In a moral society the public good must always rest on private virtue.
To make what is good for the country good for the enterprise requires hard work, great management skill, high standards or responsibility and broad vision. It is a counsel of perfection. To carry it out completely would require the philosopher's stone that can translate the basest element into pure gold. But, if management is to remain a leading group, it must make this rule the lodestar of its conduct, must consciously strive to live up to it, and must actually do so with a fair degree of success. For is a good, a moral, lasting society, the public good must always rest on private virtue. Every leading group must be able to claim that the public good determines its own interest. This assertion is the only legitimate basis for leadership; to make it a reality is the first duty of the leaders.
ACTION POINT: Make a list of three new products or services that have failed and will fail because you and your organization have ignored the public good.
Quoted from The Daily Drucker, January 23 , Page 25
Thursday, January 23, 2014
Wednesday, January 22, 2014
The Daily Drucker: January 22 - Economics as a Social Dimension
Keynes was interested in the behavior of commodities, while I was interested in the behavior of people.
I do not accept the basic premise on which economics as a discipline is based and without which it cannot be sustained. I do not accept that the economic sphere is an independent sphere, let alone that it is the dominant one. It is surely an important sphere. And as Bertolt Brecht said, " first comes the belly and then morality" - and filling the belly is what economics is all about in the main. I not only willing, but insist that in all political and social decisions the economic costs are calculated and taken into account. To talk only of the "benefits," I consider irresponsible and bound to lead to disaster.
But still, for me the economic sphere is one sphere rather than the sphere. Economic considerations are restraints rather than the overriding determinants. Economic wants and economic satisfaction are important but not absolutes. Above all, economic activities, economic institutions, economic rationality are means to non-economic (that is, human or social) ends rather than ends themselves. And this means that I do not see economics as an autonomous "science." In short, it means that I am not an economist - something I have known since, in 1934 as a young economist in a London merchant bank, I sat in the John Maynard Keynes seminar in Cambridge. I suddenly realized that Keynes was interested in the behavior of commodities, while I was interested in the behavior of people.
ACTION POINT: Before you finalize a major budget or strategic decision, set aside half an hour to make sure you have really considered the impact it will have on your people in your organization and on your customers.
Quoted from The Daily Drucker, January 22 , Page 24
I do not accept the basic premise on which economics as a discipline is based and without which it cannot be sustained. I do not accept that the economic sphere is an independent sphere, let alone that it is the dominant one. It is surely an important sphere. And as Bertolt Brecht said, " first comes the belly and then morality" - and filling the belly is what economics is all about in the main. I not only willing, but insist that in all political and social decisions the economic costs are calculated and taken into account. To talk only of the "benefits," I consider irresponsible and bound to lead to disaster.
But still, for me the economic sphere is one sphere rather than the sphere. Economic considerations are restraints rather than the overriding determinants. Economic wants and economic satisfaction are important but not absolutes. Above all, economic activities, economic institutions, economic rationality are means to non-economic (that is, human or social) ends rather than ends themselves. And this means that I do not see economics as an autonomous "science." In short, it means that I am not an economist - something I have known since, in 1934 as a young economist in a London merchant bank, I sat in the John Maynard Keynes seminar in Cambridge. I suddenly realized that Keynes was interested in the behavior of commodities, while I was interested in the behavior of people.
ACTION POINT: Before you finalize a major budget or strategic decision, set aside half an hour to make sure you have really considered the impact it will have on your people in your organization and on your customers.
Quoted from The Daily Drucker, January 22 , Page 24
Tuesday, January 21, 2014
The Daily Drucker: January 21 - Profit's Function
Today's profitable business will become tomorrow's white elephant.
Joseph Schumpeter insisted that innovation is the very essence of economics and most certainly of a modern economy. Schumpeter's Theory of Economic Development makes profit fulfill an economic function. In the economy of change and innovation, a profit, in contrast to Karl Marx's theory, is not a "surplus value" stolen from the workers. On the contrary, it is the only source of jobs for workers and labor income. The theory of economic development shows that no one except the innovator makes genuine "profit"; and the innovator's profit is always quite short lived.
