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.
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.
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!