Dr. Mario's 2nd 🧠

đź“– The Practice of Management

35 min read

Why did I want to read it?

El manager primigenio, The Boss. Cómo no lo voy a querer leer después de verle citado 27 millones de veces. Also, fue una crítica de Jose Agüera a mi ✍️ Déjame sin trabajo, por favor que me había centrado en management “moderno”, el del 0 interest rate. Y que aquí a lo mejor encontraba más condumio.

What did I get out of it?

Condumio había (ahora, no contradice en absoluto mi ✍️ Déjame sin trabajo, por favor). Tiene TANTO material, que me da que va a ser como 📖 Antifragile, irresumible.

Raw Highlights

Madre mía, con la que de ha liado después…

Management books, though only few of them, had been written and published before The Practice of Management appeared in 1954. (Location 57)

Frederick W. Taylor’s Scientific Management had come out even earlier, in 1911 (New York: Harper & Brothers), (Location 65)

what we now call organizational psychology (Location 68)

The Practice of Management was the first true “management” book. (Location 73)

the first that attempted to depict management as a distinct function, managing as specific work, and being a manager as a distinct responsibility. (Location 74)

The Practice of Management was the first book to talk of “objectives,” to define “key result areas,” (Location 84)

The Practice of Management has remained the one book which students of management, young people aspiring to become managers and mature managers still consider the foundation book. (Location 137)

And what in his job and work distinguishes the manager from the non-manager in the business enterprise? (Location 5673)

Note that it says “works as a manager”, not “is a manager”.

A manager has two specific tasks. Nobody else in the business enterprise discharges these tasks. And everyone charged with them works as a manager. (Location 5674)

One analogy is the conductor of a symphony orchestra, through whose effort, vision and leadership individual instrumental parts that are so much noise by themselves become the living whole of music. But the conductor has the composer’s score; he is only interpreter. The manager is both composer and conductor. (Location 5676)

Again, I don’t see why this is exclusive of a manager.

The second specific task of the manager is to harmonize in every decision and action the requirements of immediate and long-range future. (Location 5690)

There are five such basic operations in the work of the manager. Together they result in the integration of resources into a living and growing organism. (Location 5709)

sets objectives. (Location 5710)

Secondly, a manager organizes. (Location 5712)

Next a manager motivates and communicates. (Location 5715)

the job of measurement. (Location 5719)

develops people. (Location 5723)

he makes it easy or difficult for them to develop themselves. (Location 5724)

The manager has a specific tool: information. He does not “handle” people; he motivates, guides, organizes people to do their own work. (Location 5749)

his effectiveness depends on his ability to listen and to read, on his ability to speak and to write. (Location 5751)

all the skills he needs, today’s manager possesses least those of reading, writing, speaking and figuring. (Location 5752)

Most managers spend a large amount of time—in small driblets—on attempts to appraise the performance and quality of the men who work under them. Good time users do not. Instead, they systematically appraise their men once a year. (Location 5765)

If they have a recurrent crisis, they spend the time to find out what causes it so as to prevent its repetition. This may take time, but in the long run it saves more. (Location 5772)

The good time users among managers spend many more hours on their communications up (Location 5773)

They may spend a whole day every six months with each of their ten or twelve men going carefully over the Manager Letter—and as a result they do not have to worry much in between about their communications down. (Location 5777)

New highlights added 2023-09-09

THE fundamental problems of order, structure, motivation and leadership in the business enterprise have to be solved in the managing of managers. Managers are the basic resource of the business enterprise and its scarcest. (Location 1895)

supply every manager with the information he needs to do his own job, and with as much information about the company as is feasible. (Location 1990)

New highlights added 2023-09-19

The complexity of the task is such, even in a small business, that it cannot be discharged by one man working with helpers and assistants. It requires an organized and integrated team, each member of which does his own managerial job. (Location 2017)