But innovation, in Schumpeter's famous phrase, is also "creative destruction." It make obsolete yesterday's capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need. Thus, what the classical economist- or the accountant or the stock exchange - considers "profit" is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today's profitable business will become tomorrow's white elephant.
ACTION POINT: Insure that you are investing enough in innovation to prepare for the day when your profitable business becomes obsolete.
Quoted from The Daily Drucker, January 21 , Page 23
Joseph Schumpeter insisted that innovation is the very essence of economics and most certainly of a modern economy. Schumpeter's Theory of Economic Development makes profit fulfill an economic function. In the economy of change and innovation, a profit, in contrast to Karl Marx's theory, is not a "surplus value" stolen from the workers. On the contrary, it is the only source of jobs for workers and labor income. The theory of economic development shows that no one except the innovator makes genuine "profit"; and the innovator's profit is always quite short lived.
But innovation, in Schumpeter's famous phrase, is also "creative destruction." It make obsolete yesterday's capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need. Thus, what the classical economist- or the accountant or the stock exchange - considers "profit" is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today's profitable business will become tomorrow's white elephant.
ACTION POINT: Insure that you are investing enough in innovation to prepare for the day when your profitable business becomes obsolete.
Quoted from The Daily Drucker, January 21 , Page 23
Monday, January 20, 2014
The Daily Drucker: January 20 - Nature of man and Society
Every organized society is built upon a concept of the nature of man and of his function and place in society.
Whatever its truth as a picture of the human nature, this concept always gives the true picture of the nature of society, which recognizes and identifies itself with it. It symbolizes the fundamental tenets and beliefs of society by showing the sphere of human activity, which it regards as socially decisive and supreme. The concept of man as "economic animal" is the true symbol of societies of bourgeois capitalism and of Marxist socialism, which see in the free exercise of man's economic activity the means toward the realization of their aims. Economic satisfaction alone appear socially important and relevant. Economic position, economic privileges and economic rights are those for which man works.
ACTION POINT: What the socially supreme sphere in the US? How dos this effect you?
Quoted from The Daily Drucker, January 20 , Page 22
Whatever its truth as a picture of the human nature, this concept always gives the true picture of the nature of society, which recognizes and identifies itself with it. It symbolizes the fundamental tenets and beliefs of society by showing the sphere of human activity, which it regards as socially decisive and supreme. The concept of man as "economic animal" is the true symbol of societies of bourgeois capitalism and of Marxist socialism, which see in the free exercise of man's economic activity the means toward the realization of their aims. Economic satisfaction alone appear socially important and relevant. Economic position, economic privileges and economic rights are those for which man works.
ACTION POINT: What the socially supreme sphere in the US? How dos this effect you?
Quoted from The Daily Drucker, January 20 , Page 22
Sunday, January 19, 2014
The Daily Drucker: January 19 - The Purpose of Society
Society is only meaningful if its purpose and ideals make sense in terms of the individual's purpose and ideals.
For the individual there is no society unless he has social status and function. There must be a definite functional relationship between individual life and group life. For the individual without function and status, society is irrational, incalculable, and shape less. The "rootless" individual, the outcast - for absence of social function and status casts a man from the society of his fellows - sees no society. He sees only demoniac forces, half sensible, half meaningless, half in light and half in darkness, but never predictable. They decide about his and his livelihood without the possibility of interference of his part, indeed without the possibility of his understanding them. He is like a blindfolded man in a strange room playing a game of which he does not know the rules.
ACTION POINT: Make time to reach out to a "rootless" person who may be unemployed or retired. Drop them a note of support or take them out to lunch.
Quoted from The Daily Drucker, January 19 , Page 21
For the individual there is no society unless he has social status and function. There must be a definite functional relationship between individual life and group life. For the individual without function and status, society is irrational, incalculable, and shape less. The "rootless" individual, the outcast - for absence of social function and status casts a man from the society of his fellows - sees no society. He sees only demoniac forces, half sensible, half meaningless, half in light and half in darkness, but never predictable. They decide about his and his livelihood without the possibility of interference of his part, indeed without the possibility of his understanding them. He is like a blindfolded man in a strange room playing a game of which he does not know the rules.
