The Frontiers of Management. Peter F. Drucker

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      The Drucker Library

      The Drucker Library brings together the prolific writings of Peter F. Drucker, a writer, teacher, and management consultant. An extraordinary thinker, Drucker described the implications of cutting-edge trends while recognizing timeless human truths. From seemingly complex ideas he revealed simple management lessons addressing the down-to-earth challenges faced by real executives. His classic writings have been published in more than seventy languages, and he remains one of the most respected and read business thinkers today.

       People and Performance

       Managing in a Time of Great Change

       Toward the Next Economics

       The Changing World of the Executive

      The Frontiers of Management

      Peter F. Drucker

      Harvard Business Review Press

      Boston, Massachusetts

      Copyright 2010 Harvard Business School Publishing Corporation

      All rights reserved

      Printed in the United States of America

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      No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.

      ISBN: 978-1-4221-3157-2

      Library-of-Congress cataloging information forthcoming

      The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Publications and Documents in Libraries and Archives Z39.48-1992.

      PREFACE

      The Future Is Being Shaped Today

      The thirty-seven chapters in this volume: an Interview, an Afterword, and thirty-five essays and articles, cover a broad range of subjects. Yet they were planned from the beginning to be published eventually in one volume and as variations on one unifying theme: the challenges of tomorrow that face the executive today. If there is one single postulate underlying these pieces, it is that the future is being made by totally anonymous people, a CEO here, a marketing manager there, a training director or a comptroller yonder doing mundane jobs: building a management team; developing a new pricing strategy; changing a training program so that it matches people with different educational backgrounds to new technologies; or working out a new cost-accounting analysis to find out whether automating the welding line will pay off.

      This, after all, is the lesson of this century. It has been a century of unprecedented disasters and cataclysms: two world wars, a Stalin, a Hitler, a Mao, and scores of lesser but no less murderous villains. Indeed we packed into every decade as much “history” as one usually finds in a century; and little of it was benign. Yet most of this world, and especially the developed world, somehow managed not only to recover from the catastrophes again and again but to regain direction and momentum—economic, social, even political. The main reason was that ordinary people, people running the everyday concerns of everyday businesses and institutions, took responsibility and kept on building for tomorrow while all around them the world came crashing down. Thus tomorrow is being shaped today.

      And what kind of tomorrow it will be thus depends heavily on the knowledge, insight, foresight, and competence of the decision makers of today, and especially of the decision makers in our institutions, that is, on executives. Yet these executives are busy people. Every one of them is already fully occupied with the daily crisis—and the daily crisis is indeed the one absolutely predictable event in the working day of the executive. To enable these busy people to see and to understand the long-range implications and impacts of their immediate, everyday, urgent actions and decisions is thus the purpose to which every one of the pieces in this volume addresses itself.

      There is a second theme that runs through these thirty-seven diverse and different articles and essays: Change is opportunity. Every one of the pieces in this volume looks at changes. Some are profound and major ones, such as the impact of information on organization, the meaning of the U.S. entrepreneurial surge in the last decade, or the problems created by the success of management. Other changes are perhaps ephemeral and transitory—though for that matter no less important—for example, the mismatch between traditional jobs and the expectations and qualifications of a new, young, and educated work force. Every one of these changes might be seen as a threat and is indeed seen as such by a good many executives. Every one needs to be seen and exploited as an opportunity—for doing something different, for doing something new, and, above all, for doing something better, something more productive, something more profitable. This volume therefore aims not only at providing knowledge, insight, foresight, and competence; it aims at creating vision.

      Peter F. Drucker

      Claremont, CaliforniaSummer 1986

      INTERVIEW

      A Talk with a Wide-Ranging Mind

      Q: The last book of yours was the one in which you wrote about the deliberateness of the innovation process. Has there been any deliberateness in your own life? Was there a plan for Peter Drucker?

      A: In retrospect, my life makes sense, but not in prospect, no. I was probably thirty before I had the foggiest notion where I belonged. For ten or twelve years before that I had experimented, not by design but by accident. I knew, even as a little boy, that I didn't want to stay in Austria, and I knew that I didn't want to waste four years going to a university. So I had my father get me a job as far away as one could go and as far away from anything that I was eventually headed for. I was an apprentice clerk in an export house. Then I worked in a small bank in Frankfurt. It's a job I got because I was bilingual in English and German. That was October 1929. The stock market crashed, and I was the last in and the first out. I needed a job and got one at the local newspaper. It was a good education, I must say.

      In retrospect, the one thing I was good at was looking at phenomena and asking what they meant. I knew in 1933 how Hitler would end, and I then began my first book, The End of Economic Man, which could not be published until 1939, because no publisher was willing to accept such horrible insights. It was very clear to me that Hitler would end up killing the Jews. And it was also very clear that he would end up with a treaty with Stalin.

      I had been quite active in German conservative politics even though I had a foreign passport, and so I knew that Hitler was not for me. I left and went first to England and then, four years later, to this country. I worked in London for an insurance company as a securities analyst and as an investment banker. If I had wanted to be a rich man I would have stayed there, but it bored me to tears.

      Q: Would you define entrepreneur?

      A: The definition is very old. It is somebody who endows resources with new wealth-producing capacity. That's all.

      Q: You make the point that small business and entrepreneurial business are not necessarily the same thing.

      A: The great majority of small businesses are incapable of innovation, partly because they don't have the resources, but a lot more because they don't have the time and they don't have the ambition. I'm not even talking of the corner cigar store. Look at the typical small business. It's grotesquely