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Peter Drucker: the father of post-war management.

Peter Drucker is accepted by both practising managers and writers throughout the world as the management guru. He dislikes the term guru--likening it to charlatan--and prefers to be known as a writer. He does not claim to have invented management--something which he in fact attributes to Frederick Winslow Taylor. Drucker does concede, however, that he discovered management, not merely as a discipline, but rather as a way of life that is central to the well-being of society as well as to the economy."

Throughout his long career he has shown interests as diverse as journalism, art appreciation, mountaineering, reading--and drawing inspiration from--the works of Jane Austen, and, of course, management teaching, writing and consultancy. With more than 33 books published over seven decades (and translated into at least 30 languages) Drucker is, by common consent, the founding father of modern management studies.

Life and career

Peter Ferdinand Drucker was born in 1909 in Vienna to a high-achieving, intellectual family and was surrounded, in his early years, by the cultural elite which characterised pre-war Vienna. He commenced studies at the University of Hamburg but transferred to the University of Frankfurt where he obtained a Doctorate in Public and International Law in 1931.

While still a student in Frankfurt he worked on the city's General Anzeiger newspaper and rose to the posts of foreign and financial editor. Recognised as a talented writer, he was offered a job in the Ministry of Information. Observing the Nazis' rise to power with abhorrence, he wrote a philosophical essay condemning Nazism; this was probably instrumental in hastening his departure to England in 1933. It was in 1937 that he left for the USA to become an investment adviser to British industry and correspondent for several British newspapers, including the Financial Times, then called the Financial News.

His first book, The End of Economic Man, appeared in 1939. In 1940 he set up as a private consultant to business and government policy makers, specialising in the German economy and external politics. From 1940-42 he was a teacher at Sarah Lawrence College and this was followed by the post of Professor of Philosophy, Politics, History and Religion at Bennington College, Vermont.

It was in the early stages of this appointment that he was invited by the Vice-President of General Motors (GM) to investigate what constitutes the modern organisation and to examine what the managers running it actually do. Although Drucker was relatively inexperienced in business at the time, his analysis led to the publication, in 1946, of The Concept of the Corporation--published as Big Business in Britain--which had a mixed reception but nonetheless confirmed Drucker's future as a management writer.

The period 1950-1972 was a time of prolific writing, teaching and consulting activity while he was Professor of Management at New York University Graduate School of Business. From 1971 to the present day he has been the Marie Rankin Clarke Professor of Social Science and Management at the Graduate School in Claremont, a school which has been named after him. In 1994 he was named Godkin Lecturer at Harvard University.

Drucker holds decorations from the governments of Austria and Japan as well as 22 honorary doctorates from universities in Belgium, Japan, Spain, Switzerland, the UK and the USA. He is also

* Fellow of the American Association of Science

* Honorary Member of the National Academy of Public Administration

* Fellow of the American Academy of Arts and Sciences

* Fellow of the American, British, Irish and International Academies of Management. (""Interview with Peter Drucker"", Finanical Times)

Drucker lives in Claremont, 40 miles east of Los Angeles, and has four children and six grandchildren.

Drucker's writing

Drucker's management writings are phenomenal in their coverage and impressive in their clarity. With over 33 books to his credit, we can only provide a snapshot of his thinking here. His earlier works made a significant contribution to establishing what constitutes management practice; his later works tackle the complexities--and the management implications--of the post-industrial 1980s and beyond. It is that range and development that we have tried to represent in our comments on the books covered here.

The End of Economic Man--1939

The End of Economic Man concentrates on the politics and economics of the 1930s in general and the rise of Nazism in particular; Drucker signalled a warning about the Holocaust and predicted that Hitler would forge an alliance with Stalin. This was Drucker's first book in English as sole author and it prompted J B Priestley to say: `At once the most penetrating and the most stimulating book I have read on the world crisis. At last there is a ray of light in the dark chaos.'

This was followed by The Future of Industrial Man (1942), which assumed Hitler's defeat and started to look ahead to peacetime, warning of the dangers of an approach to planning which is founded on the denial of freedom. It attracted the interest of critics who argued that it mixed economics with social sciences; it was, in fact, the first book which argued that any organisation is both an economic and social organ. As such it laid the foundations for Drucker's interest in management in general and, as it turned out, General Motors in particular.

The Concept of the Corporation--1946

When General Motors invited Drucker to write about the company, it was to be expected that the invitation would result in a glowing description of GM's success. What resulted was something different, something that recognised success but also looked to the future.