The first requirement in managing managers is management by objectives and self-control. (Location 2029)

there is always a danger that the true workman, the true professional, will believe that he is accomplishing something when in effect he is just polishing stones or collecting footnotes. (Location 2076)

the number of functional managers should always be kept at a minimum, and there should be the largest possible number of “general” managers who manage an integrated business and are directly responsible for its performance and results. (Location 2079)

But this striving for professional workmanship in functional and specialized work is also a danger. It tends to direct a man’s vision and efforts away from the goals of the business. The functional work becomes an end in itself. In far too many instances the functional manager no longer measures his performance by its contribution to the enterprise, but only by his own professional criteria of workmanship. (Location 2087)

An effective management must direct the vision and efforts of all managers toward a common goal. (Location 2143)

objectives should lay out what performance the man’s own managerial unit is supposed to produce. (Location 2149)

Right from the start, in other words, emphasis should be on teamwork and team results. (Location 2151)

should always derive from the goals of the business enterprise. (Location 2152)

How Should Managers’ Objectives Be Set and by Whom?

This requires each manager to develop and set the objectives of his unit himself. (Location 2192)

Higher management must, of course, reserve the power to approve or disapprove these objectives. But their development is part of a manager’s responsibility; indeed, it is his first responsibility. (Location 2193)

It means, too, that every manager should responsibly participate in the development of the objectives of the higher unit of which his is a part. (Location 2194)

most effective managers I know go one step further. They have each of their subordinates write a “manager’s letter” twice a year. In this letter to his superior, each manager first defines the objectives of his superior’s job and of his own job as he sees them. He then sets down the performance standards which he believes are being applied to him. Next, he lists the things he must do himself to attain these goals—and the things within his own unit he considers the major obstacles. He lists the things his superior and the company do that help him and the things that hamper him. Finally, he outlines what he proposes to do during the next year to reach his goals. If his superior accepts this statement, the “manager’s letter” becomes the charter under which the manager operates. (Location 2203)

Mutual understanding can never be attained by “communications down,” can never be created by talking. It can result only from “communications up.” (Location 2222)

Process allergy

The second misuse is to consider procedures a substitute for judgment. Procedures can work only where judgment is no longer required, that is, in the repetitive situation for whose handling the judgment has already been supplied and tested. Our civilization suffers from a superstitious belief in the magical effect of printed forms. And the superstition is most dangerous when it leads us into trying to handle the exceptional, non-routine situation by procedure. In fact, it is the test of a good procedure that it quickly identifies the situations that, even in the most routine of processes, do not fit the pattern but require special handling and decision based on judgment. (Location 2275)

Reports and procedures should be kept to a minimum, and used only when they save time and labor. They should be as simple as possible. (Location 2295)

At least once every five years every form should be put on trial for its life. (Location 2306)

The manager should be able to point at the final results of the entire business and say: “This part is my contribution.” (Location 2343)

If the manager, however, is controlled by the objective requirements of his own job and measured by his results, there is no need for the kind of supervision that consists of telling a subordinate what to do and then making sure that he does it. There is no span of control. A superior could theoretically have any number of subordinates reporting to him. (Location 2363)

There is, indeed, a limit set by the “span of managerial responsibility” (the term was coined, I believe, by Dr. H. H. Race of General Electric): the number of people whom one superior can assist, teach and help to reach the objectives of their own jobs. This is a real limit; but it is not fixed. (Location 2365)

The span of control, we are told, cannot exceed six or eight subordinates. The span of managerial responsibility, however, is determined by the extent to which assistance and teaching are needed. It can only be set by a study of the concrete situation. (Location 2367)

Unlike the span of control, the span of managerial responsibility broadens as we move upward in the organization. Junior managers need the most assistance; their objectives are least easy to define sharply, their performance least easy to measure concretely. Senior men, on the other hand, have supposedly learned how to do their job; and their objectives can be defined as directly contributing to the business, their performance measured by the yardsticks of business results. (Location 2369)

a manager should always have responsibility for a few more men than he can really take care of. Otherwise the temptation is to supervise them, that is, to take over their jobs or, at least, to breathe down their necks. (Location 2374)

a team should always have a small number of members. (Location 2377)

