Management Challenges for the 21St Century

Rating:
Summary: Six Major Factors of Knowledge Worker Productivity.
Review: Peter F. Drucker writes in the Introduction, "...this is not a book of 'predictions,' not a book about the 'future.' The challenges and issues discussed in it are already with us in every one of the developed countries and in most of the emerging ones (e.g., Korea or Turkey). They can already be identified, discussed, analyzed and prescribed for. Some people, someplace, are already working on them. But so far very few organizations do, and very few executives. Those who do work on these challenges today, and thus prepare themselves and their institutions for the new challenges, will be the leaders and dominate tomorrow. Those who wait until these challenges have indeed become 'hot' issues are likely to fall behind, perhaps never to recover. This book is thus a Call for Action."

In this context, in Chapter 5 of this invaluable book, Drucker focuses on knowledge worker. He says that "the most important, and indeed the truly unique, contribution of management in the 20th century was the fifty-fold increase in the productivity of the 'manual worker' in manufacturing. The most important contribution management needs to make in the 21st century is similarly to increase the productivity of 'knowledge work' and the 'knowledge worker.' The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or nonbusiness, will be its knowledge workers and their productivity."

Thus, he defines six major factors determine knowledge worker productivity as follows:

1. Knowledge worker productivity demands that we ask the question: "What is the task?"

2. It demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves. They have to have authonomy.

3. Continuing innovation has to be part of the work, the task and the responsibility of knowledge workers.

4. Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of the knowledge worker.

5. Productivity of the knowledge worker is not-at least not primarily-a matter of the quantity of output. Quality is at least as important.

6. Finally, knowledge worker productivity requires that the knowledge worker is both seen and treated as an "asset" rather than a "cost." It requires that knowledge workers want to work for the organization in preference to all other opportunities.

He argues that each of these requirements-except perhaps the last one-is almost the exact opposite of what is needed to increase the productivity of the manual worker.

Highly recommended.

Rating:
Summary: Look ahead and act to transform challenges in opportunities
Review: This is the invitation made by Peter F. Drucker in his book: Management challenges for the 21st century. The author writes: "Reading this book will upset and disturb a good many people, as writing it disturbed me" and "It is a very different book from the one I originally envisaged". These two sentences explain that the pressure of the future is so already with us that ideas coming to the author have difficulties to organize on the paper. But this stressing environment gives one of the best book of Peter F. Drucker with issues not to be ignored by knowledge-workers and executives who will have to work on them to make sure to be among the leaders of tomorrow.

In the 2 first chapters, we are sharing ideas from the Management's assumptions, which are no more valid in the "New Economy" to The New Certainties on which very few organizations and very few executives are working on and are invited to a call for action in front of a period of a profound transition.

In Chapter 3, Peter F. Drucker is describing, the Change leader, which mission will not be to manage change, because it is not possible to manage change, but to be ahead of it. Different recommendations are given, but the more important one is piloting the change to permanently test reality. If making the future is highly risky, it is less risky than not trying to make it in a period of upheavals, such as the one we are living in.

In chapter 4, the author convinces us that IT Information Technology has to move from the T to the I. That means that Technology as such is not the concern of executives when Information is. It is true that executives did not get always, with the Information Technologies Revolution, the Information they need for acting. But Information requires also to move from internal information to external Information, because strategy is mainly based on the last one. Information being the key resource for knowledge workers asks to be organized at individual and group level to anticipate and avoid surprises in front of significant events and to prepare for action.

In chapter 5, after discovering that the main contribution of management in the 20th century was the fifty-fold increase of productivity of the manual-worker in manufacturing, we are presented the challenge for the 21st century as being the increase of knowledge-worker productivity. The move there is from quantity measurement to quality measurement of an agreed defined task of a knowledge-worker, which is part of a growing population in developed countries. Knowledge-workers, owning their means of production, the knowledge between their ears, are becoming assets instead of costs. And if costs need to be controlled and reduced, assets need to be made to grow. This means a change of attitude of management but also of corporation governance who have to find balance between the interests of shareholders and knowledge-workers contributing to the wealth of the organization.

In the final chapter, we are presented the impact of all previous evolutions on the individual knowledge-worker, who will have to manage himself in this new environment. This is a real revolution in mentalities due to two new realities: workers are likely to outlive organizations, and the knowledge worker has mobility the manual-worker did not have. Partnership is becoming an answer to these changes with all the consequences for the individual who has to ask himself: "what should be my contribution" and "where and how can I have results that make a difference", yes a real revolution already there.

