How to Lead Change

William A. Cohen Ph.D.

PUBLISHED:

September 4, 2023

Drucker said that the best way to deal with change was NOT to manage it, but to lead it. To do this the leader of any organization has to have a system in place whereby needed changes are identified, reviewed, and adopted periodically.


Drucker maintained that any business had two important functions: innovation and marketing. The two must operate together. Moreover, he noted that any change is an innovation, if only to that organization or the user. After the innovation is created it must be accepted by those who receive, implement, and use it and therefore it must be marketed to them effectively and early in the process. Note that both of Drucker’s primary business functions, innovation and marketing, are critical in leading change.


 Successful Change Leader

The introduction of a new product is a change. Entrepreneur E. Joseph Cossman isn’t well-known today, but he was an unbelievably productive innovator who created so many winning new products that it was a miracle that he found the time and resources to pursue them all. Still, he exploited most of them successfully. He also followed a different sequence of his education. He became successful in business first, and then attended college first for an undergraduate business degree and then after he was well established for an MBA. Then he wrote a bestselling book, How I Made a Million Dollars in Mail Order which reportedly sold over 1,000,000 copies.

Most of his new products made money every time he introduced one. Moreover, he worked alone and never sought to head a large corporation. A few of his products failed, but there was no question that his success average, as well as his productivity, were both excellent and that made him an expert as an innovator and change leader in his chosen field. For example, the Cossman “Ant Farm” was a hugely successful innovation and is still being sold.


The  19th Century Toy that was an Innovation in the 20th Century

Cossman’s “ant farm” sold in the millions and is still selling. One was bought by President Kennedy for his daughter, Caroline. The idea of re-developing a 19th century toy for children based on an ant colony, with the correct kind of dirt the ants needed for their living environment and using a wooden framework of about twelve inches by twelve inches surrounded by clear panes of glass was hardly new. It had been around for a long time. Observers could watch all the activities of the ants living their lives by looking through clear windows on a thin, picture-frame box was not new either. This basic concept had been around for eighty years or more when Cossman introduced his innovation called an “ant farm” as a child’s toy and that was a major change and was new. However, that’s only where his innovation started. The old version never attempted to create a mass market as a toy for children because the window panes permitting observation of the colony’s activities were constructed from glass and were an obvious hazard as the glass could easily break and made the toy dangerous for the owner or other observers.

Although the original ant colony concept worked when used under the supervision of a teacher in a classroom, before Cossman it could not be sold as a child’s toy, and not only because of the danger of the glass breaking. Unfortunately, the glass-wood interface was not perfect, and the ants frequently escaped in the classroom, much to the dismay of both teachers and their students. Parents would have been even less enthusiastic about this characteristic if it had been a simple child’s toy.


Not only was Cossman’s “ant farm” intended as an educational toy for children at home, but it was also made a safe toy by Cossman’s changes. Cossman replaced the wooden frame and glass with clear plastic. That made it lighter, unbreakable under normal use, and safe for children and more secure regarding the ants’ ability to escape. As a bonus, it was much less expensive to manufacture. However, even the name selected for the toy, “ant farm” was unique, provocative, and promoted increased sales. His  distribution system for the ants was logical but even unique, and it was brilliant. Cossman sold every ant farm with a “livestock certificate.” It was packaged with the toy and was sent to Cossman by the buyer after purchasing the product. Cossman guaranteed live delivery of the “livestock” to populate the farm on receipt of a certificate.


So effective were these innovations, that the “ant farm” was an immediate success and more than sixty years after Cossman’s introduction, the product is still being sold today.


Drucker’s System for Leading Change was Unique Too

Drucker told us that preferably we must take the initiative to introduce change before a competitor, or a change mandated by higher authority in our own organization forced us to act. He even recommended modifying the organization so that new changes proposed were recognized by everyone in the organization was prepared for them from the start, beginning with reviewing the need for all changes on an ongoing basis.

