"The question of the right size for a given task or a given organization will become a central question."
The context of what Drucker was talking about here, is when the economy changed from being a mechanical system to a biological one; referring to the introduction of the information age.
Concerning performance as it relates to a mechanical system, bigger was always better, as the more scale reached the better performance emerged. A greater performance meant greater power, which means in that case bigger was indeed better.
When thinking of biological systems, that analogy doesn't hold true. In that case, whatever the function or project is, will be what determines the size factor. Bigger is better is no longer relevant, just like smaller isn't relevant. It's all about the function.
So when people like to throw around the phrase, "small is the new big," they're only getting it half right. It simply depends on what you're working on and for what purpose.
An example Drucker liked to use was a saying biologists mentioned in his day, "the rat knows everything it needs to be successful as a rat." How intelligent a rat is in reference to a human being, in Drucker's words, is a stupid question. In whatever it takes for a rat to be a successful rat, they are far more advanced in that than any other creature, including human beings.
Or he has also said, it makes no sense for an elephant to be small or a cockroach to be big. They're just the right size for being what they are.
It's the same thing in business, function, operations or the project you're working on. A job for a cockroach, needs a cockroach to perform it; you don't go and get an elephant. The same is reversed. You don't get a cockroach to do an elephants' job. It makes no sense.
Our strategies need to be built around knowing what we are. That's why we always talk here about purpose. If you're a chihuahua, you don't attempt to be an Irish Setter. You will be taking on more than you can handle. It's the same with firms we may hire or outsource to. We need to know biologically what they are. If you need something small done, get those that do small. If you need something big done, hire those companies, or outsource to those that do big.
Biological entities adapt to the size of the task and project. If you're an elephant, take on an elephant's job. If you're smaller, do the same.
Does that mean we can't grow then? No. What it means is understand how far you can stretch. Many businesses are destroyed by overreaching and going beyond where they're biologically at. Take on too much, and training measures are set aside in order to grow quickly. We all know what happens to teenagers when they grow quickly, they're all gangly and uncoordinated.
In a business we need to know what growth stage we're in, how far we can stretch, and if we can or should service a larger task. I've seen far too many times, including my own, when I thought I could handle anything, just because I believed I could. While the belief was ok, it had to line up with the reality of where I and my businesses were at.
The size of the task is still one of the central questions we must understand in building our businesses or divisions. Just because we can get more business or are offered opportunities doesn't mean we should take them.
Choosing what tasks or business to take on is a key question to answer for the success of any business leader or business.
Other Peter Drucker Resources:
The Man Who Invented Management
Beyond the Information Revolution
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