brainroads-toward-tomorrows mental patterns

pyramid2dna

pyramid to dna

Post-Capitalist Society

Link to paperback on Amazon.com

by Peter Drucker — his other books
top of the food-chain

See rlaexp.com initial bread-crumb trail — toward the
end of this page — for a site “overview”

Post-Capitalist Society

 

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Unimagined FutureS

 

Also see
A Century of Social Transformation —
Emergence of Knowledge Society

 

Every few hundred years in Western history there occurs a sharp transformation.

We cross what in an earlier book, I called a “divide.”

The New Realities—1989.

Within a few short decades, society rearranges itself—its worldview; its basic values; its social and political structure; its arts; its key institutions.

Fifty years later, there is a new world.

And the people born then cannot even imagine the world in which their grandparents lived and into which their own parents were born.

… and at that time ↓, unimagined futureS seemed unthinkable …
because tomorrow is always going to be like yesterday … right?

family-old-pict-500

… and at that time ↓, unimagined futureS seemed unthinkable …

nyc-street-600t

… and at that time ↓, unimagined futureS seemed unthinkable …

watching-old-tv-600

Will this ↑ be the last unimagined change in the sequence portrayed above?
If not, when will unimagined change come to a halt?

 

We are currently living through
just such a transformation
.

A Century of Social Transformation —
Emergence of Knowledge Society

It is creating the post-capitalist society, which is the subject of this book.

... snip, snip ...

Our period, two hundred years later, is such a period of transformation.

This time it is not, however, confined to Western society and Western history.

Indeed, it is one of the fundamental changes that there no longer is a “Western” history or, in fact, a “Western” civilization.

There is only world history and world civilization—but both are “Westernized.”

... snip, snip ...

The one thing we can be sure of is that the world that will emerge from the present rearrangement of values, beliefs, social and economic structures, of political concepts and systems, indeed, of worldviews, will be different from anything anyone today imagines.

... snip, snip ...

Making the future

... snip, snip ...

That the new society will be both a non-socialist and a post-capitalist society is practically certain.

And it is certain also that its primary resource will be knowledge.

… but not knowledge as it is presented in the education system

This also means that it will have to be a society of organizations.

Certain it is that in politics we have already shifted from the four hundred years of the sovereign nation-state to a pluralism in which the nation-state will be one rather than the only unit of political integration.

It will be one component—though still a key component—in what I call the “post-capitalist polity,” a system in which transnational, regional, nation-state, and local, even tribal, structures compete and co-exist.

 

 

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Danger: Trying to fit the concepts, ideas and information on this page into one’s existing mental landscape may prove dangerous — you need to be creating a new, reality-based, non-existing mental landscape again and again …

 

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Here and further down the page are two book content lists: a short and long — more detailed

Short contents outline

Post-Capitalist Society (by Peter Drucker)

 

Closing thoughts from the chapter on the educated person

Capitalism had been dominant for over a century when Karl Marx in the first volume of Das Kapital identified it (in 1867), as a distinct social order.

The term “Capitalism” was not coined until thirty years later, well after Marx’s death.

It would therefore not only be presumptuous in the extreme to attempt to write The Knowledge today; it would be ludicrously premature.

All that can be attempted—all this book attempts—is to describe society and polity as we begin the transition from the Age of Capitalism (also, of course, the Age of Socialism).


But we can hope that a hundred years hence a book of this kind, if not one entitled The Knowledge, can be written.

That would mean that we have successfully weathered the transition upon which we have only just embarked.

It would be as foolish to predict the knowledge society as it would have been foolish to predict in 1776—the year of the American Revolution, of Adam Smith’s Wealth of Nations, and of James Watt’s steam engine—the society of which Marx wrote a hundred years later.

And it was as foolish of Marx to predict in mid-Victorian Capitalism—and with “Scientific infallibility”—the society in which we live now.


But one thing we can predict: the greatest change will be the change in knowledge—in its form and content; in its meaning; in its responsibility; and in what it means to be an educated person.

 

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Post Capitalist Society and Post Capitalist Polity

... snip, snip ...

The market will surely remain the effective integrator of economic activity.

But as a society, the developed countries have also already moved into post-capitalism.

It is fast becoming a society of new “classes,” with a new central resource at its core.

... snip, snip ...

Instead of the old-line capitalist, in developed countries pension funds increasingly control the supply and allocation of money.

... snip, snip ...

The beneficiary owners of the pension funds are, of course, the country’s employees.

If Socialism is defined, as Marx defined it, as ownership of the means of production by the employees, then the United States has become the most “socialist” country around—while still remaining the most “capitalist” one as well.

Pension funds are run by a new breed of capitalists: the faceless, anonymous, salaried employees, the pension funds’ investment analysts and portfolio managers.


But equally important: the real, controlling resource and the absolutely decisive “factor of production” is now neither capital nor land nor labor.

It is knowledge. (NOT education system courses, but in knowledge in application)

Instead of capitalists and proletarians, the classes of the post-capitalist society are knowledge workers and service workers.

 

See society :: events :: stuff happening and here for examples taken from the daily news.

 

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The Shift To The Knowledge Society

The move to the post-capitalist society began shortly after World War II.

I first wrote of the “employee society” even before 1950 (See for example, The New Society (1949)).

Ten years later, around 1960, I coined the terms “knowledge work” and “knowledge worker.”

And my The Age of Discontinuity (1969) first talked of the “society of organizations.”

Post-Capitalist Society is thus based on work done over forty years.

Most of its policy and action recommendations have been successfully tested.

The same forces which destroyed Marxism as an ideology and Communism as a social system are, however, also making Capitalism obsolescent.

For two hundred and fifty years, from the second half of the eighteenth century on, CAPITALISM was the dominant social reality.

For the last hundred years, Marxism was the dominant social ideology.

Both are rapidly being superseded by a new and very different society.

The new society—and it is already here—is a post-capitalist society.

This new society surely, to say it again, will use the free market as the one proven mechanism of economic integration.

It will not be an “anti-capitalist society.”

It will not even be a “non-capitalist society”; the institutions of Capitalism will survive, although some, such as banks, may play quite different roles.

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economic content and structure clp

Concentration—that is, the courage to impose on time and events
[one’s] own decision as to what really matters and comes first—is
the executive’s only hope of becoming the master
of time and events instead of their whipping boy.” PFD

More economic landscape vistas

 

main brainroad continues ↓

But the center of gravity in the post-capitalist society—its structure, its social and economic dynamics, its social classes, and its social problems—is different from the one that dominated the last two hundred and fifty years and defined the issues around which political parties, social groups, social value systems, and personal and political commitments crystallized.

 

The basic economic resource—“the means of production,” to use the economist’s term—is no longer capital, nor natural resources (the economist’s “land”), nor “labor.”

It is and will be knowledge. (NOT education system courses)

The central wealth-creating activities will be neither the allocation of capital to productive uses, nor “labor”—the two poles of nineteenth- and twentieth-century economic theory, whether classical, Marxist, Keynesian, or neo-classical.

Value is now created by “productivity” and “innovation,” both applications of knowledge to work.

The management revolution (below) ← ain’t what you assume

Making the future

The leading social groups of the knowledge society will be “knowledge workers”—knowledge executives who know how to allocate knowledge to productive use just as the capitalists knew how to allocate capital to productive use; knowledge professionals; knowledge employees.

Practically all these knowledge people will be employed in organizations.

Yet, unlike the employees under Capitalism, they will own both the means of production” and thetools of production”—the former through their pension funds, which are rapidly emerging in all developed countries as the only real owners; the latter because knowledge workers own their knowledge and can take it with them wherever they go — a.k.a. mobility.

How does this alter economic dynamics?

The economic challenge of the post-capitalist society will therefore be the productivity of knowledge work and the knowledge workerhere, here and here.

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Managing oneself is a REVOLUTION in human affairs.

It requires new and unprecedented things
from the individual, and especially
from the knowledge worker.

For, in effect, it demands that each
knowledge worker think and behave
as a chief executive officer.

It also requires an almost 180-degree change
in the knowledge workers’ thoughts and actions
from what most of us still
take for granted as the way to
think and the way to act.


The shift from manual workers
who do as they are being told — either
by the task or by the boss —
to knowledge workers
who have to manage themselves
profoundly challenges social structure.

For every existing society,
even the most “individualist” one,
takes two things for granted,
if only subconsciously:
Organizations outlive workers,
and most people stay put.

Managing oneself
is based on the very opposite realities.

In the United States MOBILITY is accepted.

But even in the United States,
workers outliving organizations — and with it
the need to be prepared for
a second and different half of one’s life
is a revolution for which practically no one is prepared.

Nor is any existing institution,
for example, the present retirement system.”

Management Challenges for the 21st Century


The Daily Drucker for more career thoughts

main brainroad continues ↓

The social challenge of the post-capitalist society will, however, be the dignity of the second class in post-capitalist society: the service workers.

Service workers, as a rule, lack the necessary education to be knowledge workers.

And in every country, even the most highly advanced one, they will constitute a majority.

The post-capitalist society will be divided by a new dichotomy of values and of aesthetic perceptions.

It will not be the “Two Cultures”—literary and scientific—of which the English novelist, scientist, and government administrator C. P. Snow wrote in his The Two Cultures and the Scientific Revolution (1959), though that split is real enough.

The dichotomy will be between “intellectuals” and “managers,” the former concerned with words and ideas, the latter with people and work.

To transcend this dichotomy in a new synthesis will be a central philosophical and educational challenge for the post-capitalist society.

 

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Outflanking the Nation-State

The nation-state is not going to wither away.

It may remain the most powerful political organ around for a long time to come, but it will no longer be the indispensable one.

Increasingly, it will share power with other organs, other institutions, other policy-makers.

What is to remain the domain of the nation-state?

What is to be carried out within the state by autonomous institutions?

How do we define “supranational” and “transnational"?

What should remain “separate and local"?

These questions will be central political issues for decades to come.

In its specifics, the outcome is quite unpredictable.

But the political order will look different from the political order of the last four centuries, in which the players differed in size, wealth, constitutional arrangements, and political creed, yet were uniform as nation-states—each sovereign within its territory and each defined by its territory.

We are moving—we have indeed already moved—into post-capitalist polity.

 

 

See Transnationalism, Regionalism, and Tribalism below

Money Knows No Fatherland …

… Nor Does Information

Money going transnational outflanks the nation-state by nullifying national economic policy.

Information going transnational outflanks the nation-state by undermining (in fact, destroying) the identification of “national” with “cultural” identity

Transnational Needs

Regionalism: the New Reality

The Return of Tribalism

Internationalism and regionalism challenge the sovereign nation-state from the outside.

Tribalism undermines it from within.

It saps the nation-state’s integrating power.

In fact, it threatens to replace nation with tribe.

The Need for Roots

The main reason for tribalism is neither politics nor economics.

It is existential.

People need roots in a transnational world; they need community.

They live increasingly in a transnational world.

But they feel the need for local roots; the need to belong to a local community.

Tribalism thrives precisely because people increasingly realize that what happens in Osaka affects people in Slovenia who have no idea where Osaka is and can hardly find it on the map.

Precisely because the world has become transnational in so many ways—and must become ever more so—people need to define themselves in terms they can understand.

The more transnational the world becomes, the more tribal it will also be.

This undermines the very foundations of the nation-state.

In fact, it ceases to be a “nation-state,” and becomes a “state” plain and simple, an administrative rather than a political unit.

Internationalism, regionalism, and tribalism between them are rapidly creating a new polity, a new and complex political structure, without precedent.

 

 

The last of what might be called the “pre-modern” philosophers, Gottfried Leibniz (1646-1716), spent much of his life in a futile attempt to restore the unity of Christendom.

His motivation was not the fear of religious wars between Catholics and Protestants or between different Protestant sects; that danger had already passed when Leibniz was born.

He feared that without a common belief in a supernatural God, secular religions would emerge.

And a secular religion, he was convinced, would, almost by definition, have to be a tyranny and suppress the freedom of the person.

But surely the collapse of Marxism as a creed signifies the end of the belief in salvation by society.

What will emerge next, we cannot know; we can only hope and pray.

Perhaps nothing beyond stoic resignation?

 

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The Third World

This book focuses on the developed countries: on Europe, the United States, and Canada, on Japan and the newly developed countries on the mainland of Asia, rather than on the developing countries of the “Third World.”

Internet activity ↓

Internet activity

But the developed countries also have a tremendous stake in the Third World.

Unless there is rapid development there—both economic and social—the developed countries will be inundated by a human flood of Third World immigrants far beyond their economic, social, or cultural capacity to absorb.


But the forces that are creating post-capitalist society and post-capitalist polity originate in the developed world.

They are the product and result of its development.

Answers to the challenges of post-capitalist society and post-capitalist polity will not be found in the Third World.

The challenges, the opportunities, the problems of post-capitalist society and post-capitalist polity can only be dealt with where they originated.

And that is in the developed world.

 

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Society, Polity, Knowledge

This book covers a wide range.

It deals with post-capitalist society; with post-capitalist polity; and with new challenges to knowledge itself.

Yet it leaves out much more than it attempts to cover.

It is not a history of the future.

Rather, it is a look at the present.


The areas of discussion—Society, Polity, Knowledge—are not arrayed in order of importance.

That would have put first the short discussion of the educated person which concludes this work.

The three areas are arrayed in order of predictability.

I am often asked whether I am an optimist or a pessimist.

For any survivor of this century to be an optimist would be fatuous.

We surely are nowhere near the end of the turbulences, the transformations, the sudden upsets, which have made this century one of the meanest, cruelest, bloodiest in human history.

Nothing “post” is permanent or even long-lived.

Ours is a transition period.

What the future society will look like, let alone whether it will indeed be the “knowledge society” some of us dare hope for, depends on how the developed countries RESPOND to the challenges of THIS transition period, the post-capitalist period—their intellectual leaders, their business leaders, their political leaders, but above all each of us in our own WORK and LIFE.

Yet surely this is a time to make the future—precisely because everything is in flux.

This is a time for action.

Making the future

 

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From Capitalism to Knowledge Society

WITHIN ONE HUNDRED FIFTY YEARS, from 1750 to 1900, capitalism and technology conquered the globe and created a world civilization.

Neither capitalism nor technical innovations were new; both had been common, recurrent phenomena throughout the ages, in West and East alike.

What was brand new was their speed of diffusion and their global reach across cultures, classes, and geography.

And it was this speed and scope that converted capitalism into “Capitalism” and into a “system,” and technical advances into the “Industrial Revolution.”


This transformation was driven by a radical change in the meaning of knowledge.

In both West and East, knowledge had always been seen as applying to being.

Then, almost overnight, it came to be applied to doing.

It became a resource and a utility.

Knowledge had always been a private good.

Almost overnight it became a public good.

... snip, snip ...

Jumping over the remainder of the chapter introduction
and four major sections

here

 

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The Management Revolution

When I decided in 1926 not to go to college but to go to work after finishing secondary school, my father was quite distressed; ours had long been a family of lawyers and doctors.

But he did not call me a “dropout.”

He did not try to change my mind.

And he did not prophesy that I would never amount to anything.

I was a responsible adult wanting to work as an adult.


Some thirty years later, when my son reached age eighteen, I practically forced him to go to college.

Like his father, he wanted to be an adult among adults.

Like his father, he felt that in twelve years of sitting on a school bench he had learned little, and that his chances of learning more by spending another four years on a school bench were not particularly great.

Like his father at that age, he was action-focused, not learning-focused.


And yet by 1958, thirty-two years after I had moved from high school graduate to trainee in an export firm, a college degree had become a necessity.

It had become the passport to careers.

Not to go to college in 1958 was “dropping out” for an American boy who had grown up in a well-to-do family and done well in school.

My father did not have the slightest difficulty in finding a trainee job for me in a reputable merchant house.

Thirty years later, such firms would not have accepted a high school graduate as a trainee; they would all have said, “Go to college for four years—and then you probably should go on to graduate school.”


In my father’s generation (he was born in 1876), going to college was for the sons of the wealthy and a very small number of poor but exceptionally brilliant youngsters (such as he had been).

Of all the American business successes of the nineteenth century, only one went to college: J. P. Morgan went to Göttingen to study mathematics, but dropped out after one year.

Few of the others even attended high school, let alone graduated from it.

By my time, going to college was already desirable; it gave one social status.

But it was by no means necessary nor much help in one’s life and career.

When I did the first study of a major business corporation, General Motors, the public relations department at the company tried very hard to conceal the fact that a good many of their top executives had gone to college.

The proper thing then was to start as a machinist and work one’s way up.

As late as 1950 or 1960, the quickest route to a middle-class income—in the United States, in Great Britain, in Germany (though no longer in Japan)—was not to go to college; it was to go to work at age sixteen in one of the unionized mass production industries.

There one could earn a middle-class income after a few months—the result of the productivity explosion.

Today these opportunities are practically gone.

Now there is practically no access to a middle-class income without a formal degree which certifies to the acquisition of knowledge that can only be obtained systematically and in a school.


The change in the meaning of knowledge that began two hundred fifty years ago has transformed society and economy.

Formal knowledge is seen as both the key personal and the key economic resource.

In fact, knowledge is the only meaningful resource today.

And knowledge in this new sense means knowledge as a utility, knowledge as the means to obtain social and economic results

Knowledge in action

 

These developments, whether desirable or not, are responses to an irreversible change: knowledge is now being applied to knowledge.

This is the third and perhaps the ultimate step in the transformation of knowledge.

