- Reading level: 15+ years
- Paperback: 224 pages
- Publisher: Harvard Business Review Press (1 September 2003)
- Language: English
- ISBN-10: 1591393221
- ISBN-13: 978-1591393221
- Product Dimensions: 15.2 x 1.9 x 22.9 cm
- Average Customer Review: Be the first to review this item
- Amazon Bestsellers Rank: #6,44,675 in Books (See Top 100 in Books)
Peter Drucker on the Profession of Management (Harvard Business Review Book) Paperback – 1 Sep 2003
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About the Author
Peter Drucker was a writer, teacher, and consultant. His thirty-four books have been published in more than seventy languages. He founded the Peter F. Drucker Foundation for Nonprofit Management and counseled thirteen governments, public services institutions, and major corporations. He has been called the father of modern management thinking. Author social media/website info: druckerinstitute.com
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Most helpful customer reviews on Amazon.com
Peter Drucker’s book “Managing in a Time of Great Change” published in 1995 starts with an interview with the Harvard Business Review conducted by T. George Harris: “Drucker’s most productive insights have often appeared first in the Harvard Business Review. He has written thirty HBR articles, more than any other contributor.”
In my review I am selecting some topics with special relevance for today and the future. All quotes are extracted from Drucker’s writing. My comments, where appropriate, are marked MC.
Chapter 1 The Theory of the Business (September-October 1994) …
What are the specifications of a valid theory of the business? There are four.
1. The assumptions about environment, mission, and core competencies must fit reality.
2. The assumptions in all three areas have to fit one another.
3. The theory of the business must be known and understood throughout the organization.
4. The theory of the business has to be tested constantly.
MC: today we call these efforts “business model generation”. Two of the best books in this category are: Blue Ocean Strategy by Kim & Mauborgne and Business Model Generation by Osterwalder & Pigneur.
Chapter 2 The Effective Decision (January-February 1967)
Effective executives do not make a great many decisions. They concentrate on what is important. … Unless a decision has ‘degenerated into work’, it is not a decision; it is at best a good intention. … Above all, effective executives know that decision-making has its own systematic process and its own clearly defined elements. The elements do not by themselves ‘make’ the decisions. Indeed, every decision is a risk-taking judgment. But unless these elements are the stepping-stones of the executive’s decision process, he will not arrive at a right, and certainly not at an effective decision. Therefore, in this article I shall describe the sequence of steps involved in the decision-making process. There are six.
1. The classification of the problem. Is it generic? Is it exceptional and unique? Or is it the first manifestation of a new genus for which a rule has yet to be developed?
2. The definition of the problem. What are we dealing with?
3. The specifications which the answer to the problem must satisfy. What are the ‘boundary conditions’?
4. The decision as to what is ‘right’, rather than what is acceptable, in order to meet the boundary conditions. What will fully satisfy the specifications before attention is given to the compromises, adaptations, and concessions needed to make the decision acceptable?
5. The building into the decision of the action to carry it out. What does the action commitment have to be? Who has to know about it?
6. The feedback which tests the validity and effectiveness of the decision against the actual course of events. How is the decision being carried out? Are the assumptions on which it is based appropriate or obsolete? …
The effective executive knows that there are two different kinds of compromise. One is expressed in the old proverb: ‘Half a loaf is better than no bread.’ The other, in the story of the Judgment of Solomon, is clearly based on the realization that ‘half a baby is worse than no baby at all’.
Chapter 3 How to Make People Decisions (July-august 1985)
MC: Drucker compares George C. Marshall, the World War II army’s chief of staff with Alfred P. Sloan, Jr. who ran General Motors for forty years or so, and explains their staffing principles and decision steps. The United States came out of World War II with the largest corps of competent general officers any army has ever had. Marshall had personally chosen each man.
Sloan was concerned only with performance in and for GM. Nonetheless, his long-term performance in placing people in the right jobs was flawless.
Drucker knows exactly what he is writing about – see his excellent book “Concept of the Corporation” published in 1946 which is a study of the General Motors managerial organization from within. Alfred P. Sloan published his book My Years with General Motors in 1963 – recommended by Peter Drucker and Bill Gates: “I think Alfred Sloan’s My Years with General Motors is probably the best book to read if you want to read only one book about business.”
Drucker: In picking members of their cabinets, Franklin Roosevelt [US President 1933-1945] and Harry Truman [US President 1945-1953] said, in effect: “Never mind personal weaknesses. Tell me first what each of them can do.” Drucker concludes: It may not be coincidence that these two presidents had the strongest cabinets in the twentieth-century U.S. history.
Chapter 4 The Big Power of Little Ideas (May-June 1964) …
But, of course, the small company that does a good job of shaping the future today will not remain a “small business” very long. Every successful large business in existence was once- and often quite recently, as in the case of IBM or Xerox – a small business based on an idea of what the future should be. …
As a result, innovating businessmen a group have had a good deal more impact on society than historians realize.
MC: Alfred D. Chandler – “Strategy and Structure” published in 1962, “Visible Hand” published in 1977, “Scale and Scope” published in 1990 – and David S. Landes - “The Wealth and Poverty of Nations” published in 1990 – and Daniel A. Wren – “The History of Management Thought” first published in 1972 – are examples for excellent historians who closed this gap.
Chapter 7 The Information Executives Truly Need (January-February 1995) …
Ever since the new data processing tools first emerged 30 or 40 years ago, businesspeople have both overrated and underrated the importance of information in the organization. We – and I include myself – overrated the possibilities to the point where we talked on computer-generated “business models” that could make decisions and might even be able to run much of the business. But we also grossly underrated the new tools; we saw in them the means to do better what executives were already doing to manage their organizations.
