InReview – Issue 19

Management Challenges for the 21st Century by Peter F. Drucker; New York, Harper Business Books, 1999; xi, 270 pp.

Peter Drucker has been the Clark Professor of Social Science at Claremont Graduate School in California since 1971, and has been writing books on management and economics (more than 30 in all including two works of fiction) since 1937.

Drucker may have slowed down a bit in person, but this book is evidence of a very active mind that brings a great perspective to his subject. He draws on this perspective in outlining the challenges of managing “knowledge workers” in an era where information technology has brought fundamental change to business.

As we move from the industrial era to the knowledge era, how does management’s role change? In every way, according to Drucker. The fundamental disciplines and practices of management that were true most of the past century very quickly became obsolete. The standard measures of productivity for manual laborers are almost completely wrong for knowledge workers. The assumptions that management relied on for so many years are no longer valid. Point by point, Drucker analyses the tools a manager once had in his or her bag and shows why they no longer apply.

Some gems:

“…once beyond the apprentice stage, knowledge workers must know more about their job than their boss does—or else they are no good at all.” (p. 18).

“…an increasing number of people who are full-time employees have to be managed as if they were volunteers” (p. 20).

“Low labor productivity endangers a company’s survival. But low labor costs no longer give enough of a cost advantage to offset low labor productivity” (p. 61).

“…attention has been mainly on information for the enterprise…but information for executives—and indeed, for all knowledge workers—for their own work may be a great deal more important” (p. 123).

I believe he is a bit traditional in his comments on managing technology, and a bit light on dealing with ethical issues in this book. I think he buys in too strongly to the Frederick Taylor understanding of managing manual labor. But these concerns are minor compared with the opportunity to hear some great insight from the ultimate guru.

Reviewed by Al Erisman

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The Hacker Ethic: A Radical Approach to the Philosophy of Business by Pekka Himanen; New York, Random House, 2001; xvii, 233 pp.

Pekka Himanen is a philosopher with connections to the universities of Helsinki and California (Berkeley). Linus Torvalds, creator of the Linux OS, and Manuel Castells, Berkeley professor of sociology and information age expert, provide a prologue and epilogue to Himanen’s text.

Himanen defines “hacker” as someone enthusiastic and passionate about computer work (or, for that matter, any kind of work activity: it is that attitude that counts). In the popular mind, hacker means someone who “hacks” their way into cyberspace where they don’t belong (Pentagon, bank records, etc.). Himanen calls these crooks “crackers” not “hackers.”

Himanen describes a new “ethic” or value system that is supplementing the older “Protestant work ethic” described famously by sociologist Max Weber. First, rather than a grim Calvinistic duty, work in the hacker ethic is full of passion, joy, and entertainment. Second, rather than being motivated by pecuniary gain, the hacker attitude toward money is cavalier: hackers share widely and freely what they have (as Linus Torvalds has with the Linux operating system. Thirdly, hacker social relations occur in a “nethic”—a web-facilitated network of free and open exchange of ideas and of ready access to all the people.

The historical, sociological, and theological arguments of this book would be fun to debate. I grant the existence of the caricatured Protestant work ethic but would argue that it was in part a product of technological innovation (the clock, for example) and it is unlikely to have its weaknesses corrected by further technological innovation. More importantly, I see little evidence of any sense of calling (vocation) in today’s work force and without this there is no recognizable Protestant work ethic—nor is there much sense of Sabbath. Forces other than either the Protestant work ethic or the hacker ethic are ruling our work world today and this book does not engage them very directly. The Protestant work ethic is an anachronism and a straw man.

Nevertheless, Himanen’s hacker ethic is a beautiful ideal which I heartily applaud. I doubt that even 1% of computer technologists really share these ideals in any real, lived-out way, but the book is well-worth buying (it’s not hacker-ethic-cheap, unfortunately!) and discussing.

Reviewed by David W. Gill

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The End of Money and the Struggle for Financial Privacy by Richard W. Rahn; Seattle, Discovery Institute Press, 1999; 223 pp.

Richard Rahn is a Senior Fellow of the Discovery Institute, and founder of the Novecon companies whose products range from advance semiconductor substrates and devices to international financial services. There is an idea in this book that is very much worth exploring. We all know about “the check is in the mail” as a way of keeping money in the bank for a period of time before it gets transferred to someone else. We also know about charging something on a credit card to enable a “free loan” until the bill comes due, assuming we pay off the card and avoid interest.

Rahn raises the point that we give the government a free loan every time we carry cash in our pockets. By taking money out of an account that is working for us (earning interest) and getting cash, we do not realize the benefits from this cash until it is exchanged for something of value. During that time we carry a promise from the government, with nothing in exchange except for the “outmoded” idea that we have gained convenience or opportunity from the cash.

Why is this idea outmoded? In today’s connected world, made possible by telecommunications and computing, “digital cash” would work for us up until the moment of the transaction, when it is exchanged for value. A debit card is a limited version of this. “Smart cards” and related technologies may be a more direct approach. Universal acceptance of such transactions will make money obsolete, Rahn argues.

In spite of this fascinating idea, which is being realized in some corners, and which has many implications, some discussed by the author, I have a hard time recommending this book. The author takes such a strong anti-government stance in all of this (suggesting money is the government’s plot to control us, among other things), and makes no effort to see the “other side” of any issue, that I found the rhetoric tiresome and inflammatory. I found his many side trips into personal views to be distracting beyond redeeming value.

Reviewed by Al Erisman