Supplying knowledge to find out how existing knowledge can best be applied to produce results is, in effect, what we mean by management.

But knowledge is now also being applied systematically and purposefully to define what new knowledge is needed, whether it is feasible, and what has to be done to make knowledge effective.

It is being applied, in other words, to systematic innovation.

This third change in the dynamics of knowledge can be called the “Management Revolution.”

Like its two predecessors — knowledge applied to tools, processes, and products, and knowledge applied to human work — the Management Revolution has swept the earth.

It took a hundred years, from the middle of the eighteenth century to the middle of the nineteenth century, for the Industrial Revolution to become dominant and worldwide.

It took some seventy years, from 1880 to the end of World War II, for the Productivity Revolution to become dominant and world-wide.

It has taken less than fifty years—from 1945 to 1990—for the Management Revolution to become dominant and worldwide.

 

All managers do the same things whatever the business of their organization.

Management as a liberal art

Management and the world’s work

thinking broad and thinking detailed

 

... snip, snip ...

 

That knowledge has become THE resource, rather than a resource, is what makes our society “post-capitalist.”

 

This fact changes—fundamentally—the structure of society.

It creates new social and economic dynamics.

The new worldview

Management Challenges for the 21st Century

Managing in the Next Society

Embracing the future” followed by “the primacy of knowledge”
and then “the lego world

It creates new politics.

More on the management revolution

 

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From Knowledge To Knowledges

Underlying all three phases in the shift to knowledge—the Industrial Revolution, the Productivity Revolution, and the Management Revolution—is a fundamental change in the meaning of knowledge.

We have moved from knowledge in the singular to knowledges in the plural.


Traditional knowledge was general.

 

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Knowledge and technology today

… is a symptom of the shift in the meaning of knowledge from an end in itself to a resource, that is, a means to some result.

Knowledge as the central energy of a modern society exists altogether in application and when it is put to work.

Work, however, cannot be defined in terms of the disciplines.

End results are interdisciplinary of necessity.

 

main brainroad continues ↓

What we now consider knowledge is of necessity highly specialized.

We never before spoke of a “man (or woman) of knowledge”; we spoke of an “educated person.”

Educated people were generalists.

Try a page search for “educated person”

They knew enough to talk or write about a good many things, enough to understand a good many things.

But they did not know enough to do any one thing.

As an old saying has it: You would want an educated person as a guest at your dinner table, but you would not want him or her alone with you on a desert island, where you need somebody who knows how to do things.

But in today’s university the traditional “educated people” are not considered “educated” at all.

They are looked down on as dilettantes.


The Connecticut Yankee at King Arthur’s Court, the hero of the 1889 book by Mark Twain, was not an educated person.

He surely knew neither Latin nor Greek, had probably never read Shakespeare, and did not even know the Bible well.

But he knew how to do everything mechanical, up to and including generating electricity and building telephones.


The purpose of knowledge for Socrates, as said earlier, was self-knowledge and self-development; results were internal.

For his antagonist, Protagoras, the result was the ability to know what to say and to say it well.

It was “image,” to use a contemporary term.

For more than two thousand years, Protagoras’s concept of knowledge dominated Western learning and defined knowledge.

The medieval trivium, the educational system that up to this day underlies what we call a “liberal education,” consisted of grammar, logic, and rhetoric—the tools needed to decide what to say and how to say it.

They are not tools for deciding what to do and (deciding) how to do it.

The Zen concept of knowledge and the Confucian concept of knowledge—the two concepts that dominated Eastern learning and Eastern culture for thousands of years—were similar.

The first focused on self-knowledge; the second—like the medieval trivium—on the Chinese equivalents of grammar, logic, and rhetoric.


The knowledge we now consider knowledge proves itself in action.

What we now mean by knowledge is information effective in action, information focused on results.

These results are seen outside the person—in society and economy, or in the advancement of knowledge itself.


To accomplish anything, this knowledge has to be highly specialized.

This was the reason why the tradition—beginning with the ancients but still persisting in what we call “liberal education”—relegated it to the status of a technē, or craft.

It could neither be learned nor taught; nor did it imply any general principle whatever.

It was specific and specialized — experience rather than learning, training rather than schooling.

But today we do not speak of these specialized knowledges as “crafts”; we speak of “disciplines.”

This is as great a change in intellectual history as any ever recorded.


A discipline converts a “craft” into a methodology—such as engineering, the scientific method, the quantitative method, or the physician’s differential diagnosis.

Each of these methodologies converts ad hoc experience into system.

Each converts anecdote into information.

Each converts skill into something that can be taught and learned.

 

«§§§»

 

The shift from knowledge to knowledges has given knowledge the power to create a new society.

But this society has to be structured on the basis of knowledge as something specialized, and of knowledge people as specialists.

This is what gives them their power.

But it also raises basic questions—of values, of vision, of beliefs, of all the things that hold society together and give meaning to our lives.

As the last chapter of this book will discuss, it also raises a big—and a new-question: what constitutes the educated person in the society of knowledges?

 

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… “Power has to be used.

It is a reality.

If the decent and idealistic toss power in the gutter, the guttersnipes pick it up — the antidote.

If the able and educated refuse to exercise power responsibly, irresponsible and incompetent people take over the seats of the mighty and the levers of power.

Power not being used for social purposes passes to people who use it for their own ends.

At best it is taken over by the careerists who are led by their own timidity into becoming arbitrary, autocratic, and bureaucratic.”

PFD

 

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PDF outline of selected topics

 

Notes on the transformation

 

Information is not enough — thinking is needed.
Dense reading and Dense listening

 

Thinking broad and Thinking detailed.
What’s the broad idea? and what can be done to carry it out?

 

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The Society of Organizations

The need for a theory and toward a theory

  • An organization is …
    • a special-purpose institution.
    • A human group composed of specialists — not labors
    • Working together on a common task
  • The function of organizations
    • To make knowledge productive
    • The more specialized knowledges are, the more effective they will be
    • Have to be put together with the work of other specialist to become results (on the outside)
      • Knowledges by themselves are sterile
    • Specialist are effective only as specialists—and knowledge workers have to be effective
      • The most highly effective knowledge workers do not want to be anything but narrow specialists
    • Specialist need exposure to the universe of knowledge
      • But they need to work as specialists
      • and to concentrate on being specialist
    • And for this to produce results, an organization is needed
  • Organization as a distinct species
    • All one species …
      • Armies
      • Churches
      • Universities
      • Hospitals
      • Businesses
      • Labor unions
    • They are the man-made environment, the “social ecology” of post-capitalist society
    • Management is a generic function pertaining to all organizations
  • The characteristics of organizations
    • Organizations are special-purpose institutions
      • They are effective because they concentrate on one task
        • In an organization, diversification means splintering
          • It destroys performance capacity
        • Organization is a tool
          • The more specialized its given task, the greater its performance capacity
    • Its mission must be crystal clear
      • Because the organization is composed of specialists
        • Each with his or her own narrow knowledge
      • Otherwise its members become confused
        • They will follow their specialty
        • Rather than applying it to the common task
        • They will each define “results” in terms of that specialty
          • imposing their own values on the organization
      • Only a clear, focused, and common mission can hold the organization together and enable it to produce results
      • The prototype of the modern organization is the symphony orchestra
        • Many high-grade specialists
        • By themselves they don’t make music. Only the orchestra can do that
        • Perform because they have the same score
    • Results exist only on the outside
      • Organizations exist to produce results on the outside
      • Discussion of “profit centers” vs. “cost-centers”
      • Results in an organization are always pretty far away from what each member contributes
      • Results need to be defined clearly and unambiguously
        • and, if at all possible, measurably
      • Organizations need to appraise and judge itself and its performance against clear, known, impersonal objectives and goals
    • “Voluntary” membership and the ability to leave an organizations
      • Organizations are always in competition for its essential resource qualified, knowledgeable, dedicated people
      • Need to market membership (what do the jobs really have to be to attract the needed people)
      • Have to attract people
      • Have to hold people
      • Have to recognize and reward people
      • Have to motivate people
      • Have to serve and satisfy people
      • Has to be an organization of equals, of “colleagues,” of “associates”
        • The position of each is determined by its contribution to the common task
          • rather than by any inherent superiority or inferiority
        • Must be organized as a team of “associates”
    • They are always managed
      • Have “leaders
      • May be perfunctory and intermittent
      • Or may be a full-time and demanding job for a fairly large group of people
      • Have to be people who make decisions
        • or nothing will get done
      • Have to be people who are accountable for the organization’s
        • mission
        • spirit
        • performance
        • results
      • Must be a “conductor” who controls the “score
      • There have to be people who
        • focus the organization on its mission
        • set the strategy to carry it out
        • define what the results are
      • This management has to have considerable authority
        • Yet its job in the knowledge organization is not to command; it is to direct (and inspire)
    • To be able to perform, an organization must be autonomous
      • Cannot be used to carry out “government policy”
  • Organization as a destabilizer
    • The organization of the post-capitalist society of organizations is a destabilizer
      • Its function is to put knowledge to work
        • on tools, processes, and products
        • on knowledge itself
      • It must be organized for constant change
      • It must be organized for innovation
      • It must be organized for systematic abandonment of …
        • the established
        • the customary
        • the familiar
        • the comfortable
        • products, services, and processes
        • human and social relationships
        • skills
        • organizations themselves
    • Knowledge changes fast
    • Every organization has to build into its very structure the management of change
      • Organized abandonment
        • Increasingly, organizations will have to plan abandonment rather than try to prolong the life of a successful policy: practice, or product—something which so far only a few large Japanese companies have faced up to
      • The ability to create the new (three systematic practices)
        • Continuing improvement of everything it does (Kaizen)
          • What every artist does
          • Aim is to improve each product or service so that it becomes a truly different product or service in two or three year’s time
        • Learn to exploit
          • Develop new applications from its own successes
        • Learn how to innovate
          • Every organization will have to learn how to innovate and to learn that innovation can and should be organized as a systematic process
        • Then we come back to abandonment and we start all over again
    • Post-capitalist society has to be decentralized
      • Its organizations must be able to make fast decisions
        • Based on closeness …
          • to performance
          • to the market
          • to technology
          • to the changes in society, environment, and demographics
            • all of which must be seen and utilized as opportunities for innovation
    • Organizations in the post-capitalist society thus constantly upset, disorganize, and destabilize the community
    • The “culture” of the organization must transcend community
      • It is the nature of the task that determines the culture of an organization, rather than the community in which that task is being performed
      • If the organization’s culture clashes
        • with the values of the community
        • the organization’s culture will prevail
        • or else the organization will not make its social contribution
      • ”Knowledge knows no boundaries”
        • Of necessity every knowledge organization is of necessity non-national, non-community
        • Even if totally embedded in the local community
  • The employee society
    • Another way to describe the phenomenon of the society of organizations
    • Employees who work in subordinate and menial occupations
      • Service workers
      • The wage earner, the “worker” of yesterday
    • Knowledge workers
      • 1/3 of the work force
      • They own the “means of production”
      • Cannot, in effect, be supervised
        • Cannot be told what to do, how to do it, how fast to do it and so on
        • Unless they know more than anybody else in the organization they are to all intents and purposes useless
      • They hold a crucial card in their mobility
    • Organizations and knowledge workers are interdependent
    • ”Loyalty” will have to be earned by proving to knowledge employees that the organization which presently employs them can offer them exceptional opportunities to be effective
    • Capital now serves the employee

thinking broad and thinking detailed

 

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The Characteristics Of Organizations

Organizations are special-purpose institutions.

They are effective because they concentrate on one task.


If you were to go to the American Lung Association and say: “Ninety percent of all adult Americans [it’s always 90 percent, by the way] suffer from ingrown toenails; we need your expertise in research, health education, and prevention to stamp out this dreadful scourge,” you’d get the answer: “We are interested only in what lies between the hips and the shoulders.”


That explains why the American Lung Association or the American Heart Association or any of the other organizations in the health field get results.

Society, community, family have to deal with whatever problem arises.

To do so in an organization is “diversification.”

And in an organization, diversification means splintering.

It destroys the performance capacity of any organization—whether business, labor union, school; hospital, community service, or church.

Organization is a tool.

As with any tool, the more specialized its given task, the greater its performance capacity.


Because the organization is composed of specialists, each with his or her own narrow knowledge area, its mission must be crystal clear.

The organization must be single-minded, otherwise its members become confused.

They will follow their specialty rather than applying it to the common task.

They will each define “results” in terms of that specialty, imposing their own values on the organization.

Only a clear, focused, and common mission can hold the organization together and enable it to produce results.

Without such a focused mission, the organization soon loses credibility.


A good example is what happened to American Protestantism in the post-World War II period.

Very few strategies have ever been as successful as that, of the American Protestant churches when around 1900 they focused their tremendous resources on the social needs of a rapidly industrializing urban society.

The doctrine of “Social Christianity” was a major reason why the churches in America did not become marginal, as the churches in Europe did.

Yet social action is not the mission of a Christian Church.

That is to save souls.

Because Social Christianity was so successful, the churches, especially since World War II, have dedicated themselves more and more wholeheartedly to social causes.

Ultimately, liberal Protestantism used the trappings of Christianity to further social reform and to promote actual social legislation.

Churches became social agencies.

They became politicized—and as a result they rapidly lost cohesion, appeal, and members.


The prototype of the modern organization is the symphony orchestra.

Each of the two hundred fifty musicians in the orchestra is a specialist, and a high-grade one.

Yet by itself the tuba doesn’t make music; only the orchestra can do that.

The orchestra performs only because all two hundred fifty musicians have the same score.

They all subordinate their specialty to a common task.

And they all play only one piece of music at any given time.

 


 

Results in an organization exist only on the outside.

Society, community, family are self-contained and self-sufficient; they exist for their own sake.

But all organizations exist to produce results on the outside.


Inside a business, there are only costs.

The term “profit center” (which, alas, I myself coined many years ago) is a misnomer.

Inside a business, there are only cost centers.

There are profits only when a customer has bought the product or the service and, has paid for it.

The result of the hospital is a cured patient, who can go back home (and who fervently hopes never to have to return to the hospital).

The results of the school or the university are graduates who put to work what they have learned in their own lives and work.

The results of an army are not maneuvers and promotions for generals; they are deterring a war or winning it.

The results of the Church are not even on this earth.


This means that results in an organization are always pretty far away from what each member contributes.

This is true even in the hospital, where individual contributions—those of the nurse or the physical therapist—are closely related to the result: a cured patient.

But many specialists even in the hospital cannot identify their contribution to any particular result.

What share in the recovery or rehabilitation of a patient does the X-ray technician have?

Or the clinical laboratory technician?

Or the dietitian?


In most institutions, the individual’s contribution is totally swallowed up by the task and disappears in it.

What use is the best engineering department if the company goes bankrupt?

And yet, unless the engineering department is first-class, dedicated, and hardworking, the company is likely to go bankrupt.

Each member in an organization, in other words, makes a vital contribution (at least in theory) without which there can be no results.

But none by himself or herself produces these results.


This then requires, as an absolute prerequisite of an organization’s performance, that its task and mission be crystal clear.

Results need to be defined clearly and unambiguously—and, if at all possible, measurably.


This also requires that an organization appraise and judge itself and its performance against clear, known, impersonal objectives and goals.

Neither society nor community nor family need to set such goals, nor could they.

Survival rather than performance is their test.


Joining an organization is always a decision.

De facto there may be little choice.

But even where membership is all but compulsory—as membership in the Christian Church was in Europe for many centuries for all but a handful of Jews and Gypsies—the fiction of a decision to join is carefully maintained.

The godfather at the infant’s baptism pledges the child’s voluntary acceptance of membership in the Church.


It may be difficult to leave an organization—the Mafia, for instance, or a Japanese big company, or the Jesuit Order.

But it is always possible.

And the more an organization becomes an organization of knowledge workers, the easier it is to leave it and move elsewhere (see “The Employee Society” later in this chapter).


Unlike society, community, and family, an organization is therefore always in competition for its most essential resource: qualified, knowledgeable, dedicated people.


This means that organizations have to market membership, fully as much as they market their products and services—and perhaps more.

They have to attract people, have to hold people, have to recognize and reward people, have to motivate people, have to serve and satisfy people.


Because modern organization is an organization of knowledge specialists, it has to be an organization of equals, of “colleagues,” of “associates.”

No one knowledge “ranks” higher than another.

The position of each is determined by its contribution to the common task rather than by any inherent superiority or inferiority.

“Philosophy is the queen of the sciences,” says an old tag.

But to remove a kidney stone, you want a urologist rather than a logician.

The modern organization cannot be an organization of “boss” and “subordinate”; it must be organized as a team of “associates.”


An organization is always managed.

Society, community, family may have “leaders”—and so do organizations.

But organizations, and organizations alone, are managed.

The managing may be perfunctory and intermittent—as it is, for instance, in the Parent-Teachers Association at a suburban school in the United States, where the elected officers spend only a few hours each year on the organization’s affairs.

Or management may be a full-time and demanding job for a fairly large group of people, as in the military, the business enterprise, the labor union, the university, and so on.

But there have to be people who make decisions, or nothing will ever get done.

There have to be people who are accountable for the organization’s mission, its spirit, its performance, its results.

There must be a “conductor” who controls the “score.”

score

Larger view of the image above ::: Leader of tomorrow

There have to be people who focus the organization on its mission, set the strategy to carry it out, and define what the results are.