Opportunities for change or new products may occur in many ways. These might include:


1.  Unexpected successes and failures, both our own and that of others

2.  Occurrences that have had unexpected results

3.  Emergencies Situations

4.  Changes in industry or market structures

5.  Changes in demographics

6.  Changes in meaning and perceptions of a product

7.  Actions by one or more competitors

8.  New knowledge

 

Drucker found that its not necessarily the size of the change that is most important, but the advantage created by the change. Moreover, Drucker told us what we should avoid and how we should approach innovation to build and maintain the success of our organizations with a continual stream of new ideas.


He also recommended specific ways to approach innovation that were new and that most other institutions were not following.

·     For example, a review board was established. It met frequently and periodically to review proposed new ideas and the need for them and other changes.

·     A review of the budget needed for the innovation was established at the first meeting as was a tentative strategy to be followed for the innovation’s development and its introduction.

·     Potential problems that could occur due to the introduction of the innovation along with their potential solutions were identified before the decision was made to proceed.

·     The plan as to how the change or product would be developed over time was also begun early.

 

Because products and procedures currently in use would be affected, what would be done about them were also identified. Most importantly the effect that proposed changes would have on people in the company and subordinate company organizations were also identified with solutions to the problem.


This important step was needed because a major factor that is frequently overlooked was the necessity of discontinuing existing organizations, products  or functions in our companies that had been part of successful products or procedures in the past and which would be replaced by what we propose to interduce, especially if the current product, methods, or whatever are still working and may even still be profitable.

This problem occurs because many in our organization will still be committed to the old way or old products, especially if they are still profitable and individuals involved have been affected positively in their careers by these dated innovations in the past. If we do nothing, the old product or way of operating will continue to receive priority over the new innovation and the change you want to implement, and it will be much more difficult to introduce the new innovation successfully.


Drucker told us that we must innovate with this insight. It’s not the size of the change, but the size of the advantage created by the change that is important. However, Drucker did not leave it there. He told us how we should proceed, what we should avoid, and how we should approach innovation to build and maintain the success of our organizations by employing the best way to seek, develop, and introduce new ideas into an organization. Drucker found, and others proved by the adaptation of his methods, that he was right and that what he suggested led to successful changes in any field.

 

Adapted from:

Consulting Drucker: Principles and Lessons from the World’s Leading Management Consultant by William A. Cohen (LID, 2018)

Drucker in the Lab: Leading Through Trust, Not Control

By Linda Megerdichian • November 15, 2025
Last semester, two students approached me to advise their AI-based graduate projects at a time when no one else in the department was available or willing to take them on. Our department lacked sufficient faculty with software or AI specialization at the time to support the growing number of requests in this area. I decided to take on the projects and serve as their advisor. I was honest with them from the beginning and told them that I had no prior experience in training machine learning models. Still, I said that if they were willing to put in the effort, I would learn alongside them and support them every step of the way. Both students wanted to build careers in AI, and I knew that their graduate projects could set the tone for the opportunities ahead. I have always believed it is my responsibility to open doors for my students, even when the path ahead is uncertain. Although I understood how the overall system architecture should be designed, I was learning the rest in real time just like them. Others advised me not to take the risk, but I believed in their determination and their right to pursue ideas they were genuinely passionate about rather than what was convenient for faculty. Today, both students successfully demonstrated their projects, and I could not be prouder of what they had accomplished. When I think about this experience, I am reminded of Peter Drucker’s view that leadership is not rank or privilege; it is responsibility. He often wrote that a leader’s first duty is to help others perform to the best of their abilities. That means creating conditions where people can discover what they are capable of, not directing them from above, but believing in them enough to let them try. In this small lab moment, I saw that principle come alive. I did not have the answers, and they knew it. But leadership, as Drucker would say, is not about knowing everything. It is about doing the right thing, even when it means stepping into uncertainty. Trust replaced control. Curiosity replaced expertise. And in that space, both students grew, and so did I. Drucker believed the most effective organizations are those built on mutual trust, where authority is replaced by responsibility, and learning is shared across all levels. That day in the lab, I realized that education itself is one of the purest forms of management, not managing systems or people, but managing potential. Sometimes, the best leadership lesson does not come from a management book. It comes from saying yes when it would have been easier to say no, and discovering that faith in others is the most powerful management tool of all.

