The Practice of Management – My Notes

22 Sep The Practice of Management – My Notes

My first introduction to Peter Drucker was The Effective Executive, a shorter book but one that transformed my idea of ‘getting things done’ and managing to a goal. It was a fairly easy, high-impact read and it’s on my short-list of books I like to give away.

In The Practice of Management, Drucker takes a more long-form, tedious approach. The book has plenty of ‘impact-potential’, but it’s certainly more dense than The Effective Executive. I’ve heard it referred to as a ‘mini-MBA’, and quite honestly, it about delivers on the monicker. The first half is almost exclusively history of business and philosophy of business, finally getting into practicum around page 111. If you’re really looking to develop your high-level, organizational, corporate faculty, working your way through the book will pay off.

As old as the book is (written in 1954), the content is surprisingly timeless, with Drucker speaking fluently about the onset of automation and the transformation of the professional workforce. While there are certainly more ‘refreshed’ books out there which cover similar material (I think of Execution by Larry Bossidy and Ram Charan), Drucker’s The Practice of Management needs to remain a part of the business leaders curriculum. There is something about reading material which has stood the test of time…the concepts carry more weight.

This is a book I will definitely read again in another 5-7 years, but it’s re-readability is lower than most because of how dense it is. I rely heavily, therefore, on my notes and underlines to revisit the concepts, and you’ll notice that this book has more than twice the amount of my typical underlines. Part of Drucker’s defining style is his ability to deliver so many one-line ‘zingers’…The Practice of Management is infinitely quotable and a gold mine of inspiration and encouragement!

My Underlines from The Practice of Management by Peter Drucker
[My favorite quotes are emboldened and indented.]

Even the people in a business often do not know what their management does and what it is supposed to be doing, how it acts and why, whether it does a good job or not. (p. 6)

Management is the specific organ of the business enterprise. (p. 7)

The skills, the competence and the experience that are common and therefore transferable are analytical and administrative—extremely important, but secondary to the attainment of the primary objectives of the various non-business institutions. (p. 9)

Nor is managing a business just a matter of hunch or native ability; its elements and requirements can be analyzed, can be organized systematically, can be learned by anyone with normal human endowment. (p. 9)

No greater damage could be done to our economy or to our society than to attempt to “professionalize” management by “licensing” managers, for instance, or by limiting access to management to people with a special academic degree.(p. 10)

Furthermore management can only be one leading group among several; in its own self-interest it can never and must never be the leading group. (p. 10)

Managing is not just passive, adaptive behavior; it means taking action to make the desired results come to pass.(p. 11)

Today’s economist sees the businessman as choosing rationally between alternatives of action…. what choice the businessman makes has a real impact on the economy. (p. 11)

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. (p. 12)

The enterprise, by definition, must be capable of producing more or better than all the resources that comprise it. (p. 12)

…. many rank-and-file jobs are in effect managerial, or would be more productive if made so. (p. 13)

And if an enterprise fails to perform, we rightly hire not different workers but a new president. (p. 13)

This implies organization of the work so as to make it most suitable for human beings…. (p. 14)

There is only one valid definition of business purpose: to create a customer. (p. 37)

Markets are not created by God, nature or economic forces but by businessmen. (p. 37)

It is the customer who determines what a business is. (p. 37)

What the customer thinks he is buying, what he considers “value,” is decisive—it determines what a business is, what it produces and whether it will prosper. (p. 37)

[The customer] alone gives employment. (p. 37)

Because it is its purpose to create a customer, any business enterprise has two—and only these two—basic functions: marketing and innovation. (p. 37)

Any organization in which marketing is either absent or incidental is not a business and should never be run as if it were one. (p. 38)

It is the first duty of a business to survive. The guiding principle of business economics, in other words, is not the maximization of profits; it is the avoidance of loss. Business enterprise must produce the premium to cover the risks inevitably involved in its operation. And there is only one source for this risk premium: profits. (p. 46-47)

But first and foremost [the business] must have enough profit to cover its own risks. (p. 47)

For the measurement used determines what one pays attention to. It makes things visible and tangible. (p. 65)

