What Peter Drucker Would Be Reading

Peter Drucker

Recent selections from around the web that, we think, would have caught Peter Drucker’s eye:

1.   He Who Makes the Rules: Congratulations, you got Washington to pass a law. Now you just have to see if you can make it mean anything. As an impressive article by Haley Sweetland Edwards in The Washington Monthly lays out, legislation can get drowned in the rule-making process that follows its passage. Since journalists stop taking an interest in a bill once it has passed, it’s “infinitely easier for industry lobbyists and members of Congress who voted against the laws to begin with to destroy them by subtle, nuanced, backdoor means,” something they do by “crafting crafty legal arguments and drowning understaffed rule makers.” The author writes: “This is the way a law ends: not with a bang but with a whimper.”    

2.   Management Fads That Make a Difference: Nearly every line of work is subject to management fads, and that includes those toiling in the public sector. Some of those fads actually work at saving money and improving effectiveness in government, and some don’t. In Governing magazine, Jonathan Walters writes, “Whether it’s TQM, management by objectives or the balanced scorecard, state and local governments have proved to be both fertile and shaky ground on which to establish businesslike approaches to the public’s business.” But even a skeptical Walters is impressed by a process called Lean, which “involves paring down processes to the bare essentials” as well as Six Sigma, “which aims to reduce variation in any repeatable process.” If it’s good enough for GE, it’s good enough for Iowa.

3.   Remember: A Country Is Not a CompanyWith crises in Cyprus and other parts of the world, it’s becoming common to speak of “insolvent” nations. But this, argues Stephen Kinsella in a post at the HBR Blog, is a dangerous way of thinking. For one thing, it’s just not valid. “Technically almost every country would be insolvent if it was asked to pay all of its debt using its available assets,” he points out. For another, when political leaders view their nation as insolvent they undercut the interests of their fellow countrymen. Kinsella writes, “For politicians of debtor states, suddenly vast privatizations make sense, because of course you’re selling some of your remaining assets. Suddenly the will of the people of the debtor nation becomes secondary to the will of the nation’s creditors.”      

4.  Dx Comment of the Week: Last week, when we asked about what businesses should do to hold their leaders accountable, reader Mike Grayson had this to say:

The problem with publicly held companies lies squarely at the feet of the board of directors. Many board members are appointed because of who they are, rather than what they can contribute. Peter Drucker called this ‘playing through.’ They are just playing through and aren’t really involved—that is until it’s time to accept the CEO’s resignation for missing his or her targets.
The solution is that boards need to become more committed, and not merely involved. Board members should be required to set their own objectives, and if they fail to fulfill them, then they should resign. That would quickly solve the problem and eliminate the scapegoat CEO.