During a recent trip a client and I discussed seven principles developed by Peter Drucker, as encapsulated by him in a Harvard Business Review article in September-October 1988.
Drucker’s stature as a thinker about management and business in general, is virtually unrivaled. I have slightly shortened his writings in the paragraphs that follow.
These thoughts of Drucker are timeless. Take the time to read them carefully and thoughtfully.
1. 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 an organization is about, and it is the reason that management is the critical, determining factor. Practically all of us are employed by managed institutions – and this is true for especially educated people. We depend on management for our livelihoods and our ability to contribute and achieve. Our ability to contribute to society usually depends as much on the management of the enterprises in which we work as it does on our own skills, dedication and effort.
2. Because management deals with the integration of people in a common venture, it is deeply embedded in culture. What managers do in any nation is exactly the same. How they do it may be quite different. Managers in a developing country have to find those parts of their tradition, history, and culture that can be used as building blocks. Plant important management concepts in your own culture and make them grow. (Vide Japan, India and China.)
3. Every enterprise requires simple, clear, and unifying objectives. Its mission has to be clear enough and big enough to provide a common vision. The goals that embody it have to be clear, public, and often reaffirmed. If there is no commitment there is no enterprise, there is only a mob. Management’s job is to think through, set, and exemplify those goals, values, and goals.
4. It is also management’s job to 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 never stops.
5. Every enterprise is composed of people with different skill and knowledge doing many different kinds of work. For that reason, it must be built on communication and on individual responsibility. Each member has to think through what he or she aims to accomplish – and make sure that associates know and understand that aim.
6. Neither the quantity of output nor the bottom line is by itself an adequate measure of performance of management and enterprise. Market standing, innovation, productivity, development of people, quality, financial results – all are crucial to a company’s performance and indeed to its survival. In this respect an enterprise is like a human being. Just as we need a diversity of measures to assess the health and performance of a human person, we need a diversity of measures for an enterprise. Performance has to be built into the enterprise and its management; it has to be measured –or at least judged – and it has to be continuously improved.
7. The single most important thing to remember about any enterprise is that there are no results inside its walls. 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 ten years later. Inside an enterprise, there are only cost centres. Results exist only on the outside.
“Managers who truly understand these principles and truly manage themselves in their light will be achieving, accomplished managers – the kind who built successful, productive, achieving enterprises all over the world and who establish standards, set examples, and leave as a legacy both greater capacity to produce wealth and greater human vision.”
PS The above appeared in Peter Drucker – On the Profession of Management – a Harvard Business Review Book.keywords: management, organisation, Peter Drucker