Teams should normally not exceed five or six in number; and they work best, as a rule, if they have three or four members. (Location 2382)

The managers on the firing line have the basic management jobs—the ones on whose performance everything else ultimately rests. Seen this way, the jobs of higher management are derivative, are, in the last analysis, aimed at helping the firing-line manager do his job. Viewed structurally and organically, it is the firing-line manager in whom all authority and responsibility center; only what he cannot do himself passes up to higher management. (Location 2392)

he has to help his managers to work together and to integrate their own interests with those of the enterprise. (Location 2422)

The vision of a manager should always be upward—toward the enterprise as a whole. But his responsibility runs downward as well—to the managers on his team. (Location 2443)

It is the purpose of an organization to “make common men do uncommon things”—this phrasing is Lord Beveridge’s. No organization can depend on genius; the supply is always scarce and always unpredictable. (Location 2461)

all the organizations in human history that have achieved greatness of spirit have done so through a code of practices. (Location 2487)

Reminds me of a very specific company I worked for

Few things damn a company and its spirit as thoroughly as to have its managers say: “You can’t get rich here but you won’t get fired.” (Location 2500)

I would never promote a man into a top-level job who has not made mistakes, and big ones at that. Otherwise he is sure to be mediocre. Worse still, not having made mistakes he will not have learned how to spot them early and how to correct them. (Location 2511)

Appraisal should always be the direct responsibility of a man’s manager. It should always focus on proven performance. (Location 2546)

The salary range for every job level might, for instance, make it possible for a man who performs well to earn more than the average salary for the next higher job level and as much as the minimum salary for the job level beyond that. (Location 2617)

A divisional manager in General Motors or in General Electric runs a business that is likely to be the leader in its industry. It is often many times as large or as important as any of the independent companies in the field. Yet his title is “General Manager,” whereas the man who heads up the small independent competitor is called a “president” and enjoys all the status and recognition that go to the head of a business. (Location 2624)

Promotion should not be entirely from within. This should indeed be the norm, but it is important not to let a management become inbred, not to foster smugness and isolation. And the bigger the company, the more desirable is the outsider. (Location 2645)

There is no substitute for leadership. But management cannot create leaders. It can only create the conditions under which potential leadership qualities become effective; or it can stifle potential leadership. (Location 2710)

Management must work on creating the spirit by other means. (Location 2712)

Process allergy

But practices, though humdrum, can always be practiced whatever a man’s aptitudes, personality or attitudes. They require no genius—only application. (Location 2719)

Organization structure is an indispensable means; and the wrong structure will seriously impair business performance and may even destroy it. (Location 3255)

These three analyses—of activities, of decisions, of relations—should always be kept as simple and as brief as possible. (Location 3385)

The growth of levels is a serious problem for any enterprise, no matter how organized. For levels are like tree rings; they grow by themselves with age. It is an insidious process, and one that cannot be completely prevented. (Location 3420)

Not sure if this is like this anymore

how few levels are really needed is shown by the example of the oldest, largest and most successful organization of the West, the Catholic Church. There is only one level of authority and responsibility between the Pope and the lowliest parish priest: the Bishop. (Location 3431)

Men must also be put into positions where they at least see the whole of a business, even if they do not carry direct responsibility for its performance and results. (Location 3437)

It must whenever possible integrate activities on the principle of federal decentralization, which organizes activities into autonomous product businesses each with its own market and product and with its own profit and loss responsibility. (Location 3449)

We have learned since that the first principle of good production organization is to bring the machines to the work, rather than the work to the machines. It is cheaper to have the work flow according to its own inner logic, even if it requires a few more machines, than to cart materials around. Similarly, we must always bring the special activity to the work, never the work to the special activity. For ideas and information cost even more to cart around than materials, and stand being handled even less well. (Location 3479)

There is, however, one requirement that must be satisfied if federal decentralization is to result. The managerial unit must contribute a profit to the company rather than merely contribute to the profit of the company. Its profit or loss should directly become company profit or loss. (Location 3594)

The term “decentralization” is actually misleading—though far too common by now to be discarded. It implies that the center is being weakened; but nothing could be more of a mistake. Federal decentralization requires strong guidance from the center through the setting of clear, meaningful and high objectives for the whole. (Location 3618)

Federal decentralization also requires control by measurements. (Location 3621)

An example of the delusion Drucker references about small teams: The cost of craft.

