Peter Drucker on the New Knowledge Manager

Peter Drucker (1909–2005) was born in Vienna, and moved to the United States after the rise of the Nazis to power in the 1930s. After the Second World War, he taught at New York University and Claremont Graduate University, becoming one of the world’s foremost management theorists. Drucker describes the task of managing knowledge in today’s ‘knowledge organisations.’

When I first began to study management, during and immediately after World War II, a manager was defined as ‘someone who is responsible for the work of subordinates’. A manager, in other words, was a ‘boss’, and management was rank and power … But by the early 1950s, the definition had already changed to ‘a manager is responsible for the performance of people’. Now we know that this also is too narrow a definition. The right definition is ‘a manager is responsible for the application and performance of knowledge’.

Knowledge is now fast becoming the one factor of production, sidelining both capital and labour … This change means that we now see knowledge as the essential resource. Land, labour and capital are chiefly important as restraints. Without them even knowledge cannot produce. Without them even knowledge cannot perform. Where there is effective management, that is, application of knowledge, we can always obtain the other resources. That knowledge has become the resource, rather than a resource is what makes our society ‘post-capitalist’. It changes, fundamentally, the structure of society. It creates new social dynamics. It creates new economic dynamics. It creates new politics.

Political and social theory, since Plato and Aristotle, has focused on power. But responsibility must be the principle which informs and organizes the post-capitalist society. The society of organizations, the knowledge society, demands a responsibility-based organization.

In knowledge work the organization is increasingly composed of specialists. Each of them knows more about his or her own speciality than anybody else in the organization. The old-type organization assumed that the superior knew what the subordinate was doing. For the superior, only a few years earlier, had occupied the subordinate’s position. The knowledge-based organisation has to assume, however, that superiors do not know the job of their subordinates … The knowledge-based organization therefore requires that everyone take responsibility for objectives … This implies that all members of the organization think through their objectives and their contribution and take responsibility for both. It implies there are no ‘subordinates’; there are only ‘associates’.

There is a great deal of talk today about ‘entitlement’ and ‘empowerment’. These terms express the demise of the command and control-based organization. But they are as much terms of power and terms of rank as the old terms were. We should instead be talking about responsibility and contribution.

The organisation of the post-capitalist society of organisations is a destabiliser. Because its function is to put knowledge to work—on tools, processes and products; on work; on knowledge itself—it must be organised for constant change … It must be organised for the systematic abandonment of the established, the customary, the familiar, the comfortable, whether products, services and processes, human and social relationships, skills or organisations themselves … [E]very organisation of today has to build into its very structure the management of change. It has to build in organised abandonment of everything it does.

Drucker, Peter F. 1993. Post-Capitalist Society. Oxford: Butterworth Heinemann. Pp. 40, 18, 40–41, 88, 97–98, 99, 51, 53. || Amazon || WorldCat