Peter Drucker

The information revolution. Almost everybody is sure that it is proceeding with unprecedented speed; and that its effects will be more radical than anything that has gone before. Wrong, and wrong again. Both in its speed and its impact, the information revolution uncannily resembles its two predecessors. The first industrial revolution, triggered by James Watt's improved steam engine in the mid-1770s did not produce many social and economic changes until the invention of the railroad in 1829. Similarly, the invention of the computer in the mid-1940s; it was not until 40 years later, with the spread of the Internet in the 1990s, that the information revolution began to bring about big economic and social changes; the same emergence of the “super-rich” of their day, characterized both the first and the second industrial revolutions. These parallels are close and striking enough to make it almost certain that, as in the earlier industrial revolutions, the main effects of the information revolution on the next society still lie ahead.

This new knowledge economy will rely heavily on knowledge workers; the most striking growth will be in “knowledge technologists:” computer technicians, software designers, analysts in clinical labs, manufacturing technologists, paralegals. They are not, as a rule, much better paid than traditional skilled workers, but they see themselves as “professionals.” Just as unskilled manual workers in manufacturing were the dominant social and political force in the 20th century, knowledge technologists are likely to become the dominant social—and perhaps also political—force over the next decades.

Knowing Yourself. We also seldom know what gifts we are not endowed with. We will have to learn where we belong, what we have to learn to get the full benefit from our strengths, where our weaknesses lie, what our values are. We also have to know ourselves temperamentally: "Do I work well with people, or am I a loner? What am I committed to? And what is my contribution?"

All earlier pluralist societies destroyed themselves because no one took care of the common good. They abounded in communities but could not sustain community, let alone create it.

Human beings need community. If there are no communities available for constructive ends, there will be destructive, murderous communities. Only the social sector, that is, the nongovernmental, nonprofit organization, can create what we now need, communities for citizens. What the dawning 21st century needs above all is equally explosive growth of the nonprofit social sector in building communities in the newly dominant social environment, the city.

Universities won't survive. The future is outside the traditional campus, outside the traditional classroom. Distance learning is coming on fast.

Thirty years from now the big university campuses will be relics. Universities won't survive. It's as large a change as when we first got the printed book. Do you realize that the cost of higher education has risen as fast as the cost of health care? And for the middle-class family, college education for their children is as much of a necessity as is medical care—without it the kids have no future. Such totally uncontrollable expenditures, without any visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable. Higher education is in deep crisis.

What's absolutely unforgivable is the financial benefit top management people get for laying off people. There is no excuse for it. No justification. This is morally and socially unforgivable, and we will pay a heavy price for it.

That people even in well paid jobs choose ever earlier retirement is a severe indictment of our organizations—not just business, but government service, the universities. These people don't find their jobs interesting.

The postwar WWII GI Bill of Rights—and the enthusiastic response to it on the part of America's veterans—signaled the shift to the knowledge society. Future historians may consider it the most important event of the twentieth century. We are clearly in the midst of this transformation; indeed, if history is any guide, it will not be completed until 2010 or 2020. But already it has changed the political, economic and moral landscape of the world.

This society in which knowledge workers dominate is in danger of a new "class conflict" between the large minority of knowledge workers and the majority of workers who will make their livings through traditional ways, either by manual work or by service work. The productivity of knowledge work—still abysmally low—will predictably become the economic challenge of the knowledge society. On it will depend the ability of the knowledge society to give decent incomes, and with them dignity and status, to non knowledge people.

I would hope that American managers—indeed, managers worldwide—continue to appreciate what I have been saying almost from day one: that management is so much more than exercising rank and privilege, that it is much more than "making deals." Management affects people and their lives.

I think the growth industry of the future in this country and the world will soon be the continuing education of adults. I think the educated person of the future is somebody who realizes the need to continue to learn. That is the new definition and it is going to change the world we live in and work in.

Increasingly, politics is not about "who gets what, when, how" but about values, each of them considered to be absolute. Politics is about "the right to life." It is about the environment. It is about gaining equality for groups alleged to be oppressed. None of these issues is economic. All are fundamentally moral.

