Character and Systems

An airplane is a great place to reflect about things. I used to dread flights because they seemed such a waste of time. Now I look forward to the opportunity to think without interruption (if you don't count the service cart hitting you in the shoulder and the armrest struggles with our seat mate). Yesterday as I was flying to Denver I read the November Harvard Business Review and its reflection on the work of Peter Drucker. Several articles profiled the contribution of this prolific thinker but what caught my attention was the article by Rosabeth Moss Kanter about how Drucker predicted that shifts in management practices made twenty years ago would lead to the excesses of today.

Drucker did not predict the future in a psychic way but what he did do is share his view that if you shift the reward mechanisms substantially in favor of managers that they will be motivated to take more risk in order to reach those incentives. We have all certainly seen the effects of that risk taking in the financial sector.

Drucker's view was focused on the systems that reward managers and create undo risk. Drucker would have advocated to change the system to protect the organization. A systemic perspective is legitimate but my view is that if organizations would develop the character of their leaders the system could would not have been out of balance in the first place. Great character is the fuel for great leadership and since leaders build the organizational systems let's focus on character first.