P.S : it's too long... everyone in management would have already read it but those who haven;t ... its worth it...
"I'm not very introspective," he protested in his familiar guttural baritone, thick with the accent of his native
...an excerpt from an interview with Peter Drucker
The story of Peter Drucker as told by many a management Gurus is the story of management itself. It's the story of the rise of the modern corporation and the managers who organize work. Without his analysis it's almost impossible to imagine the rise of dispersed, globe-spanning corporations.
But it's also the story of Drucker's own rising disenchantment with capitalism in the late 20th century that seemed to reward greed as easily as it did performance. Drucker was sickened by the excessive riches awarded to mediocre executives even as they slashed the ranks of ordinary workers. And as he entered his 10th decade, there were some in corporations and academia who said his time had passed. Others said he grew sloppy with the facts. Meanwhile, new generations of management gurus and pundits, many of whom grew rich off books and speaking tours, superseded him. The doubt and disillusionment with business that Drucker expressed in his later years caused him to turn away from the corporation and instead offer his advice to the nonprofit sector. It seemed an acknowledgment that business and management had somehow failed him.
But Drucker's tale is not mere history. Whether it's recognized or not, the organization and practice of management today is derived largely from the thinking of Peter Drucker. His teachings form a blueprint for every thinking leader.
In a world of quick fixes and slick explanations, a world of fads and simplistic PowerPoint lessons, he understood that the job of leading people and institutions is filled with complexity. He taught generations of managers the importance of picking the best people, of focusing on opportunities and not problems, of getting on the same side of the desk as your customer, of the need to understand your competitive advantages and to continue to refine them. He believed that talented people were the essential ingredient of every successful enterprise.
RENAISSANCE MAN
Well before his death, before the almost obligatory accolades poured in, Drucker had already become a legend, of course. He was the guru's guru, a sage, kibitzer, doyen, and gadfly of business, all in one. He had moved fluidly among his various roles as journalist, professor, historian, economics commentator, and raconteur. Over his 95 prolific years, he had been a true Renaissance man, a teacher of religion, philosophy, political science, and Asian art, even a novelist. But his most important contribution, clearly, was in business.
After witnessing the oppression of the Nazi regime, he found great hope in the possibilities of the modern corporation to build communities and provide meaning for the people who worked in them. For the next 50 years he would train his intellect on helping companies live up to those lofty possibilities. He was always able to discern trends -- sometimes 20 years or more before they were visible to anyone else. "It is frustratingly difficult to cite a significant modern management concept that was not first articulated, if not invented, by Drucker," says James O'Toole, the management author and
-- It was Drucker who introduced the idea of decentralization -- in the 1940s -- which became a bedrock principle for virtually every large organization in the world.
-- He was the first to assert -- in the 1950s -- that workers should be treated as assets, not as liabilities to be eliminated.
-- He originated the view of the corporation as a human community -- again, in the 1950s -- built on trust and respect for the worker and not just a profit-making machine, a perspective that won Drucker an almost godlike reverence among the Japanese.
-- He first made clear -- still the '50s -- that there is "no business without a customer," a simple notion that ushered in a new marketing mind-set.
-- He argued in the 1960s -- long before others -- for the importance of substance over style, for institutionalized practices over charismatic, cult leaders.
-- And it was Drucker again who wrote about the contribution of knowledge workers -- in the 1970s -- long before anyone knew or understood how knowledge would trump raw material as the essential capital of the New Economy.
Drucker made observation his life's work, gleaning deceptively simple ideas that often elicited startling results. Shortly after Welch became CEO of General Electric in 1981, for example, he sat down with Drucker at the company's
Those questions led Welch to his first big transformative idea: that every business under the GE umbrella had to be either No. 1 or No. 2 in its class. If not, Welch decreed that the business would have to be fixed, sold, or closed. It was the core strategy that helped Welch remake GE into one of the most successful American corporations of the past 25 years.
