Managing Tomorrow - critical summary review

Organizations and the World Out There

"An organization is a social entity." The phrase was said by Peter Drucker, the Austrian-born writer, professor, and management consultant considered the father of modern administration, or "the guru of gurus."

As obvious as it may seem, this idea should be kept in mind at all times, once you realize that the actions of a company materialize within society. A company creates values that bring benefits or harm to the environment in which it operates.

In this way, everything that happens in the corporate world has a ripple effect on society at large, from the private life of each employee to the collective behaviors of an entire neighborhood.

There is a symbiosis between society and companies. Their growth and evolution impact the routines of citizens. Companies are influenced by people, and people influence companies. After all, companies are made of people.

It is essential to recognize that when we look at the future of management in both large and small organizations, we are glimpsing the future of humanity itself, from small villages to vast metropolitan areas. And to look at the next steps in what we understand as business management, it is important to understand how the first ones came about.

The Beginning of Everything: The Invention of the Steam Engine

What we understand as business management emerged between the late eighteenth and early nineteenth centuries. It was a natural consequence of the First Industrial Revolution, one of the transformative events in human history, driven by the invention of the steam engine.

Before that, businesses depended on human or animal power for better performance. When steam-powered machines appeared, just one of them could do the work of hundreds of horses, of hundreds of people.

Railways were also fundamental to this process, given that steam locomotives transported far more cargo than their predecessors.

What followed was a dramatic surge in the global economy. Factories converted into industries, and the specialization of labor began to emerge in an unprecedented way, along with innovative methods and models of business management that have been studied with increasing rigor ever since.

Peter Drucker, the Father of Management

Peter Drucker trained in law and always had an interest in topics like international trade and the corporate world. He published The Future of Industrial Man and was invited to conduct a two-year study of the largest company in the world in 1943, General Motors.

In his social and scientific analysis, he focused on decision-making processes and the distribution of power, which culminated in the book Concept of the Corporation, published in 1946. By the 1950s, his book The Practice of Management represented yet another breakthrough, with another fundamental study for understanding what management really is.

His works form the foundation, the pillar of all studies on business management and administration that came afterward, guiding us day after day. In short, it is no coincidence that he is the guru of gurus.

The World Begins to Disrupt Itself

Since the 1960s, technological changes have been altering the forms of management in the corporate world. But nothing compares to the effect the internet has had on the world.

We live in the digital era. In the first phase of this movement, organizations emerged that were responsible for popularizing the use of technology across all of society. In the new era, the one we live in now, there are companies responsible for reinventing the way business is done. There are sectors and business models that were unimaginable just a few years ago.

Everything has been happening gradually, since the explosion of new companies, especially in Silicon Valley, between 1995 and 2000.

This flood of digital companies has been transforming traditional relationships in society. Organizations like Uber and Airbnb changed the way we deal with transportation and tourism, for example. The traditional management thinking, once consolidated and sacred, has been shifting as well.

The digital, physical, and biological worlds have brought new knowledge to more recent projects. And their transformations impact all of society, deconstructing the classic models of management, production systems, consumption, logistics, and distribution.

If the First Industrial Revolution caused deep changes in global production, we are now living through what is known as the Fourth Industrial Revolution, which is altering production, customs, and even the way we coexist in society.

Three Elements That Make the New Technological Movement Unique

The technological changes of our century are different from previous transformations. They can be explained through three elements that help us understand just how unique this moment is.

Speed: everything moves very fast. We are living through a technological revolution that brings constant, non-linear evolutions unlike those that came before. The world is multifaceted and interconnected. The virtuous cycle of innovation is constant.

Breadth and depth: the multiple technologies that surround us have altered the economy, business, society, and individuals in unprecedented ways. They have changed not only the "what" and the "how" of the way things are done, but also the "who" we are as individuals.

Systemic impact: the technological transformations of our time have changed countries, organizations, industries, and societies as a whole. The changes have not been confined to specific markets. In the twenty-first century, the eruption across the world has transformed every foundation.

Essential Questions for Your Strategic Reflection

Many times, employees and business owners have doubts about how their organizations are positioned. They are unable to answer whether they are connected to the corporate world of the twenty-first century or still thinking as if they worked in the twentieth century, before the revolution we are living through.

