Management, Revised Edition
by Peter Drucker with Joseph A. Maciariello
Amazon Links: Management Rev Ed and Management Cases, Revised Edition
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… It also follows that managing a business must be a creative rather than an adaptive task. The more a management creates economic conditions or changes them rather than passively adapts to them, the more it manages the business (same concept applies to non-business institutions)—Management: Tasks, Responsibilities, Practices. More on this theme in "What do you want to be remembered for?"
This is a WHAT TO DO book not "how to do it." It is not just for reading, but for doing—what and when at multiple points in the future.
This book doesn't offer fine-tuning tips and techniques to superimpose on an existing organization. It is not about how to operate a better blacksmith or candle-making shop, run a railroad, or improve AT&T of the 1960s—that's so yesterday. All of the preceding are gone—and for a reason. They outlived their usefulness.
This book addresses being a core organization in a "society of organizations" moving in time. This is a book about making a contribution to society—a contribution that matters at different points in the future.
The vacuum that many inside-out institutions filled no longer exists and they need to move on.
You might want to evaluate your performance level in each of the topic areas below. Are you world-class? Are you number 1 or 2 in the world? Do you have world-class management practices? What about tomorrowS? What are the questions that you need to ask?
Good football coaches have a playbook—plays they have thought out in advance. They also have a play sheet they carry along the side lines. They have to use experience and judgement in which actual plays to use. There has to be constant adjustment to the actual situation. These ideas also apply in a society of organizations, but there are gigantic differences. Unforeseen competitors and challenges can come from nowhere.
How Hewlett-Packard Lost the HP Way (Three CEOs in six years, boardroom changes, and other contributers to disfunction)
Who Says Elephants Can't Dance?: Leading a Great Enterprise (IBM) through Dramatic Change starting with their near bankruptcy.
Amazon link: How The Mighty Fall: And Why Some Companies Never Give In
About Peter Drucker
Remembering Drucker (Four years after his death, Peter Drucker remains the king of the management gurus) from The Economist
Contents of Revised Edition of Management: Tasks, Responsibilities, Practices by Peter Drucker
- Title & Copyright Information
- Peter Drucker most important contribution
- Contents
- Peter Drucker's Legacy
- Introduction to the Revised Edition of Management: Tasks, Responsibilities, Practices
- The Origins of This Book
- How To Use This Book
- Management As A System Of Interrelated Elements (Figure 1)
- The Spirit Of Performance (Chapter 27)
- The Theory Of The Business (Chapter 8)
- Identifying Environmental Trends And The Future That Has Already Happened (Chapters 4-7, 10, Part 4)
- Social Impacts And Social Responsibilities (Chapters 20-21)
- Creative Destruction And Innovation And Entrepreneurship (Part 8)
- Managerial Skills, Managerial Tasks, And Personal Skills
- Managerial Skills (Chapters 28-33)
- Effective managers make effective decisions
- People decisions are a special case of decision making requiring their own rules
- Remaining four areas of managerial skills that executives must acquire to carry out their tasks
- Managers must learn to be good communicators
- Budgeting is the most widely used tool of management
- Creating appropriate measurements and maintaining control
- Organizing information for decision making
- Management Tasks (Chapters 9-11, 24-26, Part 9, Chapter 45)
- The theory of the business & MBO
- Organizing
- A manager must also motivate and communicate
- Establish yardsticks of performance
- Managing oneself and one's career and developing others
- Personal Skills (Part 10)
- Summary
- Preface!!!!!
- 1 Introduction: Management and Managers Defined
- What Is Management?
- Who Are The Managers?
- The New Definition Of A Manager
- What Do Managers Do?
- Most Managers Spend Most of Their Time on Things That Are Not "Managing"
- There are five basic operations in the work of the manager
- Set objectives
- Organizes
- Motivates and Communicates
- Measures
- Develops People—Including Himself or Herself
- Every one of these categories can be divided further into subcategories
- Every Category Requires Different Qualities and Qualifications
- Only a Manager's Experience Can Bring Them to Life and Make Them Concrete and Meaningful
- The Manager's Resource: People
- Management: A Practice, Not A Science
- Note: The Roots And History Of Management
- The Early Economists
- The Emergence Of Large-Scale Organization
- The First Management Boom
- The Work Of The 1920s And 1930s
- Summary
- 2 Management as a Social Function and Liberal Art
- The Emergence of Management
- Management As The Agent Of Transformation
- Management And Entrepreneurship
- The Accountability Of Management
- What Is Management?
- A bundle of analytical tools like those taught in business schools?
- A Very Few, Essential Principles
- Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant.
- It is deeply embedded in culture
- Commitment to common goals and shared values. Management's first job is to think through, set, and exemplify those objectives, values, and goals
- Training and development that never stop
- Communication and individual responsibility
- An organization needs a diversity of measures to assess its health and performance
- Results Exist Only on the Outside
- The Path to Becoming Achieving, Accomplished Managers
- Management As A Liberal Art
- Summary
- 3 The Dimensions of Management
- Institutions and Management Are Organs of Society
- Defining Management Through its Tasks
- Mission
- Productive Work And Worker Achievement
- Social Responsibilities
- Which Task Is Most Important?
- The Time Dimension
- Administration And Entrepreneurship
- Summary
- Part I: Management's New Realities
- 4 Knowledge Is All
- Knowledge Is the Key Resource in Society and Knowledge Workers Are the Dominant Group in the Workforce
- The Three Main Characteristics of (a/the) Knowledge Economy
- Borderlessness, because knowledge travels even more effortlessly than money.
- Upward mobility, available to everyone through easily acquired formal education.
- The potential for failure as well as success. Anyone can acquire the "means of production"—that is, the knowledge required for the job—but not everyone can win.
- The New Workforce
- His And Hers
- Ever Upward
- The Price Of Success
- Summary
- 5 New Demographics
- The Sifting Age Structure
- Needed But Unwanted
- A Country of Immigrants
- Splitting of Hitherto Homogeneous Societies and Markets
- The End of the Single Market
- Beware Demographic Changes
- Summary
- 6 The Future of the Corporation and the Way Ahead
- Five OUTDATED Basic Assumptions
- The corporation is the "master," the employee is the "servant."
- The great majority of employees work full-time for the corporation
- All activities under one management
- Suppliers have market power
- Technologies and industries are a unique set
- Everything In Its Place (Five NEW Assumptions)
- The means of production is knowledge, which is owned by knowledge workers and is highly portable
- A growing number of people who work for an organization will not be full-time employees
- There always were limits to the importance of transactional costs
- The customer now has the information
- There are few unique technologies anymore
- Who Needs A Research Lab?
- The Next Company
- From Corporation To Confederation
- General Motors Example
- The Toyota Way
- A Large Manufacturer of Branded and Packaged Consumer Goods
- There Are Already a Good Many Variations on This Theme
- The Syndicate Model
- Top management's role
- Life At The Top
- The Way Ahead: The Time To Get Ready For The New Realities Is Now
- The future corporation
- People policies
- Outside information
- Change agents
- To survive and succeed, every organization will have to turn itself into a change agent.
- The most effective way to manage change successfully is to create it.
- But experience has shown that grafting innovation onto a traditional enterprise does not work.
