Musings on Entrepreneurship and Innovation
Monday, June 14, 2004Drucker and Management on the Frontier
Early this morning, I found myself re-reading passages of Peter Drucker's book, Management Challenges for the 21st Century. I rediscovered two passages that I believe have particular meaning for growing companies located outside the urban mainstream.
The first relates to an insight that came to me belatedly:
Not enough people have even one first-rate skill or knowledge area, but all of us have an infinite number of areas in which we have no talent, no skill and little chance to become even mediocre. And in these areas a person - and especially a knowledge worker - should not take on work, jobs, assignments.
The reluctant acknowledgement of the limited span of my own expertise triggered my launching Pioneer Entrepreneurs as a living laboratory for experimenting with ways to facilitate productive conversations among entrepreneurs and other sources of complementary expertise. Individually, none of us knows enough to be competitive in the long-term in the face of globalization.
There is a growing recognition that networks are important to economic vitality, but the accumulation of effective networking skills is not evenly distributed. Relative geographic isolation is at once a disadvantage and an advantage: a disadvantage in that familiar, productive, face-to-face communication is inhibited; an advantage because it forces one to consider alternative tools, techniques, and modes of communication.
Drucker was one of the earliest, and clearest, thinkers in regard to the emergence of the knowledge worker and the implications for management:
Altogether, an increasing number of people who are full-time employees have to be managed as if they were volunteers. They are paid, to be sure. But knowledge workers have mobility. They can leave. They own their "means of production," which is their knowledge...What motivates - and especially what motivates knowledge workers - is what motivates volunteers. Volunteers, we know, have to get more satisfaction from their work than paid employees, precisely because they do not get a paycheck. They need, above all, challenge. They need to know the organization's mission and to believe in it.
This is particularly relevant to organizations in more rural areas for a number of reasons. For starters, almost by definition, human capital is more scarce in rural areas. To the extent that scarce human capital is important, it needs to be managed with care. Second, as noted by Jack Schultze in Boomtown USA, "The current move to the agurbs is the third great population wave in the United States' history...this third wave is primarily undertaken by skilled and educated people who choose to live not only outside a city but also outside its sprawling suburbs." In other words, frontier opportunity is being fueled by mobile knowledge workers. Third, news travels fast in a small town, which means that an employer's reputation can be damaged in no time at all. And fourth, given the experience of many smaller places as "company towns," there may be a lingering bias among employers toward a "take it or leave it" attitude. Increasingly, knowledge workers have the ability to leave it.
