# 18: Management by Objectives

Story behind the Passage

The story behind this passage is very simple. I love Peter Drucker! He is my absolute management hero. I love him so much that I spent a whole chapter in my habilitation (second academic book) on his first study about General Motors entitled The Concept of the Corporation. I even indulged in his work so much that I spent about 10 pages on his biography in my study before actually discussing the book. That provoked one of my reviewers to write the following in her assessment (no worries, I passed!):

“For me, it remains unclear why the analysis of the books needed such a comprehensive sketch of the respective biography of the authors… and how this is essential for the strategic reading [my method developed in the book].” My translation

The critique of the reviewer was completely to the point and I did shorten this part in the actual book publication (which is still at the press). However, I was just so excited about Drucker’s path of life. Een though I am saying that the reviewer was right by critiquing the length of my biographical account, I do have to add that this information about the person behind a book is important for what I did afterwards in the chapter. Since my basic point was to show that management is more or less a liberal art, i.e., that you need comprehensive skills from different academic fields in the humanities and the sciences to do a great job, I wanted to emphasize how this interdisciplinary background was also reflected in the authors I had chosen. Well, I obviously missed to explain that a bit more clearly. (Hey, I should send a link of my blog to the reviewer today!).

In any case, Drucker remains such an admirable character to me because of his diverse academic and professional background (especially political science and journalism) and his ability to bring together all this expertise in his work on management. To me, he was one of the last polymaths, next to Herbert Simon and Henry Mintzberg, at least as far as their work in business schools was concerned. In fact, I just happened to talk about this with someone the other day and I shared that I am truly convinced that business schools — besides all the BS they have been doing and selling in the past decades and in almost every country on this planet — were and maybe still are places where intellectual weirdos who do not fit into any assigned drawer find a home.

As far as Drucker is concerned, he wrote close to 40 books and hundreds of articles. (Well, at least I am on my way to catching up when I am done with my 365 Days Blogging Challenge!) Of course, he wrote in the pre-digital age and the concept of “startup” was not even born in the 1980s. Still, he, like all truly far-sighted thinkers, knew that the advancement of technology would change everything and that this would lead to the triumph of the “knowledge worker.” Did you know that he coined this famous term? Now, I am starting to drift off and might end up celebrating Drucker’s many contributions again … I will hold it right here and start with the passage.

My Learnings

“Here lies a man/who knew how to enlist/In his service/Better men than himself.” Of course, this is not by Drucker himself but Drucker quoting Carnegie. Still, the quotation so much reflects the entire ethos that Drucker established with his thinking on effective management and especially with the contribution he made to establishing the field of business consulting. This is also where he frequently met business moguls such as Carnegie. But Drucker did not write about his topics from the perspective of a distanced observer. He did share his very personal reflection and this also included his own experience with men who did NOT know how to enlist people better than themselves.

It was in The Concept of the Corporation where Drucker described how Sloan, the CEO of General Motors, basically trusted Drucker’s insights but did not really listen to him. In other words: Even if Drucker himself would have been “better” than the great Sloan when it came to predicting the future of modern organizational design and management, according to Drucker’s description at least, Sloan was not a character who celebrated that much. The question is: Who really likes to admit and even praise others for their brain power and achievements while putting oneself behind, especially in such a powerful leadership position?

To be honest, five years ago or so when I dealt with Drucker’s writings in detail, I did understand the meaning of the quote and I completely agreed. Today, I think, however, that I was not there yet — I did not fully support the meaning. After all, we grow up in a system, a post-industrial and post-everything world, in which rationality and brain power are still considered the core ingredients of a successful career. This especially applies to academia, of course. We are “brains on a stick” in that system and the ability to write valuable books like Drucker from an authorial perspective and in a style that allows you to move away from this mono-dimensional perspective and self-identification has been lost by most academics — because it continued to be declined as unacademic.

So, what I mean by saying “I was not there yet,” I was still very much on an ego trip. Whenever there was a chance for me to show off with my knowledge or ideas — I would go for it. Maybe other people never had this tendency, but I did. And in a certain way, I think that this is even necessary to get you through some crucial phases of your career. As a coach once mentioned to me: “Ego is not all that bad, it helps you.” I also see this by now but there remains a massive problem with people who seem to only consist of ego, as defined in the most basic way as driven by self-interest and personal gain. (Of course, in the spiritual context, there is much more to say about this crucial concept.)

Today, when I look at this maxim in the context of startup life and even business in general, I am not that afraid of people not being willing to hire the best people available. I worry more about the ability of people to even see the talents in others. This reminds me of the quote: “People are like mirrors. …” The quote has many different versions of what follows in the second sentence but for me, the second sentence is: “You only see in them what is inside you.” Hopefully, enough talented people will stick around who continue listening to Drucker’s advice on this.

“It’s the abilities and not the disabilities that count.” This sentence does not need extra bla bla from my side. Just one reminder: Do not just take this as a call for non-discrimination. Make sure you apply this to yourself, i.e., look at what you can do with the natural resources you have. Everything else is secondary.

“But it is the spirit of the organization that determines whether he will do it.” This part sounds quite self-evident. Today, we have all these studies on corporate culture that show us how important organizational culture is for individual performance. But back in the days when Drucker was writing, this kind of research was only emerging. But does time matter when it comes to culture? Is this what Drucker really meant? He is using the word “spirit” here. And he is not even talking about ‘performance’ which is my interpretation, he is simply talking about implementation. What would Drucker have said about the “startup spirit” that young founders are inspired by?

Well, the answer is obvious: It does not make sense to speculate about people’s opinion — whether they lived in the past or are part of our present lives. As a management scholar and consultant, Drucker was fascinated by the “doing” part of life. Even though I love the visionary and creative thinking that the concept of leadership, as opposed to management, entails, I am quite afraid that the execution part is suffering a bit — also among young entrepreneurs. I know this sounds super skeptical and hard to understand because founders, after all, do everything themselves at the beginning and they would not be founders if they did not execute their plans.

Nevertheless, this is where culture and implementation can also stand in conflict. The spirit of the digital economy with all its startup hubs and hip co-working spaces does invite social interaction and much communication. This aspect of “doing concentrated work” is usually part of the conversation but one wonders where and when some people actually attend to it. After all, the implicit mantra that it is all about the team also leads to the fact that it sometimes remains unclear who exactly contributes which value. Does this sound old-fashioned or even mean?

I do not think so. As I repeat over and over again, we live in the age of ultra quick implementation. We can all have great visions and a wonderful mindset. But it does not get us anywhere beyond talking. And talking about ideas has value, no doubt. Still, there should be a clear differentiation or at least awareness of startup visions and real entrepreneurship. And the latter takes leaders, that also know how to use the tools of managing by objectives on a professional level . As Drucker knew very well:

“Management is doing things right. Leadership is doing the right things.” — Peter Drucker

Reflection Questions

1) Drucker was considered a management “guru.” Do you believe in this concept in the business context?

2) Do you feel you are implementing the wisdom of Carnegie in your company?

3) Did you ever work in a toxic corporate culture? How did this affect your performance?

Learn more about Silke’s 365 Days Blogging Challenge





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Silke Schmidt

Silke Schmidt

Founder & CEO of Companypoets

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