Making Knowledge Workers More Productive Insights From The Works Of Peter F. Drucker

Making Knowledge Workers
More Productive: Insights
from the Works of Peter F.
Drucker
PEX Network Article Compilation

Making Knowledge Workers More Productive: Insights from the Works of Peter F. Drucker

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INTRODUCTION
"Making knowledge workers productive requires changes in attitude,
not only on the part of the individual knowledge worker, but on the
part of the whole organization." – Peter F. Drucker

Companies have a vested interest in increasing the productivity of their workforce.
Increased productivity means the ability to do more without increasing headcounts.

But it means something more––much more. Knowledge workers put knowledge to
work.

Knowledge workers can be doctors, robotic repair people, sales managers,
maintenance managers, quality specialists, market researchers, graphic artists and
the like. The list is virtually endless given the composition of today's knowledge-
based workforce.

Let's be clear here. Information is not knowledge. Only if information is put to work
can it become KNOWLEDGE. Perhaps Oscar Hammerstein said it best: “A Bell is not a
bell 'till you ring it, a song is not a song,' till you sing it.”

Information must be applied to specific work and performance for it to be classified
as knowledge. It must be mentioned––indeed, emphasized––that only human beings
with their brains and/or the skill of their hands can convert information into
knowledge.

Wealth creation results if knowledge workers do the right things and do them right.
In other words, the right knowledge properly applied by human beings creates
wealth.

Translated, this means that knowledge workers (which are completely different than
manual workers) must be made more productive. Only by making knowledge
workers more productive––as you'll learn from the selected articles––can inflation be
controlled and wealth created for organizations and society.

Peter F. Drucker taught us much about managing knowledge work. He provided us
with a framework for being able to think through thoughtfully and thoroughly what
must be done and how to do it.

In this PEX Network article compilation, colleagues, and students of Peter F. Drucker,
share their thoughts on what the “master of management” thought about the keys
to making knowledge workers more productive.

A special thank you to Dr. Robert W. Swaim and Dr. William F. Cohen for their
contributions to this report.

www.pexnetwork.com www.pexweek.com


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CONTENTS

Introduction ................................................................................................................................ 0

A New Emphasis on Productivity Improvement ......................................................................... 4

Getting Down to Busy-ness: Knowledge Workers Are Less Productive than Ever.................... 11

Abandoning the Obsolete and Unproductive: A Difficult but Necessary Task.......................... 30

The Secret to Achieving More with Less - The Pareto Principle in Action ................................ 34

The Demotivation Trap and What You Can Do About It ........................................................... 42

5 Global “Certainties” You Can’t Afford to Ignore .................................................................... 52

About the Authors .................................................................................................................... 56

Learn more about Productivity Enhancement Through Lean Six Sigma & BPM ....................... 57



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“The most valuable assets of the 20th-century
company were its production equipment. The most
valuable asset of a 21st-century institution, whether
business or non-business, will be its knowledge
workers and their productivity.”
- Peter F. Drucker



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A NEW EMPHASIS ON PRODUCTIVITY
IMPROVEMENT
From the Editorial Staff at Process Excellence Network

Published 6 April 2009

Productivity improvement
will be a major challenge
and concern in the years
just ahead.

Productivity, as we've all
heard a good many times by
now, is the key to managing
the inflation many believe
will occur because of the
government's well-intended
(but questionable) economic policies.

To have price stability, wages must not rise faster than productivity. A simple
equation, formulated by C. Jackson Grayson Jr, former pricing commissioner/czar
during the Nixon administration, explains this quite well:

[Wages — Productivity Increases = Price Increases]

For example, if wages increase by 10 percent and productivity increases by 3 percent,
then the price increase would be 7 percent.

If wage increases gallop at a significantly faster rate than productivity, price inflation
will occur.

We expect we will soon be hearing about gearing wages to productivity improvement
guidelines. Unfortunately, many economists believe this never works.

One scenario predicted by several leading economists claims that using government
spending to stimulate consumption is a sure-fire recipe for inflation. It will lead to too
much money chasing too few goods and services.

Once the inflation starts—if, indeed it does—people will demand higher wages to
keep up with the increasing cost of living. If wages increase faster than productivity
increases, hyper-inflation is a possibility.



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The only way our society will be able to maintain or enjoy a comfortable, let alone
rising, standard of living is if managers in all enterprises solve the productivity puzzle.
This is not an easy task.

MANAGING PRODUCTIVITY

Making resources productive is the specific job of management, as distinct from the
other jobs of the "manager”: administration and entrepreneurship.

The world knows that Peter Drucker was the greatest management thinker of the last
century. His story is a story of management itself.

According to Drucker, it is only managers—not nature or laws of economics or
governments—that make resources productive.

Resources can be made productive in the individual plant or enterprise, the individual
store, the individual hospital, the individual office, the individual research and
development lab and the individual port.

They are made productive—or deprived of productivity—by individual managers
within their own individual spheres of responsibility.

PRODUCTIVITY IMPROVEMENT THROUGH INNOVATION

Thanks to Drucker we now know quite a bit about productivity improvement. We
know that it is, in part, achieved by innovation—the shifting of resources from old
and declining employments to new and more productive ones.

Organizations must be able to systematically identify emerging opportunities and
develop the structures required to make the new and different happen.

In his book Innovation and Entrepreneurship (Harper & Row,1985), Drucker
definitively described what must be done and how to do it with respect to making
innovation an acquired organizational skill.

But—and this is a big but—organizations must be able to get rid of yesterday's tasks
and free their energies and resources for new and more productive tasks.
Abandonment is a prerequisite for innovation and change.

"If an organization wants to be able to work on opportunities, it must be able to
abandon the unproductive and slough off the obsolete," Peter Drucker said.



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No organization that purposely and systematically abandons the unproductive and
obsolete ever wants for more productivity improvement opportunities. Ideas are
always around in profusion.

The key, said Drucker, is to convert them into doing. Lack of creativity is, therefore,
not the problem of today's organization. Rather it is organizational inertia which
always pushes for continuing what we are already doing.

Drucker left no doubt that existing organizations must know how to organize for
innovation. Otherwise the ongoing business will squash newness of more than a
trivial dimension.

Internal entrepreneurship will be a major trend in most organizations. It is mission-
critical if organizations want to leverage productivity improvement opportunities. But
internal entrepreneurship requires systematic, organized, purposeful management.

Innovation within an existing organization is a device for moving scarce and
expensive resources from areas of low productivity and non-results to opportunities
for achievement and contribution.

MAXIMIZING PRODUCTIVITY IMPROVEMENT THROUGH
CONTINUOUS IMPROVEMENT

In addition to innovation, productivity is increased through the continuous
improvement of the productivity of resources in existing deployments. Six Sigma
advocates speak prescriptively of kaizen, or continuous improvement.

Trying routinely to get better one step at a time is a far better way to improve than
shooting constantly for the big payoff. Major leaps into sudden business success are
very rare.

Sustained success is largely a matter of focusing on streamlining and re-engineering
existing processes. Getting better and better one process at a time leads to greater
productivity improvement over time.

PRODUCTIVITY IMPROVEMENT VIA TECHNOLOGY

Technology can increase productivity if appropriately applied. Technology does not
necessarily mean spin-offs from "science and engineering."

Techne, Peter Drucker reminded us, is the Greek word from which "technology”
derives and means "useful knowledge," or "organized skill," rather than engineering.



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The substitution of capital-intensive technology for labor-intense activities in many
instances can help productivity improvement. But in certain areas such as health
care, more capital-intensive equipment usually requires more skilled technologists to
operate the equipment.

Translated, this means the substitution of capital for labor does not necessarily
increase output or productivity and simultaneously lower costs.

In many instances, it just increases the quality of the output with a corresponding
increase in costs.

Using a broader definition of technology, that is, "useful skill," points to the direction
of more job-focused training. New and better skills must be continually acquired by
today's labor force.

Organizations will have to upgrade the skills of their employees and/or find more
talented employees to accommodate changing strategies. Organizations need people
who can work smarter.

People will have to spend more time at their jobs away from their offices and labs
attending conferences, seminars and short courses at universities and colleges.
Further, they will have to spend more time when in the office taking webinars, virtual
conferences and exchanging information with peers on social networks.

