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Drucker: The Man Who Invented the Corporate Society

 

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bbx Foreword

To understand Peter Drucker’s career we have to grasp, first of all, the American attitude towards commerce and industry.

Modern industry (that is, originally, iron and steel) was born in Britain.

But the soil of Britain, ideal for planting the seed, was not quite favourable for the growth of the industrial plant.

London was like Vienna, the centre of an empire which would soon cease to exist.

But while it remained in being and for years, indeed, after its disintegration, the brains available were directed into public rather than into business administration.

For the British chessboard was already occupied by King and Queen, by bishops, knights and castles, and there was only a limited space and opportunity for the pawn who aspired to royal importance.

There could be wealthy industrialists but they were out-rated in esteem by admirals, generals, ambassadors and judges.

There would be men like Hudson, the railway king, or Armstrong, the British answer to Friedrich Krupp.

But Armstrong with all his cannon was of small consequence beside a Viceroy of India, and was a poorer man than the Duke of Westminster.

The British had a scale of values in which an Earl comes below a Marquess, in which an actor-manager may become a knight, in which the millionaire (as such) comes practically nowhere.

Room was found for the industrialist as time went on but the tradition remained that talent should go into the diplomatic corps or the Indian Civil Service, should go into the Navy or out to the Sudan.

Younger sons without obvious ability might go into the City and a banker might have a modest position in society but the businessman was taught to know his place.

He might sit near the foot of the table or he might not have been invited at all.

He could at any time be brushed aside by even relatively penniless officers in the Household Cavalry.

In many a context his millions might be irrelevant, his manners less than acceptable, his origin all too apparent.

It was right and proper, no doubt, that businessmen should discuss business in a Chamber of Commerce but all this was of far less importance than anything discussed at Whitehall.

And what was true in London was as true, more or less, in Paris, Vienna, Berlin or Rome.

Prestige in France centred upon members of the Academy and Graduates of the Ecole Polytechnique.

Prestige in Vienna centred upon Archdukes, in Berlin upon the Prussian General Staff, in Rome upon the Vatican and the College of Cardinals.

In whichever way he might look, the European pawn could see that the chessboard was largely occupied.

In the United States the aristocracy hardly survived the Civil War, a whole continent was all but blank and for the railway magnates the sky was clearly the limit.

Little prestige attached to politics and the senator who seemed too dignified was liable to lose his seat to someone whose image was more democratic.

Big business was essentially the invention of Cornelius Vanderbilt and millionaires enjoyed an eminence they could never have achieved in Europe.

They were aided at first by the fact that there were, in those days, four dollars to the pound.

To be a millionaire in Britain was then four times as difficult.

But millions multiplied and people looked upon the great companies as the very pillars of American society.

There were criticisms, too, but it became the accepted fact that all the brightest talent should be drawn into industry or into the ancillary professions of accountancy, banking, insurance and law.

American romance centred, above all, on the oil prospector or inventor, the storekeeper who ended as head of a retail chain, the corporation’s founder who came to dominate a whole industry.

Then the scene changed in another way.

Engineers had been men associated with coal and soot, with grease and lampblack.

With the coming of electricity there appeared a new breed of engineers, cleaner and more scientific.

They were socially on a higher level and the whole world of industry became more worthy of study.

Just as scientific agriculture began with the inventions of gumboots — without which the scientist never went beyond the farm gate — so the science of management began with the electrical plant, which was clean enough for the theorist to explore.

In America some serious thought was now given, not merely to economics but to the art — and in time, the science — of management.


A pioneer in this field was F. W. Taylor, whose success was such that the American Efficiency Society was founded in 1912.

Efficiency was the American word, European practitioners calling themselves Industrial Engineers, as they still do, and British practitioners being Management Consultants.

The analysis of industrial method began at rather a humble level with time and motion study but accountants soon invaded the head office with new ideas about paper work.

Other theories, bolder still, advocated business education.

The oldest business college in the United States is believed to be the Wharton School, founded in 1881 as a part of the University of Pennsylvania; a useful experiment but rather ahead of its time.

The foundation of the Harvard School of Business Administration in 1909 is the real landmark as giving Harvard’s academic blessing to a new development and to one at which the established academics were looking askance.

From that date the business schools have been accorded a grudging recognition, at first in the United States and later, and far more slowly, in Europe.

There is still a question mark suspended over each one of them.

It is doubtful, for one thing, whether there is an accepted body of theory which a school can safely teach.

It is doubtful, on the other hand, whether the teachers (many of them lacking business experience) are well qualified to explain and justify what theory there is.

With these limitations, and with many doubts about their curriculum, the business schools have come to stay.

Parallel with business education and essential to it, there has appeared the literature of management books for the academic shelf providing topics for the academic seminar.

These begin with F. W. Taylor’s Scientific Management (1911), The Modern Corporation and Private Property, A. A. Berle and G. C. Mezas (1932), and Dale Carnegie’s How to Win Friends and Influence People (1936).

These made a beginning and one thing at once apparent was that few of these books were written by men who had themselves been successful in business.

Such books were not unknown — one or two, for example, by Andrew Carnegie — but these contained little but dreary platitudes about thrift, integrity and honest toil.

The books which could be actually read with profit came from people whose own success, except perhaps in authorship, had been far from outstanding.

Books, however, were multiplying, some about bookkeeping and commercial correspondence and some, more ambitious, about personnel management, and company law.

