Why Drucker advised managers to ‘make decisions from the gut’
William Cohen, first graduate of Drucker’s PhD program, discusses the revolutionary management consultant’s unique approach to decision-making
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Fifty years ago, I sat in Peter Drucker’s PhD classroom at Claremont Graduate University in California. It was in that classroom that I first became aware of what I call ‘trained intuition’, which Drucker referred to as ‘decisions made from the gut’. Years later I reasoned that this was part of Drucker’s philosophy of management as a liberal art, known today as MLA.
MLA is a different kind of management philosophy
MLA is not ‘common sense’ or knowing what to do without prior analysis. In fact, even though MLA is a philosophy grounded in high ethics and the acceptance of social responsibility, it is a unique management system. This is because two characteristics of a leader, high integrity and social responsibility, are required rather than just desirable, as claimed by many other management experts.
In fact, after a lifetime of practicing management, the only institution I have found which constantly insisted on such a high-level definition of integrity and honor that it outweighed any other outcome or measurement of success was the US Military Academy at West Point.
Like the values that Drucker espoused, West Point’s code of honor was, and is, absolute. If found guilty of a single violation by all 24 members of a committee representing the total body of cadets, it had but one punishment and the committee of cadets did not hesitate to apply it without exception or hesitation.
I read the following account written by an anonymous graduate of the class of 1942 about a well-known honor scandal at West Point, which occurred nine years after his graduation in 1951. He had written:
“During my four years the West Point Honor Code stated simply, ‘a Cadet will not lie, cheat or steal’. As presented to me as a plebe, The Cadet Honor Code requires complete integrity in both word and deed of all members of the Corps of cadets and permits no deviation from those standards. These exacting standards are complied with to the letter, and if any cadet violates them he is immediately discharged from the Corps of Cadets. I was aware during my cadet days of a few outstanding young men who reported their own violations and resigned out of respect for the Corps and code. In 1951 some 90 cadets, 37 of whom were football players under coach Earl Blaik, were dismissed from the Academy.”
The code was in effect when I graduated in 1959, and I too was aware of a few outstanding young men during my tenure as a cadet, who reported violations they had made, which probably would not have been discovered otherwise and in accordance with the code, were thereby required to resign from the Academy. Notably, the coach’s son was among those discharged in 1951. He had not participated in the cheating, but was aware of it, and had taken no action. It was understood that to tolerate a wrong based on honor was as dishonorable as to commit the offense yourself. “Not to tolerate anyone who commits an honor offense” has now been added to the honor code in writing so that this too is clear.
A few years back an unusual honor scandal at another institution, which involved some sort of compromise, was publicized widely in the press. My oldest son, who was then a cadet and later graduated in the class of 1992, called me by telephone to report: “Dad I just wanted you to know that while we have the occasional honor violation, this type of compromise with honor would still not be taken at West Point.” The standard of integrity required at West Point seems to have changed little over the years.
Drucker did not prescribe punishment for his standard of integrity, except to note that it was required for successful leadership and not to maintain such a standard was to forecast failure. I found it telling that when West Point established the first academic chair of leadership in its more than 200-year history, the individual selected to occupy this position was not a war hero, but Frances Hesselbein, former CEO of the Girl Scouts of America, who was Drucker’s friend, and winner of the presidential Medal of Freedom from President Bush. She had also founded the Drucker Foundation for Non-Profit Management based on his values.
MLA makes use of additional sensors in considering integrity and other relevant aspects, which may be of unique importance in certain situations. For example, when I attended graduate school for my MBA I was confronted for the first time with the term ‘quantitative analysis for business decisions’, which describes the means by which profit or other management objectives might be mathematically analyzed and calculated with exactness.
Unfortunately, such an analysis by itself considers only a single aspect based on a calculation of numbers. Yet there are many other important factors, any one of which may be of overriding importance and decisive in a management situation which has little to do with profit or the single outcome calculated. High integrity and social responsibility are just two of these factors. Drucker noted how any significant management decision that might be made through use of liberal arts requires four fundamentals in application, which he defined along with the traits of high integrity and social responsibility.
Management as a liberal art
Drucker pointed out that management is itself a liberal art because “it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership, and can be considered an ‘art’ because it deals with practice and application”.
Drucker even went further stating eight specific liberal arts to be included in MLA analysis for management decision-making:
- Economics
- Ethics
- History
- Humanities
- Philosophy
- Physical sciences
- Psychology
- Social sciences
Drucker’s cautionary note
The one cautionary note that Drucker used most often was one that I never saw in print. Drucker’s warning was “what everyone knows is usually wrong” .That is, if ‘everyone’ believes something to be true by assumption (common sense), it probably is not true at all. Those following a belief of ‘what everyone knows’ do not make a decision based on an analysis made in their gut or anywhere else, but on what they have heard and assumed to be true with no further analysis thought to be necessary.
With animals, we usually refer to this as instinct. To distinguish animals from man, who alone has the ability to think and reason, animals are referred to in the Bible as ‘owners of life’ (ba-alei cha’im). Animals do reasonably well with instinct, but only for relatively simple decisions such as escaping danger. But as thinking animals, we must guard against acceptance of a belief simply because ‘everyone knows’, as often everyone does not know at all.
My favorite example
I am a great fan of Sir Arthur Conan Doyle’s tales of Sherlock Holmes. According to ‘what everyone knows,’ Holmes would respond with only four words to Dr. Watson’s surprise at a particularly shrewd deduction made by the sleuth: “Elementary, my dear Watson.”
Unfortunately, what everyone knows is wrong. Holmes never uttered these words in a single instance in anything ever written by Doyle. Then, who did? It was the English actor, Basil Rathbone playing the part of Sherlock Holmes in Hollywood movies that responded with the famous sentence, not Doyle’s character in anything that he ever wrote.
Decisions from the gut
In a required class at West Point, an exchange officer from the Marine Corps told my class that it was essential that the combat leader make decisions from the gut and not to overanalyze a situation when an immediate or nearly immediate decision was necessary. He emphasized that in battle most decisions must be made immediately, as delay could be fatal.
The recommendations of the Marine colonel have been of value to me both as a military officer and as a civilian executive. I therefore understood what Drucker was talking about when he recommended decisions from the gut but did not give it further thought at the time, although I did ensure that I did not overanalyze decisions.
My error rate in making decisions did not increase, and in many cases I found my decisions better than those who insisted on lengthy delays when ‘quantitative analysis for business or management decisions’ was a secondary issue.
How to make decisions ‘from the gut’
To implement MLA and make decisions from the gut, as Drucker recommended, a manager needs to prepare ahead of time. They need to do this through wide reading of both fiction and non-fiction and especially look for the lessons from the eight liberal arts that Drucker specified. They need to know themselves and understand their strengths and weaknesses so that they can take advantage of the strengths and make weaknesses irrelevant.
It is important to develop wisdom, which can only be done over time and through experience and outcomes which are analyzed afterward. Become a leader if you are not one already and if you are, strive to improve and become a better one. Finally, do not forget that to apply Drucker’s philosophy of MLA, high integrity and social responsibility are not options, they are required.