Practices should be uniform only where performance directly affects other units of the business. But principles should be common, clearly spelled out and strictly observed. (Location 3801)

can only define “health” negatively, that is, as the absence of disease, deformity and pathological degeneration. (Location 3805)

One telling symptom of malorganization is the growth of levels of management—bespeaking poor or confused objectives, failure to remove poor performers, overcentralization or lack of proper activities analysis. Malorganization shows itself also in pressure for “frictional overhead”—for co-ordinators, expediters, or “assistants” who have no clear job responsibility of their own but are supposed to help their superior do his job. Similarly it shows in the need for special measures to co-ordinate activities and to establish communications between managers: co-ordinating committees, incessant meetings, full-time liaison men and so forth. (Location 3808)

Equally telling is the tendency to “go through channels” rather than directly to the man (Location 3813)

I think I lost the highlights of a couple of chapters here

EMPLOYING THE WHOLE MAN (Location 4391)

This could be said of Data too

The limitations of Personnel Administration are not hard to perceive. They are indeed admitted by most of the people in the field—at least by implication. The constant worry of all personnel administrators is their inability to prove that they are making a contribution to the enterprise. Their preoccupation is with the search for a “gimmick” that will impress their management associates. Their persistent complaint is that they lack status. (Location 4610)

This means, in effect, either that personnel administration has to usurp the functions and responsibility of the operating manager (since whoever manages the people under him is the “boss,” whatever his title); or else it means that operating managers, in self-defense, have to confine personnel administration to the handling of incidental chores, that is, to those things that are not essential to the management of worker and work. It is not surprising that the latter has been the all but universal trend. (Location 4643)

focus. It is not even enough to make “fire prevention” rather than “fire-fighting” the focus; managing worker and work—the IBM story shows this clearly—must focus on the positive and must build on underlying strength and harmony. (Location 4652)

Taylor’s divorce of planning from doing was both specifically American and specifically late nineteenth century. It is a descendant of our oldest tradition: the New England theocracy of the early Puritans. (Location 4772)

Taylor belongs with Sorel, Lenin and Pareto. This movement is usually considered to have been anti-democratic. It was—in intent and direction—fully as much anti-aristocratic. For the assertion that power is grounded in technical competence—be it for revolutionary conspiracy or for management—is as hostile to aristocracy as to democracy. Both oppose to it the same absolute principle: power must be grounded in moral responsibility; anything else is tyranny and usurpation. (Location 4778)

The thinker doer problem

The same increase in productivity (not to mention the improvement in worker attitude and pride) has been obtained wherever we have combined the divorce of planning from doing with the marriage of planner to doer. (Location 4784)

The worker under Automation will no longer do the repetitive routine chores of machine feeding and materials handling. Instead, he will build, maintain and control machines that do the repetitive routine work. To do this he must be able to do many operations, must have the largest rather than the smallest content to his job, (Location 4800)

The surgeon is the most elevated model we can see—but this makes him a good model. (Location 4937)

Systematic efforts to improve performance are indeed effective only as efforts to improve its parts. (Location 4946)

The man—or the men—doing one job should always be able to see a result. It does not have to be a complete part. But it should always be a complete step. (Location 4953)

the job should always depend for its speed and rhythm only on the performance of the man—or the men—performing it. It should not be entirely dependent on the speed with which the jobs before it are being done. The worker should be able to do it a little faster at times, or a little slower. And in turn the jobs following his should not entirely depend on his speed and rhythm, should not be put under pressure if he does the work a little faster, should not run out of work to do if for a short time he works a little more slowly. (Location 4957)

the individuals must be organized as a true group organized for working together rather than against each other rewarded for their joint as well as their individual efforts, (Location 5011)

