What Peter Drucker Would Be Reading

Peter Drucker

Recent selections from around the web that, we think, would have caught Peter Drucker’s eye:

1.  The New Futurism: Ever since the days of Rumpelstiltskin, people have been wary of “human-capital contracts.” But many loans and deals become less onerous if they are income-contingent—that is, if what you pay is adjusted according to what you make. That’s why James Surowiecki is intrigued by Upstart, a crowd-funding site that allows people to take out loans for a business in exchange for a percentage of future earnings. It increases people’s willingness to take risks—in a good way. “Human-capital contracts provide more flexibility,” he writes in The New Yorker. “This makes it easier to take a risk on a new venture.”

2.  A Tale of Two Drugs: The big buyers for prescription drugs are private insurance companies and the U.S. government. Because of that, ordinary supply-and-demand rules go out the window, and many drug prices are set primarily by “feel.” This strange world, in which companies try to determine the “value” of any given drug, is explored by Barry Werth in MIT Technology Review. “In determining the price for a drug, companies ask themselves questions that have next to nothing to do with the drugs’ costs,” he writes. “Still, we have to ask: When is the high price of a drug acceptable?”

3.  The Dangers of Denial: Failing to look reality in the eye can be deadly for a business, but, not surprisingly, it’s common. People have a hard time confronting the truth. But resolving to be honest with yourself isn’t enough. Ron Ashkenas writes at the HBR Blog that the best way to see things clearly is to rely on honest and candid teams. “While denial can still occur, it is less likely when teams are able to look at the situation from multiple angles, challenge underlying assumptions and eventually get a better picture of what’s really going on,” he writes. “So while it’s true that great leaders usually don’t get trapped in the denial of hard realities, it’s often because they get a lot of help from their teams.”

4.  Dx Comment of the Week: Last week, when we asked whether we were entering an economy of less, reader Mike Grayson answered with an emphatic “No”:

Today we have incredible opportunities. There is so much land that is arid and not used. We haven’t scratched the surface of how to properly manage the oceans. Just travel across America and you will see vast areas of rich and sparsely populated land. In places like West Texas there are more cattle per acre than people. And speaking of travel, airline travel is cheap and you can rent a car in almost any city. In the 1970s, airline travel was a luxury—and car rentals were hard to come by.
The independent, innovative and entrepreneurial American spirit is alive and well. Technology is continuing to improve, and we are learning how to use the resources that we have in better ways. We are reducing the use of energy and becoming more effective by simple innovations such as LED lighting.
With the easy availability of knowledge we are learning how to do things better. We are creating an economy of ‘more’ not ‘less.’ Opportunities abound for those willing to seek operational excellence and provide value to fellow human beings.