Peter Drucker is known as “the father of management” or “the man who created management”. But why? Other experts, including many leaders from ancient times, have contributed significantly to management. While credited for their accomplishments, they were not given such heady accolades. Is there really a ‘Drucker difference’?
Notable ancients who predated Drucker
Xenophon was writing books on management and leadership 2,000 years ago. Before becoming a writer, he was a junior officer elected as a Greek leader tasked with bringing 10,000 Greek warriors across hundreds of miles over harsh terrain out of Persia, while under almost constant attack from hostile tribes after their commanders had been disarmed and killed by subterfuge.
He accomplished this successfully. Xenophon’s feat resulted in a model for successful withdrawal still studied by military leaders. Later, he wrote many books including one Drucker called “the first systematic study of leadership”. Although few recognize it, Xenophon also created what is known and popularized today as ‘servant leadership’.
The Babylonian king Hammurabi developed a management code consisting of a compilation of 282 laws that regulated conduct in a wide variety of business dealings including behavior, punishments and interpersonal relations. Another Babylonian king, Nebuchadnezzar, developed the concept of incentives to promote productivity. Neither king was recognized for their management contributions, though what they did greatly affected both the ancient world and modern developments.
In China, philosopher and general Sun Tzu developed subdivisions and rankings of authority, represented by colors to facilitate control and coordination and boost morale. He did this 2,000 years before Max Weber developed his theory of bureaucracy.
Drucker’s strange ways of helping organizations
Drucker thought of himself as a scientist, even if he did not use the word in self-description. He called any business for which he consulted his “laboratory”. If he was not wearing a white coat, his imagery might have encouraged your mind to dress him in one anyway.
He thought of management as a serious science, but considered the analysis of numbers only a single part of the discipline. Much as Hippocrates developed an oath that medical doctors still swear their allegiance by, in modern times Drucker challenged managers to ascribe to certain basics.
For example, he insisted on integrity and social responsibility as requirements of good leadership. Whereas other experts wrote that in theory leaders should have integrity and demonstrate social responsibility, Drucker claimed that to ensure success, a leader must have integrity and demonstrate social responsibility. Drucker berated those in the past and present that failed to do this.
His professional mind-set explains a lot. Since Drucker thought of himself as a scientist, he did not covet great wealth. He required only that his clients donate to a foundation that he founded and he did not charge at all for some. He lived in a modest home in Claremont, California and drove a relatively inexpensive car. He mowed his own lawn with a mechanical mower, did not wear expensive suits or watches and his shoes were not high fashion.
The trials of being a Drucker consulting client
The manner in which Drucker provided his consulting was often uncomfortable. One client described it this way:
“We had been accustomed to hiring consultants. We told them what we wanted and defined a specified problem. They then went off and returned after a time with mounds of data and reports and made formal recommendations. We were instructed exactly what we were to do and they answered any questions we might have. Drucker did none of that. He would begin with asking us questions about the problem we wanted solved. We were expected to answer these at the first meeting. In the process we had to think through the problem and this alone frequently generated potential solutions which we would have otherwise overlooked.”
Drucker said that his clients were the real experts and understood the issue far better than he did.
The Chinese philanthropist, businessman and now Canadian citizen Minglo Shao visited Drucker in his home frequently and would ask for advice on management issues. Drucker responded by asking him questions. Discussing those opened new insights which helped him find quality solutions but
Drucker never charged him or told him specifically how to do anything. This collaboration led to Drucker allowing Shao to use the Drucker name in establishing his management schools, based on Drucker’s principles, throughout China.
Thinking is the most difficult process
Although Drucker was aware of the use of the many innovative methodologies developed by others for analyzing business situations and developing strategies, he made almost no use of them. Instead, he emphasized the importance of thinking through every situation on its own.
He did not teach the well-known ‘portfolio analyses’ with their quadrants of cash cows, shooting stars, problem children, or dogs, as developed by the Boston Consulting Group (BCG) or the GE/McKinsey nine cell version, or any another version of management or business strategy by rote methods.
Drucker’s use of ‘breakthrough’ formulae or systems
Drucker was aware of the new systems and theories being promoted, but he was extremely cautious in applying them without thinking through each situation individually to discern whether it made sense to employ any system in a particular case.
When organizations adopted participatory management based on Douglas McGregor’s research and his book describing ‘Theory X verses Theory Y’ in the early 1960s, Drucker pointed out that McGregor had noted that his Theory Y management, with significant participation from the managed party, was an alternative to the more directive style practiced almost exclusively at the time.
Drucker revealed what almost all adopters of Theory Y missed, that McGregor himself had written that his intent was to describe an alternative management style which might give better results under certain circumstances and that research should be conducted to uncover exactly what these circumstances were, not that participatory management was the universal answer in all situations. Sometimes it makes sense for a manager to simply direct subordinates to take certain actions.
Although Drucker’s association and study of Japanese management methods was extensive and his clients in Japan were quick to adopt Drucker’s ideas, he did not instantly jump on the bandwagon of ‘Japanese management’ or recommend it when it was introduced in the US as the ultimate approach in the early 1980s.
He pointed out that conditions and traditions in Japan were different and copying their exact application was unlikely to work in the US. Like Fortune Magazine, he was highly suspicious of what it had termed “management by fad” in an article written about that time.
Drucker believed the human brain to be more powerful than data analysis
Drucker insisted on measurement of all results, but the results were to be considered only inputs. He avoided decision-making by simply inputting certain crucial data into a software program, turning on a computer and having the instructions for a strategy appear as if by magic.
He pointed out that although one could gather situational data on thousands of businesses, the information was invariably insufficient. Designing software based on your extensive data, you could input data unique to the situation and be able to predict the project results with some high percentage of accuracy, say 92.5 per cent.
He probably agreed with the young Captain James T. Kirk of TV’s Star Trek. Faced with an intentionally unsolvable academic problem as a student at Star Fleet Academy, Cadet Kirk confounded his instructors by solving it. The future Captain Kirk had solved the problem by entering the computer lab at night and reprogramming the computer.
Drucker maintained that computer-generated answers were inferior to the human brain thinking through the issue and integrating available information, personal experience and knowledge and the availability of those who would be conducting the planning and implementation.
He noted that personal knowledge or instinct of one vital factor might well be decisive and that a computer might never pick it up. He reminded us that though a certain program might give accurate results 92.5 per cent of the time, for the other 7.5 per cent of the time the results were 100 per cent inaccurate. He recommended rapid decisions after considering all the information that could be obtained within the time available.
Drucker died in 2005 yet his ideas are still studied in universities worldwide and most are practiced internationally. They seem to always be based on uncomplicated basics, however:
- Asking and answering the important questions of yourself and others
- Thinking, rather than depending on formulae
- Practicing the ethics and integrity of selecting the more difficult right task rather than the easier wrong one
- Practicing social responsibility
- Being where the action is
These principles constitute the ‘Drucker difference’.