Indeed, acquiring and successfully applying useful knowledge to productive work is
probably one of the best solutions for productivity improvement.

MANAGING THE KNOWLEDGE WORKER FOR INCREASED
PRODUCTIVITY

Making the knowledge worker productive requires more than training and
information acquisition. It requires knowing the factors that determine knowledge
worker productivity.

What follows provides a more comprehensive viewpoint of how to manage and
maximize knowledge worker productivity.

Peter Drucker listed six key factors that determine knowledge worker productivity.
These are:

1. Knowledge worker productivity demands that we ask the question: “What is
the task?”



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2. It demands that we impose responsibility for their productivity on the
individual knowledge worker themselves. Knowledge workers have to
manage themselves. They have to have autonomy.

3. Continuing innovation has to be part of the work, the task and the
responsibility of knowledge workers.

4. Knowledge work requires continuous learning on the part of the knowledge
worker, but equally continuous teaching on the part of the knowledge
worker (to facilitate the sharing of best practices).

5. Productivity of the knowledge worker is not—at least not primarily—a
matter of quantity of output. Quality is at least as important.

6. Finally, knowledge worker productivity requires that knowledge workers are
both seen and treated as an "asset" rather than a "cost." It requires that
knowledge workers want to work for the organization in preference to all
other opportunities.

Each of these are requirements that were noted by Drucker, except perhaps the last
one—is almost the exact opposite of what is needed to increase the productivity of
the manual worker.

In knowledge work quality is the essence of the output. For example, in appraising
the performance of, say, surgeons in a given hospital, the question of how many
patients has he/she operated on is quite secondary to the question of how many
truly successful outcomes has she achieved?

Knowledge worker productivity, Drucker repeated again and again, has to aim first at
obtaining quality—and not minimum quality. Maximum quality.

Only then, can one ask: "What is the volume, the quantity of work?"

In essence, when managing the knowledge worker, a rigorous operational definition
of quality must be established. What results are expected?

Finally, Drucker thought the most crucial question in knowledge worker productivity
is the first one: “What is the task?”

In manual work, the key question is always: "How should the work be done?" In
manual work the task is always given.

The first requirement in tackling knowledge worker productivity is to find out what
the task is so to make it possible to concentrate the knowledge worker on the task
and to eliminate everything else.



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CONCLUSION

Productivity is the key to managing inflation. To have price stability, wages must not
rise faster than productivity.

Whether it is recognized or not, many practices for productivity improvement are
derived largely from the thinking of Peter Drucker. His teachings form a blueprint for
every thinking manager.

Read the original article here: A New Emphasis on Productivity Improvement



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"When a cynic asks, 'What if we train them and they
leave?' winning organizations respond: 'what if we
don't train them and they stay?'"
- Peter F. Drucker



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GETTING DOWN TO BUSY-NESS:
KNOWLEDGE WORKERS ARE LESS
PRODUCTIVE THAN EVER

Contributor: Robert W. Swaim

Published 29 March 2011

Knowledge is now the main
product of advanced economies
and the livelihood of the largest
group of the population in
developed countries. But how do
you measure and improve the
productivity of knowledge
workers, asks columnist Dr.
Robert Swaim, when you cannot
readily observe what they are
doing?

Peter Drucker coined the term
“knowledge workers” over forty
years ago and wrote the
following in his book,
Management Challenges for the 21st Century:

“The most valuable assets of the 20th-century company were its production
equipment. The most valuable asset of a 21st-century institution, whether business
or non-business, will be its knowledge workers and their productivity.” Peter F.
Drucker

This article addresses the following questions and Drucker’s views with respect to
knowledge and manual workers:

 What is the difference between “Manual Workers” and “Knowledge
Workers”?



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 Why has the productivity of manual workers dramatically increased during
the 20th century, while productivity of knowledge workers has decreased?

 What are the characteristics of knowledge workers, their job needs, what
motivates them, and how to lead, not manage them?

 How do you increase the productivity of knowledge workers and why this is
important?

“Manual Workers” are those who essentially work with their hands, operate
machines, assemble parts, etc. and are generally involved in the manufacture of a
tangible product. The task of what they are to do is given, including the tools and
equipment to use, with the focus on how to do it and to do things right, or efficiency.
If manual workers leave the organization, the tools they used to perform their work
generally remain behind with the organization. This may differ where certain trades
require the craftsman to furnish their own tools such as in home building, but rare in
most other cases such as an automobile manufacturing plant.

In knowledge work the task of what to do is controlled by knowledge workers, they
own the means of production (knowledge not machines), they decide what methods
and steps to use, and they focus on what to do and to the right things or
effectiveness. When they leave an organization, they take the tools with them –
knowledge.

Drucker identified another group that is in between both the manual worker and the
knowledge worker, the “Technologist.” This is someone who may work with their
hands but requires special knowledge, training, and skills to perform their work. As
an example, an X-Ray technician in the hospital, the dental assistant who cleans your
teeth, the Xerox service representative who repairs the copier and so forth.

Drucker felt this group was becoming the largest of the three but did not really focus
on them in his discussions of the knowledge worker. He did acknowledge that
technologist have to be treated as knowledge workers and that although the manual
work of their job may comprise the majority of their time, the focus has to be on
making the technologist knowledgeable, responsible, and productive as a knowledge
worker. In that regard, much of what is contained in this article would also apply to
the technologist, and I suggest, might also apply to most of today’s workforce other
than perhaps the pure laborer digging a trench.



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THE PRODUCTIVITY ACHIEVEMENTS OF MANUAL
WORKERS
In the 20th century,
organizations and management
experts focused on increasing
the productivity of “Manual
Workers.” As a result, according
to Drucker, there was a fifty-fold
increase in the productivity of
the manual worker due to the
contribution of the early
Classical School management
theorist, Fredrick Taylor
(Scientific Management) in the early 1900’s, and later in the century, by other
contributors, such as Edward Deming (statistical quality control and quality
management). As recently as the 1960s, almost fifty percent of all workers in
industrialized countries were involved in making things or helping to make things.

Today however, less than twelve to seventeen percent of the employees in
developed countries are involved in manual work – making things with their hands. In
1950, seventy three percent of employees in the United States worked in production
or manufacturing while now less than fifteen percent do. This decrease was not
created by globalization and the exporting of jobs by multinational companies to
China and other low labor-cost countries as many in the U.S. Congress argue for the
benefit of their labor union constituencies who are few in number but vocal.

It has largely been the direct result of the productivity gains in manual work as
mentioned here.

Also, farmers were the backbone of most economies a century ago – not only in the
numbers of people employed, but also in the value of what they produced. Now, in
developed countries, few people are involved in farming work. As an example, in the
1900’s, eighty five percent of the United States workforce was employed in
agriculture. Now only three percent of the U.S. workforce is employed in agriculture
and most likely are illegal Mexicans, while in the world’s second largest economy,
approximately thirty one percent of the Chinese population is still involved in farming
today.



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KNOWLEDGE WORK, KNOWLEDGE WORKERS AND
PRODUCTIVITY
Knowledge work and the
knowledge worker
produce a different type
of product, such as a new
computer software
program, a design for a
new product, market
research studies as to
what opportunities the
organization should
pursue, etc. Typically, the
output of a knowledge
worker is someone else’s input and information for management decision-making.
Knowledge workers are “specialists” in their own fields, and typically know more
about their field than the managers they work for, which is why they are knowledge
workers. This presents another challenge for the manager, how to manage someone
who knows more about the job than you do?

In the 21st century organization and economy, there are now more knowledge
workers than manual workers. Knowledge is now the main product of the advanced
economy and the livelihood of the largest group of the population in developed
countries. Increasingly, knowledge is the key factor in a country’s international
economic strength and managers need to understand how to lead and increase the
productivity of knowledge work.

Alvin Toffler in his book Revolutionary Wealth (2006) discusses three waves or
movements. The first being the early transition from hunters to agriculture, the
second from agriculture to industrialization, and now the third wave from
industrialization to knowledge. Some developing nations such as China face the
challenge of transitioning in two waves at the same time, from agriculture to
industrial to absorb the over one hundred and fifty to two hundred million floating
unemployed migrant workers from the rural areas of China, and from industrial to
knowledge as China attempts to keep pace with the developed world in technological
achievements.



