PREFACE

About a year after my 1985 book, The Frontiers of Management, had come out, I received the following letter: “I am the CEO of a still fairly small but fast-growing specialty-chemicals company. I try to read five or six of your chapters every weekend, and ask my senior associates to do likewise. When I finish one of the chapters I then ask myself in writing: ‘What does this chapter mean for me as a senior business executive? What does it mean for my colleagues on the management team? What does it mean for the company? What action does it imply—for me, the management team, the company? What opportunities does it identify for us? What changes in goals, strategies, policies, structure, might it point to?’ We then discuss our respective answers at one of our management meetings. And six months later we discuss the same answers again to see what actions we have actually taken and how they have worked out, but also what actions we should have taken and might still undertake. Of course, a good many of your chapters do not directly apply to us; they lead to understanding rather than to action. But a good many, again and again, stimulate us to do something or to stop doing something. And the most valuable ones are the chapters that make me say: ‘Of course, I have known this all along. Why haven’t I acted on it?’ ”

The chapters in this book cover a wide range of topics, and they were written over a five-year period. The individual chapters were not “planned” to fill a spot on an outline sketched out five years ago. But each was most definitely designed from the beginning to address one of the dimensions of the executive’s world: the economy and economics; people; management; organization—both outside and inside the executive’s particular enterprise.

In addition, each chapter was planned from the beginning to achieve two purposes. One: to explain to executives immersed in the demands of their own tasks and their own enterprise to understand the rapidly changing world in which they work and produce results. The other was to stimulate them to action and to provide tools for effective action.

The executive’s world has been turbulent for as long as I can remember—I started work two years before the 1929 crash! It surely has always been turbulent, but never as much as in these past few years—or in the years immediately ahead. Only a few short years ago, for instance, we worried about inflation and about the ascendancy of all kinds of new financial superpowers: global banks, transnational brokerage houses, junk-bond kings, takeover tycoons, and the like. Inflation is, of course, still a danger—and will remain one as long as governments pile up huge deficits. But executives in the ’90s are more likely to be worried by financial stringencies and credit crunches—that is, by the typical deflation symptoms. The monetary giants of yesterday are everywhere in full retreat and mired in scandal. The international economy of 1992 also bears almost no resemblance to that of 1980 or 1981 (when Japan still ran a trade deficit, the European Economic Community was still pie in the sky, and lending billions to Brazilian generals still seemed to be the truly conservative thing to do). So, every chapter in this book tries to create understanding of what changes are ahead and what they mean for the economy, people, markets, management, the organization. Every one of the chapters tries to create the understanding the executive needs to manage for tomorrow rather than for yesterday.

But every chapter was also designed from the beginning to stimulate action—to identify new opportunities; to point out areas where changes—in process and product, policies, markets, and structure—might be needed; where and what to do and where and what to stop doing.

The five years during which the chapters of this book were being written were years of unprecedented political upheaval. The earliest chapter in this book was written in August 1986; in the same week I wrote the first draft of what was published—in early winter of 1989—as Chapter 4 in my book The New Realities under the title “When the Russian Empire Is Gone”—an essay in which I predicted the inevitable failure of Mr. Gorbachev’s economic policies, the equally inevitable collapse of communism, and the disintegration of the Soviet Union. But the chapter I wrote that week for this book—it is Chapter 22—bears the title “How to Manage the Boss.” The most recently written chapter in this book, Chapter 24, was done almost exactly five years later, in August 1991 in the week after the Communist hardliners’ putsch against Mr. Gorbachev had failed. Its title, however, is “The New Japanese Business Strategies.” This book, in other words, focuses on executives, in their organizations and in their work. “The show must go on” is its motto—and management’s “show” is effective action for results. To help executives act and to produce results, to help them perform—in a turbulent, dangerous, fast-changing economy, society, and technology—that is the purpose and mission of this book.

—Peter F. Drucker
Claremont, California
Thanksgiving, 1991