And one thing apparent was that the United States in this field must lead the world, not because Americans are more intelligent but because intelligent Americans go into business.

A brilliant Frenchman becomes a civil servant and a brilliant Italian makes himself a cardinal.

Only in the United States is the Presidency of General Motors the ultimate goal of the intellectual elite.

Only in the United States is the businessman completely dedicated to business.

Then came the computer, a development of the cash register, invented in 1942 and since become widely available.

The breakthrough in this development is represented by …

bbx Preface

bbx The Man and Reputation

bbx Drucker’s Vision of the New World

bbx The Interpreter of Change

bbx Industrial Citizenship: The Dream That Never Became Real

bbx The Tasks of the Manager

bbx Management by Objectives: How a Concept Conies into Use

bbx Problem or Panacea: Drucker and the Computer

bbx The Problem or Executive Stress

bbx Drucker and the Concept-Makers

bbx Drucker the Consultant

bbx The Role Drucker Has Not Filled

bbx Drucker on the Platform

bbx Drucker as Teacher: Humanity in the Case Method

bbx Worldwide Cultural Variations in Management Style

bbx Some Predictions of Prophet Peter

bbx Drucker on Government, the World, Education, and Society

bbx Drucker’s Defense of the Multinationals

bbx The Past and Present Futurist

bbx Drucker Looks Back — and Ahead

bbx The Bottom Line

bbx Appendix: The Sayings of Chairman Peter

bbx Management Library

 

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… The Nazis had already instituted censorship; but the censor was fooled by the book’s title—especially probably the word “conservative” in it; and the book slipped through.

It became the subject of instant and widespread attention and something of a sensation.

Indeed, a few years back when Drucker attended the twentieth anniversary party of his German publisher in Salzburg, he was told by several of the high officials in the present German government that this little book—which they read while still students or just starting on their first job—had prevented them from joining the Nazis and had induced them, despite all pressures and risks, to stay aloof during the entire Nazi period.

The Nazis were also completely taken by surprise.

But within a few weeks they had banned the book—one of the earliest manifestations of the bookburning that was later extended to embrace all “hostile” books.


Drucker deafly understood that this meant he had to leave, and fast—his Austrian passport wouldn’t have protected him long.

But he also felt that now he could leave with honor and a clear conscience.

In April 1933 he left for England and a job in a merchant bank.

Then Drucker was offered the chance to serve as American correspondent for a group of British newspapers; two in London, one in Sheffield, one in Glasgow.


In 1937 he sailed for the United States with the half-finished manuscript of his next book, The End of Economic Man, in his bags.

It was his first full-length book, and the first to be published in English.


Drucker spent considerable time in Washington during the war working on intelligence about German industry.

He began to teach, first at Sarah Lawrence College in Bronxville, New York, and then from 1942 to 1949 at Bennington College in Vermont, where he taught philosophy, government and religion.

In 1950 he became professor of management at New York University; he still lectures at NYU.

In 1971 he assumed the chair of Clarke Professor of Social Science at Claremont Graduate School in California.


In 1943 Drucker took on his first consulting project, a momentous one.

He was retained to conduct a massive study of General Motors. (As we shall discuss, GM was thoroughly discomfited by Drucker’s findings, and, so far as the management of the firm was concerned, he was treated as a nonperson for many years.)


By now Drucker had written The Future of Industrial Man.

The General Motors experience provided the basis for his next work, Concept of the Corporation.

Since then he has written ten more books and hundreds of articles.

As an author he is a phenomenal seller; his books remain in print, and some have gone into dozens of editions.

His byline remains potent in magazines.


When, for example, Harvard Business Review publishes a Drucker piece, the staff braces itself for a flood of reprint requests.


The GM project was the start of an enormously successful consulting practice.

Drucker has worked with hundreds of clients.

He has never had a staff; he works alone.


Drucker’s influence is worldwide.

One reason that his thinking is valued by politicians and managers in many countries is that he does not just enunciate principles.

He tries to get inside the traditions and culture of a particular place, to understand how things really work, so that he can focus on what is truly important.


For example, Drucker has been a welcome guest in Japan for many years.

He first went there during the occupation, to lecture to Japanese businessmen.

In the beginning, one observer reports, Drucker’s lectures were popular but not necessarily productive.

Typically, there is a story of two Japanese executives meeting after one of Drucker’s sessions.

One says, “My friend, you enjoyed Drucker-san?”

“Oh, yes, very much.”

They talk about the brilliance of what they have heard; how important it will be to them.

Then one asks, “What have you done about what you heard last year from Drucker-san?”


“Nothing,” is the reply.


“Will you return next year to hear him again?”


“Oh, yes.”


For some years Drucker told the Japanese wise and sometimes brilliant things, but he was talking from the outside.

He realized this.

He dedicated himself to penetrating and understanding the Japanese culture.

Now his thinking on management and organization is tempered by his sense of Japanese tradition.

His words are welcomed—and acted upon.


In turn Drucker’s experience in Japan has enabled him to bring new insights to Western organizational thinking, notably in his analyzes of the decision-making process.


Drucker is a conservative and a moral opponent of Communism.

This does not keep Soviet management technicians from studying his theories and appropriating what they think is relevant.

The Soviets approach Drucker on the basis that, while he cannot be trusted at all in terms of overall political and economic theory, he is nevertheless a valuable thinker when it comes to practical matters of organization policy and procedure.

Soviet experts acknowledge that it is Drucker who has formulated the definition of management that has become the standard in “bourgeois” writings.

