Management issues are discussed in excerpts from ‘Managing for the Future: The 1990s and Beyond.’ The trend for organizations to employ independent outside contractors for many maintenance, clerical and support work is expected to become the norm in years to come. Such unbundling of support services from the corporate structure generally leads to more productivity because similar staff on payrolls have little motivation to produce without the promise of advancement. For businesses to earn a return on their research dollars, success depends on other things besides knowledge and luck. Given the changes in the world’s economy and organizations, new skills for executives are demanded. Three important skills for executives in the coming years are looking outside the business for management plans, assuming responsibility for obtaining information about a new position and building continuous learning into the system.
Today even more than ever before, Peter Drucker, the world’s most influential management thinker, is being looked to and listened to by business leaders and economic scholars grappling with the challenges of change. This major new book brings together his latest, most stimulating and enlightening views on the new world business order and management imperatives of the 1990s and beyond. This is the final excerpt from his latest book. From “Managing for the Future: The 1990s and Beyond” by Peter F. Drucker. Copyright (c) Peter F. Drucker, 1992. Reprinted by arrangement with Truman Talley Books-Dutton, an imprint of New American Library, a division of Penguin Books USA Inc.
…The trend is accelerating sharply in all developed countries. In another 10 or 15 years it may well be the rule…to farm out all activities that do not offer the people working in them opportunities for advancement into senior management. This may indeed be the only way to attain productivity in clerical, maintenance, and support work. And increased productivity in such work will increasingly become a central challenge in developed countries, where such work now employs as many people as manufacturing does.
Effective Research Pays
Some businesses…get a fiftyfold, or even a hundredfold, return on the research dollar. Many more get little or nothing. The key to success is not all knowledge, intelligence, or hard work–and least of all, luck. It is following the 10 Rules of Effective Research:
* 1. Every new product, processor, or service begins to become obsolete on the day it first breaks even.
* 2. Thus, your being the one who makes your product, process, or service obsolete is the only way to prevent your competitor from doing so.
* 3. If research is to have results the…distinction between “pure” and “applied” research had better be forgotten.
* 4. In effective research, physics, chemistry, biology, mathematics, economics…are not “disciplines.” They are tools.
* 5. Research is not one effort–it is three: improvement, managed evolution, and innovation. They are complementary but quite different.
* 6. Aim high! Trivial corrections usually are as hard to make and as staunchly resisted as fundamental changes.
* 7. …Effective research requires both long-range and short-range results.
* 8. Research is separate work, but it is not a separate function.
* 9. Effective research requires organized abandonment–not only of products, processes and services, but also of research projects.
* 10. Research has to be measured like everything else.
While mergers and takeovers, imports and exports grab headlines, business alliances rarely do. Nor do they generally show up in statistics. Yet for small and medium-sized businesses they are increasingly becoming the way to go international, and for big business, they are the way to become multi-technological.
…These are all dangerous liaisons…but the problems can be anticipated and largely prevented:
Before the alliance is completed, all parties must think through their objectives and the objectives of the “child.”
…Equally important is advance agreement on how the joint enterprise should be run.
…Next, there has to be careful thinking about who will manage the alliance.
…Each partner needs to make provisions in its own structure for the relationship to the joint enterprise and the other partners.
…Finally, there has to be prior agreement on how to resolve disagreements.
Corporate capitalism was the buzzword of the 1960s…Under corporate capitalism…economic superpowers were run by autonomous managements…Corporate capitalism was a delusion from the beginning and an arrogant one to boot. When attacked, no one supports it–as U.S. managements found out as soon as the raiders appeared…Speculator’s capitalism is the wrong remedy. Its side effects threaten to kill the patient. Speculator’s capitalism is probably not even very good for the shareholder. At least that seems to be the conclusion of America’s major shareholders, the pension funds.
…The proponents of corporate capitalism 20 years ago thought that they had the right answers. Speculator’s capitalism has proved them wrong. But they may well have asked the right questions. Now that speculator’s capitalism is in turn proving inadequate, and indeed a threat to America’s long-term economic future, we have to tackle these questions again. On our answers to them the future of free enterprise…may well depend.
We cannot build it yet. But already we can specify the “post-modern” factory of 1999. Its essence will not be mechanical, though there will be plenty of machines. Its essence will be conceptual–the product of four principles and practices that together constitute a new approach to manufacturing.
Each of these concepts is being developed separately, by different people with different starting points and different agendas. Statistical Quality Control is changing the social organization of the factory. The new manufacturing accounting lets us make production decisions as business decisions. The “flotilla,” or module, organization of the manufacturing process promises to combine the advantages of standardization and flexibility. Finally, the systems approach…[integrates] the physical process of making things…[which is] manufacturing…[with] the economic process of business…[which] is creating value.
New Management Skills
…In the light of changing world economy, the advent of the information-based organization and the need to systematize innovation and entrepreneurship, what skills and abilities will an executive need to be effective in the next years? The old skills are, of course, required, but there are some new ones which are likely to become increasingly important. I can think of three.
* Skill 1: Management by going outside…Learn to be outside where the results of the business take place. Nothing is more wasteful than a visit to the Barcelona subsidiary. But work for two days, standing behind the counter, and it is surprising how much the manager will learn about that company.
* Skill 2: Find out the information you need to do your job…People must learn to take responsibility for their own information needs…Most managers still believe that they need an information specialist to tell them what information they should have. But information specialists are providers of tools. It is the manager’s job to figure out what information he needs to identify: 1) what he is doing now; 2) what he should be doing; and 3) how he can get from (1) to (2).
* Skill 3: Building learning into the system…Learning must be continuous. We have to recognize the unwelcome fact that the knowledge of those who are five years out of school is by definition obsolescent. Continue reading Plan now for the future: Researches are required in any field including Home improvement