"Sine ira et studio" (Without fear or pretentiousness) - Tacitus
Speech at the 2013 PRME Summit
(under the auspices of the United Nations)
Delivered on September 25, 2013 in Bled, Slovenia
I have come to celebrate CEEMAN's 20th Anniversary and applaud and acknowledge Danica Purg's leadership. I have known Danica for 40 years. I met her in Dubrovnik, at a conference on self-management ,and I immediately realized that she was a live wire. She has developed something that is absolutely amazing. I am proud to be her friend, and I am always available if I can help as I think that she is doing a fantastic job.
CEEMAN's celebration is tomorrow. Unfortunately, I cannot attend it as I have to leave for another event. But never the less, today, let me share my thoughts on developing future leaders, the topic of this gathering.
We have three words in our topic: "developing", "future", and "leaders." Let me first talk about the future and then about what it means to be a leader in the future. Finally, I will address the issue of leadership development.
I have been in the field of change management for 40 years, and I have come to a very sad conclusion. You should not try to predict the future. Although there are 20 Nobel Prize winners in economics in the United States, none of them managed to predict the economic crisis from which we are emerging just now. Who would have believed that the Lehman Brothers would go broke? Who would have believed that if the US government had not helped the country's banks they would have all gone bankrupt? This would have resulted in a total economic disaster across the world.
Remember how arrogant General Motors used to be, saying that what is good for General Motors is good for America. That company would have also gone down the drain without the support of the US government. Nobody predicted that.
Why are we unable to predict the future? Because the world has become extremely complex. It is not atomistic anymore. Its different parts are all interconnected and overlapping. Technology advances have sizable social repercussions, which in turn have political and economic repercussions. It is one big bouillabaisse.
Is it not strange that nobody went to prison for the financial crisis? Do you know why? Because nobody can find who is the culprit. Even the government did not know what to do. They were changing their policies every 24 hours.
"Let us do this!", "No, wait; let us do that", "No, no; that is not a good idea. Let us do something else." Why was that? Because they did not know what to do.
Even the Federal Reserve admitted that the crisis was unpredictable. We are becoming increasingly confused. Do we really know what is going on? And because of accelerated change we are becoming older at a younger age. Some people are old at the age of 40. They are considered too old to be given a job. They are too old for the new technologies that are in vogue at that time. I am ready to bet that the age at which people are considered old is going to fall even further. In some fields, like rock music, you are too old at 23. What are we supposed to do?
Two things to start with:
First, you cannot be educated in one particular field and assume that this will be enough for the future. You have to have a multidisciplinary education. That is why I told the International Academy of Management that our business education is wrong. We teach Marketing, Finance, Sales, Supply Chains, Human Resources, and Accounting, and we assume that we can manage the totality. But there is no course that teaches anything about the totality. How do you integrate all elements of the system? How do you think in a systemic, integrated way?
Business education should have a much wider scope. It should provide a background in political science and sociology among others. You have to know multiple disciplines so that you are not lost in one.
Training of future leaders has to be systemic. At the Adizes Graduate School, the most important courses for future leaders are not Finance, Strategic Planning, or Human Resources. It is Epistemology and Systemic Thinking. Epistemology has to do with knowing what you know.
Second, please, do not ever graduate. The diploma that you get from the Adizes Graduate School does not say that X, Y or Z completed his studies. A good diploma should say "Allowed to continue studying." The day you stop learning, you stop changing, and unless you change fast, you die slowly. This happens to persons, companies, cities, and countries. The world is changing so fast that you should never assume that you know enough. As you study, you do not discover how much you know but how much you do not know.
Let me tell you a story, even though some of you know it because I like to tell it. I got my doctorate from Columbia University. I worked hard for it and made tough sacrifices. I was walking down the hallway with my diploma in my hands, very proud of myself. I had finally made it. I had the doctorate in my hand. I was very arrogant. At that point, a door opened and two students came out. They had just taken their Qualifying Examination for a doctorate degree. That is the exam that you take before writing your dissertation. I asked them if I could see the exam questions. I was shocked. I would have failed that exam if I had sat for it. The day that I got my doctorate, I was already obsolete.
To be leaders of the future do not be dogmatic - "I have a plan, I know which way I am going and that is it!" No! You have to be extremely flexible. You have to be extremely humble. You must admit to yourself that you do not know. This means that you are willing to learn from others all the time. And from whom do you have to learn the most? From the people down below. The workers. The people on the line. The rule of health is "Listen to your body."
The day you stop listening to your body, you become sick. Managers, listen to your organization! Leaders, listen to the organization! The higher you climb up the company's hierarchy, the smaller your mouth should be and the bigger your ears! Listen because you do not know. That will be your strength.