Marc Benioff: Reimagining Capitalism through Management as a Liberal Art

By Robert Kirkland Ph.D. • November 4, 2025
When Marc Benioff founded Salesforce in 1999, Silicon Valley had a pretty straightforward playbook which was technological disruption at any cost. Profit, scale, and market capture dominated corporate ambition. Benioff, who worked under Steve Jobs at Apple and explored Buddhist philosophy, was not satisfied with that approach. He envisioned a company that would not only revolutionize enterprise software through the cloud but also redefine the social purpose of business itself. His leadership at Salesforce reflects Peter Drucker's concept of Management as a Liberal Art (MLA). This idea holds that management is not just about efficiency or growth, but about making work human, creating meaning, and building institutions that serve society (Drucker, 1989). Philanthropy as Structure From Salesforce’s inception, Benioff took an unusual approach. He instituted the “1-1-1 model”, pledging one percent of company equity, product, and employee time to philanthropy. This simple yet radical idea embedded social responsibility into the company’s DNA, ensuring that business success translated into community benefit (Salesforce, 2021). Peter Drucker made a similar point in The Concept of the Corporation (1946). He argued that companies cannot operate as "islands of profit" detached from their communities. Benioff's model, now replicated worldwide through the Pledge 1% movement, demonstrates that corporate citizenship can be institutionalized, not just idealized. By formalizing philanthropy as part of corporate structure rather than discretionary charity, Salesforce gave proof to Drucker’s claim that companies can serve as stabilizing social institutions. Human-Centered Leadership Drucker emphasized that management is a humanistic discipline requiring both knowledge and self-awareness. Benioff has consistently modeled this through self-reflection and moral grounding. As a long-time advocate of mindfulness and meditation, he integrates spiritual awareness with corporate purpose. In Trailblazer (2019), Benioff reflects on how introspection informs strategic clarity and ethical leadership. Compassion is a core managerial value for Benioff. This aligns with Drucker’s insistence that good leaders must "engage the whole human being," acknowledging both rational capability and emotional complexity. In cultivating mindfulness as an organizational practice, Benioff turns what Drucker called “self-knowledge” into a shared institutional expectation, not a private exercise. Stakeholder Capitalism in Practice Perhaps Benioff’s most significant Druckerian contribution is his public challenge to shareholder primacy. As a high-profile advocate of stakeholder capitalism, he has urged fellow executives to view not just investors, but also customers, employees, communities, and the planet as legitimate stakeholders in corporate decision-making. Drucker anticipated this shift in 1999 when he argued that institutions must balance individual rights with broader social responsibilities, and that leadership must be anchored in moral purpose rather than short-term gain. Benioff operationalized this at Salesforce by making equality, climate action, and community impact strategic priorities alongside financial metrics. Salesforce has built environmental and social-impact objectives into its leadership accountability and public reporting, positioning those outcomes as core measures of performance rather than PR exercises. In Drucker's terms, this marks a shift from a purely economic mandate to an explicitly ethical one. Building a Meaningful Culture At Salesforce, Benioff’s internal culture emphasizes equality, diversity, and trust. His mantra of “Ohana” a Hawaiian term for family defines the company’s social ethos. Through listening sessions, employee councils, and direct engagement with staff, Benioff attempts to cultivate what Drucker would call a functioning institution: a place where individuals are offered both status and function, and where they derive meaning through active contribution. One concrete expression of this philosophy is Salesforce’s repeated company-wide pay equity audits. The company has publicly acknowledged compensation gaps across gender and race and then allocated millions of dollars to close them. This reflects Drucker’s view that organizations must respect human dignity and align personal fulfillment with collective mission. Benioff’s conviction that fairness can be measured and corrected turns theory into everyday management practice. Balancing Technology and Humanity In Post-Capitalist Society (1993), Drucker identified the rise of the knowledge worker as a defining feature