Managing Leadership^®

We’ve been looking, over the past few days, at some of Peter Drucker’s ideas about organizational design. The main lesson of his thinking is in his drive to first principles, and to his relentless effort to understand what we ought to be doing and why, and only then to turn to how we organize ourselves to do it.

While he had a lot to say on this general subject, we will close this topic out, today, with a look at how he conceptualized the sorts of things that organizations do, and how the nature of those things can be used to help us more effectively design them.

Generally, Drucker believed that contribution analyses inevitably reveal four basic classes of activities within an organization. These are result-producing, support, hygiene or housekeeping, and top-management activities. Most of us are familiar with various ways of viewing these, but Drucker had an interesting subcategory of the support type that is of special interest, here. He called its contents “conscience” activities.

Support activities are those that, while necessary, do not in and of themselves produce results that contribute measurably to organizational performance. “Conscience” activities are in this category because while their contribution to end results can’t be measured, they are necessary – even vital. These are the functions of establishing vision and standards, and the means to ensure the expression of these in the organization.

Drucker stressed that these activities are so key that they should be neither subordinated nor combined with any other activity. As a result of their nature and importance, he viewed them as a top-management function. They include everything from strategy to managing people to community responsibilities. Certainly, all of management as a group needs to concern itself with these. But it is essentially a one-person job – rather than that of a staff or department – and its performance best terminates, or originates, in a single individual.

Does that make sense to you? Who do you suppose that individual ought to be? Can a CEO delegate something like this?

On the other hand, is it really a management job – top or otherwise – at all? Doesn’t it more appropriately belong to the board of directors? Indeed, might not this “conscience” activities category be further broken up into those most appropriately assigned to ownership (such as vision and strategy) and those to management (such as management of people and marketing)?

What do you think?

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Today’s tip: Please see this piece from The Economist for an interview with a CEO that suggests many of the good reasons for developing (and hiring) internal talent for this position.

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