ACTION POINT: Make time to reach out to a "rootless" person who may be unemployed or retired. Drop them a note of support or take them out to lunch.
Quoted from The Daily Drucker, January 19 , Page 21
Saturday, January 18, 2014
The Daily Drucker: January 18 - Society of Performing Organizations
"By their fruits ye shall know them"
Society in all the developed countries has become a society of organizations in which most, if not all, social tasks are being done in and by and organization. Organizations to do exist for their own sake. They are means: each society's organ for the discharge of one social task. The organization's goal is the specific contribution to the individual and society. The test of its performance, unlike that of a biological organism, therefore, always lies outside itself. This means that we must know what "performance" means for this institution.
Each institution will be the stronger the more clearly it defines its objectives. It will be more effective the more yardsticks and measurements there are against which its performance can be appraised. It will be more legitimate the more strictly it bases authority on justification by performance. "By their fruits ye shall know them" - this might well be the fundamental constitutional principle of the new pluralist society of institutions.
ACTION POINT: Are your performance yardsticks appropriate to your objectives?
Quoted from The Daily Drucker, January 18 , Page 20
Society in all the developed countries has become a society of organizations in which most, if not all, social tasks are being done in and by and organization. Organizations to do exist for their own sake. They are means: each society's organ for the discharge of one social task. The organization's goal is the specific contribution to the individual and society. The test of its performance, unlike that of a biological organism, therefore, always lies outside itself. This means that we must know what "performance" means for this institution.
Each institution will be the stronger the more clearly it defines its objectives. It will be more effective the more yardsticks and measurements there are against which its performance can be appraised. It will be more legitimate the more strictly it bases authority on justification by performance. "By their fruits ye shall know them" - this might well be the fundamental constitutional principle of the new pluralist society of institutions.
ACTION POINT: Are your performance yardsticks appropriate to your objectives?
Quoted from The Daily Drucker, January 18 , Page 20
Friday, January 17, 2014
The Daily Drucker: January 17 - Management: The Central Social Function
Non-economic institutions need a yardstick that does for them what profitability does for business.
Non-business institutions flock in increasing numbers to business management to learn from it how to manage themselves. The hospital, the armed service, the Catholic diocese, the civil service - all want to go to school for business management.
This does not mean that business management can be transferred to the other , non-business institutions. On the contrary, the first thing these institutions have to learn from business management is that management begins with the setting of the objectives and that, therefore, non-economic institutions, such as a university or a hospital, will also need very different management from that of a business. But these institutions are right in seeing business management as a prototype. Business, far from being exceptional, is simply the first of the species and the one we have studied most intensively. Non-economic institutions need a yardstick that does for them what profitability does for business. "Profitability," in other words, rather than being the "exception" and being distinct from "human" or "social" needs, emerges, in the pluralist society of organizations, as the prototype of measurement needed by every institution in order to be managed and manageable.
ACTION POINT: What is the most important non-business institution with which you are associated? Does it use a specific yardstick to assess performance? How successful is the organization?
Quoted from The Daily Drucker, January 17 , Page 19
Non-business institutions flock in increasing numbers to business management to learn from it how to manage themselves. The hospital, the armed service, the Catholic diocese, the civil service - all want to go to school for business management.
This does not mean that business management can be transferred to the other , non-business institutions. On the contrary, the first thing these institutions have to learn from business management is that management begins with the setting of the objectives and that, therefore, non-economic institutions, such as a university or a hospital, will also need very different management from that of a business. But these institutions are right in seeing business management as a prototype. Business, far from being exceptional, is simply the first of the species and the one we have studied most intensively. Non-economic institutions need a yardstick that does for them what profitability does for business. "Profitability," in other words, rather than being the "exception" and being distinct from "human" or "social" needs, emerges, in the pluralist society of organizations, as the prototype of measurement needed by every institution in order to be managed and manageable.
ACTION POINT: What is the most important non-business institution with which you are associated? Does it use a specific yardstick to assess performance? How successful is the organization?
Quoted from The Daily Drucker, January 17 , Page 19
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