Telling It Like It Is

THE ENTERPRISE: THE PRACTICE OF MANAGEMENT--A TRIBUTE TO PETER F. DRUCKER

I FOLLOWED THE WORK OF PETER F. DRUCKER FOR MOST OF MY CAREER UNTIL HIS DEATH AT AGE 95 IN 2005.

One of his most brilliant books, many say his seminal work was a book titled The Practice of Management, published in 1954, a book that featured GM, the behemoth of American industry in that era.

While seeing the words used to describe things throughout my life I noticed how words are meaningful. Office buildings cal their entry area “foyers;” medical facilities call them “waiting rooms.”  Most companies serve “customers or clients,” but the medical service providers call them “patients.” Finally, medical professionals, doctors if you will, do what they call “practice” medicine. Combining science, observation, experience and intuition leads to diagnoses, which in turn lead to course of treatment—not always sure to cure the ailment, but made of their best informed choices.

Drucker employs much if the same progression in his most powerful book, written 67 years ago…and still highly relevant, and in most cases brilliantly insightful. 

I read The Practice of Management years after it was published. I graduated from high school in 1959, college in 1963, & grad school in 1964. I really can’t recall specifically when I read it, but my guess is during my college days. I do know it has had a profound impact on my life, my thinking, and my career. Although his examples are circa the 1950’s, the situations have recurred repeatedly in business after business. 

As I reread parts of the book in successive decades, I’ve recognized how what Drucker described has repeated itself (for example) in the evolution of retailing (Sears/Wards, Kmart, Walmart, et. al.) and of the American steel industry going back to US Steel, and of course the auto industry, in which GM and Ford are two of his primary examples.

SOME OF THE MOST PROFOUND CONCLUSIONS—BUSINESS PURPOSE 

There are many words leading up to this, but in its essence, Drucker arrives at this conclusion: “…the ultimate test of management is business performance. Achievement rather than knowledge remains, of necessity, both proof and aim. Management, in other words, is a practice, rather than a science or a profession, although containing elements of both.”

Peter Drucker puts it this way: "There is only one valid definition of business purpose: to create a customer. It is the customer who determines what the business is… What the business thinks it produces is not of first importance, especially not to the future of the business and to its success in the market place. The customer determines what a business is, what it produces and whether it will prosper."

"There is only one valid definition of a business purpose: to create a customer. —Peter F. Drucker-- The Practice of Management (1954) 

Drucker adds, “...of course it is always important to adapt to economic changes rapidly, intelligently, and rationally. But managing goes way beyond passive reaction and adaptation. It implies responsibility for attempting to shape the economic environment, for planning, initiating, and carrying through changes in that environment, for constantly pushing back the limitations of economic circumstances on the enterprise's freedom of action.”

This is why I constantly come back to how the economic and political conditions have such a large impact on business and management. Those who wish the business's management and economic/political environment could be kept separate simply do not understand the interdependency. One impacts the other constantly and significantly—there is no other way to say it, Drucker uses interesting terms, He says, “the economist’s economic conditions…is only one pole in managing a business. What is desirable in the interest of the enterprise is the other [pole].” 

Closing out this part of his opening on the Jobs of Management, he goes on…" Management is not just a creature of the economy; it is a creator as well. And only to the extent to which it masters the economic circumstances, and alters them by conscious, directed action does it  really manage. To manage a business means, therefore, to manage by objectives.”

Drucker could not have imagined how much impact his wisdom would have in the second half of the twentieth century. The term "manage by objectives” led to an entire body of work about what that meant. To many it is just common sense to set objectives and measure progress toward achieving them. To many others it was a fearful, threatening practice: to actually set specific objectives, reduce them to writing, measure progress toward them, and base rewards on results became a threat to the incompetent and a gift to the competent people engaged in "the practice of management.”

My gift to you is this link, to buy the book on amazon.com. My advice is to use it as a learning tool—not only what to do but how and why: https://www.amazon.com/Practice-Management-Peter-F-Drucker-ebook/dp/B003F1WM8E/ref=sr_1_1?crid=3L0CHLN7PLTTR&dchild=1&keywords=the+practice+of+management+peter+drucker&qid=1623771212&s=books&sprefix=The+practice+of+management,aps,306&sr=1-1

I cannot think of anywhere managers—aspiring or practicing—who are willing to actually read and think about what Drucker wrote, can learn as much from a single book, especially one written almost seven decades ago.  I have applied his principles for sixty years of my career, and still use them constantly.