For market dominance creates tremendous internal resistance against any innovation and thus makes adaptation to change dangerously difficult. Also it almost always means that the enterprise has too many of its eggs in one basket and is too vulnerable to economic fluctuations. There is, in other words, an upper as well as a lower margin….(p. 67)

In one of the most successful hospital-supply wholesalers, two of the top men of the company—president and chairman of the Board—visit between them two hundred of the company’s six hundred customers every year. They spend a whole day with each customer. They do not sell—refuse indeed to take an order. They discuss the customer’s problems and his needs, and ask for criticism of the company’s products and service. In this company the annual customer survey is considered the first job of top management. And the company’s eighteen-fold growth in the last twelve years is directly attributed to it. (p. 68)

Innovating objectives can therefore never be as clear and as sharply focused as marketing objectives. To set them, management must first obtain a forecast of the innovations needed to reach marketing goals. (p. 69)

“When you are small, you are sufficiently close to the market to know fairly fast what new products are needed. And your engineering staff is too small to become ingrown. They know they can’t do everything themselves and therefore keep their eyes and ears wide open for any new development that they could possibly use.” –President of a small company. (p. 71)

Except for the rare monopoly situation, the only thing that differentiates one business from another in any given field is the quality of its management on all levels. (p. 71)

Finally, profit insures the supply of future capital for innovation and expansion, either directly, by providing the means of self-financing out of retained earnings, or indirectly, through providing sufficient inducement for new outside capital in the form in which it is best suited to the enterprise’s objectives. (p. 77)

The simplest way to find this minimum is by focusing on the last of the three functions of profit: a means to obtain new capital. (p. 77)

The ability of a management to stay within its budget is often considered a test of management skill. But the effort to arrive at the budget that best harmonizes the divergent needs of the business is a much more important test of management’s ability. (p. 87)

The standard advice of the economists to make capital investments at the trough of the depression and to refrain from expansion and new investments at the peak of a boom seems to be nothing but the most elementary common sense. (p. 89)

The batting average of the economists has not been impressive—and the forecasting success of businessmen has not been much more so. (p. 89)

What business needs therefore are tools which will enable it to make decisions without having to try to guess in what stage of the cycle the economy finds itself. (p. 90)

Production is not the application of tools to materials. It is the application of logic to work. (p. 96)

I have learned to be extremely skeptical of any prediction of imminent revolution or of sweeping changes in technology or business organization. (p. 106)

In the American economy there will be one powerful force pushing towards and Automation revolution in the next decade: the shortage of workers. (p. 107)

The fundamental problems of order, structure, motivation and leadership in the business enterprise have to be solved in the managing of managers. (p. 111)

For the worker’s attitude reflects, above all, the attitude of his management. It directly mirrors management’s competence and structure. (p. 112)

To be a manager means sharing in the responsibility for the performance of the enterprise. (p. 112)

One does not need the gift of prophecy to predict that the emergence of a managerial class insures, over the long run, the downfall of the Communist regime in Russia. (p. 115)

The first requirement in managing managers is management by objectives and self-control. (p. 119)

A mean spirit in the organization will produce mean managers, a great spirit great managers. A major requirement in managing managers is therefore the creation of the right spirit in the organization. (p. 119)

The business enterprise must make provision for its own survival and growth. It must make provision for tomorrow’s managers. (p. 119)

Any enterprise must build a true team and weld individual efforts into a common effort.…Their efforts must fit together to produce a whole—without gaps, without friction, without unnecessary duplication of effort. (p. 121)

The manager must know and understand what the business goals demand of him in terms of performance, and his superior must know what contribution to demand and expect of him—and must judge him accordingly. If these requirements are not met, managers are misdirected. Their efforts are wasted. Instead of work, there is friction frustration and conflict. (p. 121)

Management by objectives requires major effort and special instruments. For in the business enterprise managers are not automatically directed toward a common goal. (p. 122)

But there is always 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.…But it must always be related to the needs of the whole. (p. 122)