Drucker's work at GE is instructive. It was never his style to bring CEOs clear, concise answers to their problems but rather to frame the questions that could uncover the larger issues standing in the way of performance. "My job," he once lectured a consulting client, "is to ask questions. It's your job to provide answers." Says Dan Lufkin, a co-founder of investment banking firm Donaldson, Lufkin & Jenrette Inc. (CSR ), who often consulted with Drucker in the 1960s: "He would never give you an answer. That was frustrating for a while. But while it required a little more brain matter, it was enormously helpful to us. After you spent time with him, you really admired him not only for the quality of his thinking but for his foresight, which was amazing. He was way ahead of the curve on major trends."
Drucker's mind was an itinerant thing, able to wander in minutes through a series of digressions until finally coming to some specific business point. He could unleash a monologue that would include anything from the role of money in Goethe's Faust to the story of his grandmother who played piano for Johannes Brahms, yet somehow use it to serve his point of view. "He thought in circles," says Joseph A. Maciariello, who teaches "Drucker on Management" at
Part of Drucker's genius lay in his ability to find patterns among seemingly unconnected disciplines. Warren Bennis, a management guru himself and longtime admirer of Drucker, says he once asked his friend how he came up with so many original insights. Drucker narrowed his eyes thoughtfully. "I learn only through listening," he said, pausing, "to myself."
Among academics, that ad hoc, nonlinear approach sometimes led to charges that Drucker just wasn't rigorous enough, that his work wasn't backed up by quantifiable research. "With all those books he wrote, I know very few professors who ever assigned one to their MBA students," says O'Toole. "Peter would never have gotten tenure in a major business school."
I first met Drucker in 1985 when I was scrambling to master my new job as management editor at BusinessWeek. He invited me to
Born in
When Hitler organized his first Nazi meeting in
Drucker immigrated to
So did Drucker. He taught part time at
Drucker was a professor of politics and philosophy at
CREATING A DISCIPLINE
He took Schumpeter's advice to heart, beginning a career in consulting while continuing his life as a teacher and writer. Drucker's most famous text, The Practice of Management, published in 1954, laid out the American corporation like a well-dissected frog in a college laboratory, with chapter headings such as "What is a Business?" and "Managing Growth." It became his first popular book about management, and its title was, in effect, a manifesto. He was saying that management was not a science or an art. It was a profession, like medicine or law. It was about getting the very best out of people. As he himself put it: "I wrote The Practice of Management because there was no book on management. I had been working for 10 years consulting and teaching, and there simply was nothing or very little. So I kind of sat down and wrote it, very conscious of the fact that I was laying the foundations of a discipline."
Drucker taught at NYU for 21 years -- and his executive classes became so popular that they were held in a nearby gym where the swimming pool was drained and covered so hundreds of folding chairs could be set up. Drucker moved to
In the 1980s he began to have grave doubts about business and even capitalism itself. He no longer saw the corporation as an ideal space to create community. In fact, he saw nearly the opposite: a place where self-interest had triumphed over the egalitarian principles he long championed. In both his writings and speeches, Drucker emerged as one of Corporate America's most important critics. When conglomerates were the rage, he preached against reckless mergers and acquisitions. When executives were engaged in empire-building, he argued against excess staff and the inefficiencies of numerous "assistants to." In a 1984 essay he persuasively argued that CEO pay had rocketed out of control and implored boards to hold CEO compensation to no more than 20 times what the rank and file made. What particularly enraged him was the tendency of corporate managers to reap massive earnings while firing thousands of their workers. "This is morally and socially unforgivable," wrote Drucker, "and we will pay a heavy price for it."
The hostile takeovers of the 1980s, a period that revisionists now say was essential to improve American efficiency and productivity, was for Drucker "the final failure of corporate capitalism." He then likened Wall Street traders to "Balkan peasants stealing each other's sheep" or "pigs gorging themselves at the trough." He maintained that multimillion-dollar severance packages had perverted management's ability to look out for anything but itself. "When you have golden parachutes," he told one journalist, "you have created incentives for management to collude with the raiders." At one point, Drucker was so put off by American corporate values that he was moved to say that, "although I believe in the free market, I have serious reservations about capitalism."