I hope you will make this your summer reading and be sure to substitute the generational evolution of different companies (from those he used on the 1950’s) that you recognize in it.

HAPPY READING—AND LEARNING FROM ONE OF THE GREATS.

HAPPY FATHER’S DAY TO ALL YOU FELLOW DADS—DON’T UNDERESTIMATE YOUR IMPORTANCE IN YOUR CHILDREN’S LIVES.

JOHN

PS: Remember one of my favorite quotes, from originator Josh Billings or later users, Will Rogers and Mark Twain:

It ain't what you don’t know that gets you; it’s what you thought you knew that ain’t so!” 

Check your sources…over and over…only believe half of what you see and none of what you hear….without checking it. And be very suspicious of what you find in books, articles, podcasts, blogs, from TVs talking heads, and on the Internet—there is very little (or no) quality assurance on most of  it…just lots of opinion and biases.

 

 

CHANGING THE WAY AMERICA WORKS—Redux

©John Mariotti 2021

Fifteen years ago, I started a series of several columns with this title. It was intended as a play on words—a double entendre—changing the way our country,  America Works, and changing the way we, as Americans work in our day to day lives. During that era we were holding annual “think tank” — roundtable conferences — called the Reunion Conferences, and this was the theme a very important one of them.

I never imagined I’d be resuming this topic after fifteen years and so much change. Ironically, when I review my columns from 2-3 decades ago, I’m surprised at how much is still the same—no doubt the result of human nature. 

Certainly after this Covid pandemic, much more has changed in how America works, and how Americans Work! I even began a book manuscript of the same name. What I plan to do now, like I’ve been doing, is to reflect on, point out, and speculate about how Changing the Way America Works (in both meanings) will change our behavior, our lives, our country, and its future. 

We have now seen the generations get names—Baby Boomers, Millennials, GenX, GenZ and recently iGen, for those born since the advent of iPhones in 2007-2008. Those devices, numbering 1.5 Billion as of now, and their successors yet to come, have changed so much in our world—and will continue to do so.

Hang on. This will be a wild ride! At the end I’ll share a few conclusions I reached along the way. Feel free to share yours in reply.

Headlines about this year of the Covid pandemic definitely tell many things that have changed about how America works, changed more than any year in recent history. They typically fall into several topical categories. The first is how many workers are needed, to work where, doing what—compared to pre-pandemic. Companies went from slashing workers and closing office buildings to control costs, to recalling them while figuring out how to operate in the totally different hybrid situations, and trying to ramp up both suppliers and supply chains and their workers and locations. 

None of these are easy, and doing them simultaneously and/or in rapid succession tests organizations, managers and leadership. 

Hybrid workplaces and work situations offer unique challenges, whether the hybrids are locational—office/home  or hi-tech/hi-touch (that’s mixing Zoom-type and live meetings in the same venue, at the same time, on the same topics.) Companies are still figuring out what works and what doesn’t—and won’t. 

Doing hybrids that work is harder than just staggering days in the office and adding monitors for video.  What’s lost in hybrid setups is collaboration and cooperation that happens spontaneously when people encounter each other in the context of the workplace and workday.  What’s also lost in hybrid setups is the power and value of non-verbal communications—movement of the eyes, body language, both active and passive and the ability to sense subtle cues that lead to agreement (or disagreement) and consensus.

How and where people work matters a lot, as does how the USA works...

RECENT HEADLINES:

Job openings surge to a record high

US Jobless Claims Decline to Pandemic Low

Demographics Help Squeeze Labor Supply

Study: Long hours at work killing people

**Hiring: As economy heats up, workers are scarce

The Return to the Office Weighs on Workers

Firms Brace for Hybrid Workers

Small Businesses Struggle to Fill Jobs

Retailers Retrain Staff Amid Shift In Skills Needs

Companies Weight Faster Office Return

How to Rally a Jittery Workforce

Good Moods Often Lead to Bad Decisions

Reopening Tests Appetite for Goods

Food Suppliers Scramble as Diners Return

Help Wanted: Restaurants surprising new labor shortage

Dry Cleaners might be undressed by pandemic

**Is the Work Ethic Dying?

**The Covid Welfare State

How Remote Work is Reshaping America’s Urban Geography

**Remote Work Poses New Questions

Home-Improvement Retailers Raise the Roof

**What the Pandemic Taught Us About Telemedicine

 

The Governmental Actions (reversal from Trump to Biden executive orders) complicate everything.