General Motors provided Drucker with the opportunity to test in practice the theory he had propounded in The Future of Industrial Man, .e. that an organisation was essentially a social system as well as an economic one. The Concept of the Corporation questioned whether what had worked in the past--a foolproof system of objective policies and procedures throughout every layer of the organisation--would also work in a future of global competition, changing social values, automation, the drive for quality and the growth of the knowledge worker.

The assembly line, he argued, actually created inefficiency because activity was at the pace of the slowest. Demotivation was rife because no one saw the end result, and initiative was reduced to the minutiae of checks, rules and controls. The layers of bureaucracy slowed down decision-making, created adversarial labour relations and did nothing for `creating the self-governing plant community' (the phrase Drucker used for an empowered workforce). Drucker reported the benefits of decentralised operations--an issue which critics were quick to praise and organisations quick to mimic--but suggested that the GM hierarchy of commands and controls would be slow to respond in a rapidly changing future.

The fundamental difference between Drucker and GM was that GM saw the workforce as a cost in the quest for profits, whereas Drucker saw people as a resource who would be able to better satisfy customers if they could have more involvement in their jobs and gain some satisfaction from doing them. As such, The Concept of the Corporation was decades ahead of its time in terms of its espousal of empowerment and self-management. Although Alfred Sloan--the Chief Executive and powerhouse behind General Motors' success--had no time for Drucker's book, Drucker was, in the early 1950s, to advise Sloan on setting up a School of Administration at MIT. Drucker's criticism of Sloan was implicit rather than explicit, saying he had vision rather than perspective, and implying that leadership had been sacrificed to the rulebook. Sloan was measured in his reply--after all, at the time, General Motors was the largest and arguably one of the most successful companies in the world. His response came in 1963 with the publication of My Years with General Motors which sets out the scientific credo of GM's philosophy, yet talks little of people, transparently because they had comparably insignificant importance relative to the systems they were following."

Another effect of The Concept of the Corporation was the establishment of the beginnings of management as a discipline, bringing out the notions of the:

* social and environmental responsibility of the organisation relationship between the individual and the organisation role of top management and the decision-making process need for continual training and re-training of managers with the focus on their own responsibility for self-development

* nature of labour relations

* imperatives of community and customer relations.

It is interesting that Japanese industry listened to these messages and American industry did not.

The Practice of Management--1954

The Practice of Management is Drucker's second book on management and it established him as a leader in his field. It set trends in management for decades and reputations were built by adopting and expanding on the ideas which Drucker sets out. It is still regarded by many as the definitive management text.

Drucker states that there is only one valid purpose for the existence of a business: that is, to create a customer. It is not, he argues, the internal structure, controls, organisation and procedures which keep the organisation afloat, but rather the customer--who pays, and decides what is important--who fills this role. He sets out eight areas in which objectives should be set and performance should be measured:

* Market standing

* Innovation

* Productivity

* Physical and financial resources

* Profitability

* Manager's performance and development

* Worker's performance and attitude

* Public responsibility.

The Practice of Management is probably best remembered for setting out Management by Objectives and Self Control (Drucker's term--he didn't coin the acronym)--a management process which has become accepted management theory and practice.

The book also identified the seven tasks of the manager of tomorrow. He or she must:

* manage by objectives

* take risks and allow risk-taking decisions to take place at lower levels in the organisation

* be able to make strategic decisions

* be able to build an integrated team with team members capable of managing and measuring their own performance and results in relation to overall objectives

* be able to communicate information quickly and clearly, and motivate employees to gain commitment and participation"

* be able to see the business as a whole and to integrate their function within it

* be able to relate the product and industry to the total environment, to find out what is important and what needs to be taken into account. This perspective must embrace developments outside the company's particular market or country and the manager must begin to see economic, political and social developments on a world-wide scale."

Management: Tasks, Responsibilities, Practices--1974

Much of the work in The Practice of Management is updated, expanded and revised in Management: Tasks, Responsibilities, Practices, which establishes where management has come from, where it is now and where it needs to go. It draws upon a wide range of international examples and sets out principles for managers and management. Effectively, it is a complete management handbook.

Moving on from his earlier work, Drucker defines the manager's work in terms of five basic operations. He or she:

* sets objectives

* organises

* motivates and communicates

* measures

* develops people including him/herself.

Top management's tasks are to:

* define the business mission

* set standards

* build and maintain the human organisation

* develop and maintain external relationships

* perform social and civic functions

* know how to get on with the task in hand if and when necessary.

