Peter F. Drucker symposia on managerial productivity, placement, employee performance, chief executive practices and managerial responsibility, management structure, knowledge work, and the importance of diverse perspectives in effective management
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William May begins the symposia discussing Drucker’s background, his wide-ranging interests, and his status as an academic, before providing a similar introduction for Drucker’s fellow panelist, Plato Malozemoff. Drucker begins his session talking about the topic of the symposia and opens with an anecdote about personnel productivity in New York City. Drucker comments that, above all, managerial and professional people will become the central cost center of the labor force because that is where the supply is. As in all questions of productivity, the problem, Drucker says, is not knowledge, but the will to do things on the part of management. The first thing known about managerial productivity is that, obviously, if people are put on the wrong kind of task, it isn’t going to result in productivity. In managerial and professional work, large bodies of men are sure to be unproductive, partly because there is no difference in difficulty between the important tasks, the merely interesting, and the irrelevant--they are all equally difficult. Most of the work requires, simply, hard thinking, and in all managerial work, an ounce of planning. It is dangerous to have large staffs, he says, because they believe in what they are doing and, fundamentally, they are concerned with creating knowledge, information, and tools, and an organization can absorb really only one new idea at a time. Above all, staffs must be lean and concentrated. On the topic of managerial productivity, Drucker states that the one thing to forget very quickly is the idea of a fair day’s pay for a fair day’s work, a proposition invented around 1920. When it comes to managerial/professional work, it is the wrong approach because it assumes that everyone, roughly, will do the same work with the same result if he tries halfway. This is not true for managerial work, where the rule is that there are only individual works, and no two individuals work the same way or have the same capacity. The fact that a certain person has performed well is the central key fact--Drucker uses the analogy of an orchestra, and the part of the bassoon, to underscore the importance of specialization and individual competence. Placement is the second key to productivity, and very few people spend enough time on placement. One of the keys to managerial and professional productivity is not to be satisfied with the job description, but the assignment itself. Drucker identifies General George Marshall, Chief of Staff during World War II, as an individual who embodied such a principle of productivity. Productivity is obtaining the optimum out of given resources, but without defining desired results, one cannot know what the optimum is. Drucker then identifies two kinds of chief executives he sees too much of--the ones who judge their associates by the German standard, and those who judge by the American standard. The quickest way to increase productivity, Drucker says, is not to do things that do not contribute. From then on, it is hard work. Management must take upward responsibility for performance, the assignment, and the way it is being done, as well as any ignorance or confusion. Finally, the individual must build into his/her own work in management a practice of systematic learning. Productivity occurs, Drucker states, by thinking through expectations in the areas that matter. The areas one can improve should be the main focus of one’s efforts--one learns to make oneself productive. Drucker closes his portion of the session emphasizing that his points are specific action points needed, and that the one remaining thing needed for productivity is the correct attitude--above all, an attitude on the part of management that they are being paid to make resources productive. The increasingly predominant resource that Drucker is referring to is people, who, because of their university educations, will only be available for managerial and professional work if they are to be productive. Malozemoff then takes over and begins his session commenting on the way management structure can affect management productivity and the quality of its judgments. Malozemoff notes that there has been a trend toward advancing financial executives and specially-educated MBAs into top jobs. What interests Malozemoff particularly is the effect of the evolution of the management structure on a company as it grows larger and more complex. While functional responsibilities are clear-cut, there is no such thing as departmental line exclusivity. All problem solving is done on a task force basis of three-to-five executives, with one top executive heading it. An executive supported by several assistants and numerous staff tends to delegate to staff, and decisions tend to be based more and more on mathematical analysis. To be productive and succeed, management should make a high proportion of the right decisions, and the management structure must accommodate that demand. Drucker and Malozemoff then take questions from the audience, beginning with one concerning what to do when somebody that has been promoted does not work out and there is resistance to moving the person back to where he/she was originally. Drucker first states that the ratio/weight of effective people decisions is a measure of the competence of a management. Drucker then recommends not invoking the Peter Principle--it is an alibi for incompetent and lazy managers. The belief that one cannot offer people a demotion is deeply ingrained in American folklore, and is a misjudgment, according to Drucker. Performance in any one assignment is predictable, so Drucker searches for evidence of success and performance across multiple jobs and with multiple bosses. May then introduces Dale E. Zand and provides a synopsis of his achievements. The problem with managerial productivity, according to Zand, is that it is an intermediating/intervening activity between what labor does and the final output, which normally is a tangible good. The character of management has changed, he says--management has gone from a process of telling and demanding--to negotiating the fate and future of the employee workforce. The automobile industry, Zand says, is a prime example of this trend in the evolution of management. What has happened, Zand says, is a transition from what is an industrially-driven society to a knowledge-processing society. The fundamental character of this transition is its intangibility--knowledge work is elusive. One becomes productive in this kind of atmosphere by treating knowledge as a commodity. Getting knowledge from where it exists to where it can be used is one of the challenges to being productive in this new management environment, and Zand identifies this dilemma as one of behavior. The people who tend to be most productive in management, he argues, say “I want to hear your problems, and your half solutions, and I also expect you to have solutions.” Another part of this management of knowledge culture is not so much solving problems but finding problems. Most organizations today are unwilling to search for problems and tend to focus only on solutions, and organizations’ major source of long-term error is that they do not ask the right questions. Supporting creative differences--or deviations--becomes critical in problem-solving strategies. To be productive in the current managerial climate, people must be encouraged to take different perspectives. The greatest tragedy in managerial productivity is to have a superb operational solution to the wrong problem. The panelists then take questions from the audience, the first concerning reduction of staff influence and, correspondingly, counting on general managers to become experts in the complex business and technological environment we see today and in the future. Zand responds that, in knowledge organizations, managers are always going to be managing people that know more than they do. If they do not, they are guaranteeing the obsolescence of their organization. Drucker states that staffs are not effective until their products are effective. The test of the staff should be if the output is usable. Malozemoff states that he is not sure what the solution to the problem is, except that the inventor/innovator should be at the top and overseeing things. The final question then emerges of how to get optimum results out of data processing systems development, and Drucker states that there is no such thing as a data-processing specialist. One must take responsibility for the information they need. Zand says that the problem of the information system is a classic illustration of the idea that any problem can be evaded. Corporate managers must integrators and uniters--it is the responsibility of whoever heads a corporate or division staff to properly link what that staff does to management needs and objectives.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University New York University. Graduate School of Business Administration New York (N.Y.) Management Management by objectives Productivity Job rotation Marshall, George C. (George Catlett), 1880-1959 World War II World War II United States Attitude Knowledge workers Knowledge, work & society Problem solving Creative thinking Information Systems Symposia Malozemoff, Plato Peter Principle Managerial productivity Employee performance Job placement Management styles Systematic learning Management structure Commodification of knowledge Data processing systems development Management responsibility
Original recording, April 21, 1982; Drucker Archives; Box 68