What types of responsibilities do managers have in the workplace? How can managers steer businesses toward the future?<\/p>\n\n\n\n
Peter F. Drucker is widely regarded as one of the most influential thinkers in the field of modern management. The Essential Drucker<\/em> is composed of key chapters from Drucker\u2019s most respected works and provides an overview of Drucker\u2019s core ideas.<\/p>\n\n\n\n Read below for a brief overview of The Essential Drucker<\/em>.<\/p>\n\n\n\n\n\n\n\n Of all the innovations of the last two hundred years, the growth of the field of management may be the one that\u2019s had the most dramatic impact. Today, it\u2019s hard to imagine a world without management as the guiding force behind every business, government, and nonprofit institution. Without it, how would organizations coordinate the efforts of people with disparate skills to work together toward a common goal? Without management, would those goals even be defined?<\/p>\n\n\n\n Peter F. Drucker (1909-2005) is widely regarded as one of the greatest and most influential thinkers in the field of modern management practices. Drawing from his knowledge acquired through decades of experience as a professional management consultant, Drucker authored dozens of volumes on management, including The Effective Executive<\/em><\/a>, Managing Oneself<\/em><\/a>, and Innovation and Entrepreneurship<\/em><\/a>. Drucker\u2019s writings cover the gamut of organizational development from the period between the World Wars to the start of the 21st century, and he\u2019s been cited as a powerful influence on many important business leaders of today.<\/p>\n\n\n\n In The Essential Drucker<\/em><\/a>, published in 2001, editors Atsuo Ueda and Cass Canfield Jr. compiled and abridged key chapters from 10 of Drucker\u2019s most respected works and wove them into a cohesive narrative describing the challenges, opportunities, and demands facing modern organizations and the people who manage them. In doing so, Ueda and Canfield provide an overview of Drucker\u2019s core ideas and a starting point for business leaders and students who may wish to delve further into Drucker\u2019s writings.<\/p>\n\n\n\n The first thing to do when discussing management is to define what it is, its purpose, and its scope. At its most basic, management is the practice of enabling groups of people with different knowledge, skills, and backgrounds to work together toward a common goal. More than any other part of an organization, management is directly responsible for whether the organization\u2019s efforts produce its desired results.<\/strong> Drucker writes that managers, both at the highest level and all the way down, do this by articulating an enterprise\u2019s mission, spelling out its objectives, and developing its people\u2019s strengths to maximize their individual contributions.<\/p>\n\n\n\n Though political, military, and religious leaders have existed for thousands of years, Drucker traces the start of modern \u201cmanagement\u201d to the period of industrialization beginning in the late 1800s. Before then, workers were largely unskilled and relied on a taskmaster\u2019s orders\u2014a much more authoritarian system than what we think of as management today. With the growth of subject-specific expertise and a workforce of laborers with a variety of skills, a new specialty emerged\u2014that of coordinating large groups of people to work toward a unified purpose. Today, people who make management decisions comprise more than a third of the workforce.<\/strong> For this reason, learning management skills is now a requirement in nearly every line of work.<\/p>\n\n\n\n Though management is usually discussed in business terms, its practices are central to any <\/em>organization, and managers\u2019 first duty is to spell out their organization\u2019s mission. That mission will determine every aspect of how the business functions internally and how it interacts with the external world. We\u2019ll describe Drucker\u2019s views on how an organization\u2019s mission should be defined, why managers must communicate it clearly to employees, how a business relates its mission to the market, and the concrete goals management has to set to put the organization\u2019s mission into action.<\/p>\n\n\n\n Drucker says that even in the business world, turning a profit is never the overriding mission. Rather, making money is merely the yardstick by which a business can measure its success. The mission of an organization is based on the results it hopes to achieve outside itself.<\/strong> For a law firm, that mission might be to successfully litigate on behalf of its clients. For a public library, the mission might be to grow readership in its local community. For a toothpaste company, the mission might be to help people take better care of their teeth.<\/p>\n\n\n\n Drucker writes that defining the mission of an organization is vital because at some point every person within it is going to make decisions that affect the whole enterprise, from the organization\u2019s founder to the person who cleans the floors. Therefore, everyone has to have the same understanding of the group\u2019s shared purpose<\/a>,<\/strong> who the organization\u2019s customers are, and by what external measures its success can be judged. When management can clearly articulate that purpose, it guides decision-making<\/a> at all levels of the business and sets the direction for future innovation.