of modern institutions. Salesforce, as a platform for digital collaboration across sales, service, marketing, analytics, and commerce, is organized around those workers. But Benioff’s management philosophy resists the idea that productivity can be reduced to code and dashboards. He argues that innovation begins in empathy and trust, not automation, which echoes Drucker’s warning that management cannot dissolve into technique. At the same time, Salesforce has embraced artificial intelligence through Einstein GPT and autonomous AI agents to automate routine tasks. While this automation has replaced certain roles, Benioff has publicly insisted that human connection remains irreplaceable in high-value work such as enterprise sales, and Salesforce is simultaneously hiring thousands of additional salespeople. By automating repetitive tasks while elevating distinctly human work, Benioff is enacting Drucker’s belief that technology must remain subordinate to judgment, responsibility, and moral purpose (Drucker, 1990). His leadership has also demonstrated Drucker’s axiom that effective management requires balancing continuity with change. Continuity and Change Over two decades, Salesforce has evolved from a single product - customer relationship management delivered via the cloud - to a global platform ecosystem spanning analytics, integration, AI, collaboration, and industry-specific solutions. Yet it’s core values; trust, customer success, innovation, and equality have remained remarkably consistent. The COVID-19 pandemic highlighted this balance. Salesforce mobilized its logistics network and relationships to support public health responses, sourced and donated medical equipment, and repurposed internal systems to help governments and hospitals. Simultaneously, it accelerated digital transformation for its customers, positioning the company as both economic actor and civic partner. This is management serving society not just stakeholders. Moral Stewardship and Systems Thinking A key aspect of Drucker’s MLA is its interdisciplinary nature. He describes management as a liberal art because it must draw on ethics, psychology, economics, history, and even theology to exercise wise judgment (Drucker, 1989). Benioff exemplifies this approach. He openly blends spiritual language, social justice arguments, civic activism, and technology strategy. He links corporate tax policy to homelessness and public health, climate action to fiduciary duty, and workforce equity to innovation capacity. This is not accidental rhetoric. It is an attempt to widen the frame of what “business leadership” is allowed to talk about. And in doing so, Benioff turns the CEO role into something closer to what Drucker called moral stewardship: the active use of organizational power to strengthen society’s fabric. A Model for the 21st Century Drucker argued that a functioning society depends on institutions that foster responsible citizenship, provide meaningful work, and accept obligations beyond profit. Salesforce’s global initiatives illustrate this principle. Its Climate Action Plan, net-zero commitments, LGBTQ+ advocacy, and Pledge 1% expansion reinforce that corporations can be both market leaders and social institutions. Benioff sees business as a primary vehicle for delivering resources, talent, and problem-solving at scale to communities. Marc Benioff’s work at Salesforce is one of the clearest contemporary examples of Management as a Liberal Art. Through empathy, ethical reflection, institutional responsibility, and systemic awareness, Benioff has redefined 21st century management. Like Drucker, he views organizations as moral communities’ arenas for both performance and purpose. In an era of automation, widening inequality, and environmental crisis, Benioff believes that capitalism can be rehabilitated, but only if leaders understand management not as control, but as stewardship. The liberal art of management is not an outdated ideal; it is a living practice and essential for the legitimacy of business itself.  References Benioff, M. (2019). Trailblazer: The power of business as the greatest platform for change. Currency. Drucker, P. F. (1946). The concept of the corporation. New York: The John Day Company. Drucker, P. F. (1989). The new realities: In government and politics, in economics and business, in society and world view. New York: Harper & Row. Drucker, P. F. (1990). Managing the non-profit organization. New York: HarperBusiness. Drucker, P. F. (1993). Post-capitalist society. New York: HarperBusiness. Drucker, P. F. (1999). Management challenges for the 21st century. New York: HarperBusiness. Salesforce. (2021). Philanthropy and the 1-1-1 model. https://www.salesforce.com/company/philanthropy/