Moreover, Drucker even wins grudging praise from Communist management theorists.

For example, one leading professor of organizational science in the USSR concludes a lengthy analysis of Drucker’s description of the tasks of the manager by saying, “We consider this approach rational even though it exaggerates the distinctive features of the manager’s work, and unnecessarily sets it up against all other forms of administrative activity.”

The Soviet expert goes even further.

He quotes Drucker’s remark that “the average businessman, when asked what a business is, is likely to answer: ‘An organization to make a profit.’

And the average economist is likely to give the same answer.

But this answer is not only false; it is irrelevant.” The Soviet management expert then adds, “Thus, by emphasizing the perfectly obvious distinction between management and ownership of the means of production, noted by Marx in his day, [capitalist] management theoreticians are trying to draw a picture of the gradual elimination of capitalism’s vices.”


Drucker would probably be somewhat amused and gratified by these words; he would not be likely to regard them as altogether appropriate.

His low opinion of the thinking of Karl Marx is amply recorded; indeed, he has been attacked by some critics who say Drucker goes much too far in that regard.


One can get an idea of the seriousness with which Drucker is taken in the USSR by examining Organisation and Management: A Sociological Analysis of Western Theories, by D. Gvishiani.


This treatise, translated into English and printed in Moscow by Progress Publishers, is described as the first Soviet study of the main trends and schools of bourgeois theories of organization and management.

The book is remarkable in its dual approach.

It contains concise and accurate summaries of Western management theory, starting with Frederick W. Taylor and coming down to the present day.

The exposition of capitalist theory is interspersed with political commentary that provides the required Communist viewpoint-but the theories themselves are treated with considerable objectivity and the strong implication that there is much to be learned from them.


Peter Drucker is by far the management thinker who is covered most fully in the text.

There are twenty-eight separate references to him in the index.

This is exceeded only by the number of references devoted to Marx and Lenin.

In terms of space, however, Drucker is central to the book.

There is much more space devoted to him than to anyone else.

Sections many pages long are given over to Drucker on the practice of management and the tasks of the manager.

Drucker is presented as being superior to his colleagues: “Drucker shows a certain farsightedness and understanding of the development prospects of modem production when he opposes the view that the worker is no more than an appendage of the machine.”


And, again, “As distinct from many other bourgeois sociologists, Drucker realizes that the progress of industrial production demands that the sphere of management be extended and that it should enlist the help of more people at present engaged in the process of production, since isolated individuals are unable to carry out the complex set of operations linked with the management of modem industry.”


Having thus been singled out for moderate praise, Drucker is then immediately condemned for failing to see that capitalism is “organically hostile” to the proper execution of his theory.


Sometimes the reader gets the feeling that the author thinks, wistfully, that everything would be fine if only Drucker would see the light and enroll under the red banner.


This book is only one of the numerous manifestations of the interest that Communist management theoreticians have shown in Drucker’s work and of the influence he has exerted—indirectly-on Communist organizational structure.


Now Peter Drucker lives in Claremont, California with his wife Doris, whom he married in 1937.

His four children are grown.

He is still fully active, but he restricts his traveling.

Clients come to see him, and pay a lot of money for the privilege.

He is in great demand as a speaker; he accepts no engagement that will take him away from home overnight.

He continues to write, and think.


These are the bare facts of a life.

Drucker is well known.

He is successful.

But these things do not make a man significant.

What is Drucker saying when he writes?

What does he teach?

On what principles is his consultation based?

What ideas does he have, to whom does he transmit his ideas, what has happened to his ideas in the marketplace of world affairs?


How does Drucker reach people-and whom does he reach?

As we approach this question, the image of Drucker begins to fragment into a series of prismatic images.

Many different people see him in many different ways.

 

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The Tasks of the Manager

They say that before long the manager will enjoy the privilege of working with a computer terminal at his elbow.

Confronted with a problem, he will simply crank data into the machine, and out will come the answer.

Given a choice, the average manager would like to have at his side, not so much a computer as a super-management expert; someone like Peter Drucker, or at least like the image of Drucker as super-consultant that exists in many executive minds.

The manager could handle most chores on his own; but, when difficulties arose, he could turn to his mentor and obtain expert guidance.

Of course Peter Drucker does not do this.

Even if you could afford to buy his time, you could not so involve him in the day-to-day tasks of management.

For one thing he would not leave his study at Claremont to undertake the job.

For another thing, it would bore him to distraction.

So the manager who wants answers from Drucker reads Drucker’s books and articles and listens to his lectures when he can.

This can be extremely frustrating.

Most executives are looking for specific answers to the nitty-gritty problems that come up, day after day.


They know they should be thinking big thoughts and taking the broad view, but nagging details keep interfering.

So they want help in handling the recurring, mundane matters that make up their working lives.

It is hard to find this in Drucker.

His books do not resemble the typical books produced for managers in great profusion.

Within a Drucker book — even those that focus most specifically on the tasks of management — you do not find the kinds of chapter headings you find in a typical “how-to-run-a-business” book; headings like “Six Ways to Make Things Happen,” “How to Change Bad Habits to Good Ones,” “Ten Steps to Solving Problems,” “A Sure-Fire Way to Organize Your Time,” and so forth.

Drucker does not make it seem that simple.

It is not that he is vague; he is quite specific.

But he does not distill his message into convenient and catchy little nuggets that can be ingested with no effort at all.