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HOW CAN YOU MEASURE AND INCREASE THE
PRODUCTIVITY OF KNOWLEDGE WORK?
According to Drucker, “Where
manual worker productivity has
dramatically increased, the
workers has been decreasing and
the problem has not been
addressed.” The question is how
to measure and improve the
workers when you really cannot
observe what they are doing, as
in the case of manual workers?
Are they looking out the window
at the birds, or are they creating a new product design? Drucker commented, “In
terms of actual work on knowledge worker productivity we are, in the year 2000,
roughly where we were in the year 1900, and a century ago, in terms of the
productivity of the manual worker.”

REASONS FOR LOW KNOWLEDGE WORKER PRODUCTIVITY

As mentioned, Peter F. Drucker recognized this issue over 40 years ago. Some of the
reasons he identified which contribute to decreasing knowledge worker productivity
are as follows:

 The tendency to confuse busyness (filling out paper, passing paper back and
forth and attending meetings) with productivity

 Knowledge work cannot be replaced by capital investment as in the case of
manual work

 Capital investment creates the need for more knowledge work and creates a
demand for new and more highly paid employees

 Few know how to deal with managing the knowledge worker and increasing
their productivity. In fact, Drucker suggests that, “Knowledge workers need
to be led, not managed.”



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A recent survey of 10,000 knowledge workers in the United States revealed they feel
they are less productive today compared to a decade ago and that they waste over
two hours a day excluding lunch. Interesting, many attributed this to technology,
namely the Internet and time consumed reading and responding to emails each day
although some also played games. Another major reason cited by the respondents
was not having enough work to do or they felt they were underpaid for the work
they did do.



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UNDERSTANDING THE KNOWLEDGE WORKER
To improve knowledge worker
productivity, according to Drucker, it
is necessary to understand the
characteristics of knowledge
workers, their job needs, and what
motivates them. These are presented
as follows:

CHARACTERISTICS OF THE
KNOWLEDGE WORKER

HOW DO THEY LIKE TO WORK?

 Knowledge workers have
their own routines and patterns of work and therefore, they may not
necessarily conform to 9 AM to 5 PM office hours.

 They consider the productivity of their work to be the quality, not quantity,
of their output of their work.

 They are highly mobile and can move to a new company if learning and
personal growth opportunities do not exist, or if they are underutilized in
their present positions. As such, they are more committed to their
professions rather than to the organization where they are employed.

 They will work with associates in a team depending on the assignment but
often prefer to work alone.

 They must respect who they work for.

 They need feedback but do not accept criticism of their work well.

 The physical space where they work does not need to be too large but it
should also not be a “black hole.”

 They have a “mental space” and do not appreciate people intruding on it.

 Their performance and energy levels operate in cycles – they are not
machines that can be turned on and off easily.



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WHAT KIND OF WORK DO THEY WANT AND HOW TO PERFORM IT?

 Knowledge workers need challenging work – opportunities to pursue and
problems to solve. Continuous innovation must be built into the job.

 Their authorities and responsibilities need to be clear – what decisions can
they make?

 Knowledge workers need to take responsibility for the job and need
productive work.

 They are self-directed, but need leadership and support from their manager.

 Continuous learning in their field of specialty and profession is extremely
important.

 Knowledge workers need feedback information in order to measure their
own performance against standards and objectives.

WHAT MOTIVATES THEM TO PERFORM?

 Knowledge workers are not motivated by fear, but are motivated by
achievement – they want to see the results of their work.

 They are self-motivated – given a positive organizational environment.

 The value support – they want others to think that what they’re working on
is important.

 Money and promotional opportunities are low on their list of motivation
factors – typically they are well paid and enjoy what they do. Their chief
reward is in their job and the work itself – if it is meaningful and makes a
contribution to the organization.

As can be seen, the characteristics, job needs and what motivates knowledge
workers are considerably different than that of manual workers. In relation to
popular motivational and leadership theories, knowledge workers can be considered
to be at the highest level of motivational needs.

As an example, they are at the highest level of Abraham Maslow’s “Hierarchy of
Needs Theory” in that they are motivated by “Self Actualization and Learning and
Understanding Needs” rather than the lower level “Security and Safety Needs.” With
respect to Frederick Hertzberg’s “Hygiene and Motivation Theory,” they are
motivated by the need for “Achievement and the Quality of Their Work” rather than
other “Hygiene Factors,” such as compensation and benefits and working conditions.



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And in terms of David McClelland’s “Needs Theory” they are motivated by the “Need
for Achievement,” rather than the needs for “Power” or “Affiliation.”

It is not practical to expand on all of the motivational theories sited here. For those
not familiar with these and other motivational theories, I suggest a reference text
written by Steven P. Robbins, Organizational Behavior. As previously noted in an
earlier article, Drucker took a relatively dim view of the various leadership and
motivational theories that emanated from the Behavioral School although he did
have is own views on these topics that were covered in that article such as it is easier
to de-motivate than motivate people including knowledge workers.



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GUIDELINES FOR IMPROVING THE PRODUCTIVITY
AND EFFECTIVENESS OF KNOWLEDGE WORKERS
According to Drucker, increasing
the productivity of the knowledge
worker requires addressing a
number of key factors and asking
some important questions. These
have been incorporated into a
checklist for easier reference
compared to searching for the key
points on knowledge workers in
Drucker’s books that are mainly
narratives. It should also be interesting to ask yourself as you review the checklist, do
these factors apply only to knowledge workers or everyone who works for me
(manual workers, technologists, managers who report to me, etc.)?

There are Eight Major Factors and key questions associated with each factor to
consider that are outlined below. Also building on the checklist, each factor will be
addressed in detail.

DEFINING THE “TASK” OR THE “RESULTS”

According to Drucker, “The first requirement in tackling knowledge work is to find
out what is the task is so to make it possible to concentrate knowledge workers on
the task and eliminate everything else – at least as far as it can possibly be
determined.”

This initially can create some confusion in terms of attempting to differentiate
between the knowledge worker’s “job” (Market Research Analyst), the “tasks” that
the knowledge worker performs (conducts market research surveys, designs survey
questionnaires, conducts focused interviews, etc. and the desired “results” (delivers
a market research report on a particular market segment in China).

It was also felt that Drucker deviated here from his holding people accountable and
responsible for “results” by now focusing on how these results are to be achieved –
the “task.” To maintain consistency, we should focus on the “desired results” the
knowledge worker is expected to produce – not the tasks.



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THE EIGHT KEY FACTORS IN KNOWLEDGE WORKER
PERFORMANCE
1. Define Results: What results
is the knowledge worker to
produce?

2. The Job Assignment: What is
the job the knowledge
worker is to be assigned to
or in now?

3. Task and Time Assessment:
What are the tasks the
knowledge worker is to
perform and over what
period of time? When do we
expect the results?

4. Agreement on Objectives and Their Measurement: What objectives will be
mutually agreed to and how will they be measured?

5. Providing Support: What support does the knowledge worker require to
produce the results (budget, information, your coordination to involve
others, etc.)?

6. Feedback and Self-Feedback Systems: How will the knowledge worker be
able to measure his or her progress (self-control)?

7. Recognition: How do you plan to recognize the knowledge worker for
producing the desired results (financial and non-financial rewards)?

8. Continuous Learning: What continuous learning and self-development
experience will be made available to the knowledge worker (courses,
seminars, professional conferences, and associations, etc.)?

The following is a more detailed discussion of each of these eight factors and key
questions to ask relative to the factor.

FACTOR #1: DEFINING RESULTS

Drucker stressed that the starting point in managing knowledge workers and their
productivity is a definition of “results.” What is the final product the knowledge



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worker is to produce? Drucker also outlined “Four Dimensions” with respect to
defining results that include; The Quality and Quantity Dimension, The Time
Dimension, The Resource Dimension, and The Restrictions and Limitations
Dimension. These Dimensions are summarized in the following checklists for easy
reference.

THE QUALITY AND QUANTITY DIMENSION

 What should the quality and quantity of the results be?

 How will quality and quantity be measured (agreed upon standards)?

THE TIME DIMENSION

 When should these results be delivered?

 Is when the results are expected to be delivered flexible enough to allow the
knowledge worker time to perform?

