A Dialogue with Atsuo Ueda: An Introduction to Peter F. Drucker (3)



 The wisdom to get through the knowledge society: Everyone is an executive



Isaka: What does Drucker think of today, the early days of the 21st century?

In Japan, we call the period after bubble the lost decade. Drucker says there was also the lost decade in the United States and Europe. It was 1980’s. Nothing went well in those days. However, that period is now evaluated as the stage before the leap in the nineties. He says in one interview that it might be the same with Japan. However, to that end, we have to solve the two big problems: budget deficit and bad loans. These two are huge problems.

Japan has the capability to transform as seen in import of Buddhism, Meiji Restoration, and reconstruction after World War II. He counts on such a capability. But he warns that we need determination.

However, the truly important thing is not the lost decade, but the transition. This transition started from sometime between 1965 and 1970 and will continue to 2020 or 2030, he says.

To break away from the lost decade would be difficult, but to manage the fifty or sixty-year transition stage would be far more difficult. For an individual company, it is far more important to know which stage the business is structurally in than to make an excuse for today’s business conditions. The point is that knowledge has become the center of all.


Isaka: What is knowledge, according to Drucker?

Knowledge is useful

Knowledge nowadays is the one that is highly specialized in order to produce result.

Drucker points out that knowledge for action used to be placed in a lower rank, called since the ancient days of Socrates. It could not be taught systematically, but learned from experience through apprenticeship in guild. But knowledge we need today is objective, systematized and communicable knowledge.

The more highly developed, the more specialized knowledge becomes. And the more specialized knowledge becomes, the less useful becomes knowledge alone. It is only effective when it works with other knowledge. Knowledge has the greatest impact when connected with other knowledge. Thus, one with highly-specialized knowledge can be really effective by assimilating other knowledge and combining them.

Drucker himself has studied thoroughly all kind of fields from statistics to medieval history, focusing on one theme at a time. He has been doing this for more than sixty years.


Knowledge society is the organization society

Here comes Drucker’s theory of organization. It is the organization that makes the specialized knowledge organically work with others, and makes it connected with each other. The organization is a place of work, like companies, governmental institutions, NPOs and so on, where people work together toward a common goal. Therefore, society where knowledge is the center of all becomes society of organizations. One can get along without big organizations, but never without organizations.

Of course, organizations should not be rigid and exclusive. They must allow for the freedom of its members to join or leave, or rather should welcome incomers and wish outgoers well. Employment relationship does not count anymore. There can be a variety of relationships including part-timers, contractors, and partnerships.

People used to ask “What is your job?” Today they ask “What is your company?” However the question would be revised again, “What is your job?” The power of knowledge has produced organization society. And that power of knowledge brings about organization society where people are not bound by organizations.


Educated person has living knowledge

We are now in post-capitalist society. It is a society after capitalism. The characteristics of the society are not settled. Therefore, we can just call it post-capitalist society. The society after this transition would probably be the knowledge society. At that time people would wonder, “Was there a money-oriented society?” Already, if one finds a way to cure cancer, funding appears from anywhere.

In the knowledge society, the natures of liberal education will change. Living knowledge is required. In this way Drucker reveals his insight of education.

Rather useless knowledge or non-living knowledge is frequently called a liberal art. Drucker points out Latin education as a typical example. In the West, there are still some schools that teach Latin as a compulsory subject. They say Latin nourishes logic or helps learn basics of other languages. Some even say it is a liberal art because it is useless. However, tracing back the history of Europe, Latin was used as an official written language. It was an essential skill for clerical officers. Therefore it was a mandatory subject in a higher education for scribes. Furthermore, according to Drucker, championing of Latin as its logical structure and basics for all European languages appeared after written languages changed from Latin to their spoken languages: English, French, German, etc. Such championing for Latin can only be taken as protection of Latin teachers from unemployment. Even school subjects cannot be scrapped and rebuilt so quickly.

Drucker says the difference between Sophist and Socrates as well as Confucianism and Buddhism can be condensed into the questions: “how does Man live?” and “what is Man?” Knowledge was regarded as the most important thing for Man, but it had nothing to do with practical use. Knowledge was absolute good. It was absolute existence.


Good knowledge and Bad knowledge

However nowadays, we found out that knowledge is useful. Knowledge changes the world. And it is clearly more so than ever. This means there is useful knowledge and unuseful knowledge. In other words, it revealed that knowledge is relative existence.

As a result, suspicion that as to whether there is good knowledge and bad knowledge has developed. Drucker pointed it out more than thirty years ago. It was in the world’s best seller that is still read widely today, “The Age of Discontinuity” (1969).