- The enterprise has to become a change agent.
- This requires the organized abandonment of things that have been shown to be unsuccessful …
- The organized and continuous improvement of every product, service, and process within the enterprise (which the Japanese call kaizen).
- It requires the exploitation of successes, especially unexpected and unplanned-for ones
- It requires systematic innovation.
- The point of becoming a change agent is that it changes the mindset of the entire organization.
- Instead of seeing change as a threat, its people will come to consider it as an opportunity.
- And Then?
- Information revolution in historical context
- The two industrial revolutions also bred new theories and new ideologies
- Big Ideas
- New Economic Regions
- Transnational financial organizations
- Schumpeter's postulates of dynamic disequilibrium
- The World of 2030: very different
- Summary
- 7 Management's New Paradigm
- Introduction (About Assumptions)
- Management Is Business Management — NOT!
- The One Right Organization — NOT!
- The One Right Way To Manage People — NOT!
- Technologies And End-Users Are Fixed And Given — NOT!
- Management's Scope Is Legally Defined — NOT!
- Management's Scope Is Politically Defined — NOT!
- The Inside Is Management's Domain — NOT!
-
Final paradigm: Management's Concern and Responsibility — Management is the specific tool, the specific function, the specific instrument, to make institutions capable of producing results (on the outside).
This, however, requires a final new management paradigm:
Management's concern and management's responsibility are everything that affects the performance of the institution and its results — whether inside or outside, whether under the institution's control or totally beyond it. (calendarize this?)
- Summary
- Part II: Business Performance
- 8. The Theory of the Business
- 9 The Purpose and Objectives of a Business
- The failure to understand the nature, function, and purpose of business enterprise
- To know what a business is, we have to start with its purpose
- Its purpose must lie outside of the business itself
- It is the customer who determines what a business is
- The Purpose Of A Business
- Two basic functions: marketing and innovation (it ain't what you think)
- The reality of today's organization
- What is Our Business? (Product and service names are not allowed. We're in the computer, airline, banking or retailing business misses the point. It doesn't define a specific contribution)
- Who is the Customer is the Starting Point
- Where is the customer?
- What does the customer buy?
- When to ask: What is our business?
- And what will it be?
- "What Should Our Business Be?"
- Planned, systematic abandonment
- Systematic analysis of all existing products, services …
- Defining the purpose and mission enables a business to be managed for performance
- The basic definition of the business and of its purpose and mission have to translated into objectives
- Objectives must be derived from "what our business is, what it will be, and what it should be." (Product and service names are not allowed. We're in the computer, airline, banking or retailing business misses the point. It doesn't define a specific contribution)
- Objectives must be operational
- Objectives must make possible concentration of resources and efforts
- There must be multiple objectives rather than a single objective
- Objectives are needed in all areas on which the survival of the business depends
- Areas that need objectives
- Objectives are the basis for work and assignments
- Objectives are always needed in all eight key areas
- Measurements are needed in all areas
- How to use objectives
- Marketing Objectives
- Two key decisions
- Area of concentration
- Market standing
- The Innovation Objective
- Resources Objectives
- Productivity Objectives
- The Social Responsibility Objectives
- Profit: A Need And Limitation
- Balancing Objectives
- From Objectives To Doing
- Summary
- 10 Making the Future Today
- We know only two things about the future
- Far-reaching implications
- Managers must accept the need to work systematically on making the future
- The Future That Has Already Happened
- The Power of an Idea
- Creativity (its not what you think it is)
- Summary
- 11 Strategic Planning: The Entrepreneurial Skill
- What Strategic Planning Is Not
- It is not a box of tricks, a bundle of techniques
- Strategic planning is not forecasting
- Strategic planning does not deal with future decisions, but the futurity of present decisions
- Strategic planning is not an attempt to eliminate risk
- What Strategic Planning Is

- Sloughing Off Yesterday
- What New Things Do We Have To Do — When?
- To sum up
- Everything Degenerates Into Work
- Summary
- See Mike Kami's Strategic Planning Manual
- Part III: Performance in Service Institutions
- 12 Managing Service Institutions in the Society of Organizations
- The Multi-Institutional Society
- Are Service Institutions Managed?
- But Are They Manageable?
- Managing Public-Service Instituiions For Performance
- They need to define "what our business is and what it should be."
- They must derive clear objectives and goals from their definition of function and mission
- They then must set priorities that enable them to …
- They must define measurements of performance
- They must use these measurements to feed back on their efforts
- They need an organized review of objectives and results, to weed out those objectives that no longer …
- To make service institutions perform it requires a system
- The applications of the essentials differ greatly for different service institutions. See Managing the Non-Profit Organization
- The Three Kinds Of Service Institutions
- Natural Monopoly
- Paid for Out of a Budget Allocation
- The Service Institution in Which Means Are as Important as Ends
- The Institutions' Specific Need
- The Natural Monopoly
- Socialist Competition in the Service Sector
- The Institutions of Governance
- Conclusion: What the service institutions need is not to be more businesslike
- Summary
- 13 What Successful and Performing Non profits Are Teaching Business
- A Commitment To Management
- Effective Use Of The Board
- To Offer Meaningful Achievement
- Training, Training, Training
- A Warning To Business: in my job there isn't much challenge, not enough achievement, not enough responsibility; and there is no mission, there is only expediency
- Managing the knowledge worker for productivity is the challenge ahead for American management.
- The nonprofits are showing us how to do that.
- It requires
- A clear mission
- Careful placement
- Continuous learning and teaching
- Management by objectives and self-control — see chapter 25 below
- High demands but corresponding responsibility and accountability for performance and results
- Summary
- 14 The Accountable School
- The New Performance Demands
- Learning To Learn
- The School In Society
- The Accountable School
- Summary
- 15 Rethinking "Reinventing Government"
- Restructuring
- Rethinking
- Abandoning
- An Exception For Crusades
- Government That's Effective
- Postscript
- Summary
- 16 Entrepreneurship in the Public-Service Institution
- Introduction
- Main reasons why the existing enterprise presents so much more of an obstacle to innovation
- The public-service institution is based on a "budget" rather than on being paid out of its results
- A service institution is dependent on a multitude of constituents
- Public-service institutions exist, after all, to "do good."
- These are serious obstacles to innovation
- There are enough exceptions to show that public-service institutions can innovate
- The entrepreneurial policies needed to make it capable of innovation
- The Need to Innovate
- Summary
- Part IV: Productive Work and Achieving Worker
- 17 Making Work Productive and the Worker Achieving
- Work And Worker In Rapid Change
- The Crisis Of The Manual Worker
- The Crisis Of The Union
- Unions And The Knowledge Workers
- Managing The Knowledge Worker: The New Challenge
- The Segmentation Of The Workforce
- The New Breed
- Summary
- 18 Managing the Work and Worker in Manual Work
- The Productivity Of The Manual Worker
- The Principles Of Manual-Work Productivity
- The Future Of Manual-Worker Productivity
- Summary
- 19 Managing the Work and Worker in Knowledge Work
- What We Know About Knowledge-Worker Productivity
- What Is The Task?
- The Knowledge Worker As Capital Asset
- The Technologists
- Knowledge Work As A System
- Servicing Expensive Equipment
- Orthopedic Surgeons
- What to do about knowledge-worker productivity is thus largely known
- But How To Begin?
