Building a Competitive Software Capability: Creative Destruction


them. The key challenge, of course, is determining what these future changes are likely to be and how to take advantage of them before your competitors do.

Peter Drucker devoted much thought to the analysis of corporate management. More than fifty years ago, in his 1957 book Landmarks of Tomorrow , he outlined the key challenges he saw for future managers and executives [4]. He concluded that learning how to manage knowledge work would be the key management challenge of the next century. He described knowledge work as work that is done in the workers' heads instead of with their hands. He concluded that knowledge work would soon be the most critical and the highest-valued form of labor. Later, in his book The Age of Discontinuity [5], Drucker wrote:

To make knowledge work productive will be the greatest management task of this century, just as to make manual labor productive was the great management task of the last century.

More recently, in an article in the Harvard Business Review [6], he also said:

The productivity of knowledge workers will not be the only competitive factor in the world economy. It is, however, likely to become the decisive factor, at least for most industries in developed countries.

Drucker was the premier management thinker of the twentieth century, and it behooves us to take his views seriously. Knowledge work is the work of the future, and the organizations that first recognize and capitalize on this fact will be the industrial leaders of tomorrow. Ask yourself this question: If Drucker and Schumpeter were right, what should I do to capitalize on the opportunities of the knowledge-working age?


  1. "Taking Flight," The Economist , September 17, 2009.
  2. Joseph Schumpeter, Capitalism, Socialism and Democracy (New York: Harper & Row, 1975 [orig. pub. 1942]).
  3. Nestor E. Terleckyj, "Measuring Contribution of Small Business to Industry Job Growth by Data in Business Association Directories," US Small Business Administration Report for Project SBAHQ-97-M-0753 , April 30, 1999.
  4. Peter Drucker, Landmarks of Tomorrow: A Report on the New Post-Modern World (New York: Harper & Row, 1957).
  5. Peter Drucker, The Age of Discontinuity (New York: Harper & Row, 1969).
  6. Peter Drucker, "The Future Has Already Happened," Harvard Business Review 75, no. 5 (September–October 1997): 20–23.

This article is an adapted excerpt from chapter one of Leadership, Teamwork, and Trust: Building a Competitive Software Capability by Watts Humphrey and James Over, published by Addison-Wesley Professional, Dec. 2010, ISBN 0321624505, Copyright 2011 Pearson Education, Inc.

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