Peter F. Drucker and the Consequences of Horizontal Thinking

The Man Who Invented Management: Why Peter Drucker’s ideas still matter ,” by John Byrne, BusinessWeek, 28 November 2005, http://www.businessweek.com/magazine/content/05_48/b3961001.htm.

peter_f_drucker_and_george_w_bush_md
Peter F. Drucker and George W. Bush

I have heard the name my whole life, but only read one thing my him: a short piece that made me compare the Main-Stream Media to the French Encyclopedia. On the occasion of his death, BusinessWeek summarized Drucker’s life and his greatest accomplishments. Drucker was creative — what Mark Safranski would call a “horizontal thinker.” Peter F. Drucker was to management what was to strategy: a genius able to change the orientation of people who met him. Some excerpts:

Well before his death, before the almost obligatory accolades poured in, Drucker had already become a legend, of course. He was the guru’s guru, a sage, kibitzer, doyen, and gadfly of business, all in one. He had moved fluidly among his various roles as journalist, professor, historian, economics commentator, and raconteur. Over his 95 prolific years, he had been a true Renaissance man, a teacher of religion, philosophy, political science, and Asian art, even a novelist. But his most important contribution, clearly, was in business. What John Maynard Keynes is to economics or W. Edwards Deming to quality, Drucker is to management.

After witnessing the oppression of the Nazi regime, he found great hope in the possibilities of the modern corporation to build communities and provide meaning for the people who worked in them. For the next 50 years he would train his intellect on helping companies live up to those lofty possibilities. He was always able to discern trends — sometimes 20 years or more before they were visible to anyone else. “It is frustratingly difficult to cite a significant modern management concept that was not first articulated, if not invented, by Drucker,” says James O’Toole, the management author and University of Southern California professor. “I say that with both awe and dismay.” In the course of his long career, Drucker consulted for the most celebrated CEOs of his era, from Alfred P. Sloan Jr. of General Motors Corp. (GM ) to Grove of Intel.

— It was Drucker who introduced the idea of decentralization — in the 1940s — which became a bedrock principle for virtually every large organization in the world.

— He was the first to assert — in the 1950s — that workers should be treated as assets, not as liabilities to be eliminated.

— He originated the view of the corporation as a human community — again, in the 1950s — built on trust and respect for the worker and not just a profit-making machine, a perspective that won Drucker an almost godlike reverence among the Japanese.

— He first made clear — still the ’50s — that there is “no business without a customer,” a simple notion that ushered in a new marketing mind-set.

— He argued in the 1960s — long before others — for the importance of substance over style, for institutionalized practices over charismatic, cult leaders.

— And it was Drucker again who wrote about the contribution of knowledge workers — in the 1970s — long before anyone knew or understood how knowledge would trump raw material as the essential capital of the New Economy.

Drucker’s work at GE is instructive. It was never his style to bring CEOs clear, concise answers to their problems but rather to frame the questions that could uncover the larger issues standing in the way of performance. “My job,” he once lectured a consulting client, “is to ask questions. It’s your job to provide answers.” Says Dan Lufkin, a co-founder of investment banking firm Donaldson, Lufkin & Jenrette Inc. (CSR ), who often consulted with Drucker in the 1960s: “He would never give you an answer. That was frustrating for a while. But while it required a little more brain matter, it was enormously helpful to us. After you spent time with him, you really admired him not only for the quality of his thinking but for his foresight, which was amazing. He was way ahead of the curve on major trends.”

Drucker’s mind was an itinerant thing, able to wander in minutes through a series of digressions until finally coming to some specific business point. He could unleash a monologue that would include anything from the role of money in Goethe’s Faust to the story of his grandmother who played piano for Johannes Brahms, yet somehow use it to serve his point of view. “He thought in circles,” says Joseph A. Maciariello, who teaches “Drucker on Management” at Claremont Graduate University.

Part of Drucker’s genius lay in his ability to find patterns among seemingly unconnected disciplines. Warren Bennis, a management guru himself and longtime admirer of Drucker, says he once asked his friend how he came up with so many original insights. Drucker narrowed his eyes thoughtfully. “I learn only through listening,” he said, pausing, “to myself.”

Among academics, that ad hoc, nonlinear approach sometimes led to charges that Drucker just wasn’t rigorous enough, that his work wasn’t backed up by quantifiable research. “With all those books he wrote, I know very few professors who ever assigned one to their MBA students,” says O’Toole. “Peter would never have gotten tenure in a major business school.”

Drucker taught at NYU for 21 years — and his executive classes became so popular that they were held in a nearby gym where the swimming pool was drained and covered so hundreds of folding chairs could be set up. Drucker moved to California in 1971 to become a professor of social sciences and management at Claremont Graduate School, as it was known then. But he was always thought to be an outsider — a writer, not a scholar — who was largely ignored by the business schools. Tom Peters says he earned two advanced degrees, including a PhD in business, without once studying Drucker or reading a single book written by him. Even some of Drucker’s colleagues at NYU had fought against awarding him tenure because his ideas were not the result of rigorous academic research. For years professors at the most elite business schools said they didn’t bother to read Drucker because they found him superficial. And in the years before Drucker’s death even the dean of the Peter F. Drucker Graduate School of Management at Claremont said: “This is a brand in decline.”


Mark Safranksi on horizontal thinking

Peter Drucker on management

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