MORE RECENT HEADLINES

**The Real Infrastructure Problem

Vaccine Proof is All in the Cards

You Can Cope with Chronic Uncertainty

Shoppers Feel Bite as Prices Rise

Gretchen Witmer’s Pipeline War

It Isn’t a New Era for US Productivity Yet

Commanding Amazon’s Army of Workers—With Software

**The Old New York Won’t Come Back

Big employers cut office space

**Woke Corporations: Why they've switched sides

Corporate America’s ‘Big Lie’

Joe Biden: Labor Economist

Europe Balks at Biden’s Tax Plan

**Did Biden Peak on Inauguration Day?

Here Comes the Biden Tax

Democrats to States: No New Taxes

H.R.1—A Time Bomb for the 2022 Elections

**The GOP’s Post-Trump Trauma

McCarthy Grapples with Legacy of Trump

Tim Scott Takes a Larger Role in GOP

Florida Republicans See Model for GOP

 

** These indicate some of the most vexing issues…

 

ITS CLEAR FROM THE HEADLINES THAT MANY VEXING ISSUES REVOLVE AROtUND FOUR CORE PRINCIPLES:

1. People working together as partners, make everything good happen—and vice versa.
2. Complexity in organizations, work and government is wasteful and unless measured and managed, creates masss ive waste.
3. Unity of purpose leads to strength in organizations, countries and the world; lack of unity of purpose leads to failure.
4. "What goes around, comes around,” And that means Covid and its variants...sooner or later…to change everything again! Get vaccinated!

THE PIVOTAL QUESTIONS FOR NOW (with a few of my answers)

• HOW SHOULD AMERICANS GET BACK TO WORK—AND WHERE—AND WHEN—AND DOING WHAT? Yes, but hybrid work setups are unlikely to be broadly successful, except as a transition, and when used to connect widely scattered work forces. The ethybrid workers on the video inevitably are less involved than those in person. That’s not a good outcome.  A good outcome would be to redesign processes to fit a new paradigm—fostering collaboration, partnerships and innovation in offices while reducing complexity of doing routine jobs via machine learning and AI
• HOW DOES THE WORLD INTERACT WITH AMERICA AND WHAT DOES IT MAKE OF THE NEW BIDEN/PROGRESSIVE DEMOCRAT REGIME? The world will like having a weaker, more docile America that it can take advantage of—a good system for them—a bad one for America.
• WHAT IS THE IMPACT OF COMPETING POWERS—CHINA, RUSSIA, THE MIDDLE EAST, ET. AL. ON AMERICA IN THE NEXT FEW YEARS? As America’s weak leadership bends to the will of stronger, more aggressive foreign countries, America will suffer, become weaker, and suffer adverse consequences. America’s stature in the world will decline.
• HOW MIGHT COVID REQUIRED NEW BEHAVIORS AND NEW WAYS OF WORKING—GOOD OR BAD? A few areas will do better, such as Telemedicine, and the use of remote systems to eliminate wasteful travel to faraway places. Eliminating wasteful commutes for jobs that can easily done remotely is good. Losing spontaneity and collaboration from in person offices will damage innovation, communication, and coordination. Taking out the element of human interaction too much will make companies and leaders less effective even if they seem to be more efficient.
• FINALLY—WHAT DO AMERICANS BELIEVE, AND HOW WILL THEY BEHAVE? 
• IS America is a Systemically Racist country? OR Is Critical Race Theory more relevant?
• HOW should America Reform/Rethink Law Enforcement & Policing, in the face of traffic stops, demonstrations, shootings, looting, etc.?
• WHAT IS THE PROPER ROLE OF GOVERNMENT? 
• SHOULD GOVERNMENT WORK FOR THE AMERICAN PEOPLE? (PROVIDING ONLY WHAT THE PEOPLE CANNOT DO BEST?) Yes.
• IS CAPITALISM THE BEST ECONOMIC SYSTEM? Yes…definitely.
• SHOULD THE AMERICAN PEOPLE WORK FOR THE GOVERNMENT? (WHO PROVIDES MORE & MORE AS WORK ETHIC DECLINES) No.
• IS SOCIALISM THE BEST ECONOMIC SYSTEM? No…a proven failure over and over.
• THESE AND MANY MORE INFLUENCE “HOW AMERICA WORKS” (AS A COUNTRY), & “HOW AMERICA WORKS” (AS A PEOPLE)… 

