Peter F. Drucker - The Executive in Action: Three Drucker Management Books on What to Do and Why and How to Do It

CONTENTS

There are many How-to-Do-It management books; few, however, tell the executive what to do, let alone why. There are equally a great many What-to-Do management books; but few of them tell the executive how to do it. Yet treatment without diagnosis is as useless as diagnosis without treatment. In any practice the two go togetherand Management is a Practice.

The three books of mine, here brought together in one volume, embrace the three dimensions of the successful practice of management:

Managing the Existing BusinessManaging for Results

Changing Tomorrows BusinessInnovation and Entrepreneurship

Managing OneselfThe Effective Executive

Each of these three books is distinct and self-contained. Yet in the executives work the three are always joined. Managing the Existing Business is the first day-to-day task no matter how clear the executives vision; no matter how brilliantly he or she plans for the future and innovates, todays business has to be managed for results now or there will be no tomorrow. What knowledge is needed for that job? What actions have to be taken? What pitfalls to be avoided? And what results shouldperhaps mustbe attained?

Conversely, the seemingly most successful business of today is a sham and a failure if it does not create its own and different tomorrow. It must innovate and re-create its products or services but equally the enterprise itself. Business is societys change agent. All other major institutions of society are designed to conserve if not to prevent change. Business alone is designed to innovate. No business will long survive, let alone prosper, unless it innovates successfully. And neither innovation nor entrepreneurship are inspiration, let alone flash of genius. They are disciplines and require concepts, tools, and organized, systematic work.

Finally, no matter how brilliant individual executives are or how hard they work, they will be failures and their efforts will be futile unless they are effective. It is not so terribly difficult to be an effective executive. All it requires are a few habitsthat is, doing a few things day in and day out and not doing a few other things. Yet few of the many executives with whom I have worked over more than fifty years were truly effective. They were mostly very bright, worked mostly very hard, yet had little to show for their ability, their knowledge, their hard work. The reason is simply that the modern organizationand with it executives in significant numbersonly emerged a little over a century ago and the human race is a slow learner.

To be sure, there have been naturals throughout human history. The most effective executive on record of whom we have any information was surely that minister of an ancient Egyptian pharaoh who, all of 4250 years ago, conceived the first pyramid (without any precedent whatever for such an edifice) designed it and built itand it still stands today without once having to be re-engineered. And he did so without any management books to help him and surely without having an MBA. But we need far too many effective executives to depend on geniuses. And then there is need for a disciplinethe discipline for being an effective executive.

Together these three books should enable executiveswhether high up in the organization or just beginning on their careerbut also those men and women who are studying today to become executives tomorrow:

to know the right things to do;

to know how to do them; and

to do them effectively.

Together these three books provide The Tool Kit for Executive Action.

E CONOMIC T ASKS AND R ISK - TAKING D ECISIONS

Contents

Managing for Results was the first book to address itself to what is now called business strategy. It is still the most widely used book on the subject. When I wrote it, more than twenty years ago, my original title was, in fact, Business Strategies. But strategy in those days was not a term in common usage. Indeed, when my publisher and I tested the title with acquaintances who were business executives, consultants, management teachers, and booksellers, we were strongly advised to drop it. Strategy, we were told again and again, belongs to military or perhaps to political campaigns but not to business.

By now, of course, business strategy has become an in term. Yet in retrospect I am glad we changed the title. To be sure, Managing for Results may be less sexy. But it is far more descriptive of what this book tries to do. Above all, it expresses the books premise: businesses exist to produce results on the outside, in the market and the economy. On the inside there are only costs. Indeed, what are commonly called profit centers are as a rule really cost centers. Managing for Results therefore begins with an analysis of what the book calls business realitiesthe fundamentals and constants of the outside environment, the things the business executive has to consider as givens, as constraints, as challenges. And it proceeds to discuss how a business positions itself in respect to these realities to convert them into opportunities for performance and results.

This explains, I believe, why this book, after twenty years, is still far more comprehensive than books on strategy alone. It pioneered practically everything to be found in these books: the analysis of markets and products (it contains the first classification of productstodays breadwinner, for instance); the organized abandonment of the old, the obsolete, the no-longer productive; the rewards for leadership; and the objectives of innovation. But it alsoand in this it still stands aloneshowed how to analyze the environment and how to position a business in it. It was the firstand by and large it still is the onlybook to try to balance managing todays business with making the business of tomorrow. And it concludes by linking business as an economic institution measured by economic results and business as a human organization. The last chapter deals with building performance into the organization. The book thus was the first to attempt an organized presentation of the economic tasks of the business executive managing a business organization.

Above all, as the introduction states, this book took the first step toward a discipline of economic performance in business enterprise. Never has such a discipline been needed more than it is today, when the economic, social, technological, and political environments in which businesses live and operate are changing faster than ever before, and when every business therefore needs to ask the questions which this book raises and answers: What are the realities of this business? What are its result areas? How are we doing? and What is this business and what should it be?

Claremont, California
Thanksgiving Day, 1985

This book owes much to the editorial assistance given by my wife, Doris, and by my friend, Hermine Popper. Each read the manuscript several times and at several stagesfor sense and sequence as well as for style, diction, and sentence structure. Their sensitivity to a misplaced thought and their intolerance of a misplaced word are in large measure responsible for whatever clarity, conceptual or textual, this book possesses. I am all the more grateful for their help as both interrupted urgent and important work of their own to read and edit Managing for Results.