- The Governance Of The Corporation
- Summary
- Part V: Social Impacts and Social Responsibilities
- 20 Social Impacts and Social Responsibilities
- Responsibility For Impacts
- How To Deal With Impacts
- When Regulation Is Needed
- Social Problems As Business Opportunities
- The Limits Of Social Responsibility
- The Limits Of Authority
- The Ethics Of Responsibility
- Summary
- 21 The New Pluralism: How to Balance the Special Purpose of the Institution with the Common Good
- A Brief View Back
- Why We Need Pluralism
- Leadership Beyond The Walls
- Three Dimensions To This Integration
- Above All: Two Responsibilities
- Summary
- Part VI: The Manager's Work and Jobs
- 22 Why Managers?
- The Rise, Decline, And Rebirth Of Ford—A Controlled Experiment In Mismanagement
- GM—The Counter Test
- The Lesson Of The Ford Story
- Management As A "Change Of Phase"
- Summary
- 23 Design and Content of Managerial Jobs
- Guiding concepts
- Common Mistakes In Designing Managerial Jobs
- 1. The too-small job
- 2. The nonjob
- 3. Failing to balance managing and working
- 4. Poor job design
- 5. Titles as rewards
- 6. The widow-maker job
- Job Structure And Personality
- The Span Of Managerial Relationships
- Defining A Manager's Job
- Specific function
- Assignments
- Relationships
- Information needed for the job and by a manager's place in the information flow
- These four definitions, which together describe a manager's job, are the manager's own responsibility
- The Manager's Authority
- Managers, Their Superiors, Their Subordinates, And The Enterprise
- Summary
- 24 Developing Management and Managers
- Why Management Development?
- Why Manager Development?
- What Management Development Is Not
- Not taking courses
- Not promotion planning, replacement planning, or finding potential
- Not means to "make people over" by changing their personalities
- The Two Dimensions Of Development
- Summary
- 25 Management by Objectives and Self-Control
- Four factors that tend to misdirect
- The Specialized Work Of Managers
- Misdirection By Hierarchy
- Misdirection can result from a difference in concern between various levels of management
- Misdirection By Compensation
- What Should The Objectives Be?
- Management By Drives
-
How Should Objectives Be Set and By Whom?
They have each of their subordinates write a manager's letter twice a year.
In this letter to the superior, managers first define the objectives of the superior's job and of their own job, as they see them.
They then set down the performance standards that they believe are being applied to them.
Next, they list the things they must do to attain these goals and the things within their own units they consider the major obstacles.
They list the things the superiors and the company do that help them and the things that hamper them.
Finally, they outline what they propose to do during the next year to reach their goals.
If their superiors accept this statement, the manager's letter becomes the charter under which the manager operates.
This device, like no other I have seen, brings out how easily the unconsidered and casual remarks of even the best boss can confuse and misdirect.
One large company has used the manager's letter for ten years.
Yet almost every letter still lists as objectives and standards things that baffle the superior to whom the letter is addressed.
And whenever she asks, "What is this?" she gets this sort of answer, "Don't you remember what you said last spring going down in the elevator with me?"
The manager's letter also brings out whatever inconsistencies there are in the demands made on a person by his or her superior and by the company.
Does the superior demand both speed and high quality when she can get only one or the other?
And what compromise is needed in the interest of the company?
Does the boss demand initiative and judgment of her people but also that they check back with her before they do anything?
Does the superior ask for ideas and suggestions but never uses them or discusses them?
Does the company expect of a small engineering force that it be available immediately whenever something goes wrong in the plant and yet bend all its efforts to the completion of new designs?
Does it expect managers to maintain high standards of performance but forbid them to remove poor performers?
Does it create the conditions under which people say, "I can get the work done as long as I can keep the boss from knowing what I am doing"?
As the manager's letter illustrates, managing managers requires special efforts not only to establish common direction, but to eliminate misdirection.
Mutual understanding can never be attained by "communications down," can never be created by talking.
It results only from "communications up."
It requires both the superior's willingness to listen and a tool especially designed to make lower managers heard.
- Self-Control Through Measurements
- Self-Control And Performance Standards
- A Philosophy Of Management
- Summary
- 26 From Middle Management to Information-Based Organizations
- Information Technology
- From Data To Information
- Converting Data Into Information Thus Requires Knowledge
- Content and Structure of the Information-Based Organization
- The British in India
- Requirements and Management Problems of the Information-Based Organization
- Requirements
- Special Management Problems
- Developing Rewards, Recognition, and Career Opportunities for Specialists
- Creating Unified Vision in an Organization of Specialists
- Devising the Management Structure for an Organization of Task Forces
- Ensuring the Supply, Preparation, and Testing of Top Management People
- Evolutions in the Concept and Structure of Organizations
- From Ownership to Management
- Command-and-Control Organization of Today
- The Organization of Knowledge Specialists
- Summary
- 27 The Spirit of Performance
- The Danger Of Safe Mediocrity
- "Conscience" Decisions
- Focus On Opportunity
- "People" Decisions—The Control Of An Organization
- Integrity, The Touchstone
- Leadership And The Spirit Of Performance
- Leadership "Qualities"?
- The Undoing Of Leaders
- Earning Trust Is A Must
- Summary
- Part VII: Managerial Skills
- 28 The Elements of Effective Decision Making
- Practices of Good Decision Makers
- The Elements Of Decision Making
- Determine Whether A Decision Is Necessary
- The Rules Used by Surgeons to Make Decisions
- The Recurring Crisis
- Classify The Problem
- Define The Problem
- Example
- The one way to make sure that the problem is correctly defined
- Decide On What Is Right
- Get Others To Buy The Decision
- 1. Japanese Decision-Making Process
- 2. Franklin Roosevelt's Decision Process
- Build Action Into The Decision
- Converting a Decision to Action
- Example: rationalize production
- Example: redesign instruments so they are easy to service
- Test The Decision Against Actual Results
- Summary: Seven Steps to Minimize Risks Inherent in Every Decision
- Building Continuous Learning Into Executive Decisions
- Summary
- 29 How to Make People Decisions
- Making People Decisions
- The Five Decision Steps
- Carefully think through the assignment
- Look at several qualified people
- Study the performance records of all three to five candidates to find what each does well
- Discuss the candidates with others who had worked with them
- Make sure the appointee understands the assignment
- Alfred P. Sloan, Jr., achieved a near perfect record in making people decisions
- The Five Ground Rules
- The manager must accept responsibility for any placement that fails
- The manager has the responsibility to remove people who do not perform
- Give nonperformers a second chance
- Try to make the right people decisions for every position
- Newcomers are best put into an established position where the expectations are known and help is available
- The High-Risk People Decisions
- What do I have to do now to be successful in this new assignment?
- The Widow-Maker Position
- Build Feedback Control Into People Decisions
- The Power Of Making People Decisions
- Summary
- 30 Managerial Communications
- 31 Controls, Control, and Management
- The Characteristics Of Controls
- 1. Controls can be neither objective nor "neutral."