Drucker is a stimulator.

He tries to make people think, not give them substitutes for thinking.

Moreover, he approaches management from a philosophical point of view.

He places small, discrete activities in a larger framework.

So you can’t consult the index of a Drucker book and thumb the pages to a brief, specific “answer” for your current problem.

He doesn’t make it look that easy because he doesn’t think it is that easy.

However, let’s fantasize.

Let’s assume it were possible for a manager to work intimately with Peter Drucker, turning to ask Drucker about the problems that come up during his day.

What would it be like?

Here is a scenario.

It is not an actual picture of Drucker in action; this is not the way he works.

It is rather a fictionalized version of how he might work in such circumstances.

All of the comments and suggestions attributed to Drucker are drawn from things he has written or said.

The lucky manager who is about to work with Peter Drucker is called, unoriginally, John Smith.

Smith is an executive; not the president of his company, but a man who hopes to achieve that stature.

For the purposes of this exercise we can omit specification of the particular business Smith’s company is in; management problems do not vary much in their intrinsic nature.

Smith ushers in his mentor.

He meets a solid, somewhat heavy-set man who looks younger than his actual mid-sixties: square face, thick graying hair cut fairly short, deep-set penetrating eyes , full lips that tend to curve humorously.

The voice is deep; the direction is clear and precise; the Viennese accent is noticeable but not obtrusive.

Drucker’s manner is, on the surface, grave and courtly, redolent of old-world charm, culture, and civility; but even the casual observer can see , just below that surface, a lively willingness to make the outrageous comment or dispatch the mocking thrust.

After brief greetings — Drucker is not by inclination a small-talker, although he can indulge in it with the best of them — Smith begins his day.

He starts, as many managers do, by reading some correspondence and then calling in a secretary to dictate a few letters and memos.

Smith is having trouble with one particular memo.

He asks Drucker for help.

What is the point of the communication?

Well, one of Smith’s subordinates, Jones, is working on a project, and Smith feels called upon to give Jones some further directions.

Jones does not seem to be progressing in the way he should.

How, Smith wants to know, can he get his message across to Jones?

“What do you expect Jones to do?

What are the objectives?”

Smith has a little trouble with this, but he explains that the objectives are to jack up production in a certain area while keeping a rein on costs.

Sometimes Jones seems to miss the point.

“How does Jones see it?”

By this Drucker means, what are the objectives as perceived by Jones, and what contribution does Jones feel that he should be making ?

Smith replies, “Well, I assume we have the same objectives — to get the job done.”

“And why do you assume that?”

Drucker wants to know what Jones said when he talked about the project and about what was to be done.

Smith finds it difficult to answer; they discussed it, sure, but it was pretty much a matter of Smith saying what should be done and Jones requesting some follow-up details about lines of communication and so forth.

Drucker says, “And now you are writing another memo to Jones to tell him the same things you told him before?”

Smith allows that this, in essence, is what he is doing.

“How would you class this part of your job?” asks Drucker.

“Under what general heading would it fall?”

Smith notes that all Drucker seems to do is ask questions, but he dutifully tries to answer.

The general classification under which this would fall is “communication.” “Forget it,” says Drucker.

He goes on.

Smith is not communicating at all.

He is sending something out, and it is unlikely to be received.

Communication has to start with the recipient of the message rather than the emitter.

Downward communication does not work.

It is impossible for it to work.

You can only send a message downward after upward communication has successfully been established.

So where does that leave me?

Smith wonders.

I’m the guy’s boss; I’m supposed to tell him what to do.

You are not “ supposed to tell him what to do ,” counters Drucker.

“Your job is to enable him to perform well.”

How?

First, stop trying to force information and directives down the pipe.

Get the subordinate — in this case Jones — to initiate some upward communication; not about the weather or the ball scores, but about the job.

Find out how Jones sees the job.

Let Jones talk about the objectives.

Does this mean, Smith wonders, that he should permit Jones to say what is to be done and how to do it?

Of course , replies Drucker, except that there is no “permit” about it.

You will find that Jones will not only describe the objectives differently from the way you see them, but that he will very likely require more of himself than you are requiring of him.

Smith nods.

“You mean I should listen to Jones.”

That’s part of it, says Drucker, but listening by itself is not enough.

What is necessary is that you and Jones establish a basis for exchange — the objectives toward which Jones makes a contribution.

Then both of you talk about them.

You will find that Jones will come up with many things you do not expect.

To get some real communication started, says Drucker, sit down and talk face to face with Jones — for as long as necessary — to establish the objectives.

Ask him what he wants to do.

“But,” says Smith — and to him this is the big question — “ supposing after all this he decides on going a route that I don’t think he should go?”

Then, Drucker replies, you may end up issuing a command: “This is what I tell you to do.”

But at least then you will know that you are overriding his desires.

You will realize that Jones has a problem; and so do you.

The important thing is to set a basis for exchange.

“There can be no communication if it is conceived as going from ‘I’ to ‘You.’

It works only if it is from one member of “us” to another.

“All right,” says Smith.

“I will stop trying to get the point across to Jones by writing him memos, since, as you say, we don’t seem to be getting anyplace with it anyway.

I’ll try to set up a meeting with him.

But that takes time, and where the hell am I going to find it?

I don’t have the time to do the things I should be doing now.”

So they begin to talk about how Smith spends his time.

Smith is ready for this.

A month ago, when the day with Drucker was first set up, Drucker asked Smith how he spent his time.