Nobody talks of business models making economic decisions anymore. The greatest contribution of our date processing capacity so far has not even been to management. It has been to operations …
MC: now we are talking of and using “Smart Machines” (“Watson” won Jeopardy in 2011), “BIG DATA” (A Revolution that will transform how we live, work and think) and “big data@work”. Peter Drucker’s observations are still valid.
Chapter 10 What Business Can Learn from Nonprofits (July-August 1989)
MC: I recommend reading Drucker’s excellent book “Managing the Non-Profit Organization” published in 1990.
Chapter 11 The New Productivity Challenge (November-December 1991) …
Equally important is a related insight of the last few years: knowledge workers and service workers learn most when they teach. The best way to improve a start salesperson’s productivity is to ask her to present “the secret of my success” at the company sales convention. The best way for the surgeon to improve his performance is to give a talk about it at the county medical society. We often hear it said that in the information age, every enterprise has to become a learning institution. It must become a teaching institution as well.
MC: in my experience exchanging best practices and discuss specific real cases is one of the best ways to mutually teach and learn. However, many companies do not apply such practices and instead buy external trainers touting their stories and leave the audience without any long-lasting knowledge increase. Money spent is money gone out of the window.
Chapter 12 Management and the World’s Work (September-October 1988) …
How to create an adequate managerial knowledge base fast is the critical question in economic development today. It is also one for which we have no answer so far.
MC: Peter Drucker’s lessons for today and the future are one important knowledge base. Every business college and university should teach “Drucker” instead of considering them as “Drucker’s Lost Art of Management”. The book with the same title by Professor Maciariello is an excellent source for teaching “Drucker”.
Drucker refers to his 1976 book “The Unseen Revolution: How Pension Fund Socialism Came to America” … Socially this is the most positive development of the twentieth century because it resolves the “Social Question” that vexed the nineteenth century – the conflict between “capital” and “labor” – by merging the two. … In 1986, the last year for which we have figures, the pension funds of America’s employees owned more than 40 percent of U.S. companies’ equity capital and more than two-thirds of the equity capital of the 1,000 largest companies. … Thus, by the year 2000, pension funds will hold at least two-thirds of the share capital of all U.S. businesses except the smallest. Through their pension funds, U.S. employees will be the true owners of the country’s means of production. … Indeed, economically the “rich” have become irrelevant in developed countries, however much they dominate the society pages and titillate TV viewers.
MC: Thomas Picketty who wrote the best-selling book “The Capital in the Twenty-First Century” published in 2014 focusing on the “rich” has not mentioned Drucker anywhere. I assume he did not read Drucker, he should have done so.
Chapter 13 The Post-Capitalist Executive – An Interview with Peter F. Drucker by T. George Harris (May-June 1993) …
Peter F. Drucker: You have to learn to manage in situations where you don’t have command authority, where you are neither controlled nor controlling. That is the fundamental change. Management textbooks still talk mainly about managing subordinates. But you no longer evaluate an executive in terms of how many people report to him or her. …
Today perception is more important than analysis. In the new society of organizations, you need to be able to recognize patterns to see what is there rather than what you expect to see. You need the invaluable listener who says, “I hear us all trying to kill the new product to protect the old one.” …
To be information literate, you begin with learning what it is you need to know. Too much talk focuses on the technology, even worse on the speed of the gadget, always faster, faster. This kind of “Techie” fixation causes us to lose track of the fundamental nature of information in today’s organization. …
But just the other day, I heard a senior scholar seriously reject a younger colleague’s work because more than five people could understand what he’s doing. Literally.
We cannot afford such arrogance. Knowledge is power, which is why people who had it in the past often tried to make a secret of it. In post-capitalism, power comes from transmitting information to make it productive, not from hiding it.
That means you have to be intolerant of intellectual arrogance. And I mean intolerant. …
In the traditional organization – the organization of the last 100 years – the skeleton, or internal structure, was a combination of rank and power. In the emerging organization, it has to be mutual understanding and responsibility.
MC: these few excerpts of twelve pages are telling us a lot. First, leadership and management together are important for innovation and progress, leadership without management is what I call hot air, management without leadership is pure bureaucracy, without leadership and management we have chaos and disaster. Second, the whole interview is printed on 12 pages. We have to carefully study Drucker to extract what is important for today and the future instead of nodding when reading and forgetting it immediately.
Other business books three times greater in length offer about a third of what this anthology does in terms of substance. In Part I, Drucker examines "The Manager's Responsibilities" and in Part II, "The Executive's World." When nearing his 90th birthday, Drucker observes that he is "not comfortable with the word manager any more, because it implies subordinates." This is a revealing comment in light of what the word profession literally means: "to make a public declaration or vow." For Drucker, professionals are those who have crystal clear, non-negotiable values and make a total commitment to them. Drucker may have doubts about the word "manager" but certainly has no doubts about the absolute importance of having impeccable integrity.
He reaffirms his conviction that the "fundamental task of management remains the same: to make people capable of joint performance by giving them common goals, common values, the right structure, and the ongoing training and development they need to perform and to respond to change."
Are there any predictions in Peter Drucker on the Profession of Management? No. Rather, Drucker examines the implications of a future "that has already happened." Only time will tell who prove equal to the challenges he has so eloquently identified. Authentic professionals are those who combine talent and skill with character. The challenges which await them will surely test their talent and skill but must never be allowed to compromise their character.