<\/p>\n\n\n\n It goes without saying that an organization is nothing without the people who comprise it. The task of managers has always been to give those people direction, though the old style of top-down control is no longer always appropriate. We\u2019ll explain how Drucker says the workforce has changed, how businesses may have to adapt, and how managers should think about employee motivation.<\/p>\n\n\n\n Drucker is clear that managing people <\/em>is different from managing work<\/em>.<\/strong> The latter is focused on tasks and processes and relies on the faulty assumption<\/a> that everyone who works for you is a subordinate who can\u2019t accomplish anything without direct supervision. However, we now live in an age in which we\u2019ve transitioned from a mostly unskilled workforce to one that\u2019s more educated than ever before. Therefore, instead of directing people like cogs in a machine, it\u2019s the role of modern management to help them grow their skills so that they can be more productive<\/a>.<\/p>\n\n\n\n Drucker invented the term \u201cknowledge worker\u201d to describe employees whose primary contribution comes from subject-matter expertise that isn\u2019t shared by everyone else in an organization. Knowledge workers are now the driving force in most, if not all, businesses and organizations, and their cultivation requires special management skills. Drucker explains what knowledge workers are, how organizations facilitate their productivity, the risks involved with mismanaging knowledge workers, and why communication between managers and knowledge workers must flow clearly in both directions.<\/p>\n\n\n\n Drucker writes that by the end of the 20th century, knowledge workers comprised the majority of the US workforce. As a result, it\u2019s now commonly assumed that workers need a college degree to pursue a productive career of any kind. Knowledge workers are experts in their fields in ways that their managers aren\u2019t.<\/strong> Therefore, while managers set overall expectations for knowledge workers\u2019 direction and productivity, there are many situations in which the knowledge worker<\/a> has higher authority than their boss, such as in the example of the software engineer in the previous section. While managers teach knowledge workers the needs and mission of the organization, knowledge workers teach their bosses the ins and outs of their own expertise.<\/p>\n\n\n\n Finally, it\u2019s management\u2019s role to make decisions based on issues affecting the whole organization. Drucker asserts that at the executive level, managers should devote their time to making strategic, broad-ranging decisions, not solving low-level problems. The decision path that Drucker lays out involves establishing the nature of the issue being addressed, determining the minimum requirements that a solution needs to meet, devising an action plan to implement your decision, and collecting feedback to determine whether your solution was correct.<\/p>\n\n\n\n Drucker writes that the first step in making a business decision is to determine whether the problem at hand is an isolated occurrence (such as property damage caused by a natural disaster) or a systemic issue (such as damage caused by lack of maintenance). Isolated problems can be solved individually, but systemic problems require policy decisions.<\/strong> However, managers ought to keep in mind that isolated problems are extremely rare, and what may seem like a one-of-a-kind problem could be a warning sign of a new systemic issue. It\u2019s important to figure out the underlying nature of a problem before deciding on a course of action.<\/p>\n\n\n\n The next step is to determine what bare minimum requirements your decision must meet to ensure a successful result.<\/strong> Drucker says not to try this on your own\u2014instead, you should seek input from a variety of others within your organization or outside it. When seeking advice, you want different opinions. Especially for tricky problems, you\u2019ll want a selection of alternatives, not consensus from colleagues who are afraid to ruffle each other\u2019s feathers. Encourage debate if you have to, avoiding the assumption that there\u2019s only one viable solution. When there\u2019s disagreement on an issue, Drucker suggests figuring out why <\/em>people disagree. Answering that will give you further insight into what decision you should make.<\/p>\n\n\n\n In addition to keeping an organization afloat, managers are also responsible for steering their business toward the future, which requires innovating and experimenting with new ideas. Innovation is vital for any organization because the world in which it operates is continually changing. Drucker describes how organizations should approach innovation as a part of doing business, how market analysis can generate new ideas<\/a>, and how businesses should structure themselves to enable risk-taking experiments while protecting the organization as a whole.<\/p>\n\n\n\n To be clear, innovation isn\u2019t limited to new technological developments. It includes new business practices, sales strategies, or moving a company into new markets. Drucker states that even the basic premise on which an organization is founded can go out of date. For example, video rental stores saw their business evaporate when streaming replaced physical media. The question that managers should always be asking is \u201cWhat will our organization\u2019s mission be in the future, not just in the present?