For the social ecologist language is not "communication." It is not just "message." It is substance. It is the cement that holds humanity together. It creates community and communication. Social ecologists need not be "great" writers; but they have to be respectful writers, caring writers.

That knowledge has become the resource, rather than a resource, is what makes our society "post-capitalist."

If the feudal knight was the clearest embodiment of society in the early Middle Ages, and the "bourgeois" under Capitalism, the educated person will represent society in the post-capitalist society in which knowledge has become the central resource.

A manager's task is to make the strengths of people effective and their weakness irrelevant—and that applies fully as much to the manager's boss as it applies to the manager's subordinates.

The subordinate's job is not to reform or reeducate the boss, not to make him conform to what the business schools or the management book say bosses should be like. It is to enable a particular boss to perform as a unique individual.

Keep the boss aware. Bosses, after all, are held responsible by their own bosses for the performance of their subordinates. They must be able to say: "I know what Anne (or John) is trying to do."

Never underrate the boss! The boss may look illiterate. He may look stupid. But there is no risk at all in overrating a boss. If you underrate him he will bitterly resent it or impute to you the deficiency in brains and knowledge you imputed to him.

Once a year ask the boss, "What do I or my people do that helps you to do your job?" and "What do I or my people do that hampers you?"

One of the great movements in my lifetime among educated people is the need to commit themselves to action. Most people are not satisfied with giving money; we also feel we need to work. That is why there is an enormous surge in the number of unpaid staff, volunteers. The needs are not going to go away. Business is not going to take up the slack, and government cannot.

Ideas are somewhat like babies—they are born small, immature, and shapeless. They are promise rather than fulfillment. In the innovative company executives do not say, "This is a damn-fool idea." Instead they ask, "What would be needed to make this embryonic, half-baked, foolish idea into something that makes sense, that is an opportunity for us?"

All economic activity is by definition "high risk." And defending yesterday—that is, not innovating—is far more risky than making tomorrow.

Whenever anything is being accomplished, it is being done, I have learned, by a monomaniac with a mission.

If "socialism" is defined as "ownership of the means of production"—and this is both the orthodox and the only rigorous definition—then the United States is the first truly Socialist country.

An employer has no business with a man's personality. Employment is a specific contract calling for a specific performance. Any attempt to go beyond that is usurpation. It is immoral as well as an illegal intrusion of privacy. It is abuse of power. An employee owes no "loyalty," he owes no "love" and no "attitudes"—he owes performance and nothing else. The task is not to change personality, but to enable a person to achieve and to perform.

Morale in an organization does not mean that "people get along together"; the test is performance not conformance.

Large organizations cannot be versatile. A large organization is effective through its mass rather than through its agility. Fleas can jump many times their own height, but not an elephant.

The world economy is not yet a community—not even an economic community. Yet the existence of the "global shopping center" is a fact that cannot be undone. The vision of an economy for all will not be forgotten again.

The individual needs the return to spiritual values, for he can survive in the present human situation only by reaffirming that man is not just a biological and psychological being but also a spiritual being, that is creature, and existing for the purposes of his Creator and subject to Him

In the political, the social, the economic, even the cultural sphere, the revolutions of our time have been revolutions "against" rather than revolutions "for." On the whole throughout this period the man—or party—that stood for doing the positive has usually cut a pathetic figure; well meaning but ineffectual, civilized but unrealistic, he was suspect alike to (by both) the ultras of destruction and the ultras of preservation and restoration.

The arts alone give direct access to experience. To eliminate them from education—or worse, to tolerate them as cultural ornaments—is antieducational obscurantism. It is foisted on us by the pedants and snobs of Hellenistic Greece who considered artistic performance fit only for slaves...

In book subjects a student can only do a student's work. All that can be measured is how well he learns, rather than how well he performs. All he can show is promise.

We no longer even understand the question whether change is by itself good or bad. We start out with the axiom that it is the norm. We do not see change as altering the order. We see change as being order itself—indeed the only order we can comprehend today is a dynamic, a moving, a changing one.

Tomorrow everybody—or practically everybody—will have had the education of the upper class of yesterday, and will expect equivalent opportunities. That is why we face the problem of making every kind of job meaningful and capable of satisfying every educated man.