Management: Tasks, Responsibilities, Practice, is regarded by many as Drucker's finest book. It is the only management book to have been selected by a Desert Island Discs castaway.

The Age of Discontinuity--1969 (re-issued 1992)

It is in The Age of Discontinuity that Drucker describes those very changes which he signalled to General Motors 23 years earlier.

Drucker writes in the preface: `This book does not project trends; it examines discontinuities. It does not forecast tomorrow; it looks at today. It does not ask: "What will tomorrow look like?"" It asks instead: ""What do we have to tackle today to make tomorrow?"'

The book deals with the forces changing society as new technology impacts on old industries, changing social values impact on consumer behaviour and markets become international. Drucker advocates privatisation, pointing out the ineffectiveness of government in leading and stimulating change; he examines the role of organisations in society in an age of discontinuity and looks at different ways of managing the knowledge worker.

Managing in Turbulent Times--1980

The issues raised in The Age of Discontinuity were re-visited a decade later in Managing in Turbulent Times. Change, uncertainty and turbulence are the underpinning themes as Drucker highlights the new realities of changing population demographics, global markets and a `bisexual' workforce.

Drucker issues challenges to junior, middle and senior management:

`In the knowledge organization, the "supervisor" has to become an "assistant", a "resource", a "teacher".'

`The very term "middle management" is becoming meaningless [as some] will have to learn how to work with people over whom they have no direct line control, to work transnationally, and to create, maintain, and run systems--none of which are traditionally middle management tasks.'

`It is top management that faces the challenge of setting directions for the enterprise, of managing the fundamentals. It is top management that will have to re-structure itself to meet the challenges of the "sea-change", the changes in population structure and population dynamics ... And it is top management that will have to concern itself with the turbulences of the environment, the emergence of the world economy, the emergence of the employee society, and the need for the enterprises in its care to take the lead in respect to political process, political concepts and social policies.'

He said it first

Part of Drucker's success and longevity as a management expert is that he has a remarkable knack of spotting trends which have been picked up and made fashionable by others. Invariably, research will trace the origin back to something Drucker wrote 10 years--sometimes 20 years--ago. It is interesting that Drucker noted that one of the key aspects of leadership is timing; he has, in fact, upbraided himself for being 10 years ahead with his forecasts.

This section is adapted from work by Clutterbuck and Crainer who have summarised the work of James O'Toole, Professor of Management at the University of Southern California. O'Toole said that Drucker was the first to:

* define the role of top managers as the keepers of corporate culture

* advocate mentoring, career planning and executive development as top management tasks

* say that success hinges on the vision expressed by the CEO

* show that structure follows strategy

* suggest a reduction of management layers between the top and the bottom

* argue that success comes from sticking to the basics

* state that the primary purpose of the organisation is to create a customer

* say that success boils down to consumer sensitivity and the marketing of innovative products

* suggest that quality is a measure of productivity

* describe the coming knowledge worker

* state that new approaches to management would be needed in the post-industrial age.

It must be said, however, that Drucker also foresaw the continuing growth of the middle manager as he or she evolved into the knowledge worker of post-industrial society. It has not quite happened like that and the massive delayerings of the early 1990s suggest that Drucker may well have got it wrong ... so far.

"Druckerisms"

On business

A business is not defined by the company's name, statutes, or articles of incorporation. It is defined by the want the customer satisfies when he buys a product or service. (Management: Tasks, Responsibilities, Practices.)

On leadership

These is no substitute for leadership. But management cannot create leaders. It can only create the conditions under which potential leadership qualities become effective; or it can stifle potential leadership. The Practice of Management)

On management

The function which distinguishes the manager above all others is his educational one. The one contribution he is uniquely expected to make is to give others vision and ability to perform. It is vision and moral responsibility that, in the last analysis, define the manager ... (The Practice of Management)

On decision-making

...in these specifically managerial decisions, the important and difficult job is never to find the right answer, it is to find to find the right question. For there are few things as useless--if not as dangerous--as the right answer to the wrong question. (The Practice of Management)

On the knowledge worker

Increasingly, the knowledge workers of tomorrow will have to know and accept the values, the goals and the policies of the organization--to use current buzzwords, they must be willing-nay, eager--to buy into the company's mission. ("Drucker speaks his mind", Management Review).