Management Challenges for the 21st Century is giving the basics to enter the period of profound transition we know with the arrival of the "New Economy" and will make the difference for the people who read this book. We really have to thank Peter F. Drucker for this important contribution at the age of 90, a masterpiece after more than sixty years devoted to management development.

Rating:
Summary: A beautiful management mind!
Review: Peter Drucker has a beautiful mind, forever fresh and overflowing with innovative thoughts. This book, published just as the master of management began his tenth decade of life, shows him at his perpetual best. The text carries with it the sweeping knowledge, deep experience, and astute analysis that a reader might expect from Drucker at this point in his life. But you will find no timid conservatism, no holding on to safe ground here. Drucker has made a lifelong habit of leading the way in business thought and this book confirms that he just can't help himself.

In contrast to the typical business book which is 200 pages too long, every chapter and every page of Management Challenges for the 21st Century relentlessly tweaks the noses of bad assumptions while focusing our attention on the future. Drucker pulls together diverse trends and forces to map out the truly new management challenges. His first chapter, "Management's New Paradigms" argues that organizations (or what ManyWorlds calls "business architecture") will have to become part of the executive's toolbox, yet we continue to operate on outdated assumptions about the role and domain of management.

Fortunately much recent management thinking explicitly challenges one assumption pulled apart by Drucker: The idea that the inside of the organization is the domain of management. This assumption, says Drucker, "explains the otherwise totally incomprehensible distinction between management and entrepreneurship". These are two aspects of the same task. Management without entrepreneurship (and vice versa) cannot survive in a world where every organization must be "designed for change as the norm and to create change rather than react to it."

Although Drucker is intent on uprooting old certainties and focusing organizations on constant change, he does not leave the reader without a compass. In the second chapter, "Strategy-The New Certainties", Drucker says that strategy allows an organization to be "purposefully opportunistic" and explains five certainties around we can shape our strategy. While other writers have addressed a couple of these, too little attention has been paid to some of the inevitabilities analyzed here, including the collapsing birthrate, shifts in the distribution of disposable income, and the growing incongruence between economic globalization and political splintering.

The book's third chapter, "The Change Leader", gives Drucker's unique perspective on the need for 21st organizations to be change leaders. "One cannot *manage* change. One can only be ahead of it." Change leaders have four qualities. They create policies to make the future which means not only continual improvement but *organized abandonment* - a practice still almost unknown in practice. Contrary to typical company reactions, change leaders will starve problems and feed opportunities. For Drucker this means, in part, having a policy of systematic innovation and - in tune with recent calls for new budgetary practices - having two separate budgets to ensure that the future-creating budget is not stopped off in difficult times.

Strong as the first chapters are, I found the other chapters of this book even more incisive. The reader may come away with the sense that many of Drucker's points are obvious, but will realize that they only *became* obvious after hearing them. In his chapter on "Information Challenges", Drucker gives his own, historically-rich, controversial, and provocative take on our current information revolution - the fourth such revolution, he says).

The man who coined the term "knowledge worker" has no shortage of fresh thoughts in the chapter on "Knowledge-Worker Productivity", and has profoundly important things to say in the final chapter on "Managing Oneself". Management Challenges for the 21st Century is, of course, essential reading for aspiring manager-entrepreneurs in these confusing times. As for aspiring business writers, I can only say: Read it and weep!

Rating:
Summary: How to Manage a Company Full of Knowledge Workers
Review: Drucker's covers a spectrum of topics which is not easily organized, but his wealth of experience (first business book written in 1939, this one written 60 years later) makes it worth reading regardless.

"One cannot manage change. Once can just be ahead of it." (pg 73)

An outline might look like this:

1) For starters, people must understand that a) Management does not only pertain to business. 90% of organizations are the same. b) There is no such thing as a RIGHT ORGANIZATION. The organization fits the task. c) In the knowledge economy, you cannot manage people. Only lead them. d) Management focus is external, not internal. "Management exists for the sake of its institution's results." (pg 39)

2) For knowledge workers, money is not enough. They require a challenge for motivation and must believe in the company mission to really perform. It is the quality of their work, not the quantity that matters.

3) Management needs to clearly define WHAT SHOULD BE DONE, rather than HOW IT SHOULD BE DONE. For manual labor, HOW matters because there are minimum quality requirements. For knowledge work, quality is a given.

4) Increasingly a company's comparative advantage will be its ability to attract and retain the most talented people. Likewise, knowledge workers should be treated as a capital asset, not as a cost.

5) Successful companies have a culture of organized abandonment. People are encouraged to abandon what does not work. It is innovation in motion. Opportunities are fed and problems starved.