This management has to have considerable authority.

Yet its job in the knowledge organization is not to command; it is to direct.


Finally, to be able to perform, an organization must be autonomous.

Legally, it may be a government agency, as are Europe’s railways, America’s state universities, or Japan’s leading radio and television network, NHK.

Yet in actual operation these organizations must be able to “do their own thing.”

If they are used to carry out “government policy,” they immediately stop performing.


All this, it will be said, is obvious.

Yet every one of these characteristics is new, and indeed unique to that new social phenomenon, the organization.

 

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Is Labor Still an Asset?

American manufacturing production remained almost unchanged as a percentage of gross national product in the years of the “manufacturing decline.”

Peter Drucker Sets Us Straight

It stood at 22 percent of GNP in 1975, and at 23 percent in 1990.

During those twenty years, gross national product increased two and a half times.

In other words, total American manufacturing production grew more than two and a half times in those twenty years.


But manufacturing employment did not increase at all.

On the contrary, manufacturing employment went down from 1960 to 1990 as a percentage of the work force and even in absolute numbers.

It fell by almost half in these thirty years, from 25 percent of the total labor force in 1960 to 16 or 17 percent in 1990.

During this time, the total American work force doubled the largest increase ever recorded by any country in peacetime.

All the increase was, however, in jobs other than making and moving things.


These trends are certain to continue.

Unless there is a severe depression, manufacturing production in America is likely to stay at about the same 23 percent of gross national product, which, for the next ten or fifteen years, should mean another near doubling.

During the same period, however, employment in manufacturing is likely to fall to 12 percent or less of the total labor force.

That would mean a further fairly sharp shrinkage of the total number of people employed in manufacturing work.


The development in Japan is almost identical.

There, too, total manufacturing production has increased two and a half times in the twenty years between 1970 and 1990.

There, too, however, manufacturing employment in total numbers has not increased at all.

And there too, from now on, even a sizable increase in manufacturing production will not be sufficient to offset the steady shrinkage in manufacturing jobs.

In Japan, too, by the year 2000 total employment in manufacturing will be substantially less than it was in 1990.


The response of these two countries to identical developments is, however, completely different.

In the United States, there is gloom about the “decline of American manufacturing,” if not panic about the “death of American manufacturing.”

In the United States, manufacturing is equated with blue-collar employment.

In Japan, the reaction has been the opposite.

What matters to the Japanese is the increase in manufacturing production.

Japan sees the trends of the last twenty years as victory; America sees them as defeat.

Japan sees the glass as “half full”; America as “half empty.”


As a result of these differences in attitude, the policies of the two countries also differ radically.

Every state, county, and city in America is desperately trying to attract manufacturers who offer blue-collar jobs.

Poor rural states like Kentucky and Tennessee have lured Japanese automobile manufacturers with offers of long-range tax benefits and low-interest loans.

The city of Los Angeles in early 1992 awarded a multi-billion-dollar contract for rapid-transit equipment to the company that promised to create all of ninety-seven manufacturing jobs in a region that has almost 15 million inhabitants!


By contrast, Japanese companies are moving manual work in manufacturing out of Japan as fast as they can into the United States; into plants at the U.S.-Mexican border; into Indonesia.


In the United States, manufacturing jobs are seen as a priceless asset.

In Japan, they are more and more seen as a liability.


Differences in social structure between the two countries explain, in part, these different reactions to the same trends.

The shrinkage of manual jobs in making and moving things is above all a threat to America’s most visible minority, the blacks.

Their biggest economic gains during the last thirty years have come from moving into well-paid jobs in unionized mass production industries.

In all other areas of economy and society black gains have been much more modest.

The shrinkage of jobs in the unionized mass production industries therefore aggravates what all along has been America’s most serious problem—all the more daunting since it is as much a problem of conscience as it is a social problem.


In Japan, practically all young people now get a high school degree, and then are considered overqualified for manual work.

They become clerical workers.

Those who go on to the university—and the same proportion of young males goes to the university in Japan as in the United States—take managerial or professional jobs only.

If Japan were not able to cut down on the number of manual jobs in manufacturing, it would face an extreme labor shortage.

In other words, the shrinkage in manufacturing jobs is the answer to a problem for the Japanese.


A country needs a manufacturing base, so Americans would argue—and most Europeans as well.

This means manufacturing jobs.

But the Japanese argue—convincingly—that the supply of young people in the developing countries qualified for nothing but manual work in manufacturing is so large—and will remain so large for at least another thirty years—that worrying about the “industrial base” is nonsense.

A country that has the knowledge workers to design products and to market them will have no difficulty getting those products made at low cost and high quality.

In fact, the Japanese argue that to encourage blue-collar manual work in making and moving things weakens a developed economy.

In a developed economy, even people who learn little in school represent a tremendous educational investment.

Employed as manufacturing workers, such people yield only a pitiful return to society and economy, perhaps no more than 1 or 2 percent.

Yet people in developing countries who have had no schooling are fully as productive after a little training as any manual worker in the most highly developed country.

Economically as well as socially; it would be much more productive—the Japanese argue—to put the money spent to create blue-collar jobs in developed countries instead into advancing the country’s education, and thus to ensure that youngsters learn enough to become qualified, for knowledge work, or at least for high-level service work.

 

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How Much Labor Is Needed—and What Kind?

A developed country does indeed need a manufacturing base.

Production

Peter Drucker Sets Us Straight

Yet the facts support the Japanese position.

The United States still has the world’s strongest agricultural base, even though farmers now constitute only 3 percent of the working population (they still formed 25 percent at the end of World War II).

The United States equally could still be the world’s largest manufacturer, with manufacturing workers constituting no more than 10 percent (or less) of the working population.


In 1980, United States Steel, America’s largest integrated steel company, employed 120,000 people in steel production.

Ten years later, it employed 20,000 people in steel production, and yet produced almost the same steel tonnage.

Within ten years the productivity of the manual worker engaged in steelmaking had increased seven-fold.

A large part of the increase was obtained by closing down old, outmoded plants.

Another large part of the increase came from investment in new equipment.

But the lion’s share of the jump in productivity represents the results of reengineering work flow and tasks.


As a result, U.S. Steel’s best mills are now the world’s most productive integrated steelmakers.

And yet, like all integrated steel mills the world over, they are still grossly overstaffed.

And America’s integrated steel mills are still losing money.

The so-called minimills (in 1991, almost one third of all steel produced in the U.S. was produced by minimills) are again three to four times as productive as the most productive integrated mill.

The best of American minimills could probably produce as much steel as U.S. Steel does with not much more than one sixth of U.S. Steel’s present employment.

And increasingly the minimills can turn out all the products an integrated steel mill produces and of the same quality.

Admittedly, a minimill obtains these results by not having to perform the most labor-intensive operations in an integrated steel mill.

It does not smelt iron ore to obtain iron; nor does it convert iron into steel.

It starts with scrap steel.

But for the foreseeable future, the world will have abundant supplies of scrap steel.


It is not the process that is the main difference between the integrated steel mill and the minimill.

Workers in the minimill are not blue-collar workers making and moving things; they are knowledge workers.

The minimill changes steelmaking from applying muscle and skill to work to applying knowledge to work: knowledge of the process; of chemistry; of metallurgy; of computer operations.

The workers whom U.S. Steel laid off need not apply at the minimill.


This is an extreme example, to be sure.

But it indicates the general direction.


Plenty of people will always be needed who can bring only muscle to the job.

With our present knowledge of training, they can quickly be made productive in traditional jobs.

Even more people will be needed who can only bring manual skills to the job.

But the greatest employment need of the next decades will be for “technicians.”


Technicians not only need a high level of skill; they also need a high degree of formal knowledge, and above all a high capacity to learn and to acquire additional knowledge.

Technicians are not the successors to yesterday’s blue-collar, workers.

They are basically the successors to yesterday’s highly skilled workers; or rather,— they are highly skilled workers who now also possess a substantial amount of formal knowledge, formal education, and the capacity for continuous learning.


A hot dispute is raging today in Academia and among policy makers: Is it a sufficient “manufacturing base” for developed countries to have their businesses carry on at home the work on technology, design, and marketing of industrial products, or do they also have to manufacture at home?

The question is moot.

If a country has the knowledge base, it will also manufacture.

But this manufacturing work will not be competitive if carried out by traditional blue-collar workers who serve the machine.

In competitive manufacturing, the work will largely be done by knowledge workers whom the machine serves—as computer consoles and computerized work stations serve the ninety-seven technicians in a steelmaking minimill.


This will create tremendous problems for developing countries.

They can no longer expect to be able to obtain large numbers of manufacturing jobs by training low-wage people.

Manual labor, no matter how cheap, will not be able to compete with knowledge labor, no matter how well paid.

But this also creates tremendous problems for countries—the United States is the prime example—in which there are large groups of “minority” people who are “developing” rather than “developed” in their educational qualifications.

The United Kingdom in its old working-class enclaves in the north, in Scotland (especially along the Clyde), and in Northern Ireland faces a similar problem of a working-class culture which in effect is the culture of a developing rather than a developed country.

On the continent of Europe, too, despite an educational system with relatively open access, the trend toward labor becoming a liability rather than an asset will, for a fairly long transition period, create both serious social problems and political conflicts.


Everywhere this trend also raises difficult and highly emotional questions about the role, function, and future of this century’s most successful organization, the labor union.


To maintain and strengthen a country’s manufacturing base and to ensure that it remains competitive surely deserves high priority.

But this means accepting that manual labor in making and moving things is rapidly becoming a liability rather than an asset.

Knowledge has become the key resource for all work.

Creating traditional manufacturing jobs—as the Americans, the British, and the Europeans are still doing—is at best a short-lived expedient.

It may actually make things worse.

The only long-term policy which promises success is for developed countries to convert manufacturing from being labor based into being knowledge based.

 


 

The Productivity of the New Work Forces

You can only work with the things on your mental radar

The new challenge facing the post-capitalist society is the productivity of knowledge workers and service workers.

To improve the productivity of knowledge workers will in fact require drastic changes in the structure of the organizations of post-capitalist society, and in the structure of society itself.


Forty years ago, people doing knowledge work and service work formed still less than one third of the work force.

Today, such people account for three quarters if not four fifths of the work force in all developed countries—and their share is still going up.

Their productivity, rather than the productivity of the people who make and move things, is THE productivity of a developed economy.

It is abysmally low.

The productivity of people doing knowledge work and service work may actually be going down rather than going up.

One third of the capital investment in developed countries in the last thirty years has gone into equipment to handle data and information, computers, fax machines, electronic mail, closed-circuit television, and so on.

Yet the number of people doing clerical work, that is, the number of people to whose work most of this equipment is dedicated, has been going up much faster than total output or gross national product.

Instead of becoming more productive, clerical workers have become less productive.

The same is true of salespeople and also of engineers.

The Daily Drucker

And no one, I dare say, would maintain that the teacher of 1990 is more productive than the teacher of 1900 or the teacher of 1930.


The lowest level of productivity occurs in government employment.

And yet governments everyplace are the largest employers of service workers.

In the United States, for instance, one fifth of the entire work force is employed by federal, state, and local governments, predominantly in routine clerical work.

How to guarantee non-performance

Conditions for survival

In the United Kingdom, the proportion is roughly one third.

In all developed countries, government employees account for a similar share of the total work force.

 

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Unless we can learn how to increase the productivity of knowledge workers and service workers, and increase it fast, the developed countries will face economic stagnation and severe social tension.

 

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People can only get paid in accordance with their productivity.

Their productivity creates the pool of wealth from which wages and salaries are then paid.

If productivity does not go up, let alone if it declines, higher real incomes cannot be paid.


Knowledge workers are likely to be able to command good incomes, regardless of their productivity or the productivity of the total economy.

They are in a minority; and they have mobility.

But even knowledge workers, in the long run, must suffer a decline in real income unless their productivity goes up.

Large numbers of service workers perform work that demands fairly low skills and relatively little education.

If an economy in which service worker productivity is low tries to pay them wages considerably above what their productivity produces, inflation must erode everybody’s real income.

In the not so long run, inflation will then also create serious social tensions.

If service workers, however, are paid only according to their productivity, the gap between their income and that of the “privileged,” that is, the knowledge workers, must steadily widen-again creating severe social tensions.

Knowledge: its economics and productivity


A good deal of service work does not differ too much from the work of making and doing (moving?) things.

This includes such clerical jobs as data processing, billing, answering customers’ inquiries, handling insurance claims, issuing drivers’ licenses to motorists—in fact, about two thirds of all the work done in government offices, and about one third or more of all the clerical and services work done in businesses, in universities, in hospitals, and so on.

This is in effect “production work,” which differs from the work done in the factory only in that it is being done in an office.

But even this work has first to be “re-engineered” before it can be made productive.

It has to be studied and restructured for optimum contribution and achievement.

In all other work done by the new work forces, both knowledge workers and service workers, raising productivity requires new concepts and new approaches.


In the work on productivity in making and moving things, the task is given and determined.

When Frederick W. Taylor started to study the shoveling of sand, he could take it for granted that the sand had to be shoveled.

In a good deal of the work of making and moving things, the task is actually “machine-paced”: the individual worker serves the machine.


In knowledge work, and in practically all service work, the machine serves the worker.

The task is not given; it has to be determined.

The question, “What are the expected results from this work?” is almost never raised in traditional work study and Scientific Management.

But it is the key question in making knowledge workers and service workers productive.

And it is a question that demands risky decisions.

There is usually no right answer; there are choices instead.

And results have to be clearly specified, if productivity is to be achieved.


The new productivity challenge

Chapter 19 in Management, Revised Edition

Chapter 5 in Management Challenges for the 21st Century

Knowledge: Its Economics and Productivity

 

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… This means a radical change in structure for the organizations of tomorrow.

It means that the big business, the government agency, the large hospital, the large university will not necessarily be the one that employs a great many people.

Outsourcing (not offshoring) ::: Making the future

It will be the one that has substantial revenues and substantial results—achieved in large part because it itself does only work that is focused on its mission; work that is directly related to its results; work that it recognizes, values, and rewards appropriately.

The rest it contracts out.

 

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What Kind of Team?

There is a second major difference between the productivity of making and moving things and the productivity of knowledge work and service work.

In knowledge and service work, we have to decide how the work should be organized.

What kind of human team is appropriate for this kind of work and its flow?

¶ ¶ ¶

Most human work is carried out in teams; hermits are exceedingly rare.

Even the most solitary artists, writers, or painters, depend on others for their work to become effective—the writer on an editor, a printer, a bookstore; the painter on a gallery to sell his or her work; and so on.

And most of us work in far closer relationship to our teammates.

¶ ¶ ¶

There is a great deal of talk today about “creating teamwork.”

This is largely a misunderstanding.

It assumes that the existing organization is not a team organization, and that is demonstrably false.

It secondly assumes that there is only one kind of team; but in effect there are three major kinds of teams for all human work.

And for work to be productive, it has to be organized into the team that is appropriate to the work itself, and its flow.*⁠1 

¶ ¶ ¶

The first kind of team is exemplified by the baseball or cricket team; it is also the kind of team that operates on a patient in the hospital.

In this team, all players play on the team but they do not play as a team.

¶ ¶ ¶

Each player on a baseball or a cricket team has a fixed position which he never leaves.

In baseball, the outfielders never assist each other.

They will stay in their respective positions.

“If you are up at bat, you are totally alone,” is an old baseball saying.

Similarly, the anesthesiologist will not come to the assistance of the surgical nurse or the surgeon.

¶ ¶ ¶

This team does not enjoy a good press today.

In fact, when people talk about “building teams,” they usually mean that they want to move away from this kind of team.

Yet the baseball-or cricket-team has great strengths that should not be discounted.

Because all players occupy fixed positions, they can be given specific tasks of their own, can be measured by performance scores for each task, can be trained for each task.

It is by no means accidental that in both baseball and cricket there are statistics on every player, going back for decades.

The surgical team in the hospital functions much the same way.

¶ ¶ ¶

For repetitive tasks and for work in which the rules are well known, the baseball team is the ideal.

And it was this model on which modern mass production—the work of making and moving things—was organized, and to which it owes a great deal of its performance capacity

¶ ¶ ¶

The second type of team is the soccer team.

It is also the team concept on which the symphony orchestra is organized, and the model for the hospital team that rallies around the patient who goes into cardiac arrest at two in the morning.

¶ ¶ ¶

On this team, too, all players have fixed positions.

The tuba players in the orchestra will not take over the parts of the double basses.

They stick to their tubas.

In the crisis team at the hospital, the respiratory technician will not make an incision in the chest of the patient to massage the heart.

But on these teams, the members work as a team.

Each coordinates his or her part with the rest of the team.

¶ ¶ ¶

This team requires a conductor or a coach.

And the word of the conductor or coach is law.

It also requires a “score.”

And it requires endless rehearsals to work well.

But, unlike the baseball team, it has great flexibility if the score is clear and if the team is well led.

And it can move very fast.

¶ ¶ ¶

Finally, there is the doubles tennis team—the team also of the jazz combo or of the four or five senior executives who together constitute the “President’s Office” — in the large American company, or the Vorstand (board of management) in the German company.⁠2 

¶ ¶ ¶

This team has to be small—seven to nine people may be the maximum.

The players have a “preferred” rather than a “fixed” position; they “cover” for one another.

And they adjust themselves to the strengths and weaknesses of each other.

The player in the back court in doubles tennis adjusts to the strengths and weaknesses of the partner who plays the net.