Placement as a systematic and continual effort is therefore one of the most important tasks in the management of worker and work. It cannot be done when a man comes to work but must be done after he has had time to get to know the work and to be known. It cannot be done once and for all. Placement decisions must be reviewed continually. (Location 5038)

Way before “Drive”

We also know that the old assumption that people do not want to work is not true. Man not only lives under the spiritual and psychological necessity of working. He also wants to work at something—usually at quite a few things. Our experience indicates that what a man is good at is usually the thing he wants to work at; ability to perform is the foundation of willingness to work. (Location 5042)

we have no way of telling satisfaction that is fulfilment from satisfaction that is just apathy, dissatisfaction that is discontent from dissatisfaction that is the desire to do a better job. (Location 5067)

Wow, this is quite interesting

One can be satisfied with what somebody else is doing; but to perform one has to take responsibility for one’s own actions and their impact. To perform, one has, in fact, to be dissatisfied, to want to do better. (Location 5082)

There are four ways by which we can attempt to reach the goal of the responsible worker. They are careful placement, high standards of performance, providing the worker with the information needed to control himself, and with opportunities for participation that will give him a managerial vision. All four are necessary. (Location 5095)

How interesting this book is but how hard (boring) is Drucker pose

THE ECONOMIC DIMENSION (Location 5225)

the real job is to convince workers that there is an ever-present danger of loss, that therefore profit is necessary to build their own future job and their livelihood. And this profit-sharing does not do. On the contrary, in its customary form (under which the worker gets an annual dividend), it tends to convince workers that making a profit—a big profit—is easy if not automatic. It may make them feel that the profitability of their company is a nice thing to have. (Location 5287)

What is probably central is management’s commitment to the attempt to maintain jobs, and the direct and visible connection between the enterprise’s success and the worker’s job security which it creates. (Location 5317)

Few supervisors will be found whose job is so designed as to enable them to live up to these specifications. For the supervisor’s job has not been designed, or even thought through. In American business at least it is a hodgepodge—the end product of decades of inconsistency. Everybody knows, or says he knows, what the supervisor should be doing. He is expected to be a clerk shuffling papers and filling out forms. He is to be the master technician or the master craftsman of his group. He is to be an expert on tools and equipment. He is to be a leader of people. Every one of these jobs he is expected to perform to perfection—at four thousand dollars a year. (Location 5355)

Thirty years ago the typical supervisor in manufacturing industry was responsible for the work of sixty or more people. Today the typical production supervisor has no more than twenty to twenty-five men under him. (Location 5379)

the supervisor’s problem is not that he has so many people under him; it is that he has so many things to do without knowing which are important. (Location 5381)

clearcut objectives for his own activity. (Location 5391)

That the supervisor should not be a “worker” himself is generally recognized; indeed, many union contracts forbid him to touch a machine except to repair it. But it is not sufficiently understood that he must be genuinely a manager, with significant planning and decision-making responsibility. (Location 5437)

Even at its best a supervisor’s day will always remain crowded. But if he is to do his job reasonably well, he simply has no time to fill out those printed forms on which most supervisors today spend up to one third of their time. (Location 5442)

He also has little time for the routine training of people in work (Location 5444)

This is what a manager must truly do: set up proper objectives

we should aim at supervisory units at least twice and perhaps three times as large as those we now have. This will give the supervisor the status he needs to represent the worker in management. It will prevent his “supervising” people; instead, he will have to manage by setting objectives for his men, by placing them, training them and planning and scheduling their work. (Location 5471)

Are data people”professional employees”

THE PROFESSIONAL EMPLOYEE (Location 5502)

To the layman—and to a great many businessmen—“professional employee” still means research engineer (Location 5514)