(The knowledge worker).. may realize that he depends on the organization for access to income and opportunity, and that without the investment the organization has made--and a high investment at that--there would be no opportunity for him. But he also realizes, and rightly so, that the organization equally depends on him. (The Age of Discontinuity)

In perspective

Critical of the business school system in general, Drucker has always set himself apart from mainstream management education. He said of himself: `I have always been a loner. I work best outside. That's where I'm most effective. I would be a very poor manager. Hopeless. And a company job would bore me to death. I enjoy being an outsider.'

An outsider maybe, but commentators point consistently to his gentlemanly old-world charm, his humility and the fact that he has never criticised negatively, always politely and constructively."

If in the 1990s one looks back on Drucker's earlier works, and their content no longer strikes the new reader with the same force that it had in the 1950s, 1960s and 1970s, it is to Drucker's enduring credit. His thinking has become absorbed and adopted as the prevailing wisdom behind the philosophy and practice of modern management.

What does strike the 1990s reader, however, is the sheer force of his writing, his clear mastery of the subject matter and the clarity of his expression. It is as well to remember that readable books on management were very few and far between when Drucker wrote The Concept of the Corporation and The Practice of Management. Texts for managers concentrated more usually on technical and industrial engineering and were too complex to have either a wide readership or the impact or influence that Drucker has had.

`For many business leaders across the world ... he remains the doyen of modern management theory, not so much because he can lay claim to being the founder of any particular concept such as business re-engineering, or total quality management, rather that he has demonstrated a rare ability to apply common sense understanding to the analysis of management challenges and their solutions.' ("Interview with Peter Drucker", Financial Times)

One of Drucker's achievements lies in the fact that he, a devotee of the Human Relations school, recognised the value of Taylor's scientific, work-study approach, and succeeded in striking a balance between the two approaches. Management by Objectives, when carried out properly, is an effective marriage of both schools which attaches significance to culture and to the fact that organisations are held together not just by a dictated vision, but by a shared vision of the future.

So, although Drucker casts the accolade of `guru's guru' on F W Taylor, the world of management will always attribute it to Drucker himself. His ability to see management with a long historical perspective and in a broad social and political context is very rare in management writers. With his capacity for demystifying the apparent complexities of management for millions world-wide, he stands, as he said of himself, quite alone.

Bibliography

Drucker has authored over 100 columns in the Wall Street Journal and more articles in Harvard Business Review than anyone else, and has over six million words in print. Here we list books he has authored on management but omit other contributions.

The editions cited here are those held in, and available for loan to members from, the Chartered Management Institute's Management Information Centre. These may not always be the first editions.
The future of industrial man: a conservative approach
London: Heinemann, 1943

The practice of management
London: Heinemann, 1955

The concept of the corporation
New York: New American Library, 1964

Technology, management and society
London: Heinemann, 1970

Management: tasks, responsibilities, practices
New York: Harper and Row, 1973

Managing in turbulent times
London: Heinemann, 1980

The changing world of the executive
London: Heinemann, 1982

Innovation and entrepreneurship: practice and principles
London: Heinemann, 1985

Managing for results: economic tasks and risk taking decisions
London: Heinemann, 1964

The effective executive
London: Heinemann, 1967

The end of economic man
New York: Haprer and Row, 1969

Managing the non profit organization: practices and principles
Oxford: Butterworth Heinemann, 1990

Managing for the future: the 1990s and beyond
Oxford: Butterworth Heinemann, 1992

Managing in a time of great change
Oxford: Butterworth Heinemann, 1995

The frontiers of management: where tomorrow's decisions are
being made today
London: Heinemann, 1986


Further reading

Books
Makers of Management: men and women who changed the business
world, David Clutterbuck and Stuart Crainer
London: MacMillan, 1990

Managing with the gurus: top level guidance on 20 management
techniques, Carol Kennedy
Century Business Books: 1994

Leading change: overcoming the ideology of comfort and
the tyranny of custom, James O'Toole
San Francisco: Jossey-Bass, 1995

The witch doctors: what the management gurus are saying,
why it matters and how to make sense of it,
John Micklethwait and Adrian Wooldridge
London: Heinemann, 1996

The writings of Peter Drucker: a review and a personal
appreciation, Peter Starbuck
Wolverhampton: University of Wolverhampton Business School,
Management Research Centre, Working Paper series, 1997


Journal articles
Drucker speaks his mind, Mike Johnson
Management Review, October 1995, pp10-14

Interview with Peter Drucker, Richard Donkin
Financial Times, 14 June 1996, p13


See also

The management thinkers--Alfred Sloan
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No portion of this article can be reproduced without the express written permission from the copyright holder.
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Publication:Thinkers
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Date:Dec 1, 1999
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