THE RESOURCE DIMENSION

 What financial resources are needed to produce the results (budget)?

 What special knowledge and skills will be needed by the knowledge worker
to produce the desired results?

 What additional resources may be required (clerical support, research
assistants, other knowledge workers, etc.)

THE RESTRICTIONS AND LIMITATIONS DIMENSION

 What restrictions and limitations exist that must be considered (limited
budget, hiring freeze, other restrictions, etc.)?

FACTOR #2: THE JOB ASSIGNMENT

According to Drucker, “Assignment control is the key to knowledge worker
productivity.” Here again, Drucker suggests there are “Three Dimensions” to the Job
Assignment; The Selection Dimension, The Autonomy and Responsibility Dimension,
and The Knowledge Worker Reflection and Work Plan. A checklist is provided again
for easy reference.



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THE SELECTION DECISION DIMENSION

 Who has the best strengths for this assignment (knowledge, skills,
qualifications, and experience) to produce the desired results?

 Can an individual complete the assignment or will it require a team of
knowledge workers? If a team, who should be included and who should be
the team leader?

 Is this assignment the best one for this knowledge worker(s) that will
produce the desired results?

 Is this the best use of the knowledge worker?

 Is this the best assignment for this person? Does it utilize his or her
strengths?

 Will this assignment present a challenge for the knowledge worker?

 Is this assignment an opportunity to pursue or a problem to solve? If a
problem, how long will the knowledge worker be dedicated to solving it?

THE AUTONOMY AND RESPONSIBILITY DIMENSION

 Will the knowledge worker be provided the autonomy to complete the
assignment or is there a tendency of the manager to want to over or
micromanage the project?

 Will the knowledge worker be able to make decisions relative to his or her
work? What decisions will require additional approval?

 What will the knowledge worker be responsible for – and not responsible
for?

 What responsibilities will the manager of the knowledge worker retain?

KNOWLEDGE WORKER REFLECTION & WORK PLAN DIMENSION

 How will the assignment be performed to produce the desired results?

 Has the knowledge worker been provided time for reflection on what work
needs to be done and how to produce the desired results?

 What are the tasks that need to be completed? Who should perform these
tasks and in what order? Will some tasks of other knowledge workers or



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support people be input for other tasks? (See Knowledge Worker’s
Preliminary Work Plan for an example.)

 How will progress be measured (objectives, milestones, and feedback and
self-feedback systems)?

FACTOR #3: TASK ANALYSIS AND TIME ASSESSMENT

In assessing the Tasks to be completed and the Time to complete them in, several
key questions needed to be asked by both the manager and the knowledge worker
who has been assigned to produce the results. This could also be considered part of
the knowledge worker’s reflection prior to starting the project. The key questions to
answer are also included in the checklists.

TASK ANALYSIS CHECKLISTS

THE “WHAT?”

Check the need and use of the job considered.

 What is being done?

 What is the purpose?

 Is it essential? Would the sky fall down on us if we stopped doing it?

 What keeps you from doing your tasks and should be eliminated?

THE “WHERE?”

In order to check if the place where we are doing something is the most appropriate
one.

 Where is the job performed? Why?

 Could it be performed somewhere else, in a more economical and
satisfactory manner? Outsourced?

THE “WHEN?”

In order to make sure that the job is being carried out at the most appropriate time.

 When is the job being carried out? Why?

 Is this the best time to do it?



25 | P a g e

 Could it be done in another sequence?

 What is the current status toward achieving the knowledge worker’s present
objectives?

THE “WHO?”

In order to make sure that the person who performs the job is the most appropriate
one.

 Who does this job? Why? Who could or must do it? Why?

 Could a more qualified person do it more economically?

 Could a less qualified person do it after being trained?

 Could the tasks be outsourced?

THE “HOW?”

In order to find out whether the job can be simplified or better performed, with less
complication, higher quality, and lower cost.

 How is the job done? Why?

 Could it be done in an easier and simper way?

 Can it be done with higher quality, without introducing complications?

 Are the means used the most appropriate?

 Are there alternative means or other ways of doing the job that are better
than the present ones?

 Which things make the job complicated or difficult for the people who
perform it? Could some things be eliminated?

As can be seen, there are number of important questions that need to be addressed
in this area alone if the productivity of knowledge workers is to be improved.



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FACTOR #4: OBJECTIVES AND THEIR MEASUREMENT
DIMENSION

This Dimension is classic Drucker and directly from his book Managing for Results
(1964) and later adopted in the Classical School as Management by Objectives
(MBO). Since the practice of MBO is now over forty years old this checklist is
relatively brief:

MBO as Applied to the Knowledge Worker

 Knowledge and Objectives - Knowledge workers require that demands be
made on them by knowledge – rather than bosses and by objectives – not
people.

 Mutually Established - The knowledge worker’s objectives should be mutually
established between the management and the knowledge worker and
directly relate to the results to be produced and the tasks to be completed to
produce the desired results.

 Milestones – Establish milestones for each task and objective. The manager
should not over manage, but needs information as to progress in achieving
the desired results.

 Reporting - The times the knowledge worker will report results or progress
need to be determined.

FACTOR #5: PROVIDING SUPPORT

This factor includes a number of “Key Questions to Ask” in terms of providing support
to the knowledge worker.

PROVIDING SUPPORT – KEY QUESTIONS

 Support Required - What can management do to help the knowledge worker
do his or her job? Ask when discussing the “Knowledge Worker’s Preliminary
Work Plan” and provide the support that is required.

 Obstacles - What hinders the knowledge worker from doing the job? Ask and
remove it.

 Others – Who else needs to know about this assignment? Do they have to
provide input to the knowledge worker to complete a task? Are they
cooperative or acting in their own self interests and not as a team?



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FACTOR #6: FEEDBACK & SELF FEEDBACK

Once again, the literature on providing feedback to people for their performance to
sustain or improve performance is extensive. Thousands of books have been written
on performance appraisal and so another tree will be spared here. Drucker did stress,
although not entirely unique, that the best feedback for knowledge workers is self-
feedback.

In essence then, the knowledge worker should be able to refer to his or her Work
Plan and the tasks and milestones and be able to gauge where he or she is in the
path to producing the desired results. This also relates to one of the characteristics of
the knowledge worker in that they do not accept criticism well.

This is not to say that the manager avoids contact with the knowledge worker, or
worse yet, adopts a Management by Exception (MBE) approach, one of the worst
concepts ever developed in management theory. This is the old, “You have complete
freedom to do what is necessary to get the job done – just don’t screw up and then
you will hear from me.” In the MBE approach, the only time the knowledge worker
sees his or her manager is when he or she makes a mistake and as such dreads seeing
the manager. It does not take long for the relationship between the manager and
knowledge worker to deteriorate. During the progress review, the manager should
provide both positive and constructive feedback to the knowledge worker but care
must be taken in how the constructive feedback is presented.

FACTOR #7: RECOGNITION

Another factor in Drucker’s approach to improving knowledge worker productivity is
to provide recognition for producing the desired results, once again a concept not
unique to Drucker. Recognition could be in the form of both financial and non-
financial rewards. Since the knowledge worker wants to stay abreast of
developments in his or her own field, allowing them to attend industry conferences
and professional organizations on company time versus their own time is an
inexpensive form of recognition. If the manager is unsure as to what non-financial
rewards would be appealing to the knowledge worker, simply ask them. Recognition
can also be provided by providing the knowledge worker with opportunities for self-
development as covered in Drucker’s last factor.

FACTOR #8: CONTINUOUS LEARNING

The following are several of Drucker’s guidelines in dealing with the knowledge
worker’s self development and the need for continuous learning, one of the job
needs of knowledge workers previously discussed.



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 The knowledge worker should ask – what do I need to learn to keep up with
the knowledge and know the things I am paid to know?

 Knowledge workers should request their own training and development
needs.

 Training and development should be focused on people’s strengths, rather
than on their weaknesses and limitations.

 The objective is to do better the things that one already does well.

 Everyone (knowledge workers) should be encouraged to teach and share
their knowledge with others in the organization.

 The knowledge worker should also ask, what do others need to know and
understand about my area and what it can contribute to their own work?

 Finally, the knowledge worker should ask what does my manager need to
know about my knowledge in order to understand the opportunities, issues,
and problems we need to deal with?