Good education should teach you how much you do not know rather than how much you know. The more you know, the more you should realize how much you do not know. That is good education. That means that good management education is not about teaching you to know but teaching you to be: Open-minded, humble, a good listener. Willing to admit mistakes. Willing to surround yourself with people that are better than you.
I am very disappointed with management education as practiced today. We have to change our education. I was a professor at UCLA, Columbia, and Stanford, as well as in Tel Aviv and Jerusalem. And I gave up. I gave up my professorship and my tenure because I was disgusted with management education. The reason is that the natural sciences have penetrated the social sciences in a dysfunctional way. The prevalent logic is that if you cannot measure something it does not exist. Therefore, everything must be measured. People get promoted on the basis of statistical analyses of answers to questionnaires. This is totally useless. After that, they will get a doctorate and ask "What do I do with this degree now?" I have no idea.
The quantitative approach has penetrated education so deeply that it has put an end to thinking. People are not thinking anymore. Developing questionnaires and doing statistical analyses is not thinking.
A quantitative analysis is fine but it can only be a tool, not a purpose. What we need is qualitative thinking although qualitative thinking is fuzzy. There is nothing precise about it. This is why management and leadership are not only a science. There is very little science in it by the way. It is mostly art. You have to spend sleepless nights and make judgments and evaluations. You have to suffer because there is no clear answer to your problems. You just have to bite the bullet.
I observe that the discipline of General Management has actually disappeared from management education. There is only one course called Strategic Planning. But that is only one little piece of what is known as General Management.
Many years ago, I came to the conclusion that the excellent manager of an organization does not exist. We are trying to produce something that does not exist. It is a fata morgana. Why is that so? To manage any organization, be it a city, a country, a company, or a family, you need to produce results. You have to do that efficiently so that you do not waste resources. At the same time, you must think about the future and prepare the organization for it. This means that you have to be entrepreneurial. But you should also surround yourself with competent people and make them work as a team so that they do not waste energy fighting with each other. You want a constructive culture in your organization.
This means that we want a leader who is task-oriented, efficient, active, organized, systematic, motivated, ambitious, detail-oriented, creative, innovative, inspirational, sensitive...
In the prevalent management education that today is called leadership development we try to produce that person. There are not many of us around that fit this description, right? Because it does not exist. And I have to tell you that the worst clients that I have had as a consultant are those that graduated from Harvard Business School. They are arrogant. They end up in private equity firms and consulting companies and start putting on airs.
What makes a good leader? Think of a family. It is very difficult to raise a child as a single parent, is it not? It takes a family; a man and a woman. It takes masculine and feminine energy. They have to complement each other.
Building a company is like building a family. You need a team whose members complement each other. You cannot do it on your own. That is why dictators destroy countries. That is why democracy is better. So who is a good leader? Somebody who is not afraid of working with people who are different. A leader must not be afraid of differences. A leader must not curse a rose because it has thorns. Try to learn something from the differences that you observe rather than being afraid of them. This takes mutual respect and trust. Team members should be like the fingers of a hand: different yet united. And they should not be united despite of being different but because of being different. When we are different, we learn from each other. Our differences make us stronger.
Can you command respect and trust? Are you a person who can work with different people? If you are, you can be a leader of the future. That leader is not one who has a degree and is knowledgeable. If you think you know everything and you can predict the future, you are in trouble.
There is another problem with education. What does it teach you? How to maximize Profits. As a consequence, profit has become a religion in our education. That is what we teach in finance, strategic planning, marketing... It is all about how to measure and achieve profit. That is the ultimate goal.
Milton Friedman got a Nobel prize for turning profit into a religion. But do you know what this is doing to us? It is destroying our environment. By trying to obtain more and more profit, we produce more and more things that we do not need. In California, where I live, people have enormous houses and three cars each in their garages, and they are still miserable because it is not enough. They want more. But more is not better. It is worse. By trying to have more we destroy the world that we live in.
I do not mean to say that profit should be ignored. I have been a consultant to several socially conscious organizations, like the Body Shop. They all got in serious trouble because they ignored profit. Do not ignore profit! But accept that there should be a limit to it. You need it so that you can survive and grow. The real goal must be different: make a better world. Make it a better place to be.
I just came from Montenegro where I was an advisor to the Central Bank. The bank's executive director took me to his village where he was born, in the north of the country. He introduced me to his brother. I asked him how he felt in that small mountain village of 3,000 people. He said, "Great!" I wondered how one can feel great in such a small place. He answered, "I have a roof over my head. I have food. I have rakia to drink. What am I missing?"
I hear more laughter in a developing country in one day than in a whole year in a developed country. As the standard of living goes up, the quality of life goes down. Which of the two is more important?
The leaders of the future must have a different set of values. We need a new value system in which less is beautiful. Less is better. Small is wonderful.
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