And the team only functions when this adjustment to the strengths and weaknesses of the partners has become conditioned reflex, that is, when the player in the back court starts running to “cover” for the weak backhand of the partner at the net the moment the ball leaves the racket of the player on the other side.

¶ ¶ ¶

A well-calibrated team of this kind is the strongest team of all.

Its total performance is greater than the sum of the individual performances of its members, for this team uses the strength of each member while minimizing the weaknesses of each.

But this team requires enormous self-discipline.

The members have to work together for a long time before they actually function as a “team.”

¶ ¶ ¶

These three types of teams cannot be mixed.

One cannot play baseball and soccer with the same team on the same field at the same time.

The symphony orchestra cannot play the way a jazz combo plays.

The three teams must also be “pure”; they cannot be hybrids.

And to change from one team to another is exceedingly difficult and painful.

The change cuts across old, long-established, and cherished human relationships.

Yet any major change in the nature of the work, its tools, its flow, and its end product may require changing the team.

¶ ¶ ¶

This is particularly true with respect to any change in the flow of information.

¶ ¶ ¶

In the baseball-type team, players get their information from the situation.

Each receives information appropriate to his or her task, and receives it independently of the information the teammates all receive.

In the symphony orchestra or the soccer team, the information comes largely from conductor or coach.

They control the “score.”

In the doubles tennis team, the players get their information largely from each other.

This explains why the change in information technology, and the move to what I have called the “information-based organization” has made necessary massive “re-engineering.”⁠3 

¶ ¶ ¶

The new information technology underlies the strenuous efforts of American corporations in the last ten years to “reengineer” themselves.

Traditionally, most work in large American companies was organized on the baseball team model.

Top management consisted of a chief executive officer to whom senior functional executives “reported,” each doing a specific kind of work—running the factories, running sales, finance, and so on.

The Office of the President is an attempt to convert top management into a doubles tennis team—made necessary (or, at least, possible) by the advent of information.

¶ ¶ ¶

Traditionally, work on new products was done in a baseball-type team in which each function (design, engineering, manufacturing, marketing) did its own work, and then passed it on to the next.

In some major American industries, for example, pharmaceuticals or chemicals, this was changed long ago into the soccer or symphony orchestra type of team.

But the American automobile industry retained a baseball-type team structure for the design and introduction of new automobiles.

Around 1970, the Japanese began to use information to switch to a soccer-type team for this work.

As a result, Detroit fell way behind both in the speed with which it introduced new models and in its flexibility.

Since 1980, Detroit has been trying desperately to catch up with the Japanese by changing the design and introduction of new automobiles to a soccer-type team.

And on the factory floor the availability of information—which makes possible, in fact mandatory, the shift to “Total Quality Management”—is forcing Detroit to change from the baseball team, along which the traditional assembly line had been organized, to the doubles tennis team, which is the concept underlying “flexible manufacturing.”

¶ ¶ ¶

Only when the appropriate type of team has been chosen and established will work on the productivity of knowledge workers and service workers become truly effective.

The right team by itself does not guarantee productivity.

But the wrong team destroys productivity.

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1 {On various teams, and especially on the analogy between teams in business and teams in sports, see Robert W. Keidel, Game Plans (New York: E. P. Dutton, 1985).}

2 {On this, see also the discussion of the top management job in my Management: Tasks, Responsibilities, Practices (1973).}

3 {See The New Realities, Chapter 14.}

The Need to Concentrate

Concentration on job and task is the last prerequisite for productivity in knowledge and service work.

In the work on making and doing things, the task is clearly defined.

The worker shoveling sand, whose task Taylor studied a century ago, was not expected to bring the sand to where he could begin shoveling it.

That was somebody else’s job.

The farmer plowing the field does not climb off the tractor to attend a meeting.

In machine-paced work, the machine concentrates the worker; the worker is servant to the machine.

In knowledge work and in most service work, where the machine (if any) is a servant to the worker, productivity requires the elimination of whatever activities do not contribute to performance.

They sidetrack and divert from performance.

Eliminating such work may be the single biggest step toward greater productivity in both knowledge and service work.

¶ ¶ ¶

The task of nurses in hospitals is patient care.

But every study, shows that they spend up to three quarters of their time on work, that does not contribute to patient care.

Instead, two thirds or, three quarters of the nurse’s time is typically spent filling out papers.

Whenever we analyze the performance of salespeople in the department store, we find that they spend more than halt their time on work that does not contribute to their performance, that is, satisfying the customer.

They spend at least half their time filling out papers that serve the computer rather than the customer.

Whenever we analyze the time spent by engineers, we find that half their time is spent attending meetings or polishing reports which have very little to do with their own task.

This not only destroys productivity; it also destroys motivation and pride.

¶ ¶ ¶

Wherever a hospital concentrates paperwork and assigns it, to a floor clerk who does nothing else, nurses’ productivity doubles.

So does their contentment.

They then suddenly have time, for the work they are trained and hired for: patient care.

Similarly, both the productivity and satisfaction of salespeople in department stores shoot up overnight when the paperwork is taken out of their job and concentrated with a floor clerk.

And the same happens when engineers are relieved of their “chores”—draftsman’s work, rewriting reports and memos, or attending meetings.

¶ ¶ ¶

Knowledge workers and service workers should always be asked: “Is this work necessary to your main task?

Does it contribute to your performance?

Does it help you do your own job?”

And if the answer is no, the procedure or operation must be considered a “chore” rather than “work.”

It should either be dropped altogether or engineered into a job of its own.

¶ ¶ ¶

Defining performance; determining the appropriate work flow; setting up the right team; and concentrating on work and achievement are prerequisites for productivity in knowledge work and service work.

Only when they have been done can we begin the work on making productive the individual job and the individual task.

¶ ¶ ¶

Frederick Winslow Taylor is usually criticized for not asking the workers how to do the job.

He told them.

But so did George Elton Mayo (1880-1949), the Australian-born Harvard psychologist who in the 1920s and 1930s attempted to replace Taylor’s “Scientific Management” with “Human Relations.”

Lenin and Stalin did not consult the “masses,” either; they told them.

Freud never asked patients what they thought their problem might be.

And only toward the end of World War II did it occur to any high command to consult the users—the soldiers in the field—before introducing a new weapon.

The nineteenth century believed in the expert knowing the answers.

¶ ¶ ¶

By now we have learned that those who actually do a job know more about it than anybody else.

They may not know how to interpret their knowledge, but they do know what works and what doesn’t.

And so, in the last forty years, we have learned that work on improving any job or task begins with the people who actually do the work.

They must be asked: “What can we learn from you?

What do you have to tell us about the job and how it should be done?

What tools do you need?

What information do you need?”

Workers must be required to take responsibility for their own productivity, and to exercise control over it.

¶ ¶ ¶

We were first taught this lesson by American production in World War II.*⁠1 

But, as is well known, the Japanese were the first ones to apply the idea (if only because a few Americans, especially Edwards Deming and Joseph Juran, taught it to them).

¶ ¶ ¶

After World War II, however, the United States, Great Britain, and Continental Europe all went back to the traditional “productivity by command” approach—largely as a result of strong labor union opposition to anything that would give the worker a “managerial attitude,” let alone “managerial responsibility.”

Only in the last ten years has American management rediscovered the lesson of its own performance in World War II.

¶ ¶ ¶

In making and moving things, partnership with a responsible worker is the best way.

But Taylor’s telling them worked, too, and quite well.

In knowledge and service work, partnership with the responsible worker is the only way to improve productivity.

Nothing else works at all.

«§§§»

Productivity in knowledge work and service work demands that we build continuous learning into the job and into the organization.

Knowledge demands continuous learning because it is constantly changing.

But service work, even of the purely clerical kind, also demands continuous self-improvement, continuous learning.

The best way for people to learn how to be more productive is for them to teach.

To obtain the improvement in productivity which the post-capitalist society now needs, the organization has to become both a learning and a teaching organization.

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1 { My two books The Future of Industrial Man (1942) and The New Society (1949), were the first to draw this conclusion from the World War II experience.

In them, I argued for the “responsible worker” taking “managerial responsibility.”

As a result of their wartime experiences, W. Edwards Deming and Joseph Juran each developed what we now call “Quality Circles” and “Total Quality Management.”

Finally, the idea was forcefully presented by Douglas McGregor in his well-known book The Human Side of Enterprise (New York McGraw-Hill, 1960), with his “Theory X” and “Theory Y.”}

Restructuring Organizations

Improving the productivity of knowledge workers and service workers will demand fundamental changes in the structure of organizations.

It may even require totally new organizations.

¶ ¶ ¶

Re-engineering the team so that work can flow properly will lead to the elimination of most “management layers.”

In the symphony orchestra, several hundred highly skilled musicians play together; but there is only one “executive,” the conductor, with no intermediate layers between him (or her) and the orchestra members.

This will be the organization model for the new, information-based organization.

We will thus see a radical shift from the tradition in which performance was primarily rewarded by advancement into command positions, that is, into managerial ranks.

Organizations will have very few such command positions.

We will increasingly see organizations operating like the jazz combo, in which leadership within the team shifts with the specific assignment and is independent of the “rank” of each member.

In fact, the word “rank” should disappear totally from the vocabulary of knowledge work and knowledge worker.

It should be replaced by “assignment.”

¶ ¶ ¶

This shift will raise tremendous problems of motivation, of reward, and of recognition.

The Case for Outsourcing

Even more drastic, indeed revolutionary, are the requirements for obtaining productivity from service workers.

Service work in many cases will be contracted out of the organization to whom the service is being rendered.

This applies particularly to support work, such as maintenance, and to a good deal of clerical work.

“Outsourcing,” moreover, will be applied increasingly to such work as drafting for architects and to the technical or professional library.

In fact, American law firms already contract out to an outside computerized “database” most of what their own law library used to do.

¶¶¶

One driving force behind outsourcing is the need to make service workers productive.

The greatest need for increased productivity is in activities which do not lead to promotion into senior management within the organization.

But nobody in senior management is likely to be much interested in this kind of work, know enough about it, care greatly for it, or even consider it important—no matter how much money is at stake.

Such work does not fit the organization’s value system.

¶¶¶

In the hospital, for instance, the value system is that of the doctors and nurses.

They are concerned with patient care.

No one therefore pays much attention to maintenance work, support work, clerical work even though that is where half the hospital’s costs are likely to be.

Nobody from these support activities can expect ever to get into a senior hospital position.

¶¶¶

Most of the women who start cleaning hospital floors or making hospital beds, fifteen years later will still be cleaning hospital floors or making hospital beds.

By contrast, the woman who as a senior vice president heads the hospital division of America’s largest maintenance company started as an almost illiterate Mexican immigrant with a pail and a broom fourteen years ago.

But she started working in a hospital where maintenance work had been contracted out to a maintenance company.

As a result, she had opportunities for advancement.

Productivity in the hospitals maintained by this company has almost tripled in the last fifteen years.

The time needed to make a bed, for instance, has been cut by two thirds.

¶¶¶

This maintenance company had a financial interest in improving the productivity of its menial jobs.

It had people in executive positions who knew firsthand the work needed to maintain a hospital.

The company was therefore willing to work for years on the redesign of all the tools needed, right down to the bed sheets.

It was willing to invest substantial capital in the new methods.

None of this a hospital would have done.

To make hospital maintenance productive required an outside contractor.

The greatest need for outsourcing—whether of manual work like maintenance, or clerical work like billing—is found in government (see Chapter 8 below).

There, productivity is lowest.

There, also, are the most people employed in such support activities.

¶¶¶

But large businesses are not much different.

They, too, require systematic contracting out of service work to organizations whose business it is to do such work.

These contracting organizations offer career opportunities for the people doing such work.

Their executives take such work seriously; they are therefore willing to invest time and money in redesigning the work and its tools.

They are willing, even eager, to do the hard work needed to improve productivity.

Above all, they take the people who do such work seriously enough to challenge them to take the lead in improving their work and its productivity.

¶¶¶

Outsourcing is necessary not just because of the economics involved.

It is necessary because it provides opportunities, income, and dignity for service workers.

¶¶¶

We should therefore expect within a fairly short period of years to find such work contracted out to independent organizations, which compete and get paid for their own effectiveness in making this kind of work more productive.

¶¶¶

This means a radical change in structure for the organizations of tomorrow.

It means that the big business, the government agency, the large hospital, the large university will not necessarily be the one that employs a great many people.

It will be the one that has substantial revenues and substantial results—achieved in large part because it itself does only work that is focused on its mission; work that is directly related to its results; work that it recognizes, values, and rewards appropriately.

The rest it contracts out.

Averting a New Class Conflict

The rapid increase in productivity of the workers making and moving things overcame the nineteenth century’s nightmare of class conflict.”

Now, a rapid increase in the productivity of service workers is required to avert the danger of a new “class conflict” between the two new dominant groups in the post-capitalist society: knowledge workers and service workers.

To make service work productive is thus the first social priority of the post-capitalist society, in addition to being an economic priority.

¶ ¶ ¶

Knowledge workers and service workers are not “classes” in the traditional sense.

The line between the two is porous.

In the same family, there are likely to be service workers and knowledge workers who have advanced education.

But there is a danger that the post-capitalist society will become a class society unless service workers attain both income and dignity.

This requires productivity.

But it also requires opportunities for advancement and recognition.

¶ ¶ ¶

The structure of the post-capitalist society will therefore be different from either the earlier capitalist or the socialist society.

There, organizations tried to encompass the maximum of activities.

Organizations of the post-capitalist society, by contrast, will concentrate on their core tasks.

For the rest, they will work with other organizations in a bewildering variety of alliances and partnerships.

Both capitalist and socialist societies were, to use a scientific metaphor, “crystalline” in their structure.

Post-capitalist society is more likely to resemble a liquid.

 

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Where Right Becomes Wrong

In the 1930s, John L. Lewis (1880-1969) was considered the second most powerful man in America after President Franklin D. Roosevelt.

In fact, Roosevelt owed his election in large part to Lewis, who, until then a lifelong Republican, led his coal miners’ union, the United Mine Workers of America (UMW), and with it the entire American labor movement, into the Democratic camp at the 1932 convention.

He then led the unionization drive of the New Deal years and became the head of a new and powerful labor organization, the Congress of Industrial Organizations.

❡❡❡

But in 1943 Lewis rebelled against the wage freeze imposed during World War II and pulled his coal miners out on strike.

President Roosevelt appealed to him to heed the national interest and call off the strike.

But Lewis refused.

“The President of the United States,” he said, “is paid to look after the national interest.

I am paid to look after the interests of the miners.”

❡❡❡

War production was just starting up.

American soldiers were already in combat, both in Europe and in the Pacific, but they still woefully lacked equipment and ammunition, and were suffering heavy casualties because of these shortages.

The entire war effort was fueled by coal, and the country could not afford to lose even one day’s coal production.

Furthermore, the miners were the highest paid workers in America; compared to the pay of the men in uniform, they were plutocrats.

❡❡❡

But Lewis won the strike.

❡❡❡

He immediately lost, however, all power, all influence, all respect—even within the labor movement, and indeed even within his own union.

The UMW itself immediately began to decline in power, influence, and membership.

Ten years later, coal strikes had become non-events.

In fact, Lewis’s Pyrrhic victory in 1943 marked the beginning of the decline of unionism in the United States.

❡❡❡

Lewis lived long enough to see the consequences of his “victory.”

But he maintained to his dying day that he was right in calling the strike, that it was his duty to do so.

“What is good for labor,” he repeatedly said, “is ultimately good for the country.

And a war is the only time when labor is needed, the only time when it has any real power, the only time when its legitimate claims for decent pay can be successfully pressed.”

He could never, it is reported, understand why the American public did not agree.

«§§§»

This is, of course, an extreme case.

But it is also a revealing one.

Lewis knew that he was in the right.

But at what point does the right of an organization turn into social wrong; at what point is its function no longer legitimate?

❡❡❡

These days there is a great deal of concern in the United States about “business ethics.”

But most of the discussion—and the courses under this title taught in business schools—deals with wrongdoing, for example, giving bribes or covering up for defective or harmful products.

That wrongdoers in high places always plead their allegiance to a “higher good” is nothing new.

All that needs to be said on the subject was said some three centuries ago by the great seventeenth-century French mathematician-philosopher Blaise Pascal in his Letters to a Provincial (1656-57), which demolished once and for all the Jesuit ethics of casuistry, the plea for a special ethics of power.

❡❡❡

But the Lewis story does not deal with “wrong against wrong.”

It deals with “right against right.”

While not totally unprecedented, this is a new problem.

It may be considered the central problem of responsibility within the society of organizations.

 

«§§§»

 

To be able to perform, an organization and its people must believe—as John L. Lewis did—that its own specialized task is the most important task in society.

Try a page search for “belief” here

As we saw earlier, hospitals must believe that nothing matters as much as curing the sick.

Businesses must believe that nothing matters as much as satisfying the material wants and needs of the community; and, in particular, that no product or service is nearly as vital to economy and community as the product or service “our business” produces and delivers.

Labor unions must believe that nothing matters except the rights of the laboring man.

Churches must believe that nothing matters except faith.

Schools must believe that education is the one absolute good.

And, so on.

❡❡❡

These organizations must be self-centered.

Collectively, they discharge the tasks of society.

But each discharges only one task, sees only one task.

❡❡❡

In fact, we expect the leaders of these organizations to believe, as Lewis did, that their organization is the organization, that it is society.