He resents demands made on him for the sake of business performance as interference with “good engineering,” “smooth production,” or “hard-hitting selling.” The functional manager’s legitimate desire for workmanship becomes, unless counterbalanced, a centrifugal force which tears the enterprise apart and converts it into a loose confederation of functional empires, each concerned only with its own craft, each jealously guarding its own “secrets,” each bent on enlarging its own domain rather than on building the business. (p. 123)

In one company, I have found it practicable and effective to provide even a foreman with a detailed statement of not only his own objectives but those of the company and of the manufacturing department. (p. 126)

By definition, a manager is responsible for the contribution that his component makes to the larger unit above him and eventually to the enterprise. His performance aims upward rather than downward. This means that the goals of each manager’s job must be defined by the contribution he has to make to the success of the larger unit of which he is a part. (p. 128)

Being a manager demands the assumption of a genuine responsibility. (p. 129)

There must be a “meeting of minds” within the entire management of each unit. (p. 129)

For reports and procedures, when misused, cease to be tools and become malignant masters. (p. 33)

Procedures can work only where judgement 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.…In Fact, it is the test of a good procedure that it quickly identifies the situation that, even in the most routine of processes, do not fit the pattern but require special handing and decision based on judgement. *Starred (p. 133)

Reports and procedures should be kept to a minimum, and used only when they save time and labor. (p. 134)

At least once every five years every form should be put on trial for its life. (p. 135)

To “control” everything is to control nothing. And to attempt to control the irrelevant always misdirects. (p. 135)

“Philosophy” of management….It rests on a concept of human action, human behavior and human motivation (p. 136)

The manager should be directed and controlled by the objectives of performance rather than by his boss. (p. 137)

The span of managerial responsibility, however, is determined by the extent to which assistance and teaching are needed. (p. 139)

And where good practice would counsel against stretching the span of control, 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 breath down their necks. *Starred (p. 139)

“All authority not expressly and in writing reserved to higher management is granted to lower management.” (p. 141)

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. (p. 143)

There are five areas in which practices are required to insure the right spirit throughout the management organization.

1. There must be high performance; no condoning of poor or mediocre performance; and rewards must be based on performance.
2. Each management job must be a rewarding job itself rather than just a step in the promotion ladder.
3. There must be a rational and just promotion system.
4. Management needs a “charter” spelling out clearly who has the power to make life-and-death decisions affecting a manager; and there should be some way for a manager to appeal to a higher court.
5. In its appointments management must demonstrate that it realizes that integrity is the one absolute requirement of a manger, the one quality that he has to bring with him and cannot be expected to acquire later on.

What every business needs the most: entrepreneurs. (p. 147)

It does not build spirit—only high performance can do that. (p. 147) 

The better a man is the more mistakes will he make—for the more new things he will try. (p. 147)

Whenever a man’s failure can clearly be traced to management’s mistakes, he has to be kept on the payroll. (p. 148)

The frequent excuse: “We can’t move him; he has been here too long to be fired,” is bad logic….it does harm to the performance of management people, to their spirit and to their respect for the company. (p. 149)

If one can “get fired” for poor performance, one must also be able to “get rich” for extraordinary performance. (p. 151)

For it is character through which leadership is exercised, it is character that sets the example and is imitated in turn. (p. 157)

“The bottleneck is at the head of the bottle.” (p. 161)

The intuitive manager, in other words, cannot do the chief executive’s job, no matter how brilliant, how quick, how perceptive he is. (p. 167)

Also, as soon as the business attains even modest size, everything brought to him for information or decision is of necessity predigested, formalized and abstract. (p. 168)

Manager development is therefore only another name for the way in which management discharges its obligation to make work and industry more than a way of making a living. (p. 183)

Tomorrow’s senior positions will be filled by men who today occupy junior positions. (p. 184)

Altogether the concept of a promotable man who shows high potential is a fallacy. (p. 184)

….and no man has a right to dispose of other people’s lives and careers on probability. (p. 185)

We spend a great deal of time, money and energy on improving the performance of a generator by 5 per cent. Less time, less money and less energy would probably be needed to improve the performance of managers by 5 per cent—and the resulting increase in the production of energy would be much greater. *Starred (p. 185)

