Peter Drucker has been described as “ the man who invented management. ” And yet, shortly before he died in 2005, Drucker told a reporter, “ I consider it quite likely that three years after my death my name will be of absolutely no advantage. ”
In other words, Drucker was suggesting that he—and, by extension, his ideas and ideals—would quickly fade away.
On this point, of course, the normally prescient Drucker couldn ’ t have been more wrong. His principles and practices continue to resonate today—as illustrated in this new book, What Would Drucker Do Now? , by Rick Wartzman, executive director of the Drucker Institute at Claremont Graduate University. A compendium of Wartzman ’ s popular online columns for Bloomberg Businessweek, What Would Drucker Do Now? ties insights gleaned from Peter Drucker ’ s 39 books and countless essays to some of the hottest issues and events dominating today ’ s headlines.
The result is what Warren Bennis has described as “ a tapestry of ideas drawn from Wartzman ’ s observations and personal experiences, woven together with the wisdom of the most important management thinker of this or any other age. ” Why does this mind meld work so well? And why does Drucker ’ s body of work remain so relevant five years after his death and more than 70 years after he started writing?
First, Drucker ’ s work is timeless. Kenneth Wilson, a Nobel Prize-winning scientist and education reformer, once remarked that as Newton was to mathematics, Darwin was to biology, and Einstein was to physics, Drucker was to our understanding of organizations and society. But, second, Drucker ’ s work is also timely—remarkably so when you consider how much of it was formulated a half-century ago. Examples abound, and they ’ re illuminated throughout What Would Drucker Do Now?
When Cisco Systems, the giant computer networking equipment maker, decides to stop manufacturing the Flip camcorder so it can concentrate on its core business, it ’ s taking a page right from Drucker ’ s book on smart growth. “ A business actually grows if it sloughs off activities which do not contribute, ” Drucker declared. “ Such activities only drain. They impede the true growth potential. ”
When the new chief executive of Time Inc. shakes up the magazine publisher and is then fired after just five months on the job, you have to believe that he would have been wise to listen to Drucker ’ s dictum that leaders must tread carefully when seeking to change things. “ There is indeed a need to change deeply ingrained habits in a good many organizations, ” Drucker wrote. But trying to impose a new culture is not the way to get there. “ Culture—no matter how defined—is singularly persistent, ” he asserted. “ In fact, changing behavior works only if it can be based on the existing ‘ culture. ’”
When Burger King sees its business decline after focusing almost exclusively on young male customers, you can practically hear Drucker telling executives at the fast-food chain that they ’ ve forgotten to pay attention to another essential group: their “ noncustomers. ”“ Even the biggest enterprise (other than a government monopoly) has many more noncustomers than it has customers, ” Drucker wrote, noting that hardly any companies supply even 30 percent of a given market. “ And yet very few institutions know anything about the noncustomers—very few of them even know that they exist, let alone know who they are. And even fewer know why they are not customers. ”
When managers at Procter & Gamble, Netflix, Intuit and other companies engage in various forms of collaborative research and open innovation, you can picture Drucker applauding them for figuring out how to reach beyond their organization ’ s own walls and bring in fresh ideas from the outside. “ The outside, the area of results, is much less accessible than the inside, ” Drucker wrote. “ The central problem of executives in the large organization is their insulation from the outside. What today ’ s organization therefore needs are synthetic sense organs for the outside. ”
When executives at Lehman Brothers become preoccupied with the daily stock price and consumed with quarterly earnings targets at the expense of being good stewards of the business, you can imagine Drucker shaking his head in disappointment. “ The most critical management job is to balance short-term and long-term, ” Drucker said, adding that a “ one-sided emphasis ” on the former is “ deleterious and dangerous. ” Ultimately, he added, deciding “ whether a business should be run for short-term results or with a focus on the long term is . . . a question of values. Financial analysts believe that businesses can be run for both simultaneously. Successful businesspeople know better. ”
When a number of laborers take their own lives at the sprawling Hon Hai Precision Industry factory in China, it is a tragic reminder of Drucker ’ s fateful observation that, while work “ is impersonal and objective . . . working is done by a human being. . . . As the old human relations tag has it, ‘ One cannot hire a hand; the whole man always comes with it. ’”
When Intel and General Electric form a jointly owned company to serve the home healthcare market, it ’ s as if they ’ ve first consulted Drucker ’ s 1999 book, Management Challenges for the 21st Century. “ Business growth and business expansion . . . will increasingly not be based on mergers and acquisitions or even on starting new, wholly owned businesses, ” Drucker wrote. “ They will increasingly have to be based on alliances, partnerships, joint ventures ” and other such collaborative arrangements.
When executives at Bank of America decide to systematically go through nearly every part of the business and diagnose what to sell, what to revamp and where to invest capital and resources to meet customer needs for the long haul, they are, in effect, performing what Drucker called a “ Business X-Ray. ” This is a process that “ enables us, indeed forces us, to allocate resources to results in the existing business, ” Drucker explained. “ But it also makes it possible for us to determine how much is needed to create the business of tomorrow. … It enables us to turn innovative intentions into innovative performance. ”
And when Wal-Mart teams up with American Public University so that the retailer ’ s employees can receive course credit—equivalent to as much as 45 percent of what it takes to earn a college degree—for corporate training and “ on-the-job learning, ” you can bet that Drucker would have been fascinated by the potential to combine thinking and doing this way. “ The intellectual ’ s world, unless counterbalanced by the manager, becomes one in which everybody ‘ does his own thing ’ but nobody achieves anything, ” Drucker wrote. “ The manager's world, unless counterbalanced by the intellectual, becomes the stultifying bureaucracy of the ‘ Organization Man. ’ But if the two balance each other, there can be creativity and order, fulfillment and mission. ”
You ’ ll find these--and dozens more such stories--fleshed out and fully explored in What Would Drucker Do Now? And along the way, you ’ ll discover why, as Tom Peters, put it: “ Drucker ’ s works . . . are the tracts that launched the ‘ practice of management ’ as we know it to this day—and as we will know it for decades to come. ”