\u201d<\/strong> The needs you\u2019re currently fulfilling may vanish, while new needs (and therefore customers) emerge that your organization may be suited to engage with. Watching for changes keeps organizations alive and creates opportunities for growth.<\/p>\n\n\n\n Drucker says that innovation comes from hard, diligent market analyses. Managers should watch for anomalous events, ongoing changes in demographics, and unforeseen failures or triumphs, either within the organization itself or from elsewhere in the market. If these lead to new ideas, Drucker insists that you should test innovations on a small, simple scale before developing them further.<\/strong> Small-scale innovations will let your organization fail, recover, and experiment again without a major loss of resources. Once you have a successful innovation, you should then be able to scale it up as much as your business and the market can bear.<\/p>\n\n\n\n It\u2019s a common, though untrue, stereotype that big businesses aren\u2019t innovative. The kernel of truth behind that idea is that within large, corporate structures, new ideas have a hard time taking root. Drucker writes that the solution to that is to create new, innovative business<\/a> programs as separate startup ventures<\/strong> outside the regular chain of operations. Rather than running wild, however, the organization\u2019s entrepreneurial side venture should be managed by someone high in the organization who can give it their full attention. If the venture is successful, it can be folded back into the larger institution, and if it fails, its negative returns won\u2019t impact the ongoing success of the parent company.<\/p>\n\n\n\n While discussing the importance of innovation<\/a> in general, Drucker lays out three different approaches that managers can apply to entrepreneurial endeavors. These include innovations that establish preeminence in a market, those that improve upon competitors\u2019 work, and those that identify a specialty niche in which there\u2019s no competition at all.<\/p>\n\n\n\n According to Drucker, the first of these options\u2014establishing a commanding lead in the market<\/strong>\u2014is the most popular in the literature on entrepreneurship, but it\u2019s also by far the most risky approach. It requires extensive research, planning, and a willingness to commit all your resources to pushing forward one single gamble. If your innovation succeeds and your organization takes control of a market, your work will only get harder after that. You\u2019ll constantly have to push for the next innovation, and the next, or else your competitors will pass you by and you\u2019ll lose any advantage you may have had.<\/p>\n\n\n\n The second and somewhat less risky strategy is to identify someone else\u2019s innovation that isn\u2019t being used to its fullest extent.<\/strong> Drucker says this commonly happens in the tech industry, where innovators are so focused on the technology that they\u2019re not paying attention<\/a> to how customers actually use it. The primary catch to riding someone else\u2019s coattails is that when you copycat someone else\u2019s innovation, you have to give your version a distinctive twist that sets it apart from the original. Looking for these almost-successful innovations can let your business open up whole new markets.<\/p>\n\n\n\n Drucker\u2019s final strategy is one that comes along rarely but can yield rich rewards. The trick is to identify a niche in a market that isn\u2019t being served and where there\u2019s no competition.<\/strong> Taking advantage of this kind of opportunity usually involves your organization having a specialized skill or body of knowledge that\u2019s otherwise absent in the market you\u2019re exploring. If you spot such a niche and can fill it, it offers a form of monopoly protection\u2014others may be discouraged from competing because the cost to duplicate your business\u2019s specialty may be high. However, if your company successfully establishes a niche monopoly, it\u2019s vital not to abuse that monopoly. Dissatisfied customers create a demand for competitors to step into the game.<\/p>\n\n\n\n Whereas large organizations may struggle to innovate, small businesses just starting out often suffer from a lack of managerial expertise. Drucker explains that people starting new ventures must pay close attention to their markets, carefully manage their finances, and put a leadership team in place long before a business grows to the size where such a team is needed.<\/p>\n\n\n\n Especially for a new business based on an innovative product or service, market research must take a different tack than that employed by established industries. Drucker writes that most of the time, a new business doesn\u2019t know who its customers are yet, nor how they\u2019ll actually use what it has to offer. Therefore, the manager of a new operation should assume that their original business model will have to be adjusted as the market demands. For example, someone opening a vegan<\/a> grocery in an underserved area may discover that their customers are more interested in pre-made dishes than buying separate ingredients. In the end, the market defines the nature of a business, despite the intentions of the owner.