Page 105 - The Drucker Lectures

86 [ The Drucker Lectures

company, and 98 percent of their business was within their terri-
tory because in those days 98 percent of all calls and 98 percent
of all revenue were local calls. Nobody had heard of computer
transmission or what have you. And so, when you look at it to-
day—and you all know the Bell telephone system is desperately
trying to reorganize itself into regulated and unregulated and
quasi-regulated businesses—you no longer have a local system
that’s interconnected, a long-distance system with local periph-
erals. The old organization cannot work and doesn’t. And so
how do you organize? We don’t know the answers; we know
patchwork. And we will all have to live with things that quite
clearly are full of friction and present problems.
We’ve tried to build our organizations as close to mechanical
models as possible because it is simple. [Scientific management
pioneers] Frederick Taylor and Henri Fayol both assumed that
you know what you are doing. You know, a coal mine mines coal.
It’s obvious, isn’t it? Well, you are now in a period in which the
real challenge is to decide what you are doing in the context of
technological change or market change.
The one axis of organization that you’ll say you need is a skel-
eton. And all of you know a land animal that is more than six
inches tall needs a skeleton; it can’t be held together by heart and
skin anymore. The organization chart, with its lines of author-
ity and its reporting, is a skeleton. Now, we always have some
problems with that. If you have a divisional structure, the rela-
tionship between your corporate comptroller and your divisional
comptroller is not a simple one and can’t be decided one way or
another. You all know that when you get to technology, it doesn’t
work if you have coordinating groups, and it doesn’t work any
other way.
Yet how do we organize the new within the old? In fact, can
we organize it? If you look at the last 30 years, the obstacles to
entrepreneurship were exceedingly high in terms of the tax laws,