 

THINK HARD ABOUT THESE ISSUES…RE-READ THE HEADLINES... AND CONSIDER THE IMPLICATIONS & WHAT HAS BEEN PROVEN TO WORK (Representative Democracy)—& WHAT HAS BEEN PROVEN TO FAIL (Progressive Socialism)

 

THE CHOICE WILL BE OURS TO MAKE AS WE ELECT OUR LEADERS IN THE FUTURE.

 

HAPPY MEMORIAL DAY WEEKEND.

JOHN

 

FYI—HERE IS MY ARTICLE FROM 2006

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Changing the way America Works  ©John Mariotti 2006 

This column continues a series begun last year, reflecting on people in the work environment. Most of us have a clear understanding of how we think about work. But the more recent entrants into the workforce--those born in the 1970s and early 1980s--often have different perspectives. Managers today must deal with workforces that are demographically bimodal. To younger workers, many significant events in the lives of their supervisors and managers seem like ancient history. The assassinations of John F. Kennedy, Robert Kennedy, and Martin Luther King are not personally relevant to them. They think TV sets always had remote controls. And the phrase "winding a watch" has no meaning for them in this battery-powered age. 

Managers born 20 or 30 years earlier lived through the boom of the 1960s and the inflationary 1970s, when interest rates soared to double-digit levels. New workforce entrants barely understand the term "runaway inflation." Technology comes naturally to them, while older, technophobic managers are often unable to cope with the avalanche of new technology. Personal life choices weigh more heavily with new workers than with prior generations.

In dealing with the workforce of the 21st century, managers should keep a couple of rules in mind: --The first rule: Judge people, as well as leaders, on their competence, character, and courage--not on the color of their skin, country of origin, age, or sex.

In many cases, older workers will find themselves reporting to managers who are a generation younger, different looking--or both. The new workers (or managers) may be female or may come from African, Asian, or Hispanic roots. Many are immigrants whose heritage is evident from their physical appearance--unlike earlier waves of Caucasian immigrants whose features did not readily identify their nationality, even if their language did.

A worker's country of origin is relevant only because it likely shaped his or her values. The values of the newer groups differ widely, and their perceptions of meaningful leadership are often different, too. Almost all immigrant workers are seeking a better life, and thus are very diligent. Asians are often more educated than earlier generations of immigrants.

In time, sociologists will develop theories on how to lead this new generation of workers, but that guidance may come too late. We must deal with the issue now, in today's context, and determine what that means to managers and supervisors. --The second rule: Learn all about computers, communication devices, and new technology--the uses, shortcomings, and potential--or get left behind.

Computer literacy is a given for much of the new workforce. Many managers are less computer literate than the incoming workers. This presents a problem when new computer-based tools are introduced into the workplace. The workers may grasp their use and significance more quickly than their superiors. This can diminish the respect they have for their leaders and damage manager-employee relationships.

Devices like cell phones, pagers, and personal digital assistants, as well as use of the Internet, are familiar to a generation that grew up with video games, remote controls, cordless phones, beepers, and PCs. As new technology permeates the workplace, older workers often must learn to swallow their pride and rely on the younger ones to adopt, use, and master the technology. This may be a bitter pill for many experienced workers and managers to swallow.

By itself, advancing technology is powerful. But it works best when married to the skills and experience born of years of work. And it is especially powerful when combined with a strong work ethic, youthful exuberance, and a drive to succeed. Successfully blending the knowledge, ambition, and experience of diverse groups is the key to success in the future. Management, more than ever, must be willing to look at workers based on what they can do--not their age or their ethnic origins.  Older, more experienced workers can provide experience and context while the younger ones contribute their technological prowess and energetic drive. The combination should produce exciting times in the years ahead.

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