For a proper strategic reflection, the questions below are fundamental and will lead you to better understand where your corporate environment stands:

How have you been tracking the evolution of your business and your sector? Are you following the movements happening around the world in your context?
Do you adopt any model of meetings or gatherings in your organization to study market movements? What mechanisms could you implement to keep your entire team aligned and prepared for market transformations?
Reflect on the effects of technology and communication on your business in recent years.
Which startups are offering innovative solutions to your market domestically and internationally?
Reflect deeply on which changes could cause a major disruption in your business.
Which companies once held a favorable position in your sector and have since become irrelevant?
Reflect on the similarities between those failed organizations and your current business model.
What are the obstacles in your current business model that prevent the adoption of exponential thinking oriented toward large-scale growth?
What is your investment in innovation and in initiatives focused on long-term results for your business? What budget does your organization allocate to these activities?
To what extent do the compensation models adopted by your organization encourage long-term initiatives?

The Era of Exponential Thinking Versus Linear Thinking

Any company designed to succeed in the twentieth century is destined to fail in the twenty-first. The statement may sound catastrophic, but it is the plain reality, because those who think as if they were in the last century will be swallowed up in the future and left with no alternatives or paths to follow.

We live in the era of exponential thinking, replacing the linear thinking that was previously valued and preached. This premise can be detailed through four fundamental aspects.

Risks: the difficulty human beings have in perceiving the pace of technological changes that alter the rhythm of corporate life.

Examples of leading companies that collapsed: Kodak, Blockbuster, Sony in its attempt to compete with the iPod.

Consequences: the new corporate environment consolidates deep transformations. Just as in Darwinism, it is not the largest that prospers, but the one that best adapts to the new environment.

Conclusion: companies should be preparing their foundations to destroy their current business model; otherwise, they will be destroyed by other organizations.

The Value of Generational Convergence

Generational conflict defines the clashes that arise in discussions between individuals born in distant eras.

In the Fourth Industrial Revolution, it is resolved by a substitution: out goes generational conflict, in comes generational convergence. In this model, sharing knowledge between the "silver-haired" veterans of the old guard and the "startup founders" of the new generation produces positive results.

And this does not apply only to people. The opportunity is unique for integrating high-potential new startups with already established organizations. Both have much to learn from the existing market, which is in constant evolution and transformation.

The Leadership Profile in the Fourth Industrial Revolution

With so many transformations, the active participation of those who lead organizations, at all hierarchical levels, is the leadership profile whose demand never stops growing.

A leader in the Fourth Industrial Revolution is an agent of change whose buy-in is crucial for the success of the organization. They seek answers and have an interest in awakening all of society. They read and take interest in studies, articles, and reports on leadership and transformations in the labor market.

They are not interested merely in giving orders to subordinates, because they see themselves as part of the entire process from start to finish, understanding what each person in the organization does, has to teach, and has to learn.

Furthermore, they know that stable environments that privilege the maintenance of leadership for an indefinite period are being challenged, since changes occur almost daily.

The leader must be a creator of the future, dream big, have a massive transformative purpose, be a risk-taker, understand new platforms and technologies, maintain a focus on the customer, have the capacity to ask big questions, and be a connector for the entire team.

Emotional Balance: The Foundation of Everything

It is essential that leaders in these new times prioritize emotional balance, both their own and their team's. All the diverse skills in the world are worth nothing if accompanied by toxic behavior.

Remember: corporate transformations change people's lives and vice versa. Without personal emotional balance, there will be no balance in the corporate environment.

Final Notes

The world has always been in constant change and evolution, but what is happening in the twenty-first century is unprecedented in the history of humanity.

When Sandro Magaldi and José Salibi Neto highlight a new pattern of corporate behavior in Managing Tomorrow: Everything You Need to Know About Management, Innovation, and Leadership to Win in the Fourth Industrial Revolution, there is no exaggeration.

The transformations in everything around us can feel overwhelming. One must pay close attention to new technologies without underestimating either the new or the old, always doing what is possible to ensure their convergence is productive.

With the help of leaders connected to our time, being fully connected to the Fourth Industrial Revolution is a matter of survival.

12min Tip!

Reading The Power of Self-Responsibility will complement your understanding of our role in solving problems, from the personal to the professional.