Managing in a Time of Great Change
Summary
Peter Drucker collected these essays from the mid-1990s, covering management practice, the changing shape of the organisation, the information executives need, and the economic and social changes he expected to dominate the following decades.
The strongest pieces concern information. Drucker argues that executives receive accounting data designed for cost control and receive almost nothing about what happens outside the organisation, where all results and all threats originate. He calls for measures of the business's position relative to customers, non-customers and competitors, and argues that a firm's most dangerous blind spot is the market it does not serve. He also writes on the theory of the business, meaning the set of assumptions about environment, mission and core competencies on which every organisation operates, and argues that these assumptions become obsolete without anyone noticing because they were never stated explicitly.
Other essays cover the growth of outsourcing and the unbundling of the corporation, the management of non-profit institutions, the productivity of service work, and the political consequences of economic integration. The collection repeats material from the surrounding books. The theory of the business essay is the one most worth reading and was published separately in Harvard Business Review.
Key takeaways 7
- Every organisation operates on a theory of the business, meaning assumptions about its environment, mission and competencies, and these assumptions are rarely stated.
- A theory of the business becomes obsolete through the organisation's own success, because success changes the environment the theory assumed.
- Executives receive detailed internal accounting data and almost no information about non-customers, where the threats originate.
- The most important information about a business exists outside it and is not collected by any accounting system.
- Service work productivity requires defining the task first, and most service organisations have never done so.
- Outsourcing separates ownership from the activities a business performs, which changes what management must be able to see.
- Drucker argues that an organisation should test its founding assumptions against evidence at fixed intervals rather than waiting for a crisis to reveal them.
Who should read it
Executives who want Drucker on the theory of the business and on what information management systems systematically fail to supply.
About Peter F. Drucker
Management writer and consultant; professor at Bennington, NYU and Claremont Graduate University
He invented management as a field of study, and The Practice of Management and The Effective Executive remain the primary sources every later writer builds on.
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