- 2. Controls need to focus on results
- 3. Controls are needed for measurable and nonmeasurable events
- Specification For Controls
- 1. Control is a principle of economy
- 2. Controls must be meaningful
- 3. Controls have to be appropriate to the character and nature of the phenomenon measured
- 4. Measurements have to be congruent with events measured
- 5. Controls have to be timely
- 6. Controls need to be simple
- 7. Finally, controls must he operational
- The Ultimate Control Of Organization
- Summary
- 32 The Manager and the Budget
- The Budget Is A Managerial Tool
- Zero-Based Budgeting
- Types Of Cost
- Life-Cycle Budgeting
- Operating Budget And Opportunities Budget
- Budgeting Human Resources
- Budgeting And Control
- The Gantt Chart And Network Diagrams
- Judging Performance By Using The Budget
- Summary
- 33 Information Tools and Concepts
- 1. Foundation Information That Enterprises Need
- From Cost Accounting to Result Control
- From Legal Fiction to Economic Reality
- 2. Information For Wealth Creation
- Productivity Information
- Competence Information
- Resource-Allocation Information
- Where the Results Are
- 3. Information That Managers Need For Their Work
- No Surprises
- Going Outside
- Summary
- Part VIII: Innovation and Entrepreneurship
- 34 The Entrepreneurial Business
- Structures
- The new, has to be organized separately from the old and existing
- A special, high up locus is needed
- Burdens it cannot yet carry
- The Don'ts
- Don't mix managerial units and entrepreneurial ones
- Innovation had better not be "diversification."
- Acquisitions rarely work unless …
- Summary
- 35 The New Venture
- The Need For Market Focus
- Financial Foresight
- Building a Top Management Team
- "Where Can I Contribute?"
- The Need For Outside Advice
- Summary
- 36 Entrepreneurial Strategies
- Being "Fustest With The Mostest"
- Hitting Them Where They Ain't (Creative Imitation & Entrepreneurial Judo)
- Creative Imitation
- Entrepreneurial Judo
- The Five Bad Habits That Enable Newcomers to Use Entrepreneurial Judo
- 1. The first is what American slang calls NIH ("not invented here")
- 2. The second is the tendency to "cream" a market
- 3. Even more debilitating is the third bad habit: the belief in "quality."
- 4. The delusion of the "premium" price
- 5. They maximize rather than optimize
- Entrepreneurial judo aims first at securing a beachhead—and then the whole "island"
- Entrepreneurial judo requires some degree of genuine innovation
- Entrepreneurial judo "hits them where they ain't"
- Ecological Niches
- The Toll-Gate Strategy
- The Specialty-Skill Strategy
- The Speciality-Market Strategy
- Changing Values And Characteristics
- Creating Customer Utility
- Pricing
- Adapting to Customer Reality
- Delivering Value to the Customer
- Elementary Marketing
- Summary
- 37 Systematic Innovation Using Windows of Opportunity
- Seven Windows Of Opportunity
- 1. The organization's own unexpected successes and unexpected failures
- 2. Incongruities
- 3. Process needs
- 4. Changes in industry and market structures
- 5. Changes in demographics
- 6. Changes in meaning and perception
- 7. And finally: new knowledge
- A change in any one of these seven windows of opportunity raises the question …
- Innovation is not "flash of genius."
- Piloting
- Summary
- Part IX: Managerial Organization
- 38 Strategies and Structures
- Yesterday's Final Answers
- Traditional Assumptions And Current Needs
- Then vs. now
- Different types of businesses
- More complex, more diverse
- Global reach
- Different information flows
- Different types of workers
- More entrepreneurial
- What we now know
- Organization design and structure require thinking, analysis, and a systematic approach
- The first step is identifying and organizing the building blocks of organization
- Structure follows strategy
- The Three Kinds of Work: Top Management, Operating, Innovation
- What We Need To Unlearn
- The sham battle between task focus and person focus in job design and organization structure
- Hierarchical, or scalar, versus free-form organization
- One best principle alone is "right" and that it is also always "right."
- Instead of the "one right" principle
- The Building Blocks Of Organization
- The Key Activities
- In what area is excellence required to obtain the company's objectives?
- In what areas would nonperformance endanger the results, if not the survival, of the enterprise?
- What are the values that are truly important to us in this company?
- The key activities have to be identified, defined, organized, and centrally placed
- Business should always analyze its organization structure when its strategy changes
- The Contribution Analysis
- The "Conscience" Activities
- Making Service Staff Effective
- The Two Faces Of Information
- Housekeeping
- There is one overall rule
- The building blocks of organization
- Placing the structural units that make up the organization requires two additional pieces of work
- Decision Analysis
- What decisions are needed to obtain the performance objectives?
- Large company example: decisions had to "go looking for a home"
- Four basic characteristics determine the nature of any business decision
- Degree of futurity
- Impact a decision has on other functions
- Number of qualitative factors
- Decisions can be classified as periodically recurrent or rare
- Decision placement rules
- Relation Analysis
- Symptoms Of Poor Organization
- There is no perfect organization
- At its best, an organization structure doesn't cause trouble
- Mistakes and symptoms
- An increase in the number of management levels
- Recurring organizational problems
- An organization structure that puts the attention of key people on the wrong …
- Several common symptoms of poor organization that, usually, require no further diagnosis
- Too many meetings attended by too many people
- People are constantly concerned about feelings and about what other people …
- Overstaffed organizations create work rather than performance
- Relying on "coordinators," "assistants," and …
- "Organizitis" As A Chronic Affliction
- Summary
- Five Design Principles
- 39 Work- and Task-Focused Design
- Formal Specifications (for Organization Structure)
- 1. Clarity
- 2. Economy
- 3. The direction of vision
- 4. Understanding one's own task and the common task
- 5. Decision making
- 6. Stability and adaptability
- 7. Perpetuation and self-renewal
- Meeting The Specifications
- Three Ways Of Organizing Work
- Stages in the process
- The work moves to where the skill or tool required for each of the steps is located
- A team of workers with different skills and different tools moves to the work
- Functional organization organizes work both by stages and by skills
- In the "team structure," however, work and task are, so to speak, fixed
- Both functional and team structures are old designs
- Work and task have to be structured and organized
- The Functional Structure (and the specifications)
- Its Limited Scope (to operating work)
- Where Functionalism Works
- The Team
- The Requirements of Team Design
- The Strengths and Limitations of the Team Principles
- The Scope of Team Organization
- Team Design And The Knowledge Organization
- Summary
- 40 Three Kinds of Teams
- The first kind of team is the baseball team.
- The second kind of team is the football team
- The third kind of team is the tennis doubles team
- Observations on the baseball-style team
- Observations on the football-style team
- Observations on the doubles team
- Observations on theses teams
- Summary
- 41 Result- and Relation-Focused Design
- Federal Decentralization
- The Strength of Federal Decentralization
- The Requirements of Federal Decentralization
- Size Requirements
- How Small Is Too Small?
- What Is a "Business"?
- Simulated Decentralization
- The Problems of Simulated Decentralization
- Rules for Using Simulated Decentralization
- The Systems Structure
- The Difficulties and Problems of the Systems Structure
- Summary
- 42 Alliances
- Why Do Organizations Enter into Alliances?
