Book SummaryThe Essential Drucker, by Peter Drucker

1-Page Summary1-Page Book Summary of The Essential Drucker

Of all the innovations of the last two hundred years, the growth of the field of management may be the one that’s had the most dramatic impact. Today, it’s hard to imagine a world without management as the guiding force behind every business, government, and nonprofit institution. Without it, how would organizations coordinate the efforts of people with disparate skills to work together toward a common goal? Without management, would those goals even be defined?

Peter F. Drucker (1909-2005) is widely regarded as one of the greatest and most influential thinkers in the field of modern management practices. Drawing from his knowledge acquired through decades of experience as a professional management consultant, Drucker authored dozens of volumes on management, including The Effective Executive, Managing Oneself, and Innovation and Entrepreneurship....

The Essential Drucker Summary What Is Management?

The first thing to do when discussing management is to define what it is, its purpose, and its scope. At its most basic, management is the practice of enabling groups of people with different knowledge, skills, and backgrounds to work together toward a common goal. More than any other part of an organization, management is directly responsible for whether the organization’s efforts produce its desired results. Drucker writes that managers, both at the highest level and all the way down, do this by articulating an enterprise’s mission, spelling out its objectives, and developing its people’s strengths to maximize their individual contributions.

Though political, military, and religious leaders have existed for thousands of years, Drucker traces the start of modern “management” to the period of industrialization beginning in the late 1800s. Before then, workers were largely unskilled and relied on a taskmaster’s orders—a much more authoritarian system than what we think of as management today. With the growth of subject-specific expertise and a workforce of laborers with a variety of skills, a new specialty emerged—that of coordinating large groups of people to work toward a...

The Essential Drucker Summary Management and Innovation

In addition to keeping an organization afloat, managers are also responsible for steering their business toward the future, which requires innovating and experimenting with new ideas. Innovation is vital for any organization because the world in which it operates is continually changing. Drucker describes how organizations should approach innovation as a part of doing business, how market analysis can generate new ideas, and how businesses should structure themselves to enable risk-taking experiments while protecting the organization as a whole.

To be clear, innovation isn’t limited to new technological developments. It includes new business practices, sales strategies, or moving a company into new markets. Drucker states that even the basic premise on which an organization is founded can go out of date. For example, video rental stores saw their business evaporate when streaming replaced physical media. The question that managers should always be asking is “What will our organization’s mission be in the future, not just in the present?” The needs you’re currently fulfilling may vanish, while new needs (and therefore customers) emerge that your organization may be suited to...

The Essential Drucker Summary Management for Startups

Whereas large organizations may struggle to innovate, small businesses just starting out often suffer from a lack of managerial expertise. Drucker explains that people starting new ventures must pay close attention to their markets, carefully manage their finances, and put a leadership team in place long before a business grows to the size where such a team is needed.

Especially for a new business based on an innovative product or service, market research must take a different tack than that employed by established industries. Drucker writes that most of the time, a new business doesn’t know who its customers are yet, nor how they’ll actually use what it has to offer. Therefore, the manager of a new operation should assume that their original business model will have to be adjusted as the market demands. For example, someone opening a vegan grocery in an underserved area may discover that their customers are more interested in pre-made dishes than buying separate ingredients. In the end, the market defines the nature of a business, despite the intentions of the owner.

Cultivating Customers

Regardless of who your customers turn out to be, one thing that’s common to...

The Essential Drucker Summary Management in Society

As watching the market and customers should make clear, organizations only exist in the context of a larger community. Therefore, in addition to guiding the inner workings of a business, managers must also set objectives relating to the impact their organization has on the wider world. Drucker divides businesses’ social impacts into two classes—what an organization does to society, and what it can do for society—while arguing that an organization’s primary social responsibility is to carry out the function for which it was designed.

First of all, Drucker insists that social objectives aren’t just window dressing—they’re vital for an organization’s continued existence. After all, society won’t tolerate a business that it perceives as causing more harm than good. Managers must always be aware of any negative impacts an operation has and find a way to minimize those impacts before they do harm to the business. However, that solution may come at a cost, especially for large industries. Some negative impacts require cooperation between competitors and government agencies to find a cost-efficient path to mitigation. In these cases, Drucker says the responsible course is for a...

Shortform Exercise: Reflect on Your Management Experience

Whether you work for a large organization or you’re the proprietor of your own business, you’ve almost certainly worked with management in your career and have probably made use of management skills yourself. Think about your experiences with management and how they align with Drucker’s core ideas about defining the organization’s purpose, enabling the best use of people and resources, and fostering innovation.

What is the mission of an organization that you either work or volunteer for? Who is most responsible for communicating that mission to the group? Do you feel that the mission is vague or is it clearly defined?