It has long been thought that knowledge is good. Seeking knowledge itself has been believed good and the goal. But now, the question of “what is knowledge?” appeared again in a new perspective. Even the question “what does the educated person have to know?” has arisen. Not only thinking about “what Man is” and “how Man lives”, but also having living knowledge is now indispensable. An educated barbarian is a problem, so is an ignorant gentleman. It is one of the Drucker’s utmost awareness of the issue of education.


Isaka: How does Drucker think of the change of education?

Important knowledge now is management

Drucker says the knowledge needed from now on is management. However, except for management school and management department of college, it is not taught at all. In Japan, junior high, high schools and other department of college teach the student the same thing in the same manner as in the old days when each man, having nothing to do with organizations, worked individually. Furthermore, even the teaching subjects in business schools and management department of colleges cannot catch up with the constantly advancing business world.

Management is a way of making specialized knowledge effective combining with other knowledge. This is Drucker’s insight of management. Management develops day by day. Paradigms of management keep transforming. The assumption that management is for business corporations has already crumbled. It is for all kinds of organizations.

Moreover, management knowledge is indispensable for every one. Especially, how to manage oneself has an important meaning. The questions “how to work” and “how to contribute” are connected directly to the question “how to live.”


How to manage oneself

According to Drucker, in the knowledge society, the content and the method of education become totally different. In the society of which knowledge is the center, knowledge to manage oneself is needed, as well as knowledge of one’s specialized field and of the meaning of other fields. It means how to manage time, to present one’s ideas, to communicate with others, and to be a change leader. The ability to contribute others is also indispensable in the knowledge society.

Management, which was once specific to executives, must be a common knowledge for everyone. Ability of decision-making and innovation are tools for knowledge workers to achieve. Everybody has to be a change leader.

Drucker says that like the printing revolution in the mid 15th century starting from Gutenberg’s invention of printing that made text books possible and changed education, IT revolution will change education.

Drucker identifies two kinds of knowledge. One is to learn and the other is to be taught. For learning by repetition such as multiplication tables, educational software becomes a great aid. Therefore, teachers will be released from a monitoring job and back to the primal role for teaching the meaning of things.

Going beyond that level, Drucker says, teachers will be able to pull out students’ strengths and extend them. In the knowledge society, what is most needed is a high degree of specialization, which one can get from extending one’s strengths.


Isaka: What does Drucker say about how to live in the knowledge society?

Society where everybody is an executive

Drucker says management ability has nothing to do with a special gift, but methodology. One can learn it eventually but cannot understand it easily by oneself. He would be sixty years old by the time when he could understand it completely.

Decision-making has a methodology. Not about each issue, you have to think through basics. The first step is to identify whether it is a general problem or a unique one. Starting a business has also a methodology. Analyzing opportunities and taking a good look at the outside world, you have to start small and simple but aiming at the top. The personnel placement also has a methodology. When told by the general staff that General Grant whom he was about to appoint as his commander general was a drinker, President Lincoln asked his favorite brand, suggesting to send it to the other generals. The important thing is one’s strength.

One cannot get this kind of understanding without being taught. Problem is that people are rarely taught. Drucker teaches them. Drucker teaches us fundamentals and principles from his abundant knowledge and experience. He says, “We don’t know why, but we cannot wait until we know why.”

Unless every member of the organization acts like a CEO, a company cannot develop. If not, the company will be left behind and drop out. The same is true for an entire nation. According to Drucker, members of the knowledge society are all executives.


Grasping the whole, one can see the truth

In spite of his own analytical ability since youth, Drucker says, in order to produce good results, we need an ability to look at the whole. Theory is not enough. Theory grasps relatively thickest threads and ignores the rest through abstraction. In today’s world, there is nothing that can be discarded. Therefore, observation is a must. I think this is the most important thing in Drucker’s methodology.

Grasping the whole through observing, listening and feeling is most needed. There are so many things right as logic but wrong as a whole. Everything cannot be grasped by logic. Parts together do not make the whole.

Drucker introduces a principle of advanced mathematics called “the butterfly effect.” A butterfly flapped in the Amazon, and in the next week Chicago had rain. It is proved that one cannot say these two facts have nothing to do with each other. Anything might have a relation with something else. I would say everything has a relationship with each other. It is a relationship to have a possibility of having a relationship.

Especially, in an age like today when information is delivered instantly into the whole world, what is related with what cannot be explained theoretically. If one were to reduce things to abstraction, he would be in danger of losing something important. When you can explain a case logically, be aware of the danger of “mis-abstraction.”