BOOKS - NEW GEMS FROM AN OLD PRO - Management Challenges for the 21st Century by Peter Drucker - Butterworth heinemann - £17.99 - Professor John Kay finds Drucker's capacity for original thought undiminished.
When the history of the evolution of management as a subject of study comes to be written, four names are likely to stand out. Frederick Taylor established that management processes could be studied, measured, analysed. Alfred Sloan organised the first great divisionalised corporation, and described what he had done in one of the best of business autobiographies. Alfred Chandler became the historian of the modern diversified firm. And Peter Drucker founded the theory of how these organisations came to be managed.
General Motors was an important company for all of these writers - Taylor and Sloan influenced it, Chandler and Drucker studied it - and General Motors epitomises the organisation they described. The market capitalisation of General Motors was recently overtaken by that of Yahoo!. That was mostly a statement that Wall Street valuations had lost contact with reality.
But there is still an element of reality. The 20th century was the century of great manufacturing corporations, like General Motors. The 21st century will be the time of knowledge businesses.
That is the context in which Drucker is writing, and it is obvious that many of the challenges of modern management are altered by these changes in the nature of the economy. Still, the scope of these changes must not be exaggerated. Drucker is a genuine scholar, with the perspective that genuine scholarship gives. He recognises that claims made for the information age are often overblown, that the internet does not have the same epochal significance that the invention of printing had. I read this book despite the publisher's hype, and in his introduction Drucker himself is regrettably inclined to endorse exaggerated claims to newness. It is not true that the tried and tested principles of good management no longer apply.
Indeed the publisher shrewdly acknowledges this by simultaneously republishing many of Drucker's seminal works to coincide with the publication of this volume. For General Motors to be overtaken in market capitalisation by Yahoo! is an ephemeral phenomenon. For it to be overtaken as America's largest employer by Wal-Mart is not. And the issues which arise in managing Wal-Mart, although different from those involved in the management of General Motors, are not different by orders of magnitude.
Most workers will continue to be employed in large hierarchical corporations and the analysis that Drucker developed in works like The Concept of the Corporation, The Practice of Management and Management by Objectives will continue to be relevant to them. Drucker recognises this when he describes 'technologists' as the most numerous - and perhaps most important - group of workers in the knowledge economy. Technologists, in his terminology, are those who do both knowledge work and manual work. Not, of course, a new breed.
This is not a book with large themes or a single overarching argument.
It is a collection of thoughts and observations rather than a developed thesis. Many of them are insight-ful. Some are familiar, if sometimes neglected. Drucker endorses the need to value inputs of equity capital in computing profits. Information becomes useful only when organised - something too easy to forget as data transmission, within and between organisations, becomes ever cheaper and faster. Indeed, that is why Yahoo! has the value it does.
Other thoughts are genuinely original. I had never before noticed that some leaders are listeners and others readers, still less how some learn by hearing themselves talk - but I will now never attend a meeting without Drucker's observations going through my mind. And while there is nothing new about the assertion that there is no best style of management, or structure of organisation, it is an assertion that cannot be repeated too often.
Do not buy this book for the reasons on the dust jacket. Do buy it to read again the century's greatest management theorist who still brings an enquiring mind to bear on management issues even as he nears his own century.