- The Different Types of Alliances
- Common Problems Facing All Alliances and Their Resolution
- Managing Alliances As Marketing Partnerships
- Summary
- 43 The CEO in the New Millennium
- The Work Of The CEO: The Link Between The Inside And Outside
- The Tasks Of The CEO
- To define the meaningful outside of the organization
- To work on getting information from the 'outside' into usable form
- To decide what results are meaningful for the institution
- To decide the priorities
- To place people into key positions
- To organize top management
- The CEO: An American Invention And Export
- Summary
- 44 The Impact of Pension Funds on Corporate Governance
- Can't Sell
- Management For The Stakeholders
- Institutional Structure For Accountability
- An Effective Board
- Summary
- Part X: New Demands on the Individual
- 45 Managing Oneself
- Now even people of modest endowments have to manage themselves
- Who am I?
- 1. What Are My Strengths?
- Feedback Analysis
- Action Implications
- How Do I Perform?
- Am I A Reader Or A Listener?
- How Do I Learn?
- To manage oneself, one has to ask additional questions
- What Are My Values?
- What to Do in a Value Conflict
- 2. Where Do I Belong?
- 3. What Is My Contribution?
- 4. Relationship Responsibility
- Accepting that other people are as much individuals as one is oneself
- Take responsibility for communications
- Summary
- 46 Managing the Boss
- Most Of Us Have More Than One Boss
- The Boss Is Key To Effectiveness
- Neglect Of Managing The Boss
- Who Is The Boss?
- Managing The Boss
- 1. Making a Boss List
- 2. Asking for Input
- 3. Enabling Bosses to Perform
- 4. Playing to the Bosses' Strengths
- 5. Keeping Bosses Informed
- 6. Protecting Bosses from Surprises
- 7. Never Underrating Bosses
- Summary
- 47 Revitalizing Oneself-Seven Personal Experiences
- Experience One: Goal And Vision Taught By Verdi
- Experience Two: "The Gods Can See Them"—Taught By Phidias
- Experience Three: Continuous Learning Decision As A Journalist
- Experience Four: Reviewing—Taught By the Editor In Chief
- Experience Five: What Is Necessary In A New Position—Taught By The Senior Partner
- Experience Six: Writing Down—Taught By The Jesuits And The Calvinists
- Experience Seven: What To Be Remembered For—Taught By Schumpeter
- The Same Thing Can Be Learned
- One's Own Responsibility
- Summary
- 48 The Educated Person
- At The Core Of The Knowledge Society
- The knowledge society requires a unifying force
- A universally educated person
- The Glass Bead Game
- Their liberal education does not enable them to understand or master reality
- Areas of education
- The wisdom, beauty, knowledge, that are the heritage of mankind
- Needs to be able to bring his or her knowledge to bear on the present and future
- Appreciate other cultures and traditions
- Far less exclusively "bookish"
- Trained in perception fully as much as analysis
- The Western tradition
- Prepared for life in a global and tribalized world
- Knowledge Society And Society Of Organizations
- The educated person will have to be prepared to live and work simultaneously in two cultures
- Technes And Educated Person
- The ability to understand the various knowledges
- To Make Knowledges A Path To Knowledge
- Major new insights in every one of the specialized knowledges arise out of another
- Specialists have to take responsibility for making both themselves and their specialty understood
- All knowledges are equally valuable
- The greatest change will be the change in knowledge
- Summary
- Conclusion: The Manager of Tomorrow
- In the politics, society, and economy that lie half a century ahead there will be great changes
- Important things with respect to the manager of tomorrow
- Yet the three tasks of the manager will be the same
- The performance of the institution for which they work
- Making work productive and the worker achieving
- Managing social impact and social responsibilities
- Will be expected to tackle these tasks with more knowledge, more thought, more planning …
- Learn how to manage in situations where they do not have command authority
- Managers will have to make productive people who work for them but are not employees
- Information is replacing authority
- Significant expansion in the application of managerial tasks
- Major thrust toward systematic management in the public-service institution
- Major priorities with respect to each of the major task areas
- Organize for systematic abandonment
- Make the management of human resources within our organizations conform to social reality
- The "working class" has changed dramatically in all developed countries
- The traditional line between "worker" and "owner" is fast disappearing
- The need to manage one's own career
- Managing social impact and social responsibility
- The difficult and risky "trade-offs" between conflicting needs and conflicting rights
- Think ahead with respect to the social impacts of the institutions
- This is a leadership responsibility
- These are new challenges for management and new demands on it
- The Individual Manager
- The manager of tomorrow will increasingly have more than one career
- Action areas
- Continued learning by managers
- Taking responsibility for self-development as a person and as a manager
- Thorough knowledge of a manager's work, managerial skills, and managerial tools
- Most important thing one can predict, with respect to the manager of tomorrow, is that there will be a manager of tomorrow, one defined by expected contribution
- In all likelihood, there will be more managers tomorrow than there are today, and they will matter more
- Society will continue to be a society of organizations and a knowledge society
- Every reason to expect society to demand more performance from all its institutions
- Author's Note
- Bibliography
- American Books About Peter F. Drucker
- 1. Origins, Foundations, and Tasks of Management
- 2. Management as a Process and a Discipline
- 3. Management in Japan
- 4. Managing for Performance
- 5. Work and Worker
- 6. Social Impacts and Social Responsibilities
- 7. The Manager's Work and Job
- 8. Managerial Skills and Managerial Tools
- 9. Organization Design and Structure
- 10. The Top-Management Job
- 11. Strategies and Structure
- 12. The Multinational Corporation
- 13. The Innovative Organization
- 14. The Manager of Tomorrow
- Drucker's Annotated Bibliography
- The End of Economic Man
- The Future of Industrial Man
- Concept Of The Corporation
- The New Society
- The Practice of Management
- America's Next Twenty Years
- Landmarks of Tomorrow
- Managing for Results
- The Effective Executive
- The Age of Discontinuity
- Men, Ideas, and Politics
- Technology, Management, and Society
- Management: Tasks, Responsibilities, Practices
- The Pension Fund Revolution
- Adventures of a Bystander
- Managing in Turbulent Times
- Toward the Next Economics
- The Changing World of the Executive
- Innovation and Entrepreneurship
- The Frontiers of Management
- The New Realities
- Managing the Non-Profit Organization
- Managing for the Future
- The Ecological Vision
- Post-Capitalist Society
- Managing in a Time of Great Change
- Drucker on Asia
- Peter Drucker on the Profession of Management
- Management Challenges for the 21st Century
- Managing in the Next Society
- The Daily Drucker (with Joseph A. Maciariello)
- The Effective Executive in Action (with Joseph A. MaciarieUo)
- Anthologies
- The Essential Drucker
- A Functioning Society
- Novels
- The Last of All Possible Worlds
- The Temptation to Do Good
- About Peter F. Drucker
Peter Drucker's Legacy
During a discussion in graduate school, a professor challenged my first-year class: managers and leaders—are they different?
The conversation unfolded something like this:
"Leaders set the vision; managers just figure out how to get there," said one student.
"Leaders inspire and motivate, whereas managers keep things organized," said another.
"Leaders elevate people to the highest values.
Managers manage the details."
The discussion revealed an underlying worship of "leadership" and a disdain for "management." Leaders are inspired.
Leaders are large.
Leaders are the kids with black leather jackets, sunglasses, and sheer unadulterated cool.