6) The new Information Revolution is about concepts, not data. Going forward, IT will focus less on the T (Technology) and more on the I (Information). Once again, it is a question of quality ~ not quantity. Likewise, the ultimate test of any information system is that there are no surprises.

7) Since knowledge workers have a long working life (evidence, the author), they must actively manage their careers. To achieve this, Drucker gives straightforward advice: Know yourself. What are my strengths? How do I perform? What are my values?

8) Everyone should develop secondary interests (volunteer work, different job, hobbies) to challenge, and motivate themselves. Do not get stuck mid-career without any alternatives.

Rating:
Summary: Six Major Factors of Knowledge Worker Productivity.
Review: Peter F. Drucker writes in the Introduction, "...this is not a book of 'predictions,' not a book about the 'future.' The challenges and issues discussed in it are already with us in every one of the developed countries and in most of the emerging ones (e.g., Korea or Turkey). They can already be identified, discussed, analyzed and prescribed for. Some people, someplace, are already working on them. But so far very few organizations do, and very few executives. Those who do work on these challenges today, and thus prepare themselves and their institutions for the new challenges, will be the leaders and dominate tomorrow. Those who wait until these challenges have indeed become 'hot' issues are likely to fall behind, perhaps never to recover. This book is thus a Call for Action."

In this context, in Chapter 5 of this invaluable book, Drucker focuses on knowledge worker. He says that "the most important, and indeed the truly unique, contribution of management in the 20th century was the fifty-fold increase in the productivity of the 'manual worker' in manufacturing. The most important contribution management needs to make in the 21st century is similarly to increase the productivity of 'knowledge work' and the 'knowledge worker.' The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or nonbusiness, will be its knowledge workers and their productivity."

Thus, he defines six major factors determine knowledge worker productivity as follows:

1. Knowledge worker productivity demands that we ask the question: "What is the task?"

2. It demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves. They have to have authonomy.

3. Continuing innovation has to be part of the work, the task and the responsibility of knowledge workers.

4. Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of the knowledge worker.

5. Productivity of the knowledge worker is not-at least not primarily-a matter of the quantity of output. Quality is at least as important.

6. Finally, knowledge worker productivity requires that the knowledge worker is both seen and treated as an "asset" rather than a "cost." It requires that knowledge workers want to work for the organization in preference to all other opportunities.

He argues that each of these requirements-except perhaps the last one-is almost the exact opposite of what is needed to increase the productivity of the manual worker.

Highly recommended.

Rating:
Summary: Another Great Book
Review: Drucker is a master at Business management and a great visionary, this book is a must for anyone planning for the future--CraigAdams.net

Rating:
Summary: Challenging Read!
Review: An experienced Author's presentation 'Management Challenges for the 21st Century' is a challenging and an inspiring Read. Since years, there has been drastic changes in social and economic levels. Management requires re-shaping the business strategies from time to time. Peter offers new paradigms of management with thoughtful implementations of strategic ideas to face the critical areas, weaker spots, problems, practises and how to face in the 21st century. Slightly for the genius minds, the book demands deep business sense and profound knowledge. Management needs to indepth recognising strengths and analysing on performance, clear goals on how to achieve quality work, motivation and getting quipped with innovation. Peter argues that management will increase the productivity of the knowledge worker and with the global competitiveness, he focus on re-definition of corporate performance. Peter offer lessons with the major chapters like 'Management's New Paradigms, Strategy, The New Certainties, The Change Leader, Information Challenges, Knowledge-Worker Productivity, and Managing Oneself for the new waves. In the chapter 'The Change Leader', he clearly motivates the leaders to be ahead of times by starving the problems and feeding opportunities. The uncertainties can be overcome with change in accepting new and abandoning old patterns of management and make an increase in productivity. The Knowledge worker chapter is to enhance productivity piloting to fresh new innovative ideas. Managing oneself is a thorough learning guide as Peter leaves no room in grooming the new age management leader. An Outstanding Book for Read n Digest especially to all generation next leaders and a Must Read for existing Management CEO's to cope up with the change - Change before the Change!

Rating:
Summary: Peter Drucker Does It Again!
Review: 'Management Challenges for the 21st Century' is a book by a ninety-year-old -- about the future! However, as the ninety-year-old is Dr. Peter F. Drucker, the guru of modern management practices, that is a great thing. His work truly does represent a full ninety years of accumulated knowledge (one can sense his zest for knowledge in his writing), and his writing style has actually improved over the last thirty years (The editing of this book was somewhat spotty, though -- there are several spelling and grammatical errors that detract from the work. This is unfortunate, as Dr. Drucker deserves much better from HarperCollins, his publisher of sixty years.) In fact, Dr. Drucker started writing this book as an retrospective of his past work but, as he wrote and researched, he set that aside to write not of the known past, but of the unknown future.