❡❡❡

During his lifetime, Charles E. Wilson (1890-1961) was a prominent personality on the American scene, first as president and CEO of General Motors, the world’s largest and most successful manufacturer at that time, and then, from 1953 to 1957, as Secretary of Defense in the Eisenhower administration.

If he is remembered at all today, however, it is for something he did not say: “What is good for General Motors is good for the United States.”

What Wilson did say in his 1953 confirmation hearings for the Defense Department job was: “What is good for the United States is good for GM.”

Wilson tried all the remaining years of his life to correct the misquote, but no one listened to him.

Everyone argued: “If he didn’t say it, he surely believes it’—in fact, he should believe it.”

❡❡❡

Where, then, are the limits?

In an emergency such as a war or a great natural catastrophe, the answer is fairly simple: The survival of society comes before the survival of any one of its organs.

But outside of such crises, there are no hard and fast answers.

The only way to approach the problem is as the joint responsibility of the leaders of our organizations.

❡❡❡

The closest approach so far is probably that of Japanese big business in the post-World War II period.

In their planning during those years, business leaders started out with the question: “What is best for Japan, its society, its economy?”

They then asked: “How can we turn this into an opportunity for business in general, and for our business in particular?”

They were not “altruistic” or “selfless”; on the contrary, they were extremely profit-conscious.

They did not “take leadership”; they accepted responsibility.

But even in Japan, business and its leaders became self-centered again once their country fully emerged from postwar reconstruction and into economic world leadership.

 

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From Command to Information

By 1970, information had begun to transform organizations.

We soon learned that the introduction into organization of information as a structural and organic element means the elimination of many, if not most, layers of management.

In the traditional organization, most of the people called “managers” do not actually manage; they relay orders downward and information upward.

When information becomes available, they become redundant.


But today we have to go beyond the information-based organization to the responsibility-based organization.

And in knowledge work, as we have seen, the organization is increasingly composed of specialists, each of whom knows more about his or her own specialty than anybody else in the organization.

The old-type organization assumed that the superior knew what the subordinate was doing for the superior, only a few years earlier, had occupied the subordinate’s position.

The knowledge-based organization, by contrast, has to assume that superiors do not know the job of their subordinates.

They have never held it.


Conductors do not know how the oboe does its work, but they know what the oboe should contribute.

The surgeon similarly knows what the anesthesiologist should contribute, even though he or she cannot tell the anesthesiologist how to do the job.

Both conductor and surgeon can still appraise the performance of their teammates.

But in knowledge-based organizations, there is frequently no one who knows enough about the work of the specialist to appraise what that specialist actually contributes.

Marketing people are not knowledgeable enough to appraise the performance of market researchers; they do not even understand the researchers’ language or their statistical techniques.


Sales managers are also unlikely ever to have done any sales forecasting or any pricing; they do not know enough to tell forecasters and pricers what to do.

Similarly, hospital administrators have never done clinical testing and cannot tell the pathologist in the medical lab what good testing is or how it should be done.

In today’s military, the commanding officer of an air squadron cannot tell his crew chief what good maintenance means, let alone how to do it.

Even on the factory floor (especially in highly automated production), workers increasingly have more knowledge of their jobs than their supervisor.

From Information to Responsibility

The knowledge-based organization therefore requires that everyone take responsibility for that organization’s objectives, contribution, and, indeed, for its behavior as well.


This implies that all members of the organization must think through their objectives and their contributions, and then take responsibility for both.

It implies that there are no “subordinates”; there are only “associates.”

Furthermore, in the knowledge-based organization all members have to be able to control their own work by feedback from their results to their objectives.*[1]

[1] {What forty years ago, in The Practice of Management (1954), I called “Management by Objectives and Self-Control.”}

All members must ask themselves: “What is the one major contribution to this organization and its mission which I can make at this particular time?”

It requires, in other words, that all members act as responsible decision makers.

All members have to see themselves as “executives.”


Next it is the responsibility of all members to communicate their objectives, their priorities, and their intended contributions to their fellow workers—up, down, and sideways.

And it is the responsibility of all members to make sure that their own objectives fit in with the objectives of the entire group.


This responsibility for thinking through what one’s contribution should be and one’s own responsibility as a knowledge worker, rests on each individual.

In the knowledge organization it becomes everybody’s responsibility, regardless of his or her particular job.


The ninety-seven technicians in a steelmaking minimill are legally “workers.”

But they control the machines which turn out as much steel as a conventional integrated steel mill does with a thousand people.

Every one of these technicians constantly makes critical decisions at his or her computerized work station.

They can be trained—they need to be trained.

But they cannot be commanded.

Each makes decisions all the time that have a greater impact on the results of the minimill than even middle managers ever had in the conventional steel mill.

Each of them has to be asked, “What should we hold you accountable for?”

“What information do you need”? and, in turn, “What information do you owe the rest of us?”

This means that each worker has to be a participant in decisions as to what equipment is needed; how the work should be scheduled; indeed, what the basic business policy of the entire mill should be.

In the minimill, the entire group is a team in which each member has responsibility for the performance of the organization.


Even organizations which at first glance do only low-skilled or unskilled work need to be restructured as responsibility-based organizations.

A small number of companies—one in Denmark, one in the United States, one in Japan—have been successful in greatly increasing the productivity of people who do unskilled, indeed menial, work, such as maintenance workers in hospitals, factories, or office buildings.

They have achieved these increases by demanding responsibility from the very lowliest of their employees, those who start with a pail and a broom to clean floors, or those who clean offices after hours—for objectives, for contribution, for the performance of the entire team.

These people know more about their jobs than anybody else.

And when they are held responsible, they act responsibly.

To Make Everybody a Contributor

There is a great deal of talk today about “entitlement” and “empowerment.”

These terms express the demise of the command and control-based organization.

But they are just as much terms of power and rank as the old terms were.

We should instead be talking about responsibility and contribution.

For power without responsibility is not power at all; it is irresponsibility.


Our aim should be to make people be more responsible.

What we ought to be asking is not, “What should you be entitled to?” but, “What should you be responsible for?

The task of management in the knowledge-based organization is not to make everybody a boss.

It is to make everybody a contributor.

 

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Transnationalism, Regionalism, and Tribalism

EVEN BEFORE WORLD WAR I, politicians and political scientists warned that the nation-state was becoming outmoded, and called instead for supranational institutions.

In fact, the nineteenth century had already created quite a few.

In earlier centuries, treaties were between one state and another; the nineteenth century wrote multinational treaties—one after the other.

The first half of the century produced multinational conventions to stamp out piracy and the slave trade and to guarantee the Freedom of the Seas.

The multinational treaties of the nineteenth century’s second half—those setting up, for example, the International Postal Union and the International Red Cross—for the first time put in place non-national and, indeed, supranational agencies.

Then, in the early years of the twentieth century, the International Court of Justice in The Hague was established and given jurisdiction over disputes between national states.

These non-national or transnational treaties and agencies were, however, seen as dealing with “technical” matters, and thus not infringing on national sovereignty.

(That was surely fiction.

The International Red Cross was given the right to inspect prisoner-of-war camps in wartime; and The Hague court held jurisdiction over boundary disputes between national states.)


After World War I, it became conventional wisdom that the nation-state was obsolete.

This belief underlay the attempt to create the first avowedly supranational agency, the League of Nations.

But it proved impotent right away.

And the United Nations, set up after World War II, for its first forty years served primarily as an arena in which the superpowers fought each other.

A post-World War II attempt to create a transnational currency was sponsored by John Maynard Keynes in the last months of his life.

It was defeated by the Americans.

In turn, the American proposal to transnationalize the atom—the Baruch Plan for transnational control of nuclear energy and nuclear arms—was rejected by the Russians.

And the most successful of these post-World War II inventions, GATT (the General Agreement on Trade and Tariffs), while clearly meant to impose transnationalism in an area central to sovereignty, foreign trade, has rarely prevailed against national interests.


Instead, the period after World War II saw, first, an explosive growth in the number of nation-states as the successors to the prewar empires all organized themselves as such, and second, the mutation of the nation-state into the Megastate.


But in the last decades—beginning perhaps in the 1970s—the nation-state has begun to come apart.

It has already been outflanked in crucial areas where “sovereignty” has lost all meaning.

Increasingly, the new challenges facing every government are challenges that simply cannot be dealt with by national or even international action.

They require transnational agencies, which have a “sovereignty” of their own.

Increasingly, regionalism is also sidelining the nation-state.

And internally, the nation-state is being undermined by tribalism.

 

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Money Knows No Fatherland …

“Money knows no fatherland” is a very old saying.

But the nation-state was invented in large part to disprove it.

Control over money was at the very center of what came to be called “sovereignty.”

But money has slipped the leash; it has gone transnational.

It cannot be controlled any longer by national states, not even by their acting together.


No central bank any longer controls money flows.

It can try to influence them by raising or lowering interest rates.

But in the flow of money, political factors are increasingly as important as interest rates.

The amount of money beyond the control of any one central bank, that is, the amount of money traded every day on the transnational markets (the New York foreign exchange market or the London interbank market), so greatly exceeds anything needed to finance national and international transactions that the flows escape any attempt to control or limit them, let alone manage them.

… Nor Does Information

Information was not included among Bodin’s attributes of sovereignty—there was not much of it in the late sixteenth century.

But when the mass media emerged in this century, control of information was at once seen as essential by the new practitioners of national sovereignty, the totalitarians.

Beginning with Lenin, every one of them—Mussolini, Stalin, Hitler—tried to exercise total control over information.

And in the democratic countries, mastery of information (particularly in television) increasingly became the central art of politician and politics.


Today, information is fully as transnational as money.

Governments can still control the news programs; but even in Germany during World War II, as many people may have listened clandestinely to the BBC as listened to Nazi propaganda chief Joseph Goebbels on the evening news.

Yet news programs are an increasingly small part of “information.”

Any thirty-second advertisement, any eighteen-minute soap opera episode, contains as much information as the most carefully controlled news program—maybe more.

There are no national boundaries any more for information.

Surely the increasing inability of the most absolute regime in history to control access to information was a major factor in the collapse of Communism and the Soviet Empire.


Information may be distorted.

The picture of American life conveyed by one of the world’s most popular television programs, “Dallas,” is not even a caricature.

But that does not alter the fact that “Dallas” has been seen by more people in more countries than any other kind of “message.”

Even in Communist China, it could not be kept off the air.

In a few years, with receiving dishes so small that no secret police could prevent their use inside the home, and with satellites overhead beaming programs to any point of the globe, information, for better or worse, will have become truly transnational and truly beyond the control of any one country.

Countries concerned about the integrity of their own national culture (Japan, say, or France) will attempt to protect sovereign control of popular information.

But such attempts are futile, it is abundantly clear.


It may be possible to restore control over money through a transnational institution.

The European Community is proposing the establishment of a European Central Bank and a common currency.

This would be tantamount to transnational control of economic and tax policy, which would reduce the national state in the economic sphere to the position of a local administrator.

In respect to information, no such transnational institution is even possible—not even under a world dictatorship.

Modern technology endows the individual with the means to circumvent totalitarian controls on information.

Banning fax machines and copying machines was still attempted by the Communists in their last desperate attempt to maintain control of information.

It led only to underground publication of the samizdat, manuscripts copied by hand by hundreds or thousands of students and circulated freely throughout the Soviet Union.

Once people have personal computers, fax machines, telephones, copiers, and videocassette recorders in their possession and in their homes (let alone television receivers, which can pluck messages from any satellite overhead), there is no way to reestablish control over information.


Money going transnational outflanks the nation-state by nullifying national economic policy.

Information going transnational outflanks the nation-state by undermining (in fact, destroying) the identification of “national” with “cultural” identity.

What does it mean to be a Frenchman if most of them prefer Charlie Chaplin to any play written by a French writer and produced in France?, a critic asked when movies first made their appearance in the 1920s.

But now French people—and English, German, Russian, Japanese, and Chinese—prefer Charlie Chaplin’s successors, the situation comedies or the “docudramas,” to anything produced in their own countries.

“High culture” has gone supranational fully as much as “popular culture.”

Architecture surely conveys as much of a message as does a TV show or a news bulletin; and today there is very little difference between the office buildings that go up in Tokyo and those that go up in Dallas or Düsseldorf.

Transnational Needs: the Environment

There is a growing need for truly transnational institutions, that is, for institutions that in their own sphere transcend the nation-state.

These institutions can—indeed, they must—make decisions and take action in a wide range of areas, cutting through the barrier of sovereignty and directly controlling citizens and organizations within a nation-state.

These decisions push aside the nation-state or turn it into an agent of the transnational institution.


The first is the environment.

Local action is necessary to prevent destructive pollution.

But the biggest threat to the environment is not local pollution—whether the effluents of a nearby paper mill, the wastes spewed into the ocean by municipal sewage, or the runoff of pesticides and fertilizers from local farms.

The greatest threat is damage to the human habitat, to the atmosphere, to the tropical forests which are the earth’s lungs, to the earth’s oceans, to its water supply, and to the air—the very environment on which all of humanity depends.

And there is the pressing need to balance protection of the environment against the demands of the developing world, with its rapidly growing population.


These are not challenges which can be tackled within the borders of a national state.

Pollution knows no boundaries, any more than money and information do.


The forests of Scandinavia, which may be Europe’s greatest natural resource, are being destroyed by pollution generated in the English Midlands and Scotland, in Belgium and eastern Germany.

Acid rain, which similarly threatens the forests of Canada—maybe the greatest natural resource of North America—is generated in the American Midwest.

But maintaining the Amazon rain forest in effect means putting severe short-term limitations on the ability of a growing Brazilian population to feed itself.

Who will pay for this, and how?

Stamping Out Terrorism

Second only to the environment is the growing need for transnational action and institutions to abort the return of private armies and stamp out terrorism.

The military action against Iraq in the winter and spring of 1991 may have been a starting point.

The Iraqi invasion itself was a threat only to a very small number of countries; it was not a threat to the United States, by the way, nor to any other of the developed countries.

Yet for the first time in recorded history, practically all the nation-states acted together to put down an act of terrorism—for this is what the Iraqi invasion of Kuwait represented.


Today, private armies have returned, after a gap of nearly four hundred years.

During the seventeenth century, Japan (around 1600), and Europe fifty years later, decided that the nation-state alone could be allowed to maintain a military force.

But with nuclear explosives, chemical weapons, and biological weapons, private armies have once again become possible.

Terrorism is all the more threatening as very small groups can effectively hold even large countries to ransom.

A nuclear bomb can easily be put into a locker or a postal box in any major city and exploded by remote control; so could a bacterial bomb, contain.. ing enough anthrax spores to kill thousands of people and to contaminate a big city’s water supply, making it uninhabitable.


Twenty years ago, many countries, especially the Communist countries, thought that terrorism could be used as a tool of national policy.

There is little doubt, for instance, that the terrorist groups in West Germany were recruited, financed, and trained in East Germany.

Or that Iraq, Iran, Syria, and Libya all recruited, financed, and trained groups to terrorize the Western world, and particularly the United States.


By now most countries—though by no means all—have realized that this is counterproductive.

But lack of support for terrorism is not enough.

What is needed to control the threat of terrorism is action that goes beyond any one sovereign state.

There is a precedent: the nineteenth-century treaties which stamped out the slave trade and made piracy on the high seas a transnational offense.

Arms Control

Third—and closely connected with the stamping out of terrorism—is the need for transnational arms control, which was discussed in the preceding chapter.

Finally, will there be a transnational agency to monitor and to enforce human rights?

Should there be such an agency?

Would a transnational agency, for instance, have been able to prevent Hitler’s Holocaust?

Or the “ethnic cleansing” of Moslems and Croats carried out by the Serbs in the former Yugoslavia?

Or the horror of Somalia?

Jimmy Carter as U.S. president in the 1970s clearly favored such an agency.

What might actually bring it about is the threat to prosperous countries of being inundated by millions of refugees unless transnational action can put an end to racial, religious, political, and ethnic persecution.


We may already have moved further toward transnationalism than most of us—and especially most politicians—realize.

In respect to the environment, we are close to transnational action to prevent, or at least to slow down, ozone depletion and the “greenhouse effect” of worldwide warming.

We are close to transnational action to protect the world’s great oceans and their resources.

Already there is a multilateral treaty to protect Antarctica.


With respect to—terrorism and arms control, the turning point may indeed have been the Gulf war, and especially the decision to entrust the destruction of Iraq’s terror weapons (nuclear, chemical, and biological) to agencies of the United Nations rather than to have this task carried out by the victorious U.S. Army.

Even earlier, in a step that was totally unprecedented—and indeed ran counter to all earlier American legal principles—the U.S. government proposed an International Criminal Court, with direct jurisdiction over acts of terrorism committed anywhere.

And the new government of the Russian Republic has revived the original Baruch Plan of 1947, proposing to hand over control of all nuclear weapons worldwide to a transnational agency—which, in effect, would then result in the elimination of all nuclear weapons and in action to stop any attempt by any country to build nuclear arms facilities.


The design of the necessary agencies is still ahead of us; so is the speed with which any of them will develop.

It may well take major catastrophes to make national governments willing to accept subordination to such institutions and their decisions.

The development of transnational institutions, the decision as to spheres in which they can act, their constitution, their powers, their relationship to national governments, and their financing (should they, for instance, have taxing power of their own?) are still far off.

We are indeed completely unprepared—as witness the ludicrous wrangling over who should pay what share of the costs of the military action in Iraq in 1991.