Smith began to try to describe it; “Well, I start with the correspondence, that usually takes an hour a day, and then of course there are the meetings.…” Drucker interrupted; “Do you have a log of your time?”

No, said Smith.

Drucker responded that, if Smith was relying on memory to say how his time was spent, he did not know how he was spending it.

Drucker said, “Make a log of your time; the method you use is not important.

But make a record.”

Now Smith has a record; imperfect, but it is a record.

Drucker takes a look at it, remarking, “As you’ve probably realized, your time is not your own.

The manager’s time belongs to everybody else.”

One thing has already struck Smith.

His initial guesses as to how he disposed of his time were wildly off target.

For example, he spends a lot more time in meetings than he thought he did.

He puts in more time talking to people on the telephone than he would have expected.

He spends less time working out decisions than he believed; in fact, it takes some effort to figure out exactly when he does formulate decisions.

They begin to discuss the time log.

Smith has already spotted some obvious time wasters: “You’ll note that I eat lunch out almost all the time.

Just looking over the record I see that there is often no point in it, just a habit.

Thinking it over, I realize that I could get more done on many days if I just grab a sandwich and work through.

I have more time to work, and, there are no interruptions.”

Drucker nods.

Then he notes that, during this period, Smith has been working on a report.

It’s important.

Drucker asks, “How much time have you put in on it?”

Smith says, “When you add it up, I’ve spent about nine hours on it.”

How much time does the report warrant?

Well, at least nine hours, Smith figures.

How far has he gotten on it?

Not as far as he would have liked.

Now, asks Drucker, what’s the longest single chunk of time that you put in on the report?

Smith considers; “Thursday afternoon I was able to spend a full hour working on it.

I had hoped to spend more, but a couple of calls came in and I got onto something else.”

Drucker shakes his head.

This is not the way to do it.

“It’s pointless to approach a task that should take eight or ten hours by giving it small dribs and drabs of time.

You just get started and then you stop.

The next time you turn to it, you have to ‘tool up’ again.

But you waste the ‘tooling up’ time when you don’t give yourself a substantial span in which to be productive.

All you wind up with is some squiggles on paper.

If you can lock the door, disconnect the phone, and spend , say, five or six hours without interruption, then you have a pretty good chance to at least come up with the ‘zero’ draft — the version that should come before the first draft.

From then on you can work in smaller installments, rewriting and editing.”

Smith agrees.

“But you have to free yourself up for that first big chunk,” he adds.

Drucker says, “Yes.

It’s essential.

Every executive needs to be able to dispose of his time in reasonably big chunks.

Otherwise you are constantly wasting it.

For example, I see that on a typical day you met at different times with twelve different people, sometimes for no more than five minutes.

To spend a few minutes with people is just not productive.

You say hello and just barely begin to get into something, and then you break it off.

By and large, to have much of an impact in an important conversation, you must give yourself an hour.

If you think you can get away with less, you are just kidding yourself.”

Smith gets the point.

One of the first principles in using time productively is to consolidate it into the biggest chunks possible.

Of course, as Drucker has already pointed out, he is to a considerable extent at the beck and call of others.

The demands of others on the manager’s time do not diminish as he gains more power; they increase.

But the manager’s ability to call the shots and consolidate his time increases as he goes up the ladder — if he is not too sunk in habit to do something about it.

Drucker gives a couple of examples; pack all necessary “operating work” — informational meetings, phone calls, routine reports — into, say, two days a week instead of having them strung out through the calendar.

Cram vital discretionary time together until you have at least a full day of it; and then see if you can’t sometimes work at home on that day, away from the “drop-ins,” the trivial phone calls, and the temptations to “just take care of one or two little things” before getting down to serious work.

But there are still problems.

Smith says, “It’s all very well to talk about consolidating time, and I haven’t been giving enough thought to that, but there are still too damn many things for me to do.

Just look at what I have to do today.

I have five different locations around the country to check.

All that takes time.”

Drucker is unimpressed.

“Suppose you didn’t do it?”

Smith doesn’t quite get it.

Drucker reiterates: “What would happen if you didn’t do it?”

Smith shrugs.

“I have to do it.

These people are expecting me to get in touch with them.”

Then Drucker points out that the number of things in a manager’s day that need not be done at all is truly amazing.

Many executive schedules are festooned with activities that never would be missed.

He presses Smith on the telephone calls, and finally Smith admits that if he did not make them, there would be some puzzlement and momentary confusion, but the answer is that, basically, nothing would happen.

“The obvious conclusion,” suggests Drucker, “is to stop doing it.”

Okay, agrees Smith.

There are some things he might cut out — he can see that.

But his plate is still filled to overflowing.

All right, says Drucker: the next question is, “Which of the things you’re doing could be done by somebody else?”

Smith nods knowingly ; “Yeah, I see what you mean.

I should delegate more.

I realize that.”

Drucker shakes his head.

He is not interested in sermonizing on “delegation”; managers are always being exhorted to be better delegators, and no one seems to listen.

“I have done my share of the sermonizing,” he notes.

The reason that nobody pays much attention is that the customary idea of delegation makes no sense.

The manager is told to let someone else do part of “his” work; the more of “his” work he is able to fob off on a subordinate, the better he is as a manager.

Wrong, says Drucker.

A manager should do his own work , he will have to get others to do anything that they can handle.

So let’s not get into a complicated discussion of the complexities of “delegation” as if it were an abstruse and delicate part of the management art; just figure out what others can do and have them do it.