Throughout the ages to be educated meant to be unproductive. Our word "school"—and its equivalent in all European languages—derives from a Greek word meaning "leisure."

Communism is evil. Its driving forces are the deadly sins of envy and hatred.

Through systematic terror, through indoctrination, through systematic manipulation of stimulus, reward, and punishment, we can today break man and convert him into brute animal. The first step toward survival is therefore to make government legitimate again by attempting to deprive it of these powers by international action to ban such powers.

No matter how deeply wedded one may be to the free enterprise system (and I, for one, am wedded for life), one has to accept the need for positive government; one has to consider government action on a sizable scale as desirable rather than as a necessary evil.

An organization is "sick"—when promotion becomes more important to its people than accomplishment of their job—when it is more concerned with avoiding mistakes than with taking risks—and with counteracting the weaknesses of its members than with building on their strength—and when good human relations become more important than performance and achievement. The moment people talk of "implementing" instead of "doing," and of "finalizing" instead of "finishing," the organization is already running a fever.

There is an unbroken chain of opposition to the introduction of economic freedom and to the capitalist autonomy of the economic sphere. In every case the opposition could only be overcome—peacefully or by force—because of the promise of capitalism to establish equality. That this promise was an illusion we all know.

Capitalism as a social order and as a creed is the expression of the belief in economic progress as leading toward the freedom and equality of the individual in a free and open society. Marxism expects this society to result from the abolition of private profit. Capitalism expects the free and equal society to result from the enthronement of private profit as supreme ruler of social behavior.

Fascism is the result of the collapse of Europe's spiritual and social order. Catastrophes broke through the everyday routine which makes men accept existing forms, institutions and tenets as unalterable natural laws. They suddenly exposed the vacuum behind the facade of society.

The masses must turn their hopes toward a miracle. In the depths of their despair reason cannot be believed, truth must be false, and lies must be truth. "Higher bread prices," "lower bread prices," "unchanged bread prices" have all failed. The only hope lies in a kind of bread price which is none of these, which nobody has ever seen before, and which belies the evidence of one's reason.

Our society has become an employee society.

Without institution there is no management. But without management there is no institution.

We will have to learn to lead people rather then to contain them.

A primary task of management in the developed countries in the decades ahead will be to make knowledge productive.

A management decision is irresponsible if it risks disaster this year for the sake of a grandiose future.

The only thing we know about the future is that it is going to be different.

The concept of profit maximization is, in fact, meaningless.

Profit is not a cause but a result.

Success always obsoletes the very behavior that achieved it.

The basic definition of the business and of its purpose and mission has to be translated into objectives.

It is better to pick the wrong priority than none at all.

Decisions exist only in the present.

The fault is in the system and not in the men.

A success that has outlived its usefulness may, in the end, be more damaging than failure.

One cannot hire a hand; the whole man always comes with it.

"Loafing" is easy, but "leisure" is difficult.

The first step toward making the worker achieving is to make work productive.

When Henry Ford said, "The customer can have a car in any color as long as it's black," he was not joking.

A tool is not necessarily better because it is bigger. A tool is best if it does the job required with a minimum of effort, with a minimum of complexity, and with a minimum of power.

The society of organizations is new—only seventy years ago employees were a small minority in every society.

Management has authority only as long as it performs.

It has been said, and only half in jest, that a tough, professionally led union is a great force for improving management performance. It forces the manager to think about what he is doing and to be able to explain his actions and behavior.

And no matter how serious an environmental problem the automobile poses in today's big city, the horse was dirtier, smelled worse, killed and maimed more people, and congested the streets just as much.

Wherever an impact can be eliminated by dropping the activity that causes it, this is therefore the best—indeed the only truly good—solution.

The manager is a servant. His master is the institution he manages and his first responsibility must therefore be to it.

We do not need more laws. No country suffers from a shortage of laws. We need a new model.

The worker's effectiveness is determined largely by the way he is being managed.

To be a manager requires more than a title, a big office, and other outward symbols of rank. It requires competence and performance of a high order.

There is every indication that the period ahead will be an innovative one, one of rapid change in technology, society, economy, and institutions.

Memorable Quotations: Economists

Memorable Quotations: Business Leaders

Memorable Quotations from Business Leaders
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