Drucker on Soft Power

By Michael Cortrite Ph.D. • November 4, 2025
What is Soft Power? A relatively new concept in the field of leadership is soft power. The term was coined in 1990 by Joseph S. Nye, a leading architect of U.S. foreign policy for six decades. He worked for two U.S. presidents and served as dean of Harvard’s Kennedy School of Government for a decade. Nye believed that whatever helped the world helped the United States. Soft power refers to an organization’s or country’s ability to influence others through attraction rather than coercion or payment. A good example is the aid that the United States gives to other poorer nations to alleviate disease, hunger, poverty, and illiteracy. Nye also discussed “smart power,” which involves using both hard power (military or political might) and soft power. (Nye, 1990). In furtherance of a more peaceful world, the question is whether we want leaders who are oblivious to the effectiveness of soft power and instead use hard power to coerce, threaten, and force people, or leaders who use both soft and hard power to help people. In the short term, hard power typically prevails over soft power, but in the long term, soft power often prevails. Hard power is a short-term solution, whereas soft power has long-lasting results. (Nye, 2025). Clearly, soft power can be more effective for accomplishing goals in many circumstances. However, there are times when hard power can be used in conjunction with soft power — the concept known as smart power — to be more effective in influencing the behavior of others. Sometimes people are attracted to or intimidated by threatening or bullying behavior (hard power). In this case, hard power is more effective because people fear the negative consequences of speaking out against the people in power (Tanis et al. 2025). An example of the failure of hard power can be seen in the United States’ invasion of Iraq in 2003, intended to limit terrorism. The invasion itself, along with brutal images of Abu Ghraib prison and the imprisonment of suspected terrorists in Guantanamo Bay Prison without any due process, was shown to increase the recruitment of more terrorists (Nye, 2008). Another example of potential real-life consequences of a leader choosing between hard power and soft power is reported in Foreign Policy Magazine (2025): Joseph Nye was dismayed that the new administration in Washington was using the hard power tactics of threatening, bullying, and ordering, along with canceling the soft power accomplishments of U.S. foreign aid programs. He predicted that they were ceding a United States-led world to one dominated by China, because China understands the potential of soft power. Apparently, the current administration does not. Veteran journalist Andreas Kluth (2025) notes that the United States Agency for International Development (USAID) is one of the most effective examples of the United States' soft power. It is best known for its humanitarian efforts to combat AIDS, malaria, and starvation abroad. It is estimated that without the work of USAID, an additional 14 million deaths will occur in the next five years. Almost as bad as the deaths is that the goodwill created in numerous foreign countries will be gone. Kluth and the United States Senate Foreign Relations Committee (2025) are concerned that China will be stepping into the void of losing USAID. They warn that China now has more soft power than the United States and outspends the United States in foreign aid 40 to 1 in its pursuit of world domination (Kluth 2025). In this regard, Blanchard and Lu (2012) point out a weakening of U.S. soft power since the terrorist attacks of September 11, 2001, the US invasion of Iraq, and continuing unilateralism of the United States. Peter Drucker Drucker was born in Vienna, Austria, in 1909, and as a young man witnessed Europe being taken over by the totalitarian, fascist regime of Adolph Hitler starting in the mid to late 1920s and Hitler’s being elevated to Chancellor of Germany in 1933. Drucker knew firsthand that totalitarianism hurts people, and he spent much of his life analyzing its causes and cautioning people against it. According to Drucker, people will not willingly allow their country to become totalitarian if society