But it is predictable that the design and construction of transnational institutions will be a central political issue for many decades to come.

This means that the limitation of sovereignty will become a central issue in international relations, and in foreign as well as domestic politics.

Regionalism: the New Reality

Internationalism is no longer Utopia; it is already on the horizon—if barely so.

Regionalism is already a reality.

Regionalism does not create a superstate whose government replaces national government.

Rather, it creates regional governing agencies that sideline national government in important areas and make it increasingly irrelevant.


The trend toward regionalism was triggered by the European Community.

But it will not be confined to it.

The European Community started out as the European Economic Community, that is, as a purely economic organization.

It has assumed more and more political functions, and is now proposing the creation of a central bank and a European currency.

But it also has taken jurisdiction over access to trades and professions: over mergers, acquisitions, and cartels; over social legislation; over everything that can possibly be construed as “non-tariff barriers” to the free movement of goods, services, and people.

It is moving toward a European army.


The European Community then triggered the attempt to create a North American economic community, built around the United States but integrating both Canada and Mexico into a common market.

So far this attempt is purely economic in its goal.

But it can hardly remain so in the long run.

What makes this so important is that the impetus for the North American economic community did not come from the United States; it came from Mexico.

Yet for over one hundred fifty years, ever since Mexico was unified under the presidency of Benito Juárez, the goal of Mexican policy has been to put as much distance as possible between its country and its pushy and totally alien neighbor to the north.

No two contiguous countries in the world are as different as Mexico and the United States—in language, in religion, but above all in culture, values, and tradition.

Yet Mexico had to accept in the end that the one hundred fifty years of isolationist policy had ended in failure; in order to survive as a country and civilization, it has to integrate itself, at least economically, with the huge, dangerous, and alien neighbor to the north.

The treaty which the Mexican government has proposed to establish a customs union between Mexico and the other two North American countries, the United States and Canada, may fail to go through.

But the economic integration of the three countries into one region is proceeding so fast that it will make little difference whether the marriage is sanctified legally or not.


The same will increasingly be true in East Asia; the only question is whether there will be one or several, such economic regions.

There might be a region in which Coastal China and the countries of Southeast Asia coalesce around Japan.

It is possible also that rapidly growing Coastal China, which embraces about two fifths of China’s population and produces about two thirds of China’s GNP—from Tientsin in the north to Canton in the south—will establish itself as one region, with a Japan-oriented Southeast Asia as a second region.


Which route Asia chooses will be among the key questions of the 1990s and into the early years of the twenty-first century.


There is also a growing movement toward “mini-regions.”

No sooner did the Soviet Empire disintegrate than “Turkic” successor states in Central Asia proposed a “Turkic Region,” centered in the most Westernized and most highly developed Turkic country Turkey.

No sooner did the three Baltic countries—Lithuania, Latvia, and Estonia—secede from the Soviet Empire than they began to talk of a “Baltic Region,” in which they would join with their Scandinavian neighbors—and above all Finland and Sweden.

A similar mini-region embracing the peoples and nations of Southeast Asia (Malaysia, Singapore, Indonesia, the Philippines, and Thailand) has been proposed by the prime minister of Malaysia.

And an economic region replacing the old Soviet Union is what Russia’s prime minister is pushing and hoping for.


But whether there are three or four or more such regions is less important than that the thrust toward regionalism is irreversible.

It is also inevitable as a response to the new economic reality.


In the knowledge economy, neither traditional protectionism nor traditional free trade can work by themselves.

What is needed is an economic unit that is big enough to establish meaningful free trade and strong competition within the unit.

This unit has to be large enough to allow new “high-tech” industries to develop with a high degree of protection.

And the reason for this lies in the nature of high tech, that is, of knowledge industry.


High-tech industry does not follow the supply-demand equations of classical, neo-classical, and Keynesian economics.

There, the costs of production go up in proportion to the volume of production.

In high-tech industries, by contrast, the costs of production go down very fast as the volume of production goes up—what is now called the “learning curve” (see Chapter 10 below).


The significance of this is that a high-tech industry can establish itself in such a way that it will destroy any competition—what I once called “adversarial trade.”

Once this has happened, there is almost no chance for the defeated industry to come back; it has ceased to exist.

At the same time, however, the new high-tech industry has to have sufficient competition and challenge, or else it will simply not grow and develop.

It will become monopolistic and lazy, and will soon be obsolete.

The knowledge economy requires, therefore, economic units that are substantially larger than even a fair-sized national state; otherwise there will be no competition.

But it also requires the ability to protect industry and to conduct trade with other trading blocs on the basis of reciprocity rather than either protection or free trade.

This is an unprecedented situation.

It makes regionalism both inevitable and irreversible.


But regionalism, as the example of the European Community shows, is not simply “international.”

It has to establish transnational, indeed supranational institutions.


The various regions as they are emerging are quite dissimilar.

The European Community is built around a small nucleus of countries—the United Kingdom, Germany, France, Italy, and Spain—which are roughly comparable in size and population, and which, despite great differences in wealth, are still ranged along a continuum of economic development.

The most advanced Spanish company, for instance, is actually more advanced than the average German company.


The North American economic community would be very different.

In population, its three partners range from 250 million people in the United States to one tenth that number in Canada.

The three differ widely in economic development.

Parts of the United States are the world’s wealthiest areas, whereas parts of Mexico (especially the south) are among the world’s poorest and least developed.


The economic regions in Asia will be even more different.

They will not even all share a common cultural heritage—Indonesia or Malaysia never were part of Confucian culture.


But they will all create large free trade areas, larger than free trade areas have ever been before.

At the same time, they will create large areas that are unified in their response to the outside world and capable of being “reciprocal,” that is, of being at the same time both wide open and protectionist.


These regions will not replace the nation-state.

But they will sideline it.

The Return of Tribalism

Internationalism and regionalism challenge the sovereign nation-state from the outside.

Tribalism undermines it from within.

It saps the nation-state’s integrating power.

In fact, it threatens to replace nation with tribe.


In the United States, tribalism manifests itself in the growing emphasis on diversity rather than on unity.

America has always been a country of immigrants.

Every immigrant group was at first considered “foreign” and was discriminated against until two generations later when it had become “mainstream,” beginning with the Irish in the 1830s and 1840s.

America was a “melting pot.”

In the last thirty years, this has become highly unfashionable.

Now “diversity” is the message preached and practiced.

Any attempt to make new groups into “Americans” is considered discrimination; yet only sixty years ago the attempt to prevent such groups from becoming “Americans” would have been discrimination.

Whether the new groups are Europeans or Asians, whether they are black, brown, or white, whether they are Catholics or Buddhists, the emphasis now is on maintaining their identities and preventing their being encouraged, let alone forced, to become “Americans.”


This is by no means an American phenomenon and cannot even be explained in purely American terms (though clearly, as with everything in American society, the basic American problem, race relations between white and black, is central to the phenomenon).

Tribalism is even more rampant in Europe.

It has torn asunder Yugoslavia in bloody civil war.

It threatens civil war all over the former Soviet Empire.

Scots want to secede from the United Kingdom; Slovaks demand autonomy and separation from the Czechs; Belgium is torn by strife between the Flemish and the French-speaking Walloons.

Tiny local groups, though never discriminated against, demand “cultural autonomy”—for example, the 150,000 Sorbs living in the woods south of Berlin who are the last survivors of the Slavic tribes that inhabited Northern Germany more than a thousand years ago.


Tribalism as a phenomenon has become worldwide.

Will Canada survive this century, or will it split into two parts, an English-speaking and a French-speaking one?

Or even into four parts: a French-speaking Quebec; an English-speaking Ontario,: and Manitoba; the Prairie Provinces; and British Columbia?

(Where then would the Maritimes go? And Newfoundland?)

Will India remain united politically?

Will Corsica and Brittany stay within France?

Will the Lapps in Northern Finland and Northern Sweden gain autonomy?

Will Mexico stay united—or will the Indian south break away from the Hispanic north?

The list is endless.


One reason for the trend toward tribalism is that bigness no longer confers much advantage.

In the age of nuclear war, not even the biggest country can defend its citizens.

And the smallest one—Israel is a case in point—can build terror weapons.


Now that money and information have become transnational, even very small units are economically viable.

Big or small, everyone has equal access to money and information, on the same terms.

Indeed, the true “success stories” of the last thirty years have been very small countries.


In the 1920s, the Austrian republic, remnant of the old Austro-Hungarian Empire, was universally considered much too small to be economically viable, with fewer than 6 million inhabitants.

In fact, this was the main argument in favor of Hitler’s annexation of the country in Austria itself.

The Austria of the 1920s and 1930s was indeed in pitiful economic shape, with chronic unemployment of up to 20 percent.

Post-World War II Austria is hardly larger.

In addition, it had lost the trading area it still possessed in the twenties, the successor states to the former Austria-Hungary, which had become Communist.

Yet post-World War II Austria has developed into one of Europe’s most prosperous countries.


So have Finland—equally small—and Sweden, and Switzerland.

Hong Kong and Singapore have done even better.

Twenty years ago, the most fervent nationalist in any of the three Baltic countries which Stalin had annexed in 1940 would not have believed that his country could survive economically on its own; now few doubt it.

And the same is true of Canadian Quebec.


After all, a small country can now join an economic region and thus get the best of two worlds: cultural and political independence, and economic integration.

It is surely no coincidence that tiny Luxembourg has proved the most fervent “European” of them all.

The Need for Roots

The main reason for tribalism is neither politics nor economics.

It is existential.

People need roots in a transnational world; they need community.


All educated people in Spain know Castilian (which the outside world calls Spanish).

But the language many Spaniards speak in school and at home and, increasingly, even in the office is Catalan or Basque or Galician or Andalusian.

The change may be a change in emphasis but it does represent a fundamental change in identity.

Catalans, Basques, Galicians, Andalusians see the same soap operas on their TV sets.

The products they buy are as likely to have been made in Japan or in the United States as in Spain.

Increasingly, they work for an employer whose headquarters are in Tokyo, in South Korea, in New York, or in Düsseldorf.

They live increasingly in a transnational world.

But they feel the need for local roots; the need to belong to a local community.


Tribalism is not the opposite of transnationalism; it is its pole.

More and more American Jews marry outside their faith; but this is then the reason why they come to emphasize their Jewish roots and the culture of Judaism.

In the forty years since World War II, there have been more and more Serb boys who married Croatian girls—and conversely more and more Serb girls who married Bosnian Muslims or Croatians.

But this only made the rest of the Serbs, Croats, and Bosnians more conscious of their tribal identities.

Welsh and Irish marry more and more English people, only to become more conscious of being Welsh and Irish.

Tribalism thrives precisely because people increasingly realize that what happens in Osaka affects people in Slovenia who have no idea where Osaka is and can hardly find it on the map.

Precisely because the world has become transnational in so many ways—and must become ever more so—people need to define themselves in terms they can understand.

They need a geographic, a linguistic, a religious, and a cultural community which is visible to them and which, to use an old cliché, they can “get their arms around.”


The Sorbs in the woods outside of Berlin do not cease to be part of Germany and German culture.

But they also see themselves—and demand to be seen—as something distinct.

The Latin American immigrants into Los Angeles—whether from Mexico or Central America—become American citizens as soon as they possibly can.

They expect to have the same opportunities as native-born Americans have.

They expect their children to receive the same access to education, to careers, to jobs.

But they also expect to be able to maintain their Hispanic identity, Hispanic culture, and a Hispanic community.

The more transnational the world becomes, the more tribal it will also be.


This undermines the very foundations of the nation-state.

In fact, it ceases to be a “nation-state,” and becomes a “state” plain and simple, an administrative rather than a political unit.


Internationalism, regionalism, and tribalism between them are rapidly creating a new polity, a new and complex political structure, without precedent.

From analysis to perception — the new worldview

To use a mathematical metaphor, the postcapitalist polity has three vectors, each pulling in a different direction.

But an equation with three vectors has no one solution.


In the meantime, as the old English saying has it, “the work of government must go on.”

The only institutions we have so far for this work are those of the nation-state and its government.

The first political task of the post-capitalist polity must be to restore the performance capacity of government, which the Megastate has so seriously diminished.

 

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Citizenship through the Social Sector: Introduction

Social needs will grow in two areas.

They will grow, first, in what has traditionally been considered charity: helping the poor, the disabled, the helpless, the victims.

And they will grow, perhaps even faster, in respect to services that aim at changing the community and at changing people.


In a transition period, the number of people in need always grows.

There are the huge masses of refugees all over the globe, victims of war and social upheaval, of racial, ethnic, political, and religious persecution, of government incompetence and of government cruelty.

Even in the most settled and stable societies people will be left behind in the shift to knowledge work.

The Rise of the Knowledge Worker
(from a century of social transformation)

It takes a generation or two before a society and its population catch up with radical changes in the composition of the work force and in the demands for skills and knowledge.

It takes some time—the best part of a generation, judging by historical experience—before the productivity of service workers can be raised sufficiently to provide them with a “middle-class” standard of living.


The needs will grow equally—perhaps even faster—in the second area of social services, services which do not dispense’ charity but attempt to make a difference in the community and to change people.

Such services were practically unknown in earlier times, whereas charity has been with us for millennia.

But they have mushroomed in the last hundred years, especially in the United States.


These services will be needed even more urgently in the next decades.

One reason is the rapid increase in the number of elderly people in all developed countries, most of whom live alone and want to live alone.

A second reason is the growing sophistication of health care and medical care, calling for health care research, health care education, and for more and more medical and hospital facilities.

Then there is the growing need for continuing education of adults, and the need created by the growing number of one-parent families.

The community service sector is likely to be one of the true “growth sectors” of developed economies, whereas we can hope that the need for charity will eventually subside again.


Patriotism Is Not Enough

Patriotism is the willingness to die for one’s country.

Earlier in this century, the Marxists prophesied that the working class would no longer be patriots; their allegiance would be to their class rather than to their country.

This turned out to be a false prophecy.

People—and especially working people—are still willing to die for their country, even in the least popular of wars.

But patriotism alone is not enough.

 

There has to be citizenship as well

Citizenship is the willingness to contribute to one’s country.

It means the willingness to live—rather than to die—for one’s country.

Beware: How To Guarantee Non-Performance

To restore citizenship is a central requirement of the post-capitalist polity.


Patriotism, the willingness to die for one’s country, has been universal.

But citizenship is a distinctly Western invention.

It was in effect what Athens and Rome in their glory were all about.

And the finest political statement of the Western tradition is about citizenship: the rousing speech which the Greek historian Thucydides put in the mouth of Pericles, the Athenian leader

Citizenship disappeared with the collapse of Rome.

The Middle Ages did not have citizens: feudal lords had retainers, cities had burghers, the Church had communicants—but no one had citizens.

Nor did Japan have citizens before the Meiji Restoration of 1867.

The daimyo, the lord, had retainers; the urban centers had craft guilds; the religious sects had worshippers.

But there were no citizens.

The national state reinvented citizenship, and was in fact built on it.

What citizenship means in terms of rights and obligations has ever since been a central issue of political theory and political practice.


As a legal term, “citizenship” is a term of identification rather than of action.

As a political term, “citizenship” means active commitment.

It means responsibility.

It means making a difference in one’s community, in one’s society, in one’s country.


In the Megastate, political citizenship can no longer function.

Even if the country is small, the affairs of government are so far away that individuals cannot make a difference.

Individuals can vote—and we have learned the hard way these last decades how important the right to vote is.

Individuals can pay taxes—and again we have learned the hard way these last decades that this is a meaningful obligation.

But the individuals cannot take responsibility, cannot take action to make a difference.

Without citizenship, however, the polity is empty.

There can be nationalism, but without citizenship, it is likely to degenerate from patriotism into chauvinism.

Without citizenship, there cannot be that responsible commitment which creates the citizen and which in the last analysis holds together the body politic.

Nor can there be the sense of satisfaction and pride that comes from making a difference.

Without citizenship, the political unit, whether called “state” or “empire,” can only be a power.

Power is then the only thing that holds it together.

In order to be able to act in a rapidly changing and dangerous world, the post-capitalist polity must recreate citizenship


The Volunteer as Citizen

The one area in which this need can be satisfied is the social sector.

There, individuals (see Josh Abrams and the following five links) can contribute.

They can have responsibility.

They can make a difference.

They can be “volunteers.”

This is already happening in the United States.

… snip, snip …

These volunteers are no longer “helpers”; they have become “partners.”

Non-profit organizations in the United States increasingly have a full-time paid executive, but the rest of the management team are volunteers.

Increasingly, they run the organization.

… snip, snip …

The main reason for this upsurge of volunteer participation in the United States is not an increase in need.

The main reason is the search on the part of the volunteers for community, for commitment, for contribution.

See the return of tribalism and Drucker and Me

The great bulk of the new volunteers are not retired people; they are husbands and wives in the professional, two-earner family, people in their thirties and forties, well educated, affluent, busy.

They enjoy their jobs.

But they feel the need to do something where “we can make a difference,” to use the phrase one hears again and again—whether that means running a Bible class in the local church; teaching disadvantaged children the multiplication tables; or visiting old people back home from a long stay in the hospital and helping them with their rehabilitation exercises.


What the U.S. non-profits do for their volunteers may well be just as important as what they do for the recipients of their services.

in my job there isn't much challenge, not enough achievement, not enough responsibility; and there is no mission, there is only expediencycontinue

… snip, snip …

Citizenship in and through the social sector is not a panacea for the ills of post-capitalist society and post-capitalist polity, but it may be a prerequisite for tackling these ills.