It’s that simple.

Now Drucker puts his finger on another part of Smith’s schedule.

Three key subordinates present him with biweekly summaries of certain processes.

“What about the time that’s being wasted there?”

Smith smiles.

“That’s not a time-waster.

The three guys boil everything down to one page each, and I just glance over it.

Takes a few minutes.”

“What do you get out of it?”

“Often, not very much.

Occasionally there’s something that merits some follow-up.

But it’s not a big deal.

I don’t waste much time on it.”

“I was not,” says Drucker, “talking about just your time being wasted.

You don’t spend much time on it.

But how much time do these key men spend in summarizing and boiling down something that you don’t consider to be a big deal?”


Smith doesn’t know.

He hasn’t thought of it that way.

Drucker points out that the manager should not be cavalier about wasting the time of others.

If it’s not a big deal, cut it out.

Even if you’re in doubt about it, cut it out.

If you miss it, you can always put it back in.

There are other points.

Year after year, November brings a kind of saturnalia of wheel-spinning while Smith’s subordinates try to iron out last-minute details in the budget proposals.

Often they are waiting for one another to complete phases of the work, and Smith is waiting for all of them.

Drucker observes that recurrent time-wasters are sloppy and not to be condoned.

There are other symptoms of sloppiness and disorganization.

Smith seems to spend a disproportionate amount of time straightening out conflicts between people in his department.

If people are bumping into each other, the department may be overstaffed.

Finally, one prime indicator of bad organization and time wasting is a proliferation of meetings.

Drucker and Smith sum up a few simple points about the handling of time.

Consolidate it.

Eliminate some activities.

Be conscious of wasting the time of subordinates.

Look for the telltale signs of time -eating organizational foulups: recurrent crises, conflicts, too many meetings.

“Well, talking about meetings,” says Smith, “I have one coming up now.”

Drucker goes along as an observer.

After the meeting they review what happened.

“Did you think the meeting was a success?”

Drucker asks.

Smith says, “We covered a lot of points, got a lot of things out on the table.

People had a chance to get things off their chests.”

“And what happened?”

Smith shrugs.

“I guess not much.”

“What was supposed to happen?

What was the purpose of the meeting?

Did you expect a report?

Decisions?

Answers?

Was the idea to make it clearer to everybody what each was doing?”

Smith says that he supposes the purpose of the meeting included a little of each.

You “have to have” meetings to find out what needs to be done.

Drucker insists that this is not good enough.

A meeting takes time and effort, not only Smith’s but everyone’s.

The purpose should be thought out and spelled out before the meeting is called.

Drucker says, “The manager who calls the meeting should state , at the outset, the specific purpose and contribution it is to achieve.

Obviously, to state the purpose he must know the purpose.”

Smith acknowledges that he didn’t do this — and that no doubt this lack contributed to the rambling nature of the session.

He decides that, on future meetings, he will establish the purpose beforehand, call the meeting only if there is sufficient need for it, state the purpose and keep on the track, and not let things degenerate into a bull session.

“And, at the end,” adds Drucker, “go back to the original statement and summarize conclusions in relation to it.

When you follow these practices you will find yourself calling fewer meetings, which can be nothing but an advantage.

Meetings will be more sharply focused.

Furthermore, they will be shorter.

Meetings that drag on and on are not only wasteful, they are demoralizing.”

There is one other observation about the meeting that Drucker offers.

He prefaces it with a question: “John, who directed the meeting?”

Smith says, “Why, I ran it.”

Drucker points out that, at the same time, Smith also engaged in discussion, bringing up ideas and debating the comments made by others.

“You can either direct a meeting and listen for the important things being said, or you can be part of the meeting and talk whenever you want.

You cannot do both.

To think you can is to diminish your effectiveness in either capacity.

But the important thing is to focus the meeting on contribution right from the beginning.”

Over lunch, Smith gets to talking about his difficulties with certain colleagues and subordinates.

“We just don’t seem to hit it off.

We’re not on the same wavelength.”

Drucker asks for specifics.

Smith gives examples of misunderstandings and bad feelings of lack of cooperation.

He winds up by saying, “Maybe it’s me.

Maybe I ought to go and take some sensitivity training or something.”

Drucker remarks that it would be worse than futile for Smith to subject himself to the kind of activity that is often lumped under the heading of “sensitivity training.”

He says that Smith is worrying about the wrong things.

“You seem to feel that the problem is that warm, friendly feelings do not exist between you and them.

You’re starting at the wrong end.

If the relationship is not productively work-focused —if it doesn’t produce results and accomplishments for all concerned — then all the warm feelings and pleasant words in the world are meaningless.

They are worse than meaningless, they are phony — a facade for wretched attitudes.”

Drucker says that, in his experience, two of the leaders who enjoyed the best “human relations” were Alfred P. Sloan and George C. Marshall.

“Neither, so far as I know, ever took a charm course.”

They inspired loyalty, devotion, and sometimes true affection.

But they didn’t worry about “human relations”; they took them for granted.

“A lot of managers ,” says Drucker, “feel that they must establish ‘rapport’ first and then the work will go easier and better.

That’s the wrong end to start at.

Take this one man you mentioned, Brown.

You’ve been trying to become more friendly with Brown, but it doesn’t seem to work.

Forget about that for the moment.

Why don’t you sit down and figure out what you can contribute to Brown to make him more effective on the job — and what he can contribute to you in the same way?

