Peter Drucker and Manager of Tomorrow

The Chinese Manager of Today - Observations from Dr. Swaim

After consulting with Chinese organizations and teaching graduate-level courses thoughout China for nearly five years, Swaim shares the following observations relative to the Chinese manager of today. According to Swaim, there are two major categories of managers in China today, the "old school" and the "new school."

Demographics of the Groups

A "new-school Chinese manager" could be described as one in their mid-30s, both male and female. They have a four-year university degree (often earned at a foreign university), have continued in their self-development with some graduate work, and, perhaps, have received an MBA. Many are employed in multinational firms, joint ventures, private enterprises, or are entrepreneurs and running their own businesses. Some are employed in SOEs, and they are typically frustrated because they work under "old-school Chinese managers." In urban areas, new school Chinese managers are often fluent in both oral and written English, and in some cases, even another language.

Old school Chinese managers differ considerably from those of the new school. They are predominately male, older, in their late 40s or 50s, have received little formal university education or management training, and generally are employed in a SOE or work for a bureaucratic agency of the State. Their command of other languages, both oral and written, is limited. Figure 1 depicts the demographics of these two groups.

 

Characteristics and Personality Traits

The characteristics and personality traits also differ considerably between these two groups as shown in Figure 2.Those who have had some experience in attempting to do business with the old-school Chinese managers will relate to many of these characteristics.

 

The old-school Chinese manager (a leader in upper management) may appear to be cordial and friendly in social encounters, particularly if the first meeting is at a dinner meeting. They may even try to impress you with their Karaoke singing, but this generally is only a front and will change during the business meeting. Without delving into business-meeting conduct (a topic of another article), the old-school Chinese manager is generally risk adverse, particularly if there is a chance that they might have to accept responsibility for a decision later on. Therefore, they will "think about it," which means they are not going to make a decision. If a difficult or unpopular decision is necessary, they will attempt to delegate this to someone else in order to remove themselves from situations that could diminish their wanting to maintain their "good guy" image in an organization.

The mid-level, old school Chinese manager is basically occupying space in an organization, and at best, serves as a conduit and, more often, a filter of information, and as a monitor to ensure that someone is not violating the bureaucratic policies of the organization. They have probably not earned their position based on their own merits, but rather as a result of a personal relationship, and often they are a "square peg in a round hole." Swaim observed one organization in China where the marketing manager was formally a space scientist who had worked for the Chinese military. People often joke about some positions not requiring a "rocket scientist,' but in this case the organization actually had one, one who had obtained a position based solely on a personal relationship without regard for qualifications for the position.

An old-school Chinese manager has generally learned how not to get things done, lacks creativity, initiative, and responds to new concepts by objecting that this or that is not the "Chinese way." Unfortunately, these are the more favourable characteristics and personality traits of an old-school Chinese manager. The management style of this manager varies from being laissez-faire (providing no vision, direction or objectives for his people) to being autocratic. They may practice management-by-exception but only to reprimand subordinates for their mistakes instead of rewarding them for their good performances.

Drucker wrote, "It is easier to de-motivate people than to motivate them," and old-school Chinese managers usually live up to Drucker's observations by creating a dismal working environment for their employees. More negative characteristics are not obvious to everyone at first, but, over time, one learns that these types of managers can be very manipulative, are out for what they can get (which has led to many of the corruption problems in China) and they delight in win-lose situations where they feel they have put one over on you without you knowing it. One should be wary when approached by these kinds of individuals, when they have communicated that the stated purpose of a meeting is "to cooperate with you." Essentially, they want something for free, will "pick your brain," and will never be heard from again if they have obtained what they wanted. Although, as previously mentioned, they are not creative; they are "adaptive." What this really means is they are open to stealing the ideas of others and adapting them to their own or their organization's use, contributing, of course, to the huge "piracy" problem China is widely, accurately, and unfortunately known for.

One need not review the characteristics of the new-school Chinese manager in detail, as they are generally the opposite of those of the old school. Business dealings with this group typically result in positive outcomes for both parties. The real problem for China is that there are not enough of them. Since the vast majority of enterprises in China are SOEs, the number of executives and managers from the old school is overwhelming. Recently, foreign executives and professionals have been recruited for senior positions in SOEs to deal with this unconscionable incompetence in management. This then leads to the need to replace old school managers, not necessarily with new school managers, but with the "Managers of Tomorrow," a major thrust of this article. Obviously, based on the previous discussions, new school managers with further development offer the best possibilities for all Chinese organizations.

