“It is management’s public responsibility to make whatever is genuinely in the public good become the enterprise’s own self-interest.”
Drucker’s entire work, in particular, his first book The End of Economic Man: The Origins of Totalitarianism, must be read to fathom the significance of this quote. The main argument of the book is that capitalism and Marxist socialism failed to furnish Europe’s most hoped-for promises of equality, status, and purpose. This led to an epidemic of despair and the forced social equality of totalitarianism in Nazi Germany and Soviet Russia.
An advocate of capitalism, Drucker warned that man requires more than material solutions to satisfy his basic needs. Man is a spiritual, not merely a material being, and thus cannot live on economic progress alone.
Businesses and corporations, while not sufficient for man’s needs, can contribute to them. To this end, Drucker dedicated his professional life to helping organizations fulfill their duties.
The world’s greatest corporations such as General Motors were advanced by Drucker’s ability to see the big picture. He excelled at connecting the dots across the business, market, economy, and society–seeing all as an ecosystem–and like Neil Armstrong, took a giant leap for all manager-kind by integrating management, business, and leadership realities.
Drucker understood the essential realities and responsibilities of business. The first responsibility of a business is to make a profit. It goes without saying that profit enables the corporation to sustain its activities by covering costs and rewarding performance, but it also provides an avenue for man to serve and contribute, enjoy life, and experience the dignity and status of a job well done.
Moreover, profit is a light that illuminates what customers consider to be valuable.
The quote above references the corporation’s duty to provide customers with what leads to a good life. The truly great corporate leaders (e.g. Walt Disney) were not order-takers. They defined reality, changed perceptions and conceptions, and lead customers to results that contributed to their most basic needs.
Finally, because executives and managers are the custodians of power and resources for economic results and the public good, their responsibilities include appropriate and effective governance that is ordered for performance, results, and integrity.
While this book, cannot replace managerial experience, it can make experienced executives and managers almost irreplaceable.