BUSINESSWEEK ONLINE : JUNE 7, 1999 ISSUE
BOOKS

The Power of Cosmic Thinking


MANAGEMENT CHALLENGES FOR THE 21st CENTURY
By Peter F. Drucker
HarperBusiness 207pp $27.50

Can you name the most important American social development of the past 30 years? According to management-theory maverick Peter F. Drucker, it's not the emergence of the computer or the breaking of the traditional bond between employee and employer. Instead, it's the rise of new ''mega-churches,'' which have won thousands of adherents as more traditional organizations have declined. The mega-church, argues Drucker, appeals to the nonchurchgoer by providing a spiritual and communal experience rather than a ritualistic one. Its success comes from understanding why people weren't going to church and appealing to that unserved customer.

Until you read Drucker's latest offering, Management Challenges for the 21st Century, you may not think managers can learn much from ministers. But management, argues the octogenarian Drucker, is not simply a business concern: It's a consideration for all groups, from the surgical unit to the corporate behemoth. Moreover, as we end the millennium, he says, most commonly accepted management ideas are inadequate for the changes sweeping the world. Therefore, if we must borrow more from the church than the B-school to create a workable new management structure, then so be it.

Drucker's intent is to get managers to rise above their daily worries and think in more cosmic terms. In large part, he succeeds. In the strong, clear prose we have come to expect from him, Drucker explains why management practices as we know them--along with many of his own theories--have lost their utility, what global events are behind this, and, lastly, how individuals can try to manage themselves in the years to come.

Start with the organization. Although most have used a classic command-and-control structure for the better part of this century, we can no longer assume this is appropriate. In a world of knowledge workers (a term coined by Drucker some 30 years ago), in which a young software engineer knows more about his product than his manager, management must flow in two directions. The boss is as dependent on gleaning wisdom from employees as they are on the boss's knowhow. Yet that doesn't mean all organizations must turn to ''politically correct'' teams. Drucker says the current emphasis on teams may fail--not because they're a bad idea, but because power continues to flow from the top. ''We talk incessantly about teams,'' he says. ''Yet we now practice--and not only in American industry--the most extreme personality cult of CEO supermen.''

Strategy, too, is due for an overhaul, he says, as a result of societal changes that managers rarely consider. Economic globalization, for instance, is proceeding--just as many of the world's political and ethnic groups become more fractious. Business should respond, he believes, by depending less on mergers and more on alliances that are flexible enough to survive in both a unified global economy and a fragmented political world.

The most important global shift, he thinks, is the decline in most developed countries' birthrates, to around two live births per woman of childbearing age. The resulting worker shortage, he says, will lead to a huge tide of immigration, with its obvious disruptions, and to a leap in the retirement age, to about 79. How, then, to manage older employees, who are neither temps nor full-timers, who have lots of wisdom about the company but aren't on the fast track? Current models don't address this development. Regrettably, Drucker does not come up with an action plan here, but he does ask the questions that should set us on our way.

A chapter on change management begins with the plain-and-simple assertion that it just can't be managed--that one can only strive to stay ahead of events. That's bad news for consultants, who currently are minting money by convincing clients that they can control change. Drucker does, however, provide some common sense on what not to do when trying to change your organization: Don't confuse novelty with innovation, don't confuse motion with action, and be sure to ''pilot,'' or test out new ideas first on a small scale. Amid today's market frenzy, that advice is going largely unheeded, as managers race to take their companies public before their ideas have been fully tested.

It's worth noting that Drucker himself has piloted some of this book's material, excerpting portions in Forbes, the Harvard Business Review, and the California Management Review and later using feedback to rework them. That may have helped him clarify his thoughts, but it is disappointing to those who may have expected completely fresh material.

Finally, Drucker narrows his focus, turning from the organization to the knowledge worker. Individuals are living longer and the corporation's life span is decreasing. Since that makes it likely that employees will ''outlive'' their companies, they must also learn to manage themselves. In the post-downsizing world, the concept is hardly revolutionary. Still, Drucker provides helpful and specific advice. For example, figure out whether you are a ''reader,'' someone who needs to read material to comprehend it, or a ''listener,'' one who must hear that information first. No, this is not the grandiose stuff we expect from Drucker. But the tips help humanize some of the vast concepts in this powerful book--an accomplishment that's sadly out of the reach of most management writers.

BY JENNIFER REINGOLD
Reingold covers management.

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PHOTO: Cover, ``Management Challenges for the 21st Century''



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