But every manager in a business has the opportunity to encourage individual self-development or to stifle it, to direct it or to misdirect it. (p. 187)

To find out what activities are needed to attain the objectives of the business is such an obvious thing to do that it would hardly seem to deserve special mention. (p. 195)

It will demonstrate that historically meaningful groupings no longer make sense but have, instead, become obstacles to proper performance. (p. 196)

The second major tool to find out what structure is needed is an analysis of decisions…. On what level of the organization should they be made? What activities are involved in or affected by them? Which managers must therefore participate in the decisions—at least to the extent of being consulted beforehand? Which managers must be informed after they have been made? (p. 197)

There are four basic characteristics which determine the nature of any business decision

1. There is the degree of futurity in the decision
2. The impact a decision has on other functions
3. The number of qualitative factors that enter into it: basic principles of conduct, ethical values, social and political beliefs, etc.
4. Classified according to whether they are periodically recurrent or rare, if not unique, decisions (p. 198-199)

A decision should always be made at the lowest possible level and as close to the scene of action as possible. Moreover, a decision should always be made at a level insuring that all activities and objectives affected are fully considered. The first rule tells us how far down a decision should be made. The second how far down is can be made, as well as which managers must share in the decision and which must be informed of it. *Starred (p. 199)

Organization can be likened to a transmission that converts all activities into the one “drive,” that is, business performance. (p. 202)

Every functional manager considers his function the most important one, tries to build it up and is prone to subordinate the welfare of the other functions, if not the entire business, to the interests of his unit. There is no real remedy against this tendency in the functional organization. The lust for aggrandizement on the part of each function is a result of the laudable desire of each manager to do a good job. (p. 208)

This 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. (p. 213)

Federal decentralization…. Any federal organization requires both strong parts and a strong center. (p. 214)

Functional work should thus always be organized so as to give the manager the maximum of responsibility and authority, and should always turn out as nearly finished or complete a product or service as possible. Otherwise functional managers will not have objectives of performance and measurements of results that are really derived from business objectives and really focus on business results. (p. 219)

To design a product is no longer a job which starts in the engineering department, after which the plant tools up, after which the sales department goes to work pushing the product. It is a team effort in which marketeers, production people and engineers work together right from the start—again a “task force” concept. (p. 220)

        An enterprise is too big or too complex for functional organization whenever the organization requires more than two levels of functional managers. Then the principle of federal decentralization should be introduced if it is at all feasible; for by then functional organization has ceased to be able to serve adequately the structural requirements of the business, even at its most functionally decentralized.

        Whereas federal units should be connected “in parallel,” functional units should be connected “in series.” Since by itself no functional unit produces anything, all have to work together. Their best arrangement is similar to that of tiles on a roof: with some overlap around the edges, to make sure that every necessary activity is actually covered, and to set out clearly the areas of necessary co-operation. (p. 221)

Different size demands different behavior and attitudes form the organs of management. And even more influential than size is change in size, that is, growth. (p. 228)

A company is as large as the management structure it requires. (p. 231)

In the small business neither the action part of the chief-executive job nor the objective-setting part of it are full-time preoccupations. (p. 231)

The fair-sized business therefore always has to have a chief-executive team. It always has a problem of the relationship of functional managers to top management, though the problem is still small. (p. 232 )

A very large business also becomes oversized when it needs so many levels of management that even a man of real ability cannot normally rise from the bottom to the top and yet spend enough time on each level to be thoroughly tested in performance. (p. 234)

The new technology may make this danger of over diversity the most serious problem of manageability. For Automation does not require larger businesses—it may well make smaller ones possible in many industries. (p. 235)

The main problem of small and fair-sized businesses is usually that they are too small to support the management they need. (p. 236)

Top management of both the small and the fair-sized business is apt to suffer from narrowness of outlook and constriction of outside contacts. (p. 237)

As living organisms grow they have therefore to develop special organs of breathing, perspiration and excretion. It is this law that sets a limit to the size of living organisms, that makes sure that the trees will not grow into the sky; and the business enterprise stands under this law as much as any other organism. (p. 238-239)

The very thing that will make an outside executive unpopular at first—his tendency to be critical of the conventions, mores and axioms of his new associates—is what makes him useful and important. (p. 240)

