Peter Drucker on Effectively Managing Knowledge Workers

In an essay published by the Harvard Business Review in 1992, Peter Drucker wrote that “Every few hundred years throughout Western history, a sharp transformation Imagehas occurred.” He went on to say that in this time we are the “first society in which ‘honest work’ does not mean a calloused hand. This is far more than a social change. It is a change in the human condition.” Drucker foresaw that increasing the productivity of knowledge workers—those whose main capital is knowledge—was “the most important contribution management needs to make in the 21st century,” and yet so few organizations seem to effectively manage their approach to the future in regard to this increasingly important human asset. In another article posted by HBR, six aspects are offered to more effectively run an organization of knowledge workers:

1. Know what knowledge is needed.

In a hyper-connected world—one in which vast, almost infinite amounts of information are literally at our fingertips—producers of data such as the sales force, IT, etc., are more often counted upon to provide numbers. Unfortunately, these workers don’t always know what they’re doing. A 2014 McKinsey study found that “less than 20 percent of IT professionals are effective at targeting where they can add the most value inside their organizations.” Drucker said that “an adequate information system [must lead management] to ask the right questions, not just feed them the information they expect. That presupposes first that executives know what information they need.”

2. Clean out what is no longer relevant.

Every effective manager is excited to see new innovations within their organization, but far too often they are afraid to trim the products, services, and procedures that are no longer making new contributions. Drucker said that, “Every organization will have to learn to innovate…” And then, of course, one comes back to abandonment, and the process starts all over. Unless this is done, the knowledge-based organization will very soon find itself obsolescent, losing performance capacity and with it the ability to attract and hold the skilled and knowledgeable people on whom its performance depends.”

3. Embrace employee autonomy.

Management needs to encourage decision making and accountability throughout the organization—a concept Drucker proposed in 1954 called “Management by Objectives.” The HBR article said “In a knowledge economy, top-down direction is particularly detrimental because employees are bound to know more than their supervisors do about the specialized fields in which they operate.” This supplements Drucker’s thoughts that, “Knowledge workers have to manage themselves. They have to have autonomy.”

4. Encourage learning within the organization.

“If knowledge isn’t challenged to grow, it disappears fast,” said Drucker. “It’s infinitely more perishable than any other resource we have ever had.” In the old days, organizations were more interested in achieving efficiencies of scale. Now, organizations need to be more attuned to “scalable learning,” redesigning work environments to foster new knowledge creation. This entails moving beyond what workers already know, and pushing them to make new discoveries more quickly by working together as a team to solve problems.

5. Provide a strong sense of purpose.

Drucker wrote, “What motivates–and especially what motivates knowledge workers–is what motivates volunteers…” they need to know the organization’s mission and to believe in it.” A sense of purpose is what drives employee engagement, much more so than a large paycheck or flexible work hours. Drucker went on to say that employees’ engagement cannot be attained “by satisfying knowledge workers’ greed. It will have to be done by satisfying their values.”

6. Be mindful of those left behind.

Drucker called them “knowledge-worker cousins,” you may know them as service workers. “Knowledge workers and service workers are not ‘classes’ in the traditional sense,” he said. “But there is a danger that… society will become a class society unless service workers attain both income and dignity. Anyone can acquire the ‘means of production’, i.e., the knowledge required for the job, but not everyone can win.” What this really means is that the wealth of an organization should be shared equitably, trickling down to all workers in a company. Essentially, executives need to rein in their compensation. “A healthy business cannot exist in a sick society.”

Drucker knew over half a century ago what it would take to effectively manage an organization in the 21st century. Understanding that, these days, people add more value to a business with their minds instead of their muscles is no news to most, yet the strength of the knowledge worker is still underappreciated. Consider what Peter Drucker said. And make the most of the knowledge workers in your organization.

If you’d like to know how these techniques can be used in your business, please call Advanced Business Coaching, Inc  at 262.293.3166