Only General Electric has coined a term; it calls these men “individual professional contributors.” Debatable as the term is (for these people usually do not work individually but in teams), it will have to do until a better one comes along. (Location 5526)

Any job whose objectives can be set in the main as focusing directly on the business objectives of the enterprise is a managerial one. (Location 5558)

But the job whose objectives cannot be so derived, cannot be organized as a managerial job. Its objectives will be professional objectives rather than the success of the enterprise. Its performance will be measured against professional standards (Location 5561)

it is perfectly possible to say that a chemist, a geologist, a tax lawyer, a patent attorney or a cost accountant does a splendid professional job regardless of the performance of the company. (Location 5567)

Bringing the individual contributor close to the business and its problems is also the only way to avoid “projectitis”—a common disease resulting from attempts by management to control professional work which they do not understand. Management understandably wants to see results; it gets “projects” going—usually focused on immediate urgencies rather than on long-range thinking. But the only way to get real benefit out of high-grade professional people is to hire good men and then let them do their own work. (Location 5606)

Whether he develops his subordinates in the right direction, helps them to grow and become bigger and richer persons, will directly determine whether he himself will develop, will grow or wither, become richer or become impoverished, improve or deteriorate. (Location 5789)

Being a manager, though, is more like being a parent, or a teacher. And in these relationships honorable dealings are not enough; personal integrity is of the essence. (Location 5804)

Does it require genius, or at least a special talent, to be a manager? Is being a manager an art or an intuition? The answer is: “No.” What a manager does can be analyzed systematically. What a manager has to be able to do can be learned (though perhaps not always taught). Yet there is one quality that cannot be learned, one qualification that the manager cannot acquire but must bring with him. It is not genius; it is character. (Location 5806)

the most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question. (Location 5840)

the important decisions, the decisions that really matter, are strategic. They involve either finding out what the situation is, or changing it, either finding out what the resources are or what they should be. (Location 5852)

the higher his level in the management hierachy, the more of them he must make. (Location 5854)

Nor is it enough to find the right answer. More important and more difficult is to make effective the course of action decided upon. (Location 5863)

Nothing is as useless therefore as the right answer that disappears in the filing cabinet or the right solution that is quietly sabotaged by the people who have to make it effective. (Location 5864)

assure that decisions reached in various parts of the business and on various levels of management are compatible with each other, and consonant with the goals of the whole business. (Location 5866)

The manager, however, must assume that symptoms do lie. Knowing that very different business problems produce the same set of symptoms, and that the same problem manifests itself in an infinite variety of ways, the manager must analyze the problem rather than diagnose it. (Location 5890)

In data teams it is usually the team topology

finding the “critical factor.” This is the element (or elements) in the situation that has to be changed before anything else can be changed, moved, acted upon. (Location 5892)

Elimination of the unacceptable courses of action is in itself an essential prerequisite to decision. Without it there will be so many courses to choose from as to paralyze the capacity to act. (Location 5941)

“Get the facts” is the first commandment in most texts on decision-making. But this cannot be done until the problem has first been defined and classified. Until then, no one can know the facts; one can only know data. Definition and classification determine which data are relevant, that is, the facts. (Location 5954)

The manager will never be able to get all the facts he should have. Most decisions have to be based on incomplete knowledge—either because the information is not available or because it would cost too much in time and money to get it. To make a sound decision, it is not necessary to have all the facts; but it is necessary to know what information is lacking in order to judge how much of a risk the decision involves, as well as the degree of precision and rigidity that the proposed course of action can afford. For there is nothing more treacherous—or, alas, more common—than the attempt to make precise decisions on the basis of coarse and incomplete information. (Location 5968)

“The best diagnostician is not the man who makes the largest number of correct diagnoses, but the man who can spot early, and correct right away, his own mistaken diagnosis.” To do this, however, the manager must know where lack of information has forced him to guess. He must define the unknown. (Location 5974)

To take no action is a decision fully as much as to take specific action. Yet, few people realize this. (Location 6015)