But more important than any specific practice is a basic attitude. The large and very large business tends to expect of its managers today that they make the company the center of their universe. But a man who, as the phrase goes, “lives for his business,” is far too narrow. Since the company is his life he clings to it with desperation; he is apt to stifle the development of the younger men so as to make himself indispensable and to postpone the horrible day of retirement into an empty world. In its own interest, management should encourage serious outside interests on the part of its executives.  Nor should it limit these interests to community affairs that help the company’s standing in the industry. To be known as a minor poet (as was the late Field Marshal Lord Wavell) is an asset rather than a liability in that otherwise unpoetic institution, the British Army. To be known as an ardent and scholarly student of insects (or of Roman coins) is a definite recommendation in a Catholic priest. It is high time that the large businesses, too, realize that the man who “lives for the company” is a danger to himself and to the enterprise, and likely to remain a “perennial boy scout.” (p. 240)

As far as I have been able to grasp the concept, to be “staff” means to have authority with having responsibility. (p. 241)

And they should always be members of the unit to whose manager they render functional service rather than part of a special staff.  (p. 241)

General Electric has tried to counteract this; it expects of each of the services vice-presidents that he spend only 80 per cent of his time on administering his own staff and give 20 per cent to being a member of the chief-executive team concerned with the company as a whole. (p. 242)

The root of the trouble is the belief that there is such a thing as staff functions. There are only management functions, either running a business, managing a business-producing function or managing a supply function. 

Above all, service work does not belong in top management. It does not belong in the central office. (p. 243)

There remains a need for a headquarters organization in the large company. (p. 244)

…. Whoever controls a man’s promotion controls the man. (p. 245)

There are, I believe, few companies that have experienced major growth in which some key operating positions are not held by people unfit to accept the demands of the bigger business. These men were put into their present positions when the company was still small and when both their competence and their vision was adequate to the job. As the company grew, the job grew. It was lifted up as if by geological pressure. But the man did not grow with the job. (p. 248-249)

Growth always requires new and different competence in top management. It requires that top management realize that its own function is no longer to know what goes on in the plant or in the regional sales offices. (p. 249)

That the top man of a large company knows all his foremen by their first name is not something to boast of; it is rather something to be ashamed of. For who does the work of top management while he memorizes names? The personal touch is no substitute for performance. (p. 250)

I know only one way in which management can diagnose the state of growth of the enterprise. This is by analyzing the activities needed to attain objectives, analyzing the relations between management jobs. These analyses would have shown at Johnson & Johnson that twenty-seven people had to be consulted in a decision on any one product. They would have shown in the other company cited both that the president had to give time to basic capital-expenditure decisions and that he had no business “fighting fires.” *Starred (p. 250)

Growth (provided it is not the mere addition of fat) is the result of success. A company grows because it is doing a good job. (p. 251)

The normal cause of business growth is able and competent management. (p. 251)

Whether the business enterprise performs depends in the final analysis on its ability to get people to perform, that is, to work. (p. 255)

But Automation derives its efficiency and productivity mainly from the substitution of highly trained, high-grade human work for poorly trained or semi-skilled human work. (p. 256)

But each job is designed so as always to contain a challenge to judgement, and an opportunity to influence the speed and rhythm of his work. (p. 257)

In some companies less than half of all promotions to foreman turn out really well. (p. 258)

“Productivity is an attitude” was their unanimous conclusion…. In other words, it is workers’ motivation that controls workers’ output. (p. 264)

Finally, man is distinguished from all other resources in that his “development” is not something that is done to him; it is not another or better way of using existing properties. It is growth; and growth is always from within. The work therefore must encourage the growth of the individual and must direct it—otherwise it fails to take full advantage of the specific properties of the human resource. This means that the job must always challenge the worker. *Starred (p. 266)

There are conditions for man’s psychology readiness to change. The change must appear rational to him; man always presents to himself as rational even his most irrational, most erratic, changes. It must appear an improvement. And it must not be so rapid or so great as to obliterate the psychological landmarks which make a man feel at home: his understanding of his work, his relations to his fellow-workers, his concepts of skill, prestige and social standing in certain jobs and so forth. Change with meet resistance unless it clearly and visibly strengthens man’s psychological security; and man being mortal, frail and limited, his security is always precarious. (p. 269)

