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.