Managers, well, they're the somewhat nerdy kids, decidedly less interesting, lacking charisma.
And of course, we all wanted to be leaders, and leave the drudgery of management to others.
We could not have been more misguided and juvenile in our thinking.
As Peter Drucker shows right here, in these pages, the very best leaders are first and foremost effective managers.
Those who seek to lead but fail to manage will become either irrelevant or dangerous, not only to their organizations, but to society.
Business and social entrepreneur Bob Buford once observed that Drucker contributed as much to the triumph of free society as any other individual.
I agree.
For free society to function we must have high-performing, self-governed institutions in every sector, not just in business, but equally in the social sectors.
Without that, as Drucker himself pointed out, the only workable alternative is totalitarian tyranny.
Strong institutions, in turn, depend directly on excellent management, and no individual had a greater impact on the practice of management and no single book captures its essence better than his seminal text, Management.
My first encounter with Drucker's impact came at Stanford in the early 1990s, when Jerry Porras and I researched the great corporations of the twentieth century.
The more we dug into the formative stages and inflection points of companies like General Electric, Johnson & Johnson, Procter & Gamble, Hewlett-Packard, Merck and Motorola, the more we saw Drucker's intellectual fingerprints.
David Packard's notes and speeches from the foundation years at HP so mirrored Drucker's writings that I conjured an image of Packard giving management sermons with a classic Drucker text in hand.
When we finished our research, Jerry and I struggled to name our book, rejecting more than 100 titles.
Finally in frustration I blurted, Why don't we just name it Drucker Was Right, and we're done!" (We later named the book Built to Last.)
What accounts for Drucker's enormous impact?
I believe the answer lies not just in his specific ideas, but in his entire approach to ideas, composed of four elements:
1. He looked out the window, not in the mirror
2. He started first—and always—with results
3. He asked audacious questions
4. He infused all his work with a concern and compassion for the individual.
I once had a conversation with a faculty colleague about the thinkers who had influenced us.
I mentioned Drucker.
My colleague wrinkled his nose, and said: "Drucker?
But he's so practical."
Drucker would have loved that moment of disdain, reveling in being criticized for the fact that his ideas worked.
They worked because he derived them by precise observation of empirical facts.
He pushed always to look out there, in the world, to derive ideas, challenging himself and his students to "Look out the window, not in the mirror!"
Drucker falls in line with thinkers like Darwin, Freud and Taylor—empiricists all.
Darwin wrote copious notebooks, pages and pages about pigeons and turtles.
Freud used his therapeutic practice as a laboratory.
Taylor conducted empirical experiments, systematically tracking thousands of details.
Like them, Drucker immersed himself in empirical acts and then asked, "What underlying principle explains these facts, and how can we harness that principle?"
Drucker belonged to the church of results.
Instead of starting with an almost religious belief in a particular category of answers—a belief in leadership, or culture, or information, or innovation, or decentralization, or marketing, or strategy, or any other category—Drucker began first with the question "what accounts for superior results?" and then derived answers.
He started with the outputs—the definitions and markers of success—and worked to discover the inputs, not the other way around.
And then he preached the religion of results to his students and clients, not just to business corporations but equally to government and the social sectors.
The more noble your mission, the more he demanded: what will define superior performance?
"Good intentions," he would seemingly yell without ever raising his voice, "are no excuse for incompetence."
And yet while practical and empirical, Drucker never became technical or trivial, nor did he succumb to the trend in modern academia to answer (in the words of the late John Gardner) "questions of increasing irrelevance with increasing precision."
By remaining a professor of management—not as a science, but as a liberal art he gave himself the freedom to pursue audacious questions.
My first reading of Drucker came on vacation in Monterey, California.
My wife and I embarked on one of our adventure walks through a used book store, treasure hunting for unexpected gems.
I came across a beaten-up, dog-eared copy of Concept of the Corporation, expecting a tutorial on how to build a company.
But within a few pages, I realized that it asked a much bigger question: what is the proper role of the corporation at this stage of civilization?
Drucker had been invited to observe General Motors from the inside, and the more he saw, the more disturbed he became.
"General Motors … can be seen as the triumph and the failure of the technocrat manager," he later wrote.
"In terms of sales and profits [GM) has succeeded admirably … But it has also failed abysmally—in terms of public reputation, of public esteem, of acceptance by the public."
Drucker passionately believed in management not as a technocratic exercise, but as a profession with a noble calling, just like the very best of medicine and law.
Drucker could be acerbic and impatient, a curmudgeon.
But behind the prickly surface, and behind every page in his works, stands a man with tremendous compassion for the individual.
He sought not just to make our economy more productive, but to make all of society more productive and more humane.
To view other human beings as merely a means to an end, rather than as ends in themselves, struck Drucker as profoundly immoral.
And as much as he wrote about institutions and society, I believe that he cared most deeply about the individual.
I personally experienced Drucker's concern and compassion in 1994, when I found myself at a crossroads, trying to decide whether to jettison a traditional path in favor of carving my own.
I mentioned to an editor for Industry Week that I admired Peter Drucker.
"I recently interviewed Peter," he said, "and I'd be happy to ask if he'd be willing to spend some time with you."
I never expected anything to come of it, but one day I got a message on my answering machine.
"This is Peter Drucker"—slow, deliberate, in an Austrian accent—"I would be very pleased to spend a day with you, Mr. Collins.
Please give me a call."
We set a date for December, and I flew to Claremont, California.
Drucker welcomed me into his home, enveloping my extended hand into two of his.
"Mr. Collins, so very pleased to meet you.
Please come inside."
He invested the better part of a day sitting in his favorite wicker chair, asking questions, teaching, guiding, and challenging.
I made a pilgrimage to Claremont seeking wisdom from the greatest management thinker, and I came away feeling that I'd met a compassionate and generous human being who—almost as a side benefit—was a prolific genius.
There are two ways to change the world: the pen (the use of ideas) and the sword (the use of power).
Drucker chose the pen, and thereby rewired the brains of thousands who carry the sword.
Those who choose the pen have an advantage over those who wield the sword: the written word never dies.
If you never had the privilege to meet Peter Drucker during his lifetime, you can get to know him in these pages.
You can converse with him.
You can write notes to him in the margins.
You can argue with him, be irritated by him, and inspired.
He can mentor you, if you let him, teach you, challenge you, change you—and through you, the world you touch. (calendarize this)
Peter Drucker shined a light in a dark and chaotic world, and his words remain as relevant today as when he banged them out on his cranky typewriter decades ago.
They deserve to be read by every person of responsibility, now, tomorrow, ten years from now, fifty and a hundred.
That free society triumphed in the twentieth century guarantees nothing about its triumph in the twenty-first; centralized tyranny remains a potent rival, and the weight of history is not on our side.
When young people ask, "What can I do to make a difference?" one of the best answers lies right here in this book.
Get your hands on an organization aligned with your passion, if not in business, then in the social sectors.
If you can't find one, start one.
And then lead it—through the practice of management—to deliver extraordinary results and to make such a distinctive impact that you multiply your own impact by a thousand-fold. (calendarize this?)
Jim Collins
Boulder, Colorado
December, 2007
Preface
What will future historians consider the most important event of the twentieth century:
The two World Wars?