It is no accident that the more industrialized an area the less radical its workers, the less bitterly hostile to management, enterprise and profits. It is no accident that revolutionary Marxism has succeeded only in countries that knew none but pre-industrial society. (p. 271)

Planning and doing are separate parts of the same job; they are not separate jobs. There is no work that can be performed effectively unless it contains elements of both. (p. 284)

By proclaiming peak performance to be the goal—rather than happiness or satisfaction—it asserts that we have to go beyond Human Relations. (p. 289)

…. the automobile assembly line is not perfect engineering of human work. It is imperfect and inefficient engineering of machine work. (p. 292)

We know today, in other words, that wherever the one-motion one-job concept can be used effectively, we have an operation that can and should be mechanized. (p. 292)

We have two principles therefore rather than one. The one for mechanical work is Mechanization. The one for human work is Integration…. the one organizes the motions mechanically so as to utilize the special properties of the machine, that is, its ability to do one thing fast and faultlessly. The other one integrates operations so as to utilize the special properties of the human being, that is, his ability to make a whole out of many things, to judge, to plan and to change. *Starred (p. 293)

Anything short of mechanization in such work should be considered a stopgap and evidence of incomplete or imperfect engineering rather than an example of human organization for work. (p. 293)

We have put a great deal of time and money into the selection of works. Selection is, however, a negative process. It eliminates those who are unlikely to fit. But the enterprise needs more than passable performance. It needs the best performance a man is capable of. (p. 299)

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 one thing he wants to work at; ability to perform is the foundation of willingness to work.  (p. 300)

What we need is to replace the externally imposed spur of fear with an internal self-motivation for performance. Responsibility—not satisfaction—is the only thing that will serve. (p. 303)

To perform, one has, in fact, to be dissatisfied, to want to do better. (p. 303)

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.  (p. 304)

This does not mean that one should drive people. On the contrary, one must let them drive themselves. But the only way to do this is to focus their vision on high goal. (p. 304)

Few things demoralize employees as much as to sit around waiting for work while management fumbles—no matter how much they pretend to themselves that they enjoy their paid rest. Few things constitute such conclusive proof of management’s incompetence in their eyes. To schedule so that there is always work to do for the men is not a minor matter. Nor is having the equipment in first-class condition or maintaining it before it breaks down or repairing it immediately when it breaks down. And one of the most important spurs to worker performance is spotless housekeeping. These activities directly reflect management’s competence and its standards, by making manifest to the worker how good his management is and how seriously it takes his work. (p. 305)

Any such lack of sound planning lowers the men’s respect for management. (p. 306)

A wise plant manager once told me that he didn’t want his foremen to do anything except to keep their department and the machines in it spotlessly clean, always to schedule work three days ahead, to insist on the newest equipment available and to replace tools before they gave out. *Starred (p. 306)

He should know how his work related to the work of the whole. He should know what he contributes to the enterprise and, through the enterprise, to society. (p. 307)

The figures themselves are usually on record, but new tools are needed to get them speedily to the worker whose work they measure.  (p. 307)

Management must try to convey this information—not because the worker wants it but because the best interest of the enterprise demands that he have it. (p. 307)

…. managerial vision…. this vision he can only attain through the experience of participation. (p. 307)

I am convinced that in managing the business, employees as such cannot participate. They have no responsibility—and therefore no authority. (p. 310)

The first of these is the conflict between the enterprise’s view of wage as cost and its demand for wage flexibility, and the employee’s view of wage as income and his demand for wage stability. (p. 312)

At the same time he has neither the authority nor the status, let alone the time, to discharge his responsibility. (p. 322)

Everything that is necessary to achieve the objectives of his department should be under his control—otherwise he cannot be held responsible. (p. 323)

I am old-fashioned enough to object to this on the grounds that education should confer duties rather than privileges. (p. 324)