SUMMARY

The productivity of knowledge workers has not kept pace with the productivity of
manual workers and in fact, has been decreasing. Management must know how to
address this problem, since the number of knowledge workers as compared to
manual workers in organizations, is increasing and will continue to do so.

A number of application tools that can be used in dealing with knowledge workers in
your organization that should prove useful in applying a number of the concepts that
were presented here can be obtained from the author, Dr. Robert Swaim, directly by
contacting him on docswaim@gmail.com.

Click here to read the original article: Getting Down to Busy-ness: Knowledge Workers
Are Less Productive than Ever



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“There is nothing quite so useless, as doing with
great efficiency, something that should not be done
at all.”
― Peter F. Drucker



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ABANDONING THE OBSOLETE AND
UNPRODUCTIVE: A DIFFICULT BUT
NECESSARY TASK
A fruit tree grows
stronger and fuller when
it is pruned periodically.
In a long-out-of-print
book entitled The
Folklore of Management,
Clarence B. Randall, a
retired president of
Inland Steel, expressed
this thought most
elegantly:

"The world around, hearty men who make a living by harvesting the fruits of the soil
know when and how to use the pruning knife. They have no more useful working
tool...whether it be a French peasant who gives daily, almost hourly, care to his
precious two hectares of sun drenched hillside soil in Burgundy, or the cherry grower
of Michigan or the owner of an apple orchard in the Virginia, he preserves the quality
of his product by his skill in removing deadwood...

... the significant thing about his operation, however, is that he works at it all the
time...Never does he rush out in terror to lay about him with an ax, slashing
indiscriminately right and left...he is steady and consistent about the whole process
and keeps constantly at it…in the spring following a bumper crop, when he is sure he
has a vintage product, he does the same amount of trimming as after one of those
sad years when the hail damage has all but ruined him..."

THE MESSAGE IS CLEAR

Every enterprise, business or non-business, must constantly abandon the obsolete
and the unproductive. Every organization is likely to be loaded down with yesterday's
promises. These include activities and programs that no longer contribute; the
ventures that looked so enticing when started, but now, five years later, are still
unproductive.



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The best therapy for any organization from the point of view of performance is to
purge itself of mediocrities. Systematic sloughing off of yesterday frees energies and
resources. It makes available the people and funds required for new things.

WHY PETER DRUCKER'S IDEAS STILL MATTER

The late Peter Drucker identified the key management challenge of the 21st century
as leading change and believed that the first question to ask is: “What should we
abandon?" He realized abandoning yesterday is excruciatingly difficult.

Modern organizations must be capable of change. Indeed, they must be able to
initiate change, that is, innovation. It is essential to move scarce and expensive
resources from areas of low productivity and non-results to areas where there are
opportunities for achievement and contribution.

Drucker observed:

"Maintaining yesterday is difficult and time-consuming and therefore always
commits the institution's scarcest and most valuable resources—and above all, its
ablest people—to non-results...organizational inertia always push for continuing
what we are already doing...

...organizations are always in danger of being overwhelmed by yesterday's tasks and
being rendered sterile by them... An organization - whatever its objectives - must
therefore be able to get rid of yesterday's tasks and thus free its energies and
resources for new and more productive tasks."

CONTINUITY VS. CHANGE

Drucker's central theme involved the never-ending battle of continuity vs. change. He
repeated over and over again that an organization's most able people tend to be
committed to yesterday's tasks, which means they are not available to create
tomorrow. Every strategic plan stresses what should be done. But Drucker reasoned
that the initial emphasis of a strategic plan must focus on what to stop doing.

Weeding out the nonproductive activity garden is as important in "running HR like a
business" as is in the example given by Randall. One sobering method of avoiding
putting too much effort into the soil bed of yesterday's activities and programs is to
raise the Drucker question, "If we were not presently doing this or that activity would
we risk going into it today?"



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Shortly after Jack Welch became CEO of General Electric in 1981, Business Week
magazine reported, “He sat down with Drucker at the company's New York
headquarters... Drucker posed two questions that arguably changed the course of
Welch's tenure: 'If you weren't already in a business, would you enter it today?’ he
asked. 'And if the answer is no, what are you going to do about it?'"

Those questions led Welch to a slew of abandonment decisions and to realize that
"maintaining what no longer works draws your most valuable resources away from
your number one job, creating tomorrow." Welch reinvented General Electric and is
credited with allocating resources on the right results. And in the process, Welch
made General Electric into one of America's most successful organizations.

WHY IS ABANDONMENT SO DIFFICULT?

Without doubt, abandoning yesterday is painfully difficult but necessary. Yesterday is
comfortable. By contrast, the new and different always produce new problems.
Custodial managers nurture yesterday far too long.

In short, it boils down to familiarity with and sentimentality for what already exists.

Organizations that are incapable of abandoning old and tired programs and activities
are unlikely to make the new happen. Just asking the question, "What should we
abandon or de-emphasize?" will force thinking and actions that can significantly
improve operations and productivity.



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"Successful enterprises create the conditions to
allow their employees to do their best work."
-Peter F. Drucker



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THE SECRET TO ACHIEVING MORE WITH
LESS - THE PARETO PRINCIPLE IN ACTION

From the Editorial Staff at Process Excellence Network

Published 19 September 2011

Improving productivity
requires abandoning things
that do not work, never
worked, or have outlived
their usefulness and capacity
to contribute. As both
governments and businesses
look out at a tough new
operating environment that
doesn't look set to change
anytime soon, here's how
Pareto analysis can help.

INTRODUCTION

Peter F. Drucker rendered explicit the interrelationship between and among three
distinct concepts—namely, abandonment, concentration and Pareto's Law (a.k.a. the
80/20 Principle).

Abandonment and concentration, Drucker reminded us, are opposite sides of the
same coin. Simply put, abandoning unproductive and obsolete activities frees up
resources to concentrate on result areas.

However, deciding what to abandon is never easy. We all need a framework or
methodology to help us decide what to stop doing... and to pinpoint areas we should
concentrate efforts and resources.

Pareto analysis is one of many tools used to identify activities, programs, products
and services that should be considered candidates for abandonment/de-emphasis.



35 | P a g e

PARETO'S PRINCIPLE

One of the best books ever written about the Pareto Principle is Richard Koch's The
80/20 Principle. It details how systematic and predictable lack of balance appears in
data relating to a wide range of activities in both life and management activities.

Here's an excerpt from Koch's book:

"The pattern underlying the 80/20 Principle was discovered in 1897 by the Italian
economist Vilfredo Pareto (1848- 1923). His discovery has since been called many
names, including the Pareto Principle... the Pareto Law... the 80/20 Rule... the
Principle of Least Effort... and the Principle of Imbalance.

"So what did Pareto discover? He happened to be looking at patterns of wealth and
income in 19th-century England. He found that most income and wealth went to a
minority of the people in his samples."

Koch explains that, in essence, Pareto found that 20 percent of the population
enjoyed 80 percent of the wealth in all the countries studied. Indeed, that's what
really excited Pareto.

This pattern of imbalance was repeated consistently whenever he looked at data
referring to different time periods or different countries.

It took many years for others to discover that Pareto's finding could be extended all
kinds of resources. In most situations, a pattern of imbalance with respect to efforts
and results is a near-certainty.

"In 1949, George K. Zipk, a professor at Harvard, discovered the ‘Principle of Least
Effort,’ which was actually a rediscovery and elaboration of Pareto's principle..."

Ever so slightly paraphrasing Koch's summary of Zipk's principle:

Resources (people, products, time, knowledge, physical assets or anything else that
can be made more productive) tends to arrange themselves so that approximately
20- 30 percent of any resource accounts for 70-80 percent of the activity related to
that resource.

What does this really mean? More results can be squeezed out of existing resources.
It's a good bet that an organization's resources are not as productive as they could
be.



36 | P a g e

AN EXAMPLE

Drucker provided an excellent example of how nurses in a major hospital were asked
a few questions in an employee survey:

 What is your task?

 What should it be?

 What should you be expected to contribute?

 What hampers you in doing your task, and should these obstacles be
eliminated?

According to Drucker:

“The nurses were sharply divided as to what their task was, with one group saying
‘patient care’ and another saying ‘satisfying physicians.’ However, they were in
complete agreement on the things that made them unproductive.

