Saturday, January 24, 2009

Peter Drucker - the father of modern management

"The greatness of Peter Drucker"

by Steve Arneson

Throughout the year, I thought it’d be fun to profile some of the giants in the leadership development field, and provide some insight into their best works. Let’s start with a man who is widely considered to be the father of modern management, Peter Drucker. It’s hard to overestimate the influence Drucker has had on generations of leaders; a great deal of the theories and ideas we use today were created by Drucker in the 1950’s. Now that’s staying power!
Peter Drucker was born in Vienna in 1909, and started his career as a journalist in Hamburg and Frankfurt. Drucker fled Germany in 1933, and moved to London, where he worked as the chief economist for a private bank. In the late 1930’s, he and his wife Doris moved to the U.S., and in 1943 he became a naturalized citizen. He also began a long and successful career as a university professor, first at Bennington College (1942-1949) and later at New York University (1950-1971). Drucker moved to California in 1971, where he developed one of the country's first executive MBA program for working professionals at Claremont Graduate University. From 1971 to his death in 2005 he was the Clarke Professor of Social Science and Management at Claremont.
Drucker's career as a business guru took off in 1942, when his initial writings on politics and society won him access to the internal workings of General Motors. He had become fascinated with the issue of authority during his time in Germany, and when he shared his curiosity with GM executives, they invited him to conduct what amounted to a "social audit" of a complex business setting. For two years, Drucker attended every board meeting, interviewed employees, and analyzed production and decision-making processes. The resulting book, Concept of the Corporation, popularized GM's multi divisional structure, and led to numerous articles, consulting engagements, and additional books. Interestingly, GM hated the book - Alfred Sloan was said to have ignored it as if it never existed. Drucker had suggested that the auto giant might want to reexamine a host of long-standing policies on customer relations, dealer relations, employee relations and more (hmm... think he was ahead of his time?).
Throughout his career, Drucker expanded his position that management was "a liberal art" and he infused his management advice with interdisciplinary lessons from history, sociology, psychology, philosophy, culture and religion. He also believed strongly that all institutions, including those in the private sector, had a responsibility to the whole of society. "The fact is," Drucker wrote in 1973, "that in modern society there is no other leadership group but managers. If the managers of our major institutions, especially in business, do not take responsibility for the common good, no one else can or will."
During his long consulting career, Drucker worked with many major corporations, including General Electric, Coca-Cola, Citigroup, IBM, and Intel. But Drucker's insights extended far beyond business. He served as a consultant for various government agencies in the U.S., Canada and Japan, and worked with numerous non-profit organizations to help them become successful, often consulting pro-bono. In fact, Drucker anticipated the rise of the social sector in America, maintaining that it was through volunteering that people would find the kind of fulfillment that he originally thought would be provided through their place of work. "Citizenship in and through the social sector is not a panacea for the ills of post-capitalist society, but it may be a prerequisite for tackling these ills," Drucker wrote. "It restores the civic responsibility that is the mark of citizenship, and the civic pride that is the mark of the community".
Drucker wrote dozens of books, penned a regular column for the Wall Street Journal for more than 20 years, and wrote extensively for the Harvard Business Review, The Economist, and The Atlantic Monthly. If you’re interested in reading some classic Drucker, I’d suggest the following works:
  • The Practice of Management (1954) – this seminal work still holds up well today
  • The Effective Executive (1966) – a primer on focus and results
  • Managing in Turbulent Times (1980) – timeless lessons; could have been written in 2009!
  • Managing Oneself (HBR – 1999) – a classic on what’s important
  • They’re Not Employees, They’re People (HBR – 2001) – the title says it all
  • The Essential Drucker: Peter Drucker's Essential Writings on Management (2001) – a compendium of his best works
  • What Makes An Effective Executive (HBR – 2004) – a modern synopsis of his 1966 book
Because he wrote so much, Drucker was also a quote machine. Here are some of my favorites:
  • The best way to predict the future is to create it.
  • Management is doing things right; leadership is doing the right things.
  • What's measured improves.
  • Efficiency is doing better what is already being done.
  • The most important thing in communication is hearing what isn't said.
  • There is nothing so useless as doing efficiently that which should not be done at all.
  • Rank does not confer privilege or give power. It imposes responsibility.
In closing, I had the chance to see Peter Drucker speak a conference late in his career, and was mesmerized by the great man. Everything he said dripped with common sense, and it was so cool to hear him talk in that thick Austrian accent about long-standing concepts that had relevance then, and still do today. If you want to trace the roots of our field, pick up a copy of The Practice of Management, and be prepared to be enthralled by the scope of Drucker’s insights and vision.

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