The atomic bomb?
The rise of Japan to be the first non-Western great economic power?
The information revolution?
The demographic revolutions that occurred in the twentieth century—revolutions that have profoundly changed the world's human landscape and that have no precedents.
And I mean not only the quantitative change: the explosive growth of population in the twentieth century and the equally explosive extension of life spans resulting in an aging population in all developed and in most emerging countries.
Equally important, indeed perhaps more important, was the qualitative change: the unprecedented transformation of the workforce in all developed countries, from one doing largely unskilled, manual work, to one doing knowledge work.
At the beginning of the twentieth century, ninety out of every hundred people in the working population in every country were manual workers, farmers and their hired hands, domestic servants, factory workers, miners, or construction workers.
And life expectancies, especially work-life expectancies, were so low that a majority of working people were disabled well before they reached what was then the threshold of old age, that is, age fifty.
But while the life expectancy of the individual and especially the individual knowledge worker has risen beyond anything anybody could have foretold at the beginning of the twentieth century, the life expectancy of the employing institution has been going down, and is likely to keep going down.
Or rather, the number of years has been shrinking during which an employing institution—and especially a business enterprise—can expect to stay successful.
This period was never very long.
Historically, very few businesses were successful for as long as thirty years in a row.
To be sure, not all businesses ceased to exist when they ceased to do well.
But the ones that survived beyond thirty years usually entered into a long period of stagnation—and only rarely did they turn around again and once more become successful growth businesses.
Thus, while the life expectancies and especially the working-life expectancies of the individual and especially of the knowledge worker have been expanding very rapidly, the life expectancy of the employing organizations has actually been going down.
And—in a period of very rapid technological change, of increasing competition because of globalization, of tremendous innovation—the successful life-expectancies of employing institutions are almost certain to continue to go down.
More and more people, and especially knowledge workers, can therefore expect to outlive their employing organizations and to have to be prepared to develop new careers, new skills, new social identities, new relationships, for the second half of their lives.
And now the largest single group in the workforce in all developed countries is knowledge workers rather than manual workers.
At the beginning of the twentieth century, knowledge workers in any country, even the most highly developed ones, were very scarce.
I doubt that there was any country in which they exceeded 2 or 3 percent of the working population.
Now, in the United States, they account for around 33 percent of the working population.
By the year 2020, they will account for about the same proportion in Japan and in Western Europe.
They are something we have never seen before.
These knowledge workers own their means of production, for they own their knowledge.
And their knowledge is portable; it is between their ears.
For untold millennia, there were no choices for the overwhelming majority of people in any country.
A farmer's son became a farmer.
A craftsman's son became a craftsman, and a craftsman's daughter married a craftsman; a factory worker's son or daughter went to work in a factory.
Whatever mobility there was was downward mobility.
In the 250 years of Tokugawa rule in Japan, for instance, very few people advanced from being commoners to being samurai—that is, privileged warriors.
An enormous number of samurai, however, lost their status and became commoners, that is, moved down.
The same was true all over the world.
Even in the most mobile of countries, the early twentieth-century United States, upward mobility was still the exception.
We have figures from the early 1900s until 1950 or 1955.
They show conclusively that at least nine out of every ten executives and professionals were themselves the sons of executives and professionals.
Only one out of every ten executives or professionals came from the "lower orders" (as they were then called).
The business enterprise, as it was invented around 1860 or 1870—and it was an invention that had little precedent in history—was such a radical innovation precisely because there was upward mobility within it for a few people.
This was the reason why the business enterprise ruptured the old communities—the rural village, the small town, or the craft guild.
But even the business enterprise, as it was first developed, tried to become a traditional community.
It is commonly believed—in Japan as well as in the West—that the large Japanese company with its lifetime employment is some thing that exists only in Japan and expresses specific Japanese values.
Apart from the fact that this is historical nonsense—lifetime employment in Japan even for white collar, salaried employees was a twentieth-century invention and did not exist before the end of Meiji (that is, before the twentieth century)—the large business enterprise in the West was not very different.
Anyone who worked as a salaried employee for a large company in Germany, Great Britain, the United States, Switzerland, and so on had, in effect, lifetime employment.
And even a salaried employee above the entry level in such a company considered himself "a company man" and identified himself with the company.
He—and of course in those days they were all men—was a "Siemens Man" in Germany or a "General Electric Man" in the United States.
Most of the big companies all over the West, just like the Japanese companies, hired people for only the entrance positions, and they expected them to stay until they died or retired.
In fact, the Germans, with their passion for codifying everything, even created a category for such people.
They were called "private civil servants" (Privatbeamte).
Socially, they ranked below civil servants.
But legally, they had the same job security and, in effect, lifetime employment—with the implicit assumption that they, in turn, would be committed to their employer for their entire working life and career.
The Japanese company as it was finally formulated in the 1950s or early 1960s was, in other words, simply the most highly structured and most visible expression of the large business enterprise as it had been first developed in the late nineteenth-century and then reached full maturity in the first half of the twentieth century.
The early nineteenth-century business—and even the mid-nineteenth-century business—derived success from low costs.
Successfully managing a business meant being able to produce the same commodities everybody else produced but at lower cost.
In the twentieth century this then changed to what we now call "strategy" or analysis for the purpose of creating competitive advantage.
I may claim to have been the first one to point this out, in a 1964 book called Managing for Results.
But by that time a shift was already underway to another basic foundation: knowledge.
I had realized that in 1959—and the first result of this realization was my book The Effective Executive (1966).
It was in that book that the shift to the knowledge worker was foreshadowed and its implication for the business first analyzed.
The knowledge worker, to repeat, differs from any earlier worker in two major aspects.
First, the knowledge worker owns the means of production and they are portable.
Second, he or she is likely to outlive any employing organization.
Add to this that knowledge work is very different in character from earlier forms of work.
It is effective only if highly specialized.
What makes a brain surgeon effective is that he is a specialist in brain surgery.
By the same token, however, he probably could not repair a damaged knee.
And he certainly would be helpless if confronted with a tropical parasite in the blood.
This is true for all knowledge work.
"Generalists"—and this is what the traditional business enterprise, including the Japanese companies, tried to develop—are of limited use in a knowledge economy.
In fact, they are productive only if they themselves become specialists in managing knowledge and knowledge workers.
This, however, also means that knowledge workers, no matter how much we talk about "loyalty," will increasingly and of necessity see their knowledge area—that is, their specialization rather than the employing organization—as what identifies and characterizes them.
Their community will increasingly be people who share the same highly specialized knowledge, no matter where they work or for whom.
In the United States, as late as the 1950s or 1960s, when meeting somebody at a party and asking him what he did, one would get the answer, "I work for General Electric" or "for Citibank" or for some other employing organization.
In other words, one would get exactly the same kind of answer in Germany, in Great Britain, in France, and in any other developed country.
Today, in the United States, if one asks someone whom one meets at a party, "What do you do?" the answer is likely to be, "I am a metallurgist" or "I am a tax specialist" or "I am a software designer."
In other words, in the United States, at least, knowledge workers no longer identify themselves with an employer.
They identify themselves with a knowledge area.
The same is increasingly true in Japan, certainly among the younger people.