It restores the civic responsibility that is the mark of citizenship, and the civic pride that is the mark of community.


The need is greatest where community and community organizations—and citizenship altogether—have been so thoroughly damaged as to have been almost totally destroyed: in the ex-Communist countries.

Government in these countries has not only been totally discredited; it has become totally impotent.

It may take years before the successor governments to the Communists—in Czechoslovakia and Kazakhstan, in Russia, Poland, the Ukraine—can competently carry out the tasks which only government can do: managing money and taxes; running the military and the courts; conducting foreign relations.

In the meantime, only autonomous, local non-profits—organizations of the social sector based on volunteers and releasing the spiritual energies of people—can provide both the social services that the society needs and the leadership development that the polity needs.


Different societies and different countries will surely structure the social sector very differently.

In Western Europe, for instance, the churches are unlikely to play the key role that they play in a still largely Christian America.

In Japan, membership in the employee community may well remain the central focus and badge of community, especially for rank-and-file workers.

But every developed country needs an autonomous, self-governing social sector of community organizations—to provide the requisite community services, but above all to restore the bonds of community and a sense of active citizenship.

Historically, community was fate.

In the post-capitalist society and polity, community has to become commitment.


Beware of wasting your time and life with institutions that are invested in good intentions, but are unmanaged or poorly managed.

This applies to the great majority of service institutions — How To Guarantee Non-Performance

Conditions for survival

See the social sector and the Absence of Effective Executives, Creating Tomorrow’s Society Of Citizens and Refining the Mission Statement here.

A marketing viewpoint

Mission

Managing Service Institutions in the Society of Organizations

Managing the Non-Profit Organization

 

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The long contents outline

  • Post-Capitalist Society
    • The transformation
      • We are living through a sharp transformation
      • Post-capitalist society and post-capitalist polity
        • Moving out of “capitalism”
        • The market will surely remain the effective integrator of economic activity
        • Becoming a society of new classes, with a new central resource at its core
        • Pension funds increasingly control the supply and allocation of money
      • The shift to the knowledge society
        • Employee society
        • Knowledge work and knowledge worker
        • The “society of organizations”
        • The end of one kind of history: the belief in salvation by society
        • Same forces are making capitalism obsolescent
        • The new society is already here
      • Outflanking the Nation-State
        • Nation-state losing its position as the sole organ of power
        • Will have to share power
        • In its specifics, the outcome is quite unpredictable
        • The end of the belief in salvation by society
      • The Third World
        • Not the focus of this book
        • 2/3 of the earth’s population live there now. 3/4 by 2015
        • A new and startling “economic miracle” is highly probable
        • Mainland China, Latin America, Eastern Europe
        • The danger of a tremendous flood of Third World immigrants far beyond their economic, social, or cultural capacity to absorb
      • Society, Polity, Knowledge
        • Nowhere near the end of the turbulences, transformations, the sudden upsets
        • Nothing “post” is permanent or even long-lived
    • Society
      • From Capitalism to Knowledge Society
        • The new meaning of knowledge
        • The industrial revolution
        • The productivity revolution
        • The management revolution
          • About the New Meaning of Knowledge
            • Knowledge is now being applied to knowledge
              • This is perhaps the ultimate step in the transformation of knowledge
              • Supplying knowledge to find out how existing knowledge can best be applied to produce results
                • In effect this is what we mean by management
              • Knowledge is now also being applied systematically and purposefully …
                • to define what new knowledge is needed
                  • to determine whether it is feasible
                • and to define what has to be done to make knowledge effective
              • Knowledge applied to tools, processes and products, and knowledge applied to human work
            • Management the generic organ of the knowledge society
            • Changes in the meaning of manager
              • From someone who “is responsible for the work of subordinates”
              • To one who “is responsible for the performance of people”
              • And now to one who “is responsible for the application and performance of knowledge”
            • Knowledge has become the resource
              • Changes—fundamentally—the structure of society
              • It creates new social and economic dynamics
              • It creates new politics
            • The knowledge we now consider knowledge proves itself in action
              • It is information effective in action, information focused on results
              • The results are seen outside the person
                • in society and economy
                • or in the advancement of knowledge itself
              • To accomplish anything, this knowledge has to be highly specialized
                • They are “disciplines”
                • A discipline converts a “craft” into a methodology
                  • Such as engineering, the scientific method, the quantitative method, or the physician’s differential diagnosis
                  • Each of these methodologies converts ad hoc experience into system
                  • Each converts anecdote into information
                  • Each converts skill into something that can be taught and learned
            • The shift from knowledge to knowledges has given the power to create a new society
              • Structured on the basis
                • of knowledge as something specialized
                • and of knowledge people as specialist
        • From knowledge to knowledges
      • The Society of Organizations
        • An organization is …
          • A human group composed of specialists
          • Working together on a common task
        • The function of organizations
          • To make knowledge productive
          • The more specialized knowledges are, the more effective they will be
          • Have to be put together with the work of other specialist to become results
            • Knowledges by themselves are sterile
          • Specialist are effective only as specialists—and knowledge workers have to be effective
            • The most highly effective knowledge workers do not want to be anything but narrow specialists
          • Specialist need exposure to the universe of knowledge
            • But they need to work as specialists
            • and to concentrate on being specialist
          • And for this to produce results, an organization is needed
        • Organization as a distinct species
          • All one species …
            • Armies
            • Churches
            • Universities
            • Hospitals
            • Businesses
            • Labor unions
          • They are the man-made environment, the “social ecology” of post-capitalist society
          • Management is a generic function pertaining to all organizations
        • The characteristics of organizations
          • Organizations are special-purpose institutions
            • They are effective because they concentrate on one task
              • In an organization, diversification means splintering
                • It destroys performance capacity
              • Organization is a tool
                • The more specialized its given task, the greater its performance capacity
          • Its mission must be crystal clear
            • Because the organization is composed of specialists
              • Each with his or her own narrow knowledge
            • Otherwise it member become confused
              • They will follow their specialty
              • Rather than applying it to the common task
              • They will each define “results” in terms of that specialty
                • imposing their own values on the organization
            • Only a clear, focused, and common mission can hold the organization together and enable it to produce results
            • The prototype of the modern organization is the symphony orchestra
              • Many high-grade specialists
              • By themselves they don’t make music. Only the orchestra can do that
              • Perform because they have the same score
          • Results exist only on the outside
            • Organizations exist to produce results on the outside
            • Discussion of “profit centers” vs. “cost-centers”
            • Results in an organization are always pretty far away from what each member contributes
            • Results need to be defined clearly and unambiguously
              • and, if at all possible, measurably
            • Organizations need to appraise and judge itself and its performance against clear, known, impersonal objectives and goals
          • “Voluntary” membership and the ability to leave an organizations
            • Organizations are always in competition for its essential resource qualified, knowledgeable, dedicated people
            • Need to market membership
            • Have to attract people
            • Have to hold people
            • Have to recognize and reward people
            • Have to motivate people
            • Have to serve and satisfy people
            • Has to be an organization of equals, of “colleagues,” of “associates”
              • The position of each is determined by its contribution to the common task
                • rather than by any inherent superiority or inferiority
              • Must be organized as a team of “associates”
          • They are always managed
            • Have “leaders”
            • May be perfunctory and intermittent
            • Or may be a full-time and demanding job for a fairly large group of people
            • Have to be people who make decisions
              • or nothing will get done
            • Have to be people who are accountable for the organization’s
              • mission
              • spirit
              • performance
              • results
            • Must be a “conductor” who controls the “score”
            • There have to be people who
              • focus the organization on its mission
              • set the strategy to carry it out
              • define what the results
            • This management has to have considerable authority
              • Yet its job in the knowledge organization is not to command; it is to direct
          • To be able to perform, an organization must be autonomous
            • Cannot be used to carry out “government policy”
          • Organization as a destabilizer
            • The organization of the post-capitalist society of organizations is a destabilizer
              • Its function is to put knowledge to work
                • on tools, processes, and products
                • on knowledge itself
              • It must be organized for constant change
              • It must be organized for innovation
              • It must be organized for systematic abandonment of …
                • the established
                • the customary
                • the familiar
                • the comfortable
                • products, services, and processes
                • human and social relationships
                • skills
                • organizations themselves
            • Knowledge changes fast
              • Today’s certainties will be tomorrow’s absurdities
              • Skills change slowly and infrequently
              • Changes that most profoundly affect a knowledge do not, as a rule, come out of its own area
              • Social innovation is as important as new science or new technology in creating new knowledges and in making old ones obsolete
              • Purposeful innovation has itself become an organized discipline
                • Which is both teachable and learnable
            • Every organization has to build into its very structure the management of change
              • Organized abandonment
                • Plan abandonment
              • The ability to create the new (three systematic practices)
                • Continuing improvement of everything it does (Kaizen)
                  • What every artist does
                  • Aim is to improve each product or service so that it becomes a truly different product or service in two or three year’s time
                • Learn to exploit
                  • Develop new applications from its own successes
                • Learn how to innovate
                  • Learn that innovation can should be organized as a systematic process
                • Then we come back to abandonment and we start all over again
            • Post-capitalist society has to be decentralized
              • Its organizations must be able to make fast decisions
                • Based on closeness …
                  • to performance
                  • to the market
                  • to technology
                  • to the changes in society, environment, and demographics
                    • all of which and utilized as opportunities for innovation
            • Organizations in the post-capitalist society thus constantly upset, disorganize, and destabilize the community
            • The “culture” of the organization must transcend community
              • The nature of the tasks that determines the culture of an organization
              • If the organization’s culture clashes
                • with the values of the community
                • the organization’s culture will prevail
                • or else the organization will not make its social contribution
              • ”Knowledge knows no boundaries”
                • Of necessity every knowledge organization is of necessity non-national, non-community
                • Even if totally embedded in the local community
        • The employee society
          • Another way to describe the phenomenon of the society of organizations
          • Employees who work in subordinate and menial occupations
            • Service workers
            • The wage earner, the “worker” of yesterday
          • Knowledge workers
            • 1/3 of the work force
            • They own the “means of production”
            • Cannot, in effect, be supervised
              • Cannot be told what to do, how to do it, how fast to do it and so on
              • Unless they know more than anybody else in the organization they are to all intents and purposes useless
            • They hold a crucial card in their mobility
          • Organizations and knowledge workers are interdependent
          • ”Loyalty” will have to be earned by proving to knowledge employees that the organization which presently employs them can offer them exceptional opportunities to be effective
          • Capital now serves the employee
      • Labor, Capital, and Their Future
        • If knowledge is the resource of post-capitalist society,
          • what then will be the future role and function of the two key resources of capitalist (and socialist) society, labor and capital?
        • Is labor still an asset?
        • How much labor is needed—and what kind?
          • The United States Steel example
            • From 120,000 employees to 20,000
            • Re-engineering work flow and tasks
            • Still grossly overstaffed
        • Capitalism without capitalist
          • The pension fund and its owners
            • The employees
          • The governance of corporations
            • Managing to “maximize shareholder’s value” will not work
              • Means damaging the wealth-producing capacity of the business
              • Means decline, and fairly swift decline
              • Long-term results cannot be achieved by piling short-term results on short-term results
              • Alienates the very people on whose motivation and dedication the modern business depends (knowledge workers)
            • Long-term results can be achieved …
              • By balancing short-term and long-term needs and objectives
                • short-term & long-term results
                • short-term & long-term interests of different constituencies
                  • each with a genuine stake in the business
              • We know …
                • in what areas to set objectives
                • how to integrate the pursuit of goals in different areas into a focused strategy
                • how to integrate business results and financial results
                • that there is no such thing as “profit”
                  • in a modern economy (an economy of change and innovation)
                  • there are only costs
                    • costs of the past
                    • costs of an uncertain future
                  • The minimum financial return
                    • from the operations of the past
                    • that is adequate to the cost of the future
                    • is the cost of capital
                      • Only a handful of American companies have failed to cover their costs in the last thirty years
            • Making management accountable
              • We know what management should be accountable for
              • To whom should it be accountable?
                • The owners—Pension funds and institutional investors
                  • Cannot act as owners
                  • Cannot manage a business
                  • Cannot consider themselves “investors”
                    • Holdings cannot be sold. Nobody to buy other than other pension funds
                  • They have to make sure that the business is being managed
                    • This will probably lead to a “business audit”
                      • Within the next 20 years
                      • Track the performance of a company and its management against a strategic plan and specific objectives
                        • This will show, over a period of a few years, whether a business is performing well or not
                      • Will give management the autonomy it needs to perform
                      • Will establish accountability for performance and will enforce it
                      • Will put management under the discipline of known and public performance requirements
                      • Will enable the trustees of capital to act as responsible owners
                        • Whose duty it is to take care
                          • of the property in their keeping
                          • of the companies whose legal owners they represent
                          • the future beneficiaries of the pension fund
                            • the interests of these beneficiaries are
                              • in long-term rather than short-term results
                              • and in the growth of the economy
                              • rather than in short-term stock market prices
          • The function of capital will increasingly be to …
            • make knowledge effective in performance
            • serve performing management rather than to dominate it
          • Call it “employee capitalism”
      • The Productivity of the New Work Forces
        • The new challenge facing post-capitalist society is the productivity of knowledge workers and service workers
          • To improve the productivity of knowledge work will require drastic changes
            • in the structure of the organizations of post-capitalist society
            • and in the structure of society itself
        • Knowledge and service workers account for 3/4 to 4/5 of the work force in all developed countries
          • Their productivity is the productivity of a developed economy
          • Their productivity is abysmally low. And may be going down
        • Improving productivity and the different types of work
          • Service work that is similar in nature to production work (making and moving things)
            • Has to be “re-engineered” before it can be made productive
            • Has to be studied and restructured for optimum contribution and achievement
          • In all other work done by the new work forces
            • Raising productivity requires new concepts and new approaches
            • The prerequisites for productivity in knowledge
              • Defining performance
                • The task is not given — it has to be determined
                  • ”What are the expected results from this work?
                  • Demands risky decisions
                  • Usually no right answer. There are choices instead
                  • And results have to be clearly specified
              • Determining the appropriate work flow
                • Have to decide how the work should be organized
              • Setting up the right team
                • What kind of human team is appropriate for this kind of work and its flow?
                  • 3 types of teams, their strengths and where they are appropriate
                    • baseball or cricket
                    • soccer or symphony orchestra
                    • doubles tennis or jazz combo or the ‘President’s Office’ in the large American company or the Vorstand in the German company
                  • The types cannot be mixed
                  • Changing from one type to another is exceedingly difficult and painful
                    • Cuts across old, long-established, and cherished human relationships
                    • Yet any major change in the nature of work, its tools, it flow, and its end product may require changing the team
                      • This is particularly true with respect to any change in the flow of information
                        • Discussion on the massive re-engineering and “information-based organization”
                          • The traditional American company
                          • Traditional new product work
                • The right team by itself does not guarantee productivity
                  • But the wrong team destroys productivity
              • Concentrating on work and achievement
                • Knowledge workers and service workers should always be asked
                  • Is this work necessary to your main task?
                  • Does it contribute to your performance?
                  • Does it help you do you own job?
                • If the answer is no
                  • the procedure or operation must be considered a “chore” rather than “work”
                  • It should either be …
                    • dropped altogether
                    • or engineered into a job of its own
            • Now ready to begin the work on making productive the individual job and the individual tasks
              • Ask the person who does the job
              • They may not know how to interpret their knowledge
              • But they know what works and what doesn’t
              • Questions
                • What can we learn from you?
                • What do you have to tell us about the job and how it should be done?
                • What tools do you need?
                • What information do you need?
              • Workers must be required to …
                • take responsibility for their own productivity
                • and to exercise control over it
              • Build continuous learning into the job and into the organization
                • Knowledge demands continuous learning because it is constantly changing
                • Service work demands continuous self-improvement, continuous learning
                • The best way is for them to teach
                • The organization has to become both a learning and a teaching organization
        • Restructuring organizations
          • Improving the productivity of knowledge and service workers will demand fundamental changes in the structure of organizations
            • It may even require totally new organizations
          • Re-engineering the team so that work can flow properly will lead to the elimination of most “management layers”
            • We will thus see a radical shift from the tradition in which performance was primarily rewarded by advancement into command positions
              • into managerial ranks
            • Organizations will have very few such command positions
            • We will increasingly see organizations operating like the jazz combo
              • In which leadership within the team shifts with the specific assignment
              • and is independent of the “rank” of each member
                • The word “rank” should disappear totally from the vocabulary of knowledge work and knowledge worker
                • It should be replaced by “assignment”
          • Will raise tremendous problems of
            • motivation
            • reward
            • recognition
        • The case for outsourcing
          • Even more drastic, indeed revolutionary, are the requirements for obtaining productivity from service workers
          • Service work in many cases will be contracted out of the organization to whom the service is being rendered
            • Applies particularly to support work
              • Such as maintenance
              • and a good deal of clerical work
          • Outsourcing is necessary not just because of the economics involved
            • It is necessary because it provides opportunities, income and dignity for service work
          • We should therefore expect within a fairly short period of years to find such work contracted out to independent organizations which compete and get paid for their own effective in making this kind of work more productive
          • This means a radical change in structure for the organizations of tomorrow
            • It means that the big business, the government agency, the large hospital, the large university will not necessarily be the one that employs a great many people
            • It will be the one that has substantial revenues and substantial results
              • Achieved in large part because it itself does only work that is focused on its mission
              • Work that is directly related to its results
              • Work that it recognized, values, and rewards appropriately
              • The rest it contracts out
        • Averting a new class conflict
      • The Responsibility-Based Organizations
        • The society of organizations, the knowledge society demands a responsibility-based organization
          • Take responsibility for the limit of their power
            • For the point at which exercising their function ceases to be legitimate
          • Take “social responsibility”
            • There is no one else around in the society of organizations to take care of society itself
            • Must do so responsibly
              • Within the limits of their competence
              • Without endangering their performance capacity
          • What is legitimate power? What are its limits? What should they be?
          • Have to be built on responsibility from within
            • Rather than on power or on command and control
            • In knowledge-based organizations
              • there is frequently no one
              • who knows enough about the work of the specialist
              • to appraise what that specialist actually contributes
            • Individual responsibilities
              • The knowledge-based organization therefore requires that everyone take responsibility for that organization’s objectives, contribution, and for its behavior as well
              • All members of the organization must think through their objectives and their contributions, and then take responsibility for both
              • There are no “subordinates.” There are only “associates”
              • All members have to be able to control their own work by feedback from their results to their objectives
              • All member must ask themselves: “What is the one major contribution to this organization and its mission which I can make at this particular time?”
              • Requires that all member act as responsible decision makers
              • All members have to see themselves as “executives”
              • All member must communicate their objectives, their priorities, and their intended contributions to their fellow workers—up, down, and sideways
              • All members must make sure that their own objectives fit with the objectives of the entire group
              • This responsibility for thinking through what one’s contribution should be and one’s own responsibility as a knowledge worker, rests on each individual
            • Even organizations which at first glance do only low-skilled or unskilled work need to be restructured as responsibility-based organizations
              • A small number of companies have been successful in greatly increasing the productivity of people who do unskilled, indeed menial work
              • By demanding responsibility for the very lowliest of their employees
                • for objectives
                • for contribution
                • for the performance of the entire team
            • Forget about “entitlement” and “empowerment.”
              • We should be talking about responsibility and contribution
              • ”What should you be responsible for?”
              • The task of management is the knowledge-based organization
                • to make everybody a contributor
    • Polity
      • From Nation-State to Megastate
        • The paradox of the nation-state
        • The dimensions of the Megastate
        • The nanny state
        • The Megastate as master of the economy
        • The fiscal state
        • The cold war state
        • The Japanese exceptions
        • Has the Megastate worked?
        • The pork-barrel state
        • The cold war state—the failure of success
      • Transnationalism, Regionalism, Tribalism
        • Money know no fatherland…
        • … nor does information
        • Transnational needs: the environment
        • Stamping out terrorism
        • Arms control
        • Regionalism: the new reality
        • The return of tribalism
        • The need for roots
      • The Needed Government Turnaround
        • The futility of military aid
        • What to abandon in economic theory
        • Concentrating on what does work
        • The half-successes: beyond the nanny state
      • Citizenship Through the Social Sector
        • Social needs with grow in two areas
          • Helping the poor, the disabled, the helpless, the victims
          • Services that aim at changing the community and at changing people
        • The need to “outsource”
        • Patriotism is not enough
        • The need for community
        • The vanishing plant community
        • The volunteer as citizen
    • Knowledge
      • Knowledge: Its Economics and Its Productivity
        • The economics of knowledge
        • The productivity of knowledge
        • The productivity of money
        • The management requirement
        • Only connect …
      • The Accountable School
        • How the Japanese did it
        • The new performance demands
        • Learning to learn
        • The school in society
        • The schools as partners
        • The accountable school
      • The Educated Person
        • Knowledge
          • is not impersonal, like money
          • does not reside in a book, a databank, a software program; they contain only information
          • is always embodied in a person; carried by a person; created, augmented, or improved by a person; applied by a person; taught and passed on by a person; used or misused by a person
        • The shift to the knowledge society therefore puts the person in the center
          • In so doing, it raises new challenges, new issues, new and quite unprecedented questions about the knowledge society’s representative, the educated person
          • In the knowledge society, the educated person is society’s emblem; society’s symbol; society’s standardbearer
            • The educated person is the social “archetype”?to use the sociologist’s term
            • He or she defines society’s performance capacity
            • But he or she also embodies society’s values, beliefs, commitments
          • This must change the very meaning of “educated person.”
            • It must change the very meaning of what it means to be educated
            • It will thus predictably make the definition of an “educated person” a crucial issue
          • With knowledge becoming the key resource, the educated person faces new demands, new challenges, new responsibilities
          • The educated person now matters
          • The knowledge society must have at its core the concept of the educated person
            • It will have to be a universal concept, precisely because the knowledge society is a society of knowledges and because it is global?in its money, its economics, its careers, its technology, its central issues, and above all, in its information
          • Post-capitalist society requires a unifying force
            • It requires a leadership group, which can focus local, particular, separate traditions onto a common and shared commitment to values, a common concept of excellence, and on mutual respect
          • Postcapitalist society is both a knowledge society and a society of organizations, each dependent on the other and yet each very different in its concepts, views, and values
          • Elements of the educated person
            • access to the great heritage of the past will have to be an essential element
            • will have to be able to appreciate other cultures and traditions: for example, the great heritage of Chinese
              • Japanese, and Korean paintings and ceramics; the philosophers and religions of the Orient; and Islam, both as a religion and as a culture
            • far less exclusively “bookish” than the product of the liberal education of the humanists
            • will need trained perception fully as much as analysis
            • The Western tradition will, however, still have to be at the core, if only to enable the educated person to come to grips with the present, let alone the future
              • The future may be “post-Western”; it may be “anti-Western.” It cannot be “non-Western.”
                • Its material civilization and its knowledges all rest on Western foundations: Western science; tools and technology; production; economics; Western-style finance and banking. None of these can work unless grounded in an understanding and acceptance of Western ideas and of the entire Western tradition
            • prepared for life in a global world
              • It will be a “Westernized” world, but also increasingly a tribalized world
              • must become a “citizen of the world”?in vision, horizon, information
              • will also have to draw nourishment from their local roots and, in turn, enrich and nourish their own local culture
            • be prepared to live and work simultaneously in two cultures — that of the “intellectual,” who focuses on words and ideas, and that of the “manager,” who focuses on people and work
              • Intellectuals see the organization as a tool; it enables them to practice their techné, their specialized knowledge
              • Managers see knowledge as a means to the end of organizational performances
              • Both are right
                • They are opposites; but they relate to each other as poles rather than as contradictions
                • They surely need each other: the research scientist needs the research manager just as much as the research manager needs the research scientist
                • If one overbalances the other, there is only nonperformance and all-around frustration
                • The intellectual’s world, unless counterbalanced by the manager, becomes one in which everybody “does his own thing” but nobody achieves anything
                • The manager’s world, unless counterbalanced by the intellectual, becomes the stultifying bureaucracy of the “organization man.”
                • But if the two balance each other, there can be creativity and order, fulfillment and mission.
              • A good many people in the post-capitalist society will actually live and work in these two cultures at the same time
              • And many more should be exposed to working experience in both cultures, by rotation early in their career — from a specialist’s job to a managerial one, for instance, rotating the young computer technician into project manager and team leader, or by asking the young college professor to work part-time for two years in university administration
              • And again, working as “unpaid staff” in an agency of the social sector will give the individual the perspective and the balance to respect both worlds, that of the intellectual and that of the manager.
              • All educated persons in the postcapitalist society will have to be prepared to understand both cultures
            • The technés have to become part of what it means to be an educated person
              • See heading: Technés and the Educated Person
                • But their job or their profession was seen as a “living,” not a “life.”
                • But now that the technés have become knowledges in the plural, they have to be integrated into knowledge
                • The fact that the liberal arts curriculum they enjoyed so much in their college years refuses to attempt this is the reason why today’s students repudiate it a few years later. They feel let down, even betrayed. They have good reason to feel that way. Liberal arts and Ailgemeine Bildung that do not integrate the knowledges into a “universe of knowledge” are neither “liberal” nor “Bildung. “They fall down on their first task: to create mutual understanding, that “universe of discourse” without which there can be no civilization. Instead of uniting, such disciplines only fragment.
                  • But all over the world today’s students, a few years after they have graduated, complain that “what I have learned so eagerly has no meaning; it has no relevance to anything I am interested in or want to become.” They still want a liberal arts curriculum for their own children — Princeton or Carleton; Oxbridge; Tokyo University; the lycée; the Gymnasium — though mainly for social status and access to good jobs. But in their own lives they repudiate such values. They repudiate the educated person of the humanists. Their liberal education, in other words, does not enable them to understand reality, let alone to master it.
              • We neither need nor will get “polymaths,” who are at home in many knowledges; in fact, we will probably become even more specialized
              • But what we do need — and what will define the educated person in the knowledge society — is the ability to understand the various knowledges
                • What is each one about
                • What is it trying to do?
                • What are its central concerns and theories?
                • What major new insights has it produced?
                • What are its important areas of ignorance, its problems, its challenges?
              • Without such understanding, the knowledges themselves will become sterile, will indeed cease to be “knowledges.”
                • They will become intellectually arrogant and unproductive
                • For the major new insights in every one of the specialized knowledges arise out of another, separate specialty, out of another one of the knowledges
              • The specialists have to take responsibility for making both themselves and their specialty understood
                • The media, whether magazines, movies, or television, have a crucial role to play. But they cannot do the job by themselves. Nor can any other kind of popularization.
                • Specialties must be understood for what they are: serious, rigorous, demanding disciplines.
                • This requires that the leaders in each of the knowledges, beginning with the leading scholars in each field, must take on the hard work of defining what it is they do
              • There is no “queen of the knowledges” in the knowledge society
                • All knowledges are equally valuable; all knowledges, in the words of the great medieval philosopher Saint Bonaventura, lead equally to the truth
                • But to make them paths to truth, paths to knowledge, has to be the responsibility of the men and women who own these knowledges
                • Collectively, they hold knowledge in trust.
          • But one thing we can predict: the greatest change will be the change in knowledge? in its form and content; in its meaning; in its responsibility; and in what it means to be an educated person

