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Weekly UpdatesPeter Drucker On the Profession of Management
Published by Harvard Business School Press (800) 988-0886 www.hbsp.com 2003; 224 pages; $16.95
Over the last few years, we at GFOA have heard repeated calls from our members for more guidance on general management issues. It seems that while finance officers are becoming ever more proficient in the disciplines of public finance, an increasing share of their time is now devoted to non-financial concerns for which many have little formal training. Finance officers looking for insights into how to navigate the challenges of the modern organization could do much worse than the writings of Peter Drucker, one of this century's foremost experts on management.
Harvard Business School Press recently did us all a favor by publishing 11 of the 32 articles Drucker has written over the years for Harvard Business Review. Edited by former HBR editor Nan Stone, Peter Drucker On the Profession of Management is a thought-provoking collection of forward-looking ideas that are as relevant today as they were when they were first written. While the articles focus specifically on the for-profit sector, most of the lessons are equally applicable to public management.
The book is divided into two sections: "The Manager's Responsibilities" and "The Executive's World." Although the latter section is, on the balance, more interesting and useful than the former, the article on making personnel decisions deserves careful study. "Executives who do not make the effort to get their people decisions right do more than risk poor performance," Drucker says. "They risk losing their organization's respect." In this essay, Drucker offers four basic principles for making good people decisions. Public managers would do well to learn and live by these principles.
Drucker anticipated long before most observers the shift from an industrial economy to today's information or knowledge economy. The second section specifically addresses the unique managerial challenges of the knowledge economy, where the primary factor of production is information as opposed to land, labor, and capital. Speaking of this new order, Drucker writes, "For managers, the dynamics of knowledge impose one clear imperative: every organization has to build the management of change into its very structure." This, he says, requires three systematic practices: continuous improvement, the exploitation of knowledge, and innovation.
According to Drucker, the single greatest challenge for managers in this new economy is raising the productivity of knowledge and service workers. Drucker asserts that working smarter, not harder or longer, is the only way to achieve significant productivity increases among knowledge and service workers. To Drucker, working smarter starts with defining primary tasks and eliminating unnecessary ones. Busywork, such as long meetings and cumbersome paperwork, he says, "is not job enrichment; it is job impoverishment. It destroys productivity. It saps motivation and morale." To combat low productivity, Drucker says managers must define the task, concentrate work on the task, and define performance.
One theme that runs throughout the book is the idea that to be successful, organizations must channel their resources into the performance of their mission. This theme receives particular emphasis in "What Business Can Learn from Nonprofits," an essay on how nonprofit organizations are becoming America's management leaders. "Starting with the mission and its requirements ... focuses the organization on action," Drucker writes. "It defines the specific strategies needed to attain the crucial goals. It creates a disciplined organization. It alone can prevent the most degenerative disease of organizations, especially large ones: splintering their always limited resources on things that are 'interesting' or look 'profitable' rather than concentrating them on a very small number of productive efforts." This notion is certainly relevant for governments today, as they seek to divide shrinking revenues in a seemingly endless constellation of worthy programs and services.
The ideas Drucker expounds in this collection of articles are nicely distilled in the second to last chapter, "Management and the World's Work." Here he boils down the practice of management into seven essential principles that readers will find both compelling and inspiring.
Peter Drucker On the Profession of Management does not spell out detailed instructions on how to successfully manage people and programs. Rather, it is a collection of well-reasoned ideas that will cause managers to think seriously about what they are doing and how they might achieve better results. As such, this book is a good starting point for finance officers looking for an overarching treatment of management that will get the gears turning. Those looking for detailed guidance on specific topics, however, will be better served by other, more focused books.
PETER CHRISTENSEN is managing editor of Government Finance Review and a senior policy analyst in GFOA's Research and Consulting Center.
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