The World After Peter Drucker
By George Anderson
Last week, the best-selling author, management guru and self-described “social ecologist” Peter Drucker passed away at the age of 95.
During his lifetime, Mr. Drucker authored over 30 books, served as a consultant to some of the world’s largest companies, and shaped the thinking of countless business executives.
Well before it was fashionable, he made the argument that the key to corporate profitability and long-term success was treating employees (including hourly workers) as valuable assets and giving them greater authority to make decisions.
Here are a few of the statements that made business executives think and made Peter Drucker famous:
“People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.”
“Management is doing things right; leadership is doing the right things.”
“Rank does not confer privilege or give power. It imposes responsibility.”
“So much of what we call management consists in making it difficult for people to work.”
“Making good decisions is a crucial skill at every level.”
“The most important thing in communication is to hear what isn’t being said.”
“No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed
of average human beings.”
Moderator’s Comment: What impact has Peter Drucker’s business and management philosophy had on retailing and related businesses? Which of his views have
had the most profound impact on how you approach your professional endeavors?
A New York Times obituary on Mr. Drucker concluded with a reference to an interview he did with Forbes last year. He was asked if there was
a book he hadn’t written but wished he had. His response was classic Drucker, “My best book would have been ‘Managing Ignorance,’ and I’m very sorry I didn’t write it.”
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George Anderson – Moderator
Peter Drucker preached to help foster an enlightened business world. As far as I can tell, he had almost no impact on most retailing companies. He felt that the most important resource of any business is the employees. Given how most retailers recruit and manage their employees, proven by the appalling turnover and poor performance, it’s clear that Peter had minimal influence.
Few, if any, of the elite management gurus have had the ability to see and proclaim the value of the ecological or “soft” dimension of building a successful economic enterprise as did Peter Drucker. For all his economic theories and writings, his whole life seemed to be ecological and I had the privilege of seeing this first hand.
Dr. Drucker and I were the two speakers at a “Re-engineering and Finance” Conference in Geneva. We arrived at the hotel at the same time. Drucker looked every bit the average little old man as he checked in; no entourage in sight. His wife sat in the lobby patiently knitting. He refused help with his bag and the two of them trudged slowly to their room. When we were formally introduced, I stood there awestruck while he, with genuine humility, acted as though he was actually glad to meet me. It’s that humility part that’s stayed with me.
I can’t navigate Drucker’s writings without constantly being reminded of the principles and practices of the U.S. Military. (Note: For those who knee-jerk into apoplexy regarding violence, imperialism, sexism, etc. when the U.S. Military is mentioned, relax. This is about management techniques.)
Our military operates with the idea that every member has the power to protect or cost lives, so the stakes are high. Therefore, the training is complete, consistent, and ongoing. Further, performance reviews are frequent and predictable, promotion paths are clear, expectations are clear, and everyone has value. Consider our policy of retrieving all of our wounded or dead from battlefields (still ongoing in Southeast Asia and elsewhere after decades). When was the last time a failed corporation had a plan to rescue their employees? In the U.S. military, there is no such thing as “cannon fodder,” a centuries-old term from foreign militaries referring to expendable troops sent charging into the teeth of enemy artillery to die or “feed” the cannon. U.S. companies have expendable employees, but not the U.S. Military.
With the U.S. Military management/leadership model in mind, reread the Drucker quotes in George Anderson’s introductory remarks. You’ll notice the parallels, too, and perhaps even wonder who learned the most from whom – the military from Drucker or vice versa? Plus, for those whose comments include a wish for an institution that actually implemented Drucker’s principles, perhaps one has to look no further than our military.
I think that Mr. Cowgill likely, yet sadly, has it about right. When I think about writings as mentioned, such as Drucker, Peters and others, in relationship to the discussions we have here, we discuss the principles, yet the impact is very limited.
In just the topics mentioned, think of the examples in retail that may go with them. Is there real risk-taking at retail? Well sure, just being in it is risky. But how much real risk is there to be innovative? How much real leadership is really out there? The countless examples of horrendous leadership totally outweigh the greatness that can be named. Think of the countless abuses of rank – they are endless. Great decisions? Great communication? Organizations that allow the average to achieve what could be considered great?
Certainly, as I write this, it seems a bit pessimistic. Yet, while few, there are the contrary that exist and continue to create excitement and inspire passion. Yet, the impact has been limited. As I continue to age and to learn, I understand that these things really aren’t that difficult – they are just hard. Why? Well it’s not easy for those who consider themselves leaders to remain teachable. Now, if they could…
Heck I don’t know. Why? Because when I was in college 30 years ago, I was too burned out to read his books that were required reading. I couldn’t drink enough Mountain Dew to stay awake during his lectures at 8am. Even back then, he was older than baseball. And now I deeply regret it. I’m going to get some of those books and read them.
I agree completely, Mark. In my view, Drucker had hundreds of creative and incisive ideas and observations. The one thing all this tremendous output lacked was the idea that would make his concepts useable and widely used. In a way, Drucker never really hit on the thinking that would make his ideas truly powerful (i.e., powerful = impactful). This is the same problem that has plagued, in my view, Deming, Covey, Crosby, Juran, Peters, and every other well-known business thinker I can name at the moment.
I’ll turn once again to our research, since we have been studying and measuring this issue for the past four decades. The problem is that MOST TYPES OF INFORMATION do not have this kind of power; the power to enable people to make significant change. Some types of information do have this power, but not the types Drucker, Peters, and all the rest deal in.
I believe that, as a business world, we operate under the assumption that information is power, IN ALL OR MOST CASES. This doesn’t prove to be true. Drucker a case in point. The information, “A leader is one who has followers,” or whatever the precise quote of Drucker is, is not information that enables people to become leaders of the kind Drucker is talking about; if it were, we would have thousands of them. The same can be said, I believe, of all of the information we have from Drucker, et al.
Our research shows that this type of information is weak because it doesn’t interrupt the ultra-stable information processes that maintain the status quo (the status quo of the person, the team, the division, the company, the church, the family, etc.). It doesn’t, because it is generic, it is one-way, it doesn’t address those ultra-stable processes, and it is through a low-trust and impersonal channel.
We are hooked on this kind of information (business books, magazines, seminars, workshops, retreats, etc.), which explains why, our research says, businesses so often operate at a low level, and don’t even know it — we think we are making great change when we aren’t.
I bow my head to Drucker and kneel to him. He was a wonderful man, a great thinker, and has made us all think a little more deeply.
Back in the early 80’s, the management concepts of Peter Drucker and Tom Peters were incorporated in some retail businesses. Unfortunately, his ideas of empowerment and management by objectives were lost due to humans being humans or, to be more precise, egos being egos.
These concepts died, not because they were wrong, but because they interfered with management’s desire to make decisions in their own best interest, instead of the best interest of their organization.
Peter Drucker had much the same influence on business as Jesus has on Christianity and probably other religions. We respect and revere both for their insightful teachings and great ideas, but following them seems to have lagged behind the respect we extend.
Should we now ask if it is too late for not only retailers and related businesses but for all of us to follow Drucker’s lead as we go about managing our business lives?