It must be big enough to enable him to represent his men upward. He must hold such a position that management listens to him and takes him seriously. Indeed it could be considered prima facia evidence of poor organization of the supervisor’s job if management has to make special efforts to give him a hearing—as so many do. *Starred (p. 325) 

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. (p. 325)

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. (p. 327)

It makes little sense to say of a sales department that it does a splendid selling job, if the company goes bankrupt. But it is perfectly possible to say that a chemist, a geologist, a tax lawyer, a patent attorney or a cost accountant does splendid professional job regardless of the performance of the company. (p. 332-333)

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. (p. 335)

The good professional employee also has little respect for the administrator. He respects the man who is better professionally than he is himself. (p. 335)

It requires the manager to balance and harmonize three major functions of the business enterprise: managing a business, managing managers and managing worker and work. (p. 342)

He can neither afford to say: “We will cross this bridge when we come to it,” nor “It’s the next hundred years that count.” He not only has to prepare for crossing distant bridges—he has to build them long before he gets there. (p. 342-343)

The Work of the Manager (p. 343)

1. Sets objectives
2. Organizes
3. Motivates
4. The job of measurement
5. Develops people

[The manager] does not “handle” people; he motivates, guides, organizes people to do their own work. His tool—his only tool—to do all this is the spoken or written word or the language of numbers. (p. 346)

Managers who know how to use time well achieve results by planning. They are willing to think before they act. They spend a great deal of time on thinking through the areas in which objectives should be set, a great deal more on thinking through systematically what to do with recurrent problems. (p. 347)

The good time users among managers spend many more hours on their communication up than on their communications down. They tend to have good communications down, but they seem to obtain these as an effortless by-product. They do not talk to their men about their own problems, but they know how to make the subordinates talk about theirs. (p. 347)

They are, for instance, willing to spend a great deal of their time on the half-yearly Manager Letter, in which each subordinate sets down the objectives of his job, his plans, and what his superior does to help and to hamper him. *Starred (p. 347)

It is vision and moral responsibility that, in the last analysis, define the manager. (p. 350)

Indeed, the most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question. (p. 351)

But 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. These are the specifically managerial decisions. (p. 352)

For there are few things as useless—if not as dangerous—as the right answer to the wrong question. (p. 353)

Practically no problem in life—whether in business or elsewhere—ever presents itself as a case on which a decision can be taken. What appear at the first sight to be the elements of the problem rarely are the really important or relevant things. They are at best symptoms. And often the most visible symptoms are the least revealing ones. *Starred (p. 353)

It is necessary to classify the problem in order to know who must make the decision, who must be consulted in making it and who must be informed. Without prior classification, the effectiveness of the ultimate decision is seriously endangered; for classification alone can show who has to do what in order to convert the decision into effective action. (p. 357)

The information itself needs skillful and imaginative analysis. (p. 358)

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. *Starred (p. 359)

Most of us have infinitely more imagination than we ever use. (p. 361)

Even if the change is slight there is always some danger of shock. A healthy organism will withstand such shock more easily than a diseased one; indeed, “healthy” with respect to the organization of an enterprise means the ability to accept change easily and without trauma. Still it is the mark of a good surgeon that he does not cut unless necessary. (p. 361)

There are four criteria for picking the best from among the possible solutions.

1. The risk.
2. Economy of effort. 
3. Timing.
4. Limitations of resources.

(p. 363)

If time has to be spent on selling a decision, it has not been made properly and is unlikely to become effective. (p. 364)

But the people who have to carry out the decision should always participate in the work of developing alternatives. (p. 365)

Traditionally a manager has been expected to know one or more functions. This will no longer be enough. The manager of tomorrow must be able to see the business as a whole and to integrate his function with it (p. 373)

It can be said with little exaggeration that of the common college courses being taught today the ones most nearly “vocational” as preparation for management are the writing of poetry and of short stories. For these two courses teach a man how to express himself, teach him words and their meaning and, above all, give him practice in writing.  (p. 375)

No matter what a man’s general education or his adult education for management, what will be decisive above all, in the future even more than in the past, is neither education nor skill; it is integrity of character. *Starred (p. 378)