<\/strong><\/p>\n\n\n\n While identifying customers and its true market, a new business must also take great care with its money. Drucker argues that a new enterprise should absolutely not <\/em>set its sights on profits. Instead, a growing business always needs more money,<\/strong> and draining its revenues during its early days to enrich its owners and investors is the surest way to starve it of resources. Money management for new businesses should focus on finding new sources of capital as the organization outgrows its original funding method. This may entail bringing in new partners, private investors, or even incorporating and taking the company public.<\/p>\n\n\n\n Drucker writes that most businesses start as small operations with only one person or a handful in charge. If successful, a business will eventually outgrow its original management structure<\/a>,<\/strong> and when that happens, it\u2019s crucial that a management team is already in place. If it appears that your business will grow significantly over the next few years, you and your team should plan how management tasks will one day be divided so that everyone can start learning their future jobs and how they\u2019ll interact. Another key decision to make at this point is what role the business\u2019s founder will play. It may be that they don\u2019t <\/em>want to run a big business, but would rather contribute in some other fashion, such as being the company\u2019s public face.<\/p>\n\n\n\n As watching the market and customers should make clear, organizations only exist in the context of a larger community. Therefore, in addition to guiding the inner workings of a business, managers must also set objectives relating to the impact their organization has on the wider world. Drucker divides businesses\u2019 social impacts into two classes\u2014what an organization does to<\/em> society, and what it can do for<\/em> society\u2014while arguing that an organization\u2019s primary social responsibility is to carry out the function for which it was designed.<\/p>\n\n\n\n First of all, Drucker insists that social objectives aren\u2019t just window dressing\u2014they\u2019re vital for an organization\u2019s continued existence. After all, society won\u2019t tolerate a business that it perceives as causing more harm than good. Managers must always be aware of any negative impacts an operation has<\/strong> and find a way to minimize those impacts before they do harm to the business. However, that solution may come at a cost, especially for large industries. Some negative impacts require cooperation between competitors and government agencies to find a cost-efficient path to mitigation. In these cases, Drucker says the responsible course is for a business to actively participate in the solution before one is imposed from the outside.<\/p>\n\n\n\n There are also problems in society that aren\u2019t a particular business\u2019s fault but may still be worthy of that business\u2019s concern. These may take the form of societal ills that negatively impact customers to the business\u2019s detriment. There may also be problems customers face that a business might be uniquely suited to address, creating an outlet for even more business. Drucker warns against managerial overreach\u2014in which a business steps into a social arena outside its area of competence\u2014but within an organization\u2019s expertise, there may be opportunities to make social contributions that pay dividends in higher revenues and new markets.<\/strong> Managers would be foolish to let chances like that slip by.<\/p>\n\n\n\n Nevertheless, Drucker insists that management\u2019s first responsibility to society is to make sure the organization fulfills its primary mission.<\/strong> A successful business<\/a> or nonprofit exists only because it fills a social need. If a business\u2019s job is to provide the world with shoelaces, then it should focus on making the best shoelaces it can before it gets involved in external social problems. The same holds true for nonprofit groups, each of which has its own circle of competence<\/a>. It\u2019s always possible\u2014and even desirable\u2014for that circle of competence to grow, but that growth should be deliberate, well-planned, and consistent with an organization\u2019s fundamental reason to exist.<\/p>\n","protected":false},"excerpt":{"rendered":" What types of responsibilities do managers have in the workplace? How can managers steer businesses toward the future? Peter F. Drucker is widely regarded as one of the most influential thinkers in the field of modern management. The Essential Drucker is composed of key chapters from Drucker\u2019s most respected works and provides an overview of Drucker\u2019s core ideas. Read below for a brief overview of The Essential Drucker.<\/p>\n","protected":false},"author":14,"featured_media":83725,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[40,45,14],"tags":[1302],"class_list":["post-115909","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-books","category-business","category-management","tag-the-essential-drucker","","tg-column-two"],"yoast_head":"\nThe Essential Drucker<\/em> by Peter F. Drucker<\/strong><\/h2>\n\n\n\n
What Is Management?<\/strong><\/h3>\n\n\n\n
Defining the Mission and Objectives<\/strong><\/h4>\n\n\n\n
Developing People <\/strong><\/h4>\n\n\n\n
Cultivating Experts <\/strong><\/h4>\n\n\n\n
Making Decisions <\/strong><\/h4>\n\n\n\n
Management and Innovation<\/strong><\/h3>\n\n\n\n
Innovation and the Market<\/strong><\/h4>\n\n\n\n
Three Innovation Strategies<\/strong><\/h4>\n\n\n\n
Management for Startup<\/strong>s<\/h3>\n\n\n\n
Funding and Organizing<\/strong><\/h4>\n\n\n\n
Management in Society<\/strong><\/h3>\n\n\n\n
What Does a Business Owe Society?<\/strong><\/h4>\n\n\n\n