As promised in the last issue, here are the seven common management assumptions that Peter Drucker said are outdated in the 21st century. “All of them have outlived their usefulness,” he wrote seven years ago. (Management Challenges for the 21st Century, 1999, p. 5).
The first three obsolete assumptions underlie the discipline of management; the next four underlie the practice of management.
1. Management is Business Management. In fact, management’s focus is much broader than business because, Drucker writes, the “growth sectors in the 20th century in developed countries have been in “nonbusiness” — in government, in the professions, in health and in education.” Today, he says, “management is the specific and distinguishing organ of any and all organizations” — and 90% of what managers do is the same no matter what kind of organization employs them.
2. There is — or there must be — ONE right organization structure. Organizations need structure just as all biological organisms need structure. But leaders should take a hint from biology. Just as an incredible variety of structures are needed for biological life to be successful in various environments, so too is a wide variety of structures needed to sustain organizational life. The best organizational structure is the one that best fits the organization’s mission. In fact, in large organizations, it’s often best to organize different departments in different ways, each best suited to accomplishing their respective tasks. For example, don’t expect accountants and artists to thrive in the same sort of structures and cultures.
3. There is — or there must be — ONE right way to manage people. Rubbish! It’s essential that different people are managed differently, depending on a host of variables related both to the worker and to the work. Even the same person has to be treated differently as they move from novice to master. In fact, especially with knowledge workers, the whole notion of “managing” people is obsolete. “One does not manage people. The task is to lead people,” Drucker writes.
4. Technologies, markets and end-uses are given. Technologies are becoming more generic, with broad applications across many economic sectors. Almost never is there one given end-use for any product or service. Indeed, innovation often involves finding new uses for what inventors considered failures. Just as end-uses cannot be assumed, neither can markets. Markets are more fluid and emergent than we generally imagine. People buy or accept something because they perceive value — but often they perceive value very differently than suppliers do. Listening and observing are critical activities.
5. Management’s scope is legally defined. The scope of management is not legal. “It has to be operational. It has to embrace the entire process. It has to be focused on results and performance across the entire economic chain,” Drucker says. Successful organizations today collaborate more deeply as they strive to bring value to the end-user — whether it’s person who is homeless or one who is buying a second home, whether its a patient without health insurance or the doctor treating her.
6. Management is internally focused. Management exists to deliver results — and those results always involve external factors. The focus of buying is cost and supply, two externalities. Selling is about externalizing goods and services. The ultimate end of all management — be it of businesses, universities, hospitals, churches or government agencies — is to have some sort of external impact. Internal matters are only means to an external end. The end for Christian organizations? “Go, therefore, and make disciples of all nations...” (Mat 28:19).
7. The economy as defined by national boundaries is the “ecology” of enterprise and management. It never was true for the Catholic Church. Now it’s not true for many other organizations of all types. “National boundaries are important primarily as restraints. The practice of management — and by no means for businesses only — will increasingly have to be defined operationally rather than politically,” Drucker says. We all know that business solutions tend to be ever more global in nature. But what about essential non-business considerations — like dealing with global warming or fighting a bird flu epidemic? We have to think globally because more than ever before our decisions have global implications.
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