Something may even occur to you right now.”

Smith says, “Well, Brown needs certain kinds of information fast from our operation.

I know that.

I’d like to sit down with him and work out a way for him to get the information, but we can’t seem to get together on an amicable basis to work it out.

After all, I want his cooperation too.”

Drucker sighs.

“It has to start someplace.

You think you know what Brown wants.

The difficulty is talking to him.

Well, don’t talk to him.

You make the arrangements to get him the information he needs.

Then tell him what you’ve done and ask him if the procedure is really helpful, and if not, how he would like it changed.

You and Brown don’t have to be smiling and clapping each other on the back while you’re doing this.

It’s a job-oriented discussion.

You are trying to do something that will enable him to make a greater contribution.

Why?

Not because you are desolate without Brown’s friendship, or because you hope he will remember you in his will, but because maximizing contribution wherever you can is your job.

It’s what you are paid for.

When you do your job in this sense, the kinds of relationships you want will come.

They are a corollary of contribution.”

Smith agrees that this makes sense.

He notes that the term “contribution” has come up several times.

He knows it’s important, but he wonders exactly what Drucker means by it.

Drucker says, “Let me respond — as you have noticed I often do — with a question.

What do you do in this company that justifies your salary ?”

Smith answers that he runs the so-and-so department, that he has so many people working under him.

Drucker smiles.

“That’s the way most managers answer that question.

And yet, you know, it’s the wrong answer.

That’s a description of the situation within which you are placed.

It says nothing about what you do, or why the company should pay you money.

You’re focusing on your authority — and the man who focuses on authority will always be a subordinate, no matter what title he carries.”

Where should the focus be?

On commitment and contribution, not on downward authority or rank or job title.

The manager who has the proper focus will answer, “I’m responsible for opening up new and profitable markets,” or, “I have to give the president the information he needs to make the right decisions.”

It is natural for us to be highly conscious of our specialties.

But an executive can become the prisoner of his own background and narrow skills.

The concept of contribution requires that he relate what he does, and what his particular operation does, to the entire organization and its purpose.

Every move, every plan, every policy should have its rationale within that broader framework.

Smith looks bored and skeptical.

“Do you mean every time I tell a guy to fly to the coast and inform a division of a policy change I have to first go through a big philosophical dialogue with myself about the overall purpose of this?”

Drucker explains that this is not quite what he means.

“However, if your general frame of mind is attuned to the importance of contribution, you will automatically fit actions into the larger framework.

For the successful manager it becomes second nature.

Your organization, like every other organization, needs to obtain results today and to develop people for tomorrow.

If you are contributing one hundred percent to each of those objectives, then you are a superb executive.

You probably also do not exist, because no mortal can contribute one hundred percent.

But you can look for the areas in which your contribution can be increased.”

They seek an example.

Finally they hit upon a young subordinate, Green.

Smith has mentioned that Green is a source of concern.

He is bright and has ideas.

But he is not tactful.

“He rubs people the wrong way; including me.

If there were just some way to get the benefit of his brains without having to come in contact with him, that would be perfect.”

“What are you doing about it?”

“I’ve moved him into a spot where, frankly, I don’t have to see him that often.

He can still be productive.”

“But not as productive as he might be,” says Drucker.

“True,” answers Smith.

“But I realize he’s too valuable a man to lose.

So we’re trying to help him strengthen his interpersonal skills, enable him to get along with people better.

We’ve sent him to some seminars, and there are other things we can do.”

Drucker doesn’t want to hear any more.

“This man is paid to perform, not to please you.

I assume he has considerable talent, since you are going to so much trouble and expense to try to get him ‘straightened out.’

So your job is to ask, ‘What does he contribute?’ — not ‘How does he get along with me and with others?’

By shunting Green off on a side track you have cut down on his capacity to contribute.

At the same time you are failing in your responsibility to contribute to him.”

“But I have to have a team.

Green is not a team player.”

“You have to have performance, not a team.

If you are lucky enough to find somebody — like Green — who is excellent in at least one major area, thank God for your good fortune, grab him, and get the most out of him.

If you have to put up with tantrums, put up with them.

And show by your example that other people should do the same.

Forget about trying to compensate for weaknesses.

Look for strength and build on it.”

“You mean we shouldn’t try to improve Green’s ability to get along with people?”

“Well, in the first place I doubt that you will get very far with the method you’ve chosen.

Even though it has become very popular, I am of the old-fashioned school that feels you do not enhance your relationships with people by attending a seminar.

In the second place, you have obviously tried to work around Green’s strengths by putting him in a job where he doesn’t come in contact with you or anybody else.

This is a corporation, not a club.

To try to build against weakness frustrates the whole purpose of an organization.

You seem to be looking for a ‘team’ on which everybody looks and lacks like everybody else.”

Smith says, “You have to admit that an organization works better when the people in it all have something in common, can talk with each other, like and respect each other.”

Drucker replies, “I admit no such thing.

The whole point of an organization is that you can maximize one man’s strength and compensate for his weaknesses someplace else.

So the people should be different, not all the same.

You shouldn’t be blind to Green’s inability to get along with people.

It’s a problem.

But you have him on the payroll because he has brains, not because he is supposed to act as a social director.

Concentrate on strengths.

When you hire for strengths that complement and reinforce each other, then weaknesses don’t mean so much.”

Smith goes on to talk about a job he is trying to fill.

“I’m having trouble, and it surprises me.

