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What Would Drucker Do Now?
Solutions to Today's Toughest Challenges from the Father of Modern Management
By Rick Wartzman
The McGraw-Hill Companies, Inc.Copyright © 2012The McGraw-Hill Companies, Inc.
All rights reserved.
Management as a Discipline
Peter Drucker: Timeless, Ubiquitous
A few Sundays ago, I was sitting in my home office, working on an outside writing project—a historical narrative that has nothing to do with my day job as director of the Drucker Institute. The think tank's mission is to advance the teachings of the late Peter Drucker, the man widely hailed as "the father of modern management."
My stack of reading this day included a 1939 article from The Nation magazine that explored a long-forgotten pension scheme, popularly known as Ham and Eggs, which failed twice at the ballot box in Depression-era California. I was breezing right along—that is, until I got to the penultimate sentence, which contained these six words: "as Peter Drucker has pointed out." I shook my head, burst out laughing, and raced downstairs to tell my wife about my serendipitous discovery. "Geez," I said, "this guy's following me everywhere."
In the weeks since, though, what has struck me as most remarkable is not that I stumbled upon Drucker in a nearly 70-year-old magazine story. It is that hardly a week passes when a major publication somewhere in the world doesn't invoke him in the very same manner: "as Peter Drucker has said," "as Peter Drucker has pointed out."
The Big Idea
How many people can you name whose ideas—and ideals—were being discussed in 1939, in 1969, in 1999, and will be, undoubtedly, in 2039? Likewise, how many people can you cite whose counsel was requested and (to varying degrees) followed by both General Electric Chief Executive Jack Welch and United Farm Workers leader Cesar Chavez? How many get credit for inspiring an organization such as the Girl Scouts while also helping guide a financial giant like Edward Jones?
Drucker's extraordinary staying power and his wide reach speak to several factors: the depth and breadth of his insights, an uncanny ability to anticipate the future, and a prose style that is as clear as mountain water.
But perhaps most of all, he remains highly relevant two years after his death at age 95 because he reminded us again and again that responsible management is not about buzzwords. It's not about fads. Ultimately, it is not even about developing new products or fattening the bottom line (although he believed those things are important).
Rather, it is about far more fundamental tenets—a philosophy that grew directly out of Drucker's experience as a young writer who had witnessed the rise of Nazi Germany (which in the early 1930s banned and burned the Austria native's work).
Drucker wrote that management, at its core, "deals with people, their values, their growth and development—and this makes it a humanity. So does its concern with, and impact on, social structure and the community. Indeed, as everyone has learned who ... has been working with managers of all kinds of institutions for long years, management is deeply involved in moral concerns—the nature of man, good, and evil."
Every couple of weeks, this column will endeavor to tie Drucker's teachings to events in the news. It will also, from time to time, feature the latest thinking of scholars and practitioners who have been strongly influenced by Drucker. There is no shortage of these folks around, from Procter & Gamble Chairman and Chief Executive A.G. Lafley to bestselling author Jim Collins, who has said that his book Built to Last: Successful Habits of Visionary Companies might well have been called "Drucker Was Right."
"What Would Peter Say?"
I am neither presumptuous nor foolish enough to suggest that I can possibly write with Drucker's prescience or perspicacity. That's not the intent of this column. All that any of us can do is simply ask, "What would Peter say?" and then try to connect the dots between his body of work and some of the issues making headlines now: the mortgage industry meltdown, thorny questions about globalization, immigration and income inequality, the blurring of nonprofits and profit-making enterprises in the social sector, the government's handling of a disaster like Hurricane Katrina.
Fortunately, there is a vast amount to draw from. Drucker wrote 39 books and countless articles.
He didn't always hit the mark and was occasionally criticized for being loose with the facts. But many of the concepts that Drucker introduced in the 1940s, '50s, '60s, and beyond have been built into the DNA of the world's top companies and embraced as second nature by a generation of social entrepreneurs. Among them: "There is only one valid definition of business purpose: to create a customer." "The business enterprise has two—and only these two—basic functions: marketing and innovation." "The shift from manual workers who do as they are being told—either by the task or by the boss—to knowledge workers who have to manage themselves profoundly challenges social structure." "Innovation and entrepreneurship are ... needed in society as much as in the economy, in public-service institutions as much as in businesses."
These are but a few of his principles, and they lead to what could be called the Drucker Paradox. His imprint is everywhere, so much so that his contribution has become, in many ways, imperceptible. Yet, at the same time, there are lots of people in business, government, and the nonprofit realm who forsake his wisdom each and every day. The need for effective management and ethical leadership—the need for Peter Drucker—has never been more pressing.
September 13, 2007
Muhammad Yunus: The Unlikely Disciple
There is no shortage of people who exemplify Peter Drucker's principles and practices—a multitude of middle managers and top executives responsible for many millions, if not billions, of dollars in economic activity. Yet the most Drucker-like of all may well be a man who launched his enterprise with a series of transactions totaling 27 bucks.
Nobel Peace Prize winner Muhammad Yunus, who pioneered the concept of microcredit—providing the poorest of the poor with tiny loans to start their own moneymaking ventures—is promoting a new idea these days. He calls it "social business," and in his just-released book, Creating a World Without Poverty, he contends that it promises to relegate destitution across the globe to where it belongs: inside a museum.
His notion is to foster a whole class of companies capable of competing in the marketplace but whose primary aim is to meet a clear social need, not to maximize profits.
These firms are meant to earn money. But they pay no dividends. Instead, explains Yunus, "any profit stays in the business—to finance expansion, to create products or services, and to do more good for the world." (Microsoft Chairman Bill Gates recently shared a somewhat similar, though not identical, vision in Davos, Switzerland, with his plea for "creative capitalism.")
And what might Drucker have made of all this?
Any business, he asserted in Management: Tasks, Responsibilities, Practices, "exists for the sake of society." In The Effective Executive, he added: "An organization is not like an animal, an end in itself, and successful by the mere act of perpetuating the species. An organization is an organ of society and fulfills itself by the contribution it makes to the outside environment."
No Political Boxes
This is not to say Drucker pushed for corporations to focus specifically on the needs of the indigent as Yunus has. But I think he would have greatly appreciated Yunus' model, for it is an overt exp
Excerpted from What Would Drucker Do Now? by Rick Wartzman. Copyright © 2012 by The McGraw-Hill Companies, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
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