In this article from the Harvard Business Review, Peter Drucker and his progressive understanding of business is highlighted. In the 60’s and 70’s, Drucker began to recognize the signs that there was a shift in business beginning to emerge. During this time two innovations developed, the microprocessor and economic liberalism. This created great opportunities but also a drastic change in the business was made.
“As the effects began to play out in the '70s and '80s, Drucker wrote extensively about the need for management practices to change. He knew that as the nature of work transformed and the pace of change increased, existing management practices, not to mention worker skill sets, would quickly become outdated and fail to meet the needs of the coming information economy.”
In Drucker's later writings, he started to develop main themes in exploring institutional innovation:
- The importance of lifelong learning in a rapidly evolving information society
- The need to decentralize organizations around employees — viewing them as assets capable of expanding growth rather than as fixed costs to be eliminated — and to move away from standardized and tightly-specified process flows
- The need for institutions to focus on building capability around core strengths — one of the reasons he was an early proponent of outsourcing as a way to simplify operations and to focus management on what really matters
- The importance of focusing on the dynamics of evolving economic and social processes rather than on static equilibrium models.