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The Practice Of Management- a legacy of influential works - Book Review

1 March 2007
Dr. Moria Levy
book cover

In November 2005, the father of management theory and one of its luminaries, Peter Drucker, passed away. Renowned for seamlessly blending academic and theoretical knowledge, Drucker held diverse roles as a lecturer, management consultant, "guru," and prolific author. He left behind a legacy of 39 books and hundreds of articles, having lived to 96.

Most knowledge managers are familiar with Drucker's groundbreaking work, "Management Challenges in the 21st Century," published in 1999. In this seminal piece, Drucker explores the significance of information for managers, the knowledge worker’s role, and strategies for achieving efficiency in knowledge-rich organizations.

Equally revolutionary is Drucker's "The Practice Of Management," published in 1954, laying out modern management theory's foundational principles. While the book may not strike us as revolutionary today, it's because its methods have become ingrained in the world's practices, with many of us now reaping the benefits rather than witnessing the initial revolution.

This article aims to explore Drucker's insights not from the perspective of traditional managers but through the lens of knowledge managers. Acknowledging that our discussion merely scratches the surface of Drucker's comprehensive work, we encourage readers to delve into the books themselves. Our goal is to examine the processes inherent to knowledge management, validating and reinforcing existing methodologies while gaining insights from Drucker's timeless wisdom.

According to Drucker, successful business requires addressing the mission-oriented question, "What is our business?" This question is equally crucial in the realm of knowledge management, and its significance can be highlighted for various reasons:

  1. Managing knowledge without a clear goal is akin to employing the proper methods for the wrong purpose. Establishing "What is our business" serves as the fundamental groundwork. Only after defining these aspects should an organization determine the focus of its knowledge management endeavors.

  2. The "What is our business" concept often extends beyond the original boundary that shaped the organization's inception and directed its efforts. Understanding this mission becomes especially advantageous when expanding organizational boundaries. It facilitates seamless sharing and management of knowledge. Consequently, the organization can leverage existing knowledge in an expanded scope without additional investments. This is achieved by defining and organizing knowledge in a manner that aligns with the articulated mission of "What is our business."

Following the definition of the mission, Drucker explores the establishment of goals, delineating eight critical areas for goal setting related to execution and results:

  1. Innovation

  2. Material and financial resources

  3. Execution of managers and their development

  4. Public Responsibility

  5. Market Status

  6. Fertility

  7. Profitability

  8. Performance of employees and their attitude

We won't delve into each objective's specifics or significance here. However, it is a crucial point for our knowledgeable managers. We assert that knowledge management should serve as a means to support organizational and business goals. Drucker's list becomes a benchmark for the goals that knowledge management should prioritize. Any involvement in knowledge management not aligned with these goals is deemed ineffective and secondary.

Every manager, from the "big boss" to the production manager, requires defined goals, and the preferred method is management by objectives. This approach demands self-control and thoughtful consideration of how reports, procedures, and forms are utilized. These tools are meant to guide and control, aiding managers in achieving predetermined objectives. Drucker identifies three ways in which reports and procedures are commonly misused: first, the misconception that procedures dictate what must be done; second, viewing procedures as a substitute for decision-making authority; and third, using reports and procedures as tools for top-down supervision.

Similar concerns arise in the realm of knowledge management. There is a risk that metrics such as usage and entry levels could transform into instruments for supervisory control rather than aiding assimilation. Therefore, it is crucial to ensure that these measurements serve as tools to assist assimilation and guide knowledge managers in understanding the organization's essential needs without becoming supervision instruments.

Drucker extensively explores the worker as a valuable resource in his book. As employers, we don't simply hire the mathematical and analytical ability of an employee; we hire the person as a whole, and this distinction is essential to remember. Drucker emphasizes the unique capacity of humans to change, surpassing other animals in this aspect. Two critical concepts emerge in this context: Drucker notes that while individuals can learn rapidly, their ability to forget is comparatively slow. The learning capacity doesn't diminish over time, but the challenge lies in the increasing difficulty of forgetting what has been learned. Drucker contends that experience, rather than age, becomes the critical factor for easy forgetfulness and quick learning of new things. Knowledge managers play a vital role in combining acquired knowledge with personal experience.

The second concept addresses change management. Drucker challenges the notion that human nature inherently resists change, emphasizing the importance of creating conditions for acceptance of change. For change to be embraced, it must appear acceptable to the worker, be seen as an improvement, and unfold gradually without erasing psychological signs related to work, relationships, skills, and prestige. In the 21st century, knowledge managers should conduct an "EMI test" – to ensure that change is Engaging, Meaningful, and Immediate with visible benefits for the worker.

Drucker's exploration of integrated perfection is a focal point in his book. It advocates against separating planners from performers and treating human resources as mere components of a giant puzzle. The employee executing tasks should always witness results, even if they are not perfect. Defining a challenge, focusing on the outcome, and incorporating judgment are essential elements that drive worker productivity. Knowledge managers have a role in achieving integration by providing knowledge beyond immediate work requirements. This aligns with Nonka's perspective, emphasizing that overlapping knowledge and information foster the formation and development of knowledge. While cautioning against overflow, organizing knowledge to showcase its holistic advancement to employees is crucial, highlighting results and the overall environment rather than solely focusing on actions.

To enhance employee performance, Drucker contends that accountability is crucial. Achieving this involves four simultaneous strategies: careful placement, maintaining high-performance standards, providing employees with information (and knowledge) for self-critique, and offering participation opportunities to foster a managerial vision. Interestingly, in his later work, "The Fifth Discipline," Sanji emphasizes the significance of employees as learners, stressing that organizations evolve through individuals who engage in continuous learning. Personal skill development, mainly cultivating a personal vision, is critical in this process. As knowledge managers, we recognize our pivotal role in advancing one of the essential conditions – providing employees with information and knowledge. Drucker underscores that lacking information leaves employees without motivation and the means to enhance their performance.

In the book's concluding sections, Drucker delves into administration and management, highlighting the indispensable role of information (and knowledge) as a crucial tool for managerial performance.

Drucker introduced a novel concept in 1954 – the professional worker- alongside managers and employees. Unlike managers, the professional worker's goals stem from professional rather than business objectives, measured against professional standards.

This professional worker has five specific needs for efficiency and productivity:

  1. Being a professional and understanding one's contribution.

  2. Having opportunities for professional and personal advancement.

  3. Receiving financial encouragement for improved performance.

  4. Engaging in the occupation of a professional worker.

  5. Receiving professional recognition within the enterprise and publicly.

According to Drucker, this definition lays the groundwork for the development of the knowledge worker. Drucker introduced the term "knowledge worker" 55 years later in "Management Challenges in the 21st Century," asserting that knowledge workers are not subordinates but colleagues. They are expected to possess superior knowledge about their occupation and job compared to their managers, with their output being knowledge itself.

In the contemporary landscape, a noticeable trend is emerging—organizations are becoming increasingly knowledge-intensive, recognizing knowledge as a paramount asset. Remarkably, the sentiments articulated by Drucker in 1954 form the bedrock of our work on a global scale and, precisely, guide knowledge managers in their roles.

Looking ahead, we hope that the world at large will embrace Drucker's concluding assertion: "Whatever a person's general education or education in management, in the future, the most decisive factor of all, even more than in the past, is neither education nor skill; It's integrity." This powerful statement underscores the enduring importance of integrity as the ultimate determining factor, surpassing education and skill in significance.

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