We tend to think of Drucker as forever old, a gnomic and mysterious elder. His speech, always slow and measured, was forever accented in that commanding Viennese. His wisdom could not have come from anyone who was young. So it's easy to forget his dashing youth, his long devotion to one woman and their four children (until the end, Drucker still greeted his wife of 71 years with an effusive "Hello, my darling!"), or even his deliciously self-deprecating sense of play.
During his early consulting work with DLJ, the partners flew out to
"Well, boys," he said, "why don't we relax for a few minutes? Let's go for a swim."
The executives explained that they hadn't brought their swimming trunks.
"You don't need swimming suits because it's just men here today," replied Drucker.
"And we took off our clothes and went skinny-dipping in his pool," recalls Charles Ellis, who was with the group.
Surely, Drucker never fit into the buttoned-down stereotype of a management consultant. He always favored bright colors: a bottle-green shirt, a knit tie, a royal blue jacket with a blue-on-blue shirt, or simply a woolen flannel shirt and tan trousers. Drucker always worked from a home office filled with books and classical records on shelves that groaned under their weight. He never had a secretary and usually handled the fax machine and answered the telephone himself -- he was something of a phone addict, he admitted.
PRIVACY PREVAILS
Yet Drucker also was an intensely private man, revealing little of his personal life, even in his own autobiography, Adventures of a Bystander, the book he told me was his favorite of them all. Not surprisingly, perhaps, the Drucker Archives at
It was Doris, in her own unpublished memoir, who told the story of how she once locked Drucker in a
In his later years, as his health weakened, so did Drucker's magnetic pull. Although he maintained a coterie of corporate followers, he increasingly turned his attention to nonprofit leaders, from Frances Hesselbein of the Girl Scouts of the
During the same period, Drucker, then 80 years old, penned a severely flawed foreword for a new edition of Alfred Sloan's My Years with General Motors. In one passage, Drucker quotes Sloan as saying that the death of his younger brother Raymond was "the greatest personal tragedy in my life." Raymond, however, died 17 years after Alfred. In another section, Drucker noted that the publication of the book had been delayed because Sloan "refused to publish as long as any of the GM people mentioned in the book was still alive. On the day of the death of the last living person mentioned in the book, Sloan released it for publication," wrote Drucker. In fact, Sloan generously heaped praise on 14 colleagues in the preface of his book, and all were still alive when My Years with General Motors was first published.
Whether the mistakes were a result of sloppiness or his declining intellectual power is not clear. But Drucker was no longer at the top of his game. The dean of the Drucker school, Cornelis de Kluyver, had reason to believe that Drucker's influence was on the wane -- the school was having difficulty attracting big money from potential donors. To gain a $20 million gift for its puny endowment, de Kluyver agreed in 2003 to put another name on the school, that of Masatoshi Ito, the founder of Ito-Yokado Group, owner of 7-Eleven stores in
In April, during our last meeting, I asked Drucker what he had been up to lately. "Not very much," he replied. "I have been putting things in order, slowly. I am reasonably sure that I am not going to write another book. I just don't have the energy. My desk is a mess, and I can't find anything."
I almost felt guilty for having asked the question, so I praised his work, the 38 books, the countless essays and articles, the consulting gigs, his widespread influence on so many of the world's most celebrated leaders. But he was agitated, even dismissive, of much of his accomplishment.
"I did my best work early on -- in the 1950s. Since then it's marginal. O.K.? What else do you have?"
I pressed the nonagenarian for more reflection, more introspection. "Look," he sighed, "I'm totally uninteresting. I'm a writer, and writers don't have interesting lives. My books, my work, yes. That's different....
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A few success mantra’s from Peter Drucker's are:
# Efficiency is doing better what is already being done.
# The productivity of work is not the responsibility of the worker but of the manager.
# Follow effective action with quiet reflection. From the quiet reflection will come even more effective action?
# No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.
