entrepreneurship. Without consistency, discipline, and initiative, the entrepreneur cannot develop new products, services, or solutions that address societal challenges. Drucker highlighted the criticality of results-oriented thinking and of measuring performance. He opined that entrepreneurs must constantly seek ways to improve, and that continuous learning is essential to evolve and deliver value. Hence, entrepreneurs are lifelong learners who are adaptable and resilient, able to pivot and adjust their approaches and strategies in response to varying market conditions and unanticipated challenges. Through their works, Joseph Schumpeter and Peter Drucker have influenced our perspective of entrepreneurship, and the way entrepreneurship is practiced. Schumpeter and Drucker possessed some similar views on who entrepreneurs are, and what they do. Perhaps, one of the key differences between Schumpeter and Drucker, is that the former considered that “creativity” contributes to and supports entrepreneurship, while the latter argued that entrepreneurship is not about creativity, but rather work and effort. Notwithstanding this notable difference, both Schumpeter and Drucker envisioned the entrepreneur as an agent of change, someone who is willing and able to change the way things are done, challenging the status quo, and delivering value to society. As such, entrepreneurs do not solely create new products or services, they have the ability to profoundly impact society. References Cantillon, R. (1755). Essai sur la nature du commerce en général. INEd. Drucker, P. (1985). Innovation and entrepreneurship: practice and principles. New York, NY: Harper Business. Say, J. B. (1846). Traité d'économie politique: ou simple exposition de la manière dont se forment, se distribuent et seconsomment les richesses (Vol. 9). O. Zeller. Schumpeter, Joseph A. (1942), Capitalism, socialism and democracy. London: Unwin. Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations.
By Robert Kirkland, Ph.D. 27 Apr, 2024
For over a decade, Dan Solin's wisdom has shaped my understanding of management philosophy profoundly. Dan Solin, celebrated for his bestselling 'Smartest' series on investing and his widely read work 'The Smartest Sales Book You'll Ever Read' and 'Ask: How to Relate to Anyone', connects with readers weekly through his blog on Advisor Perspectives, drawing in a devoted audience. His background as a securities attorney, along with his academic path through Johns Hopkins University and the University of Pennsylvania Law School, underscores his expertise. I've personally drawn a great deal from Solin's focus on the human side of business — it's redefined how I see leadership and the way we connect with others. He champions the idea that it's not just what we say but how we listen and empathize that forges strong relationships and drives successful enterprises. Solin's approach echoes the human-centric principles of Management as a Liberal Art (MLA), a concept promoted by Peter Drucker that suggests management is more art than science, calling for a profound engagement with personal relationships. I am convinced that merging Solin's insights with the MLA philosophy can guide us toward more effective, reflective, and compassionate management methods. In the article that follows, I'll delve into how Solin's writings harmonize with MLA's values. Emphasizing Human Interactions and Development Both Drucker and Solin recognize the significance of human development and interactions within organizations. In Solin's work, the recurring theme is the emphasis on understanding and empathizing with others rather than simply imposing one's own viewpoints. A hallmark of Solin's philosophy is the power of asking questions. Moreover, Solin advises managers to guide change with empathy and understanding, acknowledging the impact on individuals. This method aligns with MLA's view of management as an art that requires practice, reflection, and the pursuit of knowledge. By asking questions, managers can elicit deeper insights and foster a culture of curiosity and continuous learning, which is at the core of MLA. Managing Change and Leading by Example Dan Solin's forward-thinking approaches, especially his pioneering use of artificial intelligence for small businesses and financial advisors, aligns well with the ethos of Management as a Liberal Art (MLA). Solin offers practical, actionable advice, making complex technology approachable for his readers. Similarly, MLA, as conceptualized by Peter Drucker, stresses the importance of anticipating and navigating change — a skill ever so crucial in today's dynamic business landscape. Solin’s writing emphasizes the practical application of knowledge, resonating with Drucker's belief that true wisdom in management emerges from an integrated understanding of our experiences, leading with both discernment and insight. Transdisciplinary Perspective and Holistic Understanding Solin’s work on avoiding the heuristics trap and naïve realism echoes MLA's transdisciplinary perspective. Drucker believed that a manager should not rely solely on a single framework or heuristic but should integrate knowledge from various disciplines. Drucker's notion that management is both a liberal art and a practice suggests that effective managers blend empathy and analysis to make well-rounded decisions. Solin's advocacy for a broad-based approach to understanding others reinforces this principle, highlighting the importance of a holistic understanding in management. Encouraging Self-Reflection and Growth MLA posits that self-reflection and personal growth are central to effective management. Solin’s writings often touch on the benefits of self-awareness and the pursuit of personal development, paralleling the MLA belief in the necessity of continuous learning and the cultivation of self-knowledge for managers. Solin's reflections on the impact of our actions and advice demonstrate an acute awareness of ethical responsibility—a key component of MLA. Solin emphasizes that financial advisors (as well as managers) should be cognizant of how their interactions affect their clients, teams, and the larger community, advocating for responsible action and ethical management in line with MLA’s ethos. Conclusion Dan Solin's writings provide a rich resource of present practical, everyday applications of the broader and more philosophical principles of Management as a Liberal Art. His focus on empathetic communication, ethical decision-making, and continuous personal and professional growth offers a nuanced take on the MLA framework, exemplifying how management is not just a business function but a holistic and humane pursuit. Solin's work and Drucker’s MLA together provide a roadmap for managers who aspire to lead not only with competence but with wisdom, empathy, and a deep understanding of the multifaceted human experience within organizations. They teach us that to manage effectively is to navigate the delicate balance of advancing organizational goals while fostering an environment where individuals can pursue meaningful development and contribute to the larger societal good. Selected Dan Solin Books Ask: How to Relate to Anyone. Silvercloud Publishing LLC, 2020 The Smartest Sales Book You'll Ever Read: The Truth about Successful Selling. SilverCloud Publishing, 2013
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