05.14.08
Drucker on Leadership: 3 unique traits & a one word definition

Peter Drucker's "Unfinished Chapter:" The Role of the CEO

by Elizabeth Haas Edersheime

Leader To Leader, No.45, Summer 2007

For much of his life, Peter Drucker was fascinated by the role of the CEO in an institution. In his final years, as the 20th century gave way to the 21st, this fascination became almost an obsession. It's not surprising. This was a time when corporations and foundations grew more unwieldy, worldwide competition sharpened, and customers, shareholders, employees, and volunteers alike became more litigious. Today the speed and magnitude of change leave little room for leadership error.

In 2003, I was lucky enough to be summoned by Peter Drucker for a series of conversations about management. In our first conversation, he commented that the CEO role needed to be the next focus of management research. Procter & Gamble's CEO, A.G. Lafley, called the CEO role "Drucker's unfinished chapter."

An important topic in "Drucker's unfinished chapter" is the need for today's knowledge workers to be self-managing CEOs. As Drucker explained, "Knowledge workers are neither bosses nor workers, but rather something in between--resources who have responsibility for developing their most important resource, brainpower, and who also need to take more control of their own careers."

Amid the turbulence of the 21st century, Peter rightly saw CEOs as more important than ever. They had to provide leadership--strategic leadership, moral leadership, human leadership--and strike a balance. He mused about how CEOs could affect more than just corporations and foundations--they could even shape the course of countries. In fact, in 2006, of the hundred largest economic entities in the world, 46 were countries and 54 were companies. And Peter worried about how CEOs could harm all sorts of people if they were less than ethical.

If I were to distill into one word Peter's thoughts on what makes a truly great CEO, I would choose courage. It takes courage to do what is right, such as turning away from the temptation of quick short-term profits at the expense of investments for the long term. It takes courage to trailblaze change in an industry. It takes courage to redefine the theory of the business. It takes courage to face reality and get out of any product lines or businesses that "you wouldn't get into if you were not in the business today." It takes courage to break the rules in an industry still in its infancy, as Google's CEO Eric Schmidt did when the company transformed the Internet.

Peter Drucker recognized that management's most important capability is to take uncertainty out of the future by helping organizations see and selectively move around corners and place courageous bets. Today, resisting or ignoring changes often creates greater uncertainty than does placing bets. CEOs must have the vision to place the bets, and they must have the guts to lead change that enhances the likelihood of successful bets.

In our conversations, Peter defined three traits unique to a CEO:

* A broad field of vision combined with the ability to ask and answer what needs to be done.
* Accountability for the CEO's own imprint on the organization's character, values, and personality.
* The influence the CEO has on people--individually and collectively.

Let me take you through each of these and illustrate them in action at three companies--Donaldson, Lufkin & Jenrette (DLJ), Cott Beverages, and Electrolux--and then look at how they translate to the self-managing knowledge worker...

Read Ms Haas Edersheim's full piece on the Leader to Leader web site: Peter Drucker's 'Unfinished Chapter:' The Role of the CEO

Copyright © 2007 by Elizabeth Haas Edersheim

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