Why was the wisdom of Peter Drucker ignored?

2010

Thinkers often make the heinous error of confusing what they see with what they would like to see. The most profound source of true knowledge is the present, and great and good thinkers only forecast futures after thorough analysis of today.

To the uninformed, that might sound banal and limited. But while qualities such as dynamism, vision, daring and contrarianism exist and are very attractive to everyone, they can lead all too easily to gross misunderstandings like those which led the bankers and investment bankers down the path of doom.

When tested by what was really happening in the real world, their actions made no sense. 'The real economy' has become a buzzword since the crash. But economic activity can't be anything other than real; the question, though, is whether the real economy is properly understood.

That deep understanding and realism maybe rare but it was very present in the late Peter Drucker, the greatest management thinker of our times. He possessed an uncanny ability to read the present. Anyone who doubts the value of his thinking is on a very slippery slope indeed.

Many corporate CEOs sought Drucker's advice - and as a dispassionate observer his wisdom was critical and fair, assisting the foremost brains behind the great firms of America in their crucial jobs of developing these huge businesses so that their vastness became an asset rather than a liability.

Although he had no love for the CEO breed, Drucker maintained a critical detachment that stated and studied the latest key issues without selling universal truths to his clients, followers and managers everywhere.

Drucker was a humanitarian at heart and was in no doubt as to who was responsible for human failure in organisations. He said: "If I put a person into a job and he or she does not perform I have no business blaming that person."

He showed scant tolerance for the people at the top of hierarchies. Drucker naturally took to a critical role as a journalist, teacher, consultant and trouble-shooter.

Turning to the recent and current chaos, it's doubtless that Drucker would have had no patience with strategies that ignored a lifetime of his wisdom.

Rosabeth Moss Kanter is surely correct when she wrote in the Harvard Business Review:

"Listening to Drucker might have headed off some of the excesses associated with Wall Street in general and with AIG in particular, in which bonuses not only were decried for their amounts, but also were often uncorrelated with company results."

That is a surprisingly mild critique considering the enormity of the scandals. However, a major problem with being reasonable is that the truly rational man thinks that reason will always win because it is right.

Drucker had a clear eye and long experience so he was never blinded by the latest follies of top managers. Efficiency (doing more of the same things with less effort or cost) and effectiveness (setting the right goals, transforming companies as circumstances changed) were always separate to him.

Simply put (in the manner of a great seer), the efficient, ever-effective corporation was the ideal.

Drucker's wisdom went either unheeded or unnoticed as the wrong goals were attacked by the wrong managers. And what a tragedy that proved.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".

Older Comments

Thanks for this piece. I've been puzzling over this for years. It's similar to the observation by Jeffrey Pfeffer in the Human Equation from a decade ago that management practice was moving in an opposite direction from what the research indicated as sound. There's been a preference for short-termism and financial analysis over sound leadership - or a pretence that they're not in opposition to one another. May I suggest the following reasons why Drucker (and others) are ignored? 1) Belief in Newtonian models for economics, which leads to de-personalised assumptions around valuation of companies eg around mergers. This divorces analysis and strategy-making from people-management and leadership. 2) A tacit, cultural assumption that the interests of shareholders and employees must always be opposed. We are talking, sadly, about deeply internalised a priori notions. But I'm looking to co-ordinate and marshal the critical voices.

Philip Whiteley UK

Right on. Drucker, Townsend, Bennis, Peters, Covey and the lot of them have a phenomenal amount of practical knowledge that can and should be applied. Sadly, it seems few do.

Mark Smith