Joe’s Journal: Innovation vs. Revolution

“‘Revolutions’ every generation, as was recommended by Thomas Jefferson, are not the solution. We know that ‘revolution’ is not achievement and the new dawn. It results from senile decay, from the bankruptcy of ideas and institutions, from a failure of self-renewal. The only way in which an institution—whether a government, a university, a business, a labor union, an army—can maintain continuity is by building systematic, organized innovation into its very structure. Institutions, systems, policies, eventually outlive themselves, as do products, processes and services. They do it when they accomplish their objectives, and they do it when they fail to accomplish their objectives. Innovation and entrepreneurship are thus needed in society as much as in the economy, in public service institutions as much as in business. The modern organization must be a destabilizer; it must be organized for innovation.”

—Peter F. Drucker

Thomas Jefferson did indeed believe that revolution was necessary every generation to cure society of tyrannical abuses. But what Peter Drucker knew is that revolutions are often unpredictable in the course they take and can easily lead to ugly outcomes.

In Drucker’s early years in Europe, revolutions led to totalitarianism in Germany, Russia and Italy. And even now, a year after the revolution in Egypt, the outcome is very uncertain. It may turn out ugly for other Arab states, the U.S. and Israel.

What’s needed are both the destabilizing influence of innovators and the virtuous leader who seeks continuity in organizations in the midst of destabilizing change. Systematic innovation and effective leadership are topics that go hand in hand in Drucker’s work.

As we look at the most recent economic meltdown, there were numerous genuine financial innovations in the housing market, but there was also a notable absence of virtuous leaders in key governmental agencies, lending institutions and individual households.

I have thought long and hard about the issues Drucker raised in this passage because they go to the core of his methodology and vision. Some of that thinking is reflected in my remarks for the Orange Coast TEDx event last May. I welcome your comments on this important topic.

— Joe Maciariello