The other day I was reading a blog in which a particular management methodology was discussed. It seemed noticeably similar to Peter Drucker’s concept of Management by Objectives contained in his excellent book, The Practice of Management (1954). It got me thinking about Peter Drucker.
One of the phenomenon in business, particularly in the venture capital funded startup business world, is a complete lack of appreciation that businesses existed long before the invention of the personal computer or the Internet.
I often joke, “Your generation did not invent sex or business” by which I mean it is worthwhile to have knowledge of things from before the Internet.
Drucker, Big Red Car, what did he do?
Drucker wrote his first book in 1939, The End of Economic Man, and his last in 2004, The Daily Drucker. Along the way, he wrote columns for the Wall Street Journal for a decade. He also wrote for the Harvard Business Review, Atlantic Monthly, and The Economist.
At his core, Drucker was an educator turned writer turned consultant. He wrote about concepts gleaned from direct observation of business as a sought after consultant. It is difficult to condense such a body of work, but I will give it a try.
Drucker believed in simplification of everything and in the decentralization of operations. He considered the alternative to be what he called a “command and control” model. He saw companies as being involved in areas of the economy that were unrelated to their core competencies, and, in addition, producing too many products and hiring too many people to work in these unrelated areas. Initially, in his view, most big companies needed to cut, not grow.
The “knowledge worker” and the “blue collar worker” are words that Drucker coined. He preached respect for the worker and the idea that workers were a critical element of company assets. In his view, senior management was tasked to train and empower workers to excel.
Outsourcing, to Drucker, was a matter of” doing what you do best and outsourcing the rest.” He saw companies as having front rooms — core competency functions — and back rooms. The back room was to be outsourced to a company for whom it was their front room.
He preached that companies should take care of their customers while being aware that their future depended on learning about the company’s “non-customers.” He was quick to point out that if you had 30%+ of the universe as your customers, you had 70% of the universe who you did not have and you had very little information this mass of customers.
Companies had to balance a variety of needs rather than a single value and that they had to be run with a set of objectives that could be tracked and attained. This is the Management by Objectives approach — MBO. [STOP — this was his utterance in the early 1950s. Way ahead of his time and the current level of writers who seem to have just discovered this notion.]
He had a great number of other thoughts — the man wrote for more than 65 years.
Books, Big Red Car? Drucker books?
Yes, Peter Drucker wrote a few books. The ones in red, I can recommend from personal experience.
- 1939: The End of Economic Man (New York: The John Day Company)
- 1942: The Future of Industrial Man (New York: The John Day Company)
- 1946: Concept of the Corporation (New York: The John Day Company)
- 1950: The New Society (New York: Harper & Brothers)
- 1954: The Practice of Management (New York: Harper & Brothers)
- 1957: America’s Next Twenty Years (New York: Harper & Brothers)
- 1959: The Landmarks of Tomorrow (New York: Harper & Brothers)
- 1964: Managing for Results (New York: Harper & Row)
- 1967: The Effective Executive (New York: Harper & Row)
- 1969: The Age of Discontinuity (New York: Harper & Row)
- 1970: Technology, Management and Society (New York: Harper & Row)
- 1971: The New Markets and Other Essays (London: William Heinemann Ltd.)
- 1971: Men, Ideas and Politics (New York: Harper & Row)
- 1971: Drucker on Management (London: Management Publications Limited)
- 1973: Management: Tasks, Responsibilities, Practices’ (New York: Harper & Row)
- 1976: The Unseen Revolution: How Pension Fund Socialism Came to America (New York: Harper & Row)
- 1977: People and Performance: The Best of Peter Drucker on Management (New York: Harper’s College Press)
- 1978: Adventures of a Bystander (New York: Harper & Row)
- 1980: Managing in Turbulent Times (New York: Harper & Row)
- 1981: Toward the Next Economics and Other Essays (New York: Harper & Row)
- 1982: The Changing World of Executive (New York: Harper & Row)
- 1982: The Last of All Possible Worlds (New York: Harper & Row)
- 1984: The Temptation to Do Good (London: William Heinemann Ltd.)
- 1985: Innovation and Entrepreneurship (New York: Harper & Row)
- 1986: The Frontiers of Management: Where Tomorrow’s Decisions are Being Shaped Today (New York: Truman Talley Books/E.D. Dutton)
- 1989: The New Realities: in Government and Politics, in Economics and Business, in Society and World View (New York: Harper & Row)
- 1990: Managing the Nonprofit Organization: Practices and Principles (New York: Harper Collins)
- 1992: Managing for the Future (New York: Harper Collins)
- 1993: The Ecological Vision (New Brunswick, NJ and London: Transaction Publishers)
- 1993: Post-Capitalist Society (New York: Harper Collins)
- 1995: Managing in a Time of Great Change (New York: Truman Talley Books/Dutton)
- 1997: Drucker on Asia: A Dialogue between Peter Drucker and Isao Nakauchi (Tokyo: Diamond Inc.)
- 1998: Peter Drucker on the Profession of Management (Boston: Harvard Business School Publishing)
- 1999: Management Challenges for 21st Century (New York: Harper Business)
- 1999: Managing Oneself (Boston: Harvard Business School Publishing) [published 2008 from article in Harvard Business Review]
- 2001: The Essential Drucker (New York: Harper Business)
- 2002: Managing in the Next Society (New York: Truman Talley Books/St. Martin’s Press)
- 2002: A Functioning Society (New Brunswick, NJ and London: Transaction Publishers)
- 2004: The Daily Drucker (New York: Harper Business)
- 2008 (posthumous): The Five Most Important Questions (San Francisco: Jossey-Bass)
Drucker quotes, Big Red Car?
Peter Drucker is remembered for some of his quotes:
The most important thing in communication is hearing what isn’t said.
Management is doing things right; leadership is doing the right things.
The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
Rank does not confer privilege or give power. It imposes responsibility.
The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.
The best way to predict the future is to create it.
Most of what we call management consists of making it difficult for people to get their work done.
Efficiency is doing things right; effectiveness is doing the right things.
The only thing we know about the future is that it will be different.
Plans are only good intentions unless they immediately generate into hard work.
So, dear reader, there you have it — Peter Drucker. I think you should buy one of his books and study it. He was an “unwoke pale guy,” but he knew his stuff.
Today, there is a lot of unrestricted plagiarism of his work. A wise person said that copying is a form of flattery. The actual Oscar Wilde quote was:
“Imitation is the sincerest form of flattery that mediocrity can pay to greatness.”