“They called them ‘chores:’ paperwork, arranging flowers, answering the phone calls
of patients' relatives, answering the patient bells and so on.

“All—nearly all—of these could be turned over to a non-nurse floor clerk, [who are]
paid a fraction of a nurse’s pay.

“When the nurses were freed of chores, their productivity nearly doubled, as
measured by the time at the patients’ bedsides.

“Further, patient satisfaction more than doubled and turnover of nurses (which had
been catastrophically high) almost disappeared, all within four months."

The point? Resources have a tendency to decline in productivity. But, as Drucker so
clearly illustrates, the way to get more output from existing resources is to make the
resource "work smarter."

Making resources productive is the specific job of management. In this case, a
workplace survey revealed that a large percentage of the nurses' time was spent in
non- nursing activities.

That percentage had to be favorably altered—a greater percentage of nursing time
had to be directed towards the results desired.



37 | P a g e

Zipk's principle is valid. This means we have to constantly improve the productivity of
resources in existing employments. "We know that we need to work on the
productivity of each of the factors of production: capital, natural resources, time and
knowledge."

Why? Because it's near-certain that the efforts-to-results ratio with respect to most
resources is predictably unbalanced.

JURAN'S CONTRIBUTION

The other pioneer of the 80/20 Principle was the quality guru Joseph M. Juran.
Indeed, he coined the phrases "Pareto Principle" and the "Rule of the Vital Few."

According to Juran, in any relevant data set a small number of elements will be
responsible for the preponderant portion of results. In terms of results the vital few
within the configuration or data set will always take precedence over the trivial
many.

For example, if we assume there are five frequently cited reasons for customer
complaints, one reason (20 percent of the reasons) probably accounts for 80 percent
of the complaints. Efforts should be concentrated on the one reason causing the
majority of complaints.

Still another example: While a manufacturer makes 20 different products, five of
those products account for 75 percent of its customers complaints.

And still another example: While there may be 12 distinct steps in the process of
transferring a patient out of an intensive care unit into a standard bed, two of those
steps account for 82 percent of the total time in the total process.

LESSON LEARNED SO FAR?

Always look for the predictable imbalance. Breakdown the numbers. Disaggregate
the data.

Expect the unexpected. Expect 20 percent to lead 80 percent... and 80 percent to
lead to 20 percent. Always look for the powerful vital few. It's bound to be there.

This will enable you to spot the important things. Accept the reality that with respect
to causes, inputs and efforts the majority have little impact. But, rather, a small
minority of causes, inputs and efforts will have the major, dominant impact.



38 | P a g e

DRUCKER'S SUMMARY OF THE PARETO PRINCIPLE

Drucker repeatedly demonstrated how the application of Pareto's Law could be used
in diagnosing patterns of potential misallocation of resources.

"Business enterprise is not a phenomenon of nature but one of society. In a social
situation, however, events are not distributed according to a ‘normal distribution’ of
a natural universe...

"In a social situation a very small number of events at one extreme—the first 10
percent to 20 percent at most—account for 90 percent of all results; whereas the
great majority of the events accounts for 10 percent or so of the results.

“This is true in the marketplace: A handful of large customers out of many thousands
produce the bulk of orders; a handful of products out of hundreds of items in the line
produce the bulk of the volume; and so on.

“It is true of sales efforts: A few sales people out of several hundred always produce
two-thirds of all new business. It is true in the plant: A handful of production runs
account for most of the tonnage.

“It is true in research: The same few people in the laboratory are apt to produce
nearly all the important innovations.

“It holds true for practically all personnel problems: The bulk of grievances always
comes from one group of employees (for example, from the older, married women
or from the clean-up people on the night shift), as does the great bulk of
absenteeism, of turnover, of suggestions under a suggestion system and accidents..."



39 | P a g e

PREDICTABLE IMBALANCES HAVE IMPORTANT
IMPLICATIONS
In short, Drucker, Zipk, Juran
observed that aggregate
data misinform, misdirect,
mislead. It's a near-certainty
that there's an imbalance
present between efforts and
results.

Every manager, to be
effective, must assume an
imbalance exists with
respect to resource allocation. And must work hard to incrementally change the
ratio.

The relationship between efforts and results are generally in a state of imbalance.
The imbalance may be 65/35, 70/30, 75/25, 80/20 or 99/1, or any set of numbers in
between.

The key is to alter the ratio between effort and results. For example, if a manager
could change the percentage proportion from 90-10 to 60-40, 70-30 or even 80-20,
misallocation could be reduced and results improved.

To be specific, if 10 percent of the sales force is contributing 90 percent of the results
and the other 90 percent of the sales force is producing most of the cost, then the
elimination of marginal performers and improvement of the mediocre performers
should be a priority commitment.

Eliminating non-productive efforts, that is, abandonment will enhance performance
and make resources more productive.

TO SUMMARIZE

Improving productivity requires abandoning things that do not work, never worked,
or have outlived their usefulness and capacity to contribute.



40 | P a g e

It also requires concentrating on the things that do work—the things that produce
results—or the things that improve the organization's ability to perform.

Economic results, Drucker reminded us, require efforts be concentrated on the few
activities that are capable of producing significant business results.

In making a distinction between the vital few and the trivial many, management can
improve its asset management by making its capital work more effectively. The more
the Pareto Principle is explored, the greater the relevance to improving the
productivity of all resources.

Drucker frequently mentioned—indeed, emphasized—that:

"In every industry there are institutions that operate at an essentially higher
productivity level than the average... What makes one company stand out and lead in
any one industry is that it operates at about twice the average productivity of its
industry..."

Most of today's managers have grown up in a period of rapid economic growth.
Productivities have become endangered because they have been neglected.

In many organizations, to reverse the trend in productivities is a major managerial
task. It requires abandonment of obsolete and unproductive activities. It requires
focusing resources on what works.

It requires, among other tools and techniques, systematic application of the Pareto
Principle.

Read the original article here: The Secret to Achieving More with Less - The Pareto
Principle in Action



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"The first sign of decline of a company is loss of
appeal to qualified, able, and ambitious people."
- Peter F. Drucker



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THE DEMOTIVATION TRAP AND WHAT
YOU CAN DO ABOUT IT
Contributor: Robert W. Swaim

1 March 2011

Understand Drucker’s approach
to motivation, and you can
forget the countless other
books on employee motivation.
In this month's Drucker Files,
Dr. Robert Swaim - student,
colleague and friend of Peter
Drucker for thirty years -
summarizes Drucker's Seven
Keys to inspiring performance in
your people.

There are many textbook definitions of what managers are supposed to do; the job
of the manager, but perhaps one of the more pragmatic definitions is one by Peter
Drucker:

“A manager is paid to enable those people who are able and capable of work to earn
their wage and not hinder them in the process.” Peter Drucker at the Claremont
Graduate School (1976).

Along this line, Dr. Drucker pointed out that, “People know they are on the payroll to
get work out. They respect this and also want to respect the company and manager
they work for. When people are not allowed to do the work they are paid for, they
lose respect.”

THE SEVEN KEYS TO MOTIVATION

There are Seven Key Areas in which Drucker suggested the manager needs to ask
questions relative to motivating performance and include:

1. The performance of your people.



43 | P a g e

2. Time – the scare resource

3. Taking responsibility for the relationship with others.

4. Establishing and maintaining the relationships with others.

5. Accountability for results.

6. Relationship with your manager.

7. Assignment control and staffing.

AREA 1: PERFORMANCE

In terms of motivating the performance of your people, Drucker suggested the first
thing you as a manager can do today is to ask the following questions:

 What does this organization do that allows your people to do the job they
are paid for?

 When you have identified what “helps,” – provide them with more. When
you have identified what “hinders,” – remove it. In terms of what hinders
your employees the most, don’t speculate and assume you know – ask your
employees.

AREA 2: TIME

 Am I wasting my people’s time?

Another area worthy of exploration is the resource of time. No matter what the
demand for time, there is no more supply – it is a perishable resource. Investigate to
see if you are taking time away from your people by making them do things they
really aren’t paid for.

In other words, make sure your people can do the work they are paid for and have
the necessary tools to do it.

