Management Challenges For the 21st Century
1. The 21st Century faces three major business concepts: 1. The are new certainties facing managers in the 21st century. 2. Language symbols, printed text, and information are most significant breakthroughts in human history 3. Knowledge Worker Productivity is keeps companies and countries rich.
2. Why is strategy important? Strategy allows a company to become opportunistic. Strategy can be used to test the business theory. Drucker identifies five certainities: 1. The collaspe of the birthrate in the developed world. The implications are great political and economic turbulence; stating, it is unlikely developed countries will maintain stable political and economical environments. This will mean the definition of retirement will change - Drucker proposes incentives to keep older knowledge workers employee as advantageous; and also states, with less children, there will be a repopulation crisis. The consequence is less young people working and more older people retiring. 2. Shifts are occuring in disposal wealth. Drucker clarifies that the fastest growing industry, historically, has been financial services and not technology. This group is interested in maintaining retirement financial assets. Traditional Financial services realized this swing and built infrastructure capturing vast amounts of disposable income. However, major corporate loans or major public offerings of corporate securities did not grow. The impact was large financal services have overexpanded. The only industry sector that has been growing is the mid-sized business. 3. Institutes will need to define what performance means. In short, shareholders depend on their retirement economic investments. The emphasis on performance providing financial benefits for the shareholder will be valued. 4. Competive performance is measure globally. Design, marketing, and financial performance will be measured against global standards. Turbulence and financial collaspe will plague countries whose policies have failed. Examples given were Japan and Mexico 5. Growing incongruncies between the political and economic environment will increase. Drucker states political incongruncies must not interfere with economic realities.
3. The most significant innovations are the language symbols, (printed media, books and illustrations), and information. Mass production of books changed the world. Even with innovations in technology the number of printed books did not decrease. Drucker notes while Microsoft was becoming the largest software company as least two print companies were growing as fast, one being German based Bertelsmann Group. The market for media is the demand for information. People are willing to pay for information. Where, does technology fit? Internet is a media formating providing information to the viewer. Drucker advocates that business activies where consumers pay money to receive products or services should continue receiving company support and those that don't should be abandoned.
4. Drucker believed computer technology had more of an affected on operation efficiencies than decision making processes. Drucker states, no one manager uses data the same way. Each must manager must model information into a meanful form to be used.
5. The Diversity and tool maturity is a inhibitor. Drucker indicates that often the tool is not correctly designed for the task. Innovations in tool may facilitated computer technology playing a more active role in decision making. Drucker focuses on Activity based an means for wealth creation.
6. Drucker emphasis using earn valued analysis to make activity based decisions. The three stages of economic opportunity are: grow, maturity, and decline. During growth companies are willing to invest in the future, take risks, and expand. During Maturity companies focus on a few areas which they of business they do very well. During decline companies focus on quality more than production. Drucker says, its impossible to stop a dead body from stinking. Activity based decision help managers abandon unproductive activities.
7. What is expected of the Knowledge Worker? Knowledge workers are different from manual workers. Taylors scientific task analysis helped the manual worker acheive historical world class production. But a signficant differences exists between the knowledge worker and manual worker. A task can be examined and measured for the manual worker, thus increasing productivity by eliminating all unnecessary movements.
8. The following conditions applied to knowledge workers: 1. The knowledge worker must know "What is the task", such as "a satisified customer." The knowledge worker will gather information to understand what the task means. The knowledge worker is concentrated on the task and eliminates everything else. 2. Periods off noninterference is required stopping micromanagment. A knowledge worker must be given autonomy. 3. Continued Innovation has to be a part of the knowledge worker's work 4. Management support of a environment and culture of continual teaching and learning needs to be fostered 5. Quality is at least as important as productivity. 6. The knowledge worker need to be considered an asset not a cost.
Management Challenges For the 21st Century opens an new age of reasoning and thought. Peter Druckers willingness to study ideas, historically and contemporary makes him the Rennaisance man.