Rapidly Changing Times Demand a New "Manager of Tomorrow"

The following is a discussion of Drucker's observations and why he stresses the need for a new managers of tomorrow. These observations deal with changes in technology, looking at an organization as a process, particularly as it relates to a customer, the need for a greater understanding of marketing, as opposed to simply selling, by everyone in an organization, the need for innovation, the "Seven New Tasks" required of the manager of tomorrow, and what is needed to develop them. In many cases, Drucker's direct quotations will be cited to allow the reader to totally appreciate the depth and foresight of Drucker's thinking.

Technology and Understanding Processes

Drucker observes that, "The new technology will demand an understanding of the principles of production and their consistent application by all managers. It will require that the entire business be seen, understood, and managed as an integrated "process." This directly relates to the popular "Six Sigma Concept" of understanding and managing processes and an organization's value chain (inputs-transformation/process-outputs). This also applies to "inputs" such as raw-materials procurement, customer service (or service requirements as described in the Six Sigma Concept) and other aspects of the "output" process such as distribution.

Drucker asserts, "The process requires the maximum of stability, and, at the same time, the ability to anticipate future events. The process must be based on specific objectives and on long-range decisions in all key areas. But it also requires great internal flexibility and self-guidance. Therefore, managers on all levels must be able to make decisions that can adapt the whole process to new circumstances, changes in the organization's external environment and disturbances and possible crises, and yet maintain it as an ongoing process."

Marketing

Drucker, in his extensive writings, said there are two major functions only in an organization, marketing and innovation.

"In particular the new technology demands that management create markets. Management can no longer be satisfied with the market as it exists. It can no longer see, in selling, an attempt to find a purchaser for whatever it is that the business produces. It must create customers and markets by conscious and systematic work." Students of Drucker will no doubt recall Drucker's definition of the purpose of a business as "to create a customer."

"Marketing itself is becoming an increasingly integrated process. And, increasingly, it requires close integration with all other phases of the business. Instead of putting the emphasis on selling to the individual consumer, marketing centres more on product and market planning, product design and styling, product development and customer service. This will demand that tomorrow's managers, regardless of their level and function, understand the marketing objectives and policies of their company, and know what they have to contribute to them. Business management will have to think through long-range market objectives and to plan and build a long-range marketing organization." To put this into a different perspective, blindly focusing on narrow issues of concern within an organization will need to be abandoned. As an example, even the accounting and credit functions must also think marketing, not serve as Departments of "de-customerization."

Innovation

Drucker has written extensively about the need for innovation. Organizations that do not innovate will not survive.

He said, "The new technology will make new demands for innovation. Not only must the chemist, designer or engineer work closely with production and marketing colleagues, but there will also have to be a systematic approach to innovation.  Innovation will have to be managed by objectives that reflect long-term market goals. It will have to much more systematically foresee inherent possibilities of technological and scientific development and to shape manufacturing and marketing policies accordingly." As an excellent reference relative to innovative policies and practices, the reader should visit the 3M Corporation Web site, the site of one of the most successful innovative companies of all time, for additional insight.

Need for New Management Tools

Managers of tomorrow, according to Drucker, will have to acquire a whole new set of tools, many of which they will have to develop themselves. They need to develop adequate yardsticks for performance and results in their business objectives. They need to acquire economic tools so they can make meaningful decisions today for a long-range tomorrow. They will have to acquire new tools of the decision-making process.

The New Tasks of the "Manager of Tomorrow"

The managers of tomorrow must take on "Seven New Tasks"

1. They must manage by objectives.

2. They must take more risks and for a longer period ahead. And risk-taking decisions will have to be made at lower levels in the organization. The manager must therefore be able to calculate each risk, to choose the most advantageous risk-alternative, to establish in advance what they expect to happen and to "control" their subsequent courses of action as events bear out or confound their expectations.

3. They must be able to make strategic decisions.

4. They must be able to build an integrated team with the members capable of managing and of measuring their own performances and results in relation to the common objectives. And there is a big task ahead in developing managers equal to the demands of tomorrow.

5. They will have to be able to communicate information quickly and clearly. They will have to be able to motivate people. They must, in other words, be able to secure the responsible participation of other managers, of the professional specialists (knowledge workers and technologists - terms coined by Drucker over 40 years ago) and of all other workers.

6. Traditionally a manager has been expected to know one or more functions. This will no longer be enough. The managers of tomorrow must be able to see their businesses as a whole and to integrate their functions with the whole (no more narrow thinking about their duties).

