What are the greatest challenges facing business in the 21st century? New legal, accounting regulations or tax mitigation restrictions, pressure on operating margins, the volatility of leading currencies or the emergence meteoric rise of China, India or Brazil are new world economic super-powers?
At the end of his ‘watch’ Peter F Drucker, perhaps the greatest thinker in management yet born, saw the challenges facing businesses today as much more dramatic than anything he had seen in his sixty years as a management expert (1940-2000).
What changes did he see as having the most impact?
- Consumers have the controlling power.
- Global competition is rising to cosmic proportions, largely though the internet.
- Innovative companies develop not merely new products but new human wants and behaviours e.g. the iPod – the facility to have 10,000 tunes and 5 movies in your pocket.
- Some of the most successful companies in the past 5 years, in terms of share value, did not exist 10 years ago.
Drucker made some suggestions to succeed in this new marketplace and corporate landscape:
- partnering with "rivals"
- collaborating with customers to view one’s business from "outside in";
- Source new resources of talent, making better use of retired executives and workforce
- Narrow core competencies, implying greater outsourcing. "If it’s not in your front room, then make it someone else’s front room," he liked to say.
- Individuals now take full responsibility for their own career progress as ‘knowledge workers’ for one is neither boss nor member of the work force, rather more a hybrid. This helps people face the latest changes in organisations contracting employees, which has seen an end to ‘jobs for life’. The responsibility for developing their most important resource, brainpower, is now theirs, commonly referred to as ‘continual professional development’ (CPD).
Wooldridge, in his Wall Street Journal article (28 Feb 07), refers to Drucker as a model, as well as a business analyst, pointing out that he continually reinvented himself:
- 1940’s – a prophet of big organizations
- 1970’s – fan of entrepreneurship
- 1980’s – not-for-profit sector
He kept his mind fresh by taking up a new subject every few years. Drucker will probably be remember best for his contribution to Non Profit Organisations. It was one of Drucker’s biggest contributions to management theory. Drucker was able to successfully have his management principles adapted by non profit organisations, with far reaching consequences. It is now an integral part of any respectable business school’s Master of Business administration (MBA) program, including Harvard Business School’s Social Enterprise in the US, and the UK’s Cranfield School of Management.. A good example of his influence can be seen in the British National Health service (NHS) which now describes patients as clients, despite mostly being government funded.