To convert a solution into action requires that people understand what change in behavior is expected of them, and what change to expect in the behavior of others with whom they work. What they have to learn is the minimum necessary to make them able to act the new way. It is poor decision-making to present a decision as if it required people to learn all over again or to make themselves over into a new image. (Location 6073)

Participation is unnecessary—and usually undesirable—in the information-gathering phase. But the people who have to carry out the decision should always participate in the work of developing alternatives. (Location 6081)

It’s fun to read this after all this time. OR may not be “a thing” anymore, but the same applies to Data Science or LLMS

The new tools have been introduced under the rather confusing name of “Operations Research.” (Location 6095)

the “Theory of Games,” mathematical probability and so on—cannot help in defining what the problem is. They cannot determine what is the right question. (Location 6102)

they cannot by themselves make a decision effective. Yet these are the most important phases in decision-making. (Location 6104)

But the new tools can be of great help in the two middle stages: analyzing the problem and developing alternatives. (Location 6105)

The new tools are also not without danger. In fact, unless properly used they can become potent means for making the wrong decisions. (Location 6114)

It is incredible how well this applies to LLMs

Precisely because they make possible concrete and specific analysis of problems which hitherto could only be roughly defined or sensed, the new tools can be abused to “solve” the problems of one small area or of one function at the expense of other areas or functions or of the entire business. They can be abused, as the technician calls it, to “sub-optimize.” (Location 6115)

In essence these are tools of information, and of information-processing, not of decision-making. (Location 6125)

Tactical adjustments will, of course, always be needed. But they will have to be made within a framework of basic strategic decisions. No amount of skill in making tactical decisions will free tomorrow’s manager from the necessity of making strategic decisions. (Location 6142)

Generalist vs. specialist

the entire business be seen, understood and managed as an integrated process. (Location 6157)

Both because the new technology requires it and because social pressures demand it, the manager of tomorrow will have to make it possible to anticipate employment and to maintain it as close to stability as possible. At the same time, as today’s semi-skilled machine operator becomes tomorrow’s highly trained maintenance man, and today’s skilled worker tomorrow’s individual professional contributor, labor will become a more expensive resource—a capital investment of the business rather than a current cost. And its performance will have a much greater impact on the performance of the whole business. (Location 6182)

Madre mia, Drucker, bajale

Traditionally a manager has been expected to know a few products or one industry. This, too, will no longer be enough. The manager of tomorrow will have to be able to relate his product and industry to the total environment, to find what is significant in it and to take it into account in his decisions and actions. And increasingly the field of vision of tomorrow’s manager will have to take in developments outside his own market and his own country. Increasingly he will have to learn to see economic, political and social developments on a world-wide scale and to integrate world-wide trends into his own decisions. (Location 6201)

How then can we accomplish these new tasks with the same men? There is only one answer: the tasks must be simplified. And there is only one tool for this job: to convert into system and method what has been done before by hunch or intuition, to reduce to principles and concepts what has been left to experience and “rule of thumb,” to substitute a logical and cohesive pattern for the chance recognition of elements. Whatever progress the human race has made, whatever ability it has gained to tackle new tasks has been achieved by making things simple through system. (Location 6211)

For those with process allergy

The manager of tomorrow will not be able to remain an intuitive manager. He will have to master system and method, will have to conceive patterns and synthesize elements into wholes, will have to formulate general concepts and to apply general principles. Otherwise he will fail. (Location 6215)

If a man is to manage by concepts, patterns and principles, if he is to apply system and methods he can, however, also prepare himself for the job. For concepts and principles can be taught as can system, method and the formulation of patterns. Indeed, perhaps the only way to acquire them is by systematic learning. At least I have never heard of anyone acquiring those basic patterns, the alphabet and the multiplication table, by experience. (Location 6221)