7. Traditionally a manager has been expected to know a few products or one industry. This, too, will no longer be enough. The managers of tomorrow will have to be able to relate their products and industries to the total environment, to find what is significant in them and take that into account in their decisions and actions. Increasingly the field of vision of tomorrow's managers will have to take in developments outside their own markets and countries. Increasingly, they will have to learn to see economic, political and social developments on a worldwide scale and to integrate worldwide trends into their own decisions.

The Preparation of the "Manager of Tomorrow"

Drucker said the managers of tomorrow will not be able to remain intuitive managers. They will have to master systems and methods, will have to conceive of patterns and synthesize elements into wholes. They will have to formulate general concepts and to apply general principles. Otherwise, they will fail. To find the necessary general concepts, to develop correct principles, to formulate appropriate systems and methods and to discover basic patterns will be based on a premise that in our management of today we have the experience out of which we can distil valid methods and general conclusions for the management tasks of tomorrow.

Drucker said, "If a man is to manage by concepts, patterns and principles, if he is to apply system and methods he can, however, also prepare himself for the job. For concepts and principles can be taught as can system, method, and the formulation of patterns. Indeed, perhaps the only way to acquire them is by systematic learning. At least I have never heard of anyone acquiring those basic patterns, the alphabet and the multiplication table, by experience."

The Need for Experience

"Tomorrow's manager will actually need two preparations rather than one. Some things a man can learn before he becomes a manager; he can acquire them as a youth or as he goes along. Others he can learn only after he has become a manager for some time; they are adult education. One needs experience in management as well as maturity, however, to learn to manage by objectives, to analyze the company's business, to learn to set objectives and to balance them, to learn to harmonize the needs of the immediate and long-range future. Without experience as a manager -or at least as an adult -one can learn to recite these things, but one cannot learn to do them.

"One needs experience as a manager to learn how to assess and to take risks. One needs experience to learn how to exercise judgment and make decisions. One needs experience to see the business in society, to assess the impact of the environment on the business and to decide what management's public responsibilities are.

"One cannot, as a young man, learn what managing managers means, or managing workers and work. Nothing is as futile or as pathetic as the young man who has learned "personnel management" in business school and then believes himself qualified to manage people. And no one can do quite as much harm -or as little good. (Swaim adds: This should answer the question of the young Chinese university graduates who wonder why they cannot immediately get good paying management positions after graduation.)

"The specific work of the manager makes sense only to men who have set objectives, organized, communicated and motivated, measured performance and developed people. Otherwise it is formal, abstract and lifeless. But to a manager who can put the flesh of his own experience on these bones, the terms can be extremely meaningful. Their classification can become a tool by means of which he can organize his own work, examine his own performance and improve his own results."

 

Need for Advanced Education -Developing Today's Manager for Tomorrow

Drucker comments on the need for advanced education.

He said, "To discharge tomorrow's management tasks we therefore will need advanced education for people already in management. It is a fairly safe bet that the focus of education for management will increasingly shift to advanced work for the adult experienced manager. In fact, that management has a need for advanced education -as well as for systematic manager development -means only that management today has become an institution of our society." These latter observations of Drucker led Drucker and Swaim to collaborate in the development of the Peter Drucker Executive Development Programme in China for experienced Chinese managers of the new school.

Integrity is Central

The final point, but what he considers to be the most important characteristic of the manager of tomorrow is the concept of integrity.

Drucker said, "Yet intellectual and conceptual education alone will not enable the manager to accomplish the tasks of tomorrow.

"The more successfully tomorrow's manager does his work, the greater will be the integrity required of him. For under the new technology the impact on the business and his decisions, their time span and their risks, will be so serious as to require that he put the common good of the enterprise above his own self-interest (something the old-school manager does not understand). Their impact on the people in the enterprise will be so decisive as to demand that the manager put genuine principles above expediency. And their impact on the economy will be so far-reaching that society itself will hold the manager accountable. Indeed, the new tasks demand that the "Manager of Tomorrow" root every action and decision in bedrock principles, that he lead not only through knowledge, competence and skill but through vision, courage, responsibility and integrity."

No matter what a manager's general education or adult education for management was, integrity of character will be decisive above all, even more than in the past.

Drucker's observations in this article are an abstract from:

Peter F. Drucker

The Practice of Management

First Published in 1954

For additional information contact Dr. Swaim at Email:

robertswaim@hotmail.com