The way we have worked out the job description, it doesn’t seem to be too demanding.

But the last guy we had in there fell apart completely after six months.

And now I’m seeing a lot of people who have interesting backgrounds of various kinds, but nobody who fits the job.

How can I find the person I need?”

Drucker says, “If you go on looking for someone to fit a job, it may take you forever, depending upon how detailed the description is.

To me, the effective executive starts with what a person can do rather than what a job requires.

In interviewing a lot of people you are giving yourself a wonderful opportunity to look for strengths.

But you’re wasting the opportunity by blinding yourself to the strengths of the applicants and simply running a comparison test, seeing if any of them fit into the outlines of the job.

You say the job should be easier to fill because you’ve made it small.

This is a commonplace practice — to make jobs small.

And I think it is utterly wasteful of human resources.”

Smith says, “I think I see where you’re heading.”

Drucker says, “Don’t think of yourself as ‘having a job to fill.’

You need some more strength in the organization.

Look for strength.

Concentrate on what someone can do, not what the job description says.

And when you find strength, bring it in; even if you have to change the job requirements.

They should be changed anyway.

A job should be big and demanding, not reduced to bite-sized bits.”

As the afternoon wears on Smith grapples with some tough problems.

At last he leans back and says, “No doubt about it.

Making decisions is the hardest part of my job.

For instance, I have to decide on one of three plans to use in this area, and I can’t get the facts that will help me make the right choice.”

“You know, John,” says Drucker, removing his eyeglasses and gently massaging the bridge of his nose, “a decision is rarely a choice between right and wrong.

At best it’s a choice between ‘probably right’ and ‘probably wrong’ — but usually it is simply a matter of picking among several courses of action, none of which is any better than the other.”

Smith manages a tired grin.

“You mean we should just flip a coin?”

“Oh, no,” Drucker responds.

“Even if that were no worse a method than any other — which I don’t admit for a moment — what would you and I do for a living?”

They talk about the decision facing Smith.

Drucker starts by commenting on Smith’s complaint that he can’t get enough facts.

“Most advice on decision-making starts that way.

‘First get the facts.’

That is facile nonsense.

You don’t start with facts; you can’t.

You don’t even know what facts are, not relevant facts, because you have no yardsticks for relevance.”

“So where do you start?”

“Where it is logical.

With opinions.”

“But I’ve always tried to stay objective, to keep opinions out of the process.”

“John, it is a human impossibility, so stop pretending that it can be done.

Start by forming an opinion.

Ask people, not for the facts, but what they think.

At least you’ll begin to get a sense of what they feel the decision is about.”

“How do I know if those opinions are worth anything?”

“You don’t.

But you insist that the people you ask join you in spelling out what needs to be tested, so that a reasonable test of the opinion can be made.”

For the next step, Drucker advises the collection of alternatives.

Alternatives come with dissent — so the manager must encourage it.

“A cardinal rule in decision making is that you don’t make a decision until there is disagreement.

If everyone agrees, you can’t tell what the decision is all about.

Maybe there’s no decision to be made at all.

So get disagreement.”

“And how do you figure out which alternative is right?”

“There’s that word ‘right’ again.

When a man disagrees with you, don’t immediately ask ‘who is right and who is wrong?’

You are likely to give yourself the better of the bargain on too many occasions.

Admit that the other fellow has some intelligence.

Admit that, given his intelligence, he has reached a different conclusion from yours because he sees things differently.

Why?

Find out about the reality that he sees.

It may be closer to the truth than the reality that you see.”

“And then what do you do?”

“Why,” says Drucker, “you choose a course of action.

But, before putting it into execution, pause a moment.

Ask yourself if it is necessary to make a decision at all.

You always have the option of doing nothing — and, although we often see undue emphasis on decisiveness for its own sake as a favorable trait, doing nothing may often be the best thing you can do.

Having decided to do something — if that’s how you decide — think about who is going to do the work and how you will get them to do it.

If you run into real problems with that portion of your thinking, perhaps you have the wrong answer after all.

Decisions are not entire of themselves.

They have to be executed.

But, when you are satisfied with all this, go ahead and execute your decision.”

“No matter how big a risk is involved?”


“John,” says Drucker, “risk is what it’s all about.

We hear a lot of talk about techniques that ‘minimize’ risk or even ‘eliminate’ risk.

Nonsense.

To try to eliminate risk is not only futile, it can be harmful.

The bigger your job, the greater the risks you should be taking.

The idea is not to try to eliminate risks, but to take the right risks.”

The day is about over.

Smith tells Drucker he has learned a lot; he asks if Drucker will summarize the important points about the manager’s job.

Drucker answers that this is what they have been talking about.

How would Smith describe it?

“Well, you seemed to be saying, consolidate time.

Concentrate on contributions, my own and others.

Focus on strength instead of weakness.

In making decisions, start with opinions, get dissent, pick the alternative that seems best.

And don’t be afraid of risk.”

“How does it sound?”

“It sounds like common sense.”

Drucker beams.

“That’s exactly what it should sound like.

If you would like to refresh yourself on any of it, read my book The Effective Executive.

And remember; we hear a lot of talk about the manager of the future.

But the important man is the manager of today.

He must know his craft; and he must be able to function.”

Soon afterward, Drucker says goodbye.

Smith sits looking at the door.

Then he says to himself, “He didn’t mention one damn thing that I didn’t know already.

So why the hell haven’t I been doing them?”

 

“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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