Indeed, the demands that tomorrow will make on the manager may well force us to create anew what we have all but lost: the liberal education for use. It will be very different (at least in outward appearance) from what our grandfathers knew by that name. But it will again have strict method and real standards, especially of self-discipline and of ethics, instead of the abandonment of method and standards that characterizes so much of today’s so-called “progressive education.” It will again have a unified focus rather than be fragmented departmentally. And, like every living liberal education in the past, it will be preparation for work as an adult and citizen rather than merely “general culture.” (Location 6247)

One cannot, as a young man, learn what managing managers means, nor managing worker and work. Nothing is as futile or as pathetic as the young man who has learned “personnel management” in a business school and then believes himself qualified to manage people. (Location 6258)

Not sure if he is here against Milton Friedmanposition of “the social responsibility is to maximize shareholders wealth”

society is not just the environment of the enterprise. Even the most private of private enterprises is an organ of society and serves a social function. (Location 6303)

This in turn implies that the people who are entrusted with the direction of this permanent concentration of resources—the managers—have power over people, that their decisions have great impact upon society, and that they have to make decisions that shape the economy, the society and the lives of individuals within it for a long time to come. In other words, modern industry requires the business enterprise, which is something quite different and quite new. (Location 6311)

Definitely not supportive of Milton Friedman

Historically, society has always refused to allow such permanent concentrations of power, at least in private hands, and certainly for economic purposes. However, without this concentration of power which is the modern enterprise, an industrial society cannot possibly exist. Hence society has been forced to grant to the enterprise what it has always been most reluctant to grant, that is, first a charter of perpetuity, if not of theoretical immortality to the “legal person,” and second a degree of authority to the managers which corresponds to the needs of the enterprise. This, however, imposes upon the business and its managers a responsibility which not only goes far beyond any traditional responsibility of private property but is altogether different. It can no longer be based on the assumption that the self-interest of the owner of property will lead to the public good, or that self-interest and public good can be kept apart and considered to have nothing to do with each other. (Location 6314)

To attract and to hold such men a promise of a career, of a living, or of economic success is not enough. The enterprise must be able to give such men a vision and a sense of mission. It must be able to satisfy their desire for a meaningful contribution to their community and society. It must in other words embrace public responsibility of a high order to live up to the demands the manager of tomorrow must make on himself. (Location 6325)

What management should have done was to work out plans for keeping employed those older people who want to work and are able to do so, with pensions as something to fall back on for those who are unable or unwilling to keep on working. (Location 6352)

This discussion should have made it clear that the impact of management’s decisions on society is not just “public” responsibility but is inextricably interwoven with management’s responsibility to the enterprise. (Location 6388)

The first responsibility to society is to operate at a profit, and only slightly less important is the necessity for growth. (Location 6391)

But a source which the Kremlin would hardly admit as authority has said as much; I refer, of course, to Our Lord’s Parable of the Talents. (Location 6397)

The present management approach tends to do both: it shirks responsibilities that exist and usurps others that do not and must not exist. For whoever says “responsibility” also implies “authority.” (Location 6429)

It is not good enough to start out with the premise that “what is good for the business is good for the country,” even (Location 6455)

It is management’s public responsibility to make whatever is genuinely in the public good become the enterprise’s own self-interest. (Location 6459)

Mandeville, summed up the spirit of the new commercial age in the famous epigram: “private vices become public benefits”—selfishness unwittingly and automatically turns into the common good. (Location 6472)

But whether he was right or wrong is irrelevant; no society can lastingly be built on such belief. For in a good, a moral, a lasting society the public good must always rest on private virtue. No leading group can be accepted on de Mandeville’s foundation. Every leading group must, on the contrary, be able to claim that the public good determines its own interest. This assertion is the only legitimate basis for leadership; to make it reality is the first duty of the leaders. That “capitalism,” as the nineteenth century understood the term (and as Europe still too prevalently understands it), was based on de Mandeville’s principle may explain its material success. It certainly explains the revulsion against capitalism and capitalists that has swept the Western world during the last hundred years. (Location 6474)

The economic doctrines of the enemies of capitalism have been untenable and often childish. (Location 6480)

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