Managing Leadership^®

Peter Drucker, in Management: Tasks, Responsibilities, Practices, addressed the issue of management in two general ways. He began with the fundamental purpose and tasks of management, which we will briefly cover today. He then discussed the responsibilities and practices of managers, which we will go over in the next few posts.

The first, and primary, task of management is to pursue the organization’s purpose and mission:

Business management must always, in every decision and action, put economic performance first. It can justify its existence and its authority only by the economic results it produces. A business management has failed if it fails to produce economic results.”

The best way for management to stay out of trouble, when considering any decision in any other realm including those outlined below, is to make sure that the decision can unmistakably be assessed as contributing directly or indirectly to the economic performance of the firm. (For non-commercial enterprises, the social, military, governmental, or other purpose can be inserted for “economic performance.”) This includes everything from maintaining current operations to preparing for the future and developing strategies for dealing with both.

The next task, following from this, is to be able to generate productive work from the “one true resource” of the organization; its people:

Organizing work according to its own logic is only the first step. The second and far more difficult one is making work suitable for human beings - and their logic is radically different from the logic of work. . . . Management, and management alone, can satisfy these requirements.”

This is a direct appeal to managers that human resources are the fundamental asset of the firm, and will decidedly not perform at their best - which it is management’s job to help them do - if they are treated as though they are just as mechanically interchangeable as the firm’s non-human resources. Much of the nonsense written today about self-referential leaders needs to be put into the context that this management task suggests. It is a job of management, not a special breed of person, and it is subordinate to the purpose of the organization, it does not transcend it any more than the putatively unique “leader” does (as many writers mistakenly insist is the case).

Finally, comes “managing the social impacts and the social responsibilities of the enterprise.”

None of our institutions exists by itself and is an end in itself. Every one is an organ of society and exists for the sake of society. Business is no exception. . . . every one of our institutions today exists to contribute outside of itself, to supply and satisfy nonmembers. Business exists to supply goods and services to customers, rather than to supply jobs to workers and managers, or even dividends to stockholders. . . . For management to forget this is mismanagement.”

This is not a call for the sort of arbitrary “corporate citizenship” that many wish to impose on business, today. It is a fiduciary responsibility that must be managed in a manner that is consistent with the primary task of contributing to the economic performance of the firm.

There are no roles here for “edge-walkers,” “change agents,” nor for “Karma Capitalists” - and certainly not for “leaders.” Just for managers. We’ll take a closer look at Drucker’s take on them, next.

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Please be sure see all the posts in this series!

1. Marketing Management
2. Defining Management
3. Understanding what we do
4. Understanding who we are
5. Faith or deeds?
6. Doing “certain - and fairly simple - things”
7. The fundamental requirements
8. The basic resource of the business enterprise
9. Making tasks meaningful
10. Making it matter
11. Setting the rules
12. Book Review: Management: Tasks, Responsibilities, Practices

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