“Wherever rapid economic and social development took place after World War II, it occurred as a result of systematic and purposeful work on developing managers and management.”

World War II and the Marshall Plan put management practices on the map. Nations saw the capacity of management for organizing resources to increase performance and economic growth. Management boomed for about 20 years and then stopped booming as new challenges arose.

A lesson learned is that societies share common management tasks and problems, and require the same skills. The common tasks are vision, mission, objectives, and the organization of resources for results. (17)

Drucker identifies the men and women and organizations that developed management into a discipline before and after World War II. He reveals what nations hoped management would achieve such as Hungary and France’s desire for greater freedom and equality.

The management boom and its continued strength were made possible by the development and acceptance of the idea of entrepreneurship. That man is not completely determined or bound by economic and social forces. He has the ability and the responsibility to act, shape, and develop his environment for human flourishing.

Drucker’s genius comes through as he sifts between sociology, history, and economics helping leaders understand where we are and have come from and what it means for the future.

(Management, chapter 2)

“The emergence of management may be the pivotal event of our time, far more important than all the events that make the headlines.”

From 1900 to 1975, institutions across the world became more numerous and diverse. People migrated from farming and small businesses and became employees of corporations. At the same time, business institutions became less dominant as other institutions emerged. All of this created a need for management performance and the development and application of a management discipline.

Drucker’s main point is that business management should be the starting point of organizational performance. It has the tools for and a track record of performance.

(Management, chapter 1)

This is Drucker’s thick book on management tasks (811 pages and 6 pages of bibliography). The aim of the book is to help managers understand the tasks of the discipline of management and to perform. Drucker believes that free societies depend on the managerial performance of organizations and institutions. To the extent, managers perform their tasks, workers have opportunities for fulfillment, accomplishment, and service.

Drucker covers what managers need to know. Though primarily from an American perspective, he made efforts to understand, observe, correspond, and consult Asian, European, and Latin American organizations.

New material is the focus but the reader will find the work extends some of the content covered in Drucker’s seminal management book The Practice of Management (1954).

The book contains three sections: managerial tasks, managerial skills, and top management strategies.

(Management: Tasks Responsibilities Practices)

“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.

(The Practice of Management)

“The Bible is still the fullest measure of man’s nature, Aeschylus and Shakespeare still the best textbooks of psychology and sociology, Socrates and St. Thomas Aquinas still the high-water marks of human intellect.”

Drucker believed managers need a general education. A broad knowledge of the classics as well as history and economics to prepare themselves for thinking, communicating, and leading. Though rarely if ever taught in business schools, poetry, should be part of a manager’s general education. It teaches how to think and use language.

Manager training programs should encourage reading a wide array of subjects. No other medium of communication can replace the benefits of reading. Serious thinking ability, seeing the whole, and creativity are just a few of the benefits.

(The Practice of Management, chapter 29)

“…the most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question.”

Drucker’s business and management publications contain timeless truths. His writings are based on what philosopher Peter Kreeft called “three ways of knowing–experience, reason, and authority…” and thus often contrary to common thought. For example, Drucker believed that a big problem cannot be solved by problem-solving. Instead, a big problem requires a strategic decision and strategic decisions require something akin to a scientific method.

His method for strategic decision-making goes like this. First, the problem should be defined. This requires identifying the cause of the problem or the critical issue that is causing it. Second, the cause of the problem needs to be analyzed. Managers need to make sure they have the right information for the analysis. Third, managers need people and tools to come up with solutions. Drucker warned against either-or dichotomies. Several potential solutions should be sought to encourage careful thinking. Fourth, the manager must pick the best solution. Drucker provides four criteria for this decision. Finally, the decision is carried out and accomplished.

This chapter is worth reading more than once. The information is applicable to business and life decisions.

(The Practice of Management, chapter 28)

“The one contribution [the manager] is uniquely expected to make is to give others vision and ability to perform. It is vision and moral responsibility that, in the last analysis, define the manager.”

In this chapter, Drucker defined the qualities and functions of a successful manager.

• The most important qualities of a manager are vision, character, and responsibility.
• His primary duties are setting objectives, organizing the work, communicating, measuring, and developing people.
• His tools are reading, writing, speaking, listening, and planning.
• Decisions make or break the manager and those around him or her.
• Getting results, and sustaining them, are the manager’s primary responsibilities.

(The Practice of Management, chapter 27)

“It is [the book’s] thesis that management of worker and work has as its ultimate goal the realization of the managerial vision for all members of the enterprise, and as its major means the assumption of significant responsibility and decision-making power by every worker.”

A professional such as an electrical engineer, lawyer, or software developer is governed by two sets of requirements. That of the profession and that of the organization. These requirements must be integrated and ordered for business results.

Professionals ought to be allowed to fulfill the requirements of their profession, but they must have a vision of the organization’s mission and goals. Professional requirements are not an end in themselves. They are a means to an end. Their purpose is to further the mission of the organization and its goals for the public good.

To increase the ability of professionals to integrate and order their efforts, two things can be done. First, Drucker recommended giving professionals oversight opportunities in areas of the business that their work affects. He gave an example of a chemist who was put on a financial committee. The chemist’s professional requirements remained but he gained new knowledge of what the business required.

Second, professionals should have promotion tracks that encourage professional advancement, and they should be managed by people who have experience in the profession. This will increase the likelihood all requirements are fulfilled.

(The Practice of Management, chapter 26)

“If the supervisor has a genuine manager’s job; if he is adequately supported by his staff; if he has real authority; and if his unit is big enough–then his job will have become manageable again.”

Supervisors are the first level of management and they are often wasted. Not only are they required to manage, but they are also expected to function as super employees.

Drucker believed that supervisors should focus less on activities and more on objectives. They should plan, train, and guide teams toward management goals and delegate everything they do not have to do.

To make this happen executives should increase team size. This will force supervisors to set objectives and delegate work. Executives should also give supervisors more authority and status. This will force executives to pay attention to their needs.

If team size and supervisor authority increase, supervisor and employee focus will shift toward management goals and business results.

(The Practice of Management, chapter 25)

“…the real job is to convince workers that there is an ever-present danger of loss, that therefore profit is necessary to build their own future job and their livelihood.”

Many employees, in large organizations, do not believe profit or results are their responsibility. They believe profit is the CEO’s responsibility or a function of the sales or the business development team. This has caused problems. First, employees are not as motivated to perform as they would otherwise be. Second, they do not think about how their work could contribute to profit in a more effective way, or conversely, how quietly quitting affects the enterprise. Third, employees do not look for and take opportunities to contribute.

For employees to accept the fact that they are responsible for profit and results, they must realize that profits come from outside of the business, via markets and customers. They must realize that customers decide what is valuable and worth paying for and that the customer determines the economic future of the employee. An employee who understands this will be more motivated to contribute to what the customer considers to be of value and to the business’s profit.

Executives should find examples of people who accepted responsibility. They should showcase how they contributed to what customers consider value, and how this led to company profit and personal success.

(The Practice of Management, chapter 24)