gives all people status, dignity, respect, and a meaningful place in society. Drucker called this a functioning society. He advocated for a people-centric approach in leadership, where people were given autonomy and no one was left behind or abandoned by society. Although Peter Drucker did not use the term "soft power," upon examining his writings and life’s work, it is clear that he preferred the use of soft power over hard power. His classic invention of Management by Objectives, which gives employees considerable autonomy, is a prime example of soft power (Drucker 1954). He felt that companies had a social dimension as well as an economic purpose (Drucker 1942). He wanted companies to treat workers as an important resource, rather than solely as a cost (Drucker 1993). Drucker would disapprove of the most powerful democracy in the world ceding its world leader status to a totalitarian country, China. The fear is that China being seen as the world leader might influence or encourage other countries to allow dictatorial and autocratic governance (Shlapentokh 2021).  Bardy et al. (2010), in their study of Peter Drucker and ethics in the United States and Europe, posit that Drucker’s good ethics in business efforts ensure that society is being served and that change efforts are successfully brought about by adhering to Drucker’s discourse and right behavior. They said that Drucker was caring and ethical in his treatment of managers and employees, much like a leader who prefers soft power. Drucker was quoted as quoting William Norris; “The purpose of a business is to do well by doing good” (p. 539). Showing his preference for doing good for people demonstrates care ethics (Coorman, 2025), which is mostly what soft power is entails. Conclusion Peter Drucker is renowned for his ability to predict future trends in various domains, including business, economics, and society (Cohen, 2012). Currently, the world seems to be at a crossroads: Will democracy survive? Will we learn how to communicate with each other? We need to remember the wise and ethical teachings of Peter Drucker, especially on the effectiveness of using soft power. Drucker’s blend of practical management advice with profound ethical underpinnings underscores his status as a thought leader who not only understood the mechanics of management but also engaged with the moral implications of leadership within complex societal frameworks. References Bardy, R. & Rubens, A. (2010). Is There a Transatlantic Divide?: Reviewing Peter F. Drucker’s Thoughts on Ethics and Leadership of U.S. and European Managers. Management Decision. Vol. 48. Iss. 4. 528-540. DOI:10.1108/00251741011041337. Cohen, W. (2012). Drucker on Marketing: Lessons from the World’s Most Influential Business Thinker. McGraw Hill. Coorman, L. 2025. Soft Power. Master’s Thesis. Indiana University, Herron School of Art and Design. 2025. https://hdl.handle.net/1805/50513 Drucker, P, (1942). The Future of Industrial Man. Mentor Book/New American Library. Drucker, P. (1954). The Practice of Management. Harper & Row. Drucker, P, (1993). The Concept of the Corporation. Routledge. Kluth, A. 2025. How the U.S. is Making China Great Again. The Week. Iss. 12. Aug 2, 2025. Nye, J. (1990). Bound to Lead: The Changing Nature of American Power. Basic Books. Nye, J. (2008). Soft Power. Leadership Excellence. Vol. 25. Iss. 4. April 2010. Nye, J. 2024. Invest in Soft Power. Foreign Policy. Sept. 9. https://foreignpolicy.com/2024/09/09/us-soft-power-culture-political-values-democracy-human-rights/ Nye, J. (2025). Obituary. Los Angeles Times, 5/21/25 p. 11. Shlapentokh, D. 2021. Marxism and the Role of the State in the Soviet and Chinese Experience. International Journal of China Studies. Vol. 12. Iss. 1. (Jun. 2021) 157-186. https://2q21dwppn-mp03-y-https-www-proquest-com.proxy.lirn.net/scholarly-journals/marxism-role-state-soviet-chinese-experience/docview/2565686898/se-2. Tanis, F. and Emanuel, G. 2025. To Speak or not to Speak: Why Many Aid Groups are Silent about the Trump Cuts. NPR Weblog Post. August 1, 2025. https://www.proquest.com/abitrade/blogs-podcasts-websites/speak-not-why-many-aid-groups-are-silent-about/docview/3235492953/sem-2?accountid=150887
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