This is more likely to change the organization of the future, and especially the business enterprise, than technology, information, or e-commerce.
Since 1959, when I first realized that this change was about to happen, I consciously worked at thinking through the meaning of this tremendous change, and especially the meaning for individuals.
For not only is it individuals who will have to convert this change into opportunity for themselves, for their careers, for their achievement, for their identification and fulfillment.
It is the individual knowledge worker who, in large measure, will determine what the organization of the future will look like and which kind of organization of the future will be successful. (calendarize this?)
What do you want to be remembered for?
There is as a consequence only one satisfactory definition of management, whether we talk of a business, a government agency, or a nonprofit organization: to make human resources productive. (the contents of this book spread over decades through several stages of development)
It will increasingly be the only way to gain competitive advantage.
Of the traditional resources of the economist—land, labor, and capital—none anymore truly confers a competitive advantage.
To be sure, not to be able to use these resources as well as anyone else is a tremendous competitive disadvantage.
But every business has access to the same raw materials at the same price.
Access to money is worldwide.
And manual labor, the traditional third resource, has become a relatively unimportant factor in most enterprises.
Even in traditional manufacturing industries, labor costs are no more than 12 or 13 percent of total costs, so that even a very substantial advantage in labor costs (say a 5 percent advantage) results in a negligible competitive advantage except in a very small and shrinking number of highly labor-intensive industries (e.g., knitting woolen sweaters).
The only meaningful competitive advantage is the productivity of the knowledge worker.
And that is very largely in the hands of the knowledge worker rather than in the hands of management.
Knowledge workers will increasingly determine the shape of the successful employing organizations.
Larger
What this implies is basically the topic of this book.
These are very new demands.
To satisfy them will increasingly be the key to success and survival for the individual and enterprise alike.
To enable its readers to be among the successes—as executives in their organization, in managing themselves and others—is the primary aim of the revised edition of this book.
I suggest you read one chapter at a time—it is a long book.
And then first ask, "What do these issues, these challenges, mean for our organization and for me as a knowledge worker, a professional, an executive?"
Once you have thought this through, ask,
"What action should our organization and I, the individual knowledge worker and/or executive, take to make the challenges of this chapter into opportunities for our organization and me?"
What management will we need from here on out? When do we start? And after that?
Organization Evolution
Larger view
Thinking Broad and Thinking Detailed
The concepts and ideas presented here represent "constitutional" thinking.
They are not just "tips" to be layered on existing operations and activities.
There are multiple time dimensions here.
Consider the life story of Apple.
As they were doing things
they were embedded in a world doing things.
Calendarize this book? Concepts to daily action
Also see Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry I. Porras and
Good to Great: Why Some Companies Make the Leap … and Others Don't
Management is a discipline and a practice
It is polycentric—it has many centers and interrelated elements.
It is, therefore, very difficult to master this subject by mastering individual chapters in a linear way.
One must integrate the elements into a working framework, as the whole is greater and different than the sum of its parts.
Each of the ten parts of this book is related to one or more other parts.
Each chapter is a part of the whole—the "words—but the music, if you will, comes from seeing management as an organic whole.
This introduction describes these interrelated elements of management as a system.
Figure 1 provides a road map that relates each element to the whole subject.
Each element is the subject of one or more chapters in this book.
Seek to understand and apply the subject of management as an organic whole and not merely as a set of isolated elements.
This portrayal of management as an organic whole is consistent with the view expressed in the original text where Peter Drucker explains the nature of organizations and management:
There is one fundamental insight underlying all management science.
It is that the business enterprise is a system of the highest order: a system the parts of which are human beings contributing voluntarily of their knowledge, skill, and dedication to a joint venture.
And one thing characterizes all genuine systems, whether they be mechanical, like the control of a missile, biological like a tree, or social like the business enterprise:
it is interdependence.
The whole of a system is not necessarily improved if one particular function or part is improved or made more efficient.
In fact, the system may well be damaged thereby, or even destroyed.
In some cases the best way to strengthen the system may be to weaken a part—to make it less precise or less efficient.
For what matters in any system is the performance of the whole; this is the result of growth and of dynamic balance, adjustment, and integration rather than of mere technical efficiency (p. 508, Management: Tasks, Responsibilities, Practices).
Figure 1 provides a systems view of this revised edition.
The diagram and the material in this chapter will help you navigate, absorb, and apply the material contained in this book.
The elements and chapters in the book are most effectively viewed as an organic whole, an interrelated system of elements that encompass responsibilities, tasks, and practices.
These elements taken together create the basis for the practice of management.
Larger
Larger
As much as I admire this work, the material above is not the complete story — see below. Try to make sure that you don't bring a knife to gun fight — Zune ™ vs. iPod ™
Peter Drucker: Conceptual Resources
about Peter Drucker — a political social ecologist
Combined outline of Drucker's books — useful for topic searching.
Process: find topic; get Kindle version; word search; dictate notes to voice recognition software (Dragon NS or smart phone); calendarize
Invent Radium or I'll Pull Your Hair by Doris Drucker
Most of the following contain interesting introductions and prefaces with key strategic concepts. Reading through a book's index is a valuable use of time.
Toward tomorrows
Toward unimagined futures
The End of Economic Man: The Origins of Totalitarianism (1939)
The Future of Industrial Man (1943)
The New Society: The Anatomy of Industrial Order (1950)
Landmarks of Tomorrow (1957)
The Age of Discontinuity (1968)
The New Realities (1988)
Post-Capitalist Society (1993)
Managing in the Next Society (2002); Last section originally published earlier in The Economist (http://economist.com/surveys/displaystory.cfm?story_id=770819)
Comprehensive Management Books
Concept of the Corporation
Practice of Management
Managing for Results
Management: Tasks, Responsibilities, Practices
Innovation and Entrepreneurship
The Essential Drucker (An introduction to management)
Managing the Non-Profit Organization
Management, Revised Edition
Management Cases (Revised Edition)
The Five Most Important Questions You Will Ever Ask About Your Organization
“Time Related” Management Books
Managing in Turbulent Times
The Changing World of The Executive
Frontiers of Management
Managing for the Future
Managing in a Time of Great Change
Management Challenges for the 21st Century
Managing in the Next Society
Individually Aimed Books by Drucker
Managing Oneself
The Effective Executive
The Effective Executive in Action
What Executives Should Remember (a valuable summary of several core concepts)
The Daily Drucker (an introduction to broad range of his thoughts)
The Daily Drucker table of contents worksheet
Drucker on Asia — A Dialogue Between Peter Drucker and Isao Nakauchi
Adventures of a Bystander
Books about Drucker and his ideas
The Definitive Drucker
Inside Drucker's Brain
A Class With Drucker: The Lost Lessons of the World's Greatest Management Teacher
Drucker on Leadership: New Lessons from the Father of Modern Management
The Drucker Lectures: Essential Lessons on Management, Society, and Economy
The Drucker Difference
Drucker Essay Collections
Although written years ago, these essays can be valuable attention directing tools. They can take your brain to places (brain addresses and brain roads) it wouldn't naturally go. What has changed and what is likely to change?
Technology, Management and Society
Men, Ideas & Politics
Toward the Next Economics and Other Essays
The Ecological Vision: Reflections on the American Condition
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