Peter F Drucker, 95, whose thinking transformed corporate management in the latter half of the 20th century, died on November 11. But the business guru will be remembered for many things, one of them being his concept of "knowledge worker", which brought in revolutionary changes in the way corporations treated their workforce.
Drucker, who invented the term "knowledge worker" more than 35 years ago in his book Landmarks of Tomorrow said then that the management's new role is to make knowledge more productive.
Central to his philosophy was the belief that highly skilled people are an organisation's most valuable resource and that a manager's job is to prepare and free people to perform.
The guru said this at a time when -- in his own words -- practically nobody had choices. Even in the most highly developed countries, the overwhelming majority followed their father's line of work -- if they were lucky.
If your father was a peasant farmer, you were a peasant farmer. If he was a craftsman, you were a craftsman. There was only downward mobility; there was no upward mobility.
But things were changing -- fast. For the first time, substantial and rapidly growing numbers of people started to have an "abundance of choices". What is more, they could have more than one career.
That was the central theme of the path-breaking speech he gave while delivering the Edwin L Godkin Lecture at Harvard University's John F Kennedy School of Government in 1994.
The speech gave several lessons to managements of modern corporations. For instance, the ability to diagnose what kind of team a certain kind of knowledge work requires for full effectiveness, and the ability, then, to organise such a team and integrate oneself into it, will increasingly become a requirement for effectiveness as a knowledge worker.
Knowledge workers need good processes and technology, but they also need an organisational structure that doesn't get in their way.
Equally important is the second implication of the fact that knowledge workers are, of necessity, specialists: the need for them to work as members of an organisation. It is only the organisation that can convert the specialised knowledge of the knowledge worker into performance.
For instance, market researchers, by themselves, produce only data. To convert the data into information, let alone to make them effective in knowledge action, requires marketing people, sales people, production people and service people.
As a loner in research and writing, the historian can be very effective. However, to produce the education of students, a great many other specialists have to contribute people whose speciality may be literature, mathematics or other areas like history.
Drucker's lessons are extremely relevant for countries like India if they don't want to be perceived as a country of body shops -- companies that provide intellectual grunt labour and low-end coding services for software projects conceived in the West.
There is a huge economic reason why companies should try their best to retain knowledge workers. Let's take the outsourcing sector. According to a recent study by Evalueserve, the global knowledge process outsourcing market is expected to grow at a cumulative annual growth rate (CAGR) of 46 per cent, from $1.2 billion in 2003 to $17 billion in 2010.
Compare this with the prediction for the low-end outsourcing services market. This is expected to have a CAGR of 26 per cent, from $ 7.7 billion to $39.8 billion in the same period.
Evalueserve says India provided $3.5 billion of BPO and KPO (but non-IT) services in 2003, and is expected to grow at a CAGR of 36 per cent during 2004 to 2010. Hence, it is likely to earn $30 billion in 2010 by providing these services. The high-end KPO opportunities are immense for Indian firms.
For instance, look at some of the figures pertaining to intellectual property research. Drafting and filing of patent applications in the US is quite expensive. A typical application costs about $10,000 to $15,000 to draft and file with the United States Patent and Trademark Office.
Cost savings from offshoring even a portion of the patent drafting process can easily be as high as 50 per cent of the cost for the end client.
So the tribe of knowledge workers will only increase in India -- workers who don't believe they are paid to work 9 to 5; they believe they're paid to be effective. Organisations that understand what Drucker said and strip away everything that gets in their knowledge workers' way will be able to attract, hold, and motivate the best performers.
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