An outline of the education related chapters from Post Capitalist Society

 

Peter Drucker’s page on Amazon.com



Related:

 

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The following ↓ is a condensed strategic brainscape that can be explored and modified to fit a user’s needs

 

The concepts and links below ↓ are …

major foundations ↓ for future directed decisionS

aimed at navigating

a world constantly moving toward unimagined futureS

history-of-the-world-in-two-hours-03-pict-600

YouTube: The History of the World in Two Hours
— beginning with the industrial revolution ↑ ↓

Management and the World’s Work

In less than 150 years, management ↑ has transformed
the social and economic fabric of the world’s developed countries …

radar_limited-pict-no-reflect-400

Take responsibility for yourself and
don’t depend on any one organization ↑ ↓ (bread-crumb trailS below)

We can only work on the thingS on our mental radar at a point in time

About time The future that has already happened

radar-differences-pict-400

The economic and social health of our world
depends on
our capacity to navigate unimagined futureS
(and not be prisoners of the past)

 

The assumption that tomorrow is going to be
an extrapolation of yesterday sabotages the future — an
organization’s, a community’s and a nation’s future.

The assumption ↑ sabotages future generations — your children’s,
your grandchildren’s and your great grandchildren’s — in
spite of what the politicians say …

The vast majority of organization and political power structures
are engaged in this ↑ futile mind-set
while rationalizing the evidence

 

The future is unpredictable and that means
it ain’t going to be like today
(which was designed & produced yesterday)

 

The capacity to navigate is governed by what’s between our ears ↓

 

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When we are involved in doing something ↑

it is extremely difficult to navigate

and very easy to become a prisoner of the past.

 

We need to maintain a pre-thought ↓

systematic approach to work and work approach

Click on either side of the image below to see a larger view

Harvest to action

Harvesting and implementing Work

based on reality

the non-linearity of time and events

and the unpredictability of the future

with its unimagined natureS. ↓ ↑

 

(It’s just a matter of time before we can’t get to the future
from where we are presently
)

larger view

foundations-and-opportunities-2016-pict-400

Intelligence and behavior ↑ ↓ ← Niccolò Machiavelli ↑ ↓

Political ecologists believe that the traditional disciplines define fairly narrow and limited tools rather than meaningful and self-contained areas of knowledge, action, and eventscontinue

❡ ❡ ❡

Foundational ↑ Books → The Lessons of History — unfolding realities (The New Pluralism → in Landmarks of Tomorrow ::: in Frontiers of Management ::: How Can Government Function? ::: the need for a political and social theory ::: toward a theory of organizations then un-centralizing plus victims of success) ::: The Essential Drucker — your horizons? ::: Textbook of Wisdom — conceptual vision and imagination tools ::: The Daily Drucker — conceptual breadth ::: Management Cases (Revised Edition) see chapter titles for examples of “named” situations …

foundational-books-cropped-pict-600

What do these ideas, concepts, horizons mean for me? continue

 

picture-technology-pict-no-reflect-400

Society of Organizations

“Corporations once built to last like pyramids
are now more like tents.

Tomorrow they’re gone or in turmoil.”

sound-players-pict-600

“The failure to understand the nature, function, and
purpose of business enterprise” Chapter 9, Management Revised Edition

“The customer never buys ↑ what you think you sell.
And you don’t know it.

That’s why it’s so difficult to differentiate yourself.” Druckerism

 

“People in any organization are always attached to the obsolete
the things that should have worked but did not,
the things that once were productive and no longer are.” Druckerism

 

What Everybody Knows Is Frequently Wrong ::: If You Keep Doing What Worked in the Past You’re Going to Fail ::: Approach Problems with Your Ignorance—Not Your Experience ::: Develop Expertise Outside Your Field to Be an Effective Manager ::: Outstanding Performance Is Inconsistent with Fear of Failure ::: You Must Know Your People to Lead Them ::: People Have No Limits, Even After Failure ::: Base Your Strategy on the Situation, Not on a Formula — A Class With Drucker: The Lost Lessons of the World's Greatest Management Teacher

 

Why Peter Drucker Distrusted Facts (HBR blog) and here

 

Best people working on the wrong things continue

 

Conditions for survival

 

Going outside

 

Making the future — a chance for survival

 

“For what should America’s new owners, the pension funds,
hold corporate management accountable?” and
“Rather, they maximize the wealth-producing capacity of the enterprise”
Search for the quotes above here

 

Successful careerS are not planned ↑ here and

 

What do these issues, these challenges mean for me & … — an alternative

 

Exploration paths → The memo they don’t want you to see ::: Peter Drucker — top of the food chain ::: Work life foundations (links to Managing Oneself) ::: A century of social transformation ::: Post-capitalist executive ::: Allocating your life ::: What executives should remember ::: What makes an effective executive? ::: Innovation ::: Patriotism is not enough → citizenship is needed ::: Drucker’s “Time” and “Toward tomorrowS” books ::: Concepts (a WIP) ::: Site map a.k.a. brainscape, thoughtscape, timescape

 

Just reading ↑ is not enough, harvesting and action thinking are neededcontinue

Information ↑ is not enough, thinking ↓ is neededfirst then next + critical thinking

thinking-principles-taskcard-400

Larger view of thinking principles ↑ Text version ↑ :::
Always be constructiveWhat additional thinking is needed?

 

Initially and absolutely needed: the willingness and capacity to
regularly look outside of current mental involvements continue

bread-crumb trail end

 

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Peter Drucker: Conceptual Resources

The Über Mentor

A political / social ecologist
a different way of seeing and thinking about
the big picture
— lead to his top-of-the-food-chain reputation

drucker business week

about Management (a shock to the system)

 

“I am not a ‘theoretician’; through my consulting practice I am in daily touch with the concrete opportunities and problems of a fairly large number of institutions, foremost among them businesses but also hospitals, government agencies and public-service institutions such as museums and universities.

And I am working with such institutions on several continents: North America, including Canada and Mexico; Latin America; Europe; Japan and South East Asia.” — PFD

 

line

 

List of his books

 

Large combined outline of Drucker’s books — useful for topic searching.

 

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High tech is living in the nineteenth century,
the pre-management world.
They believe that people pay for technology.
They have a romance with technology.
But people don't pay for technology:
they pay for what they get out of technology.” —
The Frontiers of Management

 

“The greatest danger in times of turbulence is not turbulence; it is to act with yesterday’s logic”. — Peter Drucker


The shift from manual workers who do as they are being told — either by the task or by the boss — to knowledge workers who have to manage themselves ↓ profoundly challenges social structure

Managing Oneself is a REVOLUTION in human affairs.” … “It also requires an almost 180-degree change in the knowledge workers’ thoughts and actions from what most of us—even of the younger generation—still take for granted as the way to think and the way to act.” …

… “Managing Oneself is based on the very opposite realities: Workers are likely to outlive organizations (and therefore, employers can’t be depended on for designing your life), and the knowledge worker has mobility.” ← in a context

 

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These pages are attention directing tools for navigating a world moving toward unimagined futures.

It’s up to you to figure out what to harvest and calendarize
working something out in time (1915, 1940, 1970 … 2040 … the outer limit of your concern)nobody is going to do it for you.

It may be a step forward to actively reject something (rather than just passively ignoring) and then figure out a coping plan for what you’ve rejected.

Your future is between your ears and our future is between our collective ears — it can’t be otherwise. A site exploration starting point

 

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