Peter F. Drucker 1909-2005

He was born in Vienna during the reign of Emperor Franz Joseph (his middle initial F. stood for Ferdinand). Keynes and Schumpeter were his economics professors. His first book was reviewed by Winston Churchill in the Times Literary Supplement in 1939. The 29-year-old proved to be more prescient than the Great Man.

Mr. Drucker is one of those writers to whom almost anything can be forgiven because he not only has a mind of his own, but has the gift of starting other minds along a stimulating line of thought. There is not much that needs forgiveness in this book, but Mr. Drucker tends to be carried away by his own enthusiasm, so that the pieces of the puzzle fit together rather too neatly. It is indeed curious that a man so alive to the dangers of mechanical conceptions should himself be caught up in the subordinate machinery of his own argument. His proof, for example, that Russia and Germany must come together forgets the nationalism which has developed in Russia during the last twenty years and which would react very strongly against any new German domination of Russian life. But such excesses of logic are pardonable enough in a book that successfully links the dictatorships which are outstanding in contemporary life with that absence of a working philosophy which is equally outstanding in contemporary thought.

Within three months, Poland’s fate was sealed. When looking at Drucker’s work, the most arresting fact isn’t how much he got right, but how much he’s still misuderstood.

Mr. Drucker thought of himself, first and foremost, as a writer and teacher, though he eventually settled on the term “social ecologist.” He became internationally renowned for urging corporate leaders to agree with subordinates on objectives and goals and then get out of the way of decisions about how to achieve them.

He challenged both business and labor leaders to search for ways to give workers more control over their work environment. He also argued that governments should turn many functions over to private enterprise and urged organizing in teams to exploit the rise of a technology-astute class of “knowledge workers.”

Mr. Drucker staunchly defended the need for businesses to be profitable but he preached that employees were a resource, not a cost. His constant focus on the human impact of management decisions did not always appeal to executives, but they could not help noticing how it helped him foresee many major trends in business and politics.

He began talking about such practices in the 1940’s and 50’s, decades before they became so widespread that they were taken for common sense. Mr. Drucker also foresaw that the 1970’s would be a decade of inflation, that Japanese manufacturers would become major competitors for the United States and that union power would decline.

For all his insights, he clearly owed much of his impact to his extraordinary energy and skills as a communicator. But while Mr. Drucker loved dazzling audiences with his wit and wisdom, his goal was not to be known as an oracle. Indeed, after writing a rosy-eyed article shortly before the stock market crash of 1929 in which he outlined why stocks prices would rise, he pledged to himself to stay away from gratuitous predictions. Instead, his views about where the world was headed generally arose out of advocacy for what he saw as moral action.

As for me, I’m a bit weary of the Cult of Drucker, which is often quite different from the man. I often hear his disciples pontificate his “ideas,” which wind up being little more than Benjamin Franklin-style truisms—only covered in jargon and masquerading as ideology. “An apple a day keeps the doctor away” becomes “pro-active management encourages and facilitates preventative-based strategies in order to ensure long-run objectives without negative and unforeseen downside effects.” So much Latin, and so little English. Such are the dangers in thinking outside one’s box.

But how far can the study of management go? For all of management’s influence, the most difficult question is: Why is this enterprise worth managing? My fear is that Drucker’s legacy is so liquid that his mantle can be claimed by most anyone. The race has been on for quite some time. Right now, the yellow-jersey belongs to Newt Gingrich. The former Speaker of the House, who’s an admirer of Alvin Toffler and other future babble, has clearly adopted Drucker as a political ally.

Too many of our business schools, academic centers, media moguls, and government leaders still rely on the Keynesian command-and-control bureaucratic model. They rely on almost nothing of Drucker and even less of the Austrian school and, as a result, routinely apply the wrong principles to structuring education, training, health care, and our role in international trade. Again and again they reject the marketplace. They reject the principles of management. They reject the essence of entrepreneurship. They reject the heart of Drucker and apply instead patterns and behaviors that simply don’t work.

That is the ultimate critique of big-city schools. It’s the ultimate critique of government-run health care. It is the ultimate critique of the way the federal government and state and local governments mismanage resources. It simply doesn’t work.

To be sure, Gingrich’s ideas can stand or fall on their own—with or without the support of Drucker. But we ought to be cleat that Drucker’s ideas have little to do with what Gingrich says. In fact, Drucker was never particularly interested in economics. Too much theory, not enough people.

Drucker’s concern was studying institutions as institutions. That’s what he saw in 1939. The Nazis and Soviets had to come together. It was simply what they were. The institutions demanded it. For Drucker, it didn’t matter which institutions he looked at; governments, unions, corporations. He really didn’t find much use in analyzing the government. Drucker preferred the non-profit sector. He even looked at the girl scouts. To Drucker, an institution had an internal agenda simply because it is an institution.

Drucker saw the driver of an institution as its management. His goal was to isolate management as a separate concept and study what made some managers good, and others bad. While it sounds a bit platitudinal now, it was quite new then.

Still, when reading Drucker I can’t help feeling undernourished. Consider this from Forbes a few years ago:

In 1989 C. William Pollard, chairman of the ServiceMaster Co., took his board of directors from Chicago to meet Drucker. In a back room of Drucker’s utterly unpretentious home, the sage of Claremont opened the meeting by asking the group, “Can you tell me what your business is?”

Each director gave a different answer. Housecleaning, said one. Insect extermination, said another. Lawn care, said a third.

“You’re all wrong,” Drucker said. “Gentlemen, you do not understand your business. Your business is to train the least-skilled people and make them functional.”

Groan. This is only the beginning of an exposure to Drucker. Soon, the “ideas” begin to flow freely. We’re now “knowledge workers.” And we’re moving to a “knowledge-based society.” But…what of it? Before we know it we’re “managing change,” yet I’m only interested in “making money.” Again, here’s Drucker:

One of the most important jobs ahead for the top management of the big company of tomorrow, and especially of the multinational, will be to balance the conflicting demands on business being made by the need for both short-term and long-term results, and by the corporation’s various constituencies: customers, shareholders (especially institutional investors and pension funds), knowledge employees and communities.

Call me unimpressed. I can’t say that I disagree with anything Drucker says, which is part of the problem. Truthfully, I think the study of management can only go so far. It’s important, but it’s easily overanalyzed. Just as the diplomat urges diplomacy and the general favors war, the management guru sees only the primacy of managers. To the Drucker’s fans, it’s seems hard to conceive the fact that Grant crossed the James without the aid of a flow chart.

Here’s a large section of Druckerama. Apparently, everything is transformational. Everyone is empowered. It all sounds so epic, yet at the same time so…bland. The themes have taken over the building and they’ve smothered the plot. What’s left is Drucker’s true legacy, his boundless enthusiasm. If only all managers had it. To Churchill, Russia may have been riddle wrapped in a mystery inside an enigma, but he saw Drucker clearly.

Posted by on November 12th, 2005 at 12:04 pm


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