Peter Druckers’ ideas are always relevant

by admin

Peter Drucker made to the world, and especially the world of business. One of the more useful resources in this context is the book ‘The Essential Drucker’. For my class I had prepared a sumamry of content. I am posting it here as I am convinced it is a good source of information for those who contemplate to look deeper into Druckers ideas and philosophies.

The Essential Drucker

Ever since his first book was published some six decades ago, Peter Drucker has been essential to everyone serious about the “management of an enterprise (and) the self-management of the individual, whether executive or professional, within an enterprise and altogether in our society of managed organizations.” This distinguished 30-year

Claremont

University professor has continuously identified critical principles in management, economics, politics, and the world in general. And he has redirected our thinking about them through more than two dozen books, including an autobiography and a couple of works of fiction. With The Essential Drucker, he has overseen the compilation of his most important fundamentals into one indispensable book. Reaching back as far as 1954 with his treatise “Management by Objectives and Self-Control” (”Each manager, from the ‘big boss’ down to the production foreman or the chief clerk, needs clearly spelled-out objectives” that clarify expected contributions “to the attainment of company goals in all areas of the business”),

Drucker’s now-established ideas take on a surprising new relevancy when remixed equally pioneering ideas from the 1960s, ’70s, ’80s, and ’90s. Between the thoughtful “Management as Social and Liberal Art” through the provocative “From Analysis to Perception–The New Worldview” (both originally published in 1988’s The New Realities), this book revisits some of modern management’s most inspired writing and presents it in a way that should appeal to both newcomers and those needing a refresher course on Drucker’s basic beliefs. –Howard Rothman As great as his ideas about management are, his observations about how to think are even more valuable. The book contains no material from his autobiography, Adventures of a Bystander. What the book does contain is a fairly easy to follow series of 26 excerpts from the ten books, organized into three sections: Management, Individual, and Society. These books date back to 1954, so you get an overview of part of his work over the last 47 years. This overview will mainly be valuable to managers who have read very little Drucker, since there is essentially no new material in the book. The excerpts are also not connected by any transitions, so there is no additional perspective available from the book’s organization. Here are the sources of the chapters: Ø The New Realities, Chapters 1 and 26; n style="font-size: 11pt; color: black; font-family: Georgia">Ø Management: Tasks, Responsibilities, Practices, Chapters 2, 3, 5, and 18; Ø Managing for the Future, Chapters 4 and 19; Ø Management Challenges for the 21st Century, Chapters 6, 15, 21; Ø Managing in a Time of Great Change, Chapters 7 and 23; Ø Practice of Management, Chapter 8; Ø Frontiers of Management, Chapter 9; Ø Innovation and Entrepreneurship, Chapters 10-12, 20, and 24; Ø The Effective Executive, Chapters 13, 14, 16, and 17; and Ø Post-Capitalist Society, Chapters 22 and 25. If you are not familiar with Professor Drucker, he is generally considered to be the first person to think systematically about what management is and needs to become. He was also the first to identify that we were moving into a knowledge-based society where the focus of work and the ways that work is organized would have to be totally transformed. His definition of what a business must do is the most often quoted one around:

“The purpose of a business is to create a customer.”

Innovation and marketing are the prime tasks. The book is especially deep in references to his seminal thinking on how to innovate and to operate entrepreneurial businesses. He was also the first twentieth century thinker to see the connection between management of for profit and nonprofit organizations, and that both types of organizations are needed in growing numbers for a sound society. This book is also deeply presents his thinking about the social responsibility of business.

After you finish reading these landmark ideas, I suggest that you think about one element of the book from the individual section.

Ø What values do you want to bring to your work?

Ø Are you succeeding?

Ø If yes, congratulations! How can you accomplish more?

Ø If not, what can you change to make those values come to life?

The late Peter F. Drucker invented the discipline that we know as Management. This book is an excellent compilation of his best works, written over six decades and published in journals, magazines and over 30 books.

It includes several topics (categorized in sections for Management, The Individual and Society). In the first few chapters Drucker defines management through its tasks and states that

“there is only one valid definition of business purpose:

to create a customer” (page 20).

In the other chapters you will learn

Ø Management by Objectives (MBO),

Ø the process of making effective decisions,

Ø the importance of focusing on contributions and results,

Ø get introduced to the “knowledge worker” (page 304), a term Drucker created in the 60s,

Ø and learn about the “post-capitalist society” with knowledge as the central resource (page 288).

Thoughts from 4 chapters that were originally published in “The Effective Executive” (1966):

In Chapter 13: Effectiveness must be Learned, Drucker explains the difference between efficiency and effectiveness - efficiency is doing things right; effectiveness is doing the right things. For manual work, efficiency was enough. In today’s world, the center of gravity has shifted from the manual worker to the “knowledge worker”. For knowledge work, effectiveness is more important than efficiency. An executive is … a knowledge worker who is … responsible for contributions (decisions, actions) … that have significant impact on … performance and results of the whole organization (derived from Chapter 13).

In Chapter 14: Focus on Contribution, Drucker stresses the importance of focusing outward, on contributions and results; as opposed to downward, on efforts. He then discusses the four basic requirements of effective human relations - communication, teamwork, self-development and development of others.

In Chapter 16: Know Your Time, Drucker explains time-diagnosis with questions for the executive:
a. What would happen if this were not done at all?
b. Which activities could be done by somebody else just as well, if not better?
c. (ask others) What do I do that wastes your time without contributing to your effectiveness?
Drucker then explains the identification of time wasters caused by - a lack of system, overstaffing, bad organization structure and malfunction in information. He also states that “Time is the scarcest resource, and unless it is managed, nothing else can be managed”.

In Chapter 17: Effective Decisions, Drucker explains the decision process in five steps:
a. Determine whether the problem is generic or unique
b. Specify the objectives of the decision and the conditions it needs to satisfy
c. Determine the right solution that will satisfy the specifications and conditions
d. Convert the decision into action
e. Build a feedback process to compare results with expectations

He states that “No decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, there are only good intentions”. He then explains the importance of creating disagreement, rather than consensus. He states that disagreement provides alternatives and stimulates imagination and that “The first rule in decision making is that one does not make a decision unless there is disagreement”.

Axel Meierhofer, President AMC LLC

Share this article with others: