“Business needs to repair the way the core business is being
run by applying and utilising genuine transformational leadership. Responsible leadership will manage the business for long term sustainability as a business providing long term value to all its key stakeholders.”
deliver the EPS (earnings per share) each quarter as demanded. This is the holy cow – rather than missing EPS you miss the long term prosperity of the enterprise and cut investment in innovation just as you cut “head-counts” (a terrible term widely used in the corporate executives suites) as another adjustment variable.
What I am talking about is the sustainability of the business itself in the long term. I believe this is a subject we should be worried about when it comes to the intersection of business and society. The lack of investment in innovation and the deficiency in long term oriented stewardship for the business brings a high cost to society – in the long run. Yet, in 5 years from now, the current investors will have dumped their shares in some “profit taking” exercise or in some panic movement and executive management will have been exchanged. Just look at the average tenure times these days.
The signs are on the wall – loud and clear. The recent GE Innovation Barometer was just released:
www.ge.com/innovationbarometer/ downloads.html.
It is indeed a wake-up call. Nine out of ten executives see their ability to innovate deeply impacted in today’s situation. With regard to the sustainability of the business as a key contributor to the functioning of today’s societies, innovation is a social responsibility of the enterprise. Without a step change in innovation we cannot get back to growth and prosperity to provide decent lives to all those living in today’s complex societies. I would claim that Drucker was right: managing business for survival and prosperity in the long term is the fundamental responsibility of management.
Let me now come to the 2nd big management duty according to Peter Drucker : making people effective in organisations based on their strengths.
May 2012 | Management Today 71
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