Peter J Drucker (1909~2005)
On the 11th November 2005, the man who was revered as the father of modern corporate management died. Alistair Schofield looks back at his life and influence with the help of Robert Heller, who knew Peter Drucker personally. Although he reputedly hated the label of ‘guru’, Peter Drucker was, by any standards, the greatest management guru the world has yet seen. In 1996, the McKinsey Quarterly journal described him as the ‘the one guru to whom other gurus kowtow’ and Robert Heller described him as ‘the greatest man in the history of management’, praise indeed for a man who described himself as ‘just an old journalist’. He was born in Vienna in 1909 and began working as a financial reporter in Frankfurt, Germany, while he earned a doctoral degree in public and international law at Frankfurt University. He received his doctorate in 1931 and the following year published an essay that offended the Nazi government; his pamphlet was banned and burned. Increasingly worried by the Nazis, he moved to London, where he briefly worked for a merchant bank, before relocating to the United States where he began working as a correspondent for several British newspapers. His first book, “The End Of Economic Man: The Origins of Totalitarianism” (1939) was aimed at strengthening the will of the free world in the fight against fascism. Winston Churchill liked it so much that it was made required reading for every new British officer. |
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Following the publication of his second book, "The Future of Industrial Man" (1943), General Motors invited him to embark on a two-year study of their corporate structure. The book that resulted, "The Concept of the Corporation" (1945), proved to be something of a seminal work. It introduced the ideas of decentralising decision-making and managing for the long-term by setting a series of short-term objectives. It was an immediate bestseller, although GM wasn't pleased initially. It was said that if a GM manager was found with a copy, they would be fired.
In 1950 he became Professor of Management at New York University, and four years later, he published "The Practice of Management," which posed three now-classic business questions: What is our business? Who is our customer? What does our customer consider valuable?
During his life Peter Drucker wrote more than three dozen books, he pioneered the idea of privatisation and was the first writer to describe the corporation as a social institution, he predicted the inflation of the 1970’s, the growing competitiveness of the Japanese and the decline in the power of the unions. A list of his followers and admirers would read like a “Who’s Who” of politicians and business leaders the world over.
The world has lost a great man, but I suspect that Heaven will become a more efficient place as a result!
While my recollections of Peter Drucker are either anecdotal or based on his writings, Robert Heller new him personally. It is therefore fitting that I should leave the remainder of this article to Robert.
I’ve known Peter, and enormously liked him, for nearly forty years. He had more wisdom than anybody I’ve ever met and possessed a generosity of spirit that made him a marvellous friend and splendid teacher.
Yet Peter never ran a company or a business, and never worked as an employee for a great corporation. His monumental, apparently inside, knowledge of management, was largely acquired from the outside; but this was no disadvantage, rather an asset. It gave him a detachment and independence that made many pragmatic breakthroughs that have profoundly affected all management and all managers. Indeed, he practically invented the subject, which dates back to a book he wrote in 1954 - The Practice of Management.
The title tells the whole story. As writer and teacher Drucker had no rival, because he concentrated on strong, straightforward ideas that could be clearly expressed and tested. An example is his famous distinction between efficiency and effectiveness. The first means ‘doing things right’, which is all well and good, but the second means ‘doing the right things’, which is much better - and makes fortunes.
But I can’t resist one anecdote of my own. I took Peter to lunch with Arnold Weinstock, then still Britain’s most famed manager. The conversation was mainly historical, but when we were in the lift, Peter came right to the point. “When he leaves the company, sell the shares!” When later Weinstock did leave, the once-great General Electric Company lost virtually all its value. As a prophet, too, Peter Drucker had no peer.