AREA 3: UNDERSTANDING RELATIONSHIPS

 Who depends on me for information, ideas, products, etc.?

 Whose input is my output?



44 | P a g e

 Who do I depend on for
my input?

As a manager you must take
responsibility for your
relationship. When you have
answered these questions, take
the responsibility for establishing
and maintaining the relationship.
It will probably be no surprise to
find many of these relationships
are with your counterparts in other functional areas. Drucker pointed out that,
“Work and information flow sideways thorough the organization, not through the
organization chart.”

Therefore, it would also be helpful to keep in mind you are responsible for the work
of other people, not just subordinates. This includes yourself, your manager, your
peers, and finally, your subordinates, in the order of easiest to control, to most
difficult to control.

AREA 4: MAINTAINING RELATIONSHIPS

This logically leads to the fourth area of how to establish and maintain these
relationships, and can be summarized by a very simple Drucker Rule:

“Don’t ever assume there are mind readers at work.” Peter Drucker

Drucker, in support of this rule stated, “There is no such thing as a communications
problem – you have not told them and furthermore, assumed they understood.”

Therefore, concentrate on relationships, not communications. You can’t assume that
people you deal with don’t need to know – take responsibility by keeping them
informed and let them make the decision whether they need to know or not. People
do not trust things they do not understand, so make sure they understand. They may
not approve of what you are doing, but they should at least know what you are trying
to do. Also, it is important they understand what you are not trying to do otherwise
people will be working on it.



45 | P a g e

AREA 5: ACCOUNTABILITY

The fifth area you should investigate is accountability by asking the next series of
questions:

 What do you do that explains your being on the payroll?

 Why do you do this work?

 If you don’t do this, what happens?

When you have answered these questions, take the responsibility for the results and
contribution, and demand the same of everyone who reports to you.

After you have accomplished this, appraise the results of your people, don’t judge.
Your job is not to judge people, but to get them to perform. With respect to this
analysis or appraisal, don’t let effort absorb you, remind yourself of why it is done,
and what is the result supposed to be.

AREA 6: RELATIONSHIP WITH YOUR MANAGER

The sixth area to explore closely corresponds to relationships and specifically, the
relationship you have with your manager. In this regard, it would be helpful to ask
him the following questions:

 What do I need to know about what you are trying to do?

 What is it that he considers to be our organization’s greatest contribution?

 What is it you think I should be doing to support you?

 What is it I should be concentrating on and held accountable for?

When you have answers to these questions, establish a priority list of what must be
done, and begin by concentrating on the first thing on your list. When you have
completed the first thing, don’t go on to number two on the list, but rather make
another priority list. You may find number two is still number two, replaced by
something more critical.



46 | P a g e

AREA 7: ASSIGNMENT CONTROL

The seventh and final area is Assignment Control, or as traditional management texts
describe as staffing. Every six months, make a list of the people who report to you,
and deliver and produce.

Then ask the question:

 Are they assigned where the results are?

If they are not assigned where the demands are for results, they are being mis-
allocated. Look at these assignments every six months in terms of planning. Drucker
stated, “Plans fail because you don’t allocate an individual who can perform.” If you
identify an opportunity in your plan that can be exploited, it should be staffed with
people who can deliver.

In terms of making this list, don’t get confused between performance and potential.
If you have someone on the list that has potential, ask what he or she has done?
Don’t be misled by those with high potential, but don’t deliver, look for low potential
people who perform. Drucker expanded on this idea by indicating that, “Low
potential people have learned to perform, to do honest work and not to fail because
they are not bright enough to improvise.”

Finally, don’t leave high performing people assigned to the problem areas too long
for it is a poor use of them. Assigning the best salesmen to move the dead products
in Drucker’s view, “May be an honest and respectable goal, but it is hard work,
useless, and the quickest way to create a market for competition.”



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DRUCKER ON MOTIVATION
“There are only two books that a publisher does not lose money on - cook books and
books on motivation. The reason is they are purchased by people who can do
neither.” Peter Drucker

DRUCKER’S CRITICISM OF THE BEHAVIORAL SCIENCES AND
MOTIVATIONAL THEORIES

“There have been no major substantive intellectual breakthroughs in our
understanding of employee motivation since the Hawthorne Study of seventy years
ago (Elton Mayo)." - Peter Drucker.

Drucker’s quote above is in reference to a major event that led to the evolution of
the Human Relations School in the 1930s. This was the conclusions that were
generally reached as a result of the infamous “Hawthorne Studies” by Elton Mayo
and his colleagues at Harvard, F.J. Roethlisberger and T. N. Whitehead. Although the
studies were originally designed to attempt to measure changes in the employees’
working environment and their effect on productivity (the “Illumination
Experiments”), it was finally discovered that the changes that were observed were
the result of other factors, such as how the employees were treated.

This lead to the “human relations-be kind to people” approach to motivation that
was really more manipulative than sincere in attempts to improve productivity.
Drucker therefore felt that nothing meaningful in the way of research on motivation
has occurred since then.

Of the 39 books Drucker wrote, not one was solely dedicated to discussing leadership
and motivation. In fact, Drucker had little use for the behavioral sciences. Drucker’s
major criticism of the behavioral science was that many of their theories focused on
job satisfaction and ignored productivity. The problem he cited here was that there
was no measurement as to what employee satisfaction really is. If the mean score on
the results of employee attitude surveys registered 85, are the employees more
satisfied than if the score was 75?

Drucker also argued that there was no evidence from the behavioral sciences to
substantiate that employee satisfaction results in any better organizational
performance – in other words a “happy worker” is not necessarily a productive



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worker. Actually, Drucker did feel Frederick Herzberg’s “Two-Factor” theory of
motivation was useful as a diagnostic tool in terms of assessing an organization’s
environment from the perspective of “dissatisfiers” that tended to support his own
views on motivation. Drucker therefore made a limited contribution to this school
based on a somewhat simplistic approach to leadership and motivation as shared in
this article.

THE RESEARCH SUPPORTS DRUCKER’S VIEWS

Many studies have been conducted in an attempt to show a relationship between job
satisfaction and productivity and the results of those studies actually support
Drucker’s views in terms of their inability to prove a positive relationship. Some
other studies have actually suggested a causal relationship exists in the opposite
direction in that productivity leads to job satisfaction. These studies concluded that,
“If you do a good job, you intrinsically feel good about it. Additionally, assuming that
the organization rewards productivity, your higher productivity should increase
verbal recognition, your pay level, and probabilities for promotion. These rewards, in
turn, increase your level of satisfaction with the job.” Once again, this different
relationship may actually support Drucker’s views on motivation.

“It is easier to de-motivate people than to motivate them.” Peter Drucker

Drucker took a completely different and unique approach to the subject of
motivation by expressing the following views:

 It is easier to de-motivate people.

 The best way to motivate people is through example.

 To set an example by having standards, both of performance and of basics,
by realizing that being a manager is not a rank and a privilege, but a
responsibility.

 To motivate professionals, knowledge people, and managers is by making
demands on them for performance and responsibility. (Note: the next article
will deal with the growing number of knowledge workers compared to
manual workers and their unique job and personal needs and how to
measure their performance.)



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WHAT DE-MOTIVATES YOUR PEOPLE?
In keeping with Drucker’s view, refer to the following statements and ask if you and
your organization are contributing to some of these de-motivators?

MY ORGANIZATION AND MANAGEMENT:

 Creates a company environment of internal politics as the way to get
promoted.

 Promotes destructive internal competition between workers.

 Changes the rules in the middle of a project.

 Creates unclear expectations regarding employee's performance and results.

 Creates a bureaucracy of forms and reports and unnecessary rules for
individuals to follow.

 Over manages (tells what to do, how to do, and controls) vs. leading and
does not allow autonomy.

 Withholds information that individuals need to perform their jobs, lying, and
claiming it’s a misunderstanding.

 Takes time from people by having them attend unproductive meetings.

 Emphasizes criticism and negative feedback vs. recognition and positive
feedback.

 Tolerates poor performance of others so that high performing people feel
taken advantage of.

 Treats people unfairly and show favoritism to a select few.

 Underutilizes the capabilities of people and inhibits their personal growth.



