(by Peter F Drucker, ISBN ...)
In less than 150 years, management has transformed the social and economic fabric of the world's developed countries. The truly important problems managers face do not come from technology or politics; they are problems caused by the very success of management itself.
The fundamental task of management remains the same: to make people capable of joint performance through common goals, common values, the right structure, and the training and development they need to perform and to respond to change. But the very meaning of the task has changed, if only because the performance of management has converted the workforce from one composed largely of unskilled laborers to one of highly educated knowledge workers.
Knowledge, especially advanced knowledge, is always specialized. By itself it produces nothing. Yet a modern business employs thousands of highly knowledgeable people who represent up to sixty [or more!] different knowledge areas. None would be effective without the managed enterprise. [Flat-model structures, like Zillow and GitHub, are modern-day examples of the potential failures of a lack of management]
The Origins and Development of Management. [World War I and World War II both required effective management by its belligerents to survive; the Germans had shorter supply lines, better strategists, but the US dominated because it produced more war material than all the other belligerents combined, and put them on distant shores and cities.] By [World War II]'s end, almost all the world had become management-conscious, and management emerged as a recognizably distinct course of work, one that could be studied and developed into a discipline.
Management and Entrepreneurship. Both management and entrepreneurship are always needed and work together. Not to innovate is the single largest reason for the decline of existing organizations; not to know how to manage is the single largest reason for the failure of new ventures.
The Accountability of Management. To whom is management accountable? And for what? On what does management base its power? What gives it legitimacy? These are not business or economic questions; they are political questions. Management has to be accountable for performance. BUt how is performance to be defined? How is it to be measured? How is it to be enforced? And to whom should management be accountable?
What Is Management? Management is, above all else, based on a very few, essential principles:
Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant. This is what organization is all about, and it is the reason that mangement is the critical, determining factor.
Because management deals with the integration of people in a common venture, it is deeply embedded in culture.
Every enterprise requires commitment to common goals and shared values. Without such commitment, there is no enterprise; there is only a mob. The enterprise must have simple, clear, and unifying objectives. The mission of the organization has to be clear enough and big enough to provide common vision. The goals that embody it have to be clear, public, and constantly reaffirmed. Management's first job is to think through, set, and exemplify those objectives, values, and goals.
Management must also enable the enterprise and each of its members to grow and develop as needs and opportunities change. Every enterprise is a learning and teaching institution. Training and development must be built into it on all levels--training and development that never stop.
Every enterprise is composed of people with different skills and knowledge doing many different kinds of work. It must be built on communication and on individual responsibility. All members need to think through what they aim to accomplish--and make sure that their associates know and understand that aim. All have to think through what they owe to others--and make sure that others understand. All have to think through what they in turn need from others--and make sure that others know what is expected of them.
Neither the quanity of output nor the "bottom line" is by itself an adequate mesaure of the performance of management and enterprise. An organization needs a diversity of measures to assess its health and performance.
Finally, the single most important thing to remember about any enterprise is that results exist only on the outside: The result of a business is a satisfied customer, the result of a hospital is a healed patient, the result of a school is a student who has learned something and puts it to work. Inside an enterprise there are only costs.
Management as a Liberal Art. Mangement is what tradition used to call a liberal art--"liberal" because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; "art" because it is also concerned with practice and application. Managers draw on all the knowledges and insights of the humanities and social sciences--on psychology and philosophy, on economics and history, on ethics--as well as on the physical sciences. But they have to focus this knowledge on effectiveness and results. For these reasons, management will increasingly be the discipline and practice through with the "humanities" will again acquire recognition, impact, and relevance.
Business enterprises exist not for their own sake, but to fulfill a specific social purpose and to satisfy a specific need of a society/a community/individuals. They are not ends in themselves, but means. Management is the organ of the institution.
The question, What is management? comes second. There are three tasks that management has to perform to enable the institution in its charge to function:
Asked what a business is, the typical answer is, "An organization to make a profit"; this is not only false, it is irrelevant. The concept of profit maximization, is, in fact, meaningless. The danger in the concept of profit maximization is that it makes profitability appear a myth. Profit and profitability are, however, crucial. If archangels instead of businessmen sat in directors' chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.
The root of the confusion is the mistaken belief that the motive of a person--the so-called profit motive of the businessman--is an explanation of his behavior or his guide to right action. Whether there is such a thing as a profit motive at all is highly doubtful. There has never been any existence of the profit motive. We do not learn anything about the work of a heart specialist by being told that he is trying to make a livelihood, or even that he is trying to benefit humanity.
In fact, the concept is worse than irrelevant: it does harm. It is a major cause of the misunderstanding of the nature of profit in our society and of the deep-seated hostility to profit.
To know what a business is, we have to start with its purpose: to create a customer.
Markets are not created by God, nature, or economic forces, but by businesspeople. It is the customer who determiens what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. What the customer buys and considers value is never just a product. It is always a utility, that is, what a product or service does for him.
We live longer, we generally maximize our careers out somewhere after 20-25 years of work. Second careers are becoming much more commonplace.
Three ways to develop a second career:
* Actually start one. Just go do it.
* Develop a parallel career. Start doing the second thing while still doing the first thing, "on the side".
* Social entrepreneurs. These people love their work, but it no longer challenges them. In many cases they keep on doing what they have been doing all along but spend less and less of their time on it; they often start another activity, usually a nonprofit.
There is one prerequisite for managing the second half of your life: you must begin long before you enter it.
There is another reason to develop a second interest, and to develop it early: No one can expect to live very long without experiencing a serious setback in his/her life or work. At such times, a second major interest--not just a hobby--may make all the difference.
Last modified 18 April 2022