Closing Address / 9th Global Peter Drucker Forum 2017
by Charles Handy
So, another chapter in the great Drucker Forum story begins to come to an end. But the nice thing about a chapter ending is that you turn the page to the next. I have no mandate or intention of writing the next chapter of course; I’m just the page turner. The brief page turner.
I want to start by taking you back five centuries, because there is wisdom in history. 500 years ago last month an unknown friar in an unknown German town laid a complaint against his employer. The unknown friar was called Martin Luther. The unknown town was Wittenberg. His employer was the Catholic Church. And it wasn’t one complaint, it was 95 complaints. There were two basic themes to his complaints. The first was that to be able to buy your route to heaven and paradise was wrong. Yet that was exactly what the church was offering. A system of indulgences, a sort of passport to heaven that you could buy. It was a scam. It encouraged the poor to give what they had to make the rich richer. Sounds familiar today.
Luther thought it immoral. I thought it immoral, and indecent and inhuman and it still is.
The second theme of his complaints was that you did not get to heaven by virtue of what you did, because what you did was so laid down by the organization and so regulated by the organization that it really couldn’t count as yours. You got to heaven, in other words you succeeded, by what you are not what you did. He called this “justification by faith”. I called it “recovering our basic individual humanity” and I think this message still rings loud and clear 500 years later.
So, Luther started something. It took time, of course. Great change does take time, but one man can do it. He started the reformation of the Christian Churches, which became in due course the enlightenment, which led to the ultimate separation of church and state, to free thinking, the revolution in France, the revolution in America, the release of the individual initiative. We had two following centuries of amazing inventions, creativity and economic growth, which ended up with us being more prosperous, living longer and more healthily than ever before in history - for most of us anyway. We should be grateful for that, but the cost had a snag. One of those inventions was a very ingenious social invention: the combination of the joint stock company and the limited liability company by Acts of Parliament in Britain and then around the world in the middle of the 19th century. This allowed ownership to be separated from management, and it allowed the rich to take enormous risks without risking all that they had. It fueled the industrial revolution and this great surge of prosperity and it created the company and then the corporation, which provided so many of us in the last century with the normal way of work and a normal way of life. This enabled people and companies to be the tax collectors of society. It was a very convenient arrangement for everybody.
Now, I started my life in one of those companies 60 years ago, before most of you were even born. It was the Shell company of Singapore, part of the wider Royal Dutch Shell Group. This is a small company – a company, a group of companions. It was good. I knew them all, of course I knew what they did, but more importantly I knew who they were. I knew their families. I knew who is good and who is bad. I knew whom I could trust and whom I should avoid. I knew whom I should follow and whom I should avoid. It was good. But then, things began to change. I got back to London, and by then, the thing was not a company anymore. It was a corporation. And what did that mean? Well, it meant something more formal. I shared an office in the great Shell building looking over the Thames with Gerry. There were two of us looking out on the river. Beautiful. On the door of my office, our office, there was a brass plate. Stamped into it was the title of our department. I remember it well. It was MKR/35. That was us. Underneath were too little slots for cards with our names on it. Suddenly I knew what it meant to be a temporary role occupant in a corporation. With the emphasis obviously on the word “temporary”, because these could be slid in and out. And of course, I had what was called a role description. Three pages of the things that I was meant to do, which would be checked. Unfortunately, I noticed that my name wasn’t on the top. It was just the role. Whoever had it at the time, had to do these things. Then one day I noticed the bits of cardboard had been removed throughout the organization. Suddenly, I wasn't a name at all, I was just number: MKR/35. This didn’t sound very human to me, nor to my wife, whom I had just married – whose instincts were that this was not a very human place and that I better got out of it. Of course, I was obedient and I left. As I always do.
I then discovered later on as life went on that whenever I interacted with any corporate body of any sort I was basically an ID and a password. And recently, that got more exciting. I got a face, with face recognition technology. Ha! More humanity I thought, at last. But no. My face is just another form of data to be fed into the great munching form of digital analysis data processing thing that is called an organization. So, if they can digitize my face, will they be able to digitize the rest of me? I hope not. Surely there are things that can’t be measured, that can’t be digitized. At my best, I have imagination, and vision. I have dreams, I have hope, I have trust and empathy, I have commitment. I have possibilities. I have all these things that make me interesting, that make life worth living and work worth doing. Aren’t we lucky, that these can’t be measured? Because otherwise, if the organization were purely digitized, purely went through numbers, it would be a very dreary place. A prison for the human soul. I wouldn’t want it. But then I remembered Maslow’s law of the instrument. Maslow said, as you may remember, that if your favorite tool is a hammer everything you will want to see will be a nail. You will bang everything in sight just to use your tool.
My worry is that if you are so hung up, so excited by the digital possibilities, that we will digitize everything. So, we must be careful. We must be careful, that our humanity is not swamped by the digital revolution.
So I thought, maybe we should do a charter for humanity that people can hang on to as they organize their corporations. And I thought, that’s not enough. Actually, we need a cultural revolution. We need to rethink how businesses, particularly, and all organizations, are actually run, why they are run, and what is the purpose of business again. The things that we were talking about here earlier. And you’ll say: A revolution? Isn’t that a bit steep? I’ll say: well no, Luther did it, one man. And it has happened again. In 1970 Milton Friedman took it upon himself to announce that the only purpose of a business was to make a profit. And so, shareholder value came in, as you know. A word unknown in my youth. And then, helped by his ex colleagues, we got Agency Theory, we got the idea of a corporation, or a company, being just a bunch of contracts. We got, as you know, stock options, eventually legalized by Congress. And now, a swamp of buyback shares, trillions of dollars going into the private equities of some of the senior managers. It was all – in my view – a great mistake. But it was a revolution. It was corporate selfishness to a high degree and very dissatisfying to a lot of people.
Some years ago I talked to all the workers in one of the energy companies in the UK, which had recently been privatized by Margret Thatcher. Halfway through one of the workers stood up and said: You know, he said, we used to say that we kept the lights on in Britain. Now we have to say, we make some people, whom we have never met, a bit richer. It doesn’t feel the same, he said.
So my charter, my revolution, must include of course, as you were suggesting earlier, the role of business in society. But also, how we keep all the human values safe inside the corporation. And you will say: but who is the leader? As you were asking earlier. Who is going to lead this revolution? Well, let me copy another Martin Luther and have a little dream. No, a big dream. Could you not the modern Wittenberg be here, in the Drucker Forum? And who is the Luther of our time? Why could it not be Peter Drucker? With his words from the grave magnified … by you. By us. And exemplified by putting our words into practice. So, the word goes forth, multiplied by 500 people speaking with a loud voice in their own area and their own spheres of influence and acting out their words in their actions. And if people criticize you, be bold as Luther was, and say: here I stand I can do no other, because this is the right way to behave. Ask not where the leaders are. There aren’t any. We must just start small fires in the darkness, until they spread until the whole world is alight with a better vision of what we could do with our businesses. And I say to you now, If not us then who, if not now, then when?