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WHAT SHOULD YOU DO AS MANAGER?
Refer to the above statements. These were management actions that Drucker felt
contributed to employee de-motivation. Which actions do you and your organization
need to change to create a more positive and motivating environment? Also review
the seven key areas Drucker suggested contribute to organizational performance and
answer the key questions relative to each area. Ideally, you will find Drucker’s
approach to be more useful as compared to reviewing the countless number of
books and theories on employee motivation.

Read the original article here: The Demotivation Trap and What You Can Do About It



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“Efficiency is doing the thing right.
Effectiveness is doing the right thing.”
― Peter F. Drucker



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5 GLOBAL “CERTAINTIES” YOU CAN’T AFFORD TO
IGNORE
By William Cohen, PHD, First Published 25 October 2011

Drucker wrote that the purpose of
strategy is to enable an organization
to achieve its desired results in an
unpredictable environment. So
contrary to what many believe,
strategy is not about achieving results
in a known and foreseeable
environment, but an environment
that is unknown and unforeseeable. In
Drucker’s own words, it allows an
organization to be “purposefully
opportunistic.”

THE FIVE CERTAINTIES

Drucker was never afraid to propose ideas which others may never have even
considered, and this was certainly the case with the five environmental variables
which he felt were phenomena so unique that they could safely be considered
certainties and not just possibilities as we normally assume for fixed variables that
we sometimes call “environmental.”

Moreover, he believed that they were different from anything current strategies
considered as they were not essentially economic, but were primarily social and
political.

CERTAINTY #1: COLLAPSING BIRTHRATE IN THE DEVELOPED WORLD

Drucker found the falling birthrate in the developed world to be a phenomenon
unique in history, with dramatic collateral effects and important secondary effects.
Perhaps the most obvious change was in the very old assumption that markets would
continue to increase as the population increased.

How many times have we heard that markets are bound to enlarge due to simply to
the automatic increase in birthrate? But Drucker looked at the facts and found that
birthrates were no longer steadily increasing for populations in the developed world.



53 | P a g e

Of course the decline in birthrate could be somewhat offset, delayed, or somewhat
concealed by immigration. But even this would result in dramatic changes and would
also cause turmoil as border populations with different, customs, religions, and even
languages were attracted into countries of diminished numbers of younger workers.

Drucker saw several important secondary effects resulting from the collapsing
birthrate. He said that for the immediate future demographics would dominate the
politics in developed countries, shunted aside only temporarily by wars and
economic conditions.

Eventually government instability in developed countries would likely soon become
the norm. The definition of the concept of retirement was certain to change. While
early “retirement” would continue, it would no longer mean a return to childhood in
some kind of golden year’s playground. Rather it might mean extended employment
with the former employer, but under a different name and conditions.

We have seen this come to pass even before the onset of the current recession.

Drucker noted that older workers, especially the knowledge worker who worked
primarily with his mind and not his hands would become increasingly productive. He
speculated that firms that first discovered how best to utilize this experienced talent
in a new type of relationship would acquire a significant competitive advantage.

Perhaps of even more direct importance would be the effect on potential markets.
The size of the youth and younger market would inevitably decline and the senior
market increase. But the increase in potential would not only be due to numbers of
potential customers, but to the individual purchasing power of those who retired
from a first career and continued to find employment while in a “retired” state.

CERTAINTY #2: SHIFTS IN DISTRIBUTION OF DISPOSABLE INCOME

Drucker found that the truly important statistic that most companies overlook
completely is the share of disposable income that is being spent on the products or
services that they provide.

Drucker believed that this figure was the most reliable in formulating strategy as it
changed very little over long periods while any change in trends of disposable income
are crucial to a firm’s strategy. He concluded that utilizing this certainty required
both quantitative information and qualitative analysis.

Thus another example of looking at data but deciding what the data meant rather
than primarily crunching numbers.

CERTAINTY #3: CHANGING DEFINITION OF PERFORMANCE



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According to Drucker, the traditional view of performance has been that the
corporation was run for the interest of the manual worker, at least in Japan,
Germany, Scandinavian countries and some others. Of course, in the U.S. and Britain,
the interests have been somewhat different, at least since the late 1920s.

Though not clearly defined, business is supposed to be run for an ill defined
conglomeration of interests including customers, employees, shareholders, and
society. The only big question is whether this should be short term for gain in stock
price, or longer term for future growth.

Drucker noted that even “long term” isn’t necessarily all that long since the average
span of a “successful” enterprise in the U.S. is usually less than thirty years. The
resulting fixed certainty was many traditional views would need to be revised
including the definition of performance.

These new definitions of performance would have a clear impact on strategy, would
be based on longer term estimates, and less and less on “social harmony,” and that
performance would need to be defined non-financially with a nonfinancial “value”
return. Only in this way would this be meaningful to knowledge workers and
generate the commitment which today is frequently termed “engagement.”

CERTAINY #4: INCREASING GLOBAL COMPETITION

According to most definitions of global competitiveness, this has to do with
competiveness of nations. Each year the World Economic Forum compiles a weighted
average of many different components measured by publically available data and
surveys of a country’s relative competitiveness globally. That’s not what Drucker was
talking about with this certainty.

As he looked into the future, no small business, giant corporation, hospital,
university, you name it could ignore institutions outside of its own national
boundaries. It could neither succeed, nor even survive, without measuring up to
standards set by the leaders in its industry anywhere on the planet.

Of considerable benefit if our political, corporate, and labor leaders would simply
integrate the knowledge into their strategies it was Drucker’s contention that
traditional means of protection of home industries no longer protects, “no matter
how high the customs duties nor how low the import quotas.”

Drucker predicted the struggles now occurring for increased protectionism. He said
that the net result of protectionism would not solve a nation’s problems, or a
particular institutions, only make individual companies even more vulnerable.



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The only solution was for the organization to find a way to compete considering the
standards set by the best organizations in every area of management no matter
where located, and essentially to consider such issues as government subsidies of
global competitors as environmental variables which must be overcome by superior
strategies, not by similar protection strategies of its own government.

CERTAINTY #5: GROWING INCONGRUENCE BETWEEN ECONOMIC
GLOBALIZATION AND POLITICAL SPLINTERING

Drucker’s first successful book, The End of Economic Man took on the historic notion
that man behaved rationally in response to economics. According to Drucker, the rise
of Nazism disproved that theory.

Sixty years later Drucker revisited his earlier work in a management context and
strategy development. His conclusion: even within transnational economic units,
national politics will invariably overrule economic rationality.

Managers in all industries and disciplines are well advised to consider these
certainties as equally important to traditional environmental variables usually
considered the sole factors in developing strategy.

Read the original article here: 5 Global Certainties You Can’t Afford to Ignore



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ABOUT THE AUTHORS

Dr. Robert W. Swaim was a colleague and personal friend of
Drucker’s for nearly thirty years and worked with him for five
years prior to his death to develop both the Drucker EMBA and
Executive Development Programs that are now offered in China.
He is no doubt the foremost authority in Asia on Drucker’s work
and in this article he attempts to relate a number of Drucker’s concepts to today’s
present uncertain environment – what would Drucker have said about this and would
his concepts still be applicable? Dr. Swaim also expands on these views in his new
book that was released in 2010, The Strategic Drucker: Peter Drucker’s Strategies for
Business Growth published by John Wiley and Sons (Asia) Pte Ltd. He may be reached
via email at: docswaim@gmail.com.

To see a full list of articles authored by Dr. Robert W. Swaim please go to
PEXNetwork.com/RobertSwam

Dr. William F. Cohen was Peter Drucker’s first executive Ph.D.
graduate at what is now the Peter F. Drucker and Masatoshi Ito
Graduate School of Management. His latest books are Drucker on
Leadership (Jossey-Bass, 2010) and Heroic Leadership: Leading
with Integrity and Honor (Jossey-Bass, 2010). Cohen is the
president of The Institute of Leader Arts and a vice president of the
26 Peter F. Drucker Academies of China and Hong Kong. He is also a retired Air Force
general. He can be reached at www.stuffofheroes.com.

To see a full list of articles authored by Dr. William F. Cohen, please go to
PEXNetwork.com/WilliamCohen


Making Knowledge Workers More Productive Insights From The Works Of Peter F. Drucker

Making Knowledge Workers More Productive Insights From The Works Of Peter F. Drucker

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