In the book, one of his primary points is that, over the next century, management will increase the productivity of the knowledge worker (a term Dr. Drucker himself invented over thirty years ago) fifty-fold, which is the increase in the productivity of the manual worker during the Industrial Revolution. For this to happen, knowledge workers will be essentially self-managed. They will be responsible for their own contributions, they will be continuously innovating, and they will be continuously learning and teaching (he has an interesting chapter on how people learn). The difficulty to companies is that knowledge workers are capital assets, not costs, as they possess knowledge. This presents unique challenges to managers as, unlike with manual workers, the company needs the knowledge worker almost as much as the knowledge worker needs the company.

He discusses the collapsing birthrate and its impact on knowledge workers, relative to career length and focus. He also discusses future shifts in distribution of disposable income, a redefinition of corporate performance, global competitiveness, and the growing incongruence between economic and political reality.

He also discusses how to be a change leader in the future. ("One cannot manage change. One can only be ahead of it.") This involves innovation and careful piloting of new ideas. He follows up with his perspective on the increase in available of information, which he says was paralleled by Gutenberg's invention of printing press. He urges that the focus of IT be on the information, not on the technology.

This is an outstanding book, and I highly recommend it. I hope he chooses to write a few more.

Rating:
Summary: Extraordinary Insight!
Review: Peter Drucker contines to amazing me! Now in his 90s, he is the most insightful writer in the world on the subject of management. As a management consultant myself, I benefitted from every page of this book!

Rating:
Summary: DISCUSSES UNCERTAINITIES OF 21ST CENTURY
Review: If his statement is true: that all "Management is Business Management," then, Mr. Drucker, in this work, provides a potent combination of sage advice, well-researched techniques, business homilies, and perceptive insights into current trends in management in a compact six chapter primer that works well for all organizations.
Those six subjects are: 'Management's New Paradigms, Strategy ' The New Certainties, The Change Leader, Information Challenges, Knowledge-Worker Productivity, and Managing Oneself.' The chapters and subjects build upon each other except for the last - it provides for the human and individual element within the myriad formations of management.

Drucker highlights the new certainties for the 21st century and they are profound in their implications for all management. This is the best chapter within the text; Drucker is focused and presents a lucid discussion while avoiding unnecessary distractions. The new certainties are: '1) The Collapsing Birthrate in the Developed World. 2) Shifts in the Distribution of Disposable Income. 3) Defining Performance. 4) Global Competitiveness. 5) The Growing Incongruence Between Economic Globalization and Political Splintering."

Another Important point he brings up is Disposable Income. The share of disposable income a customer devotes to purchasing goods is fundamental knowledge any business must know for that factor is 'the foundation of all economic information.' Drucker attributes growth in the 20th century to four categories: 'Government, Health Care, Education, and Leisure.' Yet, the lone category providing growth in the 21st century is financial services. This, according to Drucker, has occurred because financial services learned how to market to the average customer. He also states it equally important to know who is not a customer, since this is always a larger population base than known customers.

Drucker offers multiple lessons for tomorrow's leaders such as: 'starve problems and feed opportunities' by being willing to abandon old ways of doing things and focusing more on the I of IT, that is, information needed rather than the technology. He points out that we have excellent technology to design a building but that does not inform us about the strategic question of whether or not it should be built. Further, rather than fearing resistance to change we must learn to look for and anticipate change'for this we need change leaders who see opportunities, not threats, in new developments.

Drucker summarizes the previous three information revolutions and claims we are experiencing the fourth. This one, driven by changes in accounting procedures and publishing advances will cause all business to learn to organize information. The key to remaining competitive in the 21st century will be to organize based on activity-based costing. Its basic premise is that business is an integrated process that starts when the supplies, material and parts arrive at the plant's loading dock and continues even after the finished product reaches the end-user. Service is still a cost of the product, and so is installation, even if the customer pays. Drucker predicts the new accounting will have its greatest impact on service industries. This paradigm shift should cause the forward thinking manager to evaluate the scarcity of resources.

Likewise an organization to be competitive in the 21st century needs to stop thinking regionally or nationally, instead "make global competitiveness a strategic goal."

Drucker starts out by providing the reader with his key assumptions underlying management. One set concerns the discipline and the other set the practice of management. These assumptions and their applicability are critical entry points into the following chapters. Drucker shatters the illusion that management is something that only certain people can do in isolation